Page 71 - RusRPTDec23

rubles. This growth comes despite the ongoing rise in interest rates, indicating a robust and resilient corporate borrowing market.
One of the key drivers of this surge has been the crab fishing industry, which accounted for approximately one-third of the increase. "The auctions conducted in October as part of the second phase of selling investment quotas for crab fishing have significantly contributed to this sector's growth," an industry expert commented. Additionally, around 10% of the increase was attributed to project financing for housing construction, where the rates have not risen as aggressively.
The remaining growth in credit demand was more evenly distributed among transportation, mining, metallurgy, and chemical companies. This broad-based increase suggests that companies are likely ramping up borrowing in anticipation of potential monetary tightening by the Central Bank.
The growth in corporate credit was not limited to ruble-denominated loans, which saw an increase of 1441 billion rubles (2.5%), but was also evident in foreign currency loans. The foreign currency loans grew by 149 billion rubles in ruble equivalent, amounting to an increase of 1.5 billion US dollars (1.2%). This was partly due to the conversion of reverse repo transactions from rubles to foreign currency, predominantly yuan.
Despite this, the share of foreign currency loans in the total corporate portfolio slightly decreased in October to 16.3% from 17.1% in September. The primary reason for this decline was attributed to the strengthening of the ruble. Excluding the ruble's impact, the share of foreign currency loans would have only decreased by 0.2 percentage points to 16.9%, due to the faster growth of ruble-denominated lending.
This trend highlights the complexities of the Russian corporate credit market and the resilience of companies in the face of economic uncertainties and monetary policy shifts.
According to preliminary data, mortgage rates have slowed down to 2.9% in October after reaching a record high of +4.2% in September, which is still a very high level. In the first ten months of this year, the mortgage portfolio has already grown by 27%, significantly higher than the 23.7% recorded in 2021, when the previous record for mortgage loans issued was set. By the end of the year, the growth could reach approximately 30%.
The slowdown in mortgages is linked to an increase in the initial down payment for preferential programs, rising from 15% to 20%. Additionally, market mortgage rates have increased. The tightening of macro-prudential measures from October 1, 2023, particularly on riskier mortgages with an LTV (Loan-to-Value) ratio >70% and/or PDN (Payment Default Notice) >50%, may have also affected the pace of lending.
In total, loans amounting to 770 billion rubles were issued, which is 19% lower than the volume in September (955 billion rubles), but still significantly higher than the monthly average of approximately 500 billion rubles. Mortgage loans with government support decreased by 17% in October, amounting to 541
71 RUSSIA Country Report December 2023 www.intellinews.com