The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) the results of its survey on credit card lending for the fourth quarter of 2003.
The amount charged off in the fourth quarter decreased for the fifth consecutive quarter to HK$1.13 billion or 2.05% of average receivables during the quarter. The "annualised"1 ratio was 8.19% compared with 9.85% in the previous quarter, and the lowest since the fourth quarter of 2001.
The delinquency ratio fell below 1% at end-December, to 0.92% compared with 1.23% at end-September. Outstanding rescheduled card receivables amounted to HK$166 million or 0.3% of total receivables within the card portfolio. Together, the delinquent and rescheduled ratio stood at 1.22% at end-December.
The total number of credit card accounts rose by 0.4%. Despite the transfer of some HK$169 million rescheduled receivables representing 0.3% of average receivables outside the credit card portfolio during the quarter, total receivables increased by 4.3% in the fourth quarter, having fallen in the first three quarters of the year. The increase can be attributed to a combination of increased spending during the festive month of December and the payment of salary tax using credit card.
The rollover amount, which reflects the amount of "borrowing" customers using their credit cards, fell for the seventh consecutive quarter to HK$27.8 billion from HK$28.8 billion as at end-September 2003.
"Debt rescheduling arrangements together with the lower trends in bankruptcy and unemployment continued to be the driving factors behind the improvement in the charge-off and delinquency situations in the card portfolio," commented Mr William Ryback, Deputy Chief Executive of the HKMA. "Despite this positive development, banks should remain watchful and be prudent on credit limits and the issue of new cards."
For further enquiries, please contact:
Kevin Ip, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
18 February 2004
1 This assumes the quarterly rate of charge-off is maintained for the next three quarters.
Annex
Survey on Credit Card Lending
Q4 02 | Q1 03 | Q2 03 | Q3 03 | Q4 03 | |
Total number of accounts at period-end ('000) | 8,865 | 8,804 | 8,732 | 8,747 | 8,784 |
Quarterly change (%) | -3.4 | -0.7 | -0.8 | +0.2 | +0.4 |
Yearly change (%) | -2.6 | -4.7 | -6.4 | -4.7 | -0.9 |
Total receivables at period-end (HK$ Mn) | 59,247 | 54,567 | 53,985 | 53,974 | 56,305 |
Quarterly change (%) | +0.1 | -7.9 | -1.1 | -0.0 | +4.3 |
Yearly change (%) | -4.5 | -9.6 | -10.4 | -8.8 | -5.0 |
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Average total receivables (HK$ Mn) 1 ( a ) | 59,215 | 56,907 | 54,276 | 53,980 | 55,140 |
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Delinquent amount > 90 days (HK$ Mn) | 756 | 685 | 688 | 662 | 519 |
Rescheduled card receivables (HK$ Mn)* ( b ) | - | - | - | - | 166 |
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Delinquency ratio (%) | 1.28 | 1.25 | 1.27 | 1.23 | 0.92 |
Rescheduled ratio (%) * ( c = b / a ) | - | - | - | - | 0.29 |
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Charge-off amount (HK$ Mn)2 ( d ) | 2,237 | 1,757 | 1,574 | 1,329 | 1,129 |
Charge-off ratios3 | |||||
- quarterly % ( e = d / a ) | 3.78 | 3.09 | 2.90 | 2.46 | 2.05 |
- quarterly %, annualised | 13.454 | 11.824 | 11.60 | 9.85 | 8.19 |
- year-to-date %, annualised | 13.25 | 12.35 | 11.77 | 10.98 | 10.02 |
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Rollover amount (HK$ Mn) | 32,076 | 30,391 | 29,019 | 28,764 | 27,759 |
Rollover ratio (%) | 54.1 | 55.7 | 53.8 | 53.3 | 49.3 |
Note:
* This line is newly introduced.
Notes to Press Release