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Bank deposits fall 2.1% mom, loans inch 0.7% lower in November

Bank deposits fall 2.1% mom, loans inch 0.7% lower in November

12 December 2011

Banking sector deposits dropped by 2.1% mom in November, the biggest monthly decline this year on considerable outflow of corporate deposits (down 5.2% mom). Both UAH and FX accounts declined, even though deposit rates continued to rise as liquidity in the sector remained tough. Lending was down 0.7% mom last month: corporate loans declined 0.6% mom while YTD growth remained strong at +14.4%. On the retail side, total loans fell 1.2% mom on a shrinking FX portfolio and despite a strong 2.6% increase in UAH facilities. Vitaliy Vavryshchuk: We attribute the decline in corporate deposits mainly to legal entities withdrawing cash to pay 3Q corporate income tax obligations due in November. Growing administrative controls over business and related capital outflows might also have contributed to the drop in corporate facilities last month. On a positive note, virtually stable retail deposits point to weak UAH depreciation expectations among the population last month. We see deposits growing steadily in the coming months while the lending recovery will remain extremely weak and focused in the corporate segment only.

Banking sector loans and deposits, USD bln

                        Nov.2011    mom    YTD    yoy
—————————————————–
Loans                            41.2  -0.7%   9.6%   9.1%
  incl. corporate loans      26.5  -0.6%  14.4%  14.7%
  incl. retail loans            14.7  -1.2%  -2.5%  -4.8%
Deposits                        25.5  -2.1%  12.3%  16.3%
  incl. corporate deposits   6.8  -5.2%  14.4%  19.6%
  incl. retail deposits        18.6  -0.3%  11.2%  14.6%
—————————————————–

Source: National Bank of Ukraine

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