Sberbank Rossii : signs cooperation agreement with DOM.RF

• Sberbank is taking part in implementation of the government's measures to minimise the risks of joint participants in housing construction.
• The measures involve replacing the joint participants' funds with bank lending within the next three years.
• The plan will enable the transfer to housing construction project financing.

25 September 2018, Moscow - Sberbank and DOM.RF (unified housing institution) have signed a cooperation agreement under which a developer loan insurance mechanism will be jointly prepared.

DOM.RF's target developer loan guarantees will contribute to the replacement of joint participants' funds with bank guarantees, as banks can use this mechanism to reduce their risks.

Deputy Chairman of the Executive Board of Sberbank Anatoly Popov:

'The government's measures to replace citizens' funds with bank financing, as well as the current changes in housing construction require the creation of mechanisms which will help minimise the joint participants' risks and secure their rights. The developer loan guarantees provided by DOM.RF and increased construction transparency will allow banks to increase the volume of housing financing. We plan to implement a pilot deal using such a guarantee to show how this mechanism will function in real life.'

When carrying out pilot deals, the parties will cooperate with federal state authorities and the Bank of Russia, as well as initiate amendments to legislative documents and acts.

Deputy General Director of DOM.RF Artyom Fedorko:

'Joint work with the largest Russian bank will help us take into account the whole interaction between lending organisations and developers. The use of the guarantee mechanism will allow the banking system to increase mortgage lending by several times and medium-sized banks to participate in the implementation of large-scale comprehensive development projects, providing a smooth transition to a new model of industry financing. In the medium term, to implement full replacement of the joint participants' funds, we need the housing construction project financing volume to grow by seven times: from RUB 0.6 to 4.3 tln. We expect that half of that goal can be achieved using the new mechanism.'

DOM.RF guarantees will become a tool that will allow the banking system to increase the volume of housing construction financing and participate in a larger number of projects that will help to change the project industry financing model.

The mechanism of target developer loan guarantees is developed in accordance with the roadmap for the three-year phased replacement of citizens' funds that are used in construction of apartment housing and other real estate with the bank lending and other forms of financing, which will minimise citizens' risk (approved by the Russian government on 21 December 2017).