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, but at a slower rate as new originations slow down

  Canada: Drop in new mortgage volume is slowing down the increasing mortgage debt levels

  Australia: Drop in property sale price yet to show impact on overall mortgage debt at a national level. Mortgage debt continues to climb; increased 6% and 15% compared to Q4 2021 and Q4 2020, respectively

  Non-Mortgage Debt
 

  United States: Non-mortgage debt has increased almost 9%; Auto loan debt is now almost 7% higher than at the end of 2021

  Canada: Average non-mortgage debt per consumer is at $21,121, an increase of 2.1% compared to Q4 2021

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

  Spain: Continued decrease in debt due to financial government support during pandemic period, and particularly in Q4 due to sales of non-performing assets (Spain only reports defaulted assets)

  Argentina: Non-mortgage debt presents a decrease between Q3 and Q4, mainly caused by movements in inflation and exchange rate. Debt stock has remained stable during 2022

 

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

Strong growth in credit card and personal loan demand across multiple regions.

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

  Mortgage Inquiries
 

 Canada: Younger (under 35 years of age), new to credit consumers driving new credit card growth

 Canada: High interest rates massively slowing down mortgage demand  

 Australia: Largest fall in mortgage demand since pandemic, down 16% compared to elevated demand levels during Q4 2021. Widespread fall in property prices nationwide as consecutive rate hikes and cost of living pressure continues  

 New Zealand: On top of rate pressures, tighter lending requirements introduced in late 2021 contributed towards lower mortgage demand in NZ; Q4 fell 27% YoY. However, despite softening market over 2022, this is 8% below pre-pandemic levels  

  Non-Mortgage Inquiries
 

  United Kingdom & Spain: Credit demand has now reached pre-pandemic levels in the UK compared to 2019, although it is not in the same situation in Spain (~90%)

 UK annual growth rate for all lending at 7.2% in March (12.1% for credit cards) Spain shows an increase in Q4 2022 from previous quarter

  Argentina: Shows an increase of non-mortgage inquiries during the last two quarters of 2022

  Argentina: Financial Institutions have been active in the market, especially in online offerings. Big banks are demonstrating a new trend of pre-approved offers for bank clients, which is generating a large volume of bureau inquiries

 

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

Utilization

Continued moderate increases in card utilization across regions.

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: Non-mortgage debt in Canada surpassed pre-pandemic levels with huge growth in new credit card volume

  United States: While the credit card unit delinquency rate is increasing, it is not quite back to pre-COVID levels. Subprime delinquency rates are showing more significant increases

  Revolving debt
 

 Argentina: Credit card utilization has been stable during 2022. Inflationary adjustments in credit card limits during the last quarter caused a drop in the utilization ratio

 Canada: Credit card utilization is increasing with high consumer spending. It is currently at 22.7%, up 7.3% from Q4 2021

 United States: Subprime credit card utilization has been rising faster than prime and near prime and now exceeds pre-Covid levels

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 loan delinquency has surpassed pre-COVID levels, in both subprime and non-subprime segments

  Bankcard delinquencies are rising across the US YoY but there are differences in the rate of increase by geographic region


  Canada
 

  Consumers with no mortgage are showing early signs of financial stress and are missing payments on non mortgage credit products at a faster rate than consumers with a mortgage

  Mortgage delinquencies remained low

  United Kingdom, Australia & New Zealand
 

  United Kingdom:  Mortgage delinquency rates remain at low levels with many households still on low interest rates, expected increase indelinquencies as consumers roll off fixed rates

  United Kingdom:  Unsecured delinquency rates are starting to rise uniformly, with most product types approaching pre-pandemic levels

  Australia:  Early personal loan delinquency increased by 0.4% compared to Q4 2021. This is likely to rise further due to the after-effects of the holidays season and increasing cost of living

  New Zealand:  Signs of strain on mortgage delinquencies in recent months as home ownership seeks to meet significant increases in mortgage interest payments as they roll off fixed rates

 

  Argentina
 

  Argentina:  Delinquency remains stable during 2022. This market behavior shows the same trend since 2021, according to historical loan delinquency levels

 

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