Loans have diverged rates – Newspaper Kommersant No. 40 (7485) dated 03/10/2023

In January, the difference between the weighted average rate on cash loans and the actual (full cost of the loan – TFR) reached a maximum for several years. Moreover, if the TIC since the middle of last year has been at the level of about 19% per annum, then the weighted average rate (declared) is reduced, amounting to 13% in January. Experts believe that banks are laying insurance and other additional services in PSK, which have begun to be more actively introduced in the face of declining creditworthiness of the population.

According to the United Credit Bureau (UCB), in January 2023, the difference between the weighted average rate on cash loans and TIC was 6 percentage points, the highest since the beginning of 2020. So, according to the results of January, TIC was 19%, it has been at this level since October 2022. At the same time, the weighted average rate fell to 13% in the first month of the year. Its level has been declining, according to the OKB, since July last year – 20%.

Bankers interviewed by Kommersant refused to comment on the difference between the actual and declared rates. The delta between the TIC and the nominal rate is now reaching a plateau, on which it can hold out for quite a long time – months, if not the whole of 2023, says Yuri Belikov, managing director of Expert RA. “Probably, the greatest influence on the formation of this difference is provided by insurance, for which banks motivate borrowers even more actively than before, in the face of an increase in the average level of credit risk,” the expert explains. “In conditions of low creditworthiness of the population, many banks are developing products related to loans, which imply additional payments and costs for servicing a loan, in particular, they offer the service of lowering the rate for a fixed fee,” Konstantin Borodulin, director of NRA banking ratings, confirms.

However, the bank actually receives a significant part of the non-interest payments on the loan at the time of issuance, notes Valery Piven, head of the financial institutions rating group at ACRA. So it cannot be unequivocally stated that the spread between the rate and TIC is an indicator targeted by banks, he believes. The decrease in the effective rate at the end of the last – the beginning of this year can also be explained by the restrictions imposed by the regulator on the issuance of loans in high-risk segments, reminds Mr. Piven (see Kommersant on February 8).

Experts are sure that the reduction of the difference between the real and nominal rates in the segment of cash loans should not be expected. “Banks will take a conservative approach to risk assessment, including potential losses in the full cost of the loan,” notes Konstantin Borodulin. “In order to reduce, we need a steadily positive dynamics of real incomes of the population, optimization of its debt burden and, as a result, an increase in the turnover of banking retail loan portfolios. To reduce TIC in general, it also requires greater certainty of the monetary policy over the medium term and a reduction in pro-inflationary expectations,” Mr. Belikov believes.

Another trend of recent months in the segment of cash loans has been the reduction of the average term, follows from the materials of the OKB. So, since December 2022, the average term of a cash loan has been at the level of 38 months. For comparison: in January 2022, this figure was 41 months. If the reduction in lending terms continues, Yury Belikov emphasizes, this “will signal a shortage of long-term and sustainable funding for banks, as well as the uncertainty of expectations regarding the medium-term dynamics of market interest rates.”

Polina Trifonova