Bank lending to businesses continues to grow in Ukraine.

Tuesday, May 21, 2024
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.

 

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