Banks generally expect an increase in the volume of funding from households and businesses in the second quarter, while at the same time the volume of wholesale funding will not change significantly. This is evidenced by the results of a quarterly survey of banks on funding conditions. This was reported by the press service of the National Bank.
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The volume of bank liabilities in the first quarter generally increased, primarily due to an increase in the volume of corporate funds. At the same time, for the first time since the third quarter of 2021, banks noted a decrease in the volume of funding from the population. The volume of wholesale funding grew for the second quarter in a row, mainly from individual large banks.
Banks explained the fall in attractions from households by a decrease in supply, considering the level of interest rates not a significant factor for changes in the volume of deposits.
Average funding costs overall declined for the third quarter in a row. About three-quarters of respondents reported a decrease in the cost of business funds. At the same time, the price of household deposits increased mainly at individual large banks. The cost of wholesale borrowings has not changed.
Almost all banks expect a decrease in the cost of deposits for households and corporations in the second quarter, while at the same time the price of wholesale funding will not change.
The share of funding in foreign currency in the first quarter, according to banks’ estimates, remained almost unchanged after a steady decline in the previous three quarters. Three-quarters of those surveyed expect a resumption of the trend and a reduction in the share of funding in foreign currency in the second quarter.
Funding duration has decreased slightly for the second quarter in a row, and banks expect this trend to continue in the next 12 months.
Capital levels have increased over the past 12 months in most banks, while 70% of respondents expect it to increase further. Respondents once again named profitability as the determining factor for capital growth.
Individual banks expect a reduction in capital as a result of changes in regulatory requirements or worsening macroeconomic forecasts. Only 15% of financial institutions noted shareholders' intentions to increase capital in the next 12 months.
Respondents for the second quarter in a row noted a decrease in the cost of capital over the last 12 months and expect this trend to continue further.
