Russians occupy banks as ruble loss bites

Mortgage holders have threatened street action if lenders don’t act to restructure debts in aftermath of ruble collapse.

Garegin Tosunyan, president of the Association of Russian Banks, talks to foreign currency mortgage holders who stage a protest outside the Yar restaurant during a meeting of the National Bank Clubin Moscow
Garegin Tosunyan, president of the Association of Russian Banks, talks to foreign currency mortgage holders who stage a protest outside the Yar restaurant during a meeting of the National Bank Clubin Moscow Credit: Photo: TASS

Disgruntled mortgage holders have threatened to take to the streets of Moscow after the collapse of the ruble left many foreign-currency borrowers unable to meet payment commitments.

Holders of foreign currency mortgages occupied branches of several separate banks in the Russian capital on Thursday, and have threatened to “mass action” if managers don’t agree to demands to restructure their debts.

Snezhana Yaroshchuk, a spokeswoman for mortgage holders from Delta Credit bank, a subsidiary of Societe General, told a Moscow radio station on Wednesday that borrowers had turned their attention to bank managers after failing to persuade the government to take action.

“We cooperation with mortgage borrowers from other banks, but given the fact that we’ve fought for a year to get through to the government, we have turned our efforts to the banks themselves,” she told Russian News Service, a radio station. “Currently everyone is trying to resolve the issue with their own bank. But if working with the banks doesn’t prove effective, we will turn to mass action,” she said.

People wear striped T-shirts during a protest of foreign currency mortgage holders at an office of the DeltaCredit Bank in Moscow

“It may be all the same to the bank, but the government can’t be indifferent to the fact that around 20,000 families could be left homeless,” she added.

Several dozen disgruntled Delta Credit bank customers briefly blocked Tverskaya, central Moscow’s equivalent of Oxford Street, in a protest on Wednesday evening.

On Thursday, dozens of protesters blocked doors and demanded meetings with top managers at branches of Bank of Moscow and VTB 24, both state-owned enterprises, and the Moscow headquarters of UniCrediBank, an Austrian-owned commercial lender, and Moskommertsbank, a subsidiary of a Kazakh bank. Raiffaisen Bank has also seen protests.

The outbreak of discontent follows a massive devaluation of the ruble driven by collapsing oil prices.

Foreign currency mortgage holders stage a protest at an office of the DeltaCredit Bank, a part of Societe Generale Group, in Moscow

Currently trading at over 76 to the US dollar and 110 to the pound, the currency has lost more than half its value since mid-2014.

Many mortgage holders took out loans when the ruble was trading at roughly 35 to the dollar and 50 to the pound, a level it had maintained more of less stably for the best part of a decade.

Vladimir Putin’s spokesman said the Kremlin is monitoring the situation but has no plans as yet to intervene.

“We know that this problem exists. It’s quite well known. There are certainly people who have fallen into a very difficult situation,” Dmitry Peskov said. “Unfortunately it is not possible to say there’s a ready made solution,” he added.