The war will restrain the recovery of lending in Ukraine.

Thursday, October 27, 2022
The war will restrain the recovery of lending in Ukraine.

In the third quarter, banks continued to report a slowdown in lending because of the war, the National Bank of Ukraine said. It is noted that the banks participating in a relevant survey noted a slight recovery in the demand for loans from businesses and a further reduction in demand from the population. They also pointed to tightening lending standards and declining approval rates. Banks continue to expect growth in demand for short-term and hryvnia business loans. At the same time, during the next 12 months, a limited increase in the volume of corporate loans and a further reduction in retail lending are predicted. Banks believe that loan portfolio quality will deteriorate, despite a moderate improvement in estimates in the third quarter of 2022. At the same time, respondents expect funding growth in the next 12 months while predicting more stable inflows of funds from the public, rather than from businesses.

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