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. Since January 2012, when just 7.05 percent of Russian credit accounts were delinquent, the country's credit health has worsened by seven points, representing a 2 percent increase in delinquencies.
All regions within Russia have shown a continued quarter-on-quarter drop in credit health since January last year, with the exception of Centralnyi which remained constant in the last quarter of 2012. So far in 2013, the Severo-Kavkazskii region has shown the largest fall (five points) in borrowers' credit performance when compared to the prior quarter, with Sibirskii, the third largest region in the country, closely following it with a four-point drop.
"The decline of the Credit Health Index is the result of the intensive growth in the highest-risk sectors of the credit market, unsecured consumer loans and credit cards, and the rise in delinquencies for these products," said Alexander Vikulin, CEO of NBKI. "For unsecured loans, delinquencies rose in the first quarter from 10.3 percent to 11.5 percent, while credit card delinquencies rose from 8.2 percent to 9.1 percent. Delinquent payments on mortgages and auto loans are low and falling, which has caused a new low in unrecoverable debt. In general, Russian banks manage their risks well even when consumers' payment discipline drops."
"While this quarter's FICO Credit Health Index shows only a small increase in delinquency, the overall trend suggests that Russians are finding it harder to pay off unsecured loans and credit card balances," said Evgeni Shtemanetyan, who directs FICO's operations in Russia. "Therefore it's especially important for banks to closely monitor borrowers' repayment behaviour to ensure their strategies are still in line with desired business objectives."
FICO and NBKI share this data with Russian lenders to improve their understanding of the market, and help them safely extend credit to consumers. Over the last year, the number of consumers in the NBKI database grew by 28 percent, to more than 60 million. More than half the top Russian banks use FICO® Scores delivered by NBKI.
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.
For FICO news and media resources, visit www.fico.com/news.
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 August 2012, NBKI consolidates data from more than 1,350 Russian creditors. The bureau provides the Russian market with modern high-tech solutions for risk assessment and control.
Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company's Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2012 and its last quarterly report on Form 10-Q for the period ended March 31, 2013. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
FICO and "Make every decision count" are trademarks or registered trademarks of Fair Isaac Corporation in the US and other countries.