Ukrainian banks are experiencing their longest period of lending growth in more than 15 years, with corporate borrowing expanding despite a slowing economy and risks linked to the ongoing war, the National Bank of Ukraine (NBU) said, reported Ukraine Business News.

Over the past decade, since the financial crisis of 2014-2015, the number of active corporate borrowers has doubled to more than 17,000 companies, according to an NBU report. The central bank said demand for financing among businesses remains strong, while the annual growth rate of the net hryvnia loan portfolio has exceeded 30% for about a year.

The fastest growth has been recorded in lending to the processing industry and construction sector, while companies in trade and agriculture continue to account for a significant share of new borrowing. Energy has emerged as another key priority, with banks providing long-term financing for the development of new generation capacity as Ukraine seeks to strengthen its power system.

Financial institutions are also expanding support for the defence-industrial sector. Under a state-backed programme, defence companies have already secured more than UAH9bn ($220mn) in loans, while Ukrainian banks signed a memorandum in May aimed at increasing financing for defence production.

The NBU said the quality of banks’ loan portfolios remains stable, with more than 70% of net loans extended to companies assessed as having satisfactory, strong or excellent financial conditions. The impact of legacy non-performing loans is gradually declining as banks apply stricter risk assessments and more selective lending practices.

The central bank expects demand for business loans to continue rising as companies invest in recovery and expansion.