Financiers: 'There is a bubble threat due to mortgage market overheating'

Tatarstan citizens took out loans worth almost half a trillion rubles in a year

Almost half a trillion rubles of loans were taken out by residents of Tatarstan last year — this is more than the population of other regions of the Volga Federal District, analysts of Realnoe Vremya calculated, having studied the data of the Central Bank. The driver was the preferential mortgage and the economic attractiveness of the republic, experts say. At the same time, the average amount of consumer loans issued in the Volga Region over the year has increased by a third — from 135,000 to 179,000 rubles.

Tatarstan residents borrowed the most in the district

The republic ranks first in the Volga Federal District in terms of all types of lending to individuals (residents), with a total issue of 418,5 billion rubles, ahead of its neighbours — Bashkiria (401,7 billion rubles), Samara Oblast (305,3 billion rubles) and Nizhny Novgorod Oblast (286,3 billion rubles). This includes mortgages, car loans, and consumer loans, according to the Central Bank.

Despite that the year for two regions — Tatarstan and Bashkortostan — began with approximately equal volumes of loans for all types, at the end of the year our republic took the lead. So, in December 2020 alone, Tatarstan residents took out loans by 5 billion rubles more (48,7 billion) than Bashkortostan residents.

“The main driver of retail loan growth in 2020 was mortgages. In turn, the main driver of mortgage growth is concessional lending," Maksim Osadchy, the head of the analytical department of the Bank for Corporate Finance, commented on this trend.

The same opinion is shared by Pavel Samiev, managing partner of the National Agency for Financial Research (NAFI):

“Kazan is one of the leading cities in terms of the increase in the commissioning of built housing. This strongly correlates with the scale of the region, in terms of the economic potential of the population. Large regions with higher dynamics of economic parameters show a high growth rate of lending and, in particular, mortgages.”

According to the Central Bank, Tatarstan accounts for about 15% of the total volume of lending to individuals in the Volga Federal District. The republic showed the lowest volume of loans in April, as well as the whole of Russia during the self-isolation. These figures were more than twice lower than in December (19,3 billion rubles).

“The question of risks is very subtle”

The debt of individuals to banks in Tatarstan (544,4 billion rubles) is slightly lower than in Bashkortostan (548,2 billion rubles), which is the leader in this indicator in the Volga Federal District. The third place in the loan portfolio of physical persons is still occupied by the same Samara Oblast (383,1 billion rubles).

At the same time, in the anti-rating of the regions of the Volga Federal District with overdue debts in absolute terms, Bashkortostan is the first (with 22,7 billion rubles or 4,1% of the debt). They are followed by Samara Oblast (22,2 billion rubles, or 5,8% of the debt), the third — Tatarstan (18,9 billion rubles, or 3,5% of the debt).

If we evaluate the percentage, the leader of the anti-rating for the share of “delinquency” in the district is still the same Samara Oblast— 5,8% of the portfolio, with an average value in the Volga Federal District — 4,2%. The second — Saratov Oblast (5,1%), third — Ulyanovsk Oblast (4,5%). According to this indicator, Tatarstan is among the best regions of the district — with a level of 3,5%.

According to Pavel Samiev, the issue of risks is very “subtle”. Credit risks can increase dramatically due to some external factors, when the market conditions and the financial situation of borrowers deteriorate. It may be a some kind of sharp shock or stagnation of the economy, which will put pressure on the budgets of each family. Together, this adds up to the overall picture of the impact on credit quality, the expert noted.

According to the National Bureau of Credit Histories, the average size of a consumer loan (issued) in the Volga Region increased by a third over the past year — from 135,000 to 179,000 rubles. Tatarstan does not lag behind the trend, where the growth was 36% (in January-147,800 rubles, in December — 200,800 rubles).

“Last year, lending in all segments (from mortgages to credit cards) was growing very intensively in all regions. But there were some regions where the growth rate was even higher," Pavel Samiev explained.

The largest increase in the size of the average consumer loan was shown by Mari El — more than 53%. In the region at the beginning of the year, this indicator was 85,900 rubles, and by the end of the year — 132,100 rubles. The second largest increase was in the Chuvash Republic (39,4%, at the beginning of the year — 120,700 rubles, at the end — 168,300 rubles). Ulyanovsk Oblast rounds out the top three in terms of the increase in the size of the average loan — 36,8%.

“The trend is alarming, including for the regulator”

In general, over the past year, Russians borrowed 15,6 trillion rubles from banks. Moreover, the record amount of issuance for the month was in December — 1,7 trillion rubles. The amplitude of the volume of lending to individuals during the year reached up to a trillion rubles, for example, in April (the lockdown period) and December.

Maksim Osadchy explained that the main factors of the growth of lending (mortgages) are:

  1. state support in the form of a soft loan programme,
  2. lower mortgage interest rates,
  3. improving the security of transactions (escrow accounts),
  4. lower interest rates on bank deposits and, as a result, the outflow of funds from the deposit market to alternative markets — the stock market and the real estate market,
  5. the rapid growth of the national debt, which is covered by the issue of cash, stimulating, among other things, the mortgage market.

The total debt of Russians to banks also reached a record high — almost 20 trillion rubles. But the situation with the share of overdue loans is relatively stable, and the second half of 2020 [the share] fluctuated in the range of 4,4-4,6% of the debt.

The Republic of Ingushetia (7,8%), the Karachay-Cherkess Republic (7,6%) and the Republic of North Ossetia — Alania (7,6%) have the worst indicators for the share of “delinquency”.

“There is a bubble threat due to mortgage market overheating. The trend is alarming, including for the regulator. The soft loan programme is likely to be fully or partially completed on July 1. Perhaps, there will remain some options for this programme, for example, for large families. However, it is too early to talk about the serious threat of a crisis and a bubble in the mortgage market. The share of overdue debt is small," Maksim Osadchy considers.

According to Pavel Samiev, the market is currently getting saturated, and the growth rate of lending is going to fall. From a period of low rates, the country will move on to the next stage. “There are some expectations of banks that the key rate will rise, and after it, the interest rates on loans will also rise. This will lead to some cooling of lending and, as a result, demand. The minimum rates are likely already passed," he concluded.

By Yevgeny Khramov