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Banks expect an increase in Russian loan delinquencies in the near future




MOSCOW, Dec 21 – PRIME. Russian banks in the near future expect an increase in overdue debt among citizens due to a drop in their income amid the coronavirus pandemic, according to the materials of the Association of Russian Banks (ADB), which are at the disposal of RIA Novosti. The lawyer explained why it is necessary to pay off debts before the New Year “In the near future, an increase in the volume of arrears is expected, caused by a drop in citizens’ incomes as a result of the introduction of restrictions related to the spread of a new coronavirus infection,” the ADB said. Experts also see the risk of growth in overdue debt. “We expect an increase in overdue debt on loans to individuals due to lower incomes of citizens,” says Irina Nosova, director of the ACRA Financial Institutions Ratings Group. By the end of the year, the drop in incomes of the population may exceed 3%, said Nadezhda Karavaeva, senior analyst of NRA banking ratings. The projected low growth of incomes of citizens in 2021 at the level of 2-3% is also an argument in favor of the growth of overdue debts against the background of falling disposable incomes of the population, she said, the expert added. “Given the continuing rather tense economic situation, we expect the trend to increase the volume of overdue debt until the end of this year with its acceleration in 2021 due to the transition of certain restructuring to the category of overdue loans,” said Mikhail Doronkin, Managing Director of the NKR Rating Agency. According to the NKR forecast, the share of delinquencies in the retail portfolio, excluding mortgages, by the end of the year may exceed 8% (7.7% at the current moment), and next year it may well add up to 2 pp. – up to 10% of the portfolio. The main negative effect of the economic downturn due to COVID-19 will affect the quality of loans next year after the cancellation of concessions on the reservation of restructured loans to individuals, explained Lyudmila Kozhekina, director of banking ratings for Expert RA. Read also: Mortgage debts increased by more than 20%

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