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February 24, 2016
The deteriorating credit performance of Russian consumers has stabilized following a four-year slide, according to data from analytic software company FICO and National Bureau of Credit Histories (NBKI), Russia’s leading credit bureau. The FICO® Credit Health Index, which has fallen steadily since January 2012, has remained at its low point since September 2015. The index stands at 90 points, 1 point higher than in October 2015 but 6 points lower than January 2015 and 25 points lower than the peak in January 2012.
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. The January index means that 16 percent of Russian credit accounts were delinquent, compared with the same rate three months ago, 13 percent one year ago and just 7.1 percent in January 2012.
Source: FICO and NBKI
Every one of the eight federal regions tracked is below the benchmark score of 100, established I October 2008, and most regions fell since October 2015. The average drop since the peak in January 2012 has been 27 points, with Severo-Kavkazskii experiencing the largest drop of 35 points and Centralnyi experiencing the smallest drop of 21 points. The regions Centralnyi (index 94), Severo-Zapadnyi (index 94) and Privoljskii (index 92) are the only regions outperforming the total population index.
“We are no longer seeing the sharp rise in delinquencies in Russian credit accounts,” said Evgeni Shtemanetyan, who directs FICO’s operations in Russia. "The growth in credit card lending initially increased the amount of risk throughout the financial system, and now we are seeing some stability. However, it remains important for Russian credit risk managers to follow best practices in managing consumers who now have higher levels of unsecured debt.”
“Banks lowered their risk appetite some time ago, and we are starting to see the effect on the index,” said Alexander Vikulin, CEO of NBKI. “However, lenders still need to deal with higher-risk accounts booked previously. This is why account monitoring and risk management are so vital.”
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 October 2015, NBKI consolidates data about 74 million borrowers and 182 million loans from 3500 Russian creditors. The bureau provides the Russian market with modern high-tech solutions for risk assessment and control.
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Businesses in more than 100 countries use FICO solutions for a wide range of mission-critical applications, from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time. Learn more at https://www.fico.com.
For FICO news and media resources, visit www.fico.com/news.
FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.
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