TRansUnion Q3 2018 Industry Insights Report (IIR)

TransUnion South Africa introduces the inaugural Industry Insights Report containing latest consumer credit trends

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IIR Q3 2018 Results

  • Newly released figures show slow or declining new account originations, as both consumers and lenders exercise caution in response to economic headwinds
  • Declining delinquency rates across most major consumer lending categories suggest that, despite the economic environment, consumers have been steady in managing their financial obligations

TransUnion’s new report found that home loans, the credit product with the highest total balances outstanding, also had the lowest serious balance-level delinquency rate in the most recent quarter. As of Q3 2018, home loans comprised 1.84 million accounts and R888 billion in total balances.

The balance-level serious delinquency rate—measured as 3 or more payments past due—saw a 10-basis point decline in the last year to close the quarter at 3.8%. While almost all other credit products also experienced yearly declines in serious delinquency rates, TransUnion noted that vehicle and asset finance (VAF) loans – the credit product with the second highest total balances – experienced a 50-basis point year-over-year rise to 4.1% in Q3 2018. Approximately 2.5 million VAF accounts were open with total balances of R414 billion.

-  Carmen Williams

“It would be reasonable to expect a deterioration in consumer credit performance over the past year. However, we have seen largely the opposite, with serious delinquency rates improving for most credit products since Q3 2017. This is certainly welcome news for the South African credit market.”

- Carmen Williams, director of research and consulting

IIR Q3 2018: Key Facts and Figures

Delinquencies Primarily Down, As Originations Are Dropping for Many Credit Products

Delinquencies Primarily Down

(1) Balance-level serious delinquency rate, measured as percentage of balances 3 or more payments past due

About the TransUnion IIR Report

TransUnion’s South Africa Industry Insights Report is an in-depth, full population-based solution that provides statistical information every quarter from TransUnion’s national consumer credit database, aggregated across virtually every active credit file on record. Each file contains hundreds of credit variables that illustrate consumer credit usage and performance.

By leveraging the Industry Insights Report, institutions across a variety of industries can analyse market dynamics over an entire business cycle, helping to understand consumer behaviour over time. The South Africa Industry Insights Report looks at major consumer lending categories: credit cards, personal loans, home loans, vehicle and asset finance (VAF), and clothing. The report primarily focuses on three dimensions across these categories: originations (new accounts opened), balances (outstanding total and average lending balances) and delinquencies (accounts in payment arears).

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