Banks remain optimistic about the prospects for lending and plan to further grow their loan portfolios and ease credit standards amid increased competition. This is evidenced by the results of the Survey on Bank Lending Conditions for the third quarter, the NBU reports.
According to the results, financial institutions expect a significant increase in business lending – the balance of responses has reached its highest level since 2015, when the observations were made. Corporate demand for loans increased moderately in the third quarter, and banks expect it to increase further in the coming period for all types of business loans, except foreign currency loans.
Demand for loans from the population also increased, and respondents expect this trend to continue. According to the banks surveyed, the debt burden of enterprises remains moderate, and the level of household debt is low.
During the third quarter, credit standards for businesses generally eased, mainly by large banks for long-term loans and loans to large companies. Financial institutions plan to continue to gradually ease conditions, primarily for small and medium-sized businesses, as well as for short-term loans.
As for the consumer segment, banks also simplified the requirements for granting consumer loans, while the conditions for mortgage lending remained unchanged. Further easing of standards is expected for both consumer loans and mortgages in the next quarter.
The level of approval of business loan applications increased, while in the household sector the increase was recorded mainly in mortgage lending, and for consumer loans the indicator remained almost unchanged.
According to banks’ estimates, operational and credit risks increased during the quarter. At the same time, for the first time since the beginning of 2021, a decrease in currency risk was observed. In the next quarter, financiers predict an increase in operational and credit risks, as well as a certain increase in currency risk, while liquidity risk, on the contrary, may decrease.
