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- Measures on the scale: Central Bank kept the rate due to 1.5-fold decrease in business loans
Measures on the scale: Central Bank kept the rate due to 1.5-fold decrease in business loans
In November, business lending decreased by 1.5 times, down to Br5.8 trillion. This was the reason why the key rate was maintained on December 20 - this reduction was the sharpest since at least 2019, Izvestia found out. Before that, the head of the regulator Elvira Nabiullina in the public field only hinted that, according to preliminary data, the rate had "significantly" decreased, without naming specific figures. After the December decision of the Central Bank, banks have already reduced deposit rates. However, loans are still issued at unaffordable high interest rates, which slows down investment activity and, consequently, economic growth. What decision the Bank of Russia may make in February is the subject of the Izvestia article.
Why the Central Bank decided to keep the key rate in December 2024.
More than a month has already passed since the last December meeting of the Central Bank, where it decided to keep the key rate at 21%, contrary to market expectations of its increase. But until now, the figures that influenced the regulator's decision have not been presented. October data, published by December 20, spoke about the continued growth of corporate lending - it was this segment that was the focus of the Bank of Russia's attention and that is why analysts expected the key rate to be raised to 23%.
Explaining the decision to keep the rate, Central Bank head Elvira Nabiullina said at a press conference that the growth rate of lending "has slowed down considerably". She emphasized: tight monetary conditions have been formed in the economy, which should ensure a slowdown in inflation.
- The effects of tighter monetary conditions have already begun to appear in November. The growth of the total loan portfolio has slowed down significantly. At the same time, for the first time in a long time, the growth rate of the corporate loan portfolio declined. The retail portfolio has been practically not growing for two months already," Elvira Nabiullina said at the time.
Alexei Zabotkin, Deputy Chairman of the Bank of Russia, said that the regulator already had preliminary data for November. According to him, the Central Bank was in close contact with business and banks at the end of the year and made sure that corporations changed their plans to increase lending. Nevertheless, absolute figures on the volume of corporate loans issued in November have not yet been publicly available.
According to Izvestia, the volume of loans to resident legal entities and individual entrepreneurs in rubles fell 1.5 times in November 2024 - to Br5.8 trillion. Judging by the Central Bank's data, this is the largest reduction for the entire time of statistics since 2019. "Izvestia" sent requests to the press service of the regulator and banks to confirm the trend.
Corporate lending in November 2024
In the course of the key rate increase, there was a "delayed effect" - at first, organizations continued to borrow money from banks, but the further increase in the cost of credit still cooled their interest, explained Pavel Samiev, chairman of the committee of "Opora Rossii" on financial markets. Not all companies have high profitability, which would allow them to borrow at 25-30% per annum, said Tatiana Zvereva, professor of the Department of Taxes and Tax Administration at the Financial University under the Government of the Russian Federation.
The high requirements of banks to their borrowers also had an impact. According to Pavel Semochkin, founder of the surveying company "Hectar Group", financial organizations understand that "expensive" money creates increased risks of default, and are more cautious in issuing such loans.
However, lending is cooling unevenly - there are segments that are practically not shrinking, they are not so sensitive to high rates, said Pavel Samiev. We are talking about turnover lending, trade financing - business continues to take such loans, as it is necessary to maintain liquidity.
What will be the rate at the end of the February meeting of the Central Bank
In December, Russian banks pledged to increase the key rate in their products. However, as a result of the meeting, this did not happen, and at the end of the month financial organizations began to reduce deposit rates. In particular, as the media wrote, Sovcombank lowered them by 0.7-2.5 p.p., to 16.1-25%, and RSHB - by 1 p.p., to 23%.
At the same time, loan rates are still stable, said leading analyst of Freedom Finance Global Natalia Milchakova. On market mortgages, the full cost of the loan remains at 30%, on consumer loans - 34%, on car loans - 23%, wrote earlier "Izvestia". And business loans are issued at an average rate of 24-29%.
Data on lending in December and January are not yet available, but it is already known that inflation in 2024 amounted to 9.5%. This was emphasized by PresidentVladimir Putin at the first meeting on economic issues this year. He emphasized that price growth exceeded the government's expectations and called on the authorities to step up to resolve the situation.
The key rate hike is designed to slow down inflation: it is assumed that people will spend less, demand will decrease, and sellers will not be able to raise prices ahead of schedule, but on the contrary, they will have to make discounts. However, the majority of experts interviewed by Izvestia believe that at the next meeting of the Central Bank on February 14, the rate will remain at the same level.
As Natalia Milchakova noted, a new increase should not take place, as it will negatively affect not only the real sector of the economy, but also the banking sector itself, which is already starting to lose clients.
On the other hand, it is too early to reduce the key rate. It is too early to talk about the reduction of corporate lending as a trend, says Alexander Isaevich, General Director of the SME Corporation. For example, small and medium-sized businesses have great maneuverability and adaptability: as soon as loans become slightly more affordable, entrepreneurs will take them.
How to support the economy in conditions of high key interest rates
Before that, the Bank of Russia fought inflation in conditions of relatively high economic growth rates for Russia, emphasized Oleg Akimov, Associate Professor of the Department of Banking and Entrepreneurship at the State University of Management. He added: in 2025, the Central Bank will have to fight stagflationary phenomena, i.e. an increase in prices with a decrease in economic growth rates.
Irina Guseva, a member of the Moscow branch of Delovaya Rossiya (Business Russia), reminded that loans are the main source of financing for many companies, particularly small and medium-sized ones. Reducing the rate of borrowing will slow down the growth of companies, as it will limit the ability to expand production and launch new projects.
Additional difficulties are created by the fact that from 2025, preferential lending to small and medium-sized businesses under the preferential program "1764" will be reduced five times - to 100 billion rubles annually. In an interview with Izvestia, Deputy Minister of Economic Development Tatyana Ilyushnikova said earlier that fewer loans will be granted, but they will become targeted.
All this will have a negative impact on investment activity, development, scaling and implementation of innovations, believes Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation. As a consequence, economic growth will also slow down. According to Izvestia forecasts, it will amount to 1.5%.
However, in 2025, it is planned to restart the program to stimulate lending to SMEs with subsidies to support SME investment projects and launch a preferential loan program for residents of special economic zones (SEZ) and entrepreneurs from single-industry towns, Alexander Isaevich, Director General of the SME Corporation, told Izvestia.
In addition, according to Vladimir Yeremkin, a researcher at the Structural Research Laboratory of the IPEI of the Presidential Academy, in conditions of limited lending, alternative sources of raising funds for businesses can be the sale of non-core assets or an initial public offering (IPO).
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