Banking loans, deposits remain weak in May

Макроэкономика 19.06.2012 Banking sector loan growth slowed to 4.0% yoy in May, from 5.3% yoy a month before, the National Bank of Ukraine said yesterday. Retail portfolios continue to shrink (-7.9% yoy in May vs -7.1% in April), while corporate accounts grew 8.3% yoy in May vs 9.9% yoy in April. Deposits decreased 0.8% mom due to a 2.3% mom decline in corporate accounts, which was partly due to companies paying corporate income tax in May. In annual terms, deposit growth remains strong at +11%. Banking sector loans and deposits, USD bln May 2012 mom yoy Total loans 98.9 -0.5% 4.0% corporate loans 75.5 -0.4% 8.3% retail loans 23.5 -0.8% -7.9% Total deposits 62.4 -0.8% 11.0% corporate deposits 20.6 -2.3% 5.6% retail deposits 41.7 0.0% 13.8% Source: NBU Olena Zuikova: May’s data on banks from the NBU supports our view that lending will remain weak this year due to problems with liquidity and a lack of creditworthy borrowers. We see full year loan book growth at 5%. Deposit growth should remain robust at around 11% through end-2012.