NBU: Ukrainian banks have sufficient potential to support the economy
20 February 17:07
Banks have maintained high profitability despite the retroactive accrual of increased income tax and have sufficient capital reserves to comply with regulatory requirements and continue lending. This is stated in the Banking Sector Review for the fourth quarter of 2024, according to
It is reported that the volume of net assets of banks increased by 7.6% in the fourth quarter and by 16.2% in 2024.
Business lending is growing
Net hryvnia loans to businesses have been growing for a year and a half in a row. Despite a certain seasonal slowdown in the fourth quarter of 2024, the overall increase for the year was 20.6%. Net hryvnia loans to small and medium-sized enterprises grew somewhat faster – by 1.2% in the fourth quarter and by 22.1% for the year. Their share in the net hryvnia portfolio of business loans increased to 60.2%.
The fastest loan growth rates were recorded by state-owned banks – 5.3% in the fourth quarter and 24.8% over the year. In terms of industries, loans to food and machine building enterprises increased most significantly during the quarter, and to trade and food industry in general for the year.
The share of loans under the “Affordable Loans 5-7-9%” program in the net hryvnia portfolio of the business decreased to 33.7% at the end of 2024.
In response to a certain revival in investment demand from businesses, net hryvnia loans with a maturity of more than three years increased by 21.6% in the fourth quarter and by more than 58% for the year, and their share in the portfolio increased to 25.2%.
The interest rates on hryvnia loans to businesses decreased to 14.7% per annum. The lowest rates were offered by foreign banks: 11.4% per annum for foreign companies and 14.3% per annum for Ukrainian private companies.
Lending to households is reviving, but there are questions
Net hryvnia loans to households are growing: by 6.7% in the fourth quarter and by 39.9% over the year. Unsecured loans continue to dominate this portfolio. The share of the two leading banks in this segment has been declining for the second quarter in a row due to competition.
The growth of mortgage loans in the fourth quarter slowed to 7% for the quarter and 60.7% for the year. Mortgage lending continues to be concentrated almost exclusively within the government program “eHouse”, whose gross portfolio increased to UAH 24.1 billion in the fourth quarter. The development of mortgage lending requires more active involvement of banks with market products, which requires strengthening of regulatory and legislative regulation of the real estate sector and improvement of the design of state support for mortgages.
Loan portfolio quality is improving
The share of non-performing loans (NPLs) decreased to 30.3% (18.6% excluding debts of the former owners of PrivatBank and old debts that arose before the crisis of 2014-2016). The main driver of the NPL decline was their write-offs and growth of new loans. The share of corporate borrowers that defaulted on hryvnia loans in 2024 decreased to about 4%.
Banks’ deposit portfolios are growing
Bank funding from businesses and households continued to grow. The amount of hryvnia deposits of individuals in banks increased by 3.7% over the quarter and by 11.5% over the year. Time deposits of individuals in hryvnia have been growing steadily since September. The level of dollarization of customer deposits decreased to 31.4%.
Hryvnia deposits from businesses grew by 16.6% for the quarter and by 19% for the year. All groups of banks saw growth.
The increase in the key policy rate finally stopped the decline in interest rates on retail deposits. In December, the cost of new hryvnia deposits from individuals amounted to 9.6% per annum, and the cost of business funds was 8.3%.
The banks’ position is stable
In 2025, banks earned UAH 103.7 billion in profit (according to preliminary data before the annual audit), but in the fourth quarter, a loss of UAH 13.5 billion was recorded due to the accrual of income tax at an increased rate of 50% retrospectively for the entire year.
Net interest income remained the main source of high profit due to stable yields on domestic government bonds and loans. The interest margin averaged 7.6% for the year. Net fee and commission income increased significantly (by 3.3% for the quarter and by 5.2% for the year), and in December, for the first time since the full-scale invasion, its monthly volume reached the pre-war level.
Regulatory capital adequacy remained high at around 17% as of January 1, 2025. Further full reflection of the 2024 income tax may lead to a violation of the requirements by some banks, but they will be able to restore capital by maintaining high efficiency and implementing capitalization programs.
The NBU also reported that at the beginning of the year, it began assessing the stability of banks and, based on its results, banks will develop capitalization or restructuring programs, if necessary, and implement them by the end of the year.
Special focus on lending for energy renewal
In an interview with Forbes Ukraine, NBU Governor Andriy Pyshnyi drew attention to the positive results of lending for energy renewal. In eight months, UAH 13 billion in financing has been opened. These projects cover the restoration of 530 MW of power generation. In December, the volume of applications to banks was one of the largest on record: 261 applications worth UAH 4.3 billion.
As for lending for energy renewal, in the period from June 1, 2024, to February 2, 2025, banks received 3,685 applications from businesses for loans for energy infrastructure renewal projects totaling UAH 75 billion.
