Ukrainian banks plan to ease lending for businesses and the public.

In the third quarter of this year, banks plan to ease lending conditions for small and medium-sized businesses, reported the National Bank of Ukraine. The central bank made this decision in response to five triggers.

The first is Demand– Since the war, there has been an increase in the demand for consumer loans and the number of approved business loan applications. And, as expected, the volume of both business and household loans will continue to grow in the next four quarters.

The second is the quality of loan portfolios. Banks continue to expect a certain amount of deterioration in the quality of their business credit portfolio, but the share of respondents with negative expectations has gradually decreased.

The third is credit standards for business. In the second quarter, these were slightly increased. Most are for long-term and foreign currency loans. At the same time, in the third quarter banks plan to relax corporate lending standards for SMEs, short-term, and hryvnia loans. The NBU recorded an increase in the number of approved applications for business loans.

The fourth is credit standards for the population. In the third quarter, banks plan to ease approval standards for mortgage and consumer loans. The number of approved applications for public loans continues to grow.

The fifth is risk. A wide range of bank clients reported an increase in credit risk and expect it to increase in the third quarter.