Despite the fact that we, above all, appreciate the attractiveness of the company, as borrower, its solvency and market position, it should be noted that the construction industry still carries the greatest risk to the lender, and especially when it comes to lending to residential real estate. At the same time the banking industry today, on the contrary, there is a question quite fundamentally improve the quality of loan portfolios by reducing the portfolio risk on new loans and return to profit. In addition, construction projects usually require a longer life, whereas in the recent maturity of deposit portfolios of the banks, by contrast, markedly decreased, and the cost of borrowed funds - has grown. And the price of the resource, and high industry risk substantially more expensive loan to the developer and further exacerbate the issue by the possibility of servicing debt owed to the bank, and even more so in terms of weak sales in the real estate market due to low demand.
Related article: HyperCheap mortgages from government is playing with fireWhile the housing market will not show the upward trend, and the financial market does not provide the prerequisites for reducing the cost of the resource until the creditor's rights are not adequately protected in law, including with respect to foreclosure of the mortgaged property and sale of collateral on overdue loans, to predict development of a mortgage is difficult.
In the future, in 2012 for our bank, as for most other financial market participants, the mortgage will not be a priority lending. Banks will seek to promote the relatively short loans of up to 1 year and issue money is not for investment projects, and to maintain the current activities of the companies, adhering to rigid enough assessment of the borrower. I think 2012 will show even a small increase in the loan portfolio as a whole - to about 7%, in the absence of pressure from external financial markets.
Alex Salivon Deputy Chairman of the Board, Director of Corporate Business, VAB Bank