Raiffeisenbank pulls out of Russian auto loan market

Austria’s Raiffeisenbank is to stop  issuing new loans for the purchase of passenger cars and commercial vehicles in Russia. The refinancing of  car loans is also to be terminated.  “This decision is due to the negative trend in the domestic automobile market, attesting to the extremely low development potential of this business in Russia in the medium term,” the bank explained in a press statement released today. Raiffeisenbank will now focus on the development of other areas of retail lending  such as credit cards, consumer loans and mortgages as well as  deposits although it also plans to close branches in 15 cities across Russia.
“For a long time Russia was the only region [where] Raiffeisenbank International developed car loans,”, its  Deputy Chairman of the Board, Head of Retail individuals and small business bank Andrey Stepanenko explained. ” Unfortunately to date, this segment has demonstrated the worst dynamics of the market as a whole.”
According to the latest forecast from Association of European Businesses (AEB),Russia’s passenger car and light commercial vehicle market has declined by 24% so far this year compared to 2014.  

Source: Interfax