Demand for loans is high in August
Companies’ demand for loans remained high in August. The corporate loan portfolio expanded by 1.7% (+2.1% in July). Many borrowers utilised credit limits at interest rates approved earlier, before their increase. Mortgage lending surged by a record 3.7%. People were likely seeking to invest in real estate, including because they expected higher interest rates and tightening of government subsidised lending terms. Consumer lending increased by 2.4% due to seasonal spending on vacations and back-to-school supplies.
According to the forecast, the expansion of lending will generally slow down during the remainder of the year considering higher interest rates and macroprudential policy tightening.
The growth of households’ funds in bank accounts edged lower from +1.1% in July to +0.8% in August. Besides, there was a notable transfer of funds from current accounts to time deposits as a result of the rise in interest rates. Corporate funds significantly increased (+3.7%), including in the oil and gas sector, which was apparently associated with higher energy commodity prices.
Banks earned ₽353 billion in August, which is 8% more than in July. As before, gains from foreign currency revaluation are an important driver of profitability.
More details are available in the information and analytical material Russian Banking Sector Development in August 2023.