TransUnion reported that in the first quarter of 2026 Hong Kong saw mixed movements across consumer credit products, with growth in credit card balances and personal loan originations, sharp contractions in revolving lines, and an increased share of new card originations coming from the Gen Z cohort.
KEY TRENDS REPORTED
In its Hong Kong Industry Insights Report for Q1 2026, TransUnion reported mixed trends in the Hong Kong consumer credit market. Outstanding card balances rose 4.9% year on year and new personal loan amounts increased 12.1%, which contrasted with a 40% year-on-year drop in revolving-line originations. The report also noted that consumer repayment behaviour remained broadly stable during the period.
Younger consumers took on a larger role in the card market. Generation Z accounted for 29.4% of new card originations in the quarter, up from 26.3% a year earlier.
TransUnion said lenders had adopted more disciplined underwriting for higher-risk unsecured products.
RISK AND PRODUCT DETAIL
Risk metrics on cards remained stable, with balance-level delinquency rising by one basis point to 0.23%. “The credit card portfolio reflects a healthy balance of resilient spending and stable risk,” said Weihan Sun, Senior Director of Research and Consulting for Asia Pacific at TransUnion.
In personal loans, the rise in new loan amounts drove a 3.6% increase in total outstanding balances and a 1.3% increase in total personal loan accounts, while delinquencies fell at both the account and consumer levels. Enquiries for new loans rose 2.7% year on year.
The report said the 40% fall in revolving-line originations followed digital banks scaling back low-limit product offerings after a period of elevated delinquencies. Traditional lenders and money lenders took a larger share of the remaining originations, driving a 24.8% increase in the average limit on newly opened accounts.
Outstanding revolving-line balances decreased by 1.6% and the number of consumers carrying a balance fell by 9.7%. In the loan-on-card segment, total accounts fell 12.3% and outstanding balances 5.6% in Q1 2026.
The figures came against a backdrop of 5.9% GDP growth in the first quarter, the strongest in nearly five years, with inflation steady at 1.7%.
“These trends reflect that the Hong Kong financial services market is becoming more balanced rather than broadly expansionary,” Sun said, adding that lenders should prioritise capturing growth in stronger segments while maintaining discipline in underwriting and portfolio management.
Sources: Fintech News HK