Page 98 - RusRPTNov23

Central Bank of Russia (CBR) reported on October 24.
There was a shift in the types of mortgages issued, with market-based mortgages for existing housing experiencing a decrease, while subsidised mortgages for new housing saw a significant surge, the regular said in a note.
This trend was driven by households' rush to secure mortgages before an upcoming increase in the minimum down payment requirement across all government subsidised mortgage programs that will be introduced soon. The CBR has become increasingly concerned that a bubble is forming in the real estate sector and is moving to cool the market.
In contrast, consumer lending witnessed a notable slowdown, declining from a 2.4% growth rate in August to 1.5% in September. This deceleration can be attributed to higher interest rates and stricter macroprudential requirements.
September maintained robust demand for loans among companies, with the corporate loan portfolio expanding by 2.0%, up from 1.7% in August.
The growth rate of funds held in bank accounts by households remained relatively stable, showing a 1.0% increase in September compared to 0.8% in August. The attractiveness of higher interest rates prompted individuals to transfer their funds from current accounts to short-term time deposits. Corporate funds also saw a moderate increase, rising by 0.7%.
Banks recorded a profit of RUB296bn ($3.2bn) in September, marking a 16% decrease from the previous month. This decline in performance was influenced by reduced gains from foreign currency revaluation and higher funding costs following an increase in the key interest rate.
There is no bubble on the Russian mortgage market, but there are some misbalances, including worsening of the lending standards, Yelizaveta Danilova, head of the financial stability department of the central bank, said on October 12. "We are concerned with the situation on the mortgage market as well. It is too early now to say that there are signs of a bubble, but at the same time, there is a range of misbalances. Firstly, there is a difference between the primary and the secondary market prices amounting to 40% on average and reaching 60% in some regions," Danilova said. The share of loans with a near-limit debt burden has exceeded 40% doubling over the last two years, which is also a worrying factor, the official said.
Russian Prime Minister Mikhail Mishustin gave instructions to extend the program of preferential investment lending to small and medium-sized enterprises (SMEs) from key sectors until 2030, with an annual budget of up to 100bn rubles ($993.24mn). Mishustin instructed to provide assistance to small and medium-sized firms (SMEs), as well as
98 RUSSIA Country Report November 2023 www.intellinews.com