Mortgage growth rates accelerate to 3.1% in June, consumer lending rises 2% - Russian Central Bank

MOSCOW. July 19 (Interfax) - According to preliminary data, Russian banks accelerated growth of mortgage portfolios to 3.1% in June 2024 from 1.7% in May in anticipation of the changes in the terms and agreements of the preferential programs, the Central Bank of Russia said in its banking sector review.

Mortgages surged 44% to 788 billion rubles in June after 546 billion rubles in May, corresponding to the average monthly volumes of the record second half of 2023, when they totaled around 780 billion rubles.

Issues of market mortgages increased 28% to 158 billion rubles in June from 124 billion rubles in May. This is quite a significant increase given the high market rates, the Central Bank notes.

The growth rate in the consumer loan portfolio in June remained at the high May level and totaled about 2%. In total, in the first half of 2024, the growth has already totaled nearly 10%, which is a third higher than in the first half of last year, when the rates were lower.

The growth is owing to the continued high consumer activity - household spending continued to grow in June, although at a somewhat more restrained pace compared to May - amid income growth. A significant volume of issuances came from the credit card segment, where rates have always been high and therefore not so sensitive to the growth of the key rate. In addition, in the context of high yields on deposits, borrowers can more actively use the free grace period, the review says.