Global Credit Trends

   North America

 Canada: The mortgage market remained strained due to high interest rates through 1H’24. Although new mortgage originations improved by 21.3% from 2023 lows, they were still well below typical second-quarter levels

  South America

 Argentina: Demand is showing signs of stabilization, building upon the positive trajectory observed since the start of 2024, although with a slight increase

 Ecuador: Non-mortgage demand presents a slight increase compared to Q1, reflecting the first trimester without a fall since 2022

   Europe

  Spain: Credit demand in Spain is stable with respect to 1H’23

  Oceania

  Australia: The decline in secured credit growth is expected to persist, with mortgage originations falling by 2% compared to last year, mirroring the decrease seen in the previous quarter. This trend is likely to continue due to significant reduction of refinancing activity compared to last year

  New Zealand: Mortgage demand softened in Q2, falling back from the stronger levels seen at the end of last year and beginning of this year — largely echoing the trends seen in house prices. Personal loan demand was also weak in Q2 on the back of more individuals believing it a poor time to buy a major household item — with the weakness most prominent in younger borrowers  

  India: Mortgage demand continued to increase with a growth of 8% in demand compared to the last year. Unsecured loans which were having a huge run up in growth have seen a softening in growth after the central bank’s tightening of monetary policies by 10%  

   Card Utilization

  United States: Credit card utilization is around ~21% — 50 bps higher than a year ago — on the back of increased credit limits, with total credit card limits 8% higher than a year ago, and balances 8% higher than a year ago

  Canada: Huge growth in new originations coupled with increasing credit limit on new cards is keeping credit card utilization flat

  Argentina: Lower credit card utilization (-7%) due to an increase in credit card limit, but constant spending

  Ecuador: Credit card utilization remains stable due to increase in credit limits in the overdebt sector. Total credit card debt increased 2.2% in Q2’24, attributable to the persistent stagnation in the labor market recovery

   Delinquency

 United States: Credit card delinquency is nearing pre-pandemic levels after a runup in 2023. Severe delinquency rates (60+ DPD $ delinquencies ex: write-offs) stand at 1.8%. Newer vintages are still exhibiting higher delinquency rates vs. those vintages originated during the pandemic

 Canada: Average credit card balance per consumer continued to grow despite a slowdown in consumer spending. This increase was primarily attributed to a reduction in card pay rates, with consumers under 35 years of age seeing the fastest decline in card payment levels

 Brazil: The delinquency rate for credit card remains stable in 1H’24, after a few quarters of increase

 India: The delinquency for credit cards has gone up by 17 bps YoY; credit card stress is increasing in the Indian economy

   North America

  United States: Non-mortgage delinquency continues to decrease across most lending products, indicating the increase in delinquency since mid 2022 is slowing. Mortgage delinquency is still lower than in pre-pandemic levels. Subprime delinquency remains elevated

  Canada: One in 23 consumers are missing a payment on at least one credit product in Q2’24, up from one in 25 a year ago. Overall, the non-mortgage balance delinquency rate sat at 1.4% surpassing peak 2020 levels, and the highest since 2011 — rising 23.4% compared to Q2’23

  South America

  Argentina:  Delinquency has remained stable in 1H’24, as the economic environment is affecting payment capacity

  Ecuador:  Personal loans delinquency rate has continued to increase due to the deterioration of people's ability to pay

  Brazil:  The delinquency rate for auto and personal loans increased a little, around 3%, compared to Q1’24

   Europe

  United Kingdom: After a prolonged period of growth as a result of interest rate pressures, mortgage delinquency rates have stabilized since the turn of the year. This welcome pause in the upward trend suggests that consumers may be adjusting to the higher cost of borrowing. Similar stability in delinquency trends has been observed across various account types

  Oceania

  Australia:  Delinquencies are still increasing but gradual. The slow increase in mortgage delinquencies reflect resilience demonstrated by Australian consumers over the past two years. If unemployment rises further, mortgage delinquencies are expected to increase more rapidly in the coming months

  New Zealand:  Delinquencies are up over the long-run noting the economic environment; however the Q2’24 levels for all products were flat (if not down) compared to Q1’24. The majority of mortgage borrowers have absorbed the pressure, noting the 90 day delinquency level is well below the GFC and the deterioration over the last few years is rolling off historically low levels (2016-2020)

  India:  Mortgage delinquency saw a 13 bps decline YoY. Non-mortgage loans saw a 5-10 basis points increase across products, this is due to the higher demand-supply dynamics in the small ticket loan segment