Page 68 - RusRPTFeb22

amounted to 6.1 trillion rubles. 21 (about 9.1% by volume net loan portfolio22), but it should be taken into account that it is unevenly distributed among banks.
In December, the volume of investments in debt securities increased slightly (+45bn rubles, or 0.3%), mainly due to an increase in their value (and, accordingly, a decrease in profitability) amid a temporary improvement in the market situation. In January, OFZ yields increased sharply (by 1.3 p.p.9) due to geopolitical risks, however, systemic risks are limited, as the revaluation loss (estimated at about RUB200bn across the entire bond portfolio, is mainly reflected directly in capital) is largely offset by earned by the main profit and the accumulated substantial stock of capital. The issuing activity of the Ministry of Finance of Russia slightly increased compared to previous months, but in general remains low - the total volume of OFZs placed at auctions amounted to 116bn rubles10 (at the same time, demand exceeded supply by almost 2 times), of which about 51% were bought by Russian banks (comparable to November)11.
8.1.7 Banks specific issues
2021 became a record year for the volume of housing construction, the number of transactions for the sale of housing, as well as the issuance of mortgage loans in the entire history of observations. In the coming year, we are likely to see some decline in property prices, an increase in mortgage rates and a decrease in mortgage issuance. In 2021, the market was warmed up by the state program of preferential mortgages and supported by the boom in demand for housing. This led to absolute records for both the number of homes sold and the number of mortgage loans issued.
In 2022, the market will strive for a balanced state. The primary market will be supported by many continuing preferential mortgage state programs. In October 2021, in 16 regions of Russia, the average mortgage loan issued was less than 3 million rubles. In 26 other regions the loan amount was in the range of 3-3.5 million rubles. That is, almost half of the country's regions fit into the maximum loan size under the state program of preferential mortgages. And, therefore, they can still count on a subsidized rate under the state program until mid-2022. In addition, the Far East has its own state program, which allows you to maintain the availability of mortgages at a high level, even against the backdrop of rising housing prices.
New mortgage loans, per CBR data, hit new highs in FY21 in terms of both quantity and volume, with the former printing +7.2% y/y, and the latter increasing +28.2% y/y. At YE21, the total mortgage portfolio was 26.4% higher than a year ago, and mortgage loans corresponded to 48.1% of the total retail lending portfolio, up from 46.6% as of YE20.
We attribute the figures to the soft monetary conditions in 1H21 and government-supported mortgage loans at subsidised rates.
Still, later in the year, as rates bounced back, mortgage growth rates subsided, and the credit impulse from mortgages went into negative
68 RUSSIA Country Report February 2022 www.intellinews.com