Ukraine's banking sector is experiencing a sharp acceleration in corporate lending while deposits have reached a record high, signalling growing business investment even as households remain cautious about committing savings to long-term accounts amid wartime uncertainty, reported Ukraine Business News.

According to banking analysts, the country's financial system has entered a new phase in which expanding credit to businesses has become the dominant trend, supported by government-backed financing programmes and international assistance aimed at sustaining economic recovery.

Total deposits and funds held in Ukrainian banks reached a record UAH3.2 trillion ($72bn), an increase of 1.3% since the beginning of the year.

Despite the record balance, deposit growth has begun to moderate. In June, annual deposit growth slowed to 15.1%, the weakest pace recorded in three months.

The composition of savings has also continued to change. Households increasingly favoured current accounts over fixed-term deposits, pushing the share of individuals' term deposits down to a historic low of 32.6%. The figure includes both resident and non-resident depositors.

Analysts said the shift reflects continued caution among consumers, who remain reluctant to tie up funds for extended periods because of inflation, exchange-rate uncertainty and the risks associated with the ongoing war.

In contrast, lending activity has strengthened significantly.

Outstanding loans to residents have risen by 12.4% since the start of the year to UAH1.3 trillion, while annual lending growth accelerated to 11.1% in June, the fastest pace in seven months.

Corporate borrowers accounted for most of the increase. UAH-denominated loans to businesses expanded by UAH26.09bn during June alone, lifting the total stock of such loans by 4.2% over the month to more than UAH641bn.

The figures suggest Ukrainian companies are increasingly relying on bank financing to fund investment, expand production and rebuild operations despite the challenges posed by the war.

Commercial banks are also broadening programmes designed to support business recovery.

Piraeus Bank said it continues to participate actively in government and international financing initiatives aimed at helping Ukrainian companies restore operations and invest in future growth.

According to Kateryna Bilous, head of the bank's trade finance division, clients are making extensive use of the government's Affordable Loans 5-7-9% programme, which provides subsidised financing for operating needs, investment projects and business expansion.

Following recent changes to the programme, the bank also plans to finance enterprises seeking to restore production facilities, equipment, infrastructure and other assets damaged or destroyed by Russian attacks.

Bilous said Piraeus Bank also administers a grant programme supported by Finance in Motion GmbH. One of its principal target groups is companies affected by the war, allowing eligible businesses to combine grants with investment financing for reconstruction and further development.

The bank is currently evaluating several new recovery projects under the Affordable Loans 5-7-9% programme while continuing to expand its portfolio of wartime reconstruction financing. In addition to loans, it offers guarantee instruments and, where eligibility requirements are met, grant support.

Bilous said the bank's priority is to finance viable enterprises, preserve employment and contribute to Ukraine's long-term economic recovery as businesses increasingly turn to the banking sector to fund reconstruction and growth.