February 2018 saw the resumption of inflows to the banking system after the traditional decrease in deposits at the beginning of the year. At the end of February, the total deposit portfolio in domestic currency of solvent banks rose by 1.4% or UAH 6.8 billionto UAH 482.2 billion. These trends are seen in the preliminary Monetary Statistics Data for February 2018.
Hryvnia household deposits were noted for a particularly accelerated growth by 2.6% mom. This can be attributed to an increase in the nominal household income and optimism associated with hryvnia deposits in the view of strengthening of hryvnia that was fostered, among other things, by the tight monetary policy implemented by the NBU.
In its turn, the share of corporate deposits in hryvnia increased by 0.3% mom. Slower growth rates of corporate deposits is typical for the period of delivering quarterly tax payments to the budget.
Total loan portfolio of banks in domestic currency in the end of February increased 0.8% mom to UAH 580 billion. Banks accelerated UAH lending to both households and business. Domestic currency loans issued to households increased by 0.9% mom, and to the corporate sector - by 0.8% mom.
In February, foreign currency loan balances (in the US dollar equivalent) declined.
In response to further increase in the key police rate by the NBU, in February, banks continued to scale up interest rates both on deposits and on loans in domestic currency, primarily for the corporate sector.
Interest rates on new hryvnia corporate deposits increased to 10.2% per annum, and on corporate loans - to 16.0% per annum. Interest rates on new hryvnia loans also rose for households up to 31.6% per annum. Instead, interest rate on new hryvnia household deposits remained on the same level as in the previous month at 11.4% per annum.