By KYIV. Oct 24 (Interfax-Ukraine) – Ukrainian banks expect continued growth in demand for lending from both businesses and households in the next four quarters, according to the results of a quarterly survey of financial institutions on lending conditions conducted by the National Bank of Ukraine.
“In the next 12 months, 60% of respondents hope for growth in the corporate and retail portfolios. Banks mainly expect that the quality of loans will not change. However, some large banks noted a deterioration in the quality of loans to households,” the National Bank indicated in a publication on the website.
The indicator of expectations for growth of the loan portfolio of legal entities in the next four quarters improved from 38% in the second quarter to 43.7% in the third. At the same time, banks predict a significant improvement in the quality of the corporate portfolio – by 14 percentage points (p.p.). At the same time, the new quality assessment minus 2.7% remains negative.
The indicator of expectations for growth of the loan portfolio of individuals in the next four quarters also increased – from 35.3% to 42.8%, while banks predict a slight deterioration in the quality of the portfolio – from minus 5.1% to minus 5.4%.
It is noted that the demand for corporate loans has increased, except for loans in foreign currency. According to the survey, the greatest demand was recorded from small and medium-sized businesses. At the same time, some large banks noted an increase in demand among large enterprises.
This result was facilitated by the need for working capital, capital investments, as well as lower interest rates, the National Bank noted. Factors that reduced demand were internal business financing and bank competition.
“In the fourth quarter, financial institutions expect an increase in demand for corporate loans. Most of all – from SMEs, as well as for short-term and hryvnia loans,” the regulator noted.
As for the population, it is emphasized that the demand for mortgage has been growing for four quarters in a row. As the NBU noted, previously such household demand was ensured by better expectations of the real estate market prospects and consumer sentiment. Meanwhile, higher spending on durable goods and foreign currency purchases increased demand for consumer loans.
“In the fourth quarter, respondents predict an increase in the population’s demand for loans,” the National Bank stated.
