PJSC Sberbank : Sber’s property developer portfolio growing by 100 billion rubles per month

Sber's portfolio of property developments is growing by RUB 100 bn per month and is already approaching RUB 1.7 tn. Vice President and Director of Lending Products and Processes Sergei Bessonov shared the data at the "2021 Trends and Their Impact on Development" online conference for developers.

Over the 10 months of 2021, Sber received approximately 1,700 applications for project financing, almost a 40% more than during the same period last year. Around 1,250 applications were approved, or 56% more y-o-y. This means that not only is the total number of applications growing; so is the quality of the applications, as evidenced by increasing approval rates.

Sber is also actively involved in a government subsidy program for low-margin housing construction in escrow. The bank was allocated RUB 3 bn in the framework of the program. Under the program, the bank finances 17 housing projects with a total area of 123,000 m² in seven regions of the Russian Federation (Saratov, Vologda, Chelyabinsk, Vladimir, and Orenburg Regions, Altai Krai, and the Republic of Mordovia). However, there are cost constraints on the projects being implemented (no more than RUB 500 bn) that impede the development of the program. The program will expand its coverage of projects by increasing the maximum project budget to RUB 800 mn to RUB 1 bn. Similar proposals have already been made by the professional community, including Sber. The proposal is expected to be implemented by the end of the year.

Sergei Bessonov, vice president, director of Lending Products and Processes, Sberbank:

"We are focusing on digital services for developers. Today, 95% of escrow accounts are opened online, and 85% of applications for project financing are received online through developers' accounts. We plan to pilot our innovative Online Housing Finance service in Q2 2022: it will calculate the financial model and determine the structure of the transaction based on a questionnaire filled out by the developer in the SberBusiness mobile app. This will reduce the time spent on document analysis to five days and facilitate automated financing decisions. We plan to extend automation to other stages of project finance transactions in the future: signing of loan documents, fulfilment of suspensive conditions, and disbursement of loan funds. Driving all these changes will be a smart AI-powered cash flow model."

According to Sber analysts, the average funding available to developers in Moscow has reached RUB 7.7 bn, up 65% from RUB 4.6 bn y-o-y. This is because Moscow developers are increasingly using project finance and bank's complementary products, which impose a limit on financing the initial stages of construction (the acquisition of a land plot, design and estimate documentation, etc.), construction permits obtained ahead of construction, and lending against future profits.

Moscow, Krasnodar Territory and St. Petersburg saw the largest growth in Sber's housing portfolio in absolute terms since the beginning of 2021. Interestingly, Krasnodar Territory has made it to the top for the first time, challenging Saint Petersburg in the Top 3 fastest growing regions within the portfolio.