Despite the war in Ukraine, bank lending to businesses is growing, consortium lending is reviving, but the issue of war risk insurance remains in limbo. Vladimir Mudry, Chairman of the Board of OTP Bank JSC and Chairman of the Board of the Independent Association of Banks of Ukraine, spoke about trends and challenges in the economy in general and the banking sector in particular during the conference “Finance for Business During War 2.0.”
“This year, new areas of work have emerged that no one was talking about last year. For example, syndicated lending, which allows for the financing of large-scale infrastructure projects. We see that banks with private and state capital are joining forces to finance initiatives aimed at developing the economy. I believe that the banking sector and business should look for new areas for cooperation. This will allow banks to refine their internal programs in line with the current needs of business, and entrepreneurs to understand which ideas can already receive financing from banks today,” said V. Mudryi.
He emphasized that bank lending to businesses is growing in Ukraine, with the hryvnia corporate portfolio growing by 9.5% in the first quarter of 2025 and 28.4% year-on-year. At the same time, there are a large number of state programs for financing SMEs, including the state program “Affordable Loans 5-7-9%” and compensation for loans for domestically produced machinery and equipment. The share of total loans to small and medium-sized businesses in the banking system as a whole has already exceeded 60%.
“At the same time, other indicators, which currently remain quite low, are cause for concern. According to the results of 2024, the loan portfolio of banks amounted to only 23% of total assets. And if we take GDP, the total loan portfolio is only 19%. For comparison, in Poland this figure is 33%. This means that there is considerable potential for growth,“ emphasized V. Mudry.
Separately, V. Mudry drew attention to the challenges common to both business and banks. ”Unfortunately, no concrete results have been achieved in the area of war risk insurance over the past year. The law is still being considered by members of parliament. We also do not see an increase in financing programs from international partners,” emphasized the head of OTP Bank.
As a reminder, the credit rating agency S&P Global raised the rating for OTP Bank (Hungary) from BBB-/A-3 to BBB/A-2. This level is higher than Hungary’s sovereign credit rating.
OTP Group is the fourth most stress-resistant banking group in Europe based on the European Banking Stress Test 2023 conducted by the European Banking Authority. OTP Group also tops the Ranking of the 100 Best Banks in Central and Eastern Europe for 2023 and 2024.
bank collaboration, Consortium lending, lending growth
