The CBR might reduce the risk coefficients of consumer loans for calculating the N1 ratio (the maximum level is cut to 2x from 2.5x) and delay the implementation of stricter requirements until 1 July from 1 March, Kommersant reports. To recap, the CBR was previously going to impose higher risk coefficients to limit the expansion of consumer lending (which reached 47% YoY in September). However, the regulator is still going to apply stricter regulations on deposit taking. The new method for calculating the cap for interest rates will apply to banks accounting for 66% of the total retail deposit base vs. the ten largest retail deposit taking banks it uses now. In assessing the level of banks’ interest rates vs. the cap, the regulator is going to take into account various ‘presents’ offered to clients. This measure is aimed at reducing the growth in the cost of funding.
We see a limited effect on smaller consumer lending banks, with the slight reduction in coefficients and delay in implementation allow them to adjust better to the new requirements. We also think there would be a limited effect on larger banks.
Mikhail Shlemov, Svetlana Aslanova
VTB Capital analyst
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