Corporate and consumer lending expectedly cool in December
December saw the corporate loan portfolio lose 0.2% owing to large repayments in foreign currency. Corporate lending grew by 17.9% in 2024 overall, which was comparable with the 2023 figure. More than a half of this growth was due to the segments that were less susceptible to interest rate rises, namely financing of investment projects launched earlier and housing construction.
Unsecured consumer lending contracted by 1.9% because of the applicable macroprudential requirements and higher interest rates. However, the portfolio of these loans gained 11.2% as of the end of 2024 owing to its fast growth last spring and summer.
Mortgage lending showed a moderate monthly increase of 0.4%, with subsidised mortgages accounting for more than 80% of new loans. Its annual growth slowed down to 13.4%, which was considerably below the level of 2023 when the market was significantly overheated by large-scale government-subsidised mortgage programmes. The amount of loans issued in 2024 was comparable with that registered in 2020 and 2022.
Household funds with banks grew by appreciable 7.2% in December, as social benefits due in January were conventionally paid in advance (including pensions and child benefits), and thanks to the payout of annual bonuses. By the end of the year, household funds with banks gained 26.1% in part due to rising household income and high deposit rates.
December registered a steep drop in the net profits of banks to ₽187 billion caused by losses from foreign exchange revaluation and higher operating expenses. The banking sector earned ₽3.8 trillion in 2024 (excluding subsidiaries’ revenues). Given the negative revaluation of securities recognised directly in equity, the aggregate financial performance of the sector went down to ₽3.4 trillion.
More details are available in the information and analytical material Russian Banking Sector Development in December 2024.