On the release of analytical material ‘Changes in Bank Lending Conditions’ for the first quarter of 2014
The Bank of Russia has released the analytical material ‘Changes in Bank Lending Conditions’ for the first quarter of 2014.
According to the results of the survey of Russian major banks, the first quarter of 2014 saw the tightening of bank lending conditions (BLC) for all categories of borrowers (except for mortgage loan borrowers). The BLC tightening resulted in interest rate increase and more stringent requirements to the financial standing of borrowers.
In 2014 Q1,the persistent macroeconomic uncertainty manifesting itself in lower accessibility of the external and internal bank funding and a deteriorating situation in the non-financial sector was the main reason for BLC tightening. Expectations of economic worsening continued to play a key role when banks made their decisions on the current tightening of lending conditions. The competition factor in the capital market in the period under review did not have a significant impact on general trends of changing BLC. The changes in the parameters of Bank of Russia monetary policy became more important for creating bank lending conditions.
Conditions for household loans unsecured with mortgage continued to become tougher, as compared with BLC for mortgage lending to households.
In 2014 Q2-Q3, banks, which have taken part in the survey, expect further tightening of BLC for all major categories of borrowers. At the same time, if the easing of BLC on mortgages is expected to continue in 2014 Q2, conditions for mortgage loans will become tougher in 2014 Q3, according to estimates of the respondent banks.
In spite of expectations voiced in the course of the former survey in 2014 Q1 banks registered a reduction in demand for new loans from major corporate borrowers and representatives of small and medium-sized businesses. Demand reduced largely in the short-term segment of the lending market, while it increased slightly in the long-term segment. Demand went down in the consumer segment of the lending market, although demand for mortgages grew as it did before. At the same time, lending markets of, first and foremost, Moscow and St Petersburg saw a decrease in demand for new loans, while many regional lending markets registered its expansion.
In 2014 Q2-Q3, despite the tightening of lending conditions, banks expect a recovery in demand for loans from all major categories of borrowers, especially from large companies. Growth in demand for loans is expected in 90% of regions undergone the survey.
The analytical material ‘Changes in Bank Lending Conditions’ is published quarterly in the Bank of Russia Bulletin and on the Bank of Russia website under the heading ‘Changes in Bank Lending Conditions’ of the ‘Monetary Policy’ section. The methodology for calculating indicators of bank lending conditions and demand for loans is placed in the same section of the Bank of Russia website.
The reference to the Press Service is mandatory if you intend to use this material.
09.06.2014 00.00.00