Nine large Russian banks among the top 50 have raised interest rates on consumer loans after the central bank raised the key rate from 16 percent to 18 percent, the Izvestia newspaper found. The average increase was 2.2 percentage points. The minimum interest rate without insurance now starts at 19 percent and reaches 28 percent for some providers.
Gazprombank has increased interest rates on consumer loans by 3.5 percentage points, according to the bank’s website. Annual interest rates now start at 19.9 percent, and the minimum total loan cost reaches 23 percent. DOM.RF Bank and Ak Bars Bank have also raised their interest rates by 2 percentage points, to 19 percent and 19.9 percent, respectively.
In addition, the cost of consumer loans at Sinara, Zentrum-Invest, Zenith, Solid Bank and TCB banks has increased. The minimum interest rate at these market participants exceeded 22 percent per annum, and approached 28 percent at some banks.
Despite the fact that the key rate was raised two weeks ago, lending rates are not growing as actively as they could, said Anna Romanenko, director of the communications policy department of Vyberu.ru.
The supply of consumer loans at banks is less responsive to the increase in the key interest rate, confirmed Konstantin Snegirev, head of the consumer lending department at VTB. According to him, the minimum rate is offered to customers with the best credit profile without fear of late payment.
In July, the approval rate for loan applications fell to 36 percent, while in May it was 44 percent, said Anna Romanenko. The central bank’s measures will lead to a further decline from September 1.
According to Oleg Abelev of the investment company Rikom-Trust, the volume of Russians’ loans has reached a record 37 trillion rubles (about 370 billion euros).
In fact, loan interest rates in Russia are said to be between 30 and 35 percent per year, says Vladimir Chernov, an analyst at Freedom Finance Global. In order to get a loan at the lowest interest rate, additional conditions must often be met, such as taking out insurance. The total cost of the loan is therefore usually significantly higher than the interest rate mentioned above.
On July 26, the Bank of Russia raised its key interest rate by 200 basis points to 18 percent in one step. This is the highest level since April 2022, when the interest rate was 20 percent per annum. Central Bank Governor Elvira Nabiullina pointed out that the high interest rate level was more a consequence of overheated demand than a risk to financial stability.
On August 7, the Central Bank published a summary of the discussion on the July 26 rate hikes, which for the first time identified signs of a slowdown in the unbalanced growth of the Russian economy.
