MOSCOW — February 5, 2015 — FICO (NYSE:FICO), the 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 health fell again in the fourth quarter of 2014, reaching a new low. As of January 1, 2015, the FICO® Credit Health Index had reached 96 points, one point lower than October 2014, the previous low. The index has now declined for 10 of the last 12 quarters.
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 January, 13 percent of Russian credit accounts were delinquent, compared with 10.7 percent in January 2014, and just 7.1 percent in January 2012, when the index reached its highest point.
Source: FICO and NBKI
Every one of the eight federal regions tracked fell between January 2014 and January 2015. Three federal regions still have stronger performance than the overall index: Centralnyi (index 100), Severo-Zapadnyi (index 100) and Privoljskii (index 98).
"The regions where credit is the most widespread also have the highest indexes,” said Evgeni Shtemanetyan, who directs FICO’s operations in Russia. "In total, 56 percent of borrowers live in the Centralnyi, Privolzhskiy and Severo-Zapadniy federal regions, where people have stronger credit performance. However, the continual decline of the index is a signal to the banks. Tight management of risk, good communications with existing borrowers and good debt collection functions are the main requirements for Russian creditors seeking to maintain profitability.”
“The slowdown of credit issuance and the negative credit health index dynamics threaten to reduce the profitability of the entire retail lending sector,” said Alexander Vikulin, CEO of NBKI. “In this situation, it’s more important than ever for banks to provide qualitative and effective risk analysis of existing portfolios. Lenders need to be able to efficiently and actively manage their loan portfolios, increasing quality through cross-selling, management of credit limits, restructuring and improving the efficiency of collection.”
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.
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.
FICO (NYSE: FICO), formerly known as Fair Isaac, is a leading analytics software company, helping businesses in 90+ 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. These include 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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