Banks expect an increase in lending to households and businesses over the next year, as well as an improvement in the quality of the loan portfolio. This is evidenced by a recent survey of banks, the NBU reports, UNN writes.
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"Banks expect an increase in lending to businesses and households over the next 12 months and, for the first time since the fourth quarter of 2021, predict an improvement in the quality of the loan portfolio," the NBU said in a statement citing the survey results.
The following trends are also reported to be observed:
- Demand for both corporate and retail loans increased. Businesses are most interested in SME loans, long-term and hryvnia loans. Financial institutions expect an increase in demand for all types of business loans in the second quarter.
- Households' demand for loans was boosted by better consumer sentiment. Banks continue to expect growth in household demand for consumer loans, while demand for mortgages will not change.
- The debt burden of businesses is assessed as medium, and that of households as low. The approval rate for business loans declined overall for the first time in 12 months, while the approval rate for SME loans increased for the fourth consecutive quarter. The approval rate for households increased only for mortgages due to some relaxation of collateral requirements.
- Banks tightened credit standards for mortgage loans, while continuing to ease standards for consumer loans for the fifth consecutive quarter. In the second quarter, banks plan to ease lending standards for households, mainly for mortgages.
- Banks reported an increase in credit risk and, to some extent, in foreign exchange risk. In the second quarter, they expect an increase in interest rate and credit risks.