TransUnion Q1 2024 Industry Insights

Q1 2024 Report highlights include:
 

• Hong Kong consumers are increasingly leveraging their existing credit cards, presenting lenders with the opportunity to better maintain and gain loyalty, while seeking opportunities for sustainable growth
• Opportunities for growth exist amongst “new-to-product” borrowers in the personal loan market 
• Traditional banks and money lenders are adapting their revolving lines risk management strategies to help manage deteriorating performance 

Consumer demand for new credit cards in Hong Kong remained subdued towards the end of 2023. Credit card enquiries – a measure of consumers applying for new cards – decreased by 8% year-over-year (YoY) in Q4 2023. However, during Q1 2024, outstanding balances increased by 8.6%, and average balances increased by 7.5%, indicating that consumers are increasingly using their existing cards in the current environment, with lenders extending additional capacity to borrowers during the first quarter of 2024.  

Personal loans remain a sizeable organic new-to-product opportunity, with one in four originations driven by new-to-product consumers – those who have never opened a personal loan previously – as they seek liquidity to meet their growing consumption needs. 

The revolving line landscape has shifted over the last few years, with virtual banks’ share of originations growing from 54% in Q4 2021 to 68% in Q4 of 2023. Over the same time, traditional banks’ share of these originations has declined from 11% to 4%, with money lenders having decreased from capturing more than one third (36%) of this market in 2021 to 27% in Q4 2023.