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Report: Alfa-Bank mulls shift to mortgage lending as corporate sector stagnates

Russian privately owned lender JSC Alfa-Bank plans to focus on retail lending, especially mortgage loans, due to stagnation in the corporate segment, Reuters reported, citing the lender's management board deputy head, Alexey Chukhlov.

The bank plans to double its retail loan book within the next two to three years, the executive said, according to the March 15 report. The lender does not expect major growth in corporate lending in coming years, taking into account the current macroeconomic situation, and is already working with the largest companies in Russia, with corporate loans accounting for 80% of its total loan book.

Alfa-Bank is also ready to purchase mortgage portfolios from other lenders to accelerate growth, with the last transaction of this type concluded at the end of 2017, Chukhlov said without disclosing details of the deal. The bank may also consider acquiring another financial institution, although Chukhlov said there are currently no attractive M&A targets that would allow the lender to boost its financial results or ensure long-term value growth for shareholders.

The lender could issue more ruble-denominated bonds in 2019, in addition to a 10 billion-ruble eurobond placed in January, with the funding to be used to expand its loan portfolio, the report said.

As of March 15, US$1 was equivalent to 65.02 Russian rubles.