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Lending Survey Shows that Banks Expect Gradual Recovery in Demand for Corporate Loans and More Rapid One in Consumer Loans

Lending Survey Shows that Banks Expect Gradual Recovery in Demand for Corporate Loans and More Rapid One in Consumer Loans

In Q2, the banks reported a negative impact of the war on lending – respondents said that the quality of loans had worsened, corporate demand for loans had remained moderate, households’ demand for loans had decreased, lending standards had tightened, and the loan approval rate had dropped. The banks expect a moderate revival in demand for loans and an increase in all types of risks.

Demand for loans is low, while lending standards have tightened further

April – June 2022 saw no substantial change in borrowers’ interest in corporate loans. As in Q1, demand was fueled by the need for working capital, debt restructuring, and internal financing. Demand for hryvnia and short-term loans, mostly loans to small and medium-sized companies, recovered somewhat.

For two quarters running, most banks said that they had tightened their corporate lending standards. For the most part, these were standards for long-term and FX loans, and loans to large companies.

Demand for retail loans decreased amid deteriorating consumer sentiment. Demand for mortgages dropped to a new historic low on the back of shrinking households’ savings and the gloomy outlook for the real estate market.

The banks have tightened their retail lending standards for two quarters in a row.

As in Q1 2022, in Q2 2022 respondents reported an increase in all types of risks, with credit and operational risks rising most of all.

The banks are guarded about lending prospects

Most respondents expect that both corporate and retail lending will contract over the next 12 months.  That said, respondents were slightly more upbeat about a revival in retail lending than in the previous quarter.

The banks expect the quality of the loan portfolio to deteriorate.

Respondents also expect their funding to decrease over the next 12 months, while being more upbeat about inflow of household deposits.

The banks said that all categories of risks would continue to increase in the coming three months.

Background information

The NBU publishes the Bank Lending Survey on a quarterly basis. The purpose of the survey is to deepen the understanding of credit market conditions and trends by the NBU and banking sector participants. It provides general assessments and forecasts of changes in lending standards and conditions for the corporate sector and households, fluctuations in lending demand, and more.

The latest survey of credit managers from 27 banks was conducted between 28 June and 12 July 2022. These banks account for 94% of the banking system’s total assets. The results of the survey reflect the opinions of the respondents, and are not estimates or forecasts of the NBU.

The NBU highly appreciates the banks’ participation in the survey under conditions of martial law.


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