Growth of individual deposits resumes in February - NBU head Pyshnyi

The head of the National Bank of Ukraine (NBU), Andrii Pyshnyi, reported that the growth of individual deposits resumed in February.

He announced this on Facebook, Ukrainian News Agency reports.

According to his data, the growth of hryvnia funds of individuals in bank accounts continued throughout the year: by 7.3% for the quarter and by 20.5% for the year.

The annual rate of growth of retail time deposits has become a record-breaking for more than a decade - 37.2%.

"At the beginning of 2024, we saw an absolutely predictable seasonal picture with outflows of funds from the accounts of individuals. But already in February, growth resumed, so there are no threats to the stability of bank funding," Andrii Pyshnyi wrote.

The head of the NBU noted that the level of dollarization of deposits decreased for the sixth quarter in a row (to 31.5%) due to the more active growth of hryvnia funds.

Lending grew in all segments.

Corporate lending demonstrated such dynamics that almost compensated for the fall at the beginning of 2023: -0.7% for the year.

Volumes of hryvnia loans to SMEs grew the fastest: +6.8% q/q and +12.4% y/y. Now these loans make up 57% of the business's net hryvnia loan portfolio.

The quality of the loan portfolio normalized.

The level of defaults decreased in all segments.

The share of NPLs at the end of the year decreased to 37.4%: by 0.8% pp for 2023.

The main driver of lending was state programs.

As Ukrainian News Agency earlier reported, Danylo Hetmantsev, a member of the Verkhovna Rada from the Servant of the People faction, head of the parliamentary committee on finance, tax and customs policy, believes that the reduction of bank deposits in hryvnia in the first month of the year is a seasonal phenomenon associated with peak calculations in December.

In particular, this trend was observed in nine out of the last ten years.

Although, of course, each year has its own specifics, as it was, for example, at the beginning of 2015 or 2022.

However, the MP admits that a certain negative effect could be related to the provisions of the bill on mobilization (No. 10449).

According to him, the norms of the bill, which provide for the blocking of bank accounts, will not be supported.