Mortgage market regulation has intensified, and Russian banks are facing a projected hit in profit for the current year—an estimate that reaches about 80 billion rubles. This assessment has been cited in reports attributed to TASS, drawing on the review from the rating agency Expert RA. While the immediate impact appears negative, the broader view suggests a compensatory dynamic over time as regulatory measures push lenders toward higher-quality portfolios and more disciplined risk management. The shift is expected to reshape how banks structure mortgage products, influence pricing, and adjust the volume of new lending as the market adapts to stricter standards.
Analysts highlight that the profit gap may be bridged in the long run through improved portfolio quality and better alignment with regulatory expectations. The anticipated improvement in credit quality is seen as the key mechanism by which profits could recover, even in the face of tighter rules and a more conservative lending environment. The focus for lenders is moving from aggressive growth to sustainable risk control and resilient funding structures, with portfolio performance serving as a central driver of future profitability.
Expert RA points to several innovations and policy changes that will influence lending behavior during the year. One notable change is the introduction of allowances from developers to the reserve ratio for mortgage loans starting May 30. This adjustment may become a driver for a reduction in the issuance of such loans and a consequent drop in the volume of upfront commissions earned by credit institutions from developers. The move signals a shift in how developers participate in the financing process and how banks account for potential defaults and risk exposure.
Another factor is the new macroprudential premiums added to the risk weights on loans with low down payments, slated to take effect on July 1. These premiums are designed to curb high-risk lending and stabilize the mortgage market by making risky loans less attractive to lenders. The measure is expected to limit the number of high-leverage loans issued in the market, contributing to a more tempered growth trajectory for mortgage issuance.
Additionally, Expert RA notes a change in how banks earn commissions from mortgage products. The Central Bank has restricted the practice of compelling borrowers to purchase insurance through a lender or to overpay for insurance outside a reserved list of accredited insurers. This regulatory tightening reduces potential commission income for banks tied to forced insurance arrangements, nudging institutions toward more transparent and borrower-friendly practices, and aligning incentives with actual risk and value delivered to customers.
Taken together, the agency forecasts a modest rise in mortgage issuance for the year, estimating growth in the ballpark of a few percent. The total volume is projected to reach approximately 4.9 to 5 trillion rubles, signaling that while the market may cool in some areas, it still demonstrates resilience and capacity to expand under a more disciplined framework. The revised outlook reflects a market that is recalibrating its risk appetite in response to macroprudential measures, with lenders adjusting product structures, pricing, and risk controls to fit the new regulatory landscape.
Earlier in the year, the Central Bank had signaled a tightening stance on extremely low-rate mortgage regulation, referencing changes that started on May 30. The combined effect of these regulatory steps is to create a more cautious lending environment, where banks emphasize prudent underwriting, improved credit assessments, and stronger capital buffers. While some institutions may experience shorter-term pressure on revenue streams, the broader expectation is for a healthier, more sustainable mortgage market that can withstand fluctuations in interest rates and macroeconomic conditions.
In this evolving context, market participants are paying closer attention to the quality of borrowers, the durability of borrower income, and the resilience of mortgage portfolios under stress scenarios. Policy shifts aim to reinforce financial stability, reduce the likelihood of aggressive credit cycles, and promote more responsible lending practices. For consumers, this could translate into closer alignment between stated loan terms and actual risk, clearer disclosure around fees and commissions, and more predictable mortgage costs over the life of the loan.
Overall, while the near term may bring tighter profitability indicators for banks, the intended effect of the regulatory changes is to foster a healthier, better-regulated mortgage market. As lenders adapt to new reserve requirements, amplified risk weights, and reforms around insurance procurement, the industry appears poised to deliver a more stable financing environment. The direction supports a longer horizon where improved portfolio quality and disciplined lending become the cornerstone of profitability for Russian banks amid evolving regulatory expectations.