In October, like in previous periods, banks continued active lending to households – the hryvnia retail loan portfolio increased by 2.2% to UAH 131.4 billion. The total lending portfolio in the domestic currency increased by 0.5% to UAH 618.8 billion in October. This is shown by preliminary Monetary Statistics Data for October 2018.
Businesses opted for loans in foreign currency, their volume in the US dollar equivalent increased by 1.5% to USD 14.9 billion, while loans in the domestic currency remained practically unchanged from the previous month and amounted to UAH 485 billion.
During October corporate sector increased their deposits in the domestic currency by 1.1% to UAH 246.4 billion, while balance of corporate deposits in foreign currency decreased by 2% to USD 5.2 billion.
Household deposits in foreign currency (in the US dollar equivalent) grew by 1% up to USD 8.7 billion. At the same time, household funds in the domestic currency grew by 0.8% and reached UAH 256.8 billion.
Increase of balances on corporate hryvnia deposits can be explained by high interest rates which are especially attractive under the hryvnia appreciation. Thus, interest rates on corporate hryvnia deposits increased by 0.6 pp up to 13.6% per annum. This resulted in a bigger gap between interest rates for corporate deposits in the hryvnia and foreign currencies. Interest rates on household hryvnia deposits also increased, however, more moderately (by 0.3% to 11.0% per annum).
In October, value of hryvnia loans had multidirectional dynamics – for corporate sector it slightly dropped down, while for households it continued to grow.
The dynamics of hryvnia interest rates, excluding transmission from the key policy rate increase in September and in the previous periods, reflected the influence of market and statistical drivers. They include higher competition among banks for clients, further increase of demand for retail loans, and a different approach in banks to accounting of certain lending products.
For more details on money market developments in October 2018, see the Macroeconomic and Monetary Review (November 2018).
For reference:
Data on loans and deposits published on the page Monetary and Financial Statistics with a breakdown into economy sectors are different from the data in the Banking Sector Review on the Publications page that includes the following:
- data on banks that were solvent on the reporting date (excluding insolvent banks) unless stated otherwise
- data on banks including branches in Ukraine and branches abroad
- loans granted to resident and nonresident clients, as well as loans granted to resident and nonresident banks (including the deposited funds)
- deposits (funds) of resident and nonresident clients as well as deposits of resident and nonresident banks (including the received loans)
data have been adjusted for loan loss provisions unless stated otherwise.