TransUnion Q2 2022 Industry Insights Report

Consumer Preferences Shift in Favour of Unsecured Loans

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The latest Industry Insights Report from TransUnion showed continued changes in Hong Kong consumer wallet profiles — driven by inflation and consecutive interest rate hikes. These impacts likely account for unusually cautious spending behaviours and the marked shift in credit product preferences.

However, against stagnating consumer sentiment, there was a rise in unsecured revolving lines, loan on cards (LoC) and personal loans, while increasing numbers of Gen Z consumers (up 7% YoY) helped fuel the growth of a very healthy credit card market.

Q2 2022 Report highlights include:

  • The number of revolving line accounts increased by 8.7% YoY; although the average balance in this category fell by 9.1% YoY.
  • The total number of unsecured personal loans increased by 5.2% YoY as the average balance for new personal loans increased by 2.7%.
  • The increased cost of living likely led to unusually cautious spending and significant growth in unsecured loans and revolving lines.

Within such a credit market, lenders can leverage enhanced data to compete for growth, retain loyalty, provide relevant offers, positively engage customers, and develop strategies to help address new-to-credit consumer needs.

Q2 2022 Metrics for Major Consumer Credit Products in Hong Kong

Source: TransUnion Hong Kong (except for mortgage data which is from the Residential Mortgage Survey (June 2022) published by the Hong Kong Monetary Authority)

i. Serious-delinquency rates are 90 or more days past due for credit cards and 60 or more days past due for all other credit products.
ii. Delinquency data are reported at a balance level except for mortgages and loan on card, which are reported at an account level.

MARIE CLAIRE LIM MOORE

“As we navigate challenging economic conditions, it is important for lenders to look for resilient consumer segments by assessing the credit needs and preferences of their existing customers. In light of the rising cost of living, there are segments of consumers who may need to leverage credit to cope with the economic pressures. By leveraging enhanced insights that help predict consumer credit needs and behaviours, lenders can serve these consumers effectively to drive portfolio growth in the near future.”

Marie Claire Lim Moore, Regional President, Asia Pacific and Hong Kong CEO, TransUnion

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