OREANDA-NEWS. According to the information in the issue of the Regional Credit Markets Review, most of the Russian regions reported lower interest rates and growth of lending (or at least slowdown in reduction of lending) in 2016 Q1. Herewith lending rates were going down more slowly than in Q4 of the last year.

Loan arrears in the banking sector continued their growth in 2016 Q1. To mitigate credit risk banks increased loan portfolios in the regions, where loan arrears were lower than market average ones.

For example, corporate lending grew in the Krasnoyarsk Territory and Bryansk Region, where corporate bad debts were small, in the first quarter of the current year.

Banks rely on the increase in borrowing demand by legal entities and households in the midterm in response to lowering of lending rates. For this purpose banks are planning to soften up lending conditions. This may accelerate corporate lending and recover growth of retail portfolios.