September 7, 2020, M.B.A Finance took part in the publication of the news portal DEBT.RF
Banks rejected the half of the requests for restructuring of loans and sold debts to debt collectors in record numbers
Retail banks in April-June increased the volume of sales of citizens’ debts by 60% compared to the same period in 2019. This is evidenced by the statistics of the National Credit Ratings Agency (NCR). If we express the volume in monetary terms, the sold loans reach the amount of 45 billion rubles.
Previously the news portal DEBT.RF spoke about how the number of requests from citizens and SMEs for restructuring has decreased. Now it is also noted that Russian banks refused citizens half of the requests for loan restructuring, which was accompanied by the sale of public debts to debt collectors in record volumes. OPT Bank, MTS Bank, Rusfinance Bank, Vostochny and others were among the top ten such leaders.
The authors of the study indicated that most often got rid of debt through the sale of Pochta Bank and Tinkoff Bank. Thus, the last financial institution assigned claims for 18.9 billion rubles, which is 4.8 times more than in the second quarter of last year. And Pochta Bank sold loans to debt collectors totaling 9.9 billion rubles — in 2019, this figure for the Bank was only 14 million rubles.
It should be noted that this trend of significant growth is due to the large volume of overdue loans that arose because of the crisis – the pandemic impact. So, banks are currently trying to smooth out the negative results for themselves by reducing the burden on their capital and updating their loan portfolios. It is also noted that at the end of the second quarter, the share of problem loans was about 10.9% of all loan portfolios. However, the banks’ indicators remain moderate, as marked in the NCR. In this regard, the situation is worse in the microfinance loan market, where, according to statistics, the most financially unsecured stratum of citizens is credited at high annual interest rates, to whom banks have refused to issue loans. According to the results of the second quarter, the share of overdue debt in the portfolios of MFOs was estimated by analysts of the National Rating Agency (NRA) at 42 %.
In NAPCA clarified the situation: “The NCR used the banks’ turnover reports in its calculations. These figures do not necessarily reflect the amount of the assignment to debt collectors only. This may include assignment of rights to subsidiary banking organizations, or other internal operations. In addition, the figures in the reports may come late, because debt transactions do not always close in one day. Because the reports of banks can be reflected deal with debt collectors, and cannot be reflected. By mid-to-late September, NAPCA is going to submit a report on the activities of debt collection agencies, and only then will it be possible to talk about the actual amounts transferred to professional debt collectors.”
This situation may affect the functioning of the banking system in the future — it is a vicious circle, says Fedor Vachata, the CEO of M.B.A. Finance.
“On the one hand, banks must help the population, and on the other, the lack of liquidity limits their capabilities. This may lead to a decrease in lending to both the population and entrepreneurs, and in general, have a negative impact on economic development.”
The CEO of M.B.A. Finance is confident that the sale of overdue loans to the debt collection Agency is a positive moment for the debtor. From this moment, the accrual of fines and penalties ceases, and a fixed amount remains, which the debtor must pay until full repayment.
However, the crisis has already hit Russians with a record amount of loans: according to the Central Bank at the beginning of 2020, Russian citizens owed banks more than 17.6 trillion rubles — which is comparable to the annual expenditure of the country’s budget, while almost every fourth borrower gives the lender more than 80% of their monthly earnings.
The situation for Russians is also complicated by the recent events around the “black collectors”. At the end of August, Russian President Vladimir Putin had a conversation with Dmitry Aristov, the Director of the Federal service of court bailiffs of the Russian Federation. In a personal conversation, the President of the Russian Federation focused on the activities of debt collectors ,which “sometimes crosses all borders” and asked the Chief of FSCB of Russia to provide proposals for monitoring recoverers — industry experts have already proposed the Institute of private bailiffs as a solution.