Credit card market in Russia, 2012

Credit card market in Russia, 2012

The credit card market is on course for a trillion

In 2012 the Russian credit card market grew by 82.5%, having exceeded the growth rates of 2011 (61.6%), and having exceeded twofold the total growth amount for the retail lending market (about 40%). As of 1 January, 2013 the total volume of the Russian banks’ credit card porLolio made up 671.3 billion roubles, the increment for the year – 303.5 billion roubles.

Almost the enOre market growth can be aPributed to the top 20 top players, whose porLolios in aggregate have increased by 282.8 billion roubles. The first five banks have increased their porLolios by 191 billion roubles, the market leader, Sberbank, – by 86.3 billion roubles. Among the 20 major credit cards market players, seven banks have increased their porLolios by more than twofold.

Trends and forecasts:

•  In 2012 the credit cards market grew by 82.5% (in 2011– by 61.6%); the total size made up 671.3 billion roubles;

•  63% of the increment is accounted for by the 5 top leaders of the market, 28.4% of growth is ensured by Sberbank;

•  Seven banks in the top 20 have increased their porKolios more than twofold – Sberbank, TCS Bank, Svyaznoy, Alfa bank, Trust, MTS Bank, SKB Bank;

•  Sberbank increased its market share the fastest, growing it from 17.1% to 22.2%;

•  In 2013 there is a likelihood of a slowdown of growth down to 50-‐60%, in parScular, due to levelling out of the low base effect; its size will approach 1 trillion roubles.

1

January 29, 2013

The market size as of 01.01.13 671 billion roubles (+82,5% as compared to 01.01.12)

*See note at the end of the document

Bank Portfolio,-billion-roubles Market-share

Sberbank 149,3------------------------- 22,2%Russian-Standard-Bank* 100,9------------------------- 15,0%VTB24 48,6--------------------------- 7,2%TCS-Bank 48,0--------------------------- 7,2%Orient-Express-Bank 45,1--------------------------- 6,7%Svyaznoy-Bank 32,5--------------------------- 4,8%Alfa-bank 30,8--------------------------- 4,6%OTP-Bank 29,9--------------------------- 4,5%HCF-Bank 19,6--------------------------- 2,9%Rosbank 15,4--------------------------- 2,3%


January 29, 2013

2

Leaders’ accelera?ng finish

In Quarter IV of the year 2012 the market growth slowed down to 13.9%, whereas in Quarter III this figure was 17.8%, in Quarter II – 18.3%, in I – 15%. According to the results of the last three months, the market size has increased by 81.8 billion roubles.

The most acOve banks took advantage of the general slump in the growth at the end of the year, in order to improve their posiOons. TCS Bank (4th place in terms of porLolio size) closed the gap on VTB24 down to 0.6 billion rouble, and increased the market share in Quarter IV from 6.8% to 7.2%. Simultaneously VTB24 (3d place) whiPled down its market share from 7.9% to 7.2%.

Dynamics of credit card porDolios, billion roubles

Banks 01.01.08 01.01.09 01.01.10 01.01.11 01.01.12 01.01.13Portfolio Market6share Portfolio Market6share Portfolio Market6share Portfolio Market6share Portfolio Market6share Portfolio Market6share

