The Central Bank of the Russian Federation sees signs of overheating of the mortgage market

CrimeaPRESS reports:

The growth of retail lending to Russians is outpacing the growth of household incomes, as reported in the Telegram channel of the Central Bank of the Russian Federation on September 6. According to the regulator, mortgage growth accelerated from 4.2% to 7%, and consumer lending growth from 2.5% to 4.5%.

The very high growth of retail lending raises concerns because it outpaces the growth of household incomes and leads to an increase in debt load. In order to reduce risks for the financial system and citizens, the Bank of Russia is forced to increase premiums on risk ratios for risky loans, — the bank’s message is quoted News.

It is noted that in the second quarter of 2023, banks earned 0.8 trillion rubles of profit (and in the first half of the year — 1.7 trillion rubles) due to the expansion of business volumes, high margins, as well as currency revaluation. In 2023, profit is expected to exceed the level of 2021 (2.4 trillion rubles), despite the increase in the key rate and higher provisions for corporate loans.

According to the Central Bank of the Russian Federation, the corporate portfolio of banks grew by 3.8% in the second quarter of 2023 after 2.8% in the first quarter against the backdrop of the ongoing recovery in business activity and replacement of external debt.

It is reported that the funds of the population for the quarter increased significantly (+5%), while the companies, on the contrary, slightly decreased (-1.4%), mainly in the accounts of oil and gas companies.

On August 15, the Central Bank announced that the board of directors at an extraordinary meeting decided to increase the key rate to 12% in order to limit risks to price stability. This was the second consecutive tightening of monetary policy over the summer. On July 21, the regulator increased the rate from 7.5 to 8.5% per annum. Before this, it had not changed since September 2022.

source: News

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