Ukrainian banks note a significant reduction in the demand of the population and business for loans in the first quarter of 2020, and also predict a decline in this indicator in the next 12 months, according to the results of the Bank Lending survey conducted by the National Bank of Ukraine (NBU), which is posted on the regulator's website.

According to the survey, banks also expect the next 12 months a significant deterioration in the quality of the loan portfolio, increased risks, primarily credit, and a slowdown in the flow of customer funds.

As for loans issued to business in January-March 2020, the largest drop was observed for long-term loans and for loans in foreign currency, while the demand for short-term loans was slowly growing.

In the first quarter, business demand factors changed significantly, in particular, the influence of interest rates decreased, while requests for debt restructuring peaked from the third quarter of 2017. "It is this factor and the need for replenishment of stocks and working capital that are decisive for the credit demand of large enterprises," the NBU said.

At the same time, respondents said that there was a significant decrease in the demand of small and medium-sized enterprises (SMEs) for loans to replenish working capital and for capital investments.