Expects VTB to boost retail lending with key interest rate reduction
In a recent announcement, VTB, one of Russia's leading banks, has revised its forecast for mortgage lending in the market, anticipating a rise to 4.04 trillion rubles for the year. This update follows the Central Bank of Russia's key rate cut by 2 percentage points to 18%.
VTB is currently analysing the situation on the retail products market, and the revised forecast indicates a positive outlook for the retail lending sector, including mortgages. The bank also expects cash loans to increase to 3.5 trillion rubles.
Looking ahead to the savings market, VTB anticipates total savings to reach 67 trillion rubles by the end of 2025, with 63.5 trillion of that in rubles. However, the yield on deposits at major banks has already fallen below 18% in July, and this downward trend in deposit rates is expected to continue.
Despite these positive trends, VTB notes that drastic market changes are premature, and government support programs will remain critical until the end of the year. The bank has already lowered rates on cash loans by 2 percentage points, but future actions depend on the regulator’s stance.
Regarding the auto loan issuance, VTB maintains its forecast for 2025 at 1.3 trillion rubles. The dynamics of the market are largely determined by the cost of cars and borrowers' debt burden, and the impact on the auto lending market is expected to be modest.
In conclusion, VTB foresees a cautious but positive growth outlook in retail lending and savings markets, aligned with the easing monetary policy. The savings market is adjusting to lower deposit yields, while the credit market is gradually recovering.
VTB will make further decisions after evaluating the regulator's rhetoric and market changes, and the market's response to the regulator’s decision is still being evaluated by VTB. State support programs will continue to play a leading role in the market until the end of the year.
- In light of the positive outlook for retail lending, VTB is exploring investment opportunities within the sector, especially focusing on the increase in mortgage lending and cash loans.
- As the savings market adapts to lower deposit yields, VTB is considering strategies to maintain its finance position, including assessing the regulator's stance and the market's response to their decisions.
