Banks record inflow of client funds and expect this trend to continue – NBU survey

The volume of household and business funds in banks increased significantly in the second quarter, and banks expect further growth in the next quarter.

This is evidenced by the results of the quarterly Funding Survey of the National Bank of Ukraine (NBU), the Ukrainian News agency reports.

In the second quarter, the amount of funds of both households and corporations, as well as wholesale funding, increased, the latter for the third consecutive quarter, mainly in individual large banks.

Financial institutions expect further growth in the volume of household and business funds in the third quarter. In contrast, in their opinion, the volume of wholesale funding will decrease somewhat.

Some large financial institutions hope to receive wholesale funding, in particular funding for recovery projects from the EU and international financial organizations, already in the third quarter.

The average cost of funding in the II quarter decreased for the fourth quarter in a row.

The largest share of respondents in the entire history of surveys from the II quarter of 2021 reported a decrease in cost.

The cost of wholesale borrowings also slightly decreased for the first time in three quarters.

Almost all banks expect a further decrease in the cost of deposits for households and corporations and the cost of wholesale funding in the third quarter.

The share of funding in foreign currency decreased in the second quarter.

A significant proportion of respondents expect the continuation of this trend in the third quarter.

Funding duration slightly decreased for the third quarter in a row. At the same time, fewer financial institutions reported this in the second quarter.

According to banks, this trend will continue in the next 12 months.

About 90% of respondents noted that the total volume of banks' capital has increased over the past 12 months.

Three-quarters of respondents expect this trend to continue in the next 12 months.

Profitability remains the determining factor for the increase in the amount of capital in the near future from the third quarter of 2022.

For the third quarter in a row, respondents reported a decrease in the cost of capital over the past 12 months.

Banks expect the cost of capital to continue to decline.

The bank funding survey was conducted from June 17 to July 8, 2024, among bank managers responsible for managing liabilities.

Answers were provided by 26 financial institutions, their share in the total assets of the banking system is 96%.

As the Ukrainian News agency earlier reported, the results of the survey reflect the opinion of the respondents. They are not estimates or forecasts of the NBU.