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VTB: yearly growth of retail lending in Russia to top 20%

At the end of 2021 retail credit portfolio of Russian banks is to increase by 22% to all-time maximum of RUB 25.6 trillion. Clients will show the main demand in cash loans and mortgage with both segments increasing by 23%. Such estimations were given by Anatoly Pechatnikov, Deputy President-Chairman of VTB’s Management Board, during VTB Capital investment forum «RUSSIA CALLING!».

The biggest fraction in the total credit portfolio of physical entities on the market by the end of this year will be shared by mortgage and cash loans. Total home loans and cash loans portfolios will top RUB 12.6 trillion (taking into account cession and securitization) and RUB 9.8 trillion, respectively.

VTB is also planning on finishing this year with record results. The retail loan portfolio will grow by 22% comparable to the market and reach RUB 4.6 trillion. Loan sales to physical entities will be almost 40% higher than in 2020 and will exceed RUB 2.5 trillion.

After 11 months of 2021 VTB has issued over RUB 1.2 trillion in cash loans, which is almost 60% higher than the result of the whole 2020, and RUB 1 trillion in mortgages (+25%).

«This year, the retail lending market in Russia will show all-time records with its total portfolio higher than RUB 25 trillion. We saw an exceptionally high demand in the first half of the year amid historically low rates and beneficiary mortgage programs. But even now, with key rate rising by 3.25 percentage points and „dragging up“ market rates, seasonal factor is active, especially in digital channels. The regulatory decisions will largely determine next year’s demand. We are expecting the key rate to increase which means that the consumer lending market dynamics might slow down from 22% to 14% but will nonetheless remain double-digit. Assuming the Central Bank’s inflation target is met, we do not expect a move to neutral monetary policy until 2023», said Anatoly Pechatnikov.

The top manager said that while increasing loan sales, VTB was closely monitoring the solvency of its borrowers. «During the pandemic, we have built up a very high-quality portfolio of loans, the debts on which are now being carefully serviced by customers. The share of 90+ delinquent loans in the retail loan portfolio at the end of October 2021 has declined by 10% compared to the beginning of 2020. This is especially noticeable in the mortgage and car loan segments, where the impact of low-rate government programs is strong. As a socially responsible bank, we make sure that the population is not overindebted with record sales and, if necessary, offer the customer the option of credit holidays, which we have internally preserved for our borrowers. That is why at the moment the delinquency level is stable and is constantly in the focus of our loan officers,» added the VTB deputy chairman.