Banks Expand Lending While Deposits Decline: How Money Behavior Is Changing in Ukraine
March 2026 showed a trend that does not look accidental. The credit portfolio of banks increased by 2.4% and reached UAH 1.26 trillion, while the volume of deposits decreased by 0.5% to UAH 3.16 trillion. Formally, these are moderate fluctuations, but together they reflect a deeper change in financial behavior.
Time for Action has analyzed how the balance between loans and deposits is shifting in Ukraine’s banking system and what these figures reveal about the behavior of businesses and households.
The key driver of lending growth remains the business sector. Corporate loans rose to UAH 887.8 billion, indicating sustained demand for financing. This is not only about short-term liquidity support, but also about investment needs and working capital replenishment. At the same time, lending to households is also growing to UAH 367.9 billion, confirming steady demand for consumer and mortgage loans. This is an important signal. In a situation of high uncertainty, businesses and households are not reducing activity, but instead are willing to take on financial obligations. Such behavior does not emerge without expectations of future income or at least short-term stability.
Against this backdrop, deposit dynamics appear more restrained. The total volume of funds in banks decreased by UAH 16.1 billion, with declines recorded in both the business and household segments. Corporate deposits fell by 0.3%, while household deposits dropped by 0.6%. It is important that the decrease affected both local currency and foreign currency funds among households, while corporate hryvnia balances even showed slight growth. This does not look like a loss of trust in the banking system. On an annual basis, deposits are growing, which means the system remains stable. However, the short-term decline indicates another trend part of the funds is moving from a savings mode into a usage mode. Money is being spent, invested, or redirected into other instruments. The currency factor also plays a role in this process. The dollar exchange rate rose by 1.4% in March to UAH 43.8 per dollar, influencing the behavior of depositors. Exchange rate fluctuations traditionally prompt businesses and households to reconsider how they store money, which partly explains the reduction in foreign currency deposits.
Looking at the broader picture, annual dynamics show a more complex situation. Household lending has grown significantly, while in the business segment the trend is mixed: a decline in hryvnia loans but growth in foreign currency loans. Deposits in both segments, however, remain higher compared to the previous year. This means short-term changes do not undermine overall stability, but they do demonstrate shifting priorities. At the same time, banks expect further growth in lending. The balance of expectations for business loans has reached its highest level since 2015, and nearly two-thirds of financial institutions plan to expand lending to households. Demand for hryvnia and long-term loans from businesses is rising due to the need to finance investments and working capital. The number of approved applications has been increasing for four consecutive quarters.
In the household segment, the trend is also clear. Demand for consumer loans has been growing steadily since 2023, while mortgage lending has shown stable growth since early 2025. Banks are not only increasing lending volumes, but also easing conditions, including extending loan terms and increasing approved amounts. This indicates that financial institutions assess risks as manageable and are ready to operate with longer horizons. At the same time, debt burden levels remain controlled. For businesses, it is assessed as moderate, and for households as low. This is important, because rapid lending growth without risk control could quickly become a problem. At present, the system demonstrates the ability to balance activity with caution.
Additional confirmation of resilience comes from the quality of the credit portfolio. The share of non-performing loans has decreased to 13.3%, the lowest level in a long period. This indicates that even amid active lending, banks maintain discipline and avoid accumulating critical risks. The financial performance of the sector also remains strong. Net profit of banks reached UAH 126.8 billion in 2025, with state-owned banks generating nearly half of this amount. Return on equity remains high, although slightly lower than before. At the same time, lending rates remain significant: over 15% annually for businesses and nearly 29% for households. This limits excessive expansion but does not stop demand.
Against this background, it is important that banks are already recording an increase in credit, operational, and currency risks. This is a natural response to a more active market. The more loans are issued, the more attention must be paid to portfolio quality and borrower behavior. The overall picture suggests a transition into a new phase. After a prolonged period of caution, the financial system is returning to a more active role in the economy. Money is beginning to circulate faster than it is being accumulated. Businesses use loans to support operations and development, while households use them for consumption and housing. Deposits remain significant, but their dynamics no longer define system behavior as strongly as before. This does not mean risks are disappearing. On the contrary, active lending always requires precise risk management. However, current indicators show something else: the banking sector is not only stable, but is gradually restoring its role as a source of economic financing. The main conclusion is clear. The financial system is shifting from a savings model to a resource utilization model, and this will define its behavior in the near term.
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