The Hong Kong Monetary Authority (HKMA) announced today
(Wednesday) the results of its survey on credit card lending for
the third quarter of 2004.
The charge-off amount continued its declining trend in the third
quarter, declining to HK$0.61 billion or 1.13% of average
receivables, from HK$0.72 billion or 1.34% in the previous quarter.
Accordingly, the "annualised" ratio further lowered from 5.37% to
4.51%, the lowest level since the second quarter of 2001.
At end-September, the delinquency ratio dropped to a historical
low level since the start of the survey in 1996, at 0.55%. The
level of rescheduled receivables retained in the card portfolio was
stable, amounting to HK$73 million or 0.14% of total receivables,
the same as the positions recorded at the end of last quarter.
Together, the delinquent and rescheduled ratio declined to 0.68%
from 0.77% at end-June.
Total receivables increased by 1% in the third quarter,
following a transfer of some HK$126 million receivables or 0.2% of
average receivables outside the credit card portfolio during the
quarter as a result of debt rescheduling. The total number of
credit card accounts rose for the fifth consecutive quarter by
2.1%.
The rollover amount, which reflects the amount of "borrowing"
customers using their credit cards, fell to HK$25.0 billion.
For further enquiries, please contact:
Kevin Ip, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
17 November 2004
Annex
Survey on Credit Card Lending
|
Q3 03 |
Q4 03 |
Q1 04 |
Q2 04 |
Q3 04 |
Total number of accounts at period-end ('000) |
8,747 |
8,784 |
8,805 |
8,933 |
9,119 |
Quarterly change (%) |
+0.2 |
+0.4 |
+0.2 |
+1.5 |
+2.1 |
Yearly change (%) |
-4.7 |
-0.9 |
+0.0 |
+2.3 |
+4.3 |
Total receivables at period-end (HK$ Mn) |
53,974 |
56,305 |
53,639 |
53,707 |
54,249 |
Quarterly change (%) |
-0.0 |
+4.3 |
-4.7 |
+0.1 |
+1.0 |
Yearly change (%) |
-8.8 |
-5.0 |
-1.7 |
-0.5 |
+0.5 |
|
Average total receivables (HK$ Mn) 1 ( a
) |
53,980 |
55,140 |
54,972 |
53,673 |
53,978 |
|
Delinquent amount > 90 days (HK$ Mn) |
662 |
519 |
421 |
343 |
300 |
Rescheduled card receivables (HK$ Mn)( b
) |
- |
166 |
178 |
73 |
73 |
|
Delinquency ratio (%) |
1.23 |
0.92 |
0.78 |
0.64 |
0.55 |
Rescheduled ratio (%) ( c = b / a
) |
- |
0.29 |
0.33 |
0.14 |
0.14 |
|
Charge-off amount (HK$ Mn)2 ( d
) |
1,329 |
1,129 |
871 |
721 |
608 |
Charge-off ratios3 |
- quarterly % ( e = d / a ) |
2.46 |
2.05 |
1.58 |
1.34 |
1.13 |
- quarterly %, annualised |
9.85 |
8.19 |
6.34 |
5.37 |
4.51 |
- year-to-date %, annualised |
10.98 |
10.02 |
6.34 |
5.79 |
5.31 |
|
Rollover amount (HK$ Mn) |
28,764 |
27,759 |
26,996 |
26,027 |
24,980 |
Rollover ratio (%) |
53.3 |
49.3 |
50.3 |
48.5 |
46.0 |
Note:
- Average during period (calculated as
[opening stock + closing stock]/2 )
- Flow during period
- Calculated as flow during period as
percentage of average receivables during period
Survey on the Banking Sector's
Credit Card Lending
Notes to Press Release
- This survey covers authorized
institutions (AIs) and some subsidiaries of AIs that are engaged in
credit card business. It does not cover card issuers that are not
AI-related.
- Credit card
receivables in the survey refer to credit card
receivables from individual credit cardholders.
- The delinquency
ratio is measured by the total amount of credit card
receivables overdue for more than 90 days and remaining unpaid at
the last day of the reporting month as a percentage of total credit
card receivables. Credit card receivables are classified as overdue
when a payment is past due on the last day of the reporting month
(see also Note 7 below). The delinquency ratio provides an early
indication of the quality of the credit card portfolio.
- Charge-off
amount refers to the total amount of credit card
receivables written off the loan book during a period (irrespective
of when a charge is made to the profit and loss account, which may
be earlier if it is the institution's policy to create provisions
at an earlier time than the amount is written off). Charge-off
policies vary from institution to institution. Normally, an account
will be written off when the receivable has been overdue for more
than 180 days or when the ultimate repayment of the receivable is
unlikely (e.g. the cardholder is bankrupt or cannot be
located).
The quarterly annualised ratio
foreshadows the extent of charge-offs that would be experienced if
the current quarter's charge-off ratio were to be sustained for the
next three quarters. The year-to-date
ratio tracks the actual charge-offs to date and is annualised for
purposes of comparison.
- The delinquency and the charge-off
ratios are complementary to each other. The former takes into
account those credit card receivables that at the reporting date
had been overdue for more than 90 days but had not yet been written
off. It is therefore an indicator of future charge-offs. The latter
captures those receivables that were written off during the
specified period because they were seriously overdue (e.g. for more
than 180 days) plus those written off earlier than 180 days because
they were considered irrecoverable (e.g. because the borrower has
gone into bankruptcy).
- The rescheduled
ratio is measured by the amount of rescheduled
receivables retained in the card portfolio which are not captured
as delinquent at period-end as a percentage of total receivables.
This ratio provides supplementary information on the quality of the
credit card receivables.
- Rollover
amount, representing "borrowing", is the amount
within total receivables in respect of which the cardholder has not
fully repaid the statement balance but has at least made the
minimum amount of payment required by the authorized institution.
It does not include amounts that are overdue. An account is overdue
when the minimum payment is not made upon the due date.
- Rollover
ratio refers to the percentage of total rollover
amounts to total credit card receivables. While total receivables
relate to the month-end position, total rollover amounts are based
on balances recorded at the statement date.