Credit Card Lending Survey Results For Third Quarter 2006

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

Total card receivables increased for the second consecutive quarter. They rose by 2.7% (or HK$1.7 billion) in the third quarter despite a transfer of HK$121 million of rescheduled receivables (representing 0.2% of average receivables) outside the credit card portfolio during the quarter. The total number of credit card accounts rose further by 2.1%.

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-September 2006.

The charge-off amount increased further in the third quarter to HK$0.53 billion or 0.82% of average receivables from HK$0.51 billion in the previous quarter. The increase was mainly attributable to an increase in bankruptcy related charge-offs during the quarter, particularly in August. Accordingly, the annualised¹ charge-off ratio increased to 3.30% from 3.28% in the previous quarter.

Despite an increase in the delinquent amount to HK$259 million from 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 combined delinquent and rescheduled ratio was also virtually unchanged at 0.49% at the end of September notwithstanding a decrease in the amount of rescheduled receivables to HK$55 million or 0.08% of total receivables, from HK$56 million or 0.09% in the second quarter.

Annex

For further enquiries, please contact:
Sara Yip, Manager (Press), at 2878 8246 or
Ying-ying Cheng, Manager (Press), at 2878 1687

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

Hong Kong Monetary Authority
15 November 2006