Case Study Method Application when Studying Finance and Banking: Situation Description

The methods of situation analysis are used more and more in the learning process in present time. Case study method takes an important place in teaching of students. When studying such subject matters as corporate finance and banking, the decision and discussion of case study becomes an effective method of assimilation of the gained knowledge, allows students to concentrate on the arisen real problem from practical activities, independently to study it, and then to offer possible versions of its decision. One of important problems in the financial and bank sphere is existence of outstanding debts which demand creation of provisions, and, therefore, increase banks’ expenses. It negatively affects financial result of commercial banks, and banks either receive less profit, or sustain losses. On the other hand, borrowers who freely obtained the credits during the pre-crisis period faced a problem of insolvency and can't fulfill the obligations for payment of the credit. It generates a problem, both in the sphere of corporate finance, and in the banking sector. Therefore considering really arisen problem situation between bank and the borrower, students are to have preliminary knowledge of the analysis of financial statements of the enterprise, skills of calculation and an assessment of financial performance (liquidity, financial stability, business activity, profitability). Besides, students need to possess skills of bank management to estimate correctly a situation in the bank, to have skills of credit policy implementation, of provision creation on the overdue credits, as well as to make decisions on restructuring of the credits. The purpose of the academic research is demonstration of the concrete problem situation which has arisen between bank and the borrower in the period of financial crisis, and the offer of possible versions of the solution of an exit from the created problem situation. In article the long-term period of cooperation of the borrower and bank (2004 - 2013) is considered, stages of their interaction during the pre-crisis period, the period of crisis and during the post-crisis period are described. Therefore for the decision of this case study students are to have skills in the sphere of economy, the financial analysis, corporate finance, banking and bank management.