Bank to double its credit cards

By Zhang Fengming | May 21, 2009, Thursday |

Print Edition

CHINA Minsheng Banking Corp expects to double its credit card circulation in three years as China's consumer credit market develops, a senior official said yesterday.

The Beijing-based bank plans to have 15 million credit cards in circulation in three years from last year's nearly seven million, Yang Ke, president of the bank's credit card center, said in Shanghai.

He said the credit card division's bad loans sat at 1.23 percent at the end of last year compared to an international average of 3 percent to 4 percent.

The bank started its credit card business in 2005 and broke even last year, Yang said.

"China's consumer credit market is still under-developed and we see a huge market potential," Yang said. "The market is far from saturation as some academics predicted."

Banks in China issued 142 million credit cards at the end of 2008, 57.7 percent more than a year ago. With many people having more than one card, the actual number of holders is about 60 million to 70 million, Yang said.

He said China should have about 300 million credit card holders based on the country's rising economy and urbanization.

A report by management consultants McKinsey & Co said credit cards would be the second most lucrative retail financial product in China after personal mortgages by 2013.

China's credit card market is fiercely competitive. Banks waive annual fees, hand out free gifts and some even lower card issuance criteria to gain a bigger slice of the market.

Some young people apply for several credit cards, leaving their parents to pick up the bill, triggering moves to strengthen regulation in the market.

On May 6, four state-level watchdogs in banking, police and administration issued a document banning lenders from outsourcing credit card marketing in a bid to solve the problem.

Finance

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Bank to double its credit cards

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