Page 65 - RusRPTAug20

throughout the early part of the year, accounting for 6.8% of the corporate loan stock at the end of May. However, the number of debtors applying for various restructuring arrangements has increased rapidly. During this spring the Russian authorities introduced various anti-crisis measures to help debtors hit by the corona recession. The measures include e.g. direct interest subsidies, provision of cheap financing to banks for lending programmes and temporary easing of bank capital requirements.
Information collected by the CBR (​CBR bulletin​) indicates that more than RUB2.3 trillion, or over 7% of the corporate loan stock has been restructured since March.
Many of the support measures announced by the Russian government this spring have focused on small and medium-sized enterprises (SMEs) in distressed sectors of the economy. About a third of all firms in these sectors are covered by loan restructurings. As of end-June, over 90,000 SMEs were able to restructure their borrowings of around RUB670bn, corresponding to over 13% of the total lending to the SME sector.
About half of the restructured SME loans were granted to firms operating in commerce, 17% to firms in the transportation sector and 10% to firms in the restaurant and tourism branches. CBR governor Elvira Nabiullina noted that the total amount of restructured loans is about 4.3 trillion rubles (close to 7% of the credit stock).
In addition, government-sponsored loan repayment holidays affected about 55,000 borrowers in the SME sector (total 120bn rubles) as of end-June. According to information released by the economy ministry last Friday (July 10), banks have granted about 500bn rubles in loans with government-subsidised interest in order to help businesses survive the corona recession.
8.1.7 ​Banks specific issues
The demand for mortgages in Russia in June was almost a third higher than last year​. According to the United Credit Bureau (OKB), banks in June 2020 issued more than 109,000 mortgage loans totalling RUB258bn. The number of issues exceeds the figures for June 2019 by 22%, and the volume by 28%. Compared to May, the issues increased by 37% in terms of quantity and 39% in terms of volume. The last time the market grew at a similar pace (+ 29%) was in February, and in March against the backdrop of a fall in the ruble and expectations of quarantine, the growth was + 50% y/y. In April the market fell by 12%, in May it grew by only 6%.
Prime Minister Mikhail Mishustin has said that the subsidised mortgage programme with a 6.5% rate might be prolonged in the autumn​. The residential housing segment faced severe pressure in 2Q20, particularly in Moscow, where construction was frozen from 12 April for four weeks and sales office were closed until 1 June. This resulted in primary demand falling 55% y/y in 2Q20. The subsidised mortgage programme was introduced on 17 April, for a total amount of RUB740bn, and became the main support initiative. It currently covers mortgages of up to RUB12mn in Moscow and St Petersburg, and up to RUB6mn in the regions, while the downpayment stands at 15% with the rate capped at 6.5%. Since the programme’s inception,
65​ RUSSIA Country Report​ August 2020 ​ ​www.intellinews.com