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Russian Consumers’ Credit Health Continues Two-Year Fall, According to FICO and NBKI Data Print E-mail
Thursday, 05 February 2015

LONDON — February 5, 2015 — 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.
 
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.

(Source - FICO Press Release)
 

 

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