19 Jul 2012

Minimal growth in Canadian consumer debt in second quarter: Equifax Canada Credit Trends Report

Toronto, ON, Thursday, July 19, 2012 - According to Equifax Canada’s National Credit Trends report, the growth in Canadian non-mortgage debt in the 12 months ending June 2012 was 30 per cent lower than the growth witnessed a year earlier. 

The report stated credit card balances continued to decrease, while other credit products such as bank loans and lines of credit showed very moderate growth compared to the same period last year. 

Total consumer non-mortgage indebtedness in Q2 2012 increased by 3.1 per cent in the last 12 months, compared to a growth of 4.4 per cent in the same period last year. 

“It is very encouraging to see non-mortgage consumer indebtedness increase at a very moderate rate with most of the growth coming from people’s existing credit facilities, as opposed to opening new accounts,” says Nadim Abdo, Vice President, Consulting and Analytical Services, Equifax Canada. “We are also seeing a continued decrease in serious consumer delinquency and bankruptcy.” 

The credit product which showed the largest increase in outstanding balances was Non-Bank Auto Finance loans and leases, which grew by 8 per cent over the same period last year. 

“According to our Credit Seeking Index, which measures the velocity at which consumers are seeking new credit facilities, consumer demand for new credit is now 6 per cent lower than it was prior to the recent financial crisis in 2008, with most of the growth being attributed to Non-Bank Auto Finance loans and leases,” notes Abdo.  

For detailed graphs, please go to:

http://www.equifax.com/international/canada/Consumer_Credit Trends_Q22012.pdf

 Some other findings:

  • Average Credit Card debt has continued to decrease for the past seven quarters. It decreased by 3.8 per cent in Q2 2012 from the same period last year.

  • Average Bank Installment loans grew by 3.4 per cent over same period last year and average Bank Revolving Loans (Lines of Credit) grew by only 0.5 per cent.

  • 90 day delinquencies continued to improve and have decreased to a rate of 1.37 per cent as of June 30, 2012.

  • Consumer bankruptcies have also continued to improve and have decreased by 4.5 per cent from the same period last year.