Weighted average interest rate on loans from the Central Bank of the Russian Federation. Weighted average interest rate - what is it and how is it calculated? Weighted average loan rate

The loan portfolios of banks and the Central Bank consist of a certain number of loans issued for different periods and for different amounts. They may also differ in types: working capital, investment, etc. In addition to amounts and terms, these loans may differ in rates.
To have an idea of ​​the real value of the loan portfolio, the Central Bank, like any other bank, uses the weighted average interest rate (WAP). It cannot be calculated as an arithmetic average, since it must reflect the amount and term of each loan in the portfolio.

In business, the SPS is needed to assess the financial efficiency of the bank. ATP can also be used by ordinary organizations that use business loans. The Central Bank uses the PCA throughout the country's entire financial system. With its help, he can assess the cost and productivity of all loans issued. This is done for the purpose of shaping and promoting monetary policy.

What is the weighted average interest rate?

If this term is considered at the level of a regular bank, then the PCA reflects the value of all loans that were issued or taken by this bank. Bank management relies on this indicator to analyze performance.

If we take it at the level of the Central Bank, then the PCA shows the cost of loans issued and received to other banks in the country. The Central Bank will be guided by this rate to formulate its monetary policy, as well as evaluate the entire banking system as a whole. Thus, the PCA reflects the value of the loan portfolio.
The ATP is calculated on a daily basis by the Central Bank. By doing this, he monitors the volume of credit transactions. In case of negative scenarios, the Central Bank has the ability to quickly respond and intervene in financial processes.

Why is SPS needed?

This rate is one of the important indicators of activity. Banks are trying to regulate their liquidity. If it is high, then he issues loans, thereby placing excess resources and making a profit, and if it is low, then he borrows to restore liquidity.

Often, in order to close their “financial holes,” banks begin to actively lend. According to the documents, it turns out that the bank has a stable condition, but in fact this often does not coincide with reality. To avoid such cases, the Central Bank monitors the volume of credit transactions.
The price of an interbank loan on the market can change based on the supply and demand of participants and the volume of money. This, in turn, is reflected in loan rates for individuals.

To stabilize the situation, the Central Bank daily monitors the volume of lending transactions and also adjusts rates on interbank loans. The calculation of the ATP is carried out on a daily basis, which allows the Central Bank to monitor the liquidity of the banking system “online”, as well as regulate the cost of government resources.

How is SPS calculated?

This value is based on the amounts and terms of loans issued. As was said, calculating the ATP by taking the arithmetic average will be incorrect, so you need to use the weighted average method, since the price of the loan depends on its amount and term. The Central Bank calculates the debt balance of each loan issued to banks.
The calculation formula is as follows:

ATP=(Σ(loan balances*interest rates on loans)/(Σtotal loan debt)

Since the Central Bank issues a huge number of loans, it is simply unrealistic to manually calculate this indicator. The calculation is carried out automatically. The system displays the ATP based on the loan balance as of the current day. Based on the obtained value, the Central Bank is already assessing its loan portfolio.

The PCA for the Central Bank describes the cost of all credit resources of the state, so it can be considered an important indicator of the efficiency of the banking system.

ATP for organizations and individuals.

Organizations and individuals can calculate their ATP based on the availability of loans. The lower this figure is, the less you will have to overpay. To maintain ATP at an acceptable level, you need to follow some rules:

• Apply for loans at low interest rates.
• Refinance or restructure loans with high interest rates.
• Avoid loans that have conditions for increasing interest rates.
• Eliminate credit products with high rates, such as credit cards, or take advantage of a grace period.

If an organization is actively lending, then it should also monitor its ATP. This will make it possible to use the company’s resources wisely, rather than throwing them at paying off excess interest, and also to monitor the efficiency of activities.
ATP is not a constant value and will change depending on the operations performed. The increase or decrease will be influenced by factors such as full repayment of debt, restructuring, refinancing, changing the rate on an existing loan, receiving the next tranche, etc.

The correct tactics when influencing the PCA would be to pay off debts with high interest rates, reduce interest on existing loans, and plan repayment schedules so that “expensive” loans are repaid first.
Each organization has its own ATP criteria. This is due to the region where the company is located, its field of activity, and the types of loans taken. It is worth remembering that it is not so much the interest that makes the loan more expensive, but also additional services, for example, insurance, collateral, and the loan term.

Where can I find information about the ATP?

Current information is posted daily on the Central Bank website in the “interest rates” section https://www.cbr.ru/statistics/pdko/int_rat/. Here you can also find an archive of rates for previous years and view their trends.

– a characteristic that reflects the average interest rate on loans issued within one company. Why is this indicator needed?

