Ukrainian banks have enjoyed a notable increase in consumer deposits in May, with a rise of UAH1.4bn (
Individual deposits in Ukrainian banks reached UAH1.0687 trillion as of
Financial analysts attribute this trend to the stabilisation of the banking system and strong financial support from global institutions, which have bolstered confidence among Ukrainian bank account holders.
According to
In addition to the macroeconomic stabilisation, rising interest rates have also drawn more money into banks. Deposits in
In May, the average interest rates on new hryvnia consumer deposits increased from 11.6% per annum to 11.9%.
The banks' deposit portfolios experienced a 1.7% growth, reaching UAH2.06 trillion in May.
During this period, citizens increased their investments in hryvnias by 2% but reduced their foreign currency deposits by 3.5%.
The NBU has been working to enhance the attractiveness of hryvnia deposits since last summer. As a result, many banks now offer interest rates of 15-20% per annum for deposits in national currency with a term of three months or longer. Such profitability enables depositors to safeguard their savings against inflationary depreciation.
After a disastrous 2022, Ukraine’s banking sector has returned to profit and had a very strong January, with profits (chart) well ahead of any result in the last five years. Profits since then have weakened somewhat but remain ahead of previous years, resulting in very strong profits for the first quarter on a cumulative basis as well. (chart)
Rising non-performing loans (NPLs) have been a problem but by May the growth in NPLs had stabilised and bankers are hoping they will begin to fall again in the second half of this year. (chart)
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