Kasikornbank (KBank), the country's second-largest credit card issuer, has set aggressive targets of 1 million new cards and a 29% surge in its card spending this year, even though domestic consumption is expected to remain lukewarm with the fragile economic recovery.
Kasikornbank executive vice-president Thawee Teerasoontornwong (centre) launches a new promotional credit card offering 20 times the reward points for the entire year. The campaign runs from Feb 1 to Jan 31 next year and aims to help the bank issue 1 million new credit cards this year.
This is its biggest growth target for new cards in the past few years, said executive vice-president Thawee Teerasoontornwong. The bank issued 700,000 new credit cards last year and 500,000 the year before.
If it issues 1 million cards, KBank's total credit cards after deducting cancelled cards will grow 22% year-on-year to 4.4 million this year, up from 3.6 million in 2014.
KBank is second to Krungsri Credit Cards, the personal loan and credit card arm of Bank of Ayudhya (BAY).
KBank aims for credit card spending of 366 billion baht this year, up from 283 billion last year. Its card-spending target is well above the 12% industry growth.
Mr Thawee said the bank's major customers were high-income earners and its marketing campaigns would support the growth of its card numbers and spending.
Of its 3.6 million total cards, 60% are platinum cards that require minimum income of 50,000 baht a month, he said, which partially explains the bank's low level of non-performing loans (NPLs), at 1.6% of outstanding credit card loans.
The industry average for bad loans is 2.9% of the total accounts.
Thailand's household debt surged to a record high of 83.5% as of June last year, with low-income earners struggling to keep their heads above water as living expenses rise and crop prices sag.
Despite its concerns about high debt leverage, the bank is confident its strong risk management will help maintain credit card NPLs at their current level, said Mr Thawee.
KBank sees 70% of its cardholders pay their bills in full each month.
To limit business risk, the bank will focus on card spending rather than cash withdrawals.
Provincial customers, first-time workers, and those who hold credit cards of other issuers are the bank's key targets.
"We will use our card privileges and benefits to attract new clients, including cardholders of other issuers. We set our marketing budget this year 10% higher than last year," he said.
KBANK shares closed yesterday on the Stock Exchange of Thailand at 228 baht, up 10 baht, in trade valued at about 2.2 billion baht.