To obtain accurate information regarding the total cost of all loans. This value is based on the volume of loans provided and their terms.

Calculation of the weighted average interest rate on loans

Many people mistakenly believe that the rate is calculated using the formula:

Iav.v. = (X1+X2+X3+Xn)/n,

where X1, X2, X3...Xn – existing interest rates in one of the banks;

n is the total number of bets available.

However, these calculations will lead to an average value, but not to a weighted average. To correctly calculate the last indicator, you should remember that the cost of using a credit loan directly depends on its amount.

According to this information, we can conclude that if a company has very large loans in its loan portfolio, but with low interest, then the total price of all available loans drops sharply.

Based on this principle, it was decided to calculate not the average value, but the weighted average.

Loan portfolio

Loan portfolio is an indicator of the totality of existing debt on the basis of one enterprise for all active lending operations for a certain period.

You can find out the weighted average loan rate by the remaining debt in each individual loan agreement.

The correct formula looks like this:

Iav.in.=Sum.(Sres.*Itek.)/Sum.Sres.,

where Srest. – balance of loan debt;

ITek. – current interest rate.

For convenience, calculations are carried out in Excel tables using a special formula “SUMPRODUCT”.

Note to consumers!

1. It is important to remember that the weighted average interest rate on loans is by no means constant and, depending on a number of reasons and operations performed, may change its boundaries. Affect a decrease or, on the contrary, an increase in the indicator:

• full repayment of the principal debt;
• the company received another tranche or a new loan;
• one of the loans changed its parameters, and the annual rate also changed.

1. In order to fully have information regarding the current affairs of the loan portfolio in one of the banks you have chosen, you should carefully monitor the slightest changes in the weighted average rate.
2. There is a common misconception that the weighted average interest rate on loans is falling. Makes the conditions for using lending resources more favorable by improving the financial condition of the entire enterprise. Not at all. Having analyzed all the factors that influence the rate, experts were able to draw up a plan according to which the price for the opportunity to spend the loaned funds tends to a minimum amount. By adhering to the points below, each client can profitably seize the moment and apply for a loan under optimal conditions or transfer an existing lending program in a more comfortable direction.

• enter into agreements under a loan agreement to receive;
• the right tactic is to first close debts that were issued at the highest (of all those existing in your name) interest rates;
• if you can’t immediately deal with loans at “expensive” rates, then it is advisable to make attempts to replace (refinance or restructure, for example) them with more favorable conditions;
• reduce or reduce the annual interest rate on current loans (you can get advice from one of the banks, as they often hold similar promotions, especially for clients with a good credit history);
• Clearly and competently plan your schedule of settlement operations for debt repayment in such a way that by the end of the repayment period, you only have those loans that provide minimum rates.

1. The weighted average rate on loans is the most complete reflection of the real cost of all resources of a financial organization that issues loans. Most often, it is this value that shows how effectively all employees of the borrowing structure can work, since their immediate responsibilities include the maximum reduction in prices for the opportunity to use the funds of the credit company to attract more clients and increase cash flow.

The value of the weighted average rate in Russia

It is impossible to answer this question unequivocally, since each region operates with its own indicators. In addition, depending on the type of loan issued (mortgage, car loan, consumer purposes), these characteristics also vary.

Why is there a discrepancy? Because each financial institution, based on the rules of its internal policy, sets completely different conditions for loan programs - some increase the rate, some extend the repayment period, and some require mandatory registration of several types of insurance and securing their loan with collateral of existing real estate or other valuables.

In order not to fall into the trap of high interest rates and long delays, you need to prepare and study the information in advance.

Today, the Internet provides an excellent opportunity to get acquainted with all existing banks and their offers.

In a matter of seconds, it will calculate all the parameters of the desired loan and display all expected payments with an accuracy of the ruble.

Based on the average rates for the programs of each bank, you can easily set the weighted average rate (using a formula).

And when the enterprise has been calculated independently, then all that remains is to choose the most optimal option for your case, and feel free to go for money for your needs, be it the purchase of household appliances or the first stone in a new business.

In conditions of constant fluctuations in the market and exchanges, many residents of our country prefer to trust banks to preserve and increase their own capital. To do this, they use a deposit system. Some organizations also follow a similar path, especially when they have monetary units unclaimed in a specific time period.

What caused this interest in bank deposits? First of all, the opportunity to save and slightly increase the deposit amount. But the relatively low risks shown by calculations in the banking system are also of great importance. It is also important to have a choice of deposit programs:

• Long-term investments up to requirement;
• Urgent investments.

