In 2020, 7846 households improved their living conditions thanks to a mortgage from Center-invest Bank. The total value of mortgages issued was RUB16bn. The bank has its own mortgage programmes and it also participates in government-subsidised programmes. In addition, it has recently introduced unique ESG loans for frontline medical workers.
For Center-invest Bank, social responsibility and family values are just as important as the quality of the financial services that it provides. The bank always offers honest interest rates for loans. Moreover, we do not require customers to take out insurance or sign up to tied-in services. When deciding how much a customer can afford to borrow, the bank takes into account the family’s total income.
In 2020, the bank’s retail loan portfolio grew by RUB3bn to RUB58.2bn. Growth was driven by mortgage lending, including lending under government-subsidised programmes such as the Rural Mortgage and New-Build Mortgage programmes. A total of RUB3.4bn was lent under these programmes in 2020. All of the mortgages are fixed rate for the whole term of the agreement. We do not charge additional fees or require customers to take out insurance.
“A unique situation emerged in the property market in 2020: an enormous choice of properties and a very low mortgage interest rate,” said Nikolai Paramonov, head of Center-invest Bank’s Retail Lending Division. “Moreover, government support mechanisms also help families to minimise their mortgage repayments when buying a home. The bank continued working throughout the period of coronavirus restrictions. All the loan applications were received electronically and processed remotely. Mortgages are one of Center-invest Bank’s core products and we will continue our work in this area, making mortgages as accessible and convenient as possible, and improving the living conditions of our fellow citizens.”
Demand for mortgages remained high until April 2020. There was then a downturn due to the coronavirus restrictions and lockdown. However, by the middle of the year, demand had recovered and it continued to grow for the rest of the year. While in the first six months of 2020, the bank issued 2767 mortgages for a total value of RUB5.2bn, mortgage lending was double this in the second six months. As a result, the bank issued 7846 mortgages in 2020 with a total value of RUB16bn.
Customers can use a mortgage to purchase a new build property or a property on the secondary market. They can also decide to build their own house. Eighteen per cent of mortgage agreements are for new build properties. Increasingly, customers are taking out a mortgage to purchase a parking space or to refinance a mortgage from another bank.
The bank’s mortgage refinancing programmes remain popular: 23% of the mortgages issued by Center-invest Bank in 2020 were to refinance loans from other banks. Many customers entered into loan agreements at a time when the best rate was 11%; they can now reduce their rate by 3-5% per annum. Refinancing is a straightforward and quick process for our customers, and the financial benefits are considerable.
Center-invest Bank is an example of a socially responsible business. To thank our heroic frontline medical workers, at the end of 2020 we introduced special loan terms for these personnel. Doctors in the Rostov region have already received the first loans under this special programme. Responding to high demand, Center-invest Bank has extended the programme to all the regions where it operates. Frontline medical workers can take out new loans, refinance existing loans from other banks on special terms, and also obtain reduced rates for existing loan agreements with Center-invest Bank.