National Bank of Ukraine survey finds banks expect deposit growth and higher retail funding costs in Q3

The National Bank of Ukraine published its quarterly Bank Funding Survey indicating that banks increased retail deposits and wholesale funding in Q2 and expect total deposits from households and businesses, as well as wholesale funding, to rise further in Q3. Respondents also anticipate an increase in overall funding costs, driven mainly by higher interest rates on retail deposits. Banks attributed the Q2 increase in average funding costs primarily to retail deposits, while the cost of wholesale funding was unchanged. The share of foreign-currency (FX) funding declined, although fewer banks now expect that downtrend to continue. Funding maturities increased, and for a second consecutive quarter almost half of banks by assets expect maturities to lengthen over the next 12 months. Nearly all respondents reported higher total capital over the past year and most expect further growth, with profitability cited as the main driver, while noting potential downside from changes in regulatory and macroeconomic conditions or shifts in risk appetite; although the cost of capital rose over the past 12 months, most banks do not expect it to change going forward. The survey was conducted between 16 June and 7 July 2025 among liability managers at 26 institutions representing 96% of banking-system assets, and the results reflect respondents’ views rather than NBU assessments or forecasts. A further survey covering expectations for Q4 2025 is scheduled for publication in October.