Banks expect decrease in cost of borrowing for the first time since Q3 2024 - NBU survey

For the first time since Q3 2024, banks have announced their expectations of a decrease in the cost of borrowing in general.

This is evidenced by the results of a quarterly survey on bank funding, the Ukrainian News agency reports.

Banks in general do not expect significant changes in the volume of customer funds in Q1 2026: the volume of funding from the population and business will decrease slightly, and the volume of wholesale funding will increase.

As before, financial institutions expect funding for recovery projects, in particular from the EU.

Another factor in attracting wholesale funding is investor interest.

The average cost of funding overall increased during 2025.

In Q4, the vast majority of banks reported an increase in the cost of customer funds, to a greater extent - for businesses.

The cost of wholesale funds did not change.

For the first time since Q3 2024, banks announced expectations of a decrease in the cost of borrowing in general.

Only a few large financial institutions expected an increase in the cost of attracted funds from the population.

The share of funding in foreign currency has decreased for three consecutive quarters, and banks expect this trend to continue.

The current round of the survey recorded an increase in funding maturity, and financial institutions reported an expected increase in maturity over the next 12 months.

The vast majority of banks reported an increase in capital over the past 12 months and expected this trend to continue throughout 2026.

Banks once again named profitability as a key factor in increasing capital in the future, but changes in regulatory requirements, macroeconomic conditions, and risk appetite restrained its growth.

Banks with a share of assets in the system of 14% reported shareholders' intentions to increase capital during 2026.

Throughout 2025, respondents reported an increase in the cost of capital, but in the 4th quarter, a record share of banks predicted a decrease in the cost of capital in the future.

The survey on bank funding was conducted from December 12, 2025 to January 9, 2026 among bank managers responsible for liability management.

Responses were provided by 26 financial institutions with a share of 96% in the total assets of the banking system.

The survey results reflect the opinions of respondents and are not estimates or forecasts of the National Bank.

As the Ukrainian News agency earlier reported, banks expect some deterioration in the quality of household loan portfolios in 2027.