Vedomosti: "Christmas Gift from German Gref"
Sberbank to reschedule consumer loans
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Anna Voronova
Russia's biggest consumer lender said it would support its borrowers finding themselves in dire straits because of the financial crisis by rescheduling their debt.
German Gref, president of Russia's largest state-controlled savings bank, Sberbank, discussed the bank's plans to support its borrowers, victims of the global financial crunch, with Prime Minister Vladimir Putin on Monday.
The first proposal will take care of those customers whose incomes dropped dramatically because of the crisis. "If a customer's income shrank because he or she lost employment on redundancy, or their salary was cut, they will need to bring documented proof, and our territorial banks or Moscow offices will grant them delays or reschedule their debts for six to 12 months, until their income is restored," Gref said.
He said they would either use capitalization of interest or other ways of rescheduling payments planned for individual customers.
The second proposal is aimed at supporting those scared of a plummeting rouble. "We have received a number of requests from individuals to convert dollar-denominated loans into roubles," Sberbank said, adding that they would perform such conversions after the New Year.
The loans will be converted at the bank's internal exchange rate, and everyone's requests will be granted, Gref said.
Putin asked him why convert credit commitments to roubles, and Gref explained that, while few people are actually paid in foreign currency, with the appreciation of the rouble, many have taken on very high liabilities and currency risks. "Many are now seeing that they were wrong, so we are willing to take on their currency risks to help them," he added.
The third proposal has to do with mortgage borrowers whose incomes have shrunk. According to Gref, Sberbank has reached an agreement with the Agency for Housing Mortgage Lending (AIZhK) and with major mortgage lenders on restructuring existing loans.
Three bailout schemes will be offered - up to 12 months' deferral (moving the payment to a later date), rescheduling (extending the term of the loan and changing the schedule of payments), or issuing a new loan to refinance the previous ones, also covering the interest. AIZhK will provide guarantees in the second and third cases.
We still need a government resolution to implement the proposals, Gref said, adding that it was expected before year's end.
The Prime Minister wanted to know whether deferrals would only be granted to customers who have lost jobs or also those whose salaries have been cut. "Both," Gref said.
VTB 24 is discussing a similar programme, but is not ready to announce it, said first deputy chairman of the board Dmitry Rudenko.
Another bank planning customer support measures is Transcreditbank, according to Andrei Kuptsov, a board member.
"We have always been willing to support customers facing problems and reschedule their debt," said Irina Zhukova, Head of the Communications Department at Home Credit and Finance Bank, adding that very few customers have yet to use that programme. To have their debt rescheduled, a customer must present a document confirming a major cut in income.
A representative from Russian Standard Bank declined to comment.
A credit manager at one of Sberbank's offices admitted he hasn't even heard of Gref's announced programme. "They only reminded us that a customer can be granted a six-month deferral," he said, adding that another option was choosing a quarterly payment schedule rather than monthly, but the amount would consequently be three times higher.
Sberbank is trying to hedge risks, believes Mark Rubinshtein, analyst with the Metropol brokerage firm. "They didn't support borrowers in the United States, and we can see now where this has gotten them!" he said.
Deferrals and rescheduling are good for both the customer and the bank, because its overdue receivables won't be growing too fast, Rubinstein said. The Central Bank has extended the period for late payments during which the bank does not have to increase reserves.
On the other hand, rescheduling non-mortgage loans might increase risks for the bank, the analyst said.
It is also a good PR act, as Sberbank has shown that it cares for its customers.
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Living on credit
Russians' total outstanding loan debt as of November 1 was 4.1 trillion roubles, including 3.6 trillion for rouble-denominated loans (up 1.4% in November) and 459.3 billion roubles for loans denominated in dollars or euros (up 3.5%).
