Bank lending to businesses continues to grow in Ukraine.

Banks have been increasing corporate lending for three quarters in a row, according to the Review of the Banking Sector for the first quarter. It is noted that the demand for business loans outside the state support programs increased primarily due to a decrease in interest rates.

Corporate lending increased for the third quarter in a row; the growth in the commercial hryvnia credit portfolio amounted to 2.9% for the quarter and 7.2% for the year. The volume of hryvnia loans to small and medium-sized enterprises is growing, and their rate of increase has accelerated to 15.9% annually.

The share of loans under the 5-7-9% lending program has decreased to a third of the hryvnia portfolio, but card lending is growing rapidly. During the quarter, market rates for hryvnia business loans decreased by one percentage point to 16.7% per annum.

Mortgage lending is also growing thanks to the eOselya program.

Loan portfolio quality is improving: the level of defaults has decreased, and the share of non-performing loans (NPL) has also decreased. Further improvement in the financial services market will contribute to lending and compliance with regulatory requirements, the NBU noted.