On the protest wave: currency borrowers are waiting for the intervention of the Central Bank

The Central Bank wrote to the bankers

Last week bankers have received requests from the Central Bank’s requirement to report the number of foreign currency borrowers, the volume of the mortgage portfolio and delinquency. This was told by a top Manager of one of the banks and confirmed the interlocutor in another Bank that received such a request. “The controller asked what the restructuring program we develop and that are willing to offer to borrowers”, — said one of the financiers, to communicate with the controller. At three banks, which also have foreign currency mortgages, said that similar requests from the regulator was received in mid-January.

A source close to the regulator said that the representatives of the Central Bank intend to meet with representatives of banks, on balance of which there are many in the currency of the mortgage, and the results of the discussions will announce their proposals for the solution of the issue of currency borrowers. “We are studying the situation with currency mortgage and plan to discuss it with market participants”, — commented the press service of the Central Bank.

Earlier, the Chairman of the Central Bank Alexey Simanovsky said that the Central Bank of Russia plans to discuss with banks the problem of repayment of foreign currency mortgages. “We will discuss the search for solutions that would lead to the best result. If you look at how banks solve problems with borrowers, they solve in different ways”, — quotes its words “Interfax”. According to Simanovsky, some opportunities for extra step borrowers exist, while the Central Bank and can not make banks any requirements. “We will search for additional solutions, including lines of how intensively used the opportunities that were identified by a government decision to allocate 4.5 billion rubles,” he said.

The government has allocated 4.5 billion rubles for the program of assistance to mortgage borrowers who find themselves in difficult financial situations. Money received in a structure that was created through the merger of the Agency for housing mortgage lending (AHML) and the RHD Foundation.

For the first time his proposals for solving the problem of foreign currency mortgages the regulator announced a year ago. In January 2015, the Central Bank recommended that banks “should consider the issue of restructuring the” foreign currency mortgages at the exchange rate at October 1, 2014 — 39,39 rubles per dollar and 49,98 rubles per Euro. The recommendation was not binding and the banks didn’t go for it. What did they offer instead?

Into rubles at benefit

Some market participants, without waiting for a new intervention of the regulator has prepared its program of restructuring foreign currency loans. In particular, ROSBANK has offered to convert foreign currency mortgage loans at a special rate, allowing to reduce the size of the debt in ruble equivalent by 20-30%. Under these conditions, the Bank is ready to refund amount to no more than 1,2-1,8 million rubles depending on the category of the borrower. Restructuring loans can count currency borrowers, under suitable conditions of the assistance program of the seller. The rest of the Bank is ready to transfer a debt into rubles at a discounted rate of 11% per annum or to provide a “vacation credit” for two years, during which rate is reduced to 9% per annum. Bank’s press service says that the introduction of the new restructuring program is not connected with the statements made by the representatives of the Central Bank.

A new restructuring programme for foreign currency borrowers also prepared the Bank of Moscow. The program provides that a borrower, who for some reason was not able to service their loan may transfer his apartment to the Bank under the contract compensation. If the debt exceeds the value of the flat, static may be charged, said the representative of the Bank. Thereafter, the borrower may enter into with Bank the agreement on lease of this apartment for up to 3 years on favourable terms. During this period, the client has the right to apply for a new mortgage for the purchase of an apartment. If the Bank’s decision will be positive, new credit may be issued for the new environment – at the rate of 10% per annum in rubles and the minimum set of documents, says Vice-President of Bank of Moscow, Miguel Markaryants.

He also said that for loans in Swiss francs and Japanese yen has a program that provides the ability to convert the balance of loan debt at the current exchange rate of the Central Bank and the decline in lending rates initially up to a comfortable level for the client. Markarian says that the interest rate on this programme is 1-3% per annum in rubles.

Earlier proposals on restructuring of foreign currency mortgage announced Absolut Bank and Sovcombank. The first is ready to convert the loans into rubles at the exchange rate 57-65 rubles per dollar and set the interest rate at 12% per annum. As reported by the Bank, a third of borrowers in 2015 are already restructured foreign currency mortgage loans. In Sovcombank had offered to convert loans at the exchange rate of 50 rubles per dollar. “Transfer today mortgages in rubles is almost impossible for many borrowers, this will inevitably lead to higher interest rates and the inability to pay regular payments”, — declared the first Deputy Chairman of Sovcombank Sergey Khotimsk. He also called on other banks to follow suit and “to limit their own appetites”.

The preferential rate when you convert foreign currency loans (50 rubles per dollar and 60 against the Euro) is valid and in Gazprombank. “The Bank reserves the right to change course in case of change of market situation”, – said the Deputy head of Department of retail products and processes Gazprombank Julia Elsukova.

Apartment in exchange for forgiveness

The rest of the market participants interviewed , offer their borrowers refinance at the current rate or vacation credit. “The issue of conversion of debt on so-called “preferential exchange rate” the Bank is not considered. Every FX mortgage borrower who faced the problem of debt repayment, the Bank worked and continues to work individually,” — said the press service of VTB24. While the Bank is also ready to consider “options for compensation” when the apartment is taken as repayment of the debt.

