The Russian credit card market grew to 422.9 billion rubles (US $13.4 billion) in receivables in the first quarter of this year, up 79% from 235.8 million rubles during the same period last year, with more than 14.5 million credit cards in circulation, according to a new research report released late last month by Russia’s Tinkoff Credit Systems bank.

The fact that credit cards still make up a small proportion of Russian payments propelled the fast growth, says Oleg Anisimov, Tinkoff vice president for marketing.

The total number of payment cards in circulation, including debit and ATM cards, was 200 million as of the start of this year, according to the Russian Central Bank. That’s up 39% from 144 million a year earlier.

Achieving the biggest gain was Sberbark, the largest savings bank in Russia and Eastern Europe, which as of March 31 had credit card receivables totaling 76.6 billion rubles, according to Tinkoff research. Sberbank's share of the Russian credit card receivables grew to 18.1% from 12% a year earlier.

Sberbank, which launched its card program in 2008, was a late entry to the credit card market. However, it became the largest bank by credit card receivables in the last quarter of 2011 and continues to pull away from the others, Anisimov says.

As of March 31, Russian Standard Bank had the second largest share at 15.3% with 64.8 billion rubles in receivables, followed by VTB 24 with 9% (37.9 billion rubles), Orient Express with 7.2% (30.5 billion rubles), and TCS Bank with 6% (25.5 billion rubles).

"It took a long time for Sberbank to build the information technology base for mass-issuing of credit cards throughout all of Russia," says Anisimov.

By 2010, the technology infrastructure was in place and Sberbank began to ramp up the rate at which it issued cards, Anisimov says. Much of its growth has come at the expense of Russian Standard Bank, the early pioneer in this industry. It had a 49.8% market share for cards issued at the start of 2008, Anisimov says.

Russia's credit card industry was hit hard by the financial crisis between 2008 and 2010, with credit card growth stagnating. The number of active cards in circulation went to 9.3 million in 2008 from 8.9 million in 2007, then fell to just 8.6 million in 2009. The market began to grow again in 2010, with 10 million cards in circulation at the end of the year.

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