Sberbank 0,7++++++++ 0,4% 2,5++++++++ 1,2% 8,3++++++ 4,3% 25,4++++ 11,2% 63,0++++ 17,1% 149,3++ 22,2%Russian+Standard+Bank 88,3++++++ 49,8% 70,9++++++ 34,5% 56,3++++ 29,2% 49,5++++ 21,7% 59,3++++ 16,1% 100,9++ 15,0%VTB24 3,6++++++++ 2,0% 12,0++++++ 5,8% 19,2++++ 10,0% 24,8++++ 10,9% 34,5++++ 9,4% 48,6++++ 7,2%TCS+Bank 0,7++++++++ 0,4% 4,5++++++++ 2,2% 4,9++++++ 2,5% 9,6++++++ 4,2% 21,2++++ 5,8% 48,0++++ 7,2%Orient+Express+Bank 0,0++++++++ 0,0% 0,2++++++++ 0,1% 1,5++++++ 0,8% 3,1++++++ 1,4% 23,1++++ 6,3% 45,1++++ 6,7%Svyaznoy+Bank 0,0++++++++ 0,0% 0,0++++++++ 0,0% 0,0++++++ 0,0% 0,2++++++ 0,1% 12,4++++ 3,4% 32,5++++ 4,8%Alfa+bank 5,3++++++++ 3,0% 8,2++++++++ 4,0% 8,6++++++ 4,5% 10,7++++ 4,7% 13,6++++ 3,7% 30,8++++ 4,6%OTP+Bank 5,0++++++++ 2,8% 6,8++++++++ 3,3% 6,9++++++ 3,6% 12,5++++ 5,5% 19,1++++ 5,2% 29,9++++ 4,5%HCF+Bank 20,9++++++ 11,8% 21,7++++++ 10,5% 16,6++++ 8,6% 11,1++++ 4,9% 14,1++++ 3,8% 19,6++++ 2,9%Rosbank 2,9++++++++ 1,6% 3,7++++++++ 1,8% 3,5++++++ 1,8% 5,9++++++ 2,6% 11,2++++ 3,0% 15,4++++ 2,3%Citibank 6,8++++++++ 3,8% 10,7++++++ 5,2% 12,0++++ 6,2% 12,9++++ 5,7% 11,2++++ 3,0% 12,6++++ 1,9%Credit+Europe+Bank 1,3++++++++ 0,7% 2,9++++++++ 1,4% 3,2++++++ 1,7% 5,2++++++ 2,3% 9,5++++++ 2,6% 11,7++++ 1,7%Privatbank 1,9++++++++ 1,1% 3,4++++++++ 1,7% 2,7++++++ 1,4% 4,2++++++ 1,8% 7,8++++++ 2,1% 10,5++++ 1,6%Renaissance+Capital 2,6++++++++ 1,5% 5,2++++++++ 2,5% 3,8++++++ 2,0% 4,1++++++ 1,8% 5,7++++++ 1,6% 9,8++++++ 1,5%Trust 1,0++++++++ 0,6% 1,0++++++++ 0,5% 0,4++++++ 0,2% 1,4++++++ 0,6% 3,7++++++ 1,0% 9,7++++++ 1,4%Raiffaisenbank 1,0++++++++ 0,6% 1,9++++++++ 0,9% 2,4++++++ 1,2% 2,8++++++ 1,2% 4,0++++++ 1,1% 7,1++++++ 1,1%MTS+Bank 1,5++++++++ 0,8% 2,5++++++++ 1,2% 2,1++++++ 1,1% 2,1++++++ 0,9% 2,5++++++ 0,7% 6,4++++++ 1,0%Avangard 6,7++++++++ 3,8% 9,1++++++++ 4,4% 6,1++++++ 3,2% 4,3++++++ 1,9% 4,2++++++ 1,1% 6,2++++++ 0,9%Uralsib 1,0++++++++ 0,6% 1,4++++++++ 0,7% 1,5++++++ 0,8% 1,9++++++ 0,8% 3,1++++++ 0,8% 6,0++++++ 0,9%SKB+Bank 0,0++++++++ 0,0% 0,0++++++++ 0,0% 0,0++++++ 0,0% 0,0++++++ 0,0% 0,1++++++ 0,0% 5,8++++++ 0,9%Others 26,2++++++ 14,8% 37,2++++++ 18,1% 32,9++++ 17,0% 36,0++++ 15,8% 44,5++++ 12,1% 65,2++++ 9,7%Total 177,4666 100,0% 205,8666 100,0% 192,96 100,0% 227,66 100,0% 367,86 100,0% 671,36 100,0%


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Banks’ shares in the credit card market

In Quarter IV Bank Svyaznoy rose from 7th to 6th posiOon, having increased its share from 4.6% to 4.8%. Alfa bank rose from 8th to 7th posiOon, having increased its share from 4.1% to 4.6%. OTP Bank, which had given way to Svyaznoy and Alfa, fell from 6th to 8th posiOon, and decreased its market share from 4.6% to 4.5%. Sberbank and Russian Standard remained in the lead, having increased their market shares to 22.2% and 15% from 21,8% and 14.9% respecOvely.

