Assessment of the Current State of Credit Activity of Banks of Ukraine

Abstract

The article assesses the current state of lending activities of Ukrainian banks in 2016-2020. The essence of credit activity of commercial banks and its influence on economic development is determined. It was found that bank lending during 2020 is not successful, unfortunately, the decrease in loans issued by banks can be traced in almost all sectors of the economy. The results of the analysis show that in the credit market there is a decrease in total loans, but at the same time also decreases the share of non-performing loans in the portfolios of banking institutions. The number of banks and their regional branches in Ukraine is constantly declining, ie insolvent institutions are leaving the financial market. Despite the gradual reduction of the NBU discount rate, the decline in the cost of loans to customers, especially for households, is much slower. In particular, cheaper deposits lead to a reduction in demand for this type of banking product, but the reduction in deposit rates is recorded only against the hryvnia and the dollar - rates on deposits in euros, by contrast, are growing. The study found that the relative credit performance of banks has a positive upward trend, which in the future will lead to a gradual reduction of credit risk and increase the efficiency of loan portfolio management. The main goal of any banking institution is to maximize profits, which are mainly formed through the issuance of new loans and constant monitoring of existing ones. The results of the analysis of banks' lending activities in Ukraine showed that the banking sector has certain shortcomings and needs to significantly improve the lending activities of banking institutions.