The last month of 2020 showed that mortgage and corporate lending have increased and interest rates are at record lows.

📌The National Bank of Ukraine conducted an analysis in the latest Banking Sector Review. What conclusions did we get:

🔸 The statistical indicator indicates that during October, November and December (4th quarter), banking institutions increased the hryvnia loan portfolio of businesses and individuals.
🔸 Low lending rates in the fourth quarter and the resumption of economic activity intensified interest in loans from companies and individuals.
🔸 The leader among lending is mortgage lending. Its volumes have doubled compared to the first half of the year.

Such demand for loans has its consequences👇:

🔹Demand for financial services has left a mark in the form of an increase in operating income of the sector;
🔹Bank settlements to loan reserves doubled during 2020, but remained moderate to the loan portfolio;
🔹This trend is likely to continue throughout 2021, which will slowly reduce the percentage of bank margins.

The main issue remains the proper assessment of credit risks by banks and improving operational efficiency in the context of a gradual reduction in interest margins.