Rising bankruptcy petitions helped to drive up Hong Kong's annualised charge-off ratio for credit cards for the second consecutive quarter in the three months to June, the Hong Kong Monetary Authority said.
The annualised charge-off ratio or the amount of credit card debt written off as proportion of total card debt rose to 3.28 per cent in the second quarter from 2.89 per cent in the previous three months.
'The increase was largely due to write-offs in relation to bankruptcy petitions during the quarter,' the authority said yesterday.
Bankruptcy petitions surged 10 per cent to 2,722 in the second quarter compared with the same period last year and 9.8 per cent from the previous quarter.
The amount of money involved in bankruptcies increased as well as the number of petitions because many lenders had increased credit line for their clients as the economy improved, said Sunny Cheung Yiu-tong, head of consumer banking at DBS Bank (Hong Kong). The authority did not release the amount of money involved in the petitions.
The charge-off ratio would continue to increase in the third and fourth quarters to 3.5 per cent to 4 per cent, Mr Cheung said.