"Reduced interest rates predicted to invigorate consumer loan initiatives, according to VTB"
In a recent announcement, VTB, one of Russia's largest banks, has revised its forecast for retail lending growth by the end of 2025. The bank expects a moderate recovery, with mortgage loans projected to reach 4.04 trillion rubles, up from a previous forecast of 3.8 trillion rubles, and cash loans estimated around 3.5 trillion rubles [1].
This revised forecast follows a reduction in the key interest rate by the Central Bank of Russia, which lowered it to 18%, creating more favorable conditions for retail lending. However, deposit yields have started to decline accordingly [1]. Despite the rate cuts, deposits and savings accounts remain popular savings tools among the population [2].
The growth of the savings market is expected to continue until the end of the year, with the trend expected to persist until the end of 2025. By the end of 2025, VTB estimates the savings market to reach 67 trillion rubles, with 63.5 trillion in ruble savings [1].
Retail lending growth is modest, with a reported increase of about 8.8% year-on-year in early 2025. However, in real terms (adjusted for inflation), this actually reflects a decline due to high interest rates prompting more household saving rather than borrowing [3]. The overall retail credit market shows some signs of risk, with non-performing retail loans at VTB increasing and continuing concerns about unsecured consumer loan quality [2][4].
Savings behavior is shifting, with the household income savings rate rising to about 10%, reflecting cautious consumer sentiment despite some recovery in lending [3]. The impact on the auto lending market is expected to be modest [1].
VTB maintains its 2025 auto lending forecast at 1.3 trillion rubles [1]. The bank will make further decisions later, after assessing the regulator's rhetoric and market changes [1]. The "Khabarovsk Krai Today" news agency reported that deposit rates on the market will continue to decrease but remain attractive for profit fixation until the end of the year [2].
The decline in deposit rates is happening faster than the key rate reduction. In the first half of July, the maximum rate in major banks for deposits and savings accounts fell below 18% [2]. This trend of declining deposit rates is expected to continue until the end of the year [2].
In the second half of the year, the savings market is expected to grow, albeit at a slower pace than previously expected [1]. The Central Bank's key rate cut of 2 percentage points is expected to stimulate a revival in retail lending, including mortgages [1].
Sources: [1] VTB Bank Press Release, 2025 [2] Khabarovsk Krai Today, 2025 [3] Central Bank of Russia Report, 2025 [4] VTB Financial Results, 2025
- With VTB's revised forecast predicting a savings market worth 67 trillion rubles by the end of 2025, personal-finance strategies may consider capitalizing on this growth in the banking-and-insurance sector.
- The reduction in key interest rates by the Central Bank of Russia has not only encouraged retail lending, but has also led to a decline in deposit yields, indicating a shift in the industry's finance landscape.
- As VTB anticipates a moderate recovery in retail lending, with mortgage loans projected to reach 4.04 trillion rubles, investing in real estate could be an attractive option in the near future for businesses or individuals looking to explore opportunities in the finance industry.
