creditors began to put up for sale a “younger” delay

According to the results of the second quarter, more than a third of the overdue debt offered by banks for sale did not exceed one year. This is the highest rate for “young” delinquency since 2020. The amount of “young” debts offered for collection has also increased. This approach allows creditors not to waste resources on working with debtors and sell overdue portfolios at high prices. In addition, banks can protect themselves from the bankruptcy of borrowers, after which it is already extremely difficult to collect debts from them.

Lenders began to put up for sale a “younger” delay. According to the National Association of Professional Collection Agencies (NAAPCA), in the second quarter of 2023, 35% of the delay set by credit institutions for sale under the cession scheme was less than 360 days. This is the highest number since 2020.

In total, overdue debts worth 104 billion rubles were put up for sale.

“Over the seven months of 2023, the volume of overdue assignments up to 360 days old increased by 70%. The volume of sold overdue debt aged 1.5–3 thousand days has halved,” Denis Belkin, head of the Debt Market ETP (part of the Sberbank group), confirms.

“Old debts with a delay of three to five years are only interesting if they are connected with attractive property, attractive collateral or encumbrance,” Olga Zheludkova, deputy general director of the Auction House of the Russian Federation, notes. In 95% of cases, consumer loans and credit cards are put up for sale, market participants confirmed earlier (see “Kommersant” dated July 19).

The average size of an overdue loan put up for auction is also growing.

The average amount of debt in the portfolio of banking cessions increased by 5.8% over the six months, according to ID Collect. The largest increase in the value of the average debt was shown by loans with an overdue of less than 360 days. In particular, in the 90-180 days arrears segment, the indicator increased by 16%, in the 180-360 days arrears segment – by 24%, while the one-two-year arrears increased by only 5%.

“In the most recent debt, where the last payment was 90 days ago, this trend is more noticeable,” Debex CEO Marat Bruk confirms the trend.

Banks have enough reasons to sell such assets. “More and more banks consider it inappropriate to spend significant resources on non-core debt collection activities. They significantly save resources, while getting a good price and fast capital turnover,” Pavel Mikhmel, Managing Director of First Client Bureau (PKB), explains the trend. “The tightening of the requirements of the banking regulator to the standards will only contribute to the growth of the “young” delay in the market,” Ms. Zheludkova is sure.

It is more profitable for creditors to sell a portfolio with a minimum period of delay and get the maximum amount for it, Elman Mehdiyev, president of SRO NAPCA, agrees.

According to his estimates, the price of such portfolios is 11-17% of the debt. According to Debex, in the second quarter of 2023, the cost of pre-trial bank delinquency traded on the exchanges is 15%. This figure was higher only in the fourth quarter of 2021.

Creditors themselves also confirm their interest in selling the “young” delay. “Banks and MFOs have learned to identify bankrupt clients at an early stage,” explains Evgeny Senkovsky, Director of the Arrears Department at Rosbank. From such debts, he adds, they try to get rid of them as soon as possible, since the efficiency of collection on them is extremely low.

Polina Trifonova