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16 Jan, 2012 12:08

December's Russian credit boom short-lived

December's Russian credit boom short-lived

Russian credit agencies have reported a record number of requests for histories in December. During the month banks went on a loan spree to compensate for the rest of 2011 when they were tight on giving money.

In December Russian banks requested about 6.2 million credit histories comparing to 3.8 million in December 2010, according to NBKI credit reference agency data. Usually the volume of requests grow at the end of the year, but December 2011 hit a record, said Alexander Vikulin, the head of NBKI. “The growth of applications shows banks wanting to decrease the amount of overdue and unrecovered loans, it is quiet obvious”, he said.But analysts warn, the loan boom in the Russian market is seasonal. “This trend is unlikely to continue. The growth in December was driven largely by spending ahead of the New Year:  people get bonuses and make major purchases, and retailers offer big discounts”, says Nikita Ignatenko from Investcafe. “At the beginning of the year people save rather than spend”, he said.Another reason for the increase in the number of loans at the end of the year could be the lack of liquidity Russian banking has been fighting during 2011. “Some banks had problems with liquidity amid the unstable financial situation and this factor held down the loan growth”, Alexey Chernishev from OTP-Bank told Kommersant daily. “In November the situation improved and those who solved their problems managed to increase loan volumes”.But even a slightly improved liquidity situation could probably affect credit rates, Mr Ignatenko says. “By the middle of the year credit rates are likely to shed 1-1.5% as banks take steps to provide effective liquidity management”, he explained.

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