Updated May 14, 2008

   Russian banks cut growth rates of loans' volumes given to individuals, as it follows from Bank of Russia statistics.

Home loans and mortgage make an exception, as these segments continue to grow rapidly.

Experts explain this by banks reorientation towards the more stable segment of the long-term lending.

   Bank of Russia has posted the statistics on its

official website about the volume of retail debts to banks as of April, 1, 2008.

By ruble loans this index totals RUR 2 798 698,3 million, having increased by RUR 522 796,8 million since October, 1, 2007. As of April, 1 the volume of retail debts by currency loans in ruble equivalent attained RUR 390 6

17,9 million, having increased by RUR 8257,8 million within six months.

Total revenue of retail loan debt totaled RUR 531 054,6 million from October till April.

Banks have been giving loans more active within previous six months – from April till October, 2007. Then the revenue of retail loan debt by ruble loans totaled RUR 561 748,1 million, by currency – RUR 71 181,6 million. Apparently, within the last six months the rates of retail debt have reduced by 16%.

   Some analysts explain the lending situation by crisis influence on international financial markets. "Over the means shortage banks have cut the volumes of retail lending", is sure Trust bank chief analyst Yevgeny Nadorshin. "Thus, currency loans in particular have undergone the most cut over the reduction of currency securitization volumes". Banks prefer to give loans in rubles, as consents Rusrating agency analyst Viktoriya Belozerova.

    O ther experts consider

the reduction of lending growth rates a regular process not related to the crisis. "Since Russian banks had started to give retail loans almost from scratch seven years ago, they were demonstrating exclusively high growth rates of lending volumes (around 90% a year)", says Renaissance Capital analysts Maxim Raskosnov. "However, retail lending business is rather in the mature stage now, and it is normal that portfolio growth rates slow down". According to his opinion, one should not take into account the decline of banks activity as well concerning mortgage granting and loan policy tightening of the largest players of the consumer lending market related to the additional commissions' refusal. "One should bear in mind that Bank of Russia statistics does not take into account the portfolios sold in term of assets securitization transactions", as expert adds.

   As it follows from Bank of Russia data, banks prefer to give long-term loans.

From October, 2007 till April, 2008 volume of the ruble home, as well as, mortgage, loans has increased by RUR 220 988,1 million, while from April till October, 2007 – by RUR 199 831,8 million. "In terms of the crisis large banks parlayed into long-term lending, as this lending segment demonstrates both the highest growth rates and permits to attract rather stable clientele, than short-term consumer loan", considers Yevgeny Nadorshin. In Mrs. Belozerova opinion, banks restricted means without the state or foreign participation enables the later to increase significantly their market share in terms of the crisis.

   Experts also spec ify that

if the tense situation at the financial market continued, an excessive keenness on the long-term lending could worsen the operating indices of some players.

"Long-term lending efficiency is lower, than short-term, and banks expenditures remain at the same level, and the securitization price rises", explained Mr. Nadorshin. However, according to the opinion of other experts, the problems of some banks would hardly affect all banking system.

"Half of Russia's retail lending market is controlled by the Savings Bank, and it does not face problems", sums up the Russian bank top-manager.