Page 63 - RusRPTAug19

Russia’s Ministry of Economic Development has again warned that the growing consumer crediting segment is creating an unsecured credit bubble, which could burst as soon as 2021, Vedomosti reports. The ministry, has previously criticized the Bank of Russia for not doing enough to curb consumer lending growth, is now proposing measures to cut the household debt burden.
Rate of retail borrowing slows. Of late, self-regulation seems to have started kicking in, as retail loan growth slowed in May and June. Interest payments/income ratio remains below 2014 level. Although the debt/income ratio this year will exceed the 2014 level, interest rates are lower. As a result, interest payments remain manageable. Share of bad retail loans on decline since 2016. In April 2016, NPLs in the retail lending segment stood at above 13%, while in May this year they were at 7.5%. Meanwhile, unsecured consumer NPLs have dropped from more than 17% to 8.6%, respectively. Retail loan growth has begun to slow. Growth peaked at 23.8% y/y in April but then slowed to 23.3% in May and 22.8% in June. This deceleration is being observed across various regions.
63 RUSSIA Country Report August 2019 www.intellinews.com