Consumer borrowing in Ukraine has surged over the past year, with household loans rising by nearly 27% even as deposits climbed to record levels, according to data from the National Bank of Ukraine, reported Ukraine Business News.

Total lending by Ukrainian banks increased by 1.6% in February to UAH1.23 trillion ($31.5bn), while the deposit base edged up by 0.2% to UAH3.18 trillion, the central bank said.

The expansion in lending was driven primarily by the corporate sector, where loan volumes rose by 1.9% to UAH870.7bn. Hryvnia-denominated loans to businesses grew by 2.2% to UAH572.5bn, while foreign-currency loans increased by a more modest 0.5% to $6.9bn.

Household lending also continued to expand, with total loans to individuals rising by 1.2% in February to UAH355bn. However, on an annual basis, growth in consumer borrowing has been far more pronounced, with hryvnia loans to households up nearly 27% compared with February last year.

By contrast, hryvnia loans to businesses declined by 2.2% year on year, highlighting a divergence between corporate and consumer credit trends. Foreign-currency lending to companies increased by 18.4% over the same period, while such loans to households fell by 11.9%.

At the same time, Ukrainians have continued to build up savings, pushing deposits to new highs. Hryvnia deposits reached a record UAH969.9bn ($22bn) in February, rising by UAH 30.3bn over the month and posting annual growth of 19.9% — the fastest pace in nearly two years.

Foreign-currency deposits also climbed to $11.1bn, their highest level in almost a decade, reflecting continued efforts by households to diversify savings amid economic uncertainty.

The corporate sector showed more cautious behaviour, with hryvnia deposits slipping slightly to UAH1.217 trillion and foreign-currency holdings remaining broadly stable at around $10bn.

Despite the rise in deposits, a growing share of savings is being held outside the banking system. Cash holdings in hryvnias reached an all-time high of UAH868.8bn, expanding at an annual rate of 17.5% — the fastest increase since late 2022.

Economists say the trend points to a complex financial landscape shaped by inflation, wartime uncertainty and shifting trust in financial institutions. While higher borrowing suggests resilience in consumer demand, the accumulation of cash outside banks raises concerns about liquidity and financial transparency.

Analysts attribute the move towards cash not only to inflationary pressures but also to behavioural factors, including concerns about tighter financial oversight, potential account restrictions and administrative controls.