Debt fever accelerates in Russia
Russian total banking debt volume increased by 22.8% in comparison with an increase of 13/2% in 2017 to 14.9 trillion rubles, according to the Russian Central Bank's review of the Russian banking sector.
This is a record growth since the pre-crisis year of 2013, when the total debt increased by almost 30%, reaching 9.7 trillion rubles.
Based on 11 months figures, the main contribution to the debt growth was made by mortgage, the loan portfolio for which increased from 5.34 trillion rubles as of January 1, 2018 to 6.53 trillion rubles as of December 1, as well as unsecured consumer lending, which grew from 6,02 trillion to 7.3 trillion rubles, RBC reports.
The Russian banking sector posted profit of 1.345 trillion rubles ($15.17 billion) last year, 70% higher than in 2017 (0.79 trillion rubles), the central bank said today.
The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to Vestnik Kavkaza, noted that, first of all, the decline in real incomes of the population led to an increase in lending. "More than 60% of new loans are on-lending. The short-term reduction in mortgage rates played a role as well, in addition, banks began to lend money to older people more often, because they have a revenue base due to an increase in pensions," he said.
"The Central Bank in its research indicates a decline in public bank lending, but an increase in microlending. The overall situation is quite complicated, and the decline in incomes not only increases the debt burden of the population, but also creates problems with mandatory payments. Last year, housing and public utilities debts amounted to almost 800 billion rubles," Alexander Safonov noted.
Over time, if the situation does not change, the number of personal bankrupts will increase in Russia. "Now, in order to fulfill the regulations of the Central Bank, banks are trying to improve the statistics, which prevents the formation of a bankruptcy wave. In this regard, it is expected that more citizens will resort to the bankruptcy procedure, but it will not be catastrophic," the vice-rector of the Academy of Labour and Social Relations concluded.