According to the results of 2012, the ten largest banks in the credit cards market look as follows: Sberbank (with the porLolio of 149.3 billion roubles), Russian Standard (100.9 billion roubles), VTB24 (48.6 billion roubles), TCS Bank (48 billion roubles), Orient Express Bank (45.1 billion roubles), Svyaznoy (32.5 billion roubles), Alfa bank (30.9 billion roubles), OTP Bank (30 billion roubles), HCF Bank (19.6 billion roubles), Rosbank (15.5 billion roubles).

GE Money Bank lec the Top-‐20 in Quarter IV to make way for SKB Bank that had joined the twenty for the first Ome. MTS Bank, which had joined the group of leaders a quarter before, conOnued its ascent having risen from 20th to 17th posiOon – with the porLolio of 6.4 billion roubles. Avangard slid down from 17th to 18th posiOon. The other banks retained their posiOons which they had achieved in the third quarter.

22,2%

15,0%

7,2% 7,2% 6,7%

4,8%

4,6%

4,5%

2,9% 2,3%

22,5%

Sberbank

Russian Standard Bank

VTB24

TCS Bank

Orient Express Bank

Svyaznoy Bank

Alfa bank

OTP Bank

HCF Bank

Rosbank

Others


January 29, 2013

4

Number of issued credit cards

(as of the end of the year and quarter)

Survival of the fiKest

In 2012, due to high compeOOon in the credit cards market, one had to show the growth that had to be much higher than the market, so as not to yield one’s posiOons to more acOve players. Seven banks of the top-‐20 increased their porLolios more than twofold – Sberbank, Tinkoff Credit Systems (TCS Bank), Svyaznoy, Alfa bank, Trust, MTS Bank and SKB Bank. These players were able to raise their raOngs and expand their market share.

Sberbank, which led the raOng at the end of 2011, did not ease up in 2012. The increase of the porLolio by 137.1% to almost 150 billion roubles enabled the bank to take up 22.2% of the market. At the beginning of the year this figure was 17.1%, the retail giant was building up its share during the year faster than all other market players.

Some leaders of the past were able to retain their posiOons in the raOng on account of the size, which had been gained previously, but they lost some of their market shares. Subject to the last year’s results, Russian Standard grew its porLolio by 70.1% (by 42 billion roubles), having scaled down the market share from 16.1% to 15%, and retained the posiOon in the 2nd line. VTB24 accrued 41.1% (14.2 billion roubles), remained in the 3d line, but reduced the share from 9.4% to 7.2%.

Size of the credit card market, billion roubles

2007 8%944%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%2008 9%296%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%2009 8%601%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%2010 10%047%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%2011 15%026%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

Q3#2012 20#426#########################################

177,4 205,8 192,9 227,6

367,8

671,3

0

100

200

300

400

500

600

700

800

2007 2008 2009 2010 2011 2012


January 29, 2013

5

In 2012 TCS Bank rose to 4th posiOon by increasing its porLolio by 126.5% (by 26.8 billion roubles). TCS’ share in the credit cards market grew from 5.8% to 7.2%. Orient Express Bank moved to the lower posiOon by occupying the 5th place and increasing its share from 6.3% to 6.7%. The increment of this bank’s porLolio in 2012 made up 95.2% (22 billion roubles). Bank Svyaznoy rose from 9th to 6th posiOon within a year, on account of the increase of its porLolio by 162.5% (by 20.1 billion roubles). Svyaznoy’s market share swelled from 3.4% to 4.8%.

