Research and Statistics Department Monetary Authority of Macao Since December 2006, the Monetary Authority of Macao has conducted the Credit Card Survey (CCS) on a regular basis in view of the growing popularity of the electronic payment in the SAR. The first batch of CCS statistics was subsequently released to the public in May 2007. Starting from this issue of the Macao Monetary Research Bulletin, a report on Macao s latest credit card statistics will be published on a semi-annual basis. The regular dissemination of the CCS Report aims to facilitate a better understanding of the credit card activity and analyses of the consumption behaviours of Macao residents and tourists. It also helps monitor risks of the unsecured bank credit to individuals. 1. Composition of Credit in Circulation The total number of credit cards in circulation reached 319,835 at the end of June 2007, up 3.42% from three months ago or 5.59% from half a year earlier. By currency, Pataca (MOP) cards were the dominant type. The number of MOP cards was 249,142 at end-june 2007, accounting for 77.90% of the total number of cards in circulation. Meanwhile, the numbers of Hong Kong Dollar (HKD) cards, Renminbi (RMB) cards and other foreign currency (OFC) cards were 63,710, 6,980 and three respectively (Chart 1). - 67 -
RMB cards recorded the fastest growth in the second quarter of 2007 (Table 1). Their number advanced 4.80% during the period. The numbers of MOP cards and HKD cards also gained 3.90% and 1.47% in respective order. The number of OFC cards, on the other hand, stayed at a meagre level of three. As illustrated in Table 1, similar growth patterns were observed in the first quarter of 2007. In the first six months of 2007, the numbers of RMB, MOP and HKD cards surged 9.89%, 6.37% and 2.22% respectively. Chart 1: Number of Credit in Circulation, End-June 2007 MOP 249,142 HKD 63,710 RMB 3 6,980 Other Currency As at the end of June 2007, the number of primary cards amounted to 293,938, representing a quarter-to-quarter growth of 3.49%. Within this total, MOP primary cards increased 3.96% while HKD and RMB primary cards registered respective growth of 1.52% and 4.46%. Their absolute numbers reached 230,575, 56,518 and 6,843 respectively. Compared with end-2006, the numbers of MOP, HKD and RMB primary cards grew 6.29%, 2.27% and 9.10% respectively. Primary cards made up 91.90% of all credit cards circulating in Macao at the end of June 2007, when the number of supplementary cards reached 25,897. - 68 -
Table 1: Number of Credit in Circulation End- 2006 (1) End- March 2007 (2) End- June 2007 (3) (2)/(1) (3)/(2) (3)/(1) (a) Primary 278,478 284,012 293,938 1.99 3.49 5.55 -MOP 216,939 221,785 230,575 2.23 3.96 6.29 -HKD 55,265 55,674 56,518 0.74 1.52 2.27 -RMB 6,272 6,551 6,843 4.45 4.46 9.10 -OFC 2 2 2 0.00 0.00 0.00 (b) Supplementary 24,428 25,232 25,897 3.29 2.64 6.01 -MOP 17,287 18,010 18,567 4.18 3.09 7.40 -HKD 7,060 7,112 7,192 0.74 1.12 1.87 -RMB 80 109 137 36.25 25.69 71.25 -OFC 1 1 1 0.00 0.00 0.00 (c)=(a)+(b) Total Number of 302,906 309,244 319,835 2.09 3.42 5.59 -MOP 234,226 239,795 249,142 2.38 3.90 6.37 -HKD 62,325 62,786 63,710 0.74 1.47 2.22 -RMB 6,352 6,660 6,980 4.85 4.80 9.89 -OFC 3 3 3 0.00 0.00 0.00-69 -
2. Financial Analysis of Credit Card Lending The financial status of credit card lending by banks in Macao is depicted in Table 2. At the end of the second quarter of 2007, credit card credit limit granted by banks in Macao reached MOP5.58 billion, 3.43% up on end-march 2007. Meanwhile, credit card receivables (including purchases and cash advances) amounted to MOP839.01 million, representing a 5.05% increase over three months ago. An utilisation rate of 15.04% was thus registered, while the rate at the end of the preceding quarter was marginally lower at 14.80%. In the second quarter of 2007, the credit card turnover totalled MOP1.14 billion, up 0.25% over last quarter. The cash advance turnover, which indicates financial stress of cardholders, occupied 9.30% of the total credit card turnover, slightly higher than the 8.44% registered in the previous quarter. On the other hand, credit card repayments slid 4.38% from the previous quarter to MOP1.16 billion. For the first half of 2007, the credit card