Russian Credit Delinquencies Continued Climb in Q2, According to FICO and NBKI Data
MOSCOW, June 5, 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' delinquent credit repayments rose slightly in April 2013, continuing a steady climb that started more than a year ago. The country's FICO® Credit Health Index dropped one point from last quarter, to 108 points.
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.
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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.
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