DOI: 10.32609/j.ruje.11.144303

Authors: Jalal Abu-Alrop

Abstract: This study aims to evaluate the efficiency of Russian banks, identify the factors influencing it based on their size and ownership type, and forecast future trends in the banking sector. The analysis utilized data from 680 Russian banks over the period 2000–2023, employing Data Envelopment Analysis (DEA) to measure technical efficiency, panel data analysis to determine efficiency-related variables, and Monte Carlo simulation to predict future performance for the years 2024–2026. The findings indicate a general decline in bank efficiency over time, driven by economic and political crises, particularly those linked to oil price fluctuations and sanctions. The study reveals that an increase in client funds (non-credit organizations) and higher leverage ratios are associated with improved bank efficiency. Among bank categories, mega-banks with assets exceeding 1.05 trillion rubles demonstrated the highest efficiency, followed by medium banks, large banks, and small banks, respectively. Moreover, Russian domestic banks exhibited higher efficiency levels compared to their foreign counterparts. The study forecasts continued increases in interest rates in the coming years, driven by the instability of the local currency and rising inflation caused by the Russia–Ukraine conflict. Significant changes in client funds (non-credit organizations) are also anticipated, with a decline expected in 2024, a temporary increase in 2025, and another decline in 2026. These fluctuations reflect instability stemming from corporate performance downturns and capital outflows due to economic sanctions. In addition, the operational efficiency of Russian banks is expected to decline, with an increase in the proportion of distressed banks, especially among small and large banks struggling with rising funding costs. The study concludes that funding sources, associated costs and leverage are the most important factors affecting the efficiency of Russian banks.

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DOI: 10.32609/j.ruje.10.124364

Authors: Duc Huu Nguyen, Irina P. Khominich

Abstract: The conflict between Russia and Ukraine, along with the imposition of energy sanctions on Russian energy sources, has prompted a reassessment of the global energy market. Utilizing the difference in differences model, this study investigates the financial performance disparities among fossil fuel companies operating within the EU-27 bloc, Russia, and countries such as the United States, the United Kingdom, Qatar, Norway, India, China, UAE, and Saudi Arabia (countries that have benefitted from exporting fossil energy to the EU-27 as an alternative to Russia) during the period spanning from 2016 to 2023. The result reveals that fossil fuel companies from the United States, the United Kingdom, Qatar, Norway, India, China, UAE, and Saudi Arabia experienced significant advantages from substituting Russia in supplying oil, natural gas, and LNG to the EU-27. This is evidenced by a notable enhancement in their financial performance compared to both Russian and EU-27-based fossil fuel companies. For fossil fuel companies, the study highlights the urgency of diversifying export and import markets, broadening partnerships for fossil fuel trading and refining, transitioning to the production of lower-emission energy forms, and enhancing sustainable development practices to mitigate risks. At the national level, the research results indicate that countries reliant on imported fossil energy, akin to most countries within the EU-27, must swiftly diversify their energy sources and focus on developing renewable energy. This strategy is crucial to avoid unexpected shocks in the energy market in the era of geopolitical conflicts and uncertainty.

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DOI: 10.32609/j.ruje.5.47422

Authors: Elena Fyodorova, Ruslan Sayakhov, Igor Demin, Dmitriy Afanasyev

Abstract: The purpose of the study is to find out the influence of semantic (emotional coloring, length and complexity of the text) and thematic features (environmental, corporate-social and legal context) of conference calls with market analysts and investors on future company performance (CAR) and analysts’ recommendation for the share. The empirical framework of the research includes annual conference calls of public companies on the Moscow (MOEX) and London Stock Exchanges (LSE) from 2015 to 2019. The research methodology is based on the semantic analysis of the call text by using the linguistic dictionaries NRC 2010 and Corporate Social Responsibility 2016. The results of the study illustrate the significant impact of textual features of the conference call (the general tone of the call, the tone of management and the negative tone of analysts, the length and complexity of the text) on the abnormal stock returns (for 3, 14, 30 days). This relation is consistent for companies of both stock exchanges, but diverges in terms of the influence of the thematic characteristics of the call that can be explained by the mandatory disclosure of this information by European public companies (ESG Reports), as opposed to voluntary publication by Russian companies. The results can be applied both by the management of public companies in order to improve companies’ attractiveness (perception and transparency) and its market value in the short and medium-term period, and by investors to manage effectively the portfolio by predicting the future dynamics of the company’s share price after a conference call based on semantic tone and thematic features.

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