President of Russia Vladimir Putin: Mr Kostin, how are things? How is your work proceeding?
President and Chairman of the Board of VTB Bank Andrei Kostin: Thank you, Mr President, things are not bad.
Over the first half of the year, the bank showed good, positive dynamics. Suffice it to say that profit for the first six months came to 60 billion rubles, which is more than the bank earned for the whole of last year. We see how economic recovery has led to growth in our loan portfolio, including in our work with the general public. This year, we expect our mortgage loan portfolio to increase by 23 percent. Interest rate reduction is also showing positive dynamics. The average interest rate on mortgage loans is around 11 percent today, but we believe that it can be brought down to 10 percent by the end of the year.
Vladimir Putin: There was a time when we dreamed of 12 percent.
Andrei Kostin: On the subject of mortgages, I would like to say that we have a new element now: together with the Agency for Housing Mortgage Lending, we are working on a programme for developing rental housing. We have already financed the construction of 85,000 square metres of rental housing and have invested around 16 billion rubles in this effort. This is an important social objective that you set for the agency. It is especially important for young families that cannot afford to buy a flat of their own but can rent good, reliable housing. We expect to have this housing on the market in 2018–2019. The new programme that we are developing now with the Agency will see a further investment of 25 billion rubles.
Vladimir Putin: In which regions?
Andrei Kostin: In Moscow, for now, but the next programme will encompass 5–6 Russian cities. In other words, we plan to go beyond Moscow.
Vladimir Putin: Fine.