The index credit health was a record in five years

The index credit health FICO calculated based on data from the National Bureau of credit histories (nbki), rising for the second consecutive quarter for the first time in five years. This index is calculated from the proportion of “bad” overdue more than 60 days of debts in the total volume of loans.

The index is calculated in FICO points. For 100 points is taken a 10% level of overdue loans. The index growth means a reduction of the overdue debt of the population to banks.

In the third quarter, the index increased by 1 percentage point compared with the second quarter of 2016, to 91 points. The last time the FICO index reached 100 in April of 2014. And the last time the rise in the index over the two quarters was recorded in 2011, follows from a joint study FICO and nbki.

Best business with “credit health” is in the Central Federal district (96 points). The only region where there was a decrease in this indicator was the Ural Federal district (89).

Director of credit score FICO Elena Koneva explains the growth of the index is the fact that quality of loans in 2014-2015, has ceased to deteriorate and gradually stabilized. In late 2015 or early 2016 index credit health fell to their historic lows. And from the second quarter of this year there has been growth.

General Director nbki Alexander Vikulin says that the peak of overdue indebtedness growth came during 2015 — early 2016, after which the situation with “bad” debts began to level off. According to the Bureau, in 2015 the arrears in the retail lending most actively grew in the segment of unsecured loans. By the end of 2015, 17.8% of consumer loans were overdue by more than 30 days (growth by 7.5 PP year-on-year). The share of overdue credits on cards has reached 19.3 per cent (an increase of 5.7 p. p. year-on-year).

The first signs of improvement were expected, said a senior economist for Russia and CIS Dmitry Field of ING. “If unsecured loans were taken in 2014-2015, but now they are repaid or becomes completely clear “bad” or not. As for new loans, their volume over the last fifteen years has decreased,” he recalls.

According to the Central Bank, in 2015 the volume of loans to natural persons decreased by 5.7%, to 10.68 trillion In the first quarter of 2016, he continued to fall: in January the volume of loans to individuals shrank by 0.6%, in February — by 0.1%, in March — on 0,5%. But then the situation has leveled off, and with the beginning of the year loan portfolio grew by 0.4%, to 10.73 trillion.

At the same time, FICO noted that the volume of bad debts in banks is still strong. So the bankers continue to monitor the quality of new loans, and existing. “The main risks remain the same — the decline in real incomes. If this trend continues, the likelihood of defaults for all retail credit products will only grow,” — says Vikulin.

According to Rosstat, in August 2016, the fall in real incomes has accelerated to 8.3% — its highest level since December 2008. The decline in real incomes for the first eight months of 2016 amounted to 5.8%. By the end of 2015 the real incomes decreased by 4.7% in 2014, the decrease amounted to 0.7%. According to estimates of the Bank, the real incomes of Russians will come to pre-crisis levels only by 2020.