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%.
