The volume of overdue bank debts put up for sale decreased

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In the second quarter of 2023, compared to the previous quarter, the amount of overdue bank debt offered for sale under the cession decreased. Bank debts are considered to be of better quality than those of MFIs, but in the absence of their supply, buyers realize demand in the microfinance segment. Banks, on the other hand, are holding onto debts, hoping to sell them at a higher price in the second half of the year. However, entering the market at once with a large amount of delay can lead to the opposite effect, experts warn.

The National Association of Collection Agencies (NAPCA) assessed the results of the sale of overdue debts of banks in the second quarter of 2023. According to them, over the quarter, banks offered for sale to investors 41.9 billion rubles. overdue retail loans against 62.1 billion rubles. in the first quarter of 2023. Of those offered for sale, transactions worth 37.2 billion rubles were implemented. against 52.9 billion rubles. in the previous reporting period, respectively. The price based on the results of transactions closed in April-June for the sale of bank delays amounted to 9.08%, while in January-March – 6.99%.

This trend is confirmed by the data of the online auction for the sale of overdue Debex. According to them, in the second quarter, transactions on the sale of overdue banks for 19.8 billion rubles were implemented on the electronic trading platforms, while in the first quarter – more than 29 billion rubles.

According to statistics, traditionally in the first quarter, banks offer less debt for sale than in the second.

“The market is lagging behind the expected pace of trading in overdue debts, not all banks have yet come out with the planned volumes, we expect the transfer of the main pool of trading to the third or fourth quarters,” says PKB Managing Director Pavel Mikhmel.

According to his estimates, at the end of 2023, the volume of supply will be in the corridor of the level of 2022 – 269 billion rubles – with the possibility of correction upwards by 5%.

Banks generally preferred to refrain from commenting on the sale of overdue loans. Only Post-Bank reported that in the second quarter of this year they did not adjust the approach to selling the portfolio of problem loans and did not reduce the amount of assignment. In the first half of 2023, the portfolio was put up for sale without deviating from the plan, Alfa-Bank assured. But the director of the department for work with overdue debts of Rosbank Evgeny Senkovsky did not hide the fact that the number of loans put up for sale at the beginning of the year was decreasing and will be reduced in the future due to the improvement in the quality of the portfolio and a change in strategy. “Consumer loans and credit cards are offered in 95%,” he specified.

“Apparently, the banks decided to wait until September-October, believing that demand and, as a result, the price of debt will increase,” notes Debex CEO Marat Brook. “Theoretically, this is possible, but you need to understand that collection agencies will buy debt anyway because they need something to work with. For now, they are focused on buying MFI debt.”

However, a situation may turn out when all free money will be spent and there will simply be nothing to buy large volumes of bank debt, Mr. Brook warns.

“You need to understand that the buyer is ready to pay a higher rate only for those lots where the price and quality are commensurate,” agrees Elman Mehdiyev, president of SRO NAPCA.

Alexander Vasilyev, general director of ID Collect, a troubled debt recovery service, expects sellers to put up for sale younger bank portfolios in the second half of the year, as a result, the weighted average price may be several percentage points higher. “In general, the banking cession looks more conservative, since the portfolios offered for sale are currently mainly formed by loans issued during the coronavirus pandemic and partly after the February events of last year,” notes Mr. Vasiliev. “Banks have tightened scoring models, cash loans could be obtained mainly by borrowers with a proven income and a good credit history.”

Ksenia Dementieva

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