turnover, cash advance turnover and credit card repayments grew 6.77%, 17.17% and 10.51% respectively, compared with the second half of 2006. The rollover amount, which represents borrowing by cardholders and a significant source of interest income for banks from credit card lending, reached MOP369.10 million at the end of the second quarter of 2007. The rollover amount made up 43.99% of credit card receivables, equivalent to a decrease of 2.19 percentage points over a quarter ago. At the end of the second quarter, the delinquent amount totaled MOP3.11 million. The delinquency ratio dropped further to 0.37%, in the sense that about 0.37% of credit card loans were granted to cardholders who did not meet their minimum repayment for 90 days or more. Decrease in delinquency ratio was generally observed in most credit institutions, showing an improvement in credit card lending quality. - 70 -
Table 2: Credit Card Lending 2006 H2 (1) 2007 H1 (2) 2007 Q1 (3) 2007 Q2 (4) (4)/(3) (2)/(1) (a) Credit limit granted* (b) Credit card receivables* (c)=(b)/(a) Utilisation rate* (d) Rollover amount* (e)=(d)/(b) Rollover ratio* (f) Credit card turnover (g) Cash advance turnover (h)=(g)/(f) Cash advance to credit card turnover ratio 5,222,886 --- 5,394,977 5,579,886 3.43 --- 836,453 --- 798,643 839,005 5.05 --- 16.02 --- 14.80 15.04 0.23 --- --- --- 368,856 369,098 0.07 --- --- --- 46.19 43.99-2.19 --- 2,138,864 2,283,758 1,140,467 1,143,291 0.25 6.77 172,897 202,585 96,217 106,368 10.55 17.17 8.08 8.87 8.44 9.30 0.87 0.79 (i) Repayments 2,152,001 2,378,246 1,215,721 1,162,525-4.38 10.51 (j) Delinquent amount* (k)=(j)/(b) Delinquency ratio* 5,078 --- 3,687 3,112-15.60 --- 0.61 --- 0.46 0.37-0.09 --- Notes: (i) *Period end figures. (ii) Unit in thousand patacas except for ratios. 3. Household Consumption and Credit As shown in Table 3, the proportion of credit card turnover to household final consumption expenditure stayed at about 14% during the second half of 2006 and the first half of 2007. In the second quarter of 2007, the credit card turnover to household - 71 -
final consumption expenditure ratio slid by 0.98 percentage points to 13.84%, attributed to the 6.30% gain in household final consumption expenditure and a mild 0.70% decrease in the credit card turnover. Table 3: Private Consumption versus Consumption by Credit Card 2006 H2 (1) 2007 H1 (2) 2007 Q1 (3) 2007 Q2 (4) (4)/(3) (2)/(1) (a) Household final consumption expenditure 13,487,808 14,540,363 7,048,272 7,492,091 ** 6.30 7.80 (b) Credit card turnover* 1,965,967 2,081,173 1,044,250 1,036,923-0.70 5.86 (c)=(b)/(a) Credit card turnover to household final consumption expenditure ratio 14.58 14.31 14.82 13.84-0.98-0.26 Notes: (i) * Excluding cash advances; ** Preliminary figure. (ii) Unit in thousand patacas except for ratios. (iii) Data of household consumption expenditure at current prices are from Statistics and Census Service (DSEC). As indicated in Table 4, the credit card lending as a percentage of the domestic credit to individuals for purposes other than house purchases was 14.52% at end-june 2007. This proportion was 0.24 percentage points lower from the previous quarter. The quarter-to-quarter growth was 5.05% for credit card lending, compared with 6.77% for the domestic credit to individuals for purposes other than house purchases. - 72 -
Table 4: Domestic Credit to Individuals for Purposes Other Than House Purchases Versus Credit Card Lending End-2006 (1) End- March 2007 (2) End-June 2007 (3) (3)/(1) (3)/(2) (a) Domestic credit to individuals for purposes other than house purchases 5,399,298 5,411,256 5,777,785 7.01 6.77 (b) Credit card receivables 836,453 798,643 839,005 0.31 5.05 (c)=(b)/(a) Credit card receivables as a percentage of domestic credit to individuals for purposes other than house purchases 15.49 14.76 14.52-0.97-0.24 Note: Unit in thousand patacas except for ratios. 4. Credit Card Transactions in Macao The number of Macao merchants accepting credit card payments increased from 4,509 at end-december 2006 to 4,546 at end-june 2007. Compared with end-march 2007, however, it decreased by 3.09%. Credit card schemes are normally operated at an international level in the sense that cardholders can make payments for purchases across countries. The local merchant turnover, including purchases with local and foreign credit cards, amounted to MOP6.04 billion in the second quarter of 2007, up 0.49% quarter-to-quarter. Meanwhile, the average turnover per merchant surged quarter-to-quarter by 3.70% to MOP1.33 million in the second quarter of 2007. For the first six months of 2007, the local merchant turnover and average turnover per merchant grew 20.62% and 19.64% respectively compared with the second half of 2006. - 73 -
