Page 125 - RusRPTApr23

8.1.2 Loans
Consumer lending in Russia has been rising for the third consecutive month with moderate growth rates, gaining half a% percent in each of February and January, according to preliminary estimates, the Central Bank reported on March 22. Russian banks’ credit portfolio amounted to RUB12.1 trillion ($156.5bn) in February 2023. The dynamics is probably due both to banks’ sticking to tight credit policy and the necessity to observe macroprudential limits, which restrict the amount of high-risk loans being extended, the regulator said.
Consumer loans are growing for the third month in a row at a moderate pace (in February, preliminary by 0.5%, in January - by 0.5%). Adjusted for sales and write-offs growth would be slightly higher (+0.6% in February, +0.7% in January), but still below levels seen in past years (average 1.3% per month in 2019-2021).
Such dynamics is likely due to both banks maintaining tight credit policy, and the need to comply macroprudential limits that limit the volume issued high-risk loans. In 1Q23, the share of loans borrowers with PTI >80% should not exceed 25% of disbursements, and loans for more than five years - 10%. To comply banks may need a tighter limit issuance of such loans in February and March.
Russia’s corporate loan portfolio grew quite significantly in February
(+RUB877bn rubles, or +1.5% y/y) after a slight decline in January (-0.2%). The main increase was provided by loans for financing current activities to companies from the transport (mainly railway) and oil and gas industries. Only loans in rubles grew (+RUB1.2 trillion, +2.5%), while foreign exchange portfolio decreased (-363bn rubles in ruble equivalent, -3.8%), largely due to converting foreign currency debt from euros to rubles.
At the end of 2022, the volume of the corporate loan portfolio increased by 14.3% in real terms, which is significantly higher than in recent years. Higher growth rates were last observed only in 2011. With some limitations, we can say that in terms of corporate lending, there is a real credit "boom". The dynamics of corporate lending is in good agreement with the dynamics of investments, in particular, according to the results of January-September 2022, according to Rosstat, investments in fixed assets grew by 5.9% amid a slight decrease in business activity.
The real growth rates of corporate lending in December turned out to be quite good. The growth in corporate loans in real terms in December amounted to +2.1%, which is close to the results of local highs in August-October 2022 (an increase of 2.4-2.5%). For comparison, in 2021 and 2020, the growth was stronger than in December last year only once in each of the years, and in 2019 there were no such monthly rates at all.
Retail lending in 2022 was characterised by moderate growth – the rate was +9.5%, which is noticeably slower than in recent years. For comparison, since 2017, the growth rate did not fall below 10%, and the local maximum for the intra-annual date was in February 2022 - 23.8%. It should be noted that a
125 RUSSIA Country Report Russia April 2023 www.intellinews.com