Standard Chartered Bank (Thai) is maintaining its approval rate for credit card applications at 50%, a lower level than that of its peers, in a bid to keep the lid on bad loans.
The bank has adopted the tough approval criteria for a while to keep non-performing loans at a satisfactory level of 3-4% of total outstanding loans.
The credit card industry's approval rate stands at around 60% on average.
Executive vice-president Auraratana Jutimitta said even though the bank has positioned itself for the upper market, applicants' debt servicing ability is the main criteria for card approvals.
"Higher income has nothing to do with financial discipline _ the ability to repay debt is the key consideration for loan approvals," she said.
The bank targets being among Thailand's top five credit card issuers by spending by the end of this year from the sixth or seventh ranking at present.
The bank's card spending is around 6,000 baht per card per month, trailing the 9,000 baht spending per card per month of the fifth.
It expected to boost card spending to more than 9,000 baht with a new promotional campaign.
The bank yesterday joined hands with Thai Airways International in introducing the Fly Faster with Standard Chartered Card campaign.
Customers can earn up to 4,500 Royal Orchid Plus miles and redeