OTP Bank forecasts significant growth in renewable energy lending next year, said Alla Biniashvili, a member of the bank’s board.
“What do we think will be the driver? Definitely renewable energy. It is already emerging, mostly in state-owned banks, but all other banks are also prioritizing the financing of energy security and renewable energy. And we expect a significant increase in its share in our portfolio next year, as well as in the portfolios of other banks,” she said at the Global Outlook: Strategic Momentum conference organized by the European Business Association (EBA) in Kyiv on Friday.
As Biniashvili noted, the banking sector is currently characterized by high liquidity, but companies also hold significant balances in their accounts due to uncertainty and lack of investment.
According to her, the main sectors for lending currently remain agriculture, food industry, trade, and defense. She noted that banks compete with each other for customers in these industries, lowering rates and offering new terms.
Binashvili named the geopolitical situation, import needs for energy security, lower harvests, and staff shortages as key risks for the banking sector. At the same time, she said that against the backdrop of international guarantees and risk-sharing programs, banks will be able to ensure about 30% growth in lending in 2026.
The international financial service NovaPay (TM NovaPay) will issue a series of “L” bonds with a total nominal value of UAH 100 million, which will be the 12th such series in the overall bond issuance program.
As noted in the SMIDA information disclosure system, the issuer is again a subsidiary of NovaPay, NovaPay Credit LLC, and the decision was approved by the general meeting of participants on July 16.
According to the announcement, the bonds are planned to be placed among an unspecified group of persons through a public offering, without the involvement of an underwriter, with a nominal value of UAH 1,000.
The company notes that there are currently 10 series of bonds in circulation – from “A” to ‘J’, each with a total nominal value of UAH 100 million, with the exception of series “I”, whose total nominal value is UAH 90 million. It is stated that the total nominal value of NovaPay Credit LLC securities in circulation at the time of the decision is 506.7% of the company’s authorized capital.
The funds raised are planned to be used for lending operations to individuals and legal entities – 80% and 20%, respectively.
NovaPay was founded in 2001 as an international financial service provider, part of the Nova Group (“Nova Poshta”), providing online and offline financial services at Nova Poshta branches. According to the website, the company employs about 13,000 people in more than 3,600 Nova Poshta branches throughout Ukraine. According to the National Bank of Ukraine, the company accounts for about 35% of the total volume of domestic money transfers.
NovaPay was the first non-bank financial institution in Ukraine to receive an extended license from the NBU in 2023, which allowed it to open accounts and issue cards, and was also the first non-bank to launch its own financial app with a wide range of financial services at the end of last year.
As reported, in 2023, NovaPay made three public issues of interest-bearing bonds of series “A”, “B” and “C”, and last year issued six more series of bonds – “D”, “E”, “F”, “G”, ‘H’ and “I”, and this year, another series “J,” all for UAH 100 million. Also this year, a decision was made to issue bonds of series “K” for UAH 100 million. Securities of all series, except for ‘B’ and “I,” are used for the REPO program as an alternative to bank deposits, They are available for purchase in the NovaPay mobile app, while bonds of series “B” and “I” are offered for sale to institutional clients, with interest income paid quarterly.
According to the prospectuses, the bonds of the last four series were issued for three years. The nominal interest rate on them is 17% per annum, while for the previous three it was 18%.
According to the prospectus, NovaPay Credit plans to increase its interest income to UAH 802.1 million this year and to UAH 1 billion 515.1 million next year, and to receive UAH 518.9 million and UAH 1 billion 30.6 million in net profit, respectively.
Last year, the company’s net profit grew to UAH 89.2 million from UAH 40.3 million a year earlier, with revenue increasing to UAH 285.6 million from UAH 95.6 million.
International agricultural research company Corteva Agriscience and state-owned Oschadbank (Kyiv) are expanding their partnership lending program to Ukrainian agricultural producers to enable them to purchase the company’s crop protection products on favorable terms, the company’s press service said.
According to the press release, under the terms of this lending program, farmers can purchase sunflower, corn and winter rape seeds of premium genetics of the Pioneer® brand at reduced rates.
Farmers wishing to purchase Corteva plant protection products in the amount of UAH 200 thousand or more can take out a loan with an interest rate of 0.01% per annum in UAH, depending on the repayment schedule, loan term and availability of collateral. There is no loan disbursement fee. The maximum loan term is 12 months. To apply, farmers should contact Corteva representatives in their region.
Borrowers under this program will provide Oschadbank with a simplified list of documents and can expect priority consideration of their application, as well as a shorter time for making a loan decision.
“Launched in February, Corteva’s program of lending at reduced rates for the purchase of Pioneer seeds in partnership with Oschadbank was well received by farmers, so we are pleased to welcome the willingness of our partners to expand the program to give farmers better access to Corteva’s advanced crop protection products,” explained Elena Dunina, Financial Head of Corteva Agriculture in Ukraine, Central Asia and the Caucasus.
“The agricultural sector suffered significant losses during the war. The State Bank considers it its mission to support agrarians and provide them with the most extensive package of opportunities. (…) Thanks to the simple and flexible terms of the Corteva partnership program, agricultural producers can get a loan at reduced rates, replenish working capital and optimize costs,” said Natalia Butkova-Vitvitska, Oschadbank Board Member in charge of micro, small and medium-sized businesses.
