Page 87 - RusRPTFeb24

According to preliminary data, consumer lending is expected to have decreased by 0.1% in December (adjusted for a significant loan sale transaction of approximately 250bn rubles). This decline can be attributed to the impact of macroprudential restrictions 9 (see chart below) and rising interest rates. Banks have significantly tightened borrower selection criteria due to the gradual depletion of MPL (in 4Q23, restrictions on the share of loans with LTV 50-80% not exceeding 25% began to apply, with the level at around 33% in 3Q23).
Overall, consumer loans grew by 15.7% in 2023, following the low results of the crisis-ridden 2022 (+2.7%), but this is only slightly below the 2021 result (+20.1%). In general, it can be said that the tightening of monetary and credit policies and macroprudential regulation contributed to cooling down consumer lending to a moderate level after active growth from May to August (+1.7-2.4% monthly).
According to preliminary data, mortgage loans grew by 2.9% in December, despite tightening conditions for preferential programs and rising market interest rates.
In December, 785bn rubles of mortgage loans were issued, a moderate increase of +8% compared to 726bn rubles in November. The main contribution came from loans with government support, with banks disbursing 655bn rubles (+21% 4 compared to 540bn rubles in November), including in response to announced measures to tighten the conditions of government programs. Both "Discounted Mortgage" (increasing to approximately 280bn rubles from 233bn rubles in November) and "Family Mortgage" (rising to approximately 284bn from 241bn rubles) saw increased disbursements. Market-rate mortgages, on the other hand, decreased significantly by 30% compared to November, totaling 131bn rubles.
In 2023, the mortgage portfolio grew by a record 34.5% 5, which is 70% higher than the 2022 result (20.4%). The growth in mortgages was primarily stimulated by government support programs (which accounted for approximately 60% of all disbursements), with their interest rates unaffected by the Bank of Russia's key rate hikes. People sought to invest in real estate amidst a weakening ruble and high inflation expectations.
In early 2024, we expect a balanced growth and improved mortgage lending standards, implying not as active a market growth as in 2023. Among the key factors are changes in preferential program conditions, including an increase in the down payment for the "Discounted Mortgage" to 30% from 20% 6, tightening of surcharges to risk coefficients for high LTV loans starting from 01.03.2024 7, and high market-rate mortgage interest rates. In addition, to mitigate systemic risks, the introduction of an MPL for mortgages 8 is planned.
One third of currency loans in Russian banks’ portfolios is yuan-denominated Currency lending for corporate clients as of the end of the fourth quarter of 2023 was predominantly in currencies of friendly countries, the Bank of Russia reported earlier
87 RUSSIA Country Report February 2024 www.intellinews.com