Financial Institutions Reduce Credit Card Issuance by a Substantial 59%
In May 2025, banks dished out 1.01 million credit cards to the Russians, slashing the total credit limit by a whopping 59% compared to the year prior. That's right, buddy, from 2.44 million cardslast year to just over a million this year - a significant drop indeed!
These numbers, my friend, tell a clear story. The total approved limits plummeted by 55%, going from a whopping 281 billion to a mere 127.86 billion rubles. But wait, there's more! The average credit limit per card skyrocketed by a tenner, reaching a high of 127,000 rubles.
Now, hold on to your socks, 'cause things are about to get spicier! The United Credit Bureau also spilled the beans on numbers from January to May 2025. Drum roll, please! In total, 5.63 million cards were issued, which is a staggering 52% less than the previous year. The total limit was 694 billion rubles (-46%), and the average limit increased by a cool 12% to 123,000 rubles. And here's the kicker - there was even a monthly decrease in indicators, a hefty 10% compared to April 2025.
Now, remember when we told ya 'bout that nasty debt spike in Tomsk region for mortgages back in April? Well, sure enough, it increased by an alarming 88% in the first four months of 2025. Yikes!
Now, if you're curious 'bout what's causing all this finance turbulence, let's dive a bit deeper. Experts say it's due to a mix of factors, like:
- Tighter Lending Rules: The Central Bank of Russia has wiggled its nose at banks, making 'em stick to stricter regulations and be more careful about approving new credit cards.
- Less Risky Business: Banks have tightened their belts and reduced their risk-taking, which means they're less keen on doling out credit cards, especially to those considered high-risk.
- Mounting Bad Debt: The rise in overdue debts, including a nearly 70% increase in credit card overdue payments, points to a high-risk environment, discouraging banks from issuing new credit cards.
- Financial Instability and Shifted Consumer Behavior: Economic instability and changes in consumer behavior, caused by factors like inflation and shaky income, might affect demand and issuance of credit cards. People may be more cautious about taking on debt, while banks may be more picky about who they give credit to.
- Macroprudential Measures: The Bank of Russia's macroprudential measures, aimed at stabilizing the financial system, have contributed to a crunch in unsecured consumer lending. These measures usually involve stricter lending standards, which can restrain the issuance of new credit cards.
The tightening of lending rules by the Central Bank of Russia, as well as banks' reduced risk-taking and increased bad debt, have contributed to the finance industry's stricter approval of new business ventures, notably credit cards. Furthermore, economic instability, changes in consumer behavior, and macroprudential measures introduced by the Bank of Russia have also been factors in this finance turbulence.
