Izvestia: “Sberbank abolishes lending fee”
Starting April 19, the Savings Bank of Russia (Sberbank) will not collect a lending fee for loan arrangements, disbursement and borrower credit files. In addition, it will cut loan rates by 0.5% to 1%, Sberbank President German Gref said at a meeting with Russian Prime Minister Vladimir Putin.
What effect can be expected?
When making credit arrangements for a five-year mortgage loan of 1 million roubles, one can save up to 40,000 roubles on commission fees and another 29,000 on interest payments. This makes a total of 69,000 roubles for the entire loan term from all payments due to the bank over five years. However, this calculation was made for maximum lending fees and minimum loan rates. In reality, the client's saving's gain will be much more modest, even unnoticeable for some.
Yet another limitation is that these rules apply only to new borrowers, Gref explained. Old clients will not receive their lending fee payments back. However, the bank's loan rates may be revised at the bank's own discretion in the "negotiating process".
"Starting April 19, we will not charge any lending fee, and clients will just pay loan rates", Gref promised the prime minister.
"Loan rates will be cut by another 0.5%-1%, although they will include earlier commissions for individuals. I hope this will help to stimulate lending from Monday", he added.
In fact, commissions have not been abolished. Sberbank has simply started calculating lending fees "within" loan rates.
At Putin's request, Gref explained that interest rates now include all "earlier charged commissions". Nevertheless, the effective loan rate will be reduced by 2.5-3 percentage points. As a result, the annual interest on mortgage loans will be set within the 10.5%-13% range, with the minimum rate on consumer loans placed at 17%. However, most clients should not hope for a considerable improvement of their loan terms. The loan rates will, most probably, remain rather high for the average client.
With the fast-falling inflation in the country, Sberbank's decision does not seem too revolutionary. From January 1, 2010, annual price growth rates have fallen from 8% to 6.5%. This means that the money the banks loan to clients costs it less and less. It is no coincidence that back in mid-January, Sberbank lowered loan rates for individuals by 1-1.25 percentage points.
Last autumn, the Supreme Court of Arbitration ruled the collection of lending fees from citizens illegal.
"No one wants to borrow money from the bank at the current exorbitant rates", said Agvan Mikaelyan, the general director of the FinExpertiza consulting firm. "Banks will no longer be able to make super profits in currency speculation. Therefore, they will all have to cut loan rates. As regards Sberbank, it has cheaper resources in the form of people's deposits. However, if it does not make loans more accessible, it will lose its advantage, and its share of the market may shrink".
Pavel Arabov
