---
title: "Hong Kong lenders tread carefully amid mixed recovery signs, TransUnion says"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/266472432.md"
description: "Hong Kong lenders are cautiously easing household lending following a rate cut, amid mixed recovery signals. The Hong Kong Monetary Authority reduced its base rate to 4.25%, prompting banks to lower prime rates. Despite rebounding retail sales, high unemployment and slowing wage growth persist. Consumers remain hesitant on large purchases, with 37% planning to reduce spending. TransUnion notes increased demand for lending products but suppressed approval rates, highlighting cautious lender behavior in a mixed economic environment."
datetime: "2025-11-19T03:30:42.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/266472432.md)
  - [en](https://longbridge.com/en/news/266472432.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/266472432.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/266472432.md) | [繁體中文](https://longbridge.com/zh-HK/news/266472432.md)


# Hong Kong lenders tread carefully amid mixed recovery signs, TransUnion says

Following the recent rate cut, Hong Kong lenders are cautiously easing household lending as they navigate a recovery that remains uneven and filled with mixed signals, according to credit reference agency TransUnion.\\nIn response to the US Federal Reserve’s latest cut, the Hong Kong Monetary Authority – the city’s de facto central bank – reduced its base rate to 4.25 per cent in October, its second decrease this year.\\nThat has prompted major banks to lower their prime rates and reduce borrowing costs for households, paving the way for Hong Kong’s consumer credit market to return to more normalised conditions, according to the Chicago-based firm, which operates in more than 30 countries.\\n“There’s kind of a cautious easing happening,” said Marie Claire Lim Moore, CEO of TransUnion’s Hong Kong operation, in an interview with the Post.\\n“Retail sales are picking up, but unemployment remains high, so lenders are still being cautious in their decisions.”\\n\\nThe unemployment rate in Hong Kong has been on the rise since the Covid-19 pandemic. It stood at 3.8 per cent at the end of October, a slight drop from 3.9 per cent the previous month, which marked the highest level in three years. However, the October figure was still high compared with pre-pandemic levels.\\nWage growth has also been slowing, falling from 3.5 per cent in 2024 to 2.5 per cent this year, according to a recent joint survey by Baptist University and other parties. Average salaries have significantly declined since the US initiated a global trade war in April.\\nOn the positive side, retail sales have been rebounding since May, reversing a 14-month decline, largely due to increased tourism and improved local consumption, according to government data. In September, total retail sales grew 5.9 per cent, according to the Census and Statistics Department.\\nHowever, consumers are still hesitant to make certain purchases.\\nWhile sales of electrical goods surged 31 per cent, and spending on alcoholic drinks and tobacco at supermarkets rose 16 per cent, spending on furniture fell 17 per cent and expenditures on clothing and footwear dropped 6 per cent.\\n\\nIn its recent survey, 37 per cent of consumers indicated they would reduce spending on large purchases over the next three months, according to TransUnion.\\n“The macro indicators are kind of mixed,” Lim said. This was not an environment “where everyone’s just going to go full steam ahead – we’re seeing caution”.\\nShe added that while demand for certain lending products was increasing, approval rates remained suppressed in some instances. Lenders considered borrowers with irregular payment histories – often from volatile sectors like retail and food and drink – to be higher risk, Lim said.\\nAs of the end of September, 83 per cent of consumers in Hong Kong were rated as prime or above, according to TransUnion.\\n“Cheaper credit will support demand, but margins are likely to tighten as lenders adjust their rates,” Lim said. “The winners will be those who move quickly and stay disciplined, focusing on the right segments rather than applying one-size-fits-all strategies.”\\n

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