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TransUnion: Canadian Total Debt Increases to Close 2011; Holiday Shopping Likely Reason for Rise
Q4 2011 TransUnion Canada Market Trends Infographic

TORONTO--(Marketwire - Feb 23, 2012) - TransUnion's quarterly analysis of Canadian credit trends found that the average consumer's total debt (excluding mortgage) floated up to $25,960 in the fourth quarter of 2011, reversing the recent three-quarter trend of flat to negative growth, but in line with the historical seasonality of the year-end holidays. Despite the quarter over quarter increase of 1.4%, Canada is still experiencing decelerating annual growth falling below 1% for the first time since TransUnion began tracking credit trends in Q1 2004.

"The fourth quarter increase in average consumer debt is in line with seasonal patterns as consumer debt levels generally rise during the holiday shopping season," said Thomas Higgins, TransUnion's vice president of analytics and decision services. "The continued deceleration in the annual growth of total debt is the bigger story. We had witnessed a stabilization of total debt for the last three quarters, and the first and second quarters of 2012 should be quite revealing as we may see the first year-over-year decline in total debt since at least 2004."

The holiday seasonality of increase average debt was consistent throughout Canada. All provinces experienced increases during the quarter except Quebec, which had been the one province bucking the national trend. On a year-over-year basis, only three provinces -- British Columbia, Nova Scotia and New Brunswick -- posted a higher annual growth rate in Q4 2011 versus Q3 2010-11.

Average Consumer Debt   Q4 2010   Q1 2011   Q2 2011   Q3 2011   Q4 2011   Q/Q Chg   Y/Y Chg
British Columbia   $36,785   $36,649   $36,820   $36,588   $37,276   1.9%   1.3%
Alberta   $34,020   $34,185   $34,081   $33,182   $33,613   1.3%   -1.2%
Ontario   $25,239   $24,869   $24,721   $24,540   $25,135   2.4%   -0.4%
Quebec   $17,424   $18,025   $18,269   $18,751   $18,376   -2.0%   5.5%

Consumer Debt - Quarterly/Yearly
Though total consumer debt has hit a seasonality increase, after three consecutive quarters of flat to negative growth, it is a new low in year-over-year growth (0.98%) since tracking began in Q1 2004 (Q4 2010: $25,709 vs. Q4 2011: $25,960). The new low is a continuation of the deceleration in total debt increases that began in Q4 2009. The previous four quarters showed year over year average debt increases as follows: 1.71% (Q3 2010-2011); 2.99% (Q2 2010-2011); 4.49% (Q1 2010-Q1 2011) and 5.60% (Q4 2009-Q4 Q2010).

Other key credit statistics, include:

  • Canadian average credit card borrower debt (defined as the aggregate balance on all credit cards for an individual bankcard borrower) declined 1.49% year over year, but posted a modest increase of 0.61% quarter over quarter.
  • Canadian lines of credit (LOC) borrower debt (defined as the aggregate balance on all LOC for an individual LOC borrower) increased 1.1% year over year and 0.64% quarter over quarter.
  • Canadian installment loan borrower debt (defined as the aggregate balance on all installment loans for an individual installment loan borrower) decreased 5.3% year over year and 2.58% quarter over quarter.
  • Canadian auto borrower debt (defined as the aggregate balance on all auto captive loans for an individual auto captive borrower) increased more than 9.7% year over year and 2.8% quarter over quarter.
    Q3 2010   Q4 2010   Q1 2011   Q2 2011   Q3 2011   Q4 2011
Credit Cards   $3,709   $3,688   $3,539   $3,590   $3,611   $3,633
Lines of Credit   $32,649   $33,981   $33,762   $33,855   $34,122   $34,340
Installment Loans   $22,731   $22,976   $22,431   $22,281   $22,340   $21,764
Auto Captives   $16,183   $16,189   $16,181   $16,671   $17,283   $17,759

Consumer Delinquencies - Quarterly/Yearly

Delinquency levels continue to remain low across all major product categories. Year over year double-digit percentage declines were observed with credit card and installment loan delinquencies.

