TransUnion Q1 2024 Industry Insights

Untapped Opportunities Exist for Hong Kong Lenders to Drive Sustainable Growth


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.

Summary of growth in unsecured lending products Q1 2024

Summary of growth in unsecured lending products Q1 2024

*Originations reported one quarter in arrears due to data lag and reflects Q4 2023 volumes. Growth reflects movement between Q4 2022 and Q4 2023 for year-over-year comparison.

Headshot of Weihan Sun

“Consumers continued to leverage their existing credit lines, building balances to meet their consumption needs during the first quarter of 2024, and extending value within those cards’ loyalty programmes rather than seeking to add new cards to their wallets. This presents lenders with the opportunity to leverage rewards programmes and other retention strategies to attain or retain the position of consumers’ top-of-wallet card, particularly at a time when consumers are using their cards more.”

- Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion

About the Hong Kong Industry Insights Report

TransUnion’s quarterly Hong Kong Industry Insights Report provides in-depth, statistical information drawn from its regional consumer credit database, aggregated across virtually every active credit file on record. Each file contains hundreds of credit variables that illustrate consumer credit usage and performance. Entities across industries can subscribe to and leverage the Industry Insights Report to analyse market dynamics throughout an entire business cycle, helping them understand consumer behaviour over time. The report looks at major consumer lending categories: credit cards, loan on cards, personal loans, revolving lines, mortgages, and auto loans, focusing primarily on three dimensions across these categories: originations (new accounts opened), balances (outstanding total and average lending balances) and delinquencies (accounts in payment arears).

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