Mortgage crediting to grow by 9% in 2012, consumer crediting by 15%, says survey
Kyiv, December 21 (Interfax-Ukraine) – The size of mortgage crediting in Ukraine in 2012 is forecasted at UAH 3.8 billion, which is 8.6% up on the figure expected in 2011, according to experts of the Financial Solutions Center (the KreditMarket trademark).
The results of the survey for prospects of the country's credit market were presented by top managers of KreditMarket at a press conference at Interfax-Ukraine on Tuesday.
The company expects that mortgage crediting this year will grow by 55.6% year-over-year, although the absolute size of crediting is very low: in 2010 mortgage credits worth UAH 2.25 billion were issued and in 2011 it is expected that mortgage credits worth UAH 3.5 billion will be issued, while in 2008 credits worth UAH 27.8 billion were issued.
"It takes four years for a resident of Italian or French capitals with average wages to buy an apartment in the capital [taking into account the ratio between the average price of an apartment in the capital and the average wage of a capital resident]… In Ukraine the indicator is 22 years. 90% of population would not be able to allow the purchase of an apartment in credit in the near term," Operating Director of KreditMarket (Financial Solutions Center) Volodymyr Kompaniyets said.
The company said that in 2012 mortgage credits will be taken by those who does not have 25-35% of the apartment value and who expects to pay back the credit in several years.
The average effective mortgage rate, taking into account all additional fees and payments, is forecasted within the 24-27% range per annum in hryvnias (nominal rates 17-20% per annum).
According to the materials released by the company, the issue of consumer credits in 2011 will expand by 15%, to UAH 92 billion, while this year it is expected at UAH 80 billion (UAH 123 billion in 2008).
Director General of KreditMarket (Financial Solutions Center) Ihor Durytsky said that in 2012 banks will continue working on the increase of the quality of risk management due to a threat of a second wave of crisis: credit and financial institutions would be careful in assessment of the quality of borrowers.
Banks will face a necessity to again change an approach to distribution channels: they could select between the expansion of partnership with other financial institutions and the reduction of the chain. He said that in 2012 bank fees will grow so to increase profitability of transactions.
Durytsky also said that in 2012 banks will focus on car crediting and issue of short-term collateral-free credits (cash credits and credits to buy goods).
He said that high competition in the goods purchase crediting area will push banks to developing new segments (crediting of purchase of construction materials, furniture, etc).
"We have rather tough competition for banks to enter such chains. By March [retail] chains will close [tenders to select banks], and from March we expect a large rise in joint auction programs of banks and chains," he said.
He added that the share of sales in credit in the segment in 2012 could expand from 30-35% to 40-45% of total sales, which is comparable with the pre-crisis level.
As for credits to buy cars, he said that in 2012 the products will be drivers on the medium term crediting market: their share in the segment could grow up to 20% of total sales if the situation were favorable, while at present it does not exceed 15%. New players could appear on the market and the market could be redistributed.