Banks do not scatter rates – Newspaper Kommersant No. 180 (7381) of 09/29/2022

On Wednesday, Central Bank Deputy Chairman Alexei Zabotkin pointed out that banks are now softening non-price lending conditions, especially in the retail segment. This is reflected primarily in the increased growth rates of lending.

On September 16, the Bank of Russia decided to reduce the key rate from 8% to 7.5% per annum, this was the sixth stage of its reduction since the start of the NCO. Against the backdrop of the military situation in Ukraine, on February 28, the Central Bank set the key rate at 20% and kept it that way until April 8, and then systematically reduced and returned to pre-crisis values ​​on June 10.

Previously, rates on loans and deposits followed the key one with a certain time lag. For example, in March, the weighted average rates on cash loans rose sharply from 13.4% in February to 24.7% in March, according to data from the United Credit Bureau (UCB, in the top 3). The weighted average rates on cash loans returned to the pre-crisis level two months after the key one, but its dynamics was generally repeated.

Now the situation is excellent, bankers see pent-up demand and stimulate issuance by any, but not price parameters. And some of the biggest players are even upping the ante. So, on August 28, Alfa-Bank announced a 0.5 percentage point increase in the rate on its own mortgage lending programs. And the largest players, Sberbank and VTB, have announced various concessions since September 16, including a reduction in the down payment on mortgages, despite the cautious position of the Central Bank on this issue (see Kommersant dated September 20). In addition, banks, large ones at that, are extending the terms of loans, lowering the requirements for the quality of loan collateral, hoping to get a paying client now, before rates fall.

And such an approach could be justified. The loss of Russian banks for the first half of 2022 amounted to 1.5 trillion rubles. At the same time, according to the head of the department of banking regulation and analytics of the Central Bank Alexander Danilov, the banks got off with little bloodshed. “In February-March, many drew rather gloomy forecasts, they expected a sharp deterioration in credit quality,” he clarifies. “Here, so far, credit risks have not materialized to the extent that many have seen.”

Nevertheless, experts and even the Central Bank do not support overly optimistic bankers. “There will be a problem, it’s just stretched out in time here,” Alexander Danilov warns. The only question remains whether the bankers will have enough time to earn today to cover tomorrow’s risks. I personally think yes, because until the pent-up demand for loans has dried up, financiers are increasing commissions (see Kommersant of September 26).