Ukrainian banks expect that lending and inflow of deposits continue in 2019, they also count on improvement of the loan portfolio, according to the poll on the conditions of banking lending conducted by the National Bank of Ukraine (NBU). According to a report posted on the central bank’s website, three quarters of the banks surveyed predict growth in corporate loans in 2019, 62% of respondents – the growth of consumer loans.
Some 66% of respondents predict the continuation of the inflow of deposits from the public in 2019, 67% – the inflow of business funds.
“The value of deposits is the highest in the entire history of observations,” the NBU said.
In the fourth quarter of 2018, the demand for loans continued to increase both from the public and business, due to the growing needs of enterprises in funds for capital investment and replenishment of working capital, as well as debt restructuring. At the same time, the business was mainly interested in short-term hryvnia loans.
In the fourth quarter of 2018, banks somewhat increased the standards for approving applications for all types of business loans along with deteriorating expectations, primarily for the exchange rate and economic development, as well as increased collateral risk. However, in the first quarter of 2019, banks plan to slightly relax domestic business lending requirements, especially for loans to small and medium-sized enterprises.
Consumer lending contributed to growth in the retail loan portfolio in the fourth quarter of 2018. The demand for respective loans was linked to an improvement in consumer confidence and a rise in spending on durable goods.
Standards for loans issued to households have not changed.
According to the report, banks, for the first time in five quarters, noted a decrease in liquidity risk.
“Banks expect that credit, currency and operational risks will increase in the first quarter of 2019, liquidity risks will decrease, interest rates will not change,” the NBU said.
The survey was conducted from December 18, 2018 to January 10, 2019 among the loan managers of 61 banks, which share of the total assets of the banking system is 96%. The next survey on bank lending will be about expectations for the second quarter of 2019 and will be published in April.