Corporate business lending under martial law in Ukraine

Kovalenko Victoria
D.Sc. (Economics), Professor, Professor, Department of Banking, Odesa National University of Economics, Odesa, Ukraine, E-mail: kovalenko-6868@ukr.net, ORCID: https://orcid.org/0000-0003-2783-186X

Stoianova Oleksandra
a student of the first (bachelor's) level of higher education, Faculty of Finance and Banking, Odesa National Economic University, Odesa, Ukraine, E-mail: sashastoyanova04@gmail.com, ORCID: https://orcid.org/0009-0001-0179-4581

Received: 12.05.2025    Аpproved: 23.05.2025    Рublished online: 05.07.2025

Cite this article:

Kovalenko V., Stoianova O. (2025) Corporate business lending under martial law in Ukraine. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Kredytuvannja korporatyvnogo biznesu v umovah vojennogo stanu v Ukraini; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 5 (330), pp.38-49.

Abstract

The article explores the peculiarities of bank lending to corporate businesses in Ukraine under martial law, which has significantly transformed the mechanisms of financial support for business entities. The purpose of the study is to investigate current trends in corporate lending, to identify structural changes in banking activity, and to analyze the challenges faced by the financial sector during the armed conflict. The research methodology is based on a combination of general scientific and specialized methods, including analysis and synthesis, induction and deduction, logical generalization, comparison, visual representation of financial dynamics, and economic-mathematical modeling. The study evaluates the dynamics of the Ukrainian banking sector's assets, identifying a reduction in the share of loans within total bank assets and a shift towards low-risk instruments such as government bonds and National Bank certificates of deposit. The article examines changes in business lending by repayment terms and sectors of economic activity. Short-term loans dominate, with trade, manufacturing, and agriculture being the most credit-intensive industries. A high level of non-performing loans (NPLs) was identified in the corporate loan portfolio, indicating significant risks for banks during wartime. Based on a developed multifactor regression model, the key internal and external determinants influencing the volume of corporate lending were determined. Among them, the most significant were reserves for loan impairment and the volume of loans to individuals, pointing to the interconnectedness of retail and corporate lending. The practical significance of the results lies in the applicability of the developed model for forecasting changes in corporate loan portfolios, supporting banks’ strategic decision-making in conditions of uncertainty.

Keywords

bank, bank lending, corporate business, martial law, credit risk, banking system.

JEL classification: G210; E630;DOI: https://doi.org/10.32680/2409-9260-2025-5-330-38-49

UD classification:336.717:004.9

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