Banks noted increase in demand for consumer loans for the first time since beginning of war - lending survey

For the first time since the beginning of the full-scale war, banks have noted an increase in demand for consumer loans and in the number of approved business loan applications.

This is evidenced by the results of a quarterly survey of banks on lending conditions, Ukrainian News Agency reports.

The volume of both business and household loans will continue to grow in the next four quarters.

Financial institutions continue to expect a deterioration in the quality of the business credit portfolio, but the share of respondents with negative expectations has been gradually decreasing since the start of the full-scale war.

According to the respondents, the quality of the portfolio of households will not change.

The demand for corporate loans increased slightly in the second quarter, mainly for hryvnia loans for small and medium-sized businesses: it is supported by the need for working capital and capital investments.

Banks predict an increase in demand for business loans in the third quarter.

Demand for mortgages is growing for the third quarter in a row, and for consumer loans - for the first time since the fourth quarter of 2021.

First of all, the demand of households for loans is stimulated by lower interest rates.

In the third quarter, banks continue to expect an increase in the population's demand for loans. Credit standards for business were slightly increased in the second quarter.

Most of them are for long-term and currency loans. In the third quarter, for the first time since the beginning of the full-scale invasion of Russia, banks plan to relax corporate lending standards for SMEs, short-term and hryvnia loans.

Instead, financial institutions expect a further increase in credit standards for long-term and foreign currency loans.

For the first time since the start of full-scale war, the survey recorded an increase in the number of approved business loan applications.

However, for loans to large enterprises, the indicator will continue to decrease.

Financial institutions eased household lending standards for the second quarter in a row and plan to ease approval standards for both mortgage and consumer loans in the third quarter.

The number of approved applications for public loans continues to grow.

Respondents reported an increase in credit risk and expect it to increase in the third quarter.

The "survey on bank lending conditions" was conducted from June 13 to July 7, 2023 among bank credit managers.

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

As Ukrainian News Agency earlier reported, the results of the survey reflect the opinion of the respondents and are not estimates or forecasts of the National Bank of Ukraine.