Russian Consumers' Credit Health Falls to Three-Year Low, According to FICO and NBKI Data
MOSCOW, Aug. 14, 2013 /PRNewswire/ -- FICO (NYSE: FICO), a leading predictive analytics and decision management software company, and the National Bureau of Credit Histories (NBKI), Russia's leading credit bureau, today announced that Russian borrowers' credit repayment delinquencies rose in July 2013, continuing the climb that started in early 2012. The country's FICO® Credit Health Index is now at 104 points, the lowest level since January 2010.
The FICO Credit Health Index measures Russia's overall credit health, based on the percentage of consumer loans and credit cards reported to NBKI that are delinquent by more than 60 days. In July, 9.81 percent of Russian credit accounts were delinquent, compared with 7.05 percent in January 2012 and 7.75 percent in July 2012.
All regions within Russia had lower FICO Credit Health Index scores than last quarter, and lower than in January 2013. The Severo-Kavkazskii region has shown the largest decline (nine points) in borrowers' credit performance this year, while the smallest decline (four points) occurred in the Privoljskii and Uralskii regions. Centralnyi had the highest Credit Health Index, at 108.
''The rapid development of the retail lending market in Russia has created a group of borrowers who actively increase their liabilities without proper assessment of their ability to discharge them," said Alexander Vikulin, CEO of NBKI, who noted that the number of borrowers with five or more existing loans reached 450,000 in July. "Despite the fact that these people represent less than 1 percent of all Russian borrowers, their high credit activity is having an increasing impact on the dynamics of the index."
"While these figures present a concern for individual lenders, they're merely a by-product of rapid market growth," said Evgeni Shtemanetyan, who directs FICO's operations in Russia. "As lenders grant more unsecured consumer loans and credit cards, which are the highest-risk credit products, delinquency rates are rising. This credit expansion is good for the Russian economy, but the higher delinquency rates demand a more disciplined approach to risk management on the part of banks, so they can ensure the health and sustainability of their bottom lines."
FICO and NBKI share this data with Russian lenders to improve their understanding of the market, and help them extend credit to consumers safely. More than half of the top Russian banks use FICO® Scores delivered by NBKI.
National Bureau of Credit Histories (NBKI) is the largest credit bureau in the Russian Federation. It was created in 2005, and counts among its shareholders major commercial banks and international companies CRIF and TransUnion. Its main specialty is an integrated center that stores and processes comprehensive data for creditors' decision making. As of July 2013, NBKI consolidates data about 120 million loans from 1,600 Russian creditors. The bureau provides the Russian market with modern high-tech solutions for risk assessment and control.
FICO (NYSE: FICO), formerly known as Fair Isaac, is a leading analytics software company, helping businesses in 80+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company's groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption — such as the FICO® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. FICO: Make every decision count™. Learn more at www.fico.com.
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