Page 96 - RusRPTSept23

performance of early-mid 2022 was replaced by the record monthly results of the current year, the annual growth rate of retail lending accelerated significantly. According to RIA Rating experts, the trend of improving dynamics in the moving segment will continue due to the 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%.
In the structure of retail lending, growth was observed for all types of borrowers, 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. 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 in June, as well as in May, was also characterized by very high growth rates. 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. It is also worth noting that high growth rates (more than 1%) were observed not only in June and May, but also in March and April. Thus, for the fourth month in a row, very high growth rates are noted, which has not been observed since the end of 2021. Recall that in 2021, the growth rate of more than 1% was recorded for ten months in a row, and perhaps this year there may be a repetition of that strong dynamics.
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 lead to new decisions side of the Central Bank on restrictions on the retail lending market.
Credit activity has been accelerating, while consumer lending acceleration particularly raises concerns, Presidential Aide Maxim Oreshkin said in an op-ed on August 14.
"If you look at the structure of the money supply formation, corporate and consumer lending played the key role in speeding up the demand. For example, corporate lending ensured the formation of 9.5 trillion rubles worth of additional demand in the economy, while consumer lending added 3.3 trillion rubles. Credit activity has been accelerating in recent months. The acceleration of consumer lending particularly raises concerns," he said.
According to the Russian Central Bank’s mid-term forecast released earlier, the outlook on growth of corporate lending for 2023 has been upgraded from 9-13% to 12-16%, while the outlook on retail lending growth - from 11-15% to 15-19%. The outlook on growth of mortgage lending in Russia for this year has been upgraded from 13-17% to 17-21%.
RUSSIA Country Report September 2023 www.intellinews.com