BUSINESS

Sberbank Leads Way With Interesting Move on Loans

By Yekaterina Dranitsyna

Staff Writer

State-owned Sberbank has decreased the interest rates of ruble loans granted to individuals, and increased those of individual dollar and euro loans, Interfax reported Monday, in a move that is likely to have repercussions across the sector.

The changes concerned mortgages, car loans, multipurpose loans and consumer loans and varied between one and five percent.

“Taking into account current macroeconomic environment — decreasing inflation, the stabilization of the national currency in relation to leading world currencies and the transition to ruble convertibility — and in order to develop consumer and mortgage loans, Sberbank decided to decrease significantly the interest on ruble loans,” the bank press service said in a statement distributed on the web.

According to the statement, lower interests will make ruble loans affordable to more people and decrease bank risks.

Denis Moukhine, analyst for banking and currency at Brokercreditservice investment company, recalled that earlier this year, at the end of July, Sberbank, for no apparent reason, stopped issuing loans for individuals.

“The decision made by Sberbank was probably caused by decreasing rates of foreign currency and the strengthening of the ruble, which made dollar loans less profitable for the bank,” Moukhine said.

“Recently Sberbank became a trendsetter among Russian banks by increasing interest on individual deposit accounts. This time Sberbank is likely to start a trend of increasing interest rates for dollar denominated loans,” Moukhine said.

Rustam Botashev, senior financial analyst at ATON brokerage, put Sberbank’s decision down to market conditions.

“They [Sberbank] would have accumulated more rubles than they’d need. And thus they’ve decreased the interest rate for ruble loans,” Botashev said.

As for the other banks, he said it’s hard to predict whether they’ll immediately follow suit, but it seems a likely scenario.

“Sberbank controls over 50 percent of the market. When such a big market player does something, it is likely to affect the market as a whole,” Botashev said.

However, a bank manager considered current interest rates quite balanced and unlikely to change.

“Loan interest rate depends on a number of factors — cost of attracting resources, national economy figures, credit risks, type of the loan and its currency,” said Igor Zhigunov, director for Northwest region at City Mortgage Bank.

“Present interest rates (10 percent to 12 percent in foreign currency and 12 percent to 15 percent in rubles on average) are reasonable and reflect real market situation. There is no real grounds for increasing or decreasing interest rates,” he said.

According to a Sberbank statement, the bank increased foreign currency mortgage interests from 11 percent up to 13.5-15.5 percent. Ruble mortgage interests decreased from 16 percent to 13-15 percent.

Dollar-euro consumer loans interest rates increased from 11.5 percent up to 15.5-17.5 percent. Ruble consumer loans interests decreased from 16-18.5 percent to 15-17 percent.

The interest on euro-dollar car loans increased from 11.5 percent up to 12-14 percent and on ruble car loans decreased from 16-18.5 percent to 11.5-13.5 percent.

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