SOURCE: TransUnion

TransUnion

November 13, 2013 11:25 ET

TransUnion: Personal Debt Levels Rise, Though Major Canadian Metro Areas See Stabilization

The Following Release Was Originally Scheduled for Thursday, November 14 but Due to an Embargo Error It Is Being Distributed on Wednesday, November 13, 2013

TORONTO, ON--(Marketwired - Nov 13, 2013) - TransUnion's quarterly analysis of Canadian credit trends found that the average consumer's total debt (excluding mortgage) in Q3 2013 increased $225 to $27,355. This quarterly increase of 0.83% was in line with the rise observed in Q2 2013 after a significant decline (-2.00%) experienced in the first quarter of 2013. On a year-over-year basis, total debt increased 2.19% from $26,770 in Q3 2012. 

Despite the increase, two of the country's largest cities -- Toronto and Vancouver -- experienced both quarterly and yearly declines in average consumer total debt. Montreal, the country's second largest city by population, saw minimal rises on both a quarterly and yearly basis. The only major city to experience a rise in debt greater than the national average was Edmonton, with total debt rising 4.6% in the last year.

                             
Avg Consumer
Debt
  Q3 2012   Q4 2012   Q1 2013   Q2 2013   Q3 2013   Q/Q Chg   Y/Y Chg
Calgary   $37,425   $39,824   $38,419   $38,167   $37,920   -0.65%   1.32%
Edmonton   $30,255   $33,005   $31,719   $31,625   $31,658   0.10%   4.64%
Montreal   $18,393   $19,651   $18,293   $18,495   $18,527   0.17%   0.73%
Ottawa   $24,395   $25,393   $24,273   $24,467   $24,438   -0.12%   0.18%
Toronto   $24,078   $25,395   $23,833   $24,127   $24,067   -0.25%   -0.05%
Vancouver   $40,813   $38,357   $40,390   $40,412   $40,174   -0.59%   -1.57%
                             
                             

"While we saw a rise in total debt on both a quarterly and yearly basis for the nation, it is a positive sign that Canada's largest metropolitan areas appear to be getting a better handle on their total debt picture," said Thomas Higgins, TransUnion's vice president of analytics and decision services. "Having said that, we still foresee a significant increase in average consumer debt through the end of the year. This rise is due to traditional debt patterns in the fourth quarter where more consumers take on debt during the holiday shopping season."

The increase in average debt varied throughout Canada, with provinces experiencing year-over-year changes from a low in BC of -0.40% to a high in Saskatchewan of 15.49%. 

                             
Avg Consumer
Debt
  Q3 2012   Q4 2012   Q1 2013   Q2 2013   Q3 2013   Q/Q Chg   Y/Y Chg
Canada   $26,768   $27,485   $26,935   $27,131   $27,355   0.83%   2.19%
British Columbia   $38,837   $37,244   $38,619   $38,672   $38,682   0.03%   -0.40%
Alberta   $33,688   $37,377   $36,223   $36,150   $36,200   0.14%   7.46%
Ontario   $25,937   $26,901   $25,735   $25,914   $25,928   0.05%   -0.03%
Quebec   $19,174   $20,102   $19,131   $19,455   $19,695   1.23%   2.72%
                     
                             

Consumer Debt - Quarterly/Yearly
Total consumer debt increases were seen across all product categories.

  • Canadian average credit card borrower debt (defined as the aggregate balance on all credit cards for an individual bankcard borrower) posted a quarterly increase of 1.82%, helping to post the consecutive year over year increases (2.13%).
  • Canadian lines of credit (LOC) borrower debt (defined as the aggregate balance on all LOC for an individual LOC borrower) was off its year over year growth trend for Q3, up only 0.30%, while posting its third consecutive decrease of -1.41% quarter over quarter.
  • Canadian installment loan borrower debt (defined as the aggregate balance on all installment loans for an individual installment loan borrower) increased 5.51% year over year, its fourth consecutive quarter above 5%, and 1.57% quarter over quarter.
  • Canadian auto borrower debt (defined as the aggregate balance on all auto captive loans for an individual auto captive borrower) increased 3.17% year over year, continuing its decelerating growth path over the past several quarters (1.63% quarter over quarter).

"The big story on the consumer debt front is that despite an overall increase in balances, lines of credit borrowers continue to buck the trend, with balances dropping for three consecutive quarters," said Higgins. "This is important because lines of credit make up about 40% of all consumer debt, when excluding mortgages."

                             
    Q1
2012
  Q2
2012
  Q3
2012
  Q4
2012
  Q1
2013
  Q2
2013
  Q3
2013
Credit Cards   $3,462   $3,556   $3,573   $3,637   $3,463   $3,585   $3,650
Lines of Credit   $34,107   $33,721   $34,050   $35,247   $34,951   $34,641   $34,151
Installment Loans   $21,974   $22,493   $22,849   $23,224   $23,269   $23,735   $24,107
Auto Captives   $18,212   $18,881   $19,228   $19,345   $19,172   $19,518   $19,837
                             
                             

Consumer Delinquencies - Quarterly/Yearly

Delinquency levels remained low for all credit products with lines of credit and auto captives continuing to have the lowest percentages. 

"The relatively low delinquency levels observed in the third quarter are a positive sign that Canadian consumers are managing their greater debt loads," said Higgins. "Credit card delinquencies saw the biggest decline on a percentage basis in the last year, which is a positive as we embark on the final three months of the year when credit card usage tends to pick up."

                             
    Q3 2012   Q4 2012   Q1 2013   Q2 2013   Q3 2013   Q/Q Chg   Y/Y Chg
Credit Cards   0.30%   0.30%   0.32%   0.24%   0.24%   0.93%   -18.4%
Lines of Credit   0.19%   0.18%   0.18%   0.17%   0.18%   4.62%   -6.31%
Installment Loans   1.22%   1.18%   1.18%   1.14%   1.26%   10.35%   3.25%
Auto Captives   0.10%   0.10%   0.10%   0.10%   0.11%   12.99%   12.32%
                             
                             

Three Highest Delinquency Provinces

             
Credit Cards   Lines of Credit   Installment Loans   Auto Captives
PEI 0.51%   BC 0.24%   BC 1.64%   MB 0.26%
NB 0.43%   AB 0.23%   AB 1.35%   NB 0.18%
NS 0.36%   PEI 0.24%   PEI 1.85%   PE 0.23%
             
             

Three Lowest Delinquency Provinces

             
Credit Cards   Lines of Credit   Installment Loans   Auto Captives
QC 0.18%   QC 0.10%   QC 0.45%   QC 0.06%
SK 0.21%   NL 0.12%   NL 1.04%   BC 0.07%
BC 0.25%   SK 0.13%   SK 1.00%   NL 0.07%
             
             

TransUnion's Market Trends
TransUnion's Market Trends is an in-depth, full sample solution that provides statistical information every quarter from TransUnion's national consumer credit database, culled from anonymous credit files. Each Canadian consumer record contains hundreds of credit variables that illustrate consumer credit usage and performance. By leveraging Market Trends, customers from a variety of industries can analyze industry trends over an entire business cycle, helping to understand consumer behaviour in different geographic locations throughout Canada. 

About TransUnion
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Based in Burlington, Ontario, with global headquarters located in Chicago, Illinois, TransUnion provides local service and support throughout Canada. Visit www.transunion.ca to learn more.

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