Credit Card Lending Survey Results For Second Quarter 2006

The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) the results of its survey on credit card lending for the second quarter of 2006.

Total card receivables increased by 2.5% (or HK$1.6 billion) in the second quarter, having fallen by 9.9% in the previous quarter. The increase occurred notwithstanding the transfer of some HK$87 million of rescheduled receivables (representing 0.1% of average receivables) outside the credit card portfolio during the quarter. The total number of credit card accounts rose further by 4.0%.

The rollover amount, which reflects the amount of borrowing by customers using their credit cards, was stable at HK$24.9 billion as at end-June 2006.

The charge-off amount increased further in the second quarter to HK$0.51 billion or 0.82% of average receivables, compared with HK$0.47 billion or 0.72% in the previous quarter. The increase was largely due to write-offs in relation to bankruptcy petitions during the quarter. As a result, the annualised¹ charge-off ratio increased to 3.28% from 2.89% in the previous quarter.

Although the delinquent amount increased to HK$251 million at the end of June, the delinquency ratio was broadly unchanged at 0.40% due to the increase in total card receivables. The level of rescheduled receivables retained in the card portfolio was stable, amounting to HK$56 million or 0.09% of total receivables. The combined delinquent and rescheduled ratio edged down to 0.49% at end-June from 0.50 at end-March.

Annex

For further enquiries, please contact:
Ying-ying Cheng, Manager (Press), at 2878 1687 or
Hing-Fung Wong, Officer (Press), at 2878 1802

Hong Kong Monetary Authority
16 August 2006

¹ This assumes the quarterly rate of charge-off is maintained for the next three quarters.