Market-based lending has emerged as a key driver of Ukraine’s economic growth, the National Bank of Ukraine said in its 2025 annual report, reported Ukraine Business News.

The central bank said the banking system remained stable throughout the year, maintaining uninterrupted payment services and sufficient levels of capital and liquidity. This enabled banks to expand lending activity significantly, supporting both businesses and households.

Corporate lending grew by 36% in 2025, while loans to individuals increased by 34%, according to the report. At the same time, the share of non-performing loans declined to 14%, its lowest level in more than 15 years.

Loan penetration in the economy also rose, reaching 8.7% of gross domestic product, with commercial lending rather than state-backed programmes acting as the main growth engine.

The NBU said banks had channelled financing into strategic sectors, including energy and the defence-industrial complex, as Ukraine sought to rebuild infrastructure and sustain military production. Lenders also resumed consortium financing, a mechanism allowing multiple banks to jointly fund large projects.

In a sign of improving financial cohesion, lending rates in frontline regions have converged with those in safer parts of the country, the report said.

The central bank added that the sector’s stability had allowed it to begin restoring pre-war regulatory requirements and continue aligning Ukraine’s financial system with EU standards.