New tax imposition knocks 30% off profits at Ukrainian banks

Banking Sector Overview: Q2 2026

According to НБУ: A newly released review of Ukraine's banking sector for the second quarter of 2026 shows that lending has been the main engine of net asset growth for more than two years. Corporate hryvnia loans expanded by 9.4% quarter-on-quarter, accelerating from 6.3% in the first quarter, with annual growth exceeding 30%. Retail hryvnia lending climbed 8% on a quarterly basis and 36.2% year-on-year.

Average hryvnia rates for corporate borrowers rose by 0.2 percentage points to 15.3% per annum, while foreign-owned private banks offered the lowest average rate at 13.5%. The share of non-performing loans declined to 12.5%, indicating better credit quality across both corporate and retail segments-figures that surpass typical pre-war levels.

Hryvnia household deposits grew by:

• +7.1% q/q
• +19.6% y/y

For businesses, the corresponding deposit inflows were:

• +4.2% q/q
• +17.1% y/y

The sector stayed profitable overall, but net profit for the quarter fell 30% year-on-year after the corporate income tax rate was raised to 50%. The National Bank of Ukraine has proposed more flexibility in restructuring loans for borrowers with temporary financial difficulties. One key looming risk is the possible extension of the additional profit tax into the next year.

In short, Ukrainian banks are posting solid gains in lending while wrestling with a heavier tax burden. The sustained recovery in credit activity, combined with a shrinking NPL ratio, points to improving borrower health and could fuel further lending growth. However, higher taxes are likely to pressure profitability and require lenders to adapt. Continued central bank support through loan restructuring remains critical for financial stability.

As Ukrainian banks navigate the challenges posed by increased taxation, the corporate borrowing landscape is evolving significantly. Recent data shows a remarkable surge in the number of firms securing loans, highlighting a robust demand for credit despite the financial pressures. For a deeper understanding of this trend and its implications for the banking sector, explore how corporate borrowing has doubled and what it means for businesses moving forward.