Page 85 - RusRPTMar21

8.1.2 Loans
The corporate portfolio contracted slightly in January, down RUB79bn ($1.01bn), or -0.2%, mainly in systemically important credit institutions (SZKO). However, this is better than in January 2020, when the decline was almost 1%.
The decrease was mainly due to the repayment of loans from subsidiaries and companies belonging to the SZKO group. At the same time, there are industries that continued to actively attract credit resources: for example, within the framework of project financing, developers increased debt by about RUB100bn.
The mortgage portfolio, according to surveys of the largest banks, grew by only 1% in January after growth of about 3% monthly in September-December 2020, which is largely due to the holidays. But the decrease in demand can also be influenced by the growth in real estate prices (in 2020, prices in the primary market increased by 12%, and in the secondary market by 9.5%).
The share of the highly popular "Preferential mortgage 6.5%" program in issues returned to the level of about 30%, however, the volume of loans decreased to RUB75bn, compared to the peak values of the fall of 2020 of about RUB160bn. In total, since the launch of this program, loans were issued in the amount of over RUB1.1 trillion.
In the future, after the seasonally modest January growth, the CBR expects the continuation of the growth of mortgage lending.
Consumer loans increased by 0.7% in January 7. This is higher than in December (+ 0.2%) and is in line with the 2020 average monthly growth.
Lending picked up in 2020 up by 10.1% or by RUB6.2 trillion net of currency fluctuations (the ruble depreciated by 19% against the dollar in 2020), which was a combination of a 9.3% growth in corporate loans by RUB3.9 trillion and a 12.8% growth by RUB2.3 trillion in retail loans.
“The state-subsidised mortgage lending programme and historically low interest rates underpin mortgage lending growth: the sector average mortgage interest rate decreased to 7.6% in 2020 compared to 9.9% in 2019,” Fitch reported. “The sector’s mortgage loans balance increased by RUB1.6 trillion (21%) in 2020, representing 70% of the total retail lending increase. Unsecured retail lending growth slowed to about 9% in 2020 compared with 20% in 2019 as banks tightened underwriting standards in the pandemic.”
Corporate lending accelerated in 2H20, when the increase was RUB2.7 trillion, or 70% of the annual growth. Higher growth in 2H20 was due to higher demand from companies offsetting lower revenues in a very sluggish 2Q20.
“Annual corporate lending growth was supported by a high $4.9bn (about RUB0.4 trillion) increase in foreign-currency (FC) loans in December 2020, compared with $2.2bn in January-November, which we believe was of a
85 RUSSIA Country Report March 2021 www.intellinews.com