MOSCOW, March 1 – RIA Novosti. The lowest share of overdue debts of the population to banks at the end of last year was recorded in the Nenets District, Sevastopol and Yamalo-Nenets Autonomous Okrug, the highest indicators of overdue debt among Russian regions – in Ingushetia and other republics of the North Caucasus, according to a study by RIA Novosti *.
To assess the share of overdue debts of the population to banks, RIA Novosti experts conducted a study and made a rating, which clearly shows in which regions the banks have the most disciplined borrowers.
The consumer lending market in Russia in 2020 showed good growth rates (+ 14%), even against the backdrop of the COVID-19 pandemic. At the same time, experts admit that relative to the dynamics of 2019 and 2018 (+ 18% and + 22%, respectively) there was a noticeable slowdown. In contrast to recent years, the dynamics of consumer lending has not been stable, in some months in the spring there was a reduction at all, which has not happened for many years, experts say.
Statistics show that the market returned to stable growth in the second half of last year due to economic stabilization, lower market rates and continued stimulation of lending (primarily mortgages). Experts also drew attention to the fact that at the end of the year, the securitization of retail portfolios intensified, which somewhat slowed down “on paper” the growth rates. Taking into account this effect, the nominal growth of the retail loan portfolio of Russian banks could be at the level of about 16% per year.
All types of lending to the population (unsecured, housing and car loans) showed an increase in 2020, however, mortgage lending grew most rapidly. The growth of mortgage debt in 2020 was at the level of + 20% (+ 17% in 2019), and as of January 1, 2021, the volume of mortgage debt on the balance sheets of banks amounted to 9.3 trillion rubles.
Despite the tangible reduction in interest rates, interest payments to banks in the past year increased by 8%, or 186 billion rubles more. In general, the population paid Russian banks in interest of about 2.5 trillion rubles for 2020.
At the same time, the trend of the last three years to improve payment discipline was interrupted. Most likely, experts say, the decline in household incomes amid the coronavirus pandemic played a large role in the growth of overdue debt. Over the past year, the amount of overdue debt increased by 168 billion rubles to 932 billion rubles as of January 1, 2021. At the same time, the share of overdue debt in 2020 increased from 4.33% as of January 1, 2020 to 4.65% at the beginning of this year. The growth that has taken place is not dramatic, analysts say – for comparison, in 2017 the share of overdue loans to individuals exceeded 8%, that is, despite the negative dynamics in the last year, over 3.5 years this share has almost halved.
Improvement in 15 regions
To assess payment discipline in a regional context, RIA Novosti experts based on data from the Central Bank of the Russian Federation conducted a study and prepared, at the end of 2020, the fifth annual rating of Russian regions in terms of the share of overdue debts of the population on ruble bank loans.
According to the results of the study, among Russian regions there is a significant differentiation in the share of overdue debt on loans to the population. In three regions, the share of delinquencies exceeds 7%, and in four constituent entities of the Russian Federation, the share of overdue debts is less than 2.5%. In general, the median value of the share of overdue debt on loans to the population at the end of 2019 was 4.4%, against 4.1% a year earlier.
In 2020, more than 80% of regions with a deterioration in the payment discipline of the population (70 out of 85 regions). The largest increase in the share of delinquencies in 2020 was observed in the Kaliningrad Region, where it grew by 1.6 percentage points over the past year. There was also a significant increase in the Chechen Republic and Lipetsk region (+1 percentage point). In another 25 regions, overdue loans to households over the past year increased by more than 0.5 percentage points. It should be noted that the overwhelming majority of regions with a large increase in delinquency in 2020 are characterized by the development of the retail lending market at a below average level.
The scale of the decline in the share of delinquency in a number of regions was much greater. If the maximum increase in the share of overdue debt was at the level of 1.6 percentage points, then the maximum decrease in the share of overdue debt was 5.3 percentage points. The leader in improving payment discipline was the Republic of Ingushetia (-5.3 percentage points), this republic has been characterized by a rapid decline in the share of delinquencies for several years in a row. Experts believe that this is most likely due to the improvement in servicing a small number of large loans, while the broad mass of the population has not yet taken bank loans in Ingushetia, and the base remains very low. Also, a noticeable increase in payment discipline is noted in the Karachay-Cherkess Republic (-1.5 percentage points and in the Republic of Buryatia (-1.0 percentage points).
Analysts draw attention to the fact that the most economically developed regions (Moscow, Yamalo-Nenets Autonomous Okrug, NAO, Khanty-Mansi Autonomous Okrug-Yugra, Sakhalin Oblast, Tatarstan and others) were characterized by a reduction or near zero dynamics in the share of overdue debt. Of course, these regions also suffered from the pandemic, but the population in the bulk of them can afford to spend money on expensive goods and services, and in the current realities, people consciously and involuntarily saved money on these expenses. And the money saved made it possible to serve their loans well, experts explain.
Best payment discipline
The Nenets Autonomous Okrug, Sevastopol, the Yamalo-Nenets Autonomous Okrug and the Chukotka Autonomous Okrug became the leaders with a noticeable margin in payment discipline for bank loans. Other northern regions are also showing very good results. On the whole, the leaders remained almost unchanged compared to last year, but a number of them had growth rates higher than the national average. Noteworthy is the relatively rapid growth of delinquencies in Crimea, where lending growth rates are slowing down due to market saturation, and old loans are becoming overdue.
The highest share of overdue debt, despite its significant decrease, remains with the Republic of Ingushetia (7.8%), but for comparison, three years ago it was at 24%. In addition, a high proportion of delinquencies was recorded in the following regions: in the Karachay-Cherkess Republic, in the Republic of North Ossetia-Alania, in the Republic of Adygea, in the Chechen Republic, in the Stavropol Territory, as well as in the Krasnodar Territory and in the Kabardino-Balkarian Republic. In all these regions, the share of overdue debt on loans to the population at the beginning of 2021 exceeds 5.9%. All the above-mentioned regions are characterized by the volume of loans for the economically active population below the national average, which may indicate a relatively weak development of retail lending.
St. Petersburg took a rather high tenth place in the rating. In the second largest city in Russia, 3.2% of retail loans are overdue (an increase in the share in 2020 by 0.4 percentage points). In Moscow, the share of overdue debt is 4.1% as of January 1, 2021 (31st position in the rating), and last year it slightly decreased.
According to RIA Novosti analysts, the situation with lending dynamics in 2021 will be similar to 2020. The economic situation will improve, which will stimulate retail borrowers to take out loans, however, some of the lending incentive programs will be limited, which in turn will slow down the growth rate. Overall, these two trends will balance each other. At the same time, although interest rates will stop decreasing, they will stimulate the growth of lending.
Since some of the borrowers who keep old loans with high rates will be able to refinance or pay off expensive loans, and then take a new, larger loan with a lower rate. In general, in 2020, retail lending will grow by 14-17% in real terms, experts say. Against this background, overdue debt will decrease on average across the country by 0.2-0.4 percentage points.
* The rating was prepared by order of the RIA Novosti agency by RIA Rating specialists.