Net assets of banks are growing: what factors support this trend
18 November 22:46
Net assets of banks showed moderate but steady growth in the third quarter: 2.7% quarter-on-quarter and 13.3% year-on-year. This was reported by "Komersant Ukrainian" with reference to the November 2025 Banking Sector Review by the National Bank of Ukraine (NBU).
For three quarters in a row, the sector’s growth has been driven primarily by active lending: in the third quarter, net loans increased by 8.0% qoq and 26.5% yoy. At the same time, there were changes in the structure of banks’ investment portfolios. For the first time since the beginning of the year, the banks’ own portfolio of domestic government bonds increased significantly, while the volume of NBU certificates of deposit decreased.
Investment dynamics: Government bonds instead of certificates of deposit
In response to the government’s increased supply of government securities, banks increased their holdings of domestic government bonds: 5.6% over the quarter and 12.6% over the year. This indicates a return of interest in government securities as a relatively safe instrument with acceptable yields. In contrast, the volume of NBU certificates of deposit decreased by 7.8% in the third quarter (although the figure still grew by 7.0% yoy in annual terms). For the market, this is a signal of a gradual rotation of liquidity from central bank instruments to more market-oriented assets.
Hryvnia loans to businesses: growth with new drivers
Net hryvnia loans to businesses remain the main driver of loan portfolio growth: 7.9% qoq and accelerating annual growth to 30.8% yoy. This is partly due to the increase in debt of some state-owned companies, especially in the energy sector. However, even excluding loans to state-owned companies, the business loan portfolio grew by 6.6% quarter-on-quarter and 27.0% year-on-year, reflecting stronger demand from private clients.
Loans to small and medium-sized businesses (SMEs) also demonstrated dynamics: 7.7% qoq and 32.5% yoy. However, the share of SMEs in the total portfolio slightly decreased to 60.8% in Q3, indicating a more intensive growth rate of loans to large borrowers.
Return of interest in foreign currency lending
The portfolio of foreign currency loans showed a noticeable recovery: 8.3% qoq and 11.8% yoy. The lion’s share of the growth came from large and medium-sized companies in the agricultural, food, and energy sectors. This means that export-oriented industries and those companies that estimate their revenues in foreign currency are more actively using external or foreign currency-denominated domestic lending to expand production and renew capital.
Banking groups: who leads in lending
All groups of banks grew their loan portfolios, with state-owned banks growing the fastest: 8.4% qoq and 36.3% yoy. The main driver for state-owned banks was loans to state-owned corporations, primarily in the energy sector. If we exclude loans to state-owned companies, the foreign bank sector became the leader in terms of growth: 8.2% qoq and 26.2% yoy. This confirms that foreign lenders are actively restoring their positions in the corporate lending market.
Term structure: long-term investments are gaining weight
Loans with a maturity of up to three years grew by 8.8% qoq and 23.2% yoy. At the same time, long-term loans for capital investments grew faster – 59.8% yoy (6.7% qoq). The share of long-term loans in the net hryvnia portfolio of businesses increased by 4.6 percentage points to 25.5% over the year. This is an important sign: businesses are increasingly investing in modernization and expansion, considering bank lending as a source of financing for capital projects.
Sectors with the highest demand for loans
In the third quarter, the most active demand was in wholesale trade, financial services, and machine building. On an annualized basis, agriculture, trade, machine building, energy, and food processing were the growth leaders. This picture is in line with the overall economic priorities: the need to modernize production chains, increase exports, and energy transformation.
Available programs: a shift towards market-based lending
An indicator that growth is occurring mainly outside the scope of government support: net hryvnia loans under the Affordable Loans 5-7-9% program grew by only 1.5%, while outside it – by 11.4%. Since the beginning of the year, the share of subsidized loans in the hryvnia portfolio of businesses has decreased by 5.4 percentage points to 27.4%. At the same time, the volume of preferential loans for the defense industry reached about UAH 5 billion.
Read also: Financial architecture of Ukraine in 2025: bank cards are replacing cash
Retail lending: growth, but with a risk lever
Net hryvnia loans to households accelerated to 8.5% qoq, although the annualized rate slowed to 32.9%. The portfolio continues to be dominated by unsecured loans. Private banks and PrivatBank were the leaders in terms of growth (9.7% and 6.3% qoq, respectively), with their total share in the portfolio rising to 55.0%. Mortgage lending picked up (10.7% qoq), reaching 13.4% of the total portfolio, mainly due to eHouse programs. Car lending also accelerated (9.5% qoq).
Watch us on YouTube: important topics – without censorship
Portfolio quality improves – NPLs fall
Improvement in loan portfolio quality continued, with the share of non-performing loans (NPLs) falling by 2.0 pp over the quarter and by 7.3 pp over the year to 25.0%, the lowest level in a decade. NPLs of businesses declined faster than those of individuals (32.5% vs. 12.8%). Corporate defaults on hryvnia loans remained below 3%, which is better than before the crisis. The main factors behind the decline in NPLs were the growth of new high-quality loans and debt write-offs, especially in state-owned and foreign banks.
The third quarter demonstrates that the banking sector is regaining its role as a catalyst for economic activity: loans are growing both in volume and quality. However, this growth needs to be balanced: credit risks need to be controlled while ensuring affordable financing for investment. The outlook depends on macroeconomic stability, public debt management policies, and further dynamics of demand in key industries.
Read us on Telegram: important topics – without censorship
