VTB is to increase mortgage lending by about 10% in 2021, taking its total mortgage lending book to RUB1trn ($13.2bn). This represents a record for VTB. Across the sector, Russian banks issued more than 1.7 million mortgages in 2020 worth RUB4.3trn, 1.5 times the 2019 figure. And now, Anatoly Pechatnikov, Deputy President and Chair, VTB Management Board, forecasts the 2021 total will represent a new record.
However, the rate of lending growth rate will be dampened due to uncertainty about the future of the state programme. In addition, growth is muted after the increase in the key rate of the Central Bank of the Russian Federation.
But, says VTB, there remains an increase demand by consumers for mortgages.
VTB predicts that mortgage loans on the market in the first quarter will grow by 40-45%.
A significant impact on sales growth is provided by preferential mortgages. Sales of such mortgages in the past 11 months exceed RUB1.2trn.
VTB mortgage lending to hit new record
“Mortgages will remain among the dynamic growth segments of the retail business, and VTB will traditionally focus on its development. This year, we plan to break our sales record,” says Pechatnikov.
He adds:” We will issue more than RUB1trn of housing loans for the first time. Our active participation in the state programme will greatly contribute to this. In the first half of the year alone, we must issue RUB150bn of concessional loans. The terms of the extension of the state programme will be decisive for the entire market. Last year nine out of 10 mortgages for new buildings were issued at a preferential rate.”
VTB plans to ramp up digital sales
Another strategic objective of VTB is the transition to digital mortgage sales. Last year, the bank was the first in Russia to offer fully remote mortgage transactions. Moreover, VTB provided customers with a convenient personal account on its website for applying for and obtaining a loan.
As a result, the share of online mortgage applications increased to 20%. By the end of 2021, VTB plans to issue one in every six mortgages without the borrower needing to visit a branch. And VTB aims to accept every second application remotely.