Credit freeze: does the banks' data tell us that inflation is declining
Lending in Russia has slowed down. According to the Central Bank's banking sector review for December last year, most indicators are either stagnant or have declined significantly. The situation is likely to worsen in January, which means that the key rate hike and tough macroprudential measures have started to work. This gives certain hopes for a slowdown in inflation and, probably, for maintaining or even reducing the key rate. Details - in the material of "Izvestia".
Signs of freezing
In general, according to the results of December 2024, the corporate portfolio decreased by 0.2%. This was largely due to the repayment of foreign currency loans. Ruble loans continued to grow, but the pace decreased compared to November. Overall, growth for the year amounted to 17.9%, slightly less than in 2023 (20.7%).
More than half of the growth is in segments less sensitive to rising rates: 45% in lending for investment programs already launched and about 16% in housing construction, where rates remain relatively low thanks to the mechanism of project financing using escrow accounts.
Mortgage growth rates remain modest - only 0.4% at the end of December. Issuance of these loans in conditions of high interest rates is supported almost exclusively by government programs.
Recall that the total limit on the "Family Mortgage" was raised by Br2.4 trillion. As a result, in December, almost 10% more loans were issued under this program than a month earlier: Br183 billion rubles against 165 billion rubles.
At the same time, the issuance of market mortgages decreased from Br65 billion to Br52 billion.
Overall, mortgage growth in 2024 slowed to 13.4% after a record 34.5% in 2023, when the market was heavily overheated by massive government support. Issuance amounted to Br4.9 trillion, down almost 40% from 2023, but comparable to 2020 and 2022: Br4.4 trillion and Br4.8 trillion, respectively.
Consumer lending in December 2024 saw a strong decline. It decreased by 1.9% after the near-zero result in November (+0.1%).
The reason for the decline was both high interest rates on loans and increased requirements of banks to borrowers in the context of tight macroprudential policy: in September, mark-ups on unsecured consumer loans (UCL) were raised. Taking into account the active growth of lending in spring and summer (1.3-2.0% monthly), the NPS portfolio grew by 11.2% in 2024 after 15.7% in 2023. Credit cards made a significant contribution to the growth of the indicator.
There is no turning point yet
Statistics confirms that the Central Bank's policy is showing some results. Does this mean that in the near future we can expect a decline in inflation and suspension of the key rate hike?
Ilya Fedorov, Chief Economist at BKS Investment World, explained to Izvestia that corporate debt was significantly repaid in December. At the same time, in January, according to operational data, lending was below the target level.
- This may be partly due to the financing of current expenditures from last year's budget. The credit impulse has practically zeroed out. The Bank of Russia will certainly take this factor into account when deciding on the key rate," explained Ilya Fedorov.
Elman Mehdiyev, founder of the Kredchek service, points out that the retail portfolio grew by 11.2% despite the "tightness" of macroprudential limits.
- A 0.2% decline in corporate lending in December - while overall growth for 2024 amounted to 17.9% - can hardly be called a sustainable trend. Especially if it was due to the repayment of only a few large foreign currency loans," the expert explained.
He added that inflation in January 2025 in annualized terms exceeded 10%, which is more than 9.5% for the whole of 2024.
- Conclusion: the signals are heard, but so far they do not mean a "break" in lending, and even more so - in the rate of inflation, - said Elman Mehdiyev.
According to Hovhannes Hovhannis Hovhannisyan, Director of Analytical Department of "Tsifra Broker", ruble loans continued to grow, but the growth rate slowed down compared to November.
- The continued growth of the ruble loan portfolio will encourage the Bank of Russia to maintain a tight monetary policy. The regulator is unlikely to raise the rate, but the Central Bank does not have much reason to lower it," the expert explained.
"Credit is only a part of demand"
As Ilya Fedorov noted, credit is a part of demand. There are also wages, the growth rate of which began to slow down in November.
- Most likely, the dynamics continued in December. Data from the hh.ru portal show a decline in demand for labor in December 2024 compared to November. Inflation will slow down unevenly. We already see that prices in the service sector are not growing as actively as before," the economist added.
According to him, the dynamics of prices in non-food products, which are sensitive to the interest rate, has also become restrained. However, food prices are growing very strongly, as there is demand (increase in wages), and the costs are easy to put on the shelf.
Ilya Fedorov notes that food is becoming more expensive all over the world, and the ruble devaluation exacerbates this process in Russia. In annual terms, prices will continue to rise until April, then a gradual decline will begin, the expert noted.
According to Olga Belenkaya, head of macroeconomic analysis department of FG "Finam", the data for the beginning of this year are still unknown, but, as the President said recently, in January the dynamics of corporate lending "is below the target benchmarks". He also noted that the decline in lending activity could pose risks to long-term growth.
- It seems that the Central Bank will take this factor into account in its decision on the key rate, because it confirms that the current rigidity of the Bank of Russia's policy has been sufficient to stop the "credit overheating". Moreover, the Central Bank saw the risk of a too strong slowdown in lending in 2025, she notes.
In fact, the unexpectedly sharp tightening of the CDS and the reaction to this lending were the determining factors in the regulator's decision not to raise the rate in December.
At the same time, notes Olga Belenkaya, it is not quite clear how sustainable the trend in corporate lending will be. According to the Central Bank's explanation, one of the reasons for the portfolio reduction in December was the outstripping repayment of loans by companies against the background of the seasonal peak of government spending (companies were able to use the funds received to repay earlier loans for the fulfillment of government orders).
- It is not excluded that as the temporary inflow of budget funds is exhausted, enterprises, especially in the segments less sensitive to the growth of interest rates, will again attract loans. In addition, the growth of money supply through the credit channel is only one of the factors of inflation, - reminds the economist.
According to her, in addition to this, there are still inflationary factors on the supply side, there is uncertainty in the full implementation of the announced normalization of fiscal policy, as well as does not exclude the deterioration of external conditions.
Переведено сервисом «Яндекс Переводчик»