"Though Canadians' debt levels have risen substantially the last several years, the increase has been tempered because of continued low delinquency levels. Lines of credit, by far the most popular credit vehicle for Canadians, currently stands at just 0.21%. Credit card delinquencies also are relatively low at 0.31%, and have dropped nearly 14% in the last year."

    Q4 2010   Q2 2011   Q3 2011   Q4 2011   Q/Q Chg   Y/Y Chg
Credit Cards   0.36%   0.33%   0.32%   0.31%   -3.1%   -13.9%
Lines of Credit   0.20%   0.20%   0.20%   0.21%   5.0%   5.0%
Installment Loans   1.44%   1.27%   1.32%   1.27%   -3.8%   -11.8%
Auto Captives   0.11%   0.10%   0.11%   0.10%   -9.1%   -9.1%

Three Highest Delinquency Provinces

Credit Cards   Lines of Credit   Installment Loans   Auto Captives
PEI 0.60%   BC 0.28%   ON 1.98%   MB 0.28%
NB 0.49%   ON 0.23%   PEI 1.75%   NS 0.15%
NS 0.51%   PEI 0.23%   NS 1.68%   NB 0.17%

Three Lowest Delinquency Provinces

Credit Cards   Lines of Credit   Installment Loans   Auto Captives
QC 0.18%   NL 0.12%   QC 0.50%   QC 0.06%
BC 0.31%   QC 0.13%   NL 1.07%   AB, SK & NL 0.08%
SK 0.29%   NB 0.14%   SK 1.13%   BC 0.07%

Consumer Bankruptcies - Quarterly/Yearly

Consumer bankruptcies in Canada continue to fall back to historical levels after the record year in 2009, posting double digit year-over-year decreases in all of the past seven quarters (Q1 2010-Q3 2011).

    2004   2005   2006   2007   2008   2009   2010   2011
Q1   5.23%   -3.24%   -1.83%   -3.74%   2.88%   34.63%   -15.08%   -14.37%
Q2   -0.15%   3.13%   -10.35%   2.23%   7.39%   41.25%   -21.69%   -16.52%
Q3   -2.61%   1.43%   -11.08%   7.89%   16.78%   41.10%   -31.30%   -15.70%
Q4   -1.59%   -0.39%   -6.05%   1.60%   27.40%   0.34%   -10.41%    

Based on tracking from the Office of the Superintendent of Bankruptcy, year to-date October reported bankruptcies have been down significantly the past two years across all regions. Ontario showed the largest decreases in both 2010 and 2011, while the East has been one of the lowest each year. Quebec was the only single digit decrease in 2011.

    2004   2005   2006   2007   2008   2009   2010   2011
Canada   -0.35%   0.31%   -7.15%   2.22%   10.44%   34.22%   -22.02%   -16.02%
West   -7.83%   -5.21%   -20.18%   -8.76%   8.16%   57.00%   -15.91%   -15.69%
Ontario   1.46%   1.93%   -7.28%   8.40%   12.18%   35.06%   -30.17%   -24.01%
Quebec   2.46%   0.07%   5.10%   3.78%   10.68%   24.68%   -19.61%   -8.73%
East   6.77%   8.96%   -8.27%   -1.82%   7.46%   19.94%   -8.91%   -10.79%

TransUnion's Market Trends
TransUnion's Market Trends is an in-depth, full sample solution that provides statistical information every quarter from TransUnion's national consumer credit database, culled from anonymous credit files. Each Canadian consumer record contains hundreds of credit variables that illustrate consumer credit usage and performance. By leveraging Market Trends, customers from a variety of industries can analyze industry trends over an entire business cycle, helping to understand consumer behaviour in different geographic locations throughout Canada.

About TransUnion
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Based in Burlington, Ontario, with global headquarters located in Chicago, Illinois, TransUnion provides local service and support throughout Canada. Visit www.transunion.ca to learn more.

Contact
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TransUnion
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Telephone: 1 312 985 3059/ 312 972 6646

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