Corteva Agriculture is a global agricultural company. It offers comprehensive solutions to maximize yields and profitability. It has more than 150 research facilities and more than 65 active ingredients in its portfolio.
The company’s presence in Ukraine includes the headquarters in Kyiv, a research center in Liubartsi village (Kyiv region) and a seed production complex in Stasi village (Poltava region).
In April 2022, the company decided to leave the Russian market due to the full-scale war against Ukraine waged by Russia.
According to the National Bank of Ukraine (NBU), as of February 1 this year, Oschadbank ranked second in terms of total assets (UAH 369.56 billion) among 63 banks operating in the country.
agricultural producer, CORTEVA AGRISCIENCE, LENDING, OSCHADBANK
The number of banks expecting an increase in the volume of their loan portfolio over the next 12 months amounted to 88% for the corporate segment and 79% for lending to the population, according to the results of a survey conducted by the National Bank of Ukraine (NBU) on the conditions of bank lending.
“In the next 12 months, 79% of respondents predict an increase in the loan portfolio of households, 88% – corporate portfolios. The share of banks that expect an increase in the loan portfolio of enterprises is the largest in the entire history of observation. 67% of financial institutions predict an increase in funding due to an increase in funds of both population and corporations,” the central bank said in a review on its website on Friday.
In addition, in the second quarter, half of the respondents noted an increase in demand for both consumer lending and mortgages.
In the second quarter, survey participants noted a moderate increase in liquidity risk, credit and interest rate risks, while in the next three months banks expect further growth in credit risk, simultaneously with a decrease in interest rate risk and liquidity risk.
More than 80% of banks consider the total debt burden to be medium, in addition, for large enterprises it is higher when compared with SMEs.
In the next quarter, financial institutions forecast the largest easing of hryvnia business lending standards since 2013. In particular, in mortgage loans, due to positive expectations of the prospects for the real estate market, and in consumer loans due to positive expectations of consumer solvency and general economic activity, as well as competition with other banks and nonbank financial institutions.
The volume of mortgage lending in January-March 2021 amounted to UAH 1.4 billion, which is two times more than in the same period in 2020, according to the results of a survey of banks conducted by the National Bank of Ukraine (NBU).
According to the report, in the first quarter of this year, 1,811 mortgage agreements were concluded, which is 51% more than in the same period last year.
According to the regulator, in March 2021 banks issued 750 loans for a total of UAH 577.4 million, which is 26% more compared to February 2021 and almost 2.5 times more than in March 2020. The number of new deals for the month increased by 22%, for the year – by 83%, the report says.
Almost 90% of mortgage agreements in the amount of UAH 506 million in March were drawn up with five banks, which indicates the concentration of the mortgage lending market.
The NBU noted that the growth of mortgage lending is mainly due to loans for the purchase of housing in the secondary real estate market. In particular, in March, the volume of loans issued for the purchase of housing in the secondary market compared to February 2021 increased by 28%, or by UAH 109.2 million, in the primary market – by 15%, or by UAH 10.3 million.
According to the survey results, the share of mortgage agreements for the purchase of housing in the secondary market in March amounted to 87% of all loans issued.
According to the banks’ information, the average size of a loan for the purchase of housing continues to grow, in particular, in February it amounted to about UAH 742,000, and in March – UAH 770,000. The average size of a new mortgage loan for the purchase of primary real estate in the reporting month amounted to UAH 837,000, and the secondary one – UAH 760,000.
It is indicated that in March the average effective rate of a mortgage loan remained almost unchanged: in the secondary market it was 14.0% (in February – 13.9%), in the primary market – 17.4% (in February – 17.1%).
As reported, the volume of mortgage lending in 2020 amounted to UAH 3.8 billion, which is 36% more than in 2019.
The number of banks expecting an increase in the volume of their loan portfolio over the next 12 months amounted to 78% for the corporate segment and 82% for lending to the population, according to the results of a survey conducted by the National Bank of Ukraine (NBU) on the conditions of bank lending.
“The survey participants positively assess the prospects for lending in the next 12 months: 78% of respondents predict the growth of the loan portfolio of corporations, 82% of households. These are the highest estimates of the growth of the loan portfolio of the population since 2015, however, some large banks expect a certain deterioration in its quality,” the review says.
According to the report, the optimism of the respondents regarding the further increase in funding has grown, in particular, 77% of respondents expect an increase in household deposits, 78% – funds of enterprises.
The banks note that despite expectations of the introduction of new quarantine restrictions, the demand for loans increased from business and the population, in particular, the demand for mortgages was the highest in the entire history of observations.
It is indicated that in January-March 2021, the demand for business loans increased, primarily for loans to SMEs, in hryvnias and long-term loans.
The main factors behind the revival of demand are still cited by banks as a decrease in interest rates, the need of enterprises for capital investments and working capital, as well as debt restructuring.
The banks explain the softening of the creditworthiness for business by the high level of liquidity, increased competition with other banks, as well as improved expectations regarding the overall economic activity and the development of certain industries, primarily for SMEs.
According to the survey, almost a quarter of the surveyed respondents noted an increase in the level of approval of applications for business loans and easing requirements for the size of the loan.
It is indicated that 92% of financial institutions rated the debt burden of household borrowers as average, and more than 80% of financial institutions also rated the debt burden of corporate borrowers.
The survey was conducted from March 19 to April 9, 2021 among credit managers of 23 banks, whose share in the total assets of the banking system of Ukraine is 88%.
