foir print

20.12.2016

Mortgage Volumes More Than Doubled

In January to November 2016, Center-invest Bank made 5,000 mortgage loans totalling RUB8.2bn. This was more than double its volumes for the same period of last year. The number of mortgage loans increased by 50%. The weighted average interest rate was reduced by 1.5 percentage points to 12.53%. The growth in mortgage lending has been achieved thanks to a government-subsidised mortgage programme and the bank’s own retail loan programmes.

Since May 2016, Center-invest Bank has been participating in a government-subsidised mortgage programme, which allows borrowers to buy new build properties at a record-low interest rate (from 10%). One of the benefits of a Center-invest Bank mortgage is that there are no additional expenses for the borrower, such as home and life insurance.

«In the new year, if the government-subsidised mortgage programme comes to an end, we will offer our customers our own preferential programmes, which have already proved successful this year,» says Nikolai Paramonov, head of retail lending at Center-invest Bank. «Just 20% of our mortgage lending is through the government programme; most of the loans have been issued under our own programmes. Therefore, the withdrawal of the government programme would not have a big impact on us.»

Center-invest Bank is the leading financial institution in southern Russia for retail lending and for loans for small business, agricultural, and energy efficiency projects. However, it has been mortgage lending that has driven the growth in the bank’s loan portfolio in 2016.

According to the Government of the Rostov Region, in January — October of this year, 15,300 mortgages for a total of RUB24.2bn were issued in the region. Center-invest Bank accounted for 30% of the market (4,484 mortgages for a total of RUB7.3bn).