In the latest credit card lending survey released by the Hong Kong Monetary Authority (HKMA), figures for the fourth quarter of 2023 showed a significant uptick in credit card usage among Hong Kong residents.
Total card receivables soared by 8.5% to HK$160.1 billion at the end of December 2023, a clear indication of heightened consumer spending during the festive season and the period for salaries tax payment.
The number of credit card accounts saw a modest increase, ending the quarter with 17,261,000 accounts, marking a 0.3% rise from the previous quarter and a 1.2% year-over-year growth. This gradual increase in accounts underscores the steady adoption of credit card usage among consumers.
Despite the surge in spending, the credit quality of credit card portfolios showed marginal fluctuations. The combined delinquent and rescheduled ratio, which offers an early glimpse into the health of credit card loans, inched up slightly to 0.34% from 0.33% in the third quarter.
Meanwhile, the charge-off ratio, representing debts deemed unrecoverable by banks, also saw a minor increase to 0.49% from 0.47%, suggesting a slight rise in credit losses.
The survey also highlighted the ongoing trend of credit card rollovers, with the rollover amount reaching HK$25,775 million. This represents scenarios where cardholders have not fully settled their statement balances but have made the minimum payments required. The rollover ratio stood at 16.1%, indicating a consistent level of revolving credit usage among cardholders.
This latest report from the HKMA encompasses data from authorized institutions and select subsidiaries engaged in credit card business, providing a comprehensive overview of the credit card lending landscape in Hong Kong.
It does not include card issuers not related to these institutions, offering a focused insight into the market dynamics influenced by established financial entities.
The findings reflect not only the robust consumer confidence that led to increased spending during the final quarter of 2023 but also the resilience of the credit card market in managing credit quality amidst rising receivables.
As Hong Kong’s economy continues to navigate through various challenges, the credit card sector remains a critical component in understanding consumer behavior and financial health.