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President of Russia Vladimir Putin: Let’s talk about the current situation in the bank and the status of its loan portfolio.

Sberbank CEO and Chairman of the Management Board German Gref: Mr President, we have achieved pretty good results despite the ups and downs of the past several months. Naturally, we were affected by it being the largest holder of security, federal loan bonds, public securities and of course, we lost a certain amount due to this volatility.

We hope that by the end of the year the situation will stabilise and we will recover these market losses. However, in the past months our net profit has been affected by portfolio volatility and the unstable markets.

If you look at the largest and most dynamic area, which is residential loans, mortgages and housing financing, it has grown by 74 percent year-on-year.

However, last year the residential loan and mortgage portfolio actually doubled compared to 2016 and reached 3.3 trillion rubles.

That was a record figure. It had never happened before in the history of our country. These days, around 30 percent of all purchased housing is funded through mortgages.

Vladimir Putin: What is the average mortgage interest rate at Sberbank?

German Gref: I think right now it is just over 9 percent.

Vladimir Putin: Is this the average interest rate?

German Gref: The interest rate can be lower or higher. The older mortgage portfolio is also undergoing gradual refinancing. Of course, we still have the old 12 percent or 13 percent loans. But we are refinancing them now.

Every year, some 15 to 20 percent of the old mortgage portfolio is refinanced according to the new interest rates. Therefore, I think that eventually, within the next year we will lower the average interest rate significantly in the wake of reducing these peak interest rates from the old mortgage portfolios.

Quite unexpectedly, the car loan portfolio increased this year by 32 percent. The credit card portfolio is growing well too. When it comes to business loans this year the figures are good. Overall, since the beginning of the year, we have provided 25 percent more loans.

Vladimir Putin: Excellent.

German Gref: This is a significant result. We did not expect such a huge increase.

At the same time, the largest customers, the largest businesses that demonstrated very weak trends in the previous years, now account for 9.6 percent. This is substantial.

Large and medium-sized businesses are growing well. Small businesses are also showing good results.

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