Sberbank says Russians’ mortgage debts to top 11 tln rbl in 2021

VLADIVOSTOK, Sep 1 (PRIME) – Russia's mortgage growth will be close to 24% this year, and the households’ debts will amount to 11.4–11.6 trillion rubles, Sberbank’s First Deputy CEO Alexander Vedyakhin told PRIME on Wednesday.

The central bank earlier said it expected mortgage lending to rise by 20–24% in 2021 from 21.6% in 2020. In July, mortgage issuance decreased by 20.5% on the month in monetary terms, and the households’ combined debt reached 10.77 trillion rubles.

“I absolutely do not rule out that we will see mortgage portfolio growth above the previous year’s figure at the end of the year, and it will be close to the upper threshold of the Bank of Russia’s forecast. … In our baseline forecast, the combined mortgage debt of the market stands at 11.4–11.6 trillion rubles as of the end of the year,” Vedyakhin said.

One of the major reasons for that is the low base effect, as mortgage demand plummeted in January–June 2020 due to the coronavirus crisis and lockdowns. Also, the interest rates are still relatively low now, he said.

He also said that Sberbank had no plans to raise interest rates on consumer loans.

Since April, the central bank has raised its key rate by 2.25 percentage points to 6.5% annually, but Sberbank has only raised its mortgage interest rates and only by 0.4 percentage points since then.

“We have no plans to raise the rates on the consumer loans now, we will continue monitoring the market situation,” Vedyakhin said.

The major reason for the regulator’s increase of the key rate is inflation growth, but in the future, it should return to the target level of 4%, meaning the key rate may fall again. Many Sberbank’s products are long-term, which means that the bank bases its interest rates on expectations of future dynamics of the key rate, not on the current key rate, he said.

(73.2781 rubles – U.S. $1)

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