TransUnion Q4 2019 Industry Insights Report

Mortgages Buck Trend and Continue to Grow as Wider Consumer Credit Market Adjusts to Challenging Economic Conditions

Latest results show an increase in mortgage originations and balances, while most other major consumer credit categories saw a reduction in originations or balances, or both

The newly-released TransUnion Q4 2019 Industry Insights Report shows that the Hong Kong recession is having an impact on the consumer lending market. The only category to record an increase in both originations (a measure of new accounts opened) and outstanding balances was mortgages. All other major consumer credit categories recorded a decline in either originations or balances, or both.

The report data also showed lenders continued to adopt a more conservative approach, with a sharp fall in YoY originations for both credit cards (-4.3%) and loan on cards (-10.4%). However, at the same time both categories recorded increases in outstanding balances – up 2.7% YoY for credit cards and 14.1% for loan on cards. This increase in balances, especially for loan on cards, suggests lenders are focusing their efforts more on existing customers, ensuring they have the liquidity they need during increasingly challenging economic times.

Q3 2019 Originations(1) – Annual Change

Source: TransUnion Hong Kong

1. Originations are viewed one quarter in arrears to account for reporting lag.

Francis Lau

“With two consecutive quarters of negative GDP growth, we are now in a technical recession. Despite this, the performance of the Hong Kong consumer credit market remains relatively robust. Lenders are still advancing credit but are increasingly focused on existing customers who are more of a known entity and are thus perceived as less risky,” said Francis Lau, director of research and consulting for TransUnion Hong Kong. “In general, consumers continue to honor their credit commitments. There are signs in some categories of increased financial stress, but despite some small rises delinquencies are still at historically low levels and far below those seen in previous periods of economic volatility.”

Francis Lau, Director of Research and Consulting for TransUnion Hong Kong

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