Russian banks approved the least amount of loans in three years

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Banks in Russia approved just over a third of retail loan applications in 2020. Such data was presented by RBC with reference to the statistics of the National Bureau of Credit Histories (NBCH).

This indicator fell by 3 pp. compared to 2019 and updated the three-year low. At the same time, the tightening of credit policy is not observed in all segments. For example, car loans are often denied. Unsecured loans and credit cards have also been approved less frequently.

However, those wishing to take out a mortgage were approved by more than 70% of loans, which exceeded the indicators of previous years.

“In the mortgage segment, the level of approval has become a record high over the past four years, which is primarily due to a decrease in rates due to state support programs,” said Alexei Volkov, NBKI Marketing Director.

According to one of the largest credit bureaus (BCI) Equifax, loans began to be approved less often in March and April, during the first wave of the coronavirus pandemic, but at the end of the year banks softened their risk policy.

“First of all, the decrease in approval levels is associated with anti-epidemic measures. This factor was the root cause of all subsequent changes in credit policy by banks in the second quarter, ”said Oleg Lagutkin, CEO of Equifax, recalling that in the spring a lot of citizens were introduced to a non-working day regime, a ban on mass events and other restrictions were introduced in the country.

All these factors, as added by the analyst of the NKR rating agency Yegor Lopatin, led to a worsening of the economic situation and a decrease in the income of the population.

In addition, experts called the Central Bank’s policy another factor in reducing the level of loan approvals. Thus, the rate of unsecured lending in the Russian Federation has been growing since 2017, and the regulator has registered an increase in the debt burden of Russians.

Moody’s analyst Svetlana Pavlova believes that in 2021 the banks’ policy will change, but not significantly.

“Most likely, against the background of the low base of 2020, we will see some movement in the direction of increasing the risk appetite of banks this year as the return to positive growth in household incomes,” she concluded.

Earlier, in January, the press service of VTB reported that Russian banks in 2020 issued a record 4.2 trillion rubles in mortgage loans. As explained by Anatoly Pechatnikov, Deputy President and Chairman of the VTB Management Board, several factors contributed to the achievement of such indicators: business digitalization, lower rates, increased demand for refinancing and a preferential mortgage program.

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