Don't be discouraged: the average cost of consumer loans exceeded 34%
The full cost of consumer loans in the largest banks of the Russian Federation has exceeded 34% on average, "Izvestia" has found out. The indicator is growing before the Central Bank meeting on the key rate, scheduled for December 20. According to its results, the rate is expected to be raised again - up to a record 23%. The overpayment on such loans can now be one and a half times, while banks are tightening their lending policy, and the share of approved applications is decreasing. Why the interest on deposits is much lower than on loans, and what will happen next year - in the material "Izvestia".
Loan rates in December 2024
The full cost of loans (FCL) in Russia reached an average of 34.2% in the top 10 banks by the volume of the portfolio of loans to individuals, according to data from their websites. "Izvestia" studied them. For almost two months, after the last increase in the key rate (up to 21%), it has grown by 1.4 p.p. We are talking about an indicator that includes not only the interest on the loan, but also all additional payments - for example, if it is required to take out insurance or a certain tariff.
At the same time, the minimum cost of loans reached an average of 28.8% - for two months this indicator increased by 3 p.p., follows from data from the websites of major banks. This suggests that financial institutions have not only laid in the prices of the previous increase in the key, but also the possibility of its further growth at the meeting on December 20 - for this they are preparing. According to Izvestia's consensus forecast, the rate may increase by 2 p.p., to a new record of 23%.
The average loan term in October was 2.5 years, according to the data of the United Credit Bureau (UCB). Overpayment on such a loan with an average APR of 34% will be one and a half times - about 44%.
Banks have to increase the cost of loans as the Central Bank's policy tightens, reminded Freedom Finance Global analyst Vladimir Chernov. Funding is also becoming more expensive for them - interest on deposits can now reach 23-25% even for terms of one year, and for two-three-year deposits it exceeds 20% for some market players.
Mikhail Polukhin, Director of ACRA Financial Institutions Ratings Group, noted that the cost of funding for banks directly affects the growth of the interest rate. At the same time, competition in the deposit market has intensified, including since free transfers of up to 30 million rubles have appeared in Russia. This allows customers to easily transfer funds to lenders who will offer the highest yield.
Thus, the interest on "consumption" (more than 34% - taking into account all additional expenses of the borrower) is much higher than on deposits (up to 25%). That is, the difference in rates can reach 8-12%.
Under such conditions, the margin (profitability) of banks on loans, as it seems, should increase during the period of high key, but, as a rule, the tight policy of the Central Bank otherwise affects the indicators, said economist Andrei Barkhota. The demand for high-yield deposits is much higher than the demand for expensive loans - banks now "give" much more than before.
Loan disbursements are indeed falling - in October they fell by almost a third compared to the previous month, said the UCB. According to their data, financial organizations issued loans worth Br4.66 trillion in just 10 months of 2024.
At the same time, the inflow of funds from the population for deposits in 2024 is high - since the beginning of the year, Russians have brought Br7.4 trillion to banks, added Freedom Finance Global analyst Vladimir Chernov.
Market participants are trying to avoid getting into a situation of "interest rate scissors" - when the cost of borrowed funds gradually catches up with the yield on assets (loans), explained Ivan Uklein from Expert RA. Because of this, part of the loans issued during the period of low rates, becomes unprofitable. This is especially true for the mortgage portfolio, as it is issued for more than 20 years, while the term of deposits in most cases shorter than three years.
When interest rates on loans
Inflation is not yet slowing down in a pronounced form, so we can expect the key rate to continue to rise even in the first quarter of 2025, warned economist Andrei Barkhota. Next year, the PSC can exceed 40%, the monthly payment due to this will increase by 15-35%. This will cut off applications for loans from about a quarter of potential borrowers.
- In the new year, obtaining unsecured loans for all categories of people will be a privilege rather than an available opportunity, - said Andrei Barkhota.
In addition, the Central Bank may tighten macroprudential limits (MPL) on loans, said Vladimir Chernov. They limit the share of high-risk borrowers - those who spend most of their income on debt service.
For example, now a financial organization can have among all its debtors no more than 15% of borrowers who spend more than half of their income on repayment.
MPL provoked a tightening of standards for issuing loans, said Igor Dodonov, an analyst at Finam. As a result, the approval rate of loan applications in November dropped to 22.5% against a peak of 40% in March 2024. Ultimately, borrowers who already have a debt load are finding it much harder to get a new loan.
Banks, as a rule, raise rates even before the Central Bank's decision, depending on expectations of its dynamics, said Vladimir Chernov. Everything depends on what will be the regulator's signal on further policy and the real situation with inflation in Russia at the beginning of 2025.
The key factor for the Central Bank now is the dynamics of corporate lending, says Olga Belenkaya, head of macroeconomic analysis department of FG Finam. Issuance of loans to individuals has already slowed down enough, while business has been increasing the debt load for a long time, despite the high interest rate.
The head of the regulator Elvira Nabiullina earlier said that corporate lending is already at a tipping point, after which it should slow down, recalled in "Finam". If this happens, the peak of the key in this upward cycle could be the level of 23%, after which it will probably start to decline to 18% by the end of 2025. However, if the factors of price acceleration remain in force, the Central Bank will have to react - the rate may rise to 24-25%.