However, it is important not only to choose the right type of deposit, but also to correctly determine the bank with which to cooperate. And here the choice largely depends on what interest rate is offered by the bank and how it relates to the weighted average rate.

What is the weighted average interest rate?

The average market deposit interest rate is the average of the rates for all deposits in a particular currency among banks in the country. In this case, deposits with different investment periods and different conditions are taken into account.

The weighted average rate is also an excellent way to determine the liquidity and reliability of the deposit. Thus, interest rates above the average level cause joy and an instant desire to invest only among inexperienced investors. Other investors understand that behind the tasty offer, in most cases, there is a catch.

For example, a common practice among structures on the verge of bankruptcy is to attract the maximum amount of capital in an attempt to solve their problems. Such banks are willing to take risks and pay for their miraculous relief from problems with increased dividend rates. But what are the chances that the bank will pull itself out of the abyss, and not sink to the bottom, dragging your money with it? After all, today the amount of compensation is only seven hundred thousand rubles.

However, the situation does not always look so dire. Sometimes high deposit rates are associated with favorable moments:

• Holidays;
• Bank's anniversary;
• They are offered by young, but already quite reliable structures.

How to correctly calculate the average market deposit rate?

Calculation of the average market interest rate on deposits assumes that it is necessary to take into account all offers on the market, sum them up and divide the result by the number of source banks. That is, we get the following formula:

F=((N_1+ N_2+⋯+N_n))/n

• F – Weighted average interest rate;
• N – Bank rate;
• n – Number of banks.

The resulting calculation can be used to analyze the liquidity and feasibility of your investments.

In the modern economy, it is possible to carry out calculations not only of the average market interest rate for the country, but also to make calculations within the framework of a specific bank or investment portfolio. The following should be taken into account:

• Interest capitalization period;
• Type of deposit;
• Interest rate.

Options	Options	Description
Investment type	Up to requirement	Such deposits include deposits that do not have a clearly defined final investment period. The money is simply returned to the investor upon his request. Moreover, the interest on such accounts is lower than on time deposits.
	Urgent investments	A deposit for a strictly defined period. It has a fairly high interest rate, which makes it attractive. But there is also a drawback: if an attempt is made to withdraw funds from circulation early, the investor is subject to penalties, up to and including the complete cancellation of all dividends.
Capitalization period	1 month
	1st quarter	Typically, accruals with such a period indicate their frequency, which means we are talking about compound interest. They are characterized by the fact that they are accrued at a certain interval throughout the entire investment period. For example: a deposit was opened for 1 year with compound interest and a capitalization period of 1 quarter. This means that dividends will be paid 4 times a year.
	At the end of the period	Investments of this type are distinguished by the fact that dividends on them are accrued at the end of the deposit. That is, if an account is opened for a period of 3 years, then dividends will be accrued once, three years from the date of opening the account. Cases where this type of dividend calculation is used are called deposits with simple interest.
Interest rate		The specific interest rate determines the extent to which dividends will be accrued. However, it must be carefully analyzed in comparison with the average interest rate. If we talk about the end of 2014, then the average market rates for deposits in domestic currency were: · About 9% for short-term investments; · 9.7% for long-term investments; · Three and thirty-three per cent period for dividends, with an investment period until the requirement for settlement. Current information can always be found in the publications of the Central Bank.

Methods for calculating the weighted average portfolio rate

For portfolio investments, such a concept as the average market interest rate is also applicable. It is calculated for all deposits, and the method of calculation depends on what deposits are in the portfolio: we are talking about simple interest or compound interest. Although, naturally, they also have their influence other indicators:

• Deposit amount;
• Investment period;
• Capitalization period for compound interest;
• Deposit rate.

When it comes to a deposit that is capitalized at the end of the term, where simple interest works, the amount of dividends is calculated using the following algorithm:

1. The investment amount must be multiplied by the annual interest rate;
2. The result of the 1st point is multiplied by the investment period in days;
3. Divide the product by 365, and divide the resulting quotient by 100.

Working with compound interest is more difficult:

1. Calculate the total deposit amount taking into account the capitalized amount under the easy interest scheme. The resulting capital is taken as the volume of investment;
2. The volume of investment multiplied by the annual interest rate;
3. The product is multiplied by the duration of the capitalization period in days;
4. Divide the result by 365 and 100;
5. Take the resulting quotient as the amount of final dividends for 1 year.

Thus, calculating the weighted average interest rate on a deposit allows not only to analyze and correctly assess the situation on the market and within the banking system. It also serves to evaluate specific contributions and calculate the monetization of dividends.

