National Bank of Ukraine publishes Bank Funding Survey showing Q4 deposit growth and a continued decline in average funding costs

The National Bank of Ukraine published its quarterly Bank Funding Survey, in which banks reported that retail deposit volumes increased at almost all institutions in Q4 2024, with some also seeing significant growth in corporate deposits, while the average cost of funding continued to fall. For Q1 2025, respondents generally do not expect liabilities to grow materially, with household deposits edging higher and business deposits expected to be unchanged. Average funding costs fell for a sixth consecutive quarter, although fewer respondents have cited a continuing downtrend over the past two quarters, and wholesale funding costs declined for a third straight quarter. Banks expect the cost of corporate deposits to rise in Q1 2025, while the cost of retail and wholesale funding is anticipated to remain almost unchanged. The share of foreign currency funding declined in Q4 at banks representing 73% of sector assets, and the same proportion of respondents expects a further decrease in the share of foreign currency liabilities in Q1. Funding maturity declined somewhat at banks holding almost half of banking sector assets, with no changes expected in deposit maturity over the next 12 months. Banks representing three-quarters of sector assets reported higher total capital over the past 12 months and almost all anticipate further increases, with profitability cited since Q3 2022 as a key driver of expected capital growth. The survey was conducted between 16 December 2024 and 10 January 2025 with responses from 26 financial institutions covering 96% of banking system assets, and the results reflect respondents’ views rather than NBU assessments or forecasts. The next survey, including expectations for Q2 2025, is scheduled for release in April.