Business development loans in foreign currency are profitable under condition that additional expenses will not exceed the difference between the loan cost in UAH and in foreign currency

Vladlen Dedkov, Head of the SME Department of JSCIB “UkrSibbank”:

It is more expedient to draw a business development loan in foreign currency provided that the difference between the loan cost in the national and foreign currency is bigger than the additional expenses, which a customer will incur when purchasing or selling the currency resources under the loan.

Such additional expenses include currency conversion fees, exchange difference (the difference between the NBU rate and the Bank’s commercial rate). Having added all mentioned expenses with loan interests, one can understand what the real cost of credit funds is going to be.

Obviously, the company, which obtains a loan in the national currency, and has no foreign exchange yield, will avoid foreign exchange rate fluctuation, especially if we speak of a long-term loan.

However, the consumers often choose loans in foreign currency, as it seems to be reasonable enough, taking into account the stability of the NBU foreign exchange rate, and moderate currency-purchasing fees of the Bank to repay the loan. Our bank offers excellent crediting conditions as far as loans in foreign currency are concerned. Thus, within the framework of partnership campaign with “KIA” network of car salons, an individual may be rendered a loan at the rate of 7,99% per annum in CHF. This is, in fact, twice as little as interest rate in local currency, which is a very attractive offer, especially if it is a long-term loan.