To keep up with the rapid pace of banking market expansion in Ukraine, Raiffeisen Bank Aval is set to relax lending terms for corporate clients and grab by year-end a 40-per-cent share of the market.

Thus, the corporate loans portfolio of the bank should reach UAH 17.5 billion.

In an interview with Interfax-Ukraine news agency, deputy chair of the banks board of directors, Viktor Horbachev, said: “The banks task is to grow at least with the pace of growth of the market to retain its share of the market."

The target, according to analysts is achievable, as it gained momentum last year. In 2006, loans to small and medium enterprises rose by 40 per cent on the year to UAH 12.8 billion as of January 1, 2007.

Broken down by sectors, in which loan beneficiaries are active, agriculture accounts for a 25-27-per-cent share of Raiffeisen Avals corporate loan portfolio. Next comes trade with 16-18 per cent, heavy engineering industry (15 per cent), construction industry (12-13 per cent), automotive sector (10 per cent), oil and gas sector (7 per cent).

Horbachev added that this year the bank would mainly be tapping to the energy, construction, gas and oil refining industries, while keeping the leader spot in the agriculture sector.

Currently, 5,200-5,500 agriculture enterprises feature among the banks clients, which represents a third of all corporate borrowers.

In 2005, the agriculture segment in the banks credit portfolio averaged UAH 2.7-2.9 billion and in 2006 UAH 3.2 billion.

Horbachev said that the bank also pins hopes to expansion in the SME lending segment.

Raiffeisen Aval Bank has 1,400 branch offices in Ukraine.