The Hong Kong Monetary Authority (HKMA) announced today (Monday) the results of its survey on credit card receivables as at end-June 2001.
According to the survey, the number of credit card accounts and the value of credit card receivables rose by 5.8% and 5.9% respectively in the 3 months to end-June 2001, compared with 4.5% and 0.5% in the previous 3 months. The growth rates for the 12 months to end-June were 24.2% and 24.4% respectively.
The delinquency ratio (measured as the value of credit card receivables overdue for more than 90 days as a percentage of total credit card receivables) rose to 1.00% from 0.93% in the previous quarter. The quarterly charge-off ratio (annualised) also increased, to 4.60% from 3.68%.
"The continued rise in the delinquency ratio and the charge-off ratio reinforces the need for authorized institutions to exercise caution in the issuing of credit cards and the setting of credit limits," said Mr David Carse, Deputy Chief Executive of the HKMA. "This is particularly important in the light of the rising trend in personal bankruptcies."
The rollover ratio remained stable at 55.3% at end-June 2001.
Please refer to the Annex for details of the survey results.
For further enquiries, please contact:
Caitlin Wong, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
13 August 2001
Annex
Survey on Credit Card Receivables
|
Jun 00 |
Sep 00 |
Dec 00 |
Mar 01 |
Jun 01 |
| Total number of accounts ('000) |
6,376 |
6,662 |
7,159 |
7,485 |
7,922 |
| quarterly change (%) |
+7.1 |
+4.5 |
+7.5 |
+4.5 |
+5.8 |
| yearly change (%) |
+21.3 |
+21.3 |
+23.9 |
+25.7 |
+24.2 |
|
| Total receivables (HK$ Mn) |
43,844 |
46,895 |
51,236 |
51,485 |
54,521 |
| quarterly change (%) |
+8.6 |
+7.0 |
+9.3 |
+0.5 |
+5.9 |
| yearly change (%) |
+19.3 |
+25.0 |
+27.3 |
+27.6 |
+24.4 |
|
| Delinquency ratio (%) |
0.73 |
0.71 |
0.76 |
0.93 |
1.00 |
|
| Charge-off ratio (% annualised) |
3.98 |
3.57 |
3.71 |
3.68 |
4.60 |
|
| Rollover ratio (%) |
54.9 |
52.8 |
54.3 |
55.2 |
55.3 |
Survey on the Banking Sector's Credit Card Receivables
Notes to Press Release
- This survey covers those authorized institutions ("AIs") engaged in credit card business and does not therefore cover card issuers that are not AIs.
- Credit card receivables in the survey refer to credit card receivables from individual credit cardholders.
- Credit card receivables are classified as overdue when a payment is past due at the last day of the reporting month (see also Note 7 below). 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.
- Charge-off ratio refers to the total amount of credit card receivables written off during a period as a percentage of the total credit card receivables at the end of that period. The charge-off policy may vary among authorized institutions. 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). To facilitate comparison among AIs (especially for those which may provide charge-offs at different intervals during the year), the charge-off ratio is annualised.
- The delinquency ratio provides an early indication of the quality of the credit card portfolio while the charge-off ratio measures the gross credit loss of that portfolio to an authorized institution over a specified period of time. The two ratios are complementary to each other in that the delinquency ratio takes into account those credit card receivables overdue for more than 90 days and not yet written off, whereas the charge-off ratio relates mainly to seriously overdue receivables (e.g. overdue for more than 180 days) that were written off during the specified period. Since the charge-off ratio is annualised but the delinquency ratio is measured based on the month-end position, the former is usually greater than the latter.
- Rollover amount of a credit card account is the amount outstanding at the previous statement date less any amount paid between the previous statement date and the current statement date.
- Accounts with rollover amount are those accounts in respect of which the cardholder has repaid at least the minimum amount of payment required by the authorized institution but has not fully repaid the statement balance. Such accounts are not regarded as 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.
