Mortgage and corporate lending continues to grow fast despite higher interest rates
Growth in the mortgage portfolio slowed down to +2.9% in October from a record high +4.2% in September. However, this rate was still high. There was a drop in both market-based mortgages due to higher interest rates and subsidised facilities because of larger down payments and tighter macroprudential requirements.
Growth in unsecured consumer lending slowed down to a greater extent to +1.1% from +1.5% in September owing to the tightening of macroprudential regulation and higher rates.
Demand for corporate loans remained high (+2.3% after +2.0% in September).
Household funds with banks were growing at a faster rate, namely +1.4% vs +1.0% in September. Clients continued to transfer funds from current accounts to time deposits. Corporate funds rose slightly (+0.2%) because of sizeable quarterly tax payments.
The banks’ monthly profit totalled ₽256 billion (return on capital was 22% in annualised terms), having dropped by 13% from the September result due to losses caused by the foreign currency revaluation amid a stronger ruble. Since the beginning of 2023, the banking sector has earned ₽2.9 trillion which is an overstatement, as banks have included a loss of around ₽0.4 trillion from the bonds’ revaluation directly in capital rather than in profit.
More details are available in the information and analytical material Russian Banking Sector Development in October 2023.