Central Bank announced a difficult year for retail banks

Central Bank announced a difficult year for retail banks

The Bank of Russia expects that in 2017 will not be easy for retail banks, said on Thursday the Chairman of the Central Bank Vasily Pozdyshev at the conference X Retail Finance Forum. Because of the tighter regulation they can get less profit it made.

“We expect to raise the risk ratios for unsecured consumer loans. Unsecured consumer lending will be more expensive for banks in terms of capital adequacy,” — said Pozdyshev about plans for 2017 (quoted by “Interfax”).

In 2017, the regulator also plans to conduct spot checks of individual Bank loans and to generalize its results on the entire portfolio of homogeneous loans, promised the Chairman of the Central Bank. According to him, this is necessary because during the previous inspections, the regulator found that some banks are “hiding” in portfolio loans significant risks. Under the current mechanism of calculating provisions and requirements of the Central Bank to identify such risks can not be admitted Pozdyshev.

In early November the Bank of Russia announced that it intends to shift down the range of the total cost of credit (PSK) for unsecured consumer loans, if it applies an increased risk factor. The Central Bank has proposed to lower the ratio from 25-35% to 20-30% for loans granted after 1 January 2017. According to Pozdyshev, the previous regulation PSK was introduced a few years ago when another level of interest rates. Now in the Central Bank consider it correct to take into account the new level of rates, which, according to Pozdyshev, prostimulirujte banks actively reduced interest rates on loans for the population. While Pozdyshev added that from the banks ‘ perspective, such a move by the Central Bank “may not have the best consequences for the generation of profits”.

As previously mentioned, for the first nine months of 2016, banks and microfinance institutions, according the National Bureau of credit histories (nbki), issued loans 53% more than last year. According to NBCH, most of the population took a mortgage and unsecured micro-loans. From the data of the Bank of Russia implies that in the third quarter, the retail loan portfolio increased in comparison with the second quarter by 0.8%. By 1 October it exceeded 5.1 trillion In 2015 and in the first half of 2016, the dynamics of lending was negative. According to the Central Bank, the average weighted rate on ruble loans to individuals-term (over a year) fell out of 18.11% in January to 16,61% in September.

Signs of recovery in consumer demand and the growth of retail lending, said earlier the head of the Central Bank Elvira Nabiullina. However, she stressed that the old model of the Russian economy, which was based on exports of raw materials and boosting consumption, including consumer loans, have been exhausted. According to Nabiullina, Russia needs to transition to a savings-investment economic model. And signs of recovery in consumption should not exceed the growth of nominal incomes of the population, said the head of the Central Bank.