TransUnion Q2 2024 Industry Insights

Q2 2024 Report highlights include:
 

• Consumers used their credit cards more during Q2 2024, likely related to summer travel spending
  
• Lenders tightened supply of new personal loans in response to slightly increased delinquency risk 
• Two in three revolving line originations were supplied by virtual banks, a significant increase from last year 

Against a backdrop of positive macroeconomic indicators in Hong Kong, including a 3.3% growth in GDP and a 7.5% year-over-year (YoY) growth in exports¹, the local credit market remained healthy during Q2 2024. Although origination growth slowed somewhat across all credit products apart from revolving lines, consumer balances on existing credit facilities increased during Q2 2024 as consumers used credit to fund summer travel and offshore spending, aligned to the trends observed in the tourism sector².

Across all credit products, the consumer-level delinquency rate – measured as 60 or more days past due (DPD) on any account – slightly increased by two basis points (bps) YoY to 0.31%. The marginal deterioration in repayment performance was primarily observed in the unsecured personal loans and revolving lines portfolios. Specifically for personal loan, account-level 60+ DPD rates increased by 5 bps YoY to 0.86% in Q2 2024, and balance-level delinquencies were up 10 bps to 0.52%. In response to these increases, personal loan lenders have scaled back on new account originations over the past year.

A noteworthy trend in Hong Kong is the increasing dominance of virtual banks in the revolving lines market, where they accounted for 69% of new account originations in Q1 2024, up from 49% in Q1 2023. This shift indicates that virtual banks are rapidly gaining market share from traditional banks and money lenders, likely due to their ability to offer more convenient and accessible services.