Distracted by business promotion, VTB 24 faced the 3-fold growth in the overdue repayment of consumer credits.
Photo: Nikolay Cyiganov
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Clients Don’t Pay Back to VTB 24
Distracted by business promotion, VTB 24 faced the 3-fold growth in the overdue repayment of consumer credits. The increase of that extent may prompt the bank to hike rates for its retail business.
VTB 24 was one of the last of all big market players that made public the 2007 accounting report under the international standards. The amount of individual loans surged 3.4 fold to 162 billion ruble, mortgage grew 4.1 fold to 82.6 billion ruble, cash credits stepped up 3.05 fold to 60.9 billion ruble, credit cards soared 3.6 fold to 3.8 billion ruble and automobile loans increased 2.4 fold to 14.6 billion ruble. VTB 24 climbed two steps in the 2007 ranking compiled by Dengi journal, having taken the second position after Sberbank by pushing down Russian Standard and Rosbank.
At the same time, the profit of the bank shed 16.4 percent to 633.7 billion ruble and arrears of consumer credits grew by more than three fold (9.1 billion ruble, or 5.6 percent of retail credit portfolio). The situation is the worst when it comes to the most profitable but most risky consumer credits. Although their three-fold growth (up to 5.7 billion ruble) matched the growth of credit portfolio, the credits with payment delayed by more than 90 days accounted for 59.2 percent of bad debts.
In the share of long-time delay in settlement of consumer debts, VTB 24 outpaced the market leaders – Home Credit and Russian Standard, which, according to AntantaPioglobal analyst Maxim Osadchy, had 51 percent (8.6 billion ruble) and 5.7 percent (2.2 billion ruble) in 2007 respectively.
www.kommersant.com
All the Article in Russian as of Aug. 26, 2008
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