Page 65 - UKRRptOct23

₴132.9B (11.9% of the total deposits). At the beginning of the year, the total deposits of citizens and private individuals in Ukrainian banks amounted to ₴1.051 trillion. The increase for 2022 was ₴375.9B or 55.6%.
The profitability of consumer hryvnia deposits is falling due to a decrease in the discount rate. Since July 2023, the National Bank of Ukraine has reduced the discount rate twice in a row: from 25% to 22% and then to 20%. Because of this, rates on hryvnia term deposits of individuals have begun to decrease gradually, the NBU noted. It is said that the hryvnia will continue to be attractive for savings. Interest rates on hryvnia deposits and government bonds (OVDP) exceed the current and expected levels of inflation. In addition, the average interest rate on hryvnia time deposits is about 14–15% per annum. After taxation, net return will be about 11-12% per annum, respectively. "The rates for OVDPs, which the population can purchase, are even higher. For example, annual OVDPs are 18-18.5%. Income from them is not taxable," the National Bank added. Note that, according to the NBU's forecast, the discount rate may drop to 18% by the end of the year.
The yield on deposits fell, and loans in the national currency became cheaper. The average rate in August for new consumer hryvnia deposits decreased to 12.2% per annum and for businesses to 13.4%, according to data from the National Bank. At the same time, the average interest rate on currency deposits increased to 1.2% per annum, while for commercial entities, it remained at 0.7%. At the same time, the average interest rate for hryvnia consumer loans decreased to 34.7% per annum in August, and for foreign currency loans, it immediately fell from 4.9% to 1.9%. The average rate of hryvnia business loans issued in August decreased to 19.1%, although it increased to 6.5% for foreign currency loans. In August, commercial deposits decreased by UAH 13.3B to UAH 1.128T, while consumer deposits increased by UAH 10.8B to UAH 977.4B. Banks' total loan portfolios reached UAH 969.6B.
65 UKRAINE Country Report October 2023 www.intellinews.com