In Ukraine, the share of NPLs is projected to fall to pre-war levels this year.

In the first three months of 2025, the share of NPLs in the banking sector decreased to 28.6%, which is 1.7 percentage points lower than at the beginning of the year and 8.8 percentage points lower than at the start of 2024 (37.4%). For the first time since 2022, this figure has fallen below 30%, and it may decrease further to 27-25% because Ukrainian banks have successfully reduced the share of NPL’s, primarily by writing off bad debt. However, to further lower this indicator, it is essential to develop the secondary debt market, simplify court procedures, and enhance the protection of creditors’ rights.

The largest share of problem loans is typically concentrated in the corporate sector (37% as of April 1). The situation is significantly better for individuals due to improved financial discipline and income stability (14.3%). Therefore, banks’ efforts to clean up their portfolios should primarily target corporate clients and focus on finding effective mechanisms for collecting or selling claims on their debts.

The bulk of non-performing assets continues to be concentrated in state-owned banks: As of April 1, their share of NPLs was 41.1%.