Demand for Mortgages and Business Loans is Growing
Ukrainian banks expect an increase in lending to businesses and households over the next 12 months, although estimates have become more cautious. The balance of responses regarding the increase in loan portfolios has dropped to its lowest level since the second quarter of 2023. In the second quarter, banks recorded a rise in demand for all types of loans, and further increases are expected in the third quarter, particularly for long-term loans. Household demand for loans has also increased, with a focus on mortgages. Credit standards for the corporate sector have remained unchanged, but in the third quarter, banks plan to ease conditions for small and medium-sized enterprises (SMEs). Some banks have already reported an increase in approved applications from SMEs. For households, the requirements for mortgage and consumer loans have become less strict, the approval rate for applications has increased, and interest rates have decreased. The debt burden for enterprises is assessed as average, while for households it is considered low. At the same time, the second quarter saw an increase in credit, currency risks, and liquidity risk. Further strengthening of currency and credit risk is expected in the next quarter. Agriculture remains a key recipient of bank loans, and the volume of long-term business loans has increased by 45.3% year-on-year.
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