In 2015, VTB24 also offers customers to refinance their foreign currency debt at the current rate, but at a reduced rate. Borrowers are also offered a “repayment holiday” for a period of 6-12 months, during which it will be possible to pay only the interest on the mortgage. Until June 2015 the Bank also had a refinancing in which the borrower was offered a discounted interest rate with no transfer of a debt into rubles.

In late January, the head of VTB24 Mikhail Zadornov said that the Bank will not change the approach to the restructuring of foreign currency mortgage loans and “handling the problem of foreign currency borrowers to other clients of the Bank”.

Head of risk management of individuals Raiffeisenbank Stanislav Times also said that the Bank is willing to forgive the debt if the amount owed on the mortgage exceeds the value of the apartment. “We can also extend the term of the loan or to offer a grace period up to 9 months, during which significantly reduced the amount of the monthly payment, twice or more”, — he added.

On availability of own programmes of restructuring of foreign currency mortgage “on individual conditions” also reported in the Delta Loan, RosEvroBank, SMP Bank, Gazprombank, Bank “FC Opening”, but the details of the programs the banks do not disclose. “We are ready to consider each case individually, since a common solution in this situation is not and can not be”, — said the official representative of SMP Bank Igor Ilyukhin. He lamented that borrowers are not took advantage of the situation, when the dollar was falling to a level about 50 rubles and continued to wait for situation improvement. “At this time we have offered a bet of 13% per annum,” — said Ilyukhin.

What proposals have the banks for foreign currency borrowers, can also be found in the material.Money: “No chance: what programs are offered by the banks monetary food”.

Who for who against

Some foreign currency borrowers are not satisfied with the offers of banks. In January during a rally at the office of Bank “Delta the credit” borrowers are required to recalculate the balance owed at the rate on the date of the agreement plus 30%, or to transfer the credit in rubles at the current exchange rate, but to write off 60% of the debt.

Only with the beginning of the year the owners of foreign currency mortgages held a number of shares at the offices of Absolut Bank, Raiffeisenbank, Bank Delta credit, VTB24, OJSC Nordea Bank, UniCredit, moskommertsbanka, Bank of Moscow, URALSIB. Tuesday, February 2nd, due to the incursion of foreign currency borrowers, dressed in garbage bags, was actually paralyzed the work of the mortgage center of Raiffeisenbank Smolenskaya-Sennaya square. Most were attacks on the offices of Delta credit, which customers January held 5 shares. The last event was held on Friday 5 February. Borrowers of the loan of the Delta, singing the Internationale and shouting “Colbert (CEO of Bank Delta Credit” Michelle Collier) — come on out!” tried to break into the office, but were stopped by security guards.

But in the midst of the exchange of food there are also many who agreed to convert its debt to bankers proposed conditions. “In 2015, there were special conditions for refinancing of foreign currency loans into rubles at a lower interest rate, and the dollar in 2015 for a long time were at significantly lower values than now”, — said the press service of the Delta of the Loan, adding that borrowers could go into Russian roubles at the rate of 11% per annum, then as on the market at the time rates were at the level of 14-16%. According to the Bank, from December 2014, more than 2.5 thousand of foreign currency borrowers have restructured their loans.

“Now a little more than 5% of all of our clients have loans in dollars”, — said the representative of Delta credit Ilya Alexandrov.

In Bank of Moscow saying that the proposed restructuring programmes have used 550 borrowers in Raiffeisenbank translated into rubles currency mortgages 69 customers, and 143 of the loan were restructured. “Our proposals for restructuring and refinancing have used about 40% of borrowers”, — said the press service of SMP Bank. In Gazprombank told that about 10% of foreign currency borrowers in November-December 2015 fully repaid their loans at a preferential rate: “Early repayment of the remaining foreign currency mortgage loans also accelerated significantly. On January 1, 2016 their number to 466 in the amount of $37,8 million,” says Julia Elsukova.

According to Mikhail Zadornov, the number of foreign currency mortgage borrowers in 2015 decreased by 27%: from 5 thousand borrowers of the Bank 1.4 thousand restructured loans remain in foreign currency, approximately 550-600 people have converted the loan into rubles, part — repaid his debt. The Bank is now about 2.5—3 thousand of foreign currency borrowers, said Zadornov. The representative of ROSBANK reported that the retail loan portfolio of the Bank now about a thousand mortgages in the currency, and in 2015 more than 35% of clients have already paid off, refinanced or restructured their loans.

According to the Central Bank for the year 2015, 1 December 2015, the total volume of mortgage loans in foreign currency amounted to 122.2 billion rubles in ruble terms (about 3% of all mortgages). However, only for the first 11 months of last year (January—December) were issued to 122 new housing loan in foreign currency amounting to 4.5 billion rubles.