Headquarters of Bank VTB 24, Moscow. One of the leaders of mortgage loans, Bank VTB 24, hiked the rates for all range of mortgage product.
Photo: Grigory Tambulov
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Crisis with Home Delivery
One of the leaders of mortgage loans, Bank VTB 24, hiked yesterday the rates for all range of mortgage product. In the bank, they call that revision a forced action, blaming it on the rise in land prices. The land is the crediting source for most of Russia’s banks, and according to the analysts, the mortgage market will face a wave of the rates’ increase in the near term.
VTB 24 hiked its mortgage rates by 0.7 percent on year. From yesterday on, the mortgage loans are granted at 9.7 percent to 13.2 percent a year, if denominated in foreign currency, and at 11.7 percent to 14.2 percent a year, if given in Russia’s rubles. The mortgage loans account for over 30 percent of VTB 24 credit portfolio ($3 billion).
In the news service of VTB 24, they confirmed the rise in rates for individuals. People in the bank acknowledged that the revision was the forced action resulted from the “limited nature and more expensive resources for the bank.” “We have no right to forget about the holders’ interests, and they are interested in the maximum efficiency of our business,” representatives of VTB 24 news service said.
Under the statistics of the Central Bank of Russia (CBR), the trend of the recent years was the decline in the mortgage rates. Toughening programs by a few banks past fall didn’t affect the general tendency. But the trend may radically change once the market leaders hike their mortgage rates due to liquidity crisis.
www.kommersant.com
All the Article in Russian as of Apr. 08, 2008
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