Citibank says Hong Kong credit card spending dropped in August amid protests
- Industries such retail, restaurants and hotels ‘quite quiet’, executive says
- Drop follows a 11.4 per cent year-on-year slump in Hong Kong’s July retail sales
Citibank, Hong Kong’s largest foreign lender, said credit card spending on retail had dropped in recent months, with the special administrative region hit hard by 13 weeks of unprecedented social unrest.
The bank, a major credit card issuer in the city, found spending by its credit card customers on retail purchases had dropped year on year in August, Lawrence Lam, consumer business manager at Citibank (Hong Kong), said on Wednesday. He was speaking at the unveiling of new digital services.
Lam, however, did not provide details. He said the current “environment is quite quiet, especially in some of the industries like retail, restaurant and hotel sectors”, and did not rule out a further decline in September.
The drop follows a 11.4 per cent year-on-year slump in Hong Kong’s July retail sales. The city’s tourist arrivals too dropped 4.8 per cent in July, according to government data.
The city’s airport as well as popular shopping and tourist districts, such as Tsim Sha Tsui, Mong Kok and Causeway Bay, have been targeted by protesters, which appears to have discouraged spending by tourists and locals alike.
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The latest industry data only reflects the situation until the end of June, and does not show the affects of the more violent protests in July. In fact, Hong Kong’s total credit card receivables increased 2.7 per cent year on year in the second quarter to HK$132.1 billion (US$16.85 billion) as of June 30, according to the Hong Kong Monetary Authority, the city’s de facto central bank.
Hong Kong, which has already seen its second-quarter gross domestic product drop 0.3 per cent from the previous quarter, may report a further decline in the third quarter, which will mean it has entered a phase of technical recession.
The bank has partnered with a number of companies, such as Zurich Insurance and data company AA Stocks, to provide banking services to customers on their smartphone apps. Expanding its mobile services has helped Citibank capture new customers since 2010, Lam said.
