How the unscheduled reduction in the Central Bank rate will affect deposits and loans

Reducing the key rate from 20% to 17% gives banks reason to lower the yield on deposits and ease the conditions on loans, especially on mortgages. Major players will do it in the near future, their representatives told RBC

An unscheduled reduction in the Central Bank's rate by 3 percentage points, to 17% per annum, will lead to a revision of the conditions for loans and deposits, RBC was told in large banks. Some players have already decided what rates they will offer depositors and potential borrowers in the near future.

VTB is preparing to lower mortgage rates below 20%, a bank representative told RBC, without disclosing details. Now the base rate for the main market programs is 23%, and the minimum is 22.4%. VTB noted that they are also considering the possibility of reducing the cost of consumer loans. Plans to change the yield of deposits were not announced there. From April 14, Sovcombank will reduce the rates on the main deposit in its lineup, as well as on the savings account, to 16% and 18% per annum, respectively, its representative said. He did not explain how the conditions for consumer loans and mortgages will change. Dom.RF Bank is considering revising rates for both credit and savings products, a representative of the organization said. On the main mortgage programs, the bank has already reduced rates on the morning of April 8 - by 5.6 percentage points, to 13.4% -13.5% per annum. Post Bank has already reduced rates on deposits and loans several times, next week the rates will be reduced again, said Gennady Chausov, HEAD of the liability and commission products service of the credit institution. According to him, the profitability of deposits and the cost of loans "over the next month" will shift down by 2-3 percentage points. Absolut Bank will adjust rates on market mortgage programs by 3-4 percentage points. and by the same amount - on deposits, Tatyana Ushkova, chairman of the board of the credit institution, told RBC. According to her, the Central Bank "set the course" for lowering rates, and banks will follow it. Zenit will soon revise the conditions for market mortgages, and for other products - consumer loans and deposits - it will focus on market conditions, said Natalia Tutova, deputy chairman of the bank. Otkritie and Moscow Credit Bank reported that that in the near future the conditions for their credit and savings products will change. PSB has the same plans: in addition to mortgage rates, consumer loans and deposits, the bank will soften rates on new loans to small businesses. Ak Bars Bank noted that they are still considering the possibility of revising the conditions only for mortgages. Alfa-Bank is also preparing to change the rates of its customers, he circulated such a message on social networks. At the time of publication, the credit institution did not respond to RBC's request. Rosbank noted that they would be guided by the situation on the market. The rest of the major players did not answer RBC's questions. that while they are considering the possibility of revising the conditions only for mortgages. Alfa-Bank is also preparing to change the rates of its customers, he circulated such a message on social networks. At the time of publication, the credit institution did not respond to RBC's request. Rosbank noted that they would be guided by the situation on the market. The rest of the major players did not answer RBC's questions. that while they are considering the possibility of revising the conditions only for mortgages. Alfa-Bank is also preparing to change the rates of its customers, he circulated such a message on social networks. At the time of publication, the credit institution did not respond to RBC's request. Rosbank noted that they would be guided by the situation on the market. The rest of the major players did not answer RBC's questions.

How the key rate has changed in RUSSIA and why

On February 21, Russia recognized the independence of the DPR and DPR, and since February 24, it has been conducting a military operation in Ukraine. In response, Western countries have imposed tough sanctions against Russian companies, large banks and the foreign exchange reserves of the Central Bank. Since then, the rate has changed twice:

On February 28, at an extraordinary meeting, the Central Bank raised the figure from 9.5% to a record 20%; On March 18, at a scheduled meeting, it was decided to keep the rate; On April 8, the Central Bank - again unscheduled - lowered the rate to 17% per annum, which is comparable to the previous maximum of the December 2014 crisis. The decision to reduce the rate of the Central Bank explained the slowdown in inflation, including due to the strengthening of the ruble. The regulator allowed further easing of monetary policy at the next meetings.

What conditions does this create for deposit rates?

Most banks have already reduced rates on savings products from March highs, without waiting for the decision of the Bank of Russia, recalls Mikhail Doronkin, managing DIRECTOR of the NKR rating agency. For example, the largest players - Sberbank and VTB - lowered the yield of savings products below 20% almost immediately after maintaining the rate on March 18.

Banks estimated losses from a sharp increase in deposit rates Finance

The average maximum rate in the top 10 banks, after a peak of 20.51% in the first ten days of March, began to fall, follows from the data of the Central Bank. At the end of the month, the average yield corrected by almost 2 percentage points to 18.58%. Nevertheless, deposit rates in Russia still remain at a record high level, by about 3 p.p. higher than in December-January 2014-2015.

When the COURT cancels the dismissal of its own free will. New cases Cases Pro We stay for the winter:

The decision of the Central Bank to lower the rate rather reflects the already formed trend towards a fall in the yield of deposits, rather than sets it, Doronkin believes. “Nevertheless, we may well see an additional slight reduction in rates on short (up to six months) deposits, long deposits were initially offered by banks at noticeably lower rates, and adjustments are unlikely to be noticeable for them,” the analyst admits. Rosselkhozbank has already begun to discourage customers from opening too short and high-yielding deposits: from April 8, it introduced extremely low rates on three-month deposits in rubles - 0.1% per annum, a representative of the RSHB said at the banki.ru forum.

The fall in the yields of long deposits will occur with a time lag and pointwise, Yuri Belikov, managing director of the Validation Department of Expert RA, agrees: “Sustainable liabilities are in short supply and we need to fight for them.” The analyst also emphasizes that the decision of the Central Bank following the results of the scheduled meeting at the end of April will be an important signal for market participants.

The Central Bank announced a reduction in the funds of Russians in banks by ₽1.2 trillion in February

How will mortgage rates change?

According to Frank RG, as of March 28, the weighted average mortgage rate for new buildings and finished housing in the top 20 banks (in terms of issuing housing loans) was at the level of 20.9%. However, price conditions for such loans began to soften even before the extraordinary decision of the Central Bank. So, in the week from March 28 to April 1, Uralsib and Rosbank lowered rates on the main market programs. The cost of mortgage loans in some banks was below the key rate.

“Each bank has different business models, strategies, and, indeed, with an extremely low demand for mortgage loans, some players can issue “minus” loans,” says Vadim Mamonov, director of the Mortgage Products and Digital Business Department at Rosbank Dom. He believes that in the short term, "protective rates", especially in the secondary market, will start to fall.

Banks will start offering mortgages with the possibility of lowering the rate

In the second half of the year, mortgage rates may roll back to 14% per annum, predicts Ushkova from Absolut Bank.

“It is too early to make assessments of lower mortgage rates, but in general, banks will try to fix rates on long-term products,” disagrees Valery Piven, senior director of the ACRA Financial Institutions Ratings Group.

Belikov from Expert RA believes that the cost of a market mortgage will still remain prohibitive. “Until a significant reduction in the key rate, only preferential programs can stimulate mortgage lending, but their effect will still be incomparable with that observed in 2020-2021. The market has changed, real estate prices have changed,” the analyst states.