The National Bank of Ukraine (NBU) is concerned about the rapid growth of unsecured consumer loans and expects more than 10% of non-performing loans (NPL) in this segment due to the “coronavirus” crisis, First Deputy Governor of the NBU Kateryna Rozhkova has said.
“In several previous reports, we noted that we were worried about the very fast growth rate of unsecured consumer lending. This crisis clearly showed us that our concerns were more than justified. We expect that over 10% of unsecured consumer loans can become non-performing as a result of this crisis,” she said during an online presentation of the financial stability report.
Rozhkova noted that there will be a deterioration in the quality of the loan portfolio of legal entities, specifying that this is due to the fact that some industries have suffered from the introduction of restrictive measures.
However, she added that now there is the so-called secondary effect due to the general economic downturn due to a decrease in demand from the population, which also influences the deterioration of the loan portfolio of legal entities.
“In this regard, we understand that the quality of the loan portfolio of legal entities will also deteriorate, our estimates are also about 10%,” she said.
Rozhkova added that if banks take all the necessary restructuring measures, some of these loans will return to their normal service mode.
