Demand for loans is growing in Ukraine – survey

30 October 08:49

Household demand for loans increased for the third quarter in a row, and the continued growth in business demand is the largest since 2021. This is evidenced by the results of the quarterly Bank Lending Conditions Survey, Komersant UkrainianKomersant Ukrainian.

Results of the third quarter

The population’s demand for loans has been growing for three consecutive quarters, with demand for consumer loans growing in the third quarter, primarily due to better consumer sentiment and lower interest rates.

Demand also increased for all types of corporate loans, most notably for hryvnia-denominated long-term loans to small and medium-sized enterprises.

According to the banks, the debt burden of small and medium-sized enterprises and large enterprises remained medium, while that of households remained low.

Banks eased credit standards for businesses for the first time since 2021 for all types of corporate loans, except for foreign currency loans. The most significant easing was made for loans to small and medium-sized enterprises, as well as for short-term and hryvnia loans.

The approval rate for corporate loans increased, most notably for hryvnia loans, short-term loans, and loans to small and medium-sized enterprises.

The approval rate for consumer loans also increased, while the approval rate for mortgages decreased. At the same time, banks reduced the cost of loans to households.

According to the banks, currency, credit, and operational risks increased moderately in the third quarter, while interest rate risks increased slightly.

Expectations for the fourth quarter

Financial institutions expect an increase in demand for all types of hryvnia corporate loans in the fourth quarter.

Demand for all types of retail loans is also expected to grow.

In the fourth quarter, banks plan to ease lending standards for all types of corporate loans and consumer loans, and also plan to tighten lending standards for mortgages.

In addition, in the fourth quarter, financial institutions expect an increase in all types of risks, most notably liquidity and credit risk.

The NBU reported that a survey on bank lending conditions was conducted from September 16 to October 7, 2024, among bank credit managers. The responses were provided by 26 financial institutions, their share in the total assets of the banking system is 96%. The NBU also reminded that the survey results reflect the opinion of the respondents and are not estimates or forecasts of the National Bank of Ukraine.

Василевич Сергій
Editor