President of Russia Vladimir Putin: Mr Mutko, how are you?
General Director of DOM.RF Vitaly Mutko: Overall, the company is progressing. We are a core development institution in the housing sector. Undoubtedly, housing is the primary priority and necessity for every individual and family, which is why we are focused first and foremost on implementing housing policy. We are engaged in fulfilling all the national goals you have outlined. Additionally, we serve as a financial investment institution – raising resources for the industry.
Certainly, the current situation in housing is challenging, but it remains manageable: approximately 119 million square metres of housing are currently under construction.
Mr President, I should note immediately that this is due to the reforms we carried out in 2019 under your instruction – I would even say with your personal involvement. At that time, we transitioned the industry to project financing using escrow accounts. We safeguarded interests and, as you recall, eliminated the very notion of defrauded equity construction investors.
Vladimir Putin: There were many doubts about whether this would be effective.
Vitaly Mutko: The Minister of Finance and I recently recalled how we reported to you three times – you corrected us, and ultimately, we implemented these reforms.
Now, as you know, credit lines totalling 20 trillion rubles have been opened in the bank. Eight trillion are active in the market, while seven trillion remain in escrow accounts. This is a guarantee of stability.
We observe, of course, that the primary driver of housing purchases today is mortgages: 80 percent of housing is acquired through mortgages. Naturally, within this mortgage structure, 70 percent involve state participation.
(Subsequently, Vitaly Mutko elaborated on specific company projects. Over five years of operation, the company has grown fivefold in assets. Its current assets stand at 5.5 trillion rubles. The company pays taxes and dividends, having transferred approximately 75 billion to the state as its shareholder, with an additional 50 billion contributed in kind. It finances the development of new territories and allocates funds for master planning as part of its social responsibility. The company operates all state mortgage programmes involving government participation. Over five years of these programmes, 3.8 million citizens have received support through DOM.RF, including preferential mortgages, family mortgages, and Far Eastern mortgages. The company also informs citizens about housing policy, with 42 million citizens accessing its services over the past five years.)
Vitaly Mutko briefed the President on several of the company’s projects, including loan securitisation: 8 percent of mortgages are securitised by DOM.RF. Another project concerns the use of idle land plots, with assistance for housing construction and national infrastructure development as a side effect. The latter involves infrastructure, publicly-funded and treasury loans. The organisation has floated infrastructure bonds, using the returns to finance various projects, namely road construction, the conversion of boiler houses from coal to gas, the creation of street lighting systems, and environmental projects.
He also reported on the implementation of the President’s instructions on the construction of rental housing in the Far East, the development of master plans for 200 backbone cities (the company plans to act as the operator of this programme), and the revitalisation of cultural landmarks, which the company renovates before transferring them to effective owners.)
Vitaly Mutko: As a financial institution, DOM.RF has been instructed to increase its capital to 11 trillion rubles by 2030, or by 500 billion rubles in terms of profit, which is, of course, a challenge.
You have also instructed us to go public and to conduct our first IPO. We will be the third or fourth largest company on the stock market that the state will offer to investors. Mr President, I believe that these resources will allow us to actively implement our housing policy.
Vladimir Putin: Housing is a key issue for every person, every citizen and family. It is also one of the most sensitive issues that determine the welfare and social wellbeing of Russian citizens.
I think we have every reason to believe we will be able to resolve the main issues in this area in a way they have never been resolved before, neither in tsarist nor in Soviet times. We have everything to do it, including the technology, developed facilities for producing construction materials, the scientific expertise, and good organisational acumen.
Your company certainly has a special role to play in dealing with the variety of questions here. As usual, it is clear that there are many organisational and financial questions to address. On the other hand, a great deal has been accomplished over the past few years. Progress has been good, and the results are promising.
I sincerely hope that you will fulfil all the tasks set for you, working together with the Government. I would like to thank you for what has been accomplished in the previous period.
<…>