The volume of overdue mortgages and car loans in Russia has nearly doubled in a year, increasing by RUR 95 bln ($1.2 bln) and RUR 35 bln ($434.8 mln), respectively, according to data from the United Credit Bureau cited by Izvestia.
This surge in overdue debt reflects the aftermath of the hyperactive lending period in 2023-2024, when banks relaxed approval standards amid fierce competition and favorable market conditions, explains Igor Rastorguyev, a lead analyst at AMarkets. Rising inflation, which eroded Russians’ real purchasing power, further exacerbated the situation.
However, Rastorguyev believes warnings of a full-scale debt crisis are premature. First, overdue debt remains within manageable limits, allowing credit institutions to maintain sufficient reserves. Additionally, the Bank of Russia’s current policies encourage more cautious lending practices. Second, as inflation stabilizes and real incomes gradually recover, some problem debts may be resolved without major strain on the banking system.
“Moreover, the government is actively rolling out support mechanisms for conscientious borrowers – from restructuring programs to mortgage subsidies for certain groups – easing household burdens and mitigating the risk of a non-payment chain reaction. As a result, the market will likely undergo a natural correction, leading to higher-quality loan portfolios and greater stability,” Rastorguyev predicts.