Alfa bank rose from 8th to 7th posiOon in the raOng in terms of the credit cards porLolio, having succeeded in increasing the market share from 3.7% to 4.6%. The growth of the bank’s porLolio in 2012 made up 126.2% (17.2 billion roubles). OTP Bank, which had lost two posiOons, found itself in 8th place (growth by 56.2%), HCF Bank went down to 9th posiOon from 7th (growth by 39.4%), Rosbank remained in 10th place with the increment of 38.3%.

Dynamics of the largest players within the year, billion roubles

-‐

20

40

60

80

100

120

140

160

Sberbank


VTB24

TCS Bank

Orient Express Bank


January 29, 2013

6

Among the second ten high growth rates were demonstrated by Trust -‐ with the increment of 162.1% (6 billion roubles) and MTS Bank, which joined the top 20 in III quarter for the first Ome, -‐ with the increment of 152.9% per year (3.9 billion roubles). SKB Bank stands out, taking according to the results of Quarter IV the 20th place with the porLolio of 5.8 billion roubles and the share of 0.9%. Having started from the low base it had grown by over 4,200%. According to the results of 2012, Uralsib became the third newcomer within the top-‐20, having increased the porLolio by 95.1% (by 2.9 billion roubles). MDM Bank, Uniastrum and GE Money Bank lec the top 20 last year.

Change of posi?ons among the top 10

1

2

3

4

5

6

7

8

9

10

Sberbank


VTB24

TCS Bank

Orient Express Bank

Svyaznoy Bank

Alfa bank

OTP Bank

HCF Bank

Rosbank


January 29, 2013

7

Quality growth

Year 2013 expects to see a slight slowdown of the growth rates in the Russian credit cards market. The levelling out of the low-‐base effect and the banks’ willingness to maintain high quality of their credit porLolios will contribute to that. The market sOll has a high potenOal, only ~17% of Russians have credit cards, despite almost 90 million of economically acOve populaOon. We should remind that the revival of the cards market acer the post-‐crisis plateau began in the second half of year 2010.

The trend for outrunning growth of the acOve market parOcipants remains stable. There is a possibility of slight slowdown of the growth rates of the porLolios of the banks, which acOvely used the salary projects resource last year in order to increase the client base in terms of credit cards use.

“In 2013, the five credit cards market leaders, including TCS Bank, will conOnue to grow their porLolios at a fast pace. But I do not think that the market on the whole will be able to repeat last year’s growth results from such a large base because the total porLolio of the banks is now quite significant,” says the President of TCS Bank Oliver Hughes. “I believe that we will see an overall slowdown of growth rates to 50-‐60%. For the most part, the growth will be driven by the 5 major players.” Note (*): The management of the bank Russian Standard believes that the volume of the bank’s por?olio is larger, since some “card credits” are recognized by the bank in accounts 45505 (Loans and other money provided to individuals for a period from 181 days to 1 year), 45506 (Loans and other money provided to individuals for a period from 1 year to 3 years), 45507 (Loans and other money provided to individuals for a period over 3 years). Our experts’ opinion is that a classical credit card means a demand loan. For the purposes of the raRng we recognize the sum of the accounts 45508 (Loans and other money provided to individuals on a call basis) and 45509 (Loan provided in case of lack of money in the deposit account (“overdraU”)).

PorDolio growth leaders


January 29, 2013

8

This report is made by the specialists of the Bank Tinkoff Credit Systems. For the purposes of drawing up the report the bank relied on the informaOon of the RF Central Bank.

On cooperaOon maPers please contact Oleg Anisimov [email protected]

TCS credit cards: hPp://www.tcsbank.ru/credit. TCS deposits: hPp://www.tcsbank.ru/deposit. TCS debit cards: hPp://www.tcsbank.ru/debit/

© Tinkoff Credit Systems, 2013. All rights reserved. For quotes please refer to the bank Tinkoff Credit Systems.

Documents

Credit card market in Russia, 2012