Banking loans, deposits remain weak in May

Banking sector loan growth slowed to 4.0% yoy in May, from 5.3% yoy a month before, the National Bank of Ukraine said yesterday. Retail portfolios continue to shrink (-7.9% yoy in May vs -7.1% in April), while corporate accounts grew 8.3% yoy in May vs 9.9% yoy in April. Deposits decreased 0.8% mom due to a 2.3% mom decline in corporate accounts, which was partly due to companies paying corporate income tax in May. In annual terms, deposit growth remains strong at +11%.

Banking sector loans and deposits, USD bln
                               May 2012    mom    yoy
Total loans                98.9          -0.5%   4.0%
 corporate loans         75.5         -0.4%   8.3%
 retail loans               23.5          -0.8%  -7.9%
Total deposits            62.4          -0.8%  11.0%
 corporate deposits    20.6          -2.3%   5.6%
 retail deposits          41.7           0.0%  13.8%
Source: NBU

Olena Zuikova: May’s data on banks from the NBU supports our view that lending will remain weak this year due to problems with liquidity and a lack of creditworthy borrowers. We see full year loan book growth at 5%. Deposit growth should remain robust at around 11% through end-2012.