Equifax reports rise in consumer delinquencies

By The IJ Staff | March 05 2019 01:30PM

Photo: Freepik

Equifax Canada reported on March 5 that consumer delinquencies edged upward in the final quarter of 2018. This follows two quarters of significant increases in consumer bankruptcies.

The 90-day mortgage delinquency rate increased by 1.5 per cent to 0.18 per cent and the comparable non-mortgage rate was up 0.4 per cent to 1.07 per cent, says Equifax.

Total consumer debt including mortgages also increased to $1.906 trillion in Q4, up from $1.821 trillion in Q4 2017 (+4.6 per cent). The average non-mortgage holding for consumers has reached $23,520, a 3 per cent increase from the same quarter last year.

Bankruptcies up 15 per cent

“As we expected, the worm is turning in the Canadian credit market,” said Bill Johnston, Vice President of Data & Analytics at Equifax Canada. “Bankruptcies are up 15 per cent in the last half of 2018 and the small increase in delinquency rates mask some underlying weakness. Rising delinquency is likely to become the norm in 2019.”

Equifax underlined a worrying trend regarding seniors. “In Q4, the delinquency rate for seniors was up by 7.2 per cent and the increases are gaining momentum,” says the report.

Regionally, Manitoba posted the most significant increase in delinquency at 6 per cent. Saskatchewan followed at 1.1 per cent higher, Quebec (+1 per cent) and BC (+0.6 per cent).

Mortgage delinquency increases in some regions

Mortgage delinquency remained very low, but did rise in some regions. Manitoba posted a 19 per cent increase in 90-day mortgage delinquency with Saskatchewan up 9 per cent. Quebec was up 4 per cent and Ontario 2 per cent.

With regard to credit growth, bank loans were the primary engine, rising 6.5 per cent year-over-year in the fourth quarter to an average of $27,667, notes Equifax. Credit card balances were up 2.4 per cent to $3,904. This partly reflects the fact that fewer people are paying off their cards in full each month, says Equifax.