TransUnion: Personal Debt Levels Shifting Back to Growth Mode
TORONTO--(Marketwire - Aug 23, 2012) - TransUnion's quarterly analysis of Canadian credit trends found that the average consumer's total debt (excluding mortgage) rose modestly, increasing by $192 in Q2 2012 to $26,221. Although this continues the trend of inflationary growth seen in the past five quarters, Q2 2012 is still the highest debt level per person seen to-date. The nation has now experienced consecutive quarters of accelerated growth when comparing both quarter over quarter (0.74%) and year over year (2.41%) numbers, possibly marking yet another turning point in the directionality trend for consumer debt.
"We are in a unique situation because while it is somewhat disconcerting to see average consumer total debt reach its highest level since we've been tracking this variable, Canadian consumers appear to be able to manage this debt as delinquency levels have dropped across all of the major credit vehicles," said Thomas Higgins, TransUnion's vice president of analytics and decision services. "It's quite possible that this is a trend that will continue as consumers take advantage of the low interest environment. However, if there are any sudden economic shifts such as a significant rise in unemployment, then it's quite conceivable that delinquencies will rise with debt levels."
The increase in average debt was consistent throughout Canada. All provinces experienced increases during the quarter except Saskatchewan. On a year-over-year basis, only Alberta posted a decreased annual growth rate in Q2 2012 versus Q2 2011, which constituted the third consecutive quarter where debt levels decreased from the prior year.
| Avg Consumer Debt | Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | Q/Q Chg | Y/Y Chg | |
| British Columbia | $36,820 | $36,588 | $37,276 | $37,433 | $37,879 | 0.2% | 2.9% | |
| Alberta | $34,081 | $33,182 | $33,613 | $33,515 | $33,564 | 1.2% | -1.5% | |
| Ontario | $24,721 | $24,540 | $25,135 | $25,235 | $25,447 | 0.8% | 2.9% | |
| Quebec | $18,269 | $18,751 | $18,376 | $18,475 | $18,580 | 0.6% | 1.7% | |
| Saskatchewan | $26,902 | $27,287 | $27,755 | $27,811 | $27,699 | -0.4% | 3.0% | |
Consumer Debt - Quarterly/Yearly
Despite year-over-year growth on total consumer debt, directional changes in debt levels varied for several credit instruments.
- Canadian average credit card borrower debt (defined as the aggregate balance on all credit cards for an individual bankcard borrower) declined 0.93% year over year, but increased 2.70% on a quarter-over-quarter basis.
- Canadian lines of credit (LOC) borrower debt (defined as the aggregate balance on all LOC for an individual LOC borrower) decreased 0.40% year over year, with a 1.13% drop quarter over quarter.
- Canadian installment loan borrower debt (defined as the aggregate balance on all installment loans for an individual installment loan borrower) increased 0.95% year over year and 2.37% quarter over quarter.
- Canadian auto borrower debt (defined as the aggregate balance on all auto captive loans for an individual auto captive borrower) increased more than 13.25% year over year and 3.67% quarter over quarter.
| Q1 2011 | Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | ||
| Credit Cards | $3,539 | $3,590 | $3,611 | $3,633 | $3,462 | $3,556 | |
| Lines of Credit | $33,762 | $33,855 | $34,122 | $34,340 | $34,107 | $33,721 | |
| Installment Loans | $22,431 | $22,281 | $22,340 | $21,764 | $21,974 | $22,493 | |
| Auto Captives | $16,181 | $16,671 | $17,283 | $17,759 | $18,212 | $18,881 | |
Consumer Delinquencies - Quarterly/Yearly
Delinquency levels continue to remain low across all major product categories.
"Across the board, we saw delinquencies drop on an annual basis," said Higgins. "Auto loan delinquencies stand out most as they are traditionally among the lowest of the major credit types, yet they've continued a downward trajectory even while auto debt experienced significant increases."
| Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | Q/Q Chg | Y/Y Chg | ||
| Credit Cards | 0.33% | 0.32% | 0.31% | 0.32% | 0.29% | -9.23% | -11.76% | |
| Lines of Credit | 0.20% | 0.20% | 0.21% | 0.20% | 0.19% | -6.80% | -7.22% | |
| Installment Loans | 1.27% | 1.32% | 1.27% | 1.24% | 1.24% | 0.00% | -2.36% | |
| Auto Captives | 0.10% | 0.11% | 0.10% | 0.09% | 0.08% | -10.99% | -15.52% | |
Three Highest Delinquency Provinces
| Credit Cards | Lines of Credit | Installment Loans | Auto Captives | |
| PEI 0.50% | BC 0.25% | ON 1.98% | MB 0.22% | |
| NS 0.45% | PEI 0.24% | NS 1.65% | NS 0.14% | |
| NB 0.43% | AB 0.22% | PEI 1.58% | NB 0.13% | |
Three Lowest Delinquency Provinces
| Credit Cards | Lines of Credit | Installment Loans | Auto Captives | |
| QC 0.19% | NL 0.10% | QC 0.46% | NL 0.04% | |
| SK 0.26% | QC 0.12% | NL 0.99% | QC 0.05% | |
| AB/BC/MB 0.29% | NB 0.14% | SK 1.10% | BC/PEI 0.06% | |
Consumer Bankruptcies - Quarterly/Yearly
Consumer bankruptcies in Canada continue to fall back to historical levels after the record year in 2009, though for the first time in eight quarters the rate of decline was below double digits.
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
| Q1 | -3.24% | -1.83% | -3.74% | 2.88% | 34.63% | -15.08% | -14.37% | -8.9% |
| Q2 | 3.13% | -10.35% | 2.23% | 7.39% | 41.25% | <
