Banking Keeps Moving Forward: Loans 20% Up YTD, Deposits Grow 12%

In May Ukraine’s banking sector kept up its strong pace: aggregate loans increased by 4.1% mom to USD 58.4 bln and 20.2% ytd – the highest 5M growth since 2002. Consumer lending continued to be the main growth driver. Loans to individuals were up 5.9% mom (+28.6% ytd) while corporate loans grew 3.2% mom (+16.2% ytd). The banks’ deposit base also continued to expand: total deposits rose 2.9% mom (12.1% ytd). In the meanwhile, average interest spreads decreased from 6.2 pp to 5.7 pp in LCY, and from 4.7 pp to 4.6 pp in FCY. Lending and deposit interest rates slid down in May: the weighted average LCY loan rates decreased from 14.1% to 13.4% and the foreign currency rate decreased from 11.7% to 11.4%. LCY deposit rates went down slightly to 7.7% from 7.9%, while foreign currency deposits became 0.2 pp cheaper, reaching 6.8%.