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Russians’ Credit Performance Is Worst in Seven Years, According to Data from FICO and NBKI

  • FICO 200 135FICO® Credit Health Index fell in April to seven-year low
  • 14.2 percent of Russian credit accounts are delinquent, twice as many as in January 2012
  • FICO Credit Health Index measures the amount of delinquent consumer loans and credit cards reported to NBKI, Russia’s largest credit bureau

The credit performance of Russian consumers reached a seven-year low last month, according to data from FICO, the predictive analytics and decision management software company, and theNational Bureau of Credit Histories (NBKI), Russia’s leading credit bureau. Continuing a three-year slide, the FICO® Credit Health Index fell in April to 94 points, two points lower than January 2015 and 21 points lower than the peak of 115 in January 2012. The index is the lowest since the index began in October 2008.

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 April,14.2 percent of Russian credit accounts were delinquent, compared with 11.5 percent in April 2014 and just 7.1 percent in January 2012. Credit cards and consumer loans saw the biggest rise in delinquencies, but delinquencies also grew for mortgages.

Every one of the eight federal regions tracked fell since the January 2015 index, and every one was lower than in April 2014. Over the last year, the Sibirskii and Yujnyi regions experienced the biggest drops, of 7 points each. In April 2015, the Severo-Kavkazskii region had the lowest index value at 87 and the regions Sibirskii (90), Dalnevostochnyi  (94), Uralskii (91) and Yujnyi  (90) all had indexes below 95.

“Russian banks have continued to increase lending to new customers, and are making more credit available through credit cards, which carry higher risk than consumer loans,” said Evgeni Shtemanetyan, who directs FICO’s operations in Russia. “We have seen this trend for several quarters now, and we counsel the banks to communicate frequently with their customers, as well as to apply sound risk management practices to ensure delinquent customers don’t drain portfolio profitability.”

“While consumer credit volumes decline, banks have lowered their appetite for risk, and are granting new credit to less risky consumers, so the average credit score on booked accounts has risen,” saidAlexander Vikulin, CEO of NBKI. “But lenders still need to deal with higher-risk accounts booked previously. Lenders are increasing their account monitoring and the volume of FICO Scores purchased for account management purposes is growing. As a result of such measures, we expect to see the index rise in the near future.”

FICO and NBKI share this data with Russian lenders to improve their understanding of the credit market, and help them extend credit to consumers safely and profitably. More than half of the top Russian banks use FICO® Scores delivered by NBKI.

About 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 January 2015, NBKI consolidates data about 70 million borrowers and 170 million loans from 2500 Russian creditors. The bureau provides the Russian market with modern high-tech solutions for risk assessment and control.

Source:  FICO Press Release

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