The population debt to banks fell for the first time since 2017

Lending in April was reduced, said the head of the Central Bank Elvira Nabiullina. This is the first monthly decrease from 2017. The crisis affected the willingness of banks to lend, and the confidence of Russians in the stability of income

Elvira Nabiullina

(Photo: Stanislav Krasilnikov / TASS)

Banking the retail loan portfolio, consumer and secured, fell in April by about 0.6%, said at a press conference the head of the Central Bank Elvira Nabiullina.

The pace of retail lending growth was double digits in 2018–2019 was worried about CB because of the risk of the market overheating. To avoid such a development, the regulator has restricted the issuance zakreditovannym most borrowers. However, the demand for lending products remained high. In March, before as the impact of the crisis became a full-fledged, banks issued to the population of loans at a record 962 billion rubles in annual terms, growth in the issuance of retail loans amounted to 27,8%, wrote RBC.

The Central Bank allowed the reduction in the rate at a record 2015 100 b.p.


But in April the pace of issuance has gone into the negative zone due to the impact of the crisis on banks and borrowers. “the Retail loan portfolio declined slightly, about 0.6%. On the one hand, the banks probably became more cautious to issue new loans to avoid growth losses in the future. On the other — the people themselves may be less willing to take them because of the uncertainty about the stability of their income”, — said Nabiullina. The last time the portfolio of loans to individuals declined in January 2017, according to data of the Central Bank (.pdf).

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Corporate loans persists the increased demand: “the requirements to the Russian companies has increased by about 1.2%. This is below the record growth in March — then it was at 2.6%, but significantly above the average before the introduction of restrictive measures, reflecting the increased demand of companies in Bank financing against the background of declining cash flows and contraction of the bond market”.

In April also broke the trend in the outflow of population from banks. In March, the Central Bank recorded a small outflow in April, the increase in the accounts of natural persons amounted to about 0.8%, gave the statistics of the Central Bank Chairman. “But at the same time reduced the funds of the organizations, somewhere in the 1.4%, but this decline was offset by an inflow of public funds”, — she concluded.

The demand for cash reduced the banks ' liquidity

Nabiullina also spoke about the situation with liquidity in the banking sector. From the beginning of 2020, the surplus of liquidity decreased from 2.8 trillion to 1.4 trillion rubles, including due to the increased public demand for cash, as “many people prefer to stock up on cash”. “We expect that the gradual lifting of restrictive measures a significant portion of the volume of cash rubles back to the banks”, — she said.

Banks are faced with the outflow of 700 billion rubles due to the growth of demand for cash


In the crisis period, the tendency to reduce the urgency of Bank liabilities. “there is a growth of long-term loans and the high share of deposits up to one year. In recent months this trend has intensified due to the fact that the company and the Federal Treasury began to place their deposits in banks in the shorter term," — said the head of the Central Bank. To strengthen the balance could and the fact that banks now restructuring loans for borrowers, faced with lower solvency. The lack of long liabilities in the future may limit the ability of banks in restructuring of loans and the issuance of long-term loans, warned the head of the Central Bank.

To align the maturity of liabilities of the Central Bank introduces long-term REPO for periods of one month and one year (REPO — that loans secured by securities). To participate in the auctions to be held every month will all the banks already have the opportunity to conduct REPO transactions with the Bank of Russia. The list of securities that are accepted as collateral will be limited. “long-term operations, taking into account the objectively higher risks, we plan to take only the most reliable assets — OFZ bonds and bonds of constituent entities of the Russian Federation and municipal entities with the highest credit rating on the national scale”, — said Nabiullina. However, the rate of annual REPO will change after the key rate, making this instrument of liquidity provision will not affect interest rates in the economy.

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