UKRAINIAN INDEX
OF EFFECTIVE INTEREST RATES
ON CONSUMER LOANS FOR INDIVIDUALS
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Car loan market to struggle for maintaining reached indices in 2013

Following the 2012 results, no increase of new car credits has been recorded. The growth of granted car loans is expected to stop in 2013, even if it goes on, the increase will not exceed 1-2%.

Car financing is not expected following the current year results. It’s explained by sales stagnation in general and reduction of the sales share funded through crediting. For example, in 2011 the market of motor cars in Ukraine increased by 35.7%, to 220.6 thousand units, but this year experts do not expect more than 220 thousand cars. It means a standstill. Based on available estimates, credited sales share has not exceeded 15-17%, and the average car credit invoice showed the amount of about UAH 120 thousands. Based on this data, the assessment demonstrates UAH 4.2 bn. new car crediting at least. In addition, sales of used cars approximated UAH 6 bn. It corresponds to about 7% of newly granted retail consumer credits (without mortgage) in 2012 and moves car loans to the last position by volumes.

Meanwhile, the car loan market turned out to be quite sensitive to the resource cost growth. The cause of this trend is that car credits are secured; therefore, the cost of resources, which became more expensive within a year, covers a significant share in these loans.

CreditMarket Car Loan Index (a mean effective rate on car credits) was recorded as high as 40.88% at the beginning of 2012, then it reached 45.99% after insignificant fluctuations and short stops. The difference by 5.1 p. p. matches the growth of one year deposits in UAH perfectly well (the NBU’s deposit index increased from 15.32% (3 January) to 19.68% (mid-October) for one year UAH deposits).

“UAH 6-6.2 bn. car loans will be provided in 2013,” forecasts Denis Rakovsky, Sales Director at KreditMarket. “The amount of issued loans, as it’s expected, will decrease, however, their average value may increase.”

INFORMATION: situation in the consumer crediting market in 2012

Renewal of retail crediting (hereinafter, mortgage is excluded), which started in March 2012, has slowed down – stagnation went on through June 2012. Then the active growth started, and consumer lending reached its highest point in August 2012.

Month-by-month consumer crediting dynamics (without mortgage) on the whole in 2012, UAH bn.

1

2

3

4

5

6

7

8

9

10

11*

12*

5.5

5.2

6.7

6.2

6.5

6.2

7.2

9

7.3

8.2

8

8.5

NBU data

* - KreditMarket estimation

The credit resource cost growth, which started in May 2012 in the Ukrainian financial market, did not slow down the new crediting increase. It’s due to the fact that long-term loan share is rather small and doesn’t exceed about 8% in the consumer crediting segment. The lion’s share of multi-year consumer credits falls on car loans. The rest are unsecured cash credits and commodity loans. They are responsible for about 25% and 54%, respectively, in the retail consumer crediting (without mortgage). The remaining part is covered by no-purpose loans secured by movable and immovable property, credit cards, etc. As a result, this market turned out less sensitive to the resource cost growth than the mortgage market.

Consumer crediting dynamics (without mortgage) on the whole in 2008-2013, UAH bn.

2008

2009

2010

2011

2012

2013

Forecast growth in

2013/2012.

123

37

48

84.3

84.5*

90-93**

+6.5-10%

NBU data

* - KreditMarket estimation

** - KreditMarket forecast

CreditMarket Car Loan Index is calculated on the basis of credits granted at 70% of the cost of a new car for a 3-year term. Promotional offers and the ones subsidized by sellers are excluded. The repayment scheme is annuity, or in case of no proposals – a classical one. The currency is UAH. The principal amount is UAH 80,000 (the car cost is UAH 114,300).

This Index is calculated by KreditMarket experts.

 

 
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