Sberbank of Russia : loan portfolio of developers reaches all-time high of RUB 675 bln

Sberbank has held its regular conference for developers under the tagline Time for Changes: Focus on Online Services and Government Support. This time, it was held online. Heads of government agencies, top managers of Sberbank and developer companies discussed how the industry had changed in the recent two years, what helped participants to adapt to the changing reality, what prospects they can see now, and how financing volume changed recently.

At the Business and Authorities: What Does the Industry Need Today panel discussion, the participants talked about new financial tools and support the government had provided to developers during lockdown. The list of panelists included Anatoly Popov, Deputy Chairman of the Executive Board of Sberbank, Olga Polyakova, Deputy Governor of the Bank of Russia, Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of Russia, Alexander Frolov, Chairman of the Board of Directors of Akvilon Group, Razim Abasov, Chairman of the Executive Board of Monolitholding LLC.

Anatoly Popov, Deputy Chairman of the Executive Board, Sberbank:

'As the largest bank in Russia, we believe that our duty and even mission is to take an active part in the development of legislative initiatives in the residential real estate industry and to closely monitor their implementation, since the industry is one of the foundations of social stability in the country. Sberbank occupies two-thirds of the market in terms of the number of escrow project finance agreements. Our loan portfolio of developers is RUB 675 bln as of September 1, 2020, the share of projects with escrow accounts is 62%. The latter segment has seen unprecedented growth since early 2019 when it stood at only 14%. These figures prove the successful implementation of the government's policy of mass migration to a secure and efficient transaction mechanism using escrow accounts.'

The number of new escrow accounts at Sberbank grew seven times in 2019 and has quadrupled since early this year. It reached 111,000 accounts totaling RUB 205 bln (12% of them have already been disbursed) in early September.

Speaking about further support for the construction industry, Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of Russia talked about a new mechanism that is about to be introduced soon.

Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of Russia:

'Russian regions have projects that deserve to receive project finance but have low profitability. Another support mechanism of subsidizing the interest rate for low-margin projects with profitability under 15% when receiving project financing will be launched soon. The rules and regulations have already been prepared, and the government is reallocating the budget for this incentive. We've designed it together with the Central Bank of Russia and Sberbank. Naturally, the program funds aren't enough to cover all low-margin projects, but I hope that the first results will show the necessity and advantages of this support measure.'