Banks expect rise in price of household deposits, reduction in cost of business funds and capital - NBU survey
Banks expect an increase in liabilities in the third quarter due to the receipt of funds from the population and business, and only 14% of respondents plan to attract wholesale funding in the future - this is the lowest indicator for the entire period of the survey launched in 2021, the National Bank said.
Nearly all financial institutions reported an increase in customer funds in the second quarter, driven by higher deposit interest rates, while wholesale funding has declined since the start of the war, according to its data.
The National Bank added that regulatory requirements, proposals from businesses and intentions of financial institutions to change the funding structure were additional factors for the growth of attracted funds from clients.
The survey results state that, according to banks, funding has become more expensive in the second quarter: a record 95% of respondents noted an increase in household deposit rates, although the share of answers about the increase in the cost of business deposits is smaller and decreased during the quarter.
"Banks mainly expect a further increase in the cost of household deposits in the third quarter, at the same time, business funds may become cheaper. The price of wholesale funding will increase slightly," the regulator said.
It is clarified that the share of funding in foreign currency has decreased, at the same time, a significant part of the respondents expects it to decrease in the future.
It is also indicated that funding maturity has increased for the second quarter in a row, and banks expect this trend to continue in the next 12 months.
In addition, for the second quarter in a row, 80% of respondents report an increase in their total capital over the past 12 months, and almost three-quarters of respondents expect further growth.
The Bank Funding Survey was conducted from June 13 to July 7, 2023 among bank managers responsible for liability management. Answers were provided by 26 financial institutions of Ukraine. Their share in the total assets of the banking system is 96%.