VTB24 sees Central Bank lowering key rate to 8.5% in H2 2016
CHELYABINSK. Oct 26 (Interfax) - VTB24 expects the Central Bank of Russia's (CBR) key interest rate to come down to 8.5% in the second half of 2016, the head of the retail bank's marketing and research department, Dmitry Lepetikov said at a press conference in Yekaterinburg on Friday.
He said the CBR could cut its key rate from 11% to 10.5% at its board meeting next week, although "perhaps they will also wait."
He also said that VTB24 expects a "stable ruble" in 2016. "If there are no geopolitical cataclysms, the ruble will be stable. On the whole for the year we forecast that the ruble and euro will weaken by 3-5%. At the end of this year the ruble might strengthen by 1-2 rubles from the current level, at most rise to 65 rubles per dollar. Add 3-5% to this - these are the figures we expect [in 2016]," Lepetikov said.
He said retail lending in Russia could grow by 5.7% in 2016 from the figure anticipated for this year, when retail lending is expected to slump 5% from 2014.
Lepetikov believes that the auto loan market will continue to shrink next year, while all other segments of the credit market will grow. Auto loans are expected to drop by 8.5% in 2016 after falling by an anticipated 19.4% in 2015, while mortgage loans are expected to grow by 10.2% after growing 5.7% in 2015, and cash loans and the credit card market are both expected to grow by 4.4% after falling by respectively 9.7% and 5% this year.
"Mortgages will be the driver of the growth of the loan portfolio in 2016. Firstly, demand for mortgages is growing. Secondly, based on the opinions of our realtor colleagues, we expect strong price growth and, thirdly, we forecast a decrease in interest rates due to the reduction of the key rate, which, again, will make mortgages more affordable for people," Lepetikov said.
He said lending to small businesses is forecast to grow by 2% in 2016 after tumbling 16.6% in 2015, and balances on retail accounts are expected to grow by 10.2% in 2016 after growing 17% this year.
"For loans to small businesses, there was a dramatic drop in the first half due to the growth of risks. We believe that this drop has stopped and hope that we have passed the peak of the decline for small businesses and the situation with risks will be better," Lepetikov said.
