BANK LENDING SURGES BY 1.5 TIMES
A year ago, Mr. A. Simanovsky, the Bank of Russia’s Deputy Chairman, ventured a guess concerning the growing banking lending to the Russian economy in 2012. In his opinion, the increase in the scopes of provided loans should have amounted to approx. 20% in the current year. However, credit institutions proved to be much more active in performing their fundamental function – placement of deposits. As of the start of November, the aggregate assets of the banking sector increased by 49.2%, to RUB 33 trillion. The growth leader was retail lending (at 81.1%), and the minimum growth was achieved in lending to public authorities and off-budget funds (27.6%).
Non-financial resident companies gained the lead by the volume of loans provided to them (approx. RUB 18 trillion); while non-resident individuals are the last in the list – they received just RUB 15.3 bln from Russian banks.
Interestingly, this year the demand for currency loans dropped among virtually all borrowers’ categories (the contraction in volumes of provided retail currency loans came to 9%), except for financial institutions, while ruble loans were popular even among non-resident borrowers (see Fig. 1, 2).
Obviously, the persisting risks of forex lending, associated with the probability of exchange rate fluctuations, is the decisive factor when the loan type is selected. The main advantage of forex loans has always been their low interest rates, which is often below the ruble loan rate by several percentage points. However, macro-economic changes in a post-crisis period result in drastic and significant exchange rate fluctuations towards increase, which levels down all of the interest payment benefits.
Head, Corporate Finance Department
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