StanChart sees slower credit card growth
11/06/2008 | 01:10 AM
MANILA, Philippines - The local unit of United Kingdom-based Standard Chartered Bank said growth of its credit card business would slow this year as it becomes more cautious in choosing new cardholders given the cooling economy.
Simon Yuen, country head for consumer banking of Standard Chartered, said the bank sees its cardholder base growing by 10-15% this year.
While this is in line with the 10-15% average industry growth for the past few years, this would be lower than the 30% growth the bank posted in 2007.
"If you look at the absolute number of cards this year and in 2009, [growth] would to be slower," Mr. Yuen told reporters at the sidelines of the launch of the Nokia Standard Chartered Card Tuesday night.
"Every issuer will be more careful in verifying the new customers they will be taking in. So inevitably, that would mean slower growth."
He said the bank currently has about 180,000 to 200,000 active cards in circulation, making it among the top five players in local credit cards industry.
Data from the Credit Card Association of the Philippines showed that there are about 6.5 million credit cards in circulation, which are held by about four million individuals.
Mr. Yuen said banks have entered a "consolidation phase," not only because they are now more careful in choosing customers but also because old cardholders would not be inclined to apply for new cards given the current economic conditions.
In order to buck the trend, Mr. Yuen said Standard Chartered is targeting a specific segment of the market, saying that there may be a general slowdown in economic activities but growth remains robust in some areas.
"We have to focus on certain segments where the growth will continue. It doesn’t mean that if there is an economic slowdown, everything will actually [weaken]," he said.
"We are very cautious [but] we want to offer good deals to customers who we think are good borrowers," he added.
The bank, for instance, has singled out the mobile phone market with the Nokia Standard Chartered Card.
The card, which provides perks in exchange for purchases of mobile phones and prepaid credits as well as payments of postpaid accounts, would give added boost to its projected growth for this year.
More than half of the bank’s profits could be attributed to its credit cards business, Mr. Yuen said. — Gerard S. dela Peña, BusinessWorld
Simon Yuen, country head for consumer banking of Standard Chartered, said the bank sees its cardholder base growing by 10-15% this year.
While this is in line with the 10-15% average industry growth for the past few years, this would be lower than the 30% growth the bank posted in 2007.
"If you look at the absolute number of cards this year and in 2009, [growth] would to be slower," Mr. Yuen told reporters at the sidelines of the launch of the Nokia Standard Chartered Card Tuesday night.
"Every issuer will be more careful in verifying the new customers they will be taking in. So inevitably, that would mean slower growth."
He said the bank currently has about 180,000 to 200,000 active cards in circulation, making it among the top five players in local credit cards industry.
Data from the Credit Card Association of the Philippines showed that there are about 6.5 million credit cards in circulation, which are held by about four million individuals.
Mr. Yuen said banks have entered a "consolidation phase," not only because they are now more careful in choosing customers but also because old cardholders would not be inclined to apply for new cards given the current economic conditions.
In order to buck the trend, Mr. Yuen said Standard Chartered is targeting a specific segment of the market, saying that there may be a general slowdown in economic activities but growth remains robust in some areas.
"We have to focus on certain segments where the growth will continue. It doesn’t mean that if there is an economic slowdown, everything will actually [weaken]," he said.
"We are very cautious [but] we want to offer good deals to customers who we think are good borrowers," he added.
The bank, for instance, has singled out the mobile phone market with the Nokia Standard Chartered Card.
The card, which provides perks in exchange for purchases of mobile phones and prepaid credits as well as payments of postpaid accounts, would give added boost to its projected growth for this year.
More than half of the bank’s profits could be attributed to its credit cards business, Mr. Yuen said. — Gerard S. dela Peña, BusinessWorld
