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Russia's VTB sees July-Dec retail lending rising at least 50% vs H1

·1-min read
FILE PHOTO: A VTB bank logo is seen on screen through a window in the Moscow International Business Centeron a sunny day in Moscow

MOSCOW (Reuters) - Russia's second-largest lender VTB expects retail lending to rise by at least 50% in the second half of 2022 compared with the first six months of the year, its deputy chairman Anatoly Pechatnikov said on Tuesday.

Lending activity in Russia is on the mend, having waned earlier this year when the central bank hiked its key interest rate to 20% in an emergency move days after Moscow started what it calls a "special military operation" in Ukraine on Feb. 24.

The rate move helped to cap outflows from banks' deposits, while four cuts since then took the key rate to a pre-crisis level of 8%, making loans more affordable. The central bank is expected to trim it further as soon as next week.

In July-August, state-run VTB disbursed more than 300 billion roubles ($4.94 billion) in loans to individuals, a 12% increase from the second quarter, Pechatnikov said at the Eastern Economic Forum in Vladivostok.

In August alone, VTB loaned 165 billion roubles to retail clients, its highest since February.

"The retail lending market is on the rise for the fifth consecutive month ... Such borrowing activity can be explained by lower interest rates, as well as by the continuation of government programmes for the most popular products - mortgages and car loans," Pechatnikov said.

At the same time, VTB said it expects 15% growth in rouble-denominated deposits this year thanks to record-high deposit rates in the first half of 2022 and a substantial decline in demand for foreign currencies.

($1 = 60.7470 roubles)

(Reporting by Elena Fabrichnaya Writing by Andrey Ostroukh; Editing by Mark Potter)