Share of non-performing loans in banks decreases in December to lowest level in more than 15 years

In December, the share of non-performing loans fell to a historically low level in more than 15 years (13.9%).

This is stated in the report of the NBU, the Ukrainian News agency reports.

It is noted that the share of defaults of corporate borrowers on hryvnia loans remained below 3%, the average figure before the full-scale invasion.

At the same time, banks' liabilities grew by 12.3% in the fourth quarter and by 16.1% for the year due to the inflow of funds from businesses and households. The acceleration in the growth of business funds in the last quarter repeated the trend of previous years.

The share of term deposits remained almost unchanged at 33.8%, while the level of dollarization of retail deposits decreased to 33.2% (this trend continues for the third quarter in a row).

Market rates on hryvnia loans to businesses temporarily increased in November, but in December they dropped to 15.2% per annum. This is only 0.5 percentage points higher than at the beginning of the year. During the quarter, interest rates on loans to households increased by 1.3 percentage points to 28.7% per annum.

As the Ukrainian News agency earlier reported, on the eve of russia's full-scale invasion of Ukraine, the share of NPLs in Ukrainian banks began to decline: from 55% in 2018 to 27% as of March 1, 2022.

PrivatBank had previously written off assets related to its former owners.

It is noted that the net carrying amount of these assets was zero.

As a result of this derecognition, the share of non-performing assets in the total portfolio decreased from 59.4% to 10%.