Bangkok Bank (BBL), the country's third largest lender by assets, wants to tighten credit card spending by self-employed workers, online vendors and small business operators after soured loans for these customer groups climbed.
The bank is closely monitoring card spending behaviour of these customer groups, particularly those with irregular spending, and plans to lower their credit limit for cash withdrawals via credit cards on a case-by-case basis for both existing and new cardholders to keep a lid on non-performing loans (NPLs), said Shoke Na Ranong, executive vice-president and card division manager.
"We plan to rework measures to control credit card NPLs after dropping them for a few years. They will be applied on a case-by-case basis," said Mr Shoke.
The bank's credit card NPLs inched up to 2.1-2.2% of total credit card loans from 1.9% at the end of 2018, mainly from higher loan defaults by small business operators, online sellers and self-employed cardholders, he said.
Mr Shoke said the sluggish economy contributes to rising credit card NPLs.
Cardholders are using credit cards to help their small businesses with liquidity amid the stuttering economy, but many cannot make the monthly payments, leading to higher NPLs, he said.
This causes their financial costs to increase significantly as credit card interest rates are far above the minimum retail rate and minimum overdraft rate -- the prime lending rates for individuals and small business operators, said Mr Shoke.
The bank aims to educate these customer groups to use the correct funding sources to alleviate their financial burdens and help BBL control NPLs for plastic cards, he said.
BBL will also concentrate more on higher-income earners with monthly income of 30,000 to 40,000 baht or above, which is now the bank's largest portion.
BBL has 2.5 million credit cardholders, of which 40% are those without payslips, while 60% are salaried employees.
The bank has no plan to reduce the portion of cardholders who do not have payslips, but it needs to increase asset quality management because most of them are good borrowers, said Mr Shoke.
In a related development, BBL aims to expand its credit card base to 2.6 to 2.7 million by year-end and targets 15% card spending growth this year.
He said the bank would miss its growth target this year as it has expanded 10% year-to-date. Even though the final quarter usually sees higher spending, a high base effect during the period means the bank will record lower than targeted growth.
The bank now offers wireless electronic data capture via credit card payment at Caltex stations nationwide.