The slogan on constructed apartment building reads: "Flat Mortgage."
Photo: Vasily Alexandrov
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Bankers Forecast Mortgage Crisis in Russia
The mortgage crisis is threatening Russia, said Igor Kuzin, board chairman of DeltaCredit Mortgage Bank. The crisis will be similar to the one that hit the United States, and it will be caused by risky loans that the banks are giving in big numbers.
The matter at stake is the loans given with no initial payment or given to borrowers with low income or with no income confirmation. Moreover, the mortgage margin isn’t great vs. the other types of loans. The bank profit equals just 0.5 percent point, though consumer credits, for instance, generate 40 percent points for the banks. Potential decline in real estate prices will further aggravate the situation.
The analysts agree that the mortgage crisis could be stirred up in Russia, not in the near term though but in five years - the amount of mortgage loans and the share of risky loans will widen materially by that time. The forecast of analysts is that 5 trillion rubles will be given in mortgage loans by 2010 vs. 289.2 million rubles provided as of April 1, 2007, according to Central Bank of Russia.
Judging by its own evaluation, DeltaCredit is one of the leading banks on the mortgage market of the country. It has granted 10,000 mortgage loans for the total amount of over $550 million.
www.kommersant.com
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