TransUnion has reported mixed trends in the Hong Kong consumer credit market in Q1 2026, with steady growth in credit cards and personal loans offsetting sharp contractions in revolving lines.
The credit bureau’s latest Hong Kong Industry Insights Report indicates that consumer repayment behaviour remained stable, and lenders have adopted more disciplined underwriting for higher-risk unsecured products.
This shift occurs against a backdrop of 5.9% GDP growth in the first quarter, the strongest performance in nearly five years. Inflation remained steady at 1.7%.
Credit card momentum and Gen Z growth
Hong Kong’s credit card market maintained its spending momentum despite a 2.1% year-on-year drop in total card accounts, which lenders attributed to the closure of dormant facilities.
Outstanding card balances rose 4.9% year-on-year, and the average balance per consumer increased by 3.6%.
Younger consumers took on a larger role in the market, with Generation Z accounting for 29.4% of new card originations, up from 26.3% a year ago.
Risk metrics remained stable, with balance-level delinquency rising by just 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.
Sun noted that card issuers should focus their account management programmes on maintaining or increasing their share of wallet to drive profitable balance sheet growth.
Personal loans expand as lenders target access
The personal loan segment showed strong supply growth, with new loan amounts increasing 12.1% year-on-year in the first quarter.
This drove a 3.6% rise in total outstanding balances and a 1.3% increase in total personal loan accounts.
Lenders reported improving portfolio performance, as delinquencies fell at both the account and consumer levels.
Enquiries for new loans increased by 2.7% year-on-year in the first quarter, signalling renewed consumer demand following a slight slowdown at the end of 2025.
Revolving credit and card loans contract
In contrast to cards and personal loans, originations for revolving lines dropped 40% year-on-year, continuing a trend seen throughout 2025.
The report noted this 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. This drove a 24.8% increase in the average limit on newly opened accounts.
Outstanding balances for revolving lines decreased by 1.6%, and the number of consumers carrying a balance fell by 9.7%.
Similarly, the loan on card segment continued to moderate.
Origination volumes fell 28.3% year-on-year in the final quarter of 2025 as some lenders reduced campaign activity.
This pullback contributed to a 12.3% drop in total loan-on-card accounts and a 5.6% decline in outstanding balances in Q1 2026.
However, consumers who continued to use loan on card products borrowed higher amounts, as average opening balances increased by 11.7%.
“These trends reflect that the Hong Kong financial services market is becoming more balanced rather than broadly expansionary,”
Sun added.
He said lenders should prioritise capturing growth in stronger segments while maintaining discipline in underwriting and portfolio management.
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