The banks remain optimistic about the growth in their corporate and retail loan portfolios, and for the first time in a year are expecting loan quality to improve. This is according to the quarterly Bank Lending Survey.
The survey showed that demand for corporate loans increased in Q2, in particular for long-term loans and loans to large enterprises, for the first time since the full-scale invasion. The respondents project a rise in demand for all types of loans to businesses in Q3.
Households’ demand increased for both mortgages and consumer loans, and the banks anticipate that this uptrend will continue.
Most banks ranked the debt burden of businesses as average. Meanwhile, the share of financial institutions that assessed the debt burden of households as low shrank slightly.
The banks relaxed their lending standards for businesses for the first time since Q3 2024, primarily due to intensified competition.
The banks also eased their lending standards for households for the fifth straight quarter. A significant driver of this easing was, for consumer loans, competition among the banks and between them and non-bank financial institutions. For mortgages, the easing was driven by a better outlook for the real estate market.
The respondents plan to continue to relax their lending standards for businesses and households.
Loan application approval rates edged higher for both companies and households. The banks relaxed their requirements for mortgage collateral while also increasing the sizes of consumer loans.
The respondents noted a tangible increase in credit risk and a certain rise in operational risk, but for the first time in two years, they detected no growth in FX risk. A rise in FX and credit risks is anticipated in Q3, as is a moderate increase in liquidity risk.
This Bank Lending Survey was carried out from 16 June through 7 July 2025 among bank loan managers. The answers were provided by 26 financial institutions, which together held 96% of the banking system’s total assets. The survey’s results reflect the views of the respondents and are not assessments or forecasts by the NBU. A bank funding survey with the banks’ expectations for Q4 will be published in October.