Economic & Credit Insights

Global Credit Trends

Explore global credit and financial data insights. Delivering trends in credit risk, debt, utilization and delinquencies from around the world.


Executive Summary

Here are the top 3 trends across the globe from the 1st half of 2022:

 

Inflationary pressure visible across countries

 

Personal loan demand and debt levels are increasing due to inflationary pressures. Demand for personal loans in the US has increased by 23% in the last 12 months, compared to an overall non-mortgage debt increase of 7%. In Australia, personal loan demand grew 4% compared to Q2 2021; while Buy Now Pay Later inquiries grew a staggering 42% fueled by emerging entrants to the Australian market. And in Canada, credit card spending is reaching historically high levels with average spend per card consumer up 20% from pre-pandemic (Q2 2019) period.

Mortgage demand is changing

 

Rising interest rates and living costs deter new applications, except for Australia, where new mortgages rose for the first time since the pandemic to 32% of all mortgage inquiries. Home prices were steady in the US and Canada but due to rising interest rates, there is expected to be a decrease in new mortgage and refinances in the coming months.

Delinquencies are on the rise

 

Non-Mortgage debt has been increasing across countries globally driven by demand and inflation. In the US, personal loan debt now accounts for 3% of non-mortgage US debt, compared to 2.6% a year ago. Also in the US, auto loans originated in April 2022 show increased early delinquency after 3 months on book across subprime, near prime and prime loans. In Australia, personal loan early delinquency (30+dpd) hit the highest level since the pandemic at 3.13%.

Overall Debt

Non-Mortgage debt has been increasing across countries globally driven by demand and inflation.

Chart data is indexed as of Q4 2019.
*Data not reported for this region

   Mortgage Debt
 

  United States: Total mortgage debt continued to rise—9% YOY in March

  Canada: Despite a decline in new mortgage volume, Canada’s mortgage debt grew by 9.2% YOY and 2.6% QOQ in Q2 2022

  Australia: Mortgage debt will continue to be elevated as a result of the pandemic property boom

  Non-Mortgage Debt
 

  United States: Personal loan debt has increased significantly in the past year with total balances 17.6% higher YOY. This product now accounts for 3% of non-mortgage US debt, compared to 2.6% a year ago

  Canada: Average non-mortgage debt per consumer is at $21,128 , an increase of 2.4% compared to Q2 2021

  United Kingdom: Consumers paying off credit card debt throughout the pandemic, balances still at below 80% of Jan 2020 levels

  Spain: Continued decrease in debt due to financial government support during pandemic period (Spain only reports defaulted assets)

 

Debt: Money borrowed by consumers at a point in time. Refers to amortized limit or outstanding balance depending on data collected from each region, except Spain which reports just defaulted assets because Spanish Bureau manages negative data only.

Non-Mortgage: Includes Buy Now Pay Later, credit cards, installment loans, personal loans and automobile loans. Availability and coverage will vary by region.

Demand

Climbing non-mortgage demand as cost of living rises. Mortgage demand continues to trend down globally.

Chart data is indexed as of Q4 2019.
*Data not reported for this region

  Mortgage Inquiries
 

 Canada: Non-mortgage credit demand is going up

 Canada: Mortgage broker inquiries are slowing down but the demand is still higher than pre-pandemic  

  Mortgage Inquiries
 

  Australia: AU mortgage demand approaching pre-pandemic levels, Q2 2022 fell 7% compared to the same quarter last year

  New Zealand: Mortgage demand in NZ for the June quarter dropped by 37%, year on year. Despite the softening market, mortgage demand in the June quarter 2022 was still 8.6% higher than the same quarter in Q2 2019  

  Mortgage Inquiries
 

 United Kingdom & Spain: Credit demand has now reached pre-pandemic levels (UK), at around 92% (ES) compared to 2019

  UK Annual growth rate for all lending at 6.5% in March (12.5% for credit cards)

  Non-Mortgage Inquiries
 

  Argentina: After a high increase in the third quarter of 2021, demand of non-mortgage loans has stabilized in 2022 with bigger values for Q2 than Q1

 

Non-Mortgage: Includes Buy Now Pay Later, credit cards, installment loans, personal loans and automobile loans. Availability and coverage will vary by region.

Utilization

Credit limits surpass pre-pandemic levels—moderate increases in card utilization.

Chart data is indexed as of Q4 2019.
*Data not reported for this region

  Rising Card Delinquencies
 

  Overall: Multiple regions are showing an uptick in credit card delinquency

  Canada: Credit card utilization is increasing with high consumer spending. It is currently at 22.3%, up 8% from Q2 2021

  Non-Mortgage Debt
 

 United States: Bankcard utilization is increasing across all score tiers, however has not returned to pre-COVID levels

  The most aggressive increase in credit limits is seen in subprime and nearprime, with a ~18% increase YOY in these segments

 Canada: Average credit limit on new cards is up by 27% when compared to the same time period in 2021

 Argentina: Credit limit increases didn't follow the inflation rate behavior, which can impact the utilization levels. Utilization levels are moving around 35% in the last 3 quarters

Delinquencies

Delinquency rates rising in most regions in varying levels of severity.

Chart data is indexed as of Q4 2019.
*Data not reported for this region

  United States
 

  Auto loans originated in April 2022 shows increased early delinquency after 3 months on book across subprime, near prime and prime loans

  Consumer loans are exceeding pre-Covid delinquency levels. This is due to both score shift (increased subprime underwriting) as well as increased delinquency


  Canada
 

  Credit card and other non-mortgage products are starting to see a rise in account level 90+ delinquency rate

  However, we are not seeing the same uptick in balance level delinquency rate as high debt levels are masking the delinquent balances

  Australia & New Zealand
 

  Cost of living stings AU as personal loan early delinquency (30+dpd) hit highest level since the pandemic at 3.13%

  NZ delinquencies remain low and reasonably stable across all products

 

Delinquency: The delinquency rate refers to the percentage of loans that are 90 or more days past due.
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