It will not end with a long time – Newspaper Kommersant No. 197 (7398) of 10/22/2022

The Bank of Russia noted a decrease in the debt burden on households in the second quarter of 2022 for the first time in seven years. The decline in unsecured consumer debt played a major role, and this fall outweighed even the growth in the number of credit card borrowers and mortgage debt. However, experts draw attention to the fact that the reduction in the debt burden is not due to rising incomes, but due to falling consumption.

The reduction in unsecured consumer debt led to a reduction in household debt for the first time in seven years, according to the Credit Reference Bureau (CRB). Such data are provided by the Central Bank in the review “Analysis of trends in the retail lending segment …” for the first half of 2022 (.pdf). If, as of January 1 and April 1, 11.6% of the disposable income of the population was directed to payments on all loans, then by July 1, their share decreased to 11.4%. The decline occurred even against the background of increased demand for credit cards during this period (the number of borrowers increased from 8.3 million to 8.7 million people) and a sharp increase in mortgage loans (by more than a third compared to the second quarter of last year).

At the same time, the regulator found a positive effect – in the second quarter of 2022, the share of mortgage loans for which borrowers could estimated use a consumer loan for a down payment decreased from 6.1% to 3.9%.

As a result, due to the tightening of conditions for issuing and falling demand for unsecured consumer loans, the total number of bank borrowers in the second quarter of this year decreased from 42.4 million to 42.1 million.

However, experts do not consider these statistics optimistic. Ludmila Kozhekina, director of banking ratings at the Expert RA agency, points out that in the current circumstances, the decrease in the debt load of the population cannot be considered an unambiguously positive factor, since it is not caused by income growth, but by a reduction in consumption and savings, as well as a more cautious approach to credit obligations against the backdrop of unstable environment.

On the other hand, banks themselves were reluctant to issue unsecured consumer loans. In the second quarter, everyone was expecting a serious crisis: rising unemployment, bankruptcies, and the like, explains Mikhail Matovnikov, chief analyst at Sberbank. However, according to him, none of this happened, moreover, it became clear that unemployment is not growing, the fall in real disposable incomes of the population is not so terrible, and inflation has begun to fall. As a result, banks began to return to the previous lending standards. In the third quarter, as Mikhail Matovnikov noted, there was a good growth in lending (see chart). “Kommersant” from September 13), but growth will slow in the fourth quarter, although “the loan portfolio is unlikely to decline as in the second quarter, this requires a very sharp drop in disbursements.” But so far, he says, it seems unlikely.

Most experts suggest that the debt burden may not show growth until the end of the year. Yegor Lopatin, deputy director of the group of ratings of financial institutions of the NKR agency, notes that its dynamics until the end of the year will be determined by the degree of severity of the risk policies of banks.

“Against the backdrop of partial mobilization, a number of banks rather quickly tightened their risk policies, and given the increased level of uncertainty, any significant mitigation and an increase in the level of approval are unlikely before the end of the year,” he says. The population, according to him, may somewhat slow down consumer activity in the current conditions, which, in turn, will lead to stabilization or a further reduction in the debt burden. Olga Ulyanova, an independent banking expert, does not yet see the prerequisites for a significant reduction in the debt burden of the population. “Appetite for new loans will be very moderate for both banks and borrowers, but disposable incomes will also decline,” she says. At the same time, Olga Ulyanova notes that rates on both consumer loans and mortgages remain relatively high.

At the same time, the uncertainty with the employment of the population, according to experts, does not give grounds for positive forecasts for the level of disposable income. Based on this factor and a number of others, financial expert Nadezhda Gromova believes that the situation with the debt burden will not improve in the fourth quarter. This will be facilitated by the policy of the regulator. “The Bank of Russia must fight inflation and, most likely, will leave the key rate at the same level or even raise it, and this factor will in no way lower the cost of new loans, and it is possible that it will even increase, which will create additional risks for individuals who borrow on box office gap,” she says.

Traditionally, consumers show increased lending activity in the fourth quarter, VTB noted. However, the bank does not predict significant changes in the debt burden of borrowers, since many credit institutions are cautious in assessing customers. Other major banks surveyed by Kommersant refrained from making forecasts.

Maxim Buylov, Olga Sherunkova