Austria-headquartered Raiffeisen, the
third-largest bank by assets in Central and Eastern Europe (CEE)
after UniCredit and Erste, is to extend its use of FICO’s Economic
Impact Service (EIS).
The agreement is designed to give
Raiffeisen greater credit control risk as it develops its lending
strategies across 15 countries.
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Raiffeisen tested FICO’s
EIS software on personal loans in Eastern Europe.
Deploying EIS allowed the bank to overlay macro-economic
information on top of its traditional credit scoring system,
adjusting risk scores based upon recent and projected economic
conditions, with the aim of improving profit per
account.
Zsolt Jaczko, vice
president and head of Methodology and Validation at Raiffeisen,
said:” In a difficult economy, innovation is the key to raising our
performance.
“FICO has given us a
better way to adjust our credit risk strategies in response to
changing economic conditions. Each market we serve faces different
economic prospects, and calibrating risk strategies for each market
will help us grow in good and bad economic periods.”
FICO’s EIS has been
developed to enable lenders to adjust their use of risk scores
based on economic projections and lender-defined scenarios. It
examines up to 150 different economic indicators, and then
scientifically calibrates credit risk estimates to expected market
conditions, at the account level.
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By GlobalDataMike Gordon, vice
president and MD for FICO in EMEA, said in a statement: ”The past
may not be the best indicator of the future. The FICO Economic
Impact Service is a ‘stress test’ of consumer credit risk at the
borrower level, and Raiffeisen is using this breakthrough in credit
scoring technology to do proactive customer management and fuel
ambitious growth plans.”
Raiffeisen Bank
International was formed in October, following the merger of
Raiffeisen International – the retail focused lender based in 17
CEE countires – with the Austrian commercial and investment bank
business of its parent group, RZB.
Raiffeisen
International’s non-performing loans (NPL) amounted to 10.4% of
total customer loans in the first half of 2010, up from 8.8% at
year-end 2009. The bank’s toughest market is in Ukraine – among the
hardest hit banking sectors in the whole CEE region during the
crisis – contributing to a NPL ratio in the region of
24.5%.
Raifeissen ranks third
by market share in Ukraine, with around a 6.5% share of total
sector banking assets, after PrivatBank (9.8%) and Oshadbank
(6.8%).
Raifeissen’s NPL ratio
rose in the first half in other regions: to 8.0% in Central Europe,
7.5% in South and Eastern Europe and 11.2% in Russia.
Raiffeisen has forecast
moderate growth in bank lending in CEE in 2010 and 2011.
