Growth in the square

In Russia, there is a rapid recovery of the mortgage, which can become a major source of stability in the banking sector. Restoration of the form by the end of 2007, nearly a quarter of total retail portfolio of Russian banks (about 1 trillion) accounted for mortgage lending. The crisis caused mortgage lending fell by about a factor of eight. This year, newly mortgages began to rise. In the third quarter of 2010, Russian banks have issued about 150 billion of mortgage loans that exceeded six times the minimum level of crisis of the first quarter of 2009. This figure is a bit shy of the record before the crisis than in 2008. The reasons for this rapid recovery of the mortgage market in the special advantages of mortgages compared to other banking products. No renewal of crediting banks are doomed to slow death, as it is interest income from loans for most of them are a major source of profit. Because the demand for retail loans is quite stable, which makes this a very attractive market segment in terms of growth potential. Moreover, the demand for retail loans primarily formed not the wealthiest segments of the population, many of whom are state employees who receive a small but stable income. This stability provides a high repayment of retail loans. Availability of reliable supply in the form of real estate and accuracy of most borrowers make mortgage one of the least risky bank products. The reason for the growth of mortgage portfolios at a faster rate compared to other types of lending. Unlike many other species (unsecured and car loans), retail loans, the mortgage market is still very far from saturation. Among all real estate transactions, only about 10% occurs with the participation of the loan, and even in the most favorable mortgage in 2007 this share was less than 20%. Interest rates on mortgages in the third quarter actually returned to their pre-crisis levels. Given the limited and expensive currency funding for banks to issue foreign currency loans are less profitable than the ruble. If we analyze the dynamics of the ratio of ruble and currency mortgage for several years, the obvious is a general trend to oust from the market exchange rate mortgages. Thus, if the beginning of 2006 in foreign currency issued about 45% of all mortgage loans in the third quarter of this year, their share had fallen to 4.4%. The sharp depreciation of the ruble in 2008 resulted in increased debt burden on holders of foreign currency mortgage loans, resulting in many of them this additional workload was excessive, so the currency segment the most dismal performance of mortgage arrears (8.4% on October 1, 2010) . Three sources of mortgage market structure consists of three main groups of banks: state-owned banks, foreign banks and private domestic banks. In the group of state-owned banks Sberbank holds a special place, which in the first half of this year accounted for 60% of all issued by Russian banks mortgage loans. Two other groups of banks are about equal shares on the market, with the share of foreign banks tends to increase and the share of private Russian banks - to decline. The reason is accessibility to foreign subsidiaries of relatively cheap funding from parent institutions. With such support, some of them (eg, "DeltaCredit") are still able to maintain their portfolios in the high proportion of foreign currency mortgages. Some Russian banks are trying to keep the mortgage market by developing their own programs, securitization and refinancing of mortgage loans, but this is more the exception than the rule. Therefore, for the majority of domestic banks refinance mortgage loan means a sale or other banks or mortgage agencies, especially the Agency for Housing Mortgage Lending (AHML). Thus the mortgage business for these banks into a source of fee income only. Hold on its balance sheet mortgages, such banks are not able to because of limited resources and high cost of urgency. The most powerful position in the mortgage market there are three state agencies: Sberbank, VTB 24 and HMLA corporation. Savings Bank now has the strongest position. Despite the presence of government guarantees in all three structures, the obligations of the Savings Bank debt are perceived by investors as more reliable due to the development of its banking business. Therefore, Sberbank is able to borrow more cheaply in the debt market and, consequently, to win price competition in the mortgage market. Strengthening the position of HMLA could encourage even greater increase in the mortgage market by actively participating in its programs for small and medium-sized Russian banks based on their existing clientele. But this issue is directly related to the peculiarities of perception HMLA investment community. All three of these structures are actively present in most Russian regions, either directly or through its agents. While such competition is not particularly stimulating growth in the market, as competition is for the same potential borrowers whose mortgage loan as a result of the balance will be one of the three organizations. Total liabilities Mortgage is a kind of ultralong-bank lending. The average time to issue mortgage loans is 16 years old, which means they slow repayment. And other retail loans have a duration of one year. Thus, to maintain a stable level of mortgage portfolios, banks may in fact do not give new loans. But to maintain a stable level of retail loans portfolio of other banks are forced to issue an annual loan volume equivalent to the total size of the loan portfolio. It turns out that even a small increase in the rate of mortgage loans can dramatically increase the share of mortgage loans in loan portfolios of banks. Resulting in a securitization of loans, and they go on the balance sheets of investment funds and specialized agencies (including the Civil HMLA). Such loans would be like leaving out of view of bank accounts, but they continue to serve the population. Mortgage loans in Russia are not only banks, but also various kinds of mortgage agencies, including working on the program AHML. These lenders never appear in the accounts of commercial banks. Thus the mortgage obligation of the population is significantly higher than the total portfolio of mortgage loans. On October 1, 2010 the total volume of mortgage commitments of the population (excluding loans to bypass the banking system) was about 1.9 trillion rubles, or almost twice the total mortgage portfolio of Russian banks. If we assume conservation of the current rate of growth of the mortgage market because of its particularly attractive for the banks, as well as to assume that other retail loans will grow at a rate of approximately 25% per year, then by the end of 2012, the total amount of mortgage obligations population of about 5 trillion rubles. That is, every second ruble to be paid by the public in repayment of loans will be paid by the end of 2012 on mortgage loans.