Banks will lose on mortgages – Newspaper Kommersant No. 67 (7512) dated 04/18/2023

As a result of regulatory tightening in the mortgage market, banks may lose 80 billion rubles. earnings, analysts calculated. The Central Bank introduces additional reserves and macroprudential premiums on risky loans, limits the influence of bankers when choosing an insurer for a client. Measures should minimize the risks for customers, banks and the market as a whole, and will also result in a decrease in the issuance of mortgages and a reduction in income from it.

“Kommersant” got acquainted with the study “Expert RA”, according to which in 2023 banks may lose about 80 billion rubles. profits due to tighter regulation of the mortgage market. The main restrictions will be surcharges on the reserve rate for the “mortgage from the developer”, which will come into force on May 30. According to Expert RA, this will lead to a decrease in loans and a reduction in one-time commissions received by banks from developers. According to the Central Bank, in such programs, the bank’s commission and the size of the “margin”, due to which the rate shifted to “near zero”, could be 20-30%.

Macroprudential risk premiums on low down payment loans, effective June 1, will dampen the upside potential for new disbursements.

Also, analysts expect banks to receive less commission income, as the Central Bank has deprived them of the ability to impose the purchase of an insurance policy at an inflated price. “Now the borrower himself has the right to choose an insurance company with a credit rating, which can reduce the cost of an insurance policy and deprive banks of a significant part of the commission income,” the authors of the study note.

As Nadezhda Karavaeva, Junior Director for Banking Ratings at Expert RA, explained, the assessment took into account that some of the innovations would be in effect from the second half of 2023. She notes that, based on the forecasted profit of the sector (1.2-1.5 trillion rubles according to the Central Bank), the losses can be called “acceptable”, since they will mainly affect “several large mortgage players issuing preferential mortgages”. Over the long term, “this lost profit will be offset by improving the quality of portfolios targeted by regulation,” the review notes.

The greatest limitation will come from increased reserves introduced from May 30, since the share of loans falling under the reserve could be up to 50% in the primary market, which is 150-200 billion rubles. issuance per month, one of Kommersant’s sources in a large bank believes.

“At the same time, the largest developers are still developing schemes that allow customers to make non-market conditions, which allows them to bypass the restrictions of the Central Bank. For example, schemes with cashback or installment plans and expensive insurance, while formally the requirement for a minimum TIC (full cost of the loan.— “b”) is respected,” says the banker. According to Kommersant’s interlocutor, this will not have a strong impact on the primary market, it will sink by a maximum of 10-15% of the volume, “if the Central Bank does not correct the indication.” Restrictions on insurance, in principle, will not affect mortgage sales, as well as new macro allowances, he is sure.

The changes will limit the growth of the market and prevent it from approaching the indicators of 2021 (then banks issued a record 5.7 trillion rubles in mortgage loans), which will lead to a drop in potential interest and commission income, says Mikhail Doronkin, managing director of the NKR rating agency. “But given the higher level of rates in the segment compared to 2021-2022, banks’ interest income is unlikely to decrease significantly,” the expert clarifies. Irina Nosova, Senior Director of the ACRA Group of Financial Institutions Ratings, admits that “banks can shift the costs of a new, higher provision to the client by raising the mortgage rate, but the demand for such loans will be low.” Now the average offer rates of the largest players in the market are about 11% per annum.

Meanwhile, for example, Sberbank expects prices to stabilize on the market – first for new buildings, then for secondary housing. At the same time, the bank positively assesses the prospects of the market, “given the presence of a large number of state mortgage programs that allow you to take out a mortgage at a rate of 4-6% per annum.”

Olga Sherunkova