Charge for Credit Losses

Loan impairment provisions and charge for credit losses are the main indicators of the bank’s loan portfolio quality and reflect its approach to risk management.

For the year ended 31 December 2019, MKB recognised a charge for credit losses on loans to customers of RUB 7.7 bln, an increase of RUB 0.35 bln, or 6%, from RUB 7.3 bln for the year ended 31 December 2018. The slight increase in the charge for credit losses on loans to customers is attributable to a more active development of consumer lending in 2019. The preservation of the loan portfolio quality was also evidenced by the cost-of-risk ratio, which was as low as 1.0% at end-2019.

Indicator, RUB bln Year ended 31 December
2019 2018
Charge for credit losses on loans to customers:
Loans to corporate customers 3,753 6,009
Auto loans (19) (13)
Mortgage loans (144) (60)
Credit cards 189 45
Consumer loans 3,960 1,296
Total loans to individuals 3,986 1,268
Total charge for credit losses on loans to customers 7,739 7,277
Cost of risk 1.0% 1.0%