The net hryvnia loans provided to businesses are growing at a rate of 26% per annum, and those issued to micro, small and medium-sized enterprises – 30%, which is one of the highest results in the past decade.
The relevant statement was made by Governor of the National Bank of Ukraine (NBU) Andriy Pyshnyy, answering a question from Ukrinform during a monetary briefing about the risks of banks placing excessive funds in NBU certificates of deposit instead of lending to the real sector.
“The loan portfolio has been growing at an increasingly rapid pace for two years in a row. The net hryvnia loans provided to businesses are currently growing at a rate of 26% per annum; micro, small and medium-sized enterprises – 30%. Last time we saw a similar pace was prior to the full-scale invasion, immediately after the Covid-19 pandemic. This is actually the highest growth rate in the past decade, despite the ongoing war,” Pyshnyy told.
In his words, at the end of 2023, banks expected the business loan portfolio to increase by approximately 10%. Meanwhile, at the end of February 2024, the growth in the net loan portfolio hit about 28.7%, despite the increase in the NBU’s key policy rate.
“In the public sphere, lending dynamics are often assessed using an indicator, such as gross credit. This is to some extent a wrong approach, because it does not take into account a whole range of important elements. When we talk about the gross portfolio, this volume includes non-performing loans. For example, even the loan portfolio of PrivatBank’s former shareholders,” Pyshnyy explained.
Therefore, assessing the penetration of loans and their ratio to GDP through the gross loan portfolio indicator does not provide a correct understanding of the dynamics and state of affairs. It is more appropriate to use the concept of growth in the net hryvnia loan portfolio that the NBU expects to see in 2025.
As emphasized by Pyshnyy, the structure of the loan portfolio is also changing. A quarter now consists of loans that borrowers take out for investment purposes for a period of more than three years.
Following the NBU’s forecast and a survey of bank managers, in 2025, the growth rate of the net hryvnia business loan portfolio will be around the same level as last year, i.e. at least 25%.
A reminder that Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy Danylo Hetmantsev stated earlier that, in the first quarter of 2025, the loan portfolio of Ukrainian banks showed a critically low growth rate of just 3.3%.
Source: Ukrainian National News Agency – English / Digpu NewsTex