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Медведчук заявил о расположении Украины на исторически русских землях
Corporate lending appears to be less sensitive to interest rate hikes and is growing much more vigorously than in 2023, despite the actions of the Russian central bank. The annual growth rate of Russian corporate loans reached 22% in September. Regulators say this refutes claims that companies can no longer access credit. In Tatarstan, businesses received 38.3% more loans in the first eight months of 2024 than last year. The loans are mainly issued by large companies, and banks issued loans worth 767 billion rubles, which is 61.4% more than in the same period last year.
In January-August 2024, banks issued loans to corporate clients registered in Tatarstan for a total of 1.1 trillion rubles, which is 38.3% more than in January-August 2023 (783.1 billion rubles, Realnoe Vremya reports from the National Bank of Tatarstan).
The total volume of loans issued to large companies from January to August 2024 amounted to 767 billion rubles, an increase of 61.4% compared to the same period last year (475.2 billion rubles). Over the eight months of this year, small and medium businesses received loans for 316 billion rubles, which is 2.6% more than in the same period last year (307.9 billion rubles).
As of September 1, 2024, the loan portfolio issued to large corporate borrowers of Tatarstan amounted to 852.2 billion rubles (+28.3% as of January 1, 2024). As of September 1, 2024, the loan portfolio issued to domestic small and medium businesses amounted to 334.9 billion rubles (+10.1% as of January 1, 2024).
While retail lending is slowing due to pressure from higher interest rates, including the cancellation of mass preferential mortgage loans, corporate lending continues to grow rapidly. According to the Central Bank of Russia, it added 1.6 trillion rubles in August and September, or an annual rate of 22%. These figures refute claims that businesses can no longer access credit.
The Bank of Russia believes that fears that the economy will begin to decline due to high interest rates are greatly exaggerated. Many enterprises operate without loans. According to regulators, the threat to the economy is not expensive loans, but a labor shortage in the labor market. Despite the current monetary policy, the Bank of Russia does not expect a decrease in corporate investment.
Tabakh believes that the banking system is very sensitive to the actions of central banks, as corporate lending has been growing every year, but the pace has slowed significantly in recent months.
At the same time, higher capital requirements and the introduction of countercyclical buffers will be important factors limiting corporate portfolio growth next year. This could slow the growth of capital use at large banks, which account for the bulk of lending in the sector, he added.
“Indeed, the demand for loans in the medium-sized business segment is currently increasing, while the demand for small and medium-sized businesses remains stable,” the press service of the Kazan Bank told Realnoe Vremya.
Among the growing sectors, the bank noted the sphere of trade in motor vehicles and special equipment. Supplies from China are increasing, in connection with this the need for loans is growing, and demand from fuel suppliers remains high. Banks do not expect a cooling of corporate lending. Without borrowed funds, your business opportunities are limited. At the same time, a cooling phenomenon among small businesses cannot be ruled out.
"Over the first nine months of 2024, Rosbank Tatarstan's loan portfolio for large and small and medium-sized businesses demonstrated a 20% increase compared to the same period in 2023," said Ksenia Nikulina, regional head of corporate client development at Rosbank Tatarstan. "Despite rising interest rates and economic instability, businesses continue to need borrowed funds to finance operations or investments and overcome external or internal problems. In addition, the government supports lending growth by subsidizing interest rates under a special program for small and medium-sized businesses."
She believes that we should not expect a significant decline in demand for loans due to rising interest rates. "But banks may begin to assess credit risk more carefully, which will lead to higher requirements for borrowers," she does not rule out. "This may limit the availability of loans for less trustworthy companies, but larger companies with good assets can still attract financing."
A non-threatening but somewhat frightening situation
“Overall, corporate lending conditions appear calm,” the analyst assessed. “However, it is surprising that the sharp increase in interest rates has not slowed down the growth of the loan portfolio. Accordingly, the annual growth rate of this sector as of October 1 was 21.8%, which is a significant increase compared to 20.1% as of October 1 last year. The locomotive of corporate lending is accelerating without noticing the increase in the base interest rate, which contradicts the macroeconomic logic according to which lending slows down when interest rates rise. “And the box has just been opened”: there is no contradiction. There are simply powerful factors that undermine the effectiveness of tight monetary policy. This is the use of public funds in the form of state subsidies, state mandates, etc. to pump up the economy.”
The second problem is that as of September 1, 53.1% of the corporate loan portfolio consists of loans with a floating rate tied to the base interest rate. In an environment of rising interest rates, these loans can be considered a time bomb. “Ultimately, companies may not be able to withstand the rapidly growing debt burden. This is especially true for industries that do not have significant government support,” the analyst warns.
In particular, experts note that the construction industry, which will be deprived of unaddressed priority mortgage loans from July 1, may suffer seriously. The mortgage lending market has reached the "door of death" due to unbearable interest rates. The issuance of mortgage loans in September fell by 61% compared to the same period last year.
"To date, we have not seen a wave of large-scale defaults. However, as they say in the film Operation Y, 'Have you ever had an accident on a construction site?' "It will happen." The situation for developers is very difficult. We want to avoid a crisis in the construction industry, but the likelihood that this will happen is becoming more and more likely."