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Business / Finance

The race for mortgage holders

Banki.ru: themes of the day 08.08.2019 at 21:00

Banking and financial news on the website Banki.ru

Competition of banks for mortgage borrowers has intensified, analysts and market participants. Why is this happening and what are the benefits from this can get clients?

Banks come to the second round in lowering mortgage rates. From late spring re-softening of the conditions for its products has taken Sberbank, Russian agricultural Bank, Absolut Bank, ROSBANK, Alfa-Bank and Promsvyazbank. In the same period 18 players somehow improve the conditions for mortgage loans. For example, Gazprombank and Promsvyazbank ease the burden for borrowers under the program "Family mortgage". VTB and TCB announced a refinancing program, and "URALSIB" Bank and "Opening" launched promotions on mortgage loans. Banks, in particular, discount rate, if the customer purchases real estate partners, takes credit for more than 20 million rubles, or quickly goes to the transaction after approval of mortgage application.

the Competition in the segment of mortgage is escalating, says the head of sales and partnerships channel Bank "AK bars" Ekaterina Makeeva. In her words, "AK bars" will not remain in side: will lower mortgage rates in August, and may continue to do so. To update the terms for some types of housing loans also intends to Sovcombank. In VTB have explained that further changes to the terms on your mortgage will depend on movements in the key rate of the Central Bank, the macroeconomic situation and market conditions. The same view of the situation was voiced by most of the players from the top 30 surveyed Banks.ru.

the actions of the regulator and other factors

the Fall in mortgage rates was the result of lower cost of funding and the key rate, says associate Director on Bank ratings "Expert RA" Catherine Shurigina. With the beginning of the year, the Bank of Russia conducted two rounds of monetary easing — the key rate was lowered by 0.5 percentage points to 7.25% per annum, and in the July comments of the regulator did not rule out a further reduction at one of the next meetings of the Board of Directors. Policy of the Central Bank affected the profitability of deposits, which remain a significant source of funding for credit institutions. In the third decade of July, the average maximum rate on deposits top 10 Russian banks fell to 7.05%. To an absolute minimum 2018 6.05% is, of course, far, but experts expect the trend to decrease.

"it's not so much the reduction of the key rate, as the slowdown in inflation and a decrease in the yields of government bonds, anticipating the actions of the Central Bank", — stressed chief analyst "the Bank House" Natalia Vasilyuk. The decline in mortgage rates triggered and indirect factors, the expert on credit products of the Banks.ru Inna Soldatenkov: "mortgage Rates influenced by other factors, such as, for example, the tightening of reserving or the cost of securitization". The main factor in interest rate policy is still cost resources, said the managing Director of retail products at Absolut Bank Anton Pavlov.

However, one should not ignore the situation in the mortgage market. Banks have to stimulate demand for this product, indicates the Deputy Director of the group ratings of financial institutions of an ACRE Valery Piven. December last year can be considered the last good month on the mortgage — the amount of loans granted has exceeded 340 billion rubles, follows from the statistics of the Central Bank. In the beginning of the year issuance has fallen markedly both in monetary and quantitative terms. So, in June banks issued 96.3 thousand mortgage loans, which is 20% less than in the same period of 2018. The volume of issued loans was 214,8 billion, which is 11.5% less year-on-year. On a longer horizon the situation is no better. "Amount of disbursements for the first half decreased by 3.5%, and the number of renditions — by 13% compared to the same period of 2018. Under these conditions, competition in the mortgage market intensifies: the big players are actively competing among themselves including the interest rate to increase or at least retain market share," notes Catherine Shurigina.

the Competition — the progress engine

market Participants also recognize the struggle for food has intensified. One of the reasons is the decrease in concentration. At the end of II quarter of 2019, the share of the three largest players in this segment has been at a minimal level over the past five years, refers to the data Frank RG Natalia Vasiluk of ROSBANK. "Players outside the top 3 had the opportunity to increase the volume of lending, after some of the largest banks in the beginning of the year first raised interest rates on mortgages and was in no hurry to reduce them," explains the analyst. State-owned banks still have the ability to dictate terms to the market, agrees Anton Pavlov of Absolut Bank. "Private banks is quite difficult to compete on prices, and increasing importance is the quality of service and exclusive offers," — said the expert.

the policy of the banks also affects the regulation of retail lending, said Valery Piven. Since October 1, financial institutions will be required to calculate the limit the debt burden of borrowers (a measure PTI). Central Bank uses this measure to cool the market for unsecured consumer credit. In these circumstances mortgage loans (in particular mortgages) are becoming an alternative for those who do not want to lose their positions in retail. "The situation in the economy continues to leave little room for banks to build up assets. The change in the regulation of the unsecured loan even more limit the development of credit institutions. The consequence of this is the intensification of competition for mortgage borrowers," — said the Deputy Director of the group ratings of financial institutions of an ACRE.

the mortgage is the least risky segment, with a minimum level of delay, agrees Anton Pavlov. Moreover, in Russia continue to operate an ambitious program of state support of this segment. Even in crisis conditions, it allows the business to grow, summarizes the top Manager of the Absolut Bank.

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How banks converted into benefits for borrowers?

In June, the weighted average mortgage rate fell to 10.28%, reported the Central Bank. Is 0.25 p. p. less than in may. At least last year — 9,41% — can be achieved in a relatively short time, experts say.

"If the regulator continues to reduce [key rate], until the end of the year mortgage rate may be reduced by approximately 0.25 percentage point" — gives a conservative estimate Anton Pavlov. Catherine Shurigina of "Expert RA" expects to reduce rates in the range of 0.25—0.5 p. p.

"we Can expect that the weighted average mortgage rate will fall below 10% this year," agrees Valery Piven of an ACRE. Similar Outlook and gives the Bank the HOUSE.Russia: "the Continued reduction of the key rate, creates the conditions for reducing the average rate of mortgages to 9.7—9.8 per cent in the fourth quarter of 2019". And if the regulator will be able to move to a neutral monetary policy in mid-2020, Russian borrowers will be lucky: for the first time in the history of the Russian market of mortgage rates can be below 9%, the Bank considers the HOUSE.Of the Russian Federation.

Yulia KOSHKINA, Banki.ru