National Bank of Ukraine

Banks Lend to Households and Businesses and Operate with Profit – Banking Sector Review
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31 October 2018

Press Release


The banking system has been profitable since the beginning of the year. Banks are reviving their corporate lending and actively lending to households. The expected resumption of cooperation with the IMF will contribute to the stability of the macroeconomic environment in Q4. Inflow of deposits and growth of retail lending are expected to be evident by the end of the year. The banking sector will remain profitable. According to the October Banking Sector Review released by the National Bank of Ukraine.


High rates of retail lending remain


During Q3, intensive retail lending could be observed: net personal loans in hryvnia grew by 10.6 % evenly through all bank groups. In annual terms, hryvnia household loans increased by 38.0% yoy.


Corporate lending accelerated seasonally (+8.3% during the quarter) mainly in banks with foreign capital and state-owned banks.


Due to the lending revival in Q3, the share of non-performing loans reduced by 1.4 pp to 54.3%.


Investments of financial institutions in domestic government bonds increased by UAH 17 billion: demand on government securities was generated by state-owned banks. Certificates of deposit decreased by 2.8 pp to 2.1%, which was the lowest level since 2014.


In July – September, almost all components of banks’ liabilities increased, particularly, funds due to international financial institutions and interbank liabilities, as well as funds due to the NBU (three banks received refinancing loans for terms exceeding 30 days).


Household deposit rates are rising


Banks ramped up FX lending to both households and businesses. Hryvnia deposits of households slightly decreased in volume, while corporate deposits remained at the level of the previous quarter. In July – September, the households deposit portfolio remained unchanged, while the corporate one slightly increased.


Deposit interest rates continued to grow due to the NBU’s tight monetary policy with the increase of the key policy rate to 18% per annum in September, as well as competition among banks for corporate deposits.


Average value of 12-month household deposits grew by 0.9 pp to 15% per annum in UAH and by 0.2 pp to 3.5% per annum in USD. At the same time, rates on 6-month, 9-month, and 12-month deposits were almost the same.


Interest rates on new corporate loans rose by 0.5 pp, to 17.5% per annum, while interest rates on household borrowing decreased by 0.6 pp to 29.7% per annum.


Since the beginning of the year, the banking sector has earned almost UAH 11 billion in profits.


During the 9 months since the beginning of the year, the banking sector has earned UAH 10.9 billion in profits including UAH 2.7 billion in Q3.


Operating income in January – September increased by 20.3% yoy mainly due to the growth of net interest and commission incomes, while expenses grew by 24.5% yoy. Banks’ operating profit before provisioning increased by 13.5% yoy.


During the 9 months of 2018, the sector made provisions for the amount of UAH 19.9 billion which was by 24.2% less than the same indicator for the same period of the previous year.



For more detail, see The Banking Sector Review posted in the Publications section on the NBU’s website.


Data on loans and deposits published in the Banking Sector Review differ from the corresponding data published in the Monetary Statistics because the former:

-         contain data on banks that were solvent on the reporting date unless stated otherwise

-         include data covering banks together with their branches that operate abroad

-         contain funds deposited with other resident and non-resident banks

-         have been adjusted for loan loss provisions unless stated otherwise

-         contain data on personal certificates of deposit, unless stated otherwise

-         contain information on nonresident customers.


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