The head of Zadornov VTB24 in 2016 expected growth of demand for loans at 5-6% driven

The head of Zadornov VTB24 in 2016 expected growth of demand for loans at 5-6% driven

MOSCOW, December 28. The head of VTB 24 Mikhail Zadornov believes that the demand for loans in the Bank will grow by 5-6% in 2016 at the expense of the mortgage. He reported about it in interview to TV channel “Russia 24”.

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“We are waiting still from the point of view of the population and small business to a revival of demand for loans. From the population, we expect 5-6% growth, primarily through the same mortgage,” he said.

“If the government will extend preferential program for new construction on the mortgage – and we believe that it is reasonable to do, otherwise you’ll just be sad consequences for the construction business, mortgages will rise 10 percent next year and tighten all the crediting market”, – said Zadornov.

According to the head of VTB24, people will be more likely to borrow “just to maintain their standard of living”. “Frankly, we understand that the population is impoverished, and people just can drastically reduce your standard, and you can try a loan to support some elements of their normal lives,” he concluded.

Mortgage lending fell

VTB24 in 2015 reduced mortgage lending by 40%. This was reported today the President-Chairman of the Board Mikhail Zadornov on air of TV channel “Russia 24”.

“The least affected of the mortgage market. Issuance decreased by 40%. In 2009 there was a fall of almost 60 per cent,” he said.

Speaking about the dynamics of bad loans VTB24, Zadornov noted that the delay increases because the overall portfolio of outstanding loans is decreasing. “The rate of increase of delay less in 2015 than in 2014,” he said.

The head of VTB24 added that “this year will absolutely create less reserves than were created in the past.”

The reduction of the key rate

While Zadornov expects a gradual reduction in the key rate in 2016, he stated today on air of TV channel “Russia 24”.

Credit products remain one of the main sources of income and attract customers for banks, he said. “If the rate decreases with inflation is a more favorable situation for banks, because the rate reduction is one of the factors increasing demand for credit. The higher the rate, the less the demand for loans,” – said Zadornov.

Earlier, the head of the CBR Elvira Nabiullina said that the Central Bank may reduce its key interest rate at its next three meetings, when the inflation forecasts and inflation risks decline. According to the forecast of the Central Bank of the Russian Federation, the annual rate of increase in consumer prices at the end of 2016 will be about 6% and will reach goal of 4% in 2017.

In turn, the Minister of economic development Alexei Ulyukayev admitted the possibility of reducing the key rate of the Central Bank of the Russian Federation to single values in the 1-m sq