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Credit Card Lending Survey Results For First Quarter 2005

The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) the results of its survey on credit card lending for the first quarter of 2005.

The charge-off amount continued to decline in the first quarter, down to HK$0.46 billion or 0.80% of average receivables, compared with HK$0.53 billion or 0.94% in the previous quarter. The annualised1 charge-off ratio declined further to 3.18% from 3.76% in the previous quarter, the lowest level since the third quarter of 1998.

There was a slight rise in the delinquency ratio to 0.45%, up from 0.44% at end-December. However, this was due, not to an increase in the value of accounts that were delinquent, but rather to a contraction in total card receivables. Similarly, the delinquent and rescheduled ratio increased to 0.57% at end-March from 0.55% at end-December, although the amount of rescheduled receivables declined further to HK$68 million from HK$70 million in the previous quarter. Rescheduled receivables remained constant as a percentage of total receivables at 0.12%.

The decrease in total card receivables reflected seasonal factors, including the receding effect of the payment of salary taxes by credit card. Total card receivables decreased by 4.1% (or HK$2 billion), having risen 9.2% in the previous quarter. In addition, HK$79.6 million of rescheduled receivables (representing 0.1% of average receivables) was transferred outside the credit card portfolio during the quarter. The total number of credit card accounts rose further by 1.3%.

The rollover amount, which reflects the amount of borrowing by customers using their credit cards, increased to HK$24.8 billion from HK$24.4 billion as at end-December 2004.

For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Kevin Ip, Manager (Press), at 2878 1687

Hong Kong Monetary Authority
18 May 2005

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


Survey on Credit Card Lending

  Q1 04Q2 04Q3 04Q4 04Q1 05
Total number of accounts at period-end ('000) 8,805 8,933 9,119 9,276 9,396
Quarterly change (%) +0.2 +1.5 +2.1 +1.7 +1.3
Yearly change (%) +0.0 +2.3 +4.3 +5.6 +6.7
Total receivables at period-end (HK$ Mn) 53,639 53,707 54,249 59,256 56,803
Quarterly change (%) -4.7 +0.1 +1.0 +9.2 -4.1
Yearly change (%) -1.7 -0.5 +0.5 +5.2 +5.9


Average total receivables (HK$ Mn) 1 ( a ) 54,972 53,673 53,978 56,753 58,029


Delinquent amount > 90 days (HK$ Mn) 421 343 300 259 253
Rescheduled card receivables (HK$ Mn)( b ) 178 73 73 70 68


Delinquency ratio (%) 0.78 0.64 0.55 0.44 0.45
Rescheduled ratio (%) ( c = b / a ) 0.33 0.14 0.14 0.12 0.12


Charge-off amount (HK$ Mn)2 ( d ) 871 721 608 534 461
Charge-off ratios3
- quarterly % ( e = d / a ) 1.58 1.34 1.13 0.94 0.80
- quarterly %, annualised 6.34 5.37 4.51 3.76 3.18
- year-to-date %, annualised 6.34 5.79 5.31 4.73 3.18


Rollover amount (HK$ Mn) 26,996 26,027 24,980 24,385 24,767
Rollover ratio (%) 50.3 48.5 46.0 41.2 43.6



  1. Average during period (calculated as [opening stock + closing stock]/2 )
  2. Flow during period
  3. 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

  1. 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.
  2. Credit card receivables in the survey refer to credit card receivables from individual credit cardholders.
  3. 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.
  4. 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.
  5. 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).
  6. 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.
  7. 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.
  8. 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.
Last revision date: 1 August 2011
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