Moscow, Russia — 17 May 2017.
Today Tinkoff Bank publishes the findings of its research on the Russian credit card market in Q1 2017.

The research is based on the data of the Central Bank of Russia (CBR) and only takes into account loans that are not overdue (on demand loans and overdrafts to individuals).

In Q1 2017, the credit card market started to grow for the first time in two years, with long-awaited growth hitting 2.3%, or RUB 22.6 bn in absolute terms. According to the research, as at 1 April 2017, the credit card market volume reached RUB 1,021 bn. The growth was driven by two banks — Sberbank and Tinkoff Bank, while other players showed no improvement.

It could be said that the growth was evenly spread throughout the quarter despite a certain slump in February, a traditionally low month. On a month-by-month basis, the market grew by RUB 12.4 bn in January, declined by RUB 1.9 bn in February and added another RUB 12 bn in March.

The key enabler of the upward trend was the steady portfolio growth of Sberbank and Tinkoff Bank. Sberbank enlarged its market share by 0.7 p.p. to 43.6% YTD, and Tinkoff Bank — by 0.5% p.p. to 10.8% YTD. Their aggregate credit card market share hit 54.3%, or RUB 554.7 bn in absolute terms. All other banks hold 45.7% of the market, totalling RUB 466.5 bn in absolute terms.

The market share of Russian Standard Bank saw the biggest drop, as its portfolio shrank by 0.5 p.p. to RUB 49.4 bn in Q1 2017.

By the end of Q1 2017, there were 32 credit institutions in the credit card market with portfolios worth over RUB 1 bn. Their aggregate market share totalled 98.7%.

Q1 2017 witnessed some changes in market leadership. B&N Bank Credit Cards saw its portfolio shrink by RUB 0.8 bn, making way for Raiffeisenbank to join the Top 10 banks ranking ninth with a portfolio of RUB 15.5 bn.

Sberbank’s portfolio increased by RUB 17 bn to RUB 444.9 bn, and Tinkoff Bank’s portfolio showed growth by RUB 7.4 bn to 109.8 bn. Alfa Bank ranked third by absolute portfolio growth of RUB 1.8 bn reaching RUB 74.5 bn. However, it did not drive any market share increase for the bank because of some growth of the market itself.

Pochta Bank delivered the highest relative growth among the credit institutions holding portfolios worth over RUB 1 bn due to an increase in its portfolio by 20.2%, or RUB 1.04 bn in absolute terms.

Orient Express Bank also continued to grow, with its portfolio gaining 3% YTD and reaching RUB 39.6 bn.

Oliver Hughes, CEO of Tinkoff Bank, commented on the bank’s portfolio expansion as follows: «The decline in the credit card market observed over the last two years is finally over. In late 2016, the market stabilised at RUB 999 bn and saw the long-awaited growth in early 2017 with the volumes going up to RUB 1,021 bn. Notably, the growth was generated by two banks, including Tinkoff Bank. In Q1 2017, we increased our portfolio to RUB 109.8 bn, and the market share of the bank reached 10.8%. We expect to see further growth in the credit card market following the economic upturn and market recovery».

Methodology:

The report was drafted by Tinkoff Bank’s team.
For the purposes of this report, the Bank relied on CBR data. Tinkoff Bank’s analysts use amounts in accounts 45502 (loans and other funds provided to resident individuals for a period of up to 30 days), 45508 (demand loans and other funds provided to resident individuals), 45509 (deposit account overdrafts provided to resident individuals), 45707 (demand loans and other funds provided to non-resident individuals), and 45708 (deposit account overdrafts provided to non-resident individuals).

Russian Credit Card Market 1Q2017.