The Lending Survey Analytical Report published today by the National Bank of Ukraine highlights that banks expect corporate sector lending to recover for the first time since the end of 2015.

In a survey carried out from 21 December 2016 through 16 January 2017, credit managers of 64 banks participated (the share of these banks is 99% of the total assets in the banking system). The survey reveals the results of Q4 2016 and expectations for Q1 2017.

The share of banks forecasting that their corporate loan portfolio will grow over the next 12 months increased up to 71% compared to 38% in the previous report. The volume of deposits should grow as well, with 80% of respondents expecting this. The expectations of corporate deposit inflows are high (the position of 76% of respondents).

It is already a year and a half that banks generally keep enthusiastic about the quality of loan portfolios for both the corporate sector and households. The survey reflects such expectations on behalf of 49% and 63% of respondents, respectively.

The demand for corporate loans continued to increase in Q4. This is a position supported by the statements of 34% of banks. Higher demand was observed for all types of loans, except for long-term and FX loans. Key factors for this are lower interest rates and higher needs of enterprises for working capital. The demand for loans on the part of households grew, primarily, due to lower interest rates, increased consumer confidence, and savings. Banks expect further growth in demand for corporate and household UAH loans in Q1 2017.

The level of approvals for loan applications also meets demand, and rises as well. In particular, this applies to both corporate loans (excluding long-term and FX loans to households) and to mortgage loans.

Reference. The NBU publishes the Lending Survey Analytical Report quarterly. The report summarizes the results of a survey conducted by the NBU among commercial banks on the state of lending in the reporting quarter, its prospects for the next quarter, and its prospects over the 12 subsequent months.