Page 102 - RusRPTSept23

effect of the low base in the third quarter of 2022, and by the end of 2023, we can expect an increase in retail lending at the level of 20%.”
All types of retail lending saw strong growth in recent months, with most of the growth provided by mortgages. The mortgage portfolio grew by 2.4% in June, which is the best result since January 2022, the CBR reports. At the same time, growth rates of more than 2% are observed for the fourth month in a row, and similar dynamics were observed during the mortgage booms of 2020 and 2021.
Unsecured lending was also growing fast in in the last four months, which has not been observed since the end of 2021 when there was a 10-month growth streak. According to the statistics of the Central Bank, the increase in this type of lending for the month amounted to +1.6% against +1.7% in May. At the same time, June marked the third best monthly increase since October 2021.
According to RIA Rating experts, the acceleration of the pace of unsecured lending on a rolling 12-month period will continue in the coming months due to the low base effect of 2022, and by the end of the third quarter, the growth over 12 months will be about 15%, which may soon lead to new efforts by the regulator to start cooling demand for retail loans.
Just how bad the problem of rising NPLs is remains in debate, as despite the fast expansion the overall level remains manageable. Experts say the upsurge in the number of enforced collections may not necessarily indicate a deterioration in the payment discipline of borrowers, Vedomosti reports.
Elman Mehdiyev, the president of SRO NAPCA, told the paper that this trend is a result of changes in creditors' collection strategies. With the legal wording being somewhat ambiguous, collection agencies often resort to taking legal action out of concern for potential fines by the FSSP, even for minor issues such as short phone calls that are equated to conversations.
Russian financial institutions rating group ACRA, suggested that the growth could also be linked to the removal of the relaxations introduced by banks in 2022. These relaxations had permitted the postponement of recognizing bad debts.
In March, the Central Bank disclosed that around 23.1% of Russian families were burdened by debts, with a median liability amount of RUB140,000 ($1,488). The most prevalent type of debt was consumer unsecured loans, affecting 10.5% of households. Credit card and mortgage obligations were slightly less common, impacting 6.4% and 5.3% of households, respectively.
8.1.5 Liquidity, NIMs & CARs
LIQUITDITY: The moderate decrease in ruble liquidity reserves was observed in July, with a decline of 300bn rubles (-1.8%). This reduction encompassed a decrease in balances held with the Bank of Russia (-248bn rubles) and non-pledged market collateral (-122bn rubles).
RUSSIA Country Report September 2023 www.intellinews.com