KIEV, April 5 – The credit quality of Ukrainian banks is improving from the worst of the financial downturn, but is still weighed down by problem loans and stagnant lending, Standard & Poor's Ratings Services said in a report.

"Despite the gradually improving macroeconomic environment, we believe the Ukrainian banking sector remains fragile and its pace of recovery is lagging behind economic rehabilitation," said Standard & Poor's credit analyst Maria Malyukova.