Sergey Zubov, Senior researcher, Financial Studies Department of the Gaidar Institute, told ”Nezavisimaya gazeta” that households will save loans by 2026 for the higher amount vs the overall volume of deposits.

The volume of loans obtained by the Russians in banks is increasing several times faster than the volume of the households’ bank deposits. According to the newspaper, if the current trend continues, by 2026 the households’ bank debts may exceed the amount of their savings. It may happen even earlier if another crisis bursts and the depositors decide to withdraw their money. This could be a major problem for the next presidential cycle, especially if the authorities fail to ensure sustainable growth of personal incomes.

According to the Central Bank statistics, the volume of loans issued by banks to households at the beginning of 2022 amounted to about Rb 25 trillion, increasing over the past year by almost 26%, and the volume of deposits reached about Rb 34.7 trillion, increasing for the year by about 6%.

At this moment, households keep more funds in deposits compared to their debts to credit institutions. However, the ratio may soon change noticeably. During the last three years, the volume of household deposits increased by an average of 7% per year, while loans increased by an average of 19% per year. If these rates persist, then, as shown by “NG” estimates, by 2026 the debts will outweigh.

"If the financial authorities and the Central Bank do not take radical measures to cool the market of consumer and mortgage lending, it is possible that by 2026 the volume of loans to households will reach the level of households deposits," says Sergey Zubov.

For comparison, in the EU, according to the expert, "on average, the ratio of loans and households’ deposits is higher than in Russia, and amounts to about 85%. In some countries it is even higher, for example, in France - 92%.” Thus, he assumes that the amount of households’ debts to banks may be more than the volume of deposits even earlier than in 2026. "Deposits are growing more slowly than loans. Deposits can be withdrawn quickly. The situation in the market is more conducive to borrowing."

Will the excess of debts over deposits become a significant issue for Russia? According to Sergey Zubov, this will be a non-standard situation for the Russian economy, although an excess of households’ loans over deposits should not initiate social and economic problems, although certain conditions have to be fulfilled.

"Debt service indicators will play an important role, as well as the extent of growth of households’ real disposable incomes and the level of investment climate in the country," explained the economist.

He pointed out that such a change in the ratio is still potentially dangerous for the banking system: "In the event of any crisis, there may be an increase in defaults on loans, which may cause problems in repayment of bank liabilities, including households’ deposits and businesses, and this, in turn, is a serious problem for the economy as a whole.”

Nevertheless, according to Sergei Zubov, the quality of the loan portfolio of individuals is currently at a respectively high level: "The risks of short-term consumer lending are compensated by the high level of mortgage loans". Therefore, instead of the problem of mismatching the volume of loans and deposits, one should consider the household debt load, "which really poses a risk for banks that the funds borrowed from them will not be repaid". "The growing volume of payments on loans results in a reduction in the solvent demand of households as a whole.

Both before and during the pandemic, representatives of the government and the expert community repeatedly made statements about the need to reduce household debt load and prevent further growth of the "credit bubble." However, the ensued measures did not contribute to solving this issue," said Sergey Zubov.

"It is safe to say that the Central Bank will strive to help cooling the consumer lending market and reorient banks to the corporate segment," the expert believes. If regulation by changing the premiums to the risk ratios proves insufficient, direct quantitative restrictions are possible. And already in this case, part of the credit demand risks being unsatisfied, which "could result in the debt load in the microfinance market and challenges for a certain part of individual borrowers.