Credit cards kept the delay – Newspaper Kommersant No. 221 (7422) dated 11/29/2022

At the end of October, the share of overdue debt in the credit card portfolio showed a decrease to 11.5%. This is at least four years. The decrease in the indicator occurs against the background of tightening requirements for borrowers by banks, a reduction in the issuance of credit cards, as well as a decrease in expenses on them by customers. Closer to the New Year holidays, restrictions on both banks and citizens may become less severe. However, in this case, an increase in the delay can be expected next year as the grace periods end.

At the end of October 2022, the share of delays over 90 days in the credit card segment decreased to 11.5% of the total portfolio (625.3 billion rubles), according to the data of the Scoring Bureau (formerly Equifax). This is the lowest value since the end of 2018. For comparison: from May to September of this year and in October 2021, this figure was 13.2%, in 2020 – 15.7%. The trend towards a decrease in the share of delinquency in the segment is outlined against the backdrop of a reduction in disbursements that has been going on for two months (see Kommersant of November 16).

NPLs in the credit card segment are traditionally higher than in other segments of unsecured consumer lending, which explains the higher rates for such instruments. In the previous three months, the weighted average total cost of a loan, according to the OKB, was about 25% per annum. In these months, the share of overdue was kept at the level of 12%. At the same time, in the segment of cash loans, the level of delinquency was close to 8.5%, follows from the data of the Scoring Bureau. For secured loans, delinquency was even lower, around 4.7% for auto loans and less than 1% for mortgages.

Bankers are reluctant to discuss the topic of credit cards. The quality of the portfolio remains stable, but in October there was a slight decrease in spending on credit cards, the PSB noted. VTB and Rosbank only clarified that they do not observe an increase in delinquency in the credit card segment.

The trend may change during the high pre-New Year season, which is still expected, albeit with lower rates than in previous years (see Kommersant of November 14). Alfa-Bank sees stable demand for credit cards and expects its traditional growth in December. PSB and VTB expect that consumer spending will increase seasonally by the New Year holidays and, accordingly, the population will use credit funds more actively.

“Bank customers have revised their consumption strategy and are trying to make fewer spontaneous, unreasonable purchases. However, by the end of the year, during the traditional New Year’s Eve weeks, we can expect an increase in the use of credit cards,” agrees Konstantin Borodulin, director of NRA banking ratings. At the same time, in the current issue, a significant share falls on cards with a small size of limits, he clarifies. According to the NBKI, in October the share of credit cards with a limit of up to 50 thousand rubles. was about 60%.

According to collectors, now the delay in the segment of credit cards is at a comfortable level. This is the merit of balanced approaches of banks to underwriting, says Ksenia Yakushkina, director of banking ratings at Expert RA.

However, the figure may rise, and the growth rate will depend on the overall economic situation, creditors warn. At the same time, the New Year’s activation of the use of credit cards, taking into account the grace period, may actually manifest itself in delinquency rates only next year.

Polina Trifonova