Global Credit Trends
Executive Summary
Here are the top three trends from across the globe in 2022:
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
Non-Mortgage: Includes Buy Now Pay Later, credit cards, installment loans, personal loans and automobile loans. Availability and coverage will vary by 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 7.5% in January 2023 (12.4% for credit cards)
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
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
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 in delinquencies 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