Ukrainian Banks Report Increasing Demand for Loans and Easing of Lending Conditions

Banks in Ukraine have recorded a trend of increasing demand for loans among businesses and individuals. According to a survey by the National Bank, further growth in the loan portfolio of domestic corporations and households is expected over the next 12 months. This indicates a gradual improvement in credit activity in the country.

This is reported by AgroReview

Changes in Lending Standards and Expert Predictions

In the first quarter of this year, there was a slight increase in demand for corporate loans, primarily in hryvnias. In the second quarter, respondents predict an increase in demand for all types of business loans, indicating positive dynamics in the lending sector.

As for individuals, demand for loans has also risen. Some large financial institutions reported an increase in demand for mortgage loans, leading to the highest level of positive responses since the beginning of the full-scale invasion. Many respondents expect further growth in demand for mortgages and consumer loans.

“A significant share of respondents expects continued growth in demand for mortgages and consumer loans among the population,” the National Bank notes.

Changes in Lending Standards and Risks

Banks have partially eased lending conditions for short-term loans and hryvnia loans for businesses, and experts predict further easing of these conditions. The approval rate for business applications has remained stable. At the same time, lending standards for mortgage and consumer loans have been decreasing for four consecutive quarters, and further loosening is expected in the next quarter.

The banking sector is witnessing an increase in currency and credit risks, as well as a rise in interest and operational risks. Forecasts indicate that by the second quarter of 2025, all types of risks, except operational, are expected to increase, highlighting the need for caution and enhanced control over the loan portfolio.