THREE BUREAUS DIVIDED THE RUSSIAN MARKET OF CREDIT HISTORIES
According to the Central Bank, the market of credit histories was divided by three largest bureaus, that is Global Payments, National Bureau of Credit Histories and Infocredit. They account for more than 90% of histories being currently in the central register. Along with this, the share of the bureau established by Russian Standard, one of the largest crediting banks, turned out to be almost unnoticeable.
The Central Bank published statistical data on the credit histories collected in the central register. According to the regulator, there are already more than 7 million histories in the central catalog. The largest bureaus according to the quantity of accumulated histories were Global Payments belonging to HCF-bank (Home Credit), National Bureau of Credit Histories (NBKI) established by the Association of Russian Banks (as of June 2006, 570 banks cooperated with the bureau) and Infocredit, its main founder being Sberbank. These three largest players account for 90% of the histories contained in the register.
Oleg Lagutkin, head of Global Payments, says, “We already have 3 million histories in the bureau.” During establishment of the bureau, its founders announced that it would not be of “pocket” type but would become a part of the group’s business. Lagutkin explains advantages of Global Payments, “Our server-to-server technology guarantees high speed of data exchange with a bank, which is important for express crediting.” Thus, the bureau collected approximately 43% of the histories submitted to the central catalog.
Head of NBKI Alexander Vikulin reports, “Now NBKI stores 2.250 million histories.” This amounted to approximately 32% of all histories. As a result, Infocredit has approximately 1.050 million histories, which accounts for 15% of the overall number of histories in the central catalog.
The credit bureau of Russian Standard bank, one of the largest players on the market of consumer crediting, and Experian-Interfax bureau failed to become the leaders. Vladimir Gerasimov, member of the Board of Directors of Experian-Interfax, explains, “We are the only credit bureau established without participation of banks in capital, which is why we have not received credit histories of the founders contrary to the three leaders.” According to Gerasimov, now the bureau has about 700,000 histories and 170 banks are partners of the bureau. Gerasimov adds, “We have always announced that we stake at quality of services and the process of histories accumulation continues.”
According to him, the histories collected by Experian-Interfax constitute the remaining 10% of the 7 million histories collected in the catalog of the Central Bank. Thus, the share of the bureau of Russian Standard and other bureaus is almost unnoticeable. Market players say that although Russian Standard issues many credits its bureau is practically not present on the market and does not cooperate with other banks.
A representative of the credit bureau explains that much depends on clients of the bank. He adds, “Not all clients of Russian Standard know what a credit history is and what a credit bureau is. That is why if a bank does not insist on this the borrower does not even think about transfer of information.”
<ref>Biznes, July 24, 2006
PRESIDENT PUTIN IS DISCONTENT WITH SIGNIFICANT ROUBLE APPRECIATION
The Finance Ministry and the Central Bank may lose one of the most efficient tools for combating inflation. At a meeting with ministers on July 24, President Putin persistently recommended state officials not to be too keen on excessive rouble appreciation leading to dramatic growth of import to Russia. Experts presume that if the Finance Ministry and the Central Bank give up their plans to correct the exchange rate of the national currency it will be possible to forget about annual inflation of 8.09%.
This is not the first time when the President expresses discontent with the rouble appreciation being the most efficient tool of the monetary authorities in combating inflation. At the beginning of 2006, Putin attracted attention of Economic Development and Trade Minister German Gref to rapid growth of import to Russia that amounted to 28% according to results of 2005 alone. The President called rouble appreciation the main catalyst for import growth.
At his traditional meeting with ministers on July 24, Putin was more decisive. He remarked, “If this appreciation is continued the volume of import will grow and Russian manufacturers will experience certain pressure.”
The Economic Development and Trade Minister tried to sooth down the President having said that inflation in year-on-year terms would amount only to 7-9%. This argument did not persuade Putin who unequivocally demanded the Finance Ministry and the Central Bank “to keep this issue in the field of vision.”
Deputy Prime Minister Sergei Ivanov supported the demand of the President and said that contracts in the field of military technological cooperation with foreign partners signed in US dollars were getting unprofitable due to rouble appreciation. Ivanov stated, “Practically all contracts become unprofitable because they have been signed in dollars and purchase of components for this armament is made here in roubles.” To minimize losses of the military industrial complex Ivanov proposed signing all contracts only in roubles.
At any rate, experts are not inclined to dramatize the situation.
Vadim Zuev, analyst of the investment company Russian Financial Traditions, presumes, “It would be possible to call the situation catastrophic if rouble growth appreciated 20-25%. However, correction of the exchange rate by 7-9% is a normal practice.”
Analyst Danila Levchenko of Zenit bank agrees with his conclusions, “I have never heard yet that rouble appreciation harms someone very much.” In any case, Elena Trubnikova, managing partner of Finexpertiza group, believes that Putin’s apprehensions are justified. Trubnikova explains, “Continuing application of the former policy of rouble appreciation we lose our competitive advantages: both on foreign and on domestic markets Russian goods are getting less competitive than Western ones.”
Changing of the exchange rate policy towards giving up of further rouble appreciation will make keeping the promise to restrain inflation in the limits of even 9% made by the government much more difficult. Rouble appreciation by itself is not connected with growth of production volumes or labor productivity increase and these parameters are, according to Trubnikova, alternative ways to combat inflation. The expert sums up, “Thus, it will be necessary to sacrifice either rouble or inflation anyway.” The Economic Development and Trade Ministry will evidently listen to recommendation of the President. Trubnikova presumes that in this case it is almost impossible to hold full-year inflation in the limits of 10%. Levchenko agrees, “Besides the exchange rate policy we actually do not have other efficient ways to hinder inflation growth. That is why it is possible that if rouble appreciation is given up, prices will grow by more than 9%.”
<ref>Biznes, July 25, 2006
