Euromoney Alfa-Bank CEO is shaking off consumer credit restrictions

Russia’s chief executive officer Vladimir Verkhoshinskiy said that despite new restrictions on the segment, Russian Alfa-Bank can see strong growth in retail lending.

In response to growing concerns about over-indebtedness among personal borrowers, the Central Bank of Russia (CBR) introduced a series of new regulations in October to slow the growth of retail lending.


Russian banks are now required to calculate the Debt Service to Income Ratio (DSTI) for retail customers. Loans to consumers with high DSTI scores have a much higher risk weight. The CBR has also increased the risk weight for mortgages with a LTV above 80%.

This follows actions in April that sharply increased the risk weight for unsecured consumer loans with an effective interest rate of more than 10%. Central bankers expect the two rounds of regulation to slow retail lending growth in 2020 from nearly 20% in the past two years to 10%.

One of the key growth drivers in the segment was Alfa-Bank. Russia’s largest privately owned lender expanded its retail portfolio by 60% over the past year.

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