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‘Softest’ Credit Card Growth Since Mar’23

CANADA DATA
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  • Household credit liabilities increased a seasonally adjusted 0.29% M/M in April after 0.33% in March.
  • The Y/Y growth rate held at 3.5% for a second month, having accelerated from historical lows of 3.1% seen in late 2023.
  • The three-month run rate dipped in April although continues to run a little hotter, at 4.0% annualized after 4.2% in March.
  • This bottoming/stabilization in credit growth came months ahead of the BoC cutting its overnight rate 25bps to 4.75% earlier this month.
  • Within the details, the latest M/M moderation was led by mortgage loans (easing from 0.31% to 0.24% M/M) whilst non-mortgage loan growth accelerated (from 0.38% to 0.43% M/M).
  • Non-mortgage lending has been increasing faster than mortgage for a little while now, with mortgage loans +3.4% Y/Y vs non-mortgage loans +3.8% Y/Y and more notably with three-month rates of 3.7% vs 4.9% annualized.
  • One interesting observation within non-mortgage loans: credit card growth saw its weakest M/M increase since Mar’23 but at 0.4% M/M was still strong and followed a particularly strong 1.1% M/M averaged since November.
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  • Household credit liabilities increased a seasonally adjusted 0.29% M/M in April after 0.33% in March.
  • The Y/Y growth rate held at 3.5% for a second month, having accelerated from historical lows of 3.1% seen in late 2023.
  • The three-month run rate dipped in April although continues to run a little hotter, at 4.0% annualized after 4.2% in March.
  • This bottoming/stabilization in credit growth came months ahead of the BoC cutting its overnight rate 25bps to 4.75% earlier this month.
  • Within the details, the latest M/M moderation was led by mortgage loans (easing from 0.31% to 0.24% M/M) whilst non-mortgage loan growth accelerated (from 0.38% to 0.43% M/M).
  • Non-mortgage lending has been increasing faster than mortgage for a little while now, with mortgage loans +3.4% Y/Y vs non-mortgage loans +3.8% Y/Y and more notably with three-month rates of 3.7% vs 4.9% annualized.
  • One interesting observation within non-mortgage loans: credit card growth saw its weakest M/M increase since Mar’23 but at 0.4% M/M was still strong and followed a particularly strong 1.1% M/M averaged since November.