Preferential mortgages have a gap in commissions

There has been a new twist in the conflict between developers and banks over commissions on preferential mortgage programs. Promsvyazbank will be the first of the major players to stop charging such a commission from developers, market participants say. Other large banks are in no hurry to take similar actions.

Promsvyazbank (10th place in mortgage issuance in 2023, according to JSC Dom.RF) less than a month after the introduction of a program to subsidize preferential mortgages, it decided to cancel the commission from developers. The TG channel “Mortgage and Real Estate” was the first to report this. Information about the abolition of the PSB commission was confirmed by Kommersant sources both in the mortgage market and among developers. They claim that the new conditions will apply from January 30. The bank did not answer Kommersant’s questions.

Market participants note that the PSB commission was relatively small. According to two Kommersant interlocutors, it amounted to 3.5% of the mortgage loan amount. At Sberbank, depending on the program, it is 7.5–11.5% (see “Kommersant” dated December 27, 2023). PSB’s commission for transactions under preferential programs is significantly lower than in Sberbank, VTB and Alfa Bank, confirms Yulian Ovechkin, head of the mortgage department of Level Group.

Kommersant’s interlocutors, both in the banking market and among developers, note that they have not yet seen any precedents for banks canceling commissions. Previously, Sberbank and VTB (at the beginning of 2024, their total mortgage portfolio exceeded 76% of the market) complained about the loss of profitability of the mortgage business, thus explaining the decision to introduce the practice of charging commissions from developers. In particular, the executive director of the Domklik division of Sberbank, Artem Gerasimovich, warned on January 18 that the margin from issuing preferential mortgages from March of this year, even taking into account subsidies, will be zero, and the deputy chairman of the board of VTB, Georgy Gorshkov, indicated that preferential mortgages will be unprofitable from the end of 2023.

The Central Bank insists: “Despite the change in the conditions of preferential state mortgage lending programs, they remain profitable for banks.”

As evidenced by the reporting data of Dom.RF JSC on preferential lending, the previous decision of the PSB to charge a commission did not fundamentally affect the statistics of the number of loans issued. Issues in the last two weeks of January are comparable to the figures for November-December last year. The chief expert of Rusipoteka, Sergei Gordeiko, notes that in the current conditions, Russian banks are forced to act based on their tasks and capabilities, so he does not exclude in the future that the conditions for working with developers will continue to change, albeit on an individual basis. “Banks need to increase their loan portfolios, and developers need sales. Market participants will have to look for a compromise,” the expert notes.

According to one of Kommersant’s sources in a large development company, PSB’s decision to abolish the commission “will have a positive impact on the bank’s share in the portfolio of developers.” According to Tatyana Boeva, head of the mortgage lending department at Granel Group of Companies, “the abolition of commissions on preferential mortgages by banks may lead to some recovery of the market.” She believes that if other industry participants join in on such a decision, it will make it possible to adapt to the new situation at a lower cost.

Against the backdrop of banks charging commissions from developers, there may be a transition of mortgage clients from large banks to medium and small ones, notes Yuri Belikov, managing director of the Expert RA rating agency. According to Rustam Azizov, Director for Mortgage Sales and Implementation of Financial Instruments at Group of Companies A101, “there are already examples on the market when banks that officially refused to introduce commissions for developers, literally in a week significantly increased the volume of mortgage issuances – in some cases, almost doubling.” .

At the same time, according to Yuri Belikov, banks may be interested in abolishing this practice in the event of a large loss of their client base. In addition, the expert does not exclude measures of influence from the Central Bank, which may increase the intensity of inspections and inquiries about the quality of such loans.

Olga Sherunkova, Daria Andrianova