Russian banks in July cut rates on corporate loans for up to a year to a new minimum – Central Bank

Russian banks in July cut rates on corporate loans for up to a year to a new minimum – Central Bank

Russian banks in July cut rates on corporate loans for up to a year to a new minimum - Central Bank

The weighted average rate on ruble-denominated loans provided by Russian banks to non-financial enterprises for up to a year, including on-demand loans, in July 2020 decreased to 6.27% from 6.89% in June, follows from information posted on the website of the Central Bank of the Russian Federation … Thus, the rate has renewed its absolute minimum for the third month in a row.

The rate on short-term loans excluding Sberbank (MCX: SBER) in Russia also continued the renewal of the lows that began in May – it fell to 6.38% from 6.89%.

The share of short-term loans in their total amount in July was 66%, long-term – 34%.

The weighted average interest rate on loans of all banks for a period of more than a year after a decrease in June by more than 1 percentage point (pp) – to 7.13% from 8.26% in July rose to 7.42%.

This happened due to loans for terms from one to three years (they accounted for about half of the long-term loans issued in July), the rate on them increased to 7.76% from 7.06%. At the same time, the rate on loans for more than three years continued to decline – it decreased in July to 7.08% from 7.26% in June.

With the exclusion of loans provided by Sberbank from the calculation, the rate on long-term loans in July decreased, as well as on short-term loans, but not so significantly (by 0.08 pp versus 0.51 pp) – to 7.26% from 7.34%. This rate has updated the absolute minimum.

Comparison of data on rates on long-term loans allows us to conclude that the increase in the average rate for all banks, instead of updating the minimum, was due to loans for periods from one to three years provided by Sberbank at rates higher than the market average.

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