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Collectors could not cope with the entire volume of bad loans: Banks put up for sale portfolios of overdue loans to individuals in the amount of 200 billion rubles.
Banks put up for sale portfolios of overdue loans to individuals in the amount of 200 billion rubles, which is almost two times more than last year. For the remaining two months before the end of the year, bad debts put up for sale may be increased by 80 billion rubles. There aren’t enough buyers for this whole amount: collectors are ready to recover only half
The fact that banks cannot sell portfolios of bad loans, RBC was told by representatives of large collection agencies and banks. “In the bad debt market, supply exceeds demand. In the current economic conditions, collection agencies cannot make long-term forecasts about how much they will be able to earn on overdue loan portfolios and are in no hurry to buy them, ”explained Elena Dokuchaeva, chairman of the board of directors of the Sequoia Credit Consolidation collection agency.
This year, banks want to sell loans in an amount more than two times higher than last year. According to Sequoia, for ten months of 2014, banks put up for sale overdue loans worth 200 billion rubles. In November-December, it may increase by another 80 billion rubles. In 2013, banks offered collectors debts in the amount of 122 billion rubles.
However, while the collectors have bought only half of the proposed volume. “According to the results of the first half of the year, the share of repurchased debts amounted to 50% of the total volume of proposals,” commented Sergey Shpeter, senior vice president of the collection agency “National Recovery Service”. According to Sequoia, last year only 10-15% of transactions for the sale of overdue transactions were not closed.
In the summer, collectors turned to banks to disclose more information about portfolios. “This could increase the value and proportion of closed deals. But to judge whether this happened, it will be possible only in January, since a large number of transactions fall on November-December, ”said Shpeter.
Prices are falling
Overdue debt prices have fallen almost twice this year compared to 2013. The average price of a portfolio at the moment is 2.34%. Last year, it was at the level of 4–4.8% of the total debt. The price of a loan portfolio assigned to a collection agency depends on a number of factors: the availability of collateral for the loan, the type of loan product, the amount of the loan, and the current period of continuous delay. The average debt in the portfolio last year was 650-700 days, this year – 900 days.
“Prices have fallen primarily due to the debt load of the population, as well as a sharp decrease in the solvency of borrowers. If before the borrower had an average of one or two loans, now this figure is two or three loans, the maximum number is 17 loans. Of course, it is not possible to pay and service all loans. All this affects the quality of the portfolio and, as a consequence, its value, ”said Elena Dokuchaeva.
According to the chairman of the board of directors of the Stolichnoe AVD collection agency, Dmitry Mokhnachev, now banks have large arrays of long hopeless arrears that they need to sell in order to clear the balance. “Debt has become too heavy to recover,” he notes. According to him, the population has been re-credited and the total amount of loans exceeds the financial capabilities of many borrowers to pay on loans.
However, some banks decide to collect debts independently, without the help of collectors. For example, HCF Bank, which sold debts worth about 9 billion rubles last year, does not plan to put up portfolios for sale this year. “It is more profitable for us to process the debt on our own than to sell it at current prices established in a market that is oversaturated with offers,” said Irina Poddubnaya, director of the department for work with overdue debts of Home Credit Bank.
According to Mokhnachev, in order to get out of a difficult situation, banks should introduce such tools as debt restructuring, writing off fines, and increasing the maturity of late payments. “Then it’s realistic to recover at least part of the debt. Otherwise, banks will have to write off their debts at a loss, ”Mokhnachev concluded.
According to Sequoia, the structure of the average portfolio for sale looks like this: cash loans account for about 50%, credit cards – 20%, POS loans – 19%, car loans – 10%, others – 1%. In the debt structure, 50.7% is the main debt, 37.4% – interest, 11.8% – fines.