The pace of growth of retail lending in Ukraine in 2019 could be 30-40%, according to bankers polled by Interfax-Ukraine. “In 2019, consumer loans will remain the main component and driver of growth in the loan portfolio of banks and the main direction of retail lending: they now form more than 80% of all retail loans in hryvnias. The growth rate of retail loans may reach 40%, the most dynamic growth will remain in short term loan segments – up to one year, as well as from one to five years,”, Deputy Board Chairman, Director for Retail Business at Credit Dnepr Bank Oleh Pakhomov said.
Pakhomov said that in 2019, GDP growth is expected to slow down to 3% from 3.2-3.5% in 2018, while the consumer segment will be again the driver rather than the real economic sector. At the same time, inflationary dynamics forces the NBU to maintain a tight monetary policy, raising the refinancing rate and thus increasing the cost of the hryvnia resource in the market. In these circumstances, banks will still prefer to place part of their resources not in credit programs, but in risk-free operations with deposit certificates and government bonds.
Board Chairperson of IBOX Bank Halyna Kheilo said that the growth rate of lending to the population in 2019 could reach 30%.
Head of the RwS Bank’s lending department Natalia Holub said that retail lending will grow by 30% next year.
“Given that the average loan term for retail products is two years and the outlined pace, the growth of the retail loan portfolio in 2019 will be 12-15%, and the volume of retail lending will grow by 30%,” she said.
Deputy Board Chairman for Retail Business at FUIB Sebastian Rubaj said that the portfolio of retail lending to banks will grow by approximately 15%.
Director of Retail Banking at Ukrgasbank Oleh Kliapko said that in 2019, the focus of retail lending will shift to high-margin products with short turnarounds. Priority areas will be cash loans and credit cards.
Bankers believe that retail loan rates in 2019 will remain high.
Ukraine’s Verkhovna Rada on Tuesday passed at second reading bill No. 6027-d amending some Ukrainian laws regarding resumption of lending. According to a posting on the website of the National Bank of Ukraine (NBU), the adoption of the document would ensure the solving of existing problems creating systemic obstacles for resumption of lending to the economy and bringing additional risks for operations of national and foreign investors.
“In the conditions of the enhanced protection of rights of creditors banks would be able to announce more balanced requirements to borrowers. This, of course, would help to spread lending, cut the cost of borrowed funds and ease the access to bank products for economic entities and natural persons,” the NBU said.
Verkhovna Rada in the middle of May 2018 passed at repeated first reading bill No. 6027-d for resumption of lending. During the finalization of the bill, the requirement was clarified, in particular, regarding the banks’ access to the public register of civil status assets. This access is proposed to be provided with the written consent of the individual concerned.
In addition, the creditor’s deadline for submission of claims to heirs from the date of receipt of a certificate of inheritance was reduced from 12 to 6 months. In this case, this rule excludes the situation when the bank did not know and could not know that the moment the inheritance becomes available.
Lending to small and medium-sized enterprises (SME) becomes a driver of the banking market, Deputy Board Chairperson of the bank Globus Olena Dmitriyeva said at a roundtable organized by the Financial Club in Kyiv on Tuesday. “SME becomes a driver of lending, as in this segment the quality of the portfolio is twice better than the quality of portfolios of corporate clients. 75% of banks started lending to SME, and this is a good trend,” she said. Dmitriyeva said that at present, banks are trying to relax the decision making processes for lending to SME.
Head of the SME department at Piraeus Bank Svitlana Bazhenova said that from October 2017 through February 2018, the SME loan portfolio in Ukraine grew by UAH 25 billion.
“The growth of SME share of total portfolio of loans issued to businesses by Ukrainian banks grew from 51% to 52% of the total loan portfolio. The growth was mainly generated by loans to SME,” she said. Deputy Director of the SME department at Ukrgasbank Semen Puskai pointed out the importance of programs to support development of SME.
“We are optimistic about the future of the SME segment, as there are now many assistants in this area. There is the state that implements programs to reduce the cost of loans for agrarians, and we also see the active participation of international financial institutions like the German-Ukrainian Fund, the EIB and IFC. When decentralization began municipalities started joining the project. They cheapen lending rates and support business in their region… To date, the programs signed and declared with the municipalities are quite numerous, but it is necessary that these programs start working as soon as possible and then, there will be cheaper rates,” he said.