Anticipated Timeline for Credit Renaissance in Russia as Per VTB Forecasts
Looks like we're discussing the state of consumer lending in Russia, as per several financial experts. Georgiy Gorshkov, for one, thinks we ain't seein' a drop in consumer lending rates back to the 2020-2021 levels within the next year and a half. He also predicts a retail lending revival won't happen before the second half of 2026.
Gorshkov believes that rates will stay in the double digits, hovering around 20-25-30% per year. He reckons the market needs time to recuperate after a prolonged period of high key rates, so banks gonna be real careful from now on when dolin' out 'cheap' long-term loans.
Now, a top honcho at VTB thinks that tiny initial down payments are gonna become as rare as a unicorn’s nose, and in the auto lending market, we're lookin' at smaller loan approvals compared to previous years. That means borrowers gotta dig deeper into their pockets. VTB is predictin' a 40% drop in auto loan issuance - down to 1.3 trillion rubles. All in all, VTB estimates the market gonna shrink by around 30% to 8.8 trillion rubles by year's end.
The key rate in Russia has been maxed out at 21% since October 2022. On March 21, the Bank of Russia's Board of Directors left it unchanged for the third time in a row. On April 8, Central Bank Governor Elvira Nabiullina ensured us that the high key rate period ain't gonna last forever. The Bank of Russia plans ta take it slow when it comes to easin' monetary policy, takin' into account the risk of global trade tectonics.
VTB CEO Andrei Kostin, in a meetin' with clients, stated that he sees signs of a rate reduction by the end of 2023. "We believe there's a reason for the rate to start decreasin' gradually, say, to 19% by the end of the year. It'll remain quite high for the next two years," Andrei Kostin mentioned on April 24. According to him, the Bank of Russia is gonna keep the key rate at 21% at the next meeting.
So there ya have it, folks! Bottom line is that consumer lending rates ain't droppin' back to the 2020-2021 levels anytime soon, and we gotta brace ourselves for double-digit rates for the foreseeable future.
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- Georgiy Gorshkov, a financial expert, expects consumer lending rates in Russia not to decrease to the 2020-2021 levels within the next year and a half, and a retail lending revival won't occur before the second half of 2026.
- According to Gorshkov, consumer lending rates will stay in the double digits, hovering around 20-25-30% per year, with banks being careful when doling out long-term loans.
- In contrast, a top executive at VTB suggests that tiny initial down payments in the auto lending market will become rare, and smaller loan approvals are expected compared to previous years.
- The key rate in Russia has been at 21% since October 2022, and VTB CEO Andrei Kostin sees signs of a rate reduction by the end of 2023, predicting a gradual decline to 19% by year-end.
- The Bank of Russia, led by Governor Elvira Nabiullina, has assured that the high key rate period won't last forever, although they plan to take it slow when easing monetary policy, considering the risk of global trade tectonics.
