Ukraine’s banking sector recorded a historic increase in hryvnia-denominated commercial lending in April, driven largely by financing for the defence industry, energy projects and agriculture, reported Ukraine Business News.

The surge pushed the total volume of commercial hryvnia loans in the Ukrainian banking system to a record UAH609.28bn ($13.8bn), according to banking sector data released this week.

Analysts said the expansion reflected a gradual shift away from direct state-budget financing towards bank-led lending and investment mechanisms, particularly in sectors tied to national security and strategic infrastructure.

Traditionally, state-owned banks dominate Ukraine’s lending market, and they continued to account for the largest share of the commercial loan portfolio at UAH382.1bn. Banks with foreign capital held UAH230.8bn in business loans, while privately owned Ukrainian banks accounted for UAH209.4bn.

“The defence sector has become one of the key drivers of loan growth,” one banking analyst said. “Financing that previously passed directly through the budget is now increasingly being channelled through banks and broader investment structures.”

Agriculture and energy also remained major recipients of financing as Ukraine continued rebuilding damaged infrastructure and maintaining export capacity during the war with Russia.

Other parts of the economy, however, appeared to be growing more slowly, with analysts suggesting some industries remained effectively frozen because of wartime uncertainty, labour shortages and security risks.

Among individual lenders, FUIB recorded the strongest growth in business lending during the first quarter of 2026, increasing its portfolio by UAH7.23bn. It was followed by PrivatBank with UAH5.01bn, Ukrgasbank with UAH4.26bn, Bank Pivdennyi with UAH4.08bn and OTP Bank with UAH3.16bn.

The National Bank of Ukraine (NBU), in its 2025 annual report, said the banking system had remained resilient despite the pressures of war, allowing lenders to expand financing across the economy.

According to the central bank, corporate lending grew by 36% in 2025, while retail lending increased by 34%. At the same time, the share of non-performing loans fell to 14%, its lowest level in more than 15 years.

The NBU said loan penetration in the economy rose to 8.7% of GDP, with market-based lending rather than state subsidy programmes becoming the primary source of growth.

Banks were increasingly financing strategic sectors including energy and the defence-industrial complex, while consortium lending — involving several banks jointly financing large projects — had also resumed, the regulator said.

The central bank added that lending conditions in front-line regions had gradually converged with those elsewhere in the country, despite continuing security risks and repeated Russian attacks on infrastructure.

Ukraine’s financial sector has remained one of the more stable parts of the wartime economy, supported by international assistance, tight monetary policy and emergency regulatory measures introduced after the war began in 2022.

The NBU said the sector’s resilience had also allowed regulators to begin restoring some pre-war banking requirements and continue aligning Ukraine’s financial system with European Union standards as Kyiv pursues eventual EU membership.