Table 5: Local Merchant Turnovers 2006 H2 (1) 2007 H1 (2) 2007 Q1 (3) 2007 Q2 (4) (2)/(1) (4)/(3) (a) Number of local merchants accepting credit cards* (b) Local merchant turnover by credit cards (c)=(b)/(a) Average turnover per merchant 4,509 4,546 4,691 4,546 0.82-3.09 9,995,712 12,056,708 6,013,525 6,043,183 20.62 0.49 2,217 2,652 1,282 1,329 19.64 3.70 Notes: (i) * Period end figures. (ii) Unit in thousand patacas except for ratios. 5. Conclusion The number of credit cards in circulation has grown steadily since the second half of 2006. The local merchant turnover by credit cards advanced although the number of merchants accepting credit cards did not show any significant increase during the survey period. Meanwhile, the credit limit granted and credit card repayments grew at a steady pace. The financial status of credit card lending witnessed some improvement as shown in lower delinquency and rollover ratios. - 74 -
Annex Notes METHODOLOGY AND DATA SOURCES Credit card is defined as a plastic card used to purchase goods and services and to obtain cash advances on credit for which the cardholder is subsequently billed by the issuing institution for repayment of the credit extended. Credit card statistics of Macao cover general-purpose credit cards issued to individuals by reporting authorised credit institutions or agencies of their subsidiaries, affiliated companies or off-shore head offices in Macao. The statistics do not cover charge cards, debit cards, private label cards and corporate cards. The AMCM surveyed all 26 authorised commercial banks plus the Caixa Económic Postal operating in Macao. The credit card statistics consist of four parts: (i) the composition of credit cards in circulation (ii) the financial status of credit card lending (iii) household consumption and credit, and (iv) credit card transactions in Macao. GLOSSARY Cardholder A person who is authorised to use credit cards for payments of goods and services. Agent bank A bank that, by agreement, participates in another bank s card programme, usually by turning over its applicants for bank cards to the bank administering the card programme and by acting as a depository for merchants. Issuer An institution (or its agent) that issues credit cards to cardholders, sometimes, referred to as the issuing bank. - 75 -
Merchant A firm agrees to accept credit cards for payments of goods and services. Credit limit granted The value of approved credit limits for credit cards, whether used or unused. Credit card receivables Total value of outstanding balances owed on credit cards, whether or not incurring interest charges. Utilisation rate The rate of credit card receivables as a percentage of credit limit granted. Rollover amount The amount within total receivables in respect of which the cardholder has not fully repaid the statement balance but has at least made the minimum amount of payment required by the authorised institution. It does not include amounts that are overdue. Credit card turnover Aggregate transaction amount of cardholders, including retail purchases and cash advances. Cash advances Transaction in which cash is received by a cardholder, typically at an ATM, and billed to a credit card account. Repayments All payments for the credit card account balances owed, including payments of retail purchases, cash advances, revolving interest, annual fee and all other charges billed to the account. Delinquent amount Receivables that have been overdue for over 90 days. - 76 -
Overdue A payment is past due, i.e. the cardholder fails to pay the minimum amount at the payment due date. General purpose credit card Credit card issued under the trademark of a credit card association, e.g. Visa, Master, China Unionpay, and accepted by many merchants. - 77 -