The biggest five banks in Russia account for eight out of ten rubles lent to home buyers, and mortgage loans were up by over 80% in the first four months of this year.
The 15 largest banks in Russia issued RUB827bn ($13.3bn) of mortgage loans in the first four months of this year, an increase of 84.7% y/y according to Dom.rf and Frank RG.
At the same time, the top five creditors account for 81.6% of all the loans extended. The market leader remains Sberbank, which in the first four months of this year has issued RUB455.9bn and increased the market share by 1.6 percentage points to 52%.
In second place is VTB Bank (RUB141.6bn), which saw its market share fall by 6.5 percentage points to 16%. The third and fourth places are occupied by Rosselkhozbank (RUB48.5bn) and Gazprombank (RUB46.7bn) with market shares of 5.5% and 5.3%, respectively.
The share of foreign banks in the total volume of mortgage lending in Russia is minimal. According to the rating, Raiffeisenbank (RUB23.9bn) and DeltaCredit (RUB20.6bn) lead the pack of foreign banks with 2.7% and 2.3% shares of the market respectively.
The concentration of mortgage loans in a few big banks is partly related to the banking sector clean up where the Central Bank of Russia (CBR) has been closing small banks at the rate of about 100 a year. In June CBR governor Elvira Nabiullina said that the clean up of the sector was “nearly over” as the total number of banks fell to 534.
The government has been actively promoting home buying as a way to stabilise society as studies show homeowners are less likely to protest and participate more in government and elections. The state was subsidising mortgage loans over 12% last year, but since the interest rates fell below this level and are now in the range of 7%-9% this programme was ended. State support for mortgage loans was also effectively support for the banking sector, which has been recovering from a crisis over the last three years.