Page 64 - bne IntelliNews monthly country report Russia February 2024

8.1.2 Loans
In November, the pace of corporate lending growth slightly decreased to +2.0%, or +1.4 trillion rubles (+2.3% in October), remaining at a high level. For comparison, the average monthly growth for the first six months of 2023 and for the entire year 2022 was +1.1%.
Approximately a quarter of the growth was attributed to financing major M&A deals, excluding which it would have been a more moderate 1.6%. Another 10% of the growth was related to project financing for housing construction, which is less sensitive to market rates due to high escrow account coverage. Additionally, significant contributions came from transportation and oil and gas companies, as well as financial (factoring, leasing) subsidiaries of banks. Some companies sought to secure limits amid expectations of potential tightening of monetary conditions and the receipt of payment for budget contracts in December.
Loans increased both in rubles (+1,085 billion rubles, +1.8%) and in foreign currency (+355 billion rubles in ruble equivalent, +3.7 billion US dollars, +3.0%). The growth of foreign currency loans accelerated compared to October (+1.2%). Loans were mainly issued in currencies of friendly countries. However, due to the strengthening of the ruble, the share of foreign currency loans in the overall corporate portfolio decreased to 15.8% in November from 16.3%. Excluding the exchange rate factor, their share increased by 0.1 percentage points, driven by the leading growth of foreign currency loans.
According to preliminary data, consumer lending in November experienced a growth of 1.0%, aligning with the trend observed in October (+1.1%). This result may be attributed to heightened consumer activity towards the end of the year, including purchases during "Black Friday" and preparations for the upcoming holiday season.
Anticipating a significant slowdown in consumer lending in December due to existing macroprudential constraints and rising interest rates. Several banks began reducing lending in November, influenced by the gradual exhaustion of the Loan Portfolio Limits (LPL). In 4Q23, restrictions on the share of loans with a Loan-to-Value (LTV) ratio of 50–80, limited to 25%, began to take effect, with levels around 33% in 3Q23.
Preliminary data indicates that the growth rate of mortgages reached a significant 2.8%, aligning with October's figure (+2.9%) but slightly below the exceptionally high result in September (+4.2%). The portfolio has grown by 30.6% over the first 11 months of 2023.
Mortgage growth continues to be driven by preferential programs, sometimes combined with support from banks and developers aiming to sell more housing by the year-end. Amid inflationary expectations, the strong demand for real estate persists.
A total of 726 billion rubles in mortgages were issued, just slightly below the October figure (770 billion rubles). State-supported mortgage issuance in
64 RUSSIA Country Report February 2024 www.intellinews.com