The Russian duma (parliament) was debating legislation in December 2013 that will introduce new regulations for consumer credit, amid growing concerns that the market could be overheating. The regulations will require, among other things, that credit cards are dispatched to customers only after full identity and creditworthiness checks, including verifying the customers’ details with a credit bureau.
However, consumer lending remains by far the most profitable activity in the Russian banking sector, to judge by 2012 results (see chart 1). The aggregate return on assets for 14 consumer banks on which The Banker has data was 3.39%. That includes several early-stage projects such as Svyaznoybank, MTS Bank and Cetelem that are still generating very low or negative returns owing to start-up costs. By contrast, the aggregate return on assets for the rest of the top 100 Russian banks that The Banker tracks is just 2.02%.
