Mortgage remains booster of lending growth all over Russia

In the second quarter of 2016 mortgage lending supported by the government programme of interest rate subsidies, remained one of the boosters for the Russian credit market growth. Mortgage loan portfolios increased by 2.4% throughout the quarter. The banks continued increasing mortgage loan portfolios almost in all Russian regions, the current issue of Regional Credit Markets Review says.

The banks kept on pursuing conservative retail lending policies by reducing the proportion of risky consumer loans and increasing the mortgage share. Notably, the consumer lending cuts markedly decelerated. This resulted in started retail lending growth in Russia as a whole in the second quarter of 2016.

The banks increased retail lending at outstripping growth rates in most of the regions of Siberian and Central Federal Districts, and in some regions of North-Caucasian Federal District. The retail portfolio cuts significantly slowed down in the Urals Federal District.

Corporate lending growth rates were next to nothing both in the first and the second quarters. The Siberian and Urals Federal Districts contributed most to the corporate lending growth, whereas the Southern Federal District contributed most to the corporate lending decrease. Against the backdrop of softer lending conditions SME loan portfolio cuts changed for their growth in the second quarter.