The loan portfolio of almost any company usually consists of a certain amount various loans, which can be both long-term and short-term, both current and investment. Rates for different loans usually vary. In order to have accurate information about the total cost of all loans, a special concept was invented - the APR (weighted average interest rate), which is reflecting the average interest rate on all loans taken by the company.

Calculation of the weighted average loan rate

Let's say a company took out three loans with interest rates: 14, 12 and 16 percent; if we calculate the usual average value of all loan rates, it turns out (14% + 16% + 12%) / 3 = 14%. According to this calculation, the average value of all interest rates on loans will be 14%, but this figure is not a characteristic of the company's loan portfolio. It must be remembered that the cost of using a loan directly depends on its amount, so a company whose loan portfolio contains loans for a larger amount with a lower interest rate will have a significantly lower cost of loans. According to this principle when determining the total cost of loans, not the average interest rate is used, but the weighted average. The weighted average rate is calculated based on the outstanding balance separately for each loan. At the same time, its weight when calculating the weighted average interest rate directly depends on the loan amount at a stable interest rate. To carry out the calculation, the following formula is used:

• iav.vz.- weighted average rate;
• Sost- loan debt or loan balance;
• itek- loan interest rate.

Typically, to calculate the weighted average rate, calculations are performed in Excel using the “SUMPRODUCT” function. If you calculate the rate using the formula for the example above, then the average rate will not be 14%, but 14.38%. This is explained by the fact that most of the loan amount had a rate higher than the average.

The PCA may change periodically if the following events occur:

1. The interest rate on a loan has changed.
2. The principal debt was repaid.
3. The company took out another loan.

It is necessary to carefully monitor any change in the ATP in order to have information about the value of the company's overall loan portfolio. Do not be mistaken that the lower the weighted average interest rate, the lower the cost of credit resources, thereby reducing interest, and the organization’s profit will increase. An analysis of all the factors that influence the rate leads to several rules, adhering to which, the cost of loans to any company will be close to the minimum:

1. Loans should be obtained at a minimum rate.
2. If possible, you should pay off loans with the highest interest rates first.
3. If possible, get rid of all loans with high interest rates, or replace them with others with a lower interest rate.
4. Plan a repayment schedule for all loans so that at the end only low-interest rate loans remain.
5. Reduce interest rates on existing loans. You can talk to banks and try to reduce interest rates.

The weighted average interest rate reflects the cost of all credit resources. It is usually used as the main indicator of the effectiveness of all employees of the financial service, since they are able and obliged to reduce the cost of funds taken on credit. After reading this material, you will be able to answer what the interest rate is on all loans of your company.

Konstantin asks

Hello! Recently I heard such a formulation as the weighted average loan rate. Wanted to know what it is?

Good afternoon, Konstantin. Yes, there is such a wording. Let's see what the weighted average loan rate means.

What is the weighted average loan rate and its calculation

The loan portfolio of any company consists of different loans.

They can be:

Long-term;
Short-term;
Negotiable;
Investment.

The rates of different loans are different, therefore, in order for the company to have accurate information about the cost of all loans, they came up with the concept of a weighted average interest rate. ATP is a reflection of the average rate on all loans taken by the company.

The calculation is carried out as follows:

Suppose an enterprise took out three loans: the first with a rate of 14%, the second - 12, the third - 16. The average rate is 14% ((14+12+16)/3), but this indicator is not considered a characteristic of the enterprise's loan portfolio.

Note!

We must remember that the cost of using a loan depends on its amount. Consequently, if the company’s loan portfolio contains loans for a large amount with a low interest rate, the price of the loans will be much lower.

According to this principle, the total cost of loans is determined not by the average interest rate, but by the weighted average, which is calculated based on the outstanding balance for each loan separately. If the interest rate is stable, its weight depends on the loan amount when calculating the weighted average interest rate.

The weighted average rate is calculated using the formula:

Sost – loan balance,
Itek – loan interest rate.

The ATP will change if:

The rate on any loan will change;
The principal debt will be repaid;
The company will issue a new loan.

In order to have reliable data on the value of the company's loan portfolio, changes in the ATP should be monitored. To bring the cost of loans of any enterprise as close as possible to the minimum cost, you must adhere to certain rules:

1. Loans are issued at the lowest possible rate;

2. Try to be the first to repay loans with high interest rates;

3. If it is impossible to get rid of high-interest loans, you should try to replace them with loans with lower rates;

4. Create a loan repayment plan such that low-interest loans remain at the end;

5. Reduce interest rates on existing loans: talk with credit institutions and try to reduce interest rates.

The ATP, reflecting the cost of the company's credit resources, is the main indicator of the performance of financial service employees: they are the ones who must reduce the cost of funds purchased with bank money.