Aug. 4 (Bloomberg) -- VTB Group, Russia's second-biggest bank, retreated to a record low and OAO Sberbank, the largest, dropped to a level not seen since November 2006 on concern domestic lending growth will slow.

Vedomosti newspaper reported today that the global credit crisis and rising real estate prices are slowing the growth of Russian mortgage lending as banks tighten standards, boost interest rates and increase the minimum down payment.

Russia's central bank on Aug. 1 raised the mandatory reserve requirements for banks to slow inflation.

``This is negative for Russian banks in the short term and will slow asset growth slightly,'' Moscow-based UralSib Financial Corp. wrote in a note to investors today.

Separately, the central bank said Aug. 1 that the total assets in the Russian banking system grew by 15 percent to 23 trillion rubles ($985 billion) in the first half of 2008, or less than the 23 percent asset growth in the first half of 2007.

VTB, which sold shares at 13.6 kopeks in the world's biggest initial public offering last year, dropped 0.17 kopek, or 2.1 percent, to 7.87 kopeks on the Micex Stock Exchange. A kopek is one hundredth of a Russian ruble.

Sberbank, Russia's biggest bank, sank 3.56 rubles, or 5.2 percent, to 64.45 rubles.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net.

Last Updated: August 4, 2008 12:18 EDT