Consortium lending and collaboration between banks with public and private capital create additional incentives for lending growth – V. Mudryi about trends in the economy
Despite the war in Ukraine, bank lending to businesses is growing, consortium lending is picking up, but the issue of war risk insurance is in a "suspended" state. About trends and challenges in the economy in general and the banking industry in particular, spoke Chairman of the Board of the Independent Association of Banks of Ukraine and CEO of OTP BANK Ukraine Volodymyr Mudryi during the conference “Finance for Business During War 2.0”.
“This year, new areas of work have begun to emerge that no one was talking about last year. For example, consortium lending, which allows financing large-scale infrastructure projects. We see banks with private and public capital joining forces to finance initiatives aimed at developing the economy. I believe that the banking sector and business should look for new areas for joint work. This will allow banks to refine their internal programs in accordance with the current needs of business, and entrepreneurs to understand which ideas can receive financing from banks today”, - noted V. Mudryi.
He emphasized that bank lending to businesses is growing in Ukraine, in particular, in the first quarter of 2025, the hryvnia corporate portfolio grew by 9.5%, and year-on-year growth was 28.4%. At the same time, there are a large number of state programs for financing SMEs, in particular the state program "Affordable Loans 5-7-9%", compensation for lending for domestically produced machinery and equipment. The share of total loans to small and medium-sized businesses in the banking system as a whole has already exceeded 60%.
"At the same time, other indicators are worrying, which currently remain quite low. According to the results of 2024, the bank's loan portfolio accounted for only 23% of total assets. And if we take it to GDP, the total loan portfolio is only 19%. For comparison, in Poland this indicator is 33%. That is, the potential for growth is quite large," emphasized V. Mudryi.
Separately, V. Mudryi drew attention to the challenges common to business and banks. "Unfortunately, no concrete result has been achieved in the year on the issue of insurance of war risks. The law is still under consideration by the people's deputies. We also do not see an increase in financing programs from international partners," the head of OTP BANK emphasized.
To remind, recently S&P Global has upgraded the ratings of OTP Bank from BBB-/A-3 to BBB/A-2. The bank's rating is now better than the sovereign credit rating of the Hungary.
OTP Group is the 4th most stress-resilient banking group in Europe, based on the European Banking Authority’s European banking stress test 2023. Also OTP Group leads The Banker’s 2023 and 2024 Top 100 CEE banks ranking.
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Public Joint Stock Company OTP Bank is a subsidiary of OTP Bank, which is the largest independent Central-Eastern-European banking group. JSC OTP Bank is one of the largest domestic banks, a recognized leader in the financial sector of Ukraine. The Bank provides a full range of financial services to corporate and private customers, as well as to small and medium enterprises. The bank entered the Ukrainian market in 1998, and since then it enjoys a staunch reputation of socially responsible, reliable and stable institution providing its consumers with services of European quality standard.
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