Banking loans, deposits down in January

Banking sector deposits in Ukraine declined 0.5% mom in January, according to data published Friday by the National Bank. Corporate facilities were down 5.2% mom while retail deposits continued to grow strongly, +2.4% mom, even though interest rates decreased (- 2.6 pp mom to 7.0%). Total loans were down 0.8% mom, falling in both the corporate and retail segments.

Ukraine banking sector statistics, January 2012

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     USD bln, stock     Jan.2012    mom    yoy

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Total loans                   98.5        -0.8%    8.3%

corporate loans            74.1        -0.8%   13.5%

retail loans                  24.4         -0.6%   -4.9%

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Total deposits              60.9         -0.5%  14.4%

corporate deposits       21.6         -5.2%  17.1%

retail deposits             39.4          2.4%  12.9%

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Source: National Bank of Ukraine

Olena Zuikova: The banking system’s weak January statistics confirm our view that lending will remain muted this year – we project loans to increase just 5% yoy in 2012, vs. 9% yoy in 2011. We also believe deposit growth will slow this year, to +11% yoy in 2012, vs. 17% in 2011 as economic activity cools. On a positive note, we project the system’s Loan-to-Deposit ratio to decline 9 pp to 153% in 2012, decreasing dependence on external funding.