To give is not to take: the creditworthiness of Russians has fallen to a record in ten years

The population's debt burden has been decreasing for the third month in a row. This means that citizens give back more loans than they collect. By March, the total volume of loans from Russians had fallen by 390 billion rubles. This is happening against the background of the Central Bank's record interest rate and quantitative restrictions on granting loans to people with high debt loads. In recent years, the loan portfolio of citizens has steadily increased. Such a significant decrease, as it is now, was only during the crisis of 2015. The decline in debt is a positive trend, but it also means that Russians cannot afford to borrow under current conditions. When loans will become more affordable — in the Izvestia article.

Why banks hardly issue new loans

The population's debt burden has dropped to a record in ten years. This follows from the data of the Central Bank, which was analyzed by Izvestia. The total volume of Russians' borrowings has been declining for the third month in a row — by March it had dropped by 390 billion. In recent years, this indicator has steadily increased — in the middle of 2023, the growth reached almost a trillion per month.

The last time the creditworthiness of Russians decreased was in April and May 2022, after the start of its development. Then the Central Bank sharply raised the key rate to 17%, which reduced the demand for borrowed funds. However, then the total volume of household loans fell by only 271 billion. The indicator also decreased once in covid 2020.

The last time the loan portfolio of individuals fell for three months in a row was observed only in early 2016, said Dmitry Gritskevich, Head of Banking and Financial Market Analysis at PSB. But the decrease was still less — only by 68 billion.

Photo: RIA Novosti/Grigory Sysoev

It was only in 2015 that the drop was as significant as it is now. It reached 645 billion rubles, Dmitry Gritskevich estimated. At that time, the volume of loans to the population was declining for almost the entire year. The Central Bank also raised the key rate, which led to a decrease in consumer activity, said Vitaly Kostyukevich, director of Absolut Bank's retail products department.

— Of course, now the high key interest rate limits the growth of lending in the market. One of the goals of the Central Bank's tightening monetary policy was to cool consumer demand and increase the savings activity of the population in order to reduce inflation," said Dmitry Gritskevich from the PSB.

Value added: real consumer loan rates are close to 40%

Why do banks continue to raise the cost of loans even if the key rate remains unchanged

The decrease in consumer loans is also largely due to the measures taken by the Central Bank. One of them is a direct restriction on the provision of loans to borrowers with a high debt burden, said Mikhail Matovnikov, head of Sberbank's financial analytics center.

The decline in the loan portfolio of Russians is a consequence of low disbursements while maintaining repayments, Mikhail Matovnikov added. According to him, an additional factor is that customers are trying to repay debts at higher rates as quickly as possible.

On the one hand, borrowers cannot afford to apply for loans at such interest rates, said Vitaly Kostyukevich from Absolut Bank. Currently, the average total cost of consumer loans in the largest financial organizations has reached 40%, Izvestia wrote. On the other hand, banks are not ready to provide loans in the current conditions, because issuing loans at such interest rates is associated with increased risks, the expert explained.

Photo: RIA Novosti/Pavel Bednyakov

Currently, only a relatively small category of citizens have access to preferential loans, while the rest cannot afford to take out a mortgage due to prohibitive interest rates, Vitaly Kostyukevich added.

Are there any risks of high creditworthiness of the population

The decrease in the level of household debt can be called a positive trend, because the risks of household bankruptcy are also decreasing, said Vladimir Chernov, analyst at Freedom Finance Global. At the same time, the main disadvantage is that this trend is not caused by early repayment of loans due to faster growth rates of real incomes of the population, but by the unavailability of loans for citizens.

In addition, the decline in consumer and mortgage lending is holding back domestic demand and economic growth in the country, said Fyodor Sidorov, founder of the School of Practical Investment.

And the expert is sure that the risks of high creditworthiness of the population remain: many citizens already have loans taken out during a period of low interest rates. Due to the high interest rate, banks are less willing to restructure debts, and this can lead to an increase in delinquencies.

Photo: TASS/Nikolai Gyngazov

By the end of 2024, the average debt per economically active Russian to banks was 459 thousand rubles. At the same time, its ratio to the annual salary was slightly more than 50%, Vladimir Chernov estimated. According to him, this already indicates a high debt burden of citizens.

However, the Central Bank's introduction of direct restrictions on the issuance of car loans and mortgages will continue to restrain demand in the future, according to the VTB press service. They are aimed at reducing the share of highly creditworthy borrowers. Mandatory documentary proof of income will also have an impact if the car loan amount exceeds 1 million rubles, the bank noted.

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When will the Central Bank lower the key rate

As long as rates remain at a high level, the total loan portfolio will shrink, says Vitaly Kostyukevich from Absolut Bank. The pace of repayments will outpace new disbursements, he explained.

As inflationary processes stabilize, the Central Bank will be able to gradually reduce the key rate, said Dmitry Gritskevich from the PSB. According to his estimates, the first reduction will occur in the third quarter of 2025, and the rate will be 18% by the end of the year.

Photo: RIA Novosti/Vladimir Trefilov

The current economic situation is not standard — there are too many factors that can affect inflation, warned the Director of Macroeconomic Analysis at Dom Bank.Russian Federation" by Zhanna Smirnova. Overheating in the economy also remains significant. A premature reduction in the key rate in the current conditions may lead to an additional heating up of demand, and then we will have to return to tightening monetary policy and raise it above 21%, the expert explained.

At the same time, a reduction in interest rates by 1-3 percentage points will not significantly affect the availability of loans, Vitaly Kostyukevich noted. According to him, to resume the growth of the retail loan portfolio, it is necessary to relax at least 5-6 percentage points.

The regulator will be able to significantly soften the PREP only in 2026, Dmitry Gritskevich predicts. This will lead to an increase in lending, including due to pent-up demand.