In October 2023, the average limit on issued credit cards was 104.4 thousand rubles, decreasing over the month by 4.3 thousand rubles, or 4%, according to statistics from the credit history bureau “Scoring Bureau” (available from RBC ). This is the most noticeable drop in the indicator since the crisis March of 2022 – then the average bill in the credit card segment dropped by 20.9%, to 66.8 thousand rubles.
After the peak of the crisis, the credit card market recovered at a rapid pace and began to set new records by the end of the year.
Against this background, the average limit on credit cards grew almost continuously – in the summer of this year it approached 100 thousand rubles, and then overcame this level.
According to BKI data, in addition to the average bill, the issuance of new credit cards is also falling. In September, Russian banks approved 2.25 million credit cards to individuals, which is 10.7% less than the August result. In October, the trend continued: the number of cards provided decreased by another 1.5%, to 2.2 million. The volume of issues in this segment in September decreased by 7.7%, to 245 billion rubles, and in October – by 5.4%, to 231.7 billion rubles.
Why did banks begin to cut limits on new credit cards?
The reduction in the average limit on credit cards, as well as the decline in issuances, is a reaction of banks to tightening regulation by the Central Bank, according to experts interviewed by RBC.
From 1 September, macroprudential buffers for unsecured loans were increased for lenders, and new, stricter macroprudential limits (MPLs) came into effect from 1 October. Both measures also affect the credit card segment.
Banks were generally ready to reduce the MPL for the most heavily indebted clients – with a debt burden above 80%, notes Ivan Uklein, director of banking ratings at Expert RA. But the extension of restrictions on loans to clients with a moderately high personal income tax (50-80%) “turned out to be rather an unexpected measure for market participants,” the analyst believes.
“From October 1, such clients in the volume of issuance may not exceed 20%, which is quite sensitive for credit institutions and could not but cause targeted adjustments in credit policy,” says Uklein.
Banks could reduce the average limit on credit cards in order to level out the increase in interest rates on the market, which occurred in the fall and affected the debt burden of new borrowers, believes Yegor Lopatin, deputy director of the group of financial institution ratings of the NKR agency: “Banks could thus maintain the average PND of October issues at the level August-September.”
The same version is shared by Igor Lisyansky, Product and Marketing Director of the Scoring Bureau. “Lenders traditionally use risk-based limit technology—the lending limit is reduced for riskier clients,” he explains. The Central Bank’s measures are precisely aimed at reducing the issuance of loans to the most over-leveraged borrowers.
The Bank of Russia previously reported a noticeable increase in the number of credit card holders: as of July 1, there were 23 million such people in Russia. Moreover, we are talking about clients who have a card debt of over 10 thousand rubles, and not about everyone who has a card, but is not activated. In total, there were 46.7 million borrowers in the country, that is, as of the reporting date, almost every second person had a credit card with debt.
As follows from the Scoring Bureau data, the credit card portfolio of Russian banks has been growing at a steady pace – by an average of 3.6% monthly since the beginning of the year. In January-October it increased by 42.6%, to 2.3 trillion rubles. Over the same period, lenders provided nearly 10 million new cards to individuals.
According to Lopatin, issues in the credit card segment will continue to stagnate in November, and in December they will show only a slight seasonal increase.
The slowdown in lending against the backdrop of high rates will most likely continue, agrees ACRA Managing Director Valery Piven. “However, it cannot be ruled out that banks will try to compensate for the reduction in limits by expanding the supply of other products, for example, installment programs,” the expert adds.
Igor Lisyansky also admits that at the end of November – December, lenders “will traditionally make all possible marketing efforts to achieve planned targets.”