MOSCOW, Aug. 27, 2014 /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' credit health fell again in recent months. As of July 1, 2014, the FICO® Credit Health Index had reached 98 points, the lowest level since the Index was initiated in 2008. The previous low point (100 points) was initiated in July 2009.
The FICO Credit Health Index measures Russia's overall credit health, based on the percentage of consumer loans and credit cards reported to NBKI as delinquent by more than 60 days. In July 2014, 12.2 percent of Russian credit accounts were delinquent, compared with 10.07 percent in January 2014, and just 7.05 percent in January 2012, when the index reached its highest point.
"The index is based on the share of 'bad' debts," said Alexander Vikulin, CEO of NBKI. "The growth rate of new loans is declining, and delinquencies in unsecured credit are growing because of rapid development of retail lending in previous years. That's why the share of bad debts is inevitably increasing. Nevertheless, we see that the quality of new loans is high, based on the repayment patterns, so we expect that the index will increase bit by bit."
Since January, Severo-Kavkazskii region experienced the largest Index drop (27 points), while Centralnyi experiencing the smallest drop (13 points). The regions Centralnyi (index 102), Severo-Zapadnyi (index 101) and Privoljskii (index 100) were the only regions outperforming the total population index in July.
"The largest share of troubled debt in banks' portfolios came from the intensive development of the unsecured lending market," said Evgeni Shtemanetyan, who directs FICO's operations in Russia. "Lenders should focus on improving the performance of existing customers and implementing more intelligent risk management systems. FICO has seen growing interest from Russian banks in modernizing their risk management tools and decision-making systems at all stages of the credit lifecycle."
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 August 2014, NBKI consolidates data about 68 million borrowers and 150 million loans from 2300 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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