Debts have had a slow season

The traditional decline in the volume of overdue debt sold in the first quarter turned out to be more noticeable in 2024 than a year earlier. In addition, banks have reduced the supply of court portfolios for collection under the assignment scheme. Overdue debts also showed the minimum price since 2021 – 6.5% of the nominal value. It is more profitable for creditors to sell “young” and promising overdue loans, for which collectors are willing to pay more. At the same time, during the year, market participants expect an increase in the supply of outstanding debts, but do not expect an increase in prices for them.

Based on the results of the first quarter of 2024, on online platforms, banks offered overdue debts worth 24.95 billion rubles for sale under an assignment scheme, according to data from the Debex online auction. This is 2.5 times less than in the fourth quarter of last year. At the beginning of the year, there is a seasonal decline, but this year it turned out to be comparable to the decline in the crisis year of 2022. Then in the first quarter the volume of supply decreased by 2.7 times compared to the fourth quarter of the previous year. In 2023, the decrease over the same period was only 1.7 times.

At the same time, the supply of outstanding debt decreased noticeably. According to Debex, at the end of the last quarter, 26.43 billion rubles were offered for sale. such debts, which is 1.6 times less than in the previous quarter. At the same time, the share of debts in this category in the total supply volume decreased to 75%. In the previous two quarters, this figure exceeded 90%. It exceeded the 90% mark in the first quarter of 2022, the most turbulent period for the Russian economy in the last three years.

At the same time, the price of overdue loans decreased, as follows from Debex data. At the end of the quarter, it amounted to 6.52%, the minimum value since 2021. “The assignment market, in addition to its pronounced seasonality (clearing balances at the end of the year with a drawdown at the beginning of the next), is highly dependent on the key rate. Since the collection business involves long-term work with cash flows, the price of transactions is largely determined by the discount rate, which, in turn, is a derivative of the interest rate environment in the economy,” explains Ivan Uklein, senior director for bank ratings at the Expert RA agency. After several increases in the key rate in the second half of 2023 (overall from 7.5% to 16%), “average prices for assignments of receivables returned to 2022 levels,” the expert notes.

For creditors, selling debts at an early date without a court decision is much more profitable, since buyers are ready to offer a good price for high-quality portfolios, NAPKA admits (see Kommersant on February 19). According to Debex, prices for pre-litigation portfolios have remained fairly high over the past 12 months, ranging from 13.3% to 15.7%. Both buyers and the debtors themselves benefit from pre-trial work, the industry association is confident – collection agencies offer various restructuring measures, which gives debtors the opportunity to repay the debt in a “comfortable” mode.

Acting CEO of ABK Evgeniy Utkin considers this trend to be short-term. “Individual banks may change sales volumes in different quarters, which also affects the overall dynamics,” she points out. Many banks were able to sell fairly old debts at an affordable price, Debex CEO Marat Brook also notes. This year, he expects the supply of overdue loans on the market to increase by 10–15% from the 2023 level. However, he does not expect prices to rise. This situation will generally suit both sellers and buyers, Mr. Brook is sure, given that there is a high proportion of bankrupts in the outstanding portfolios.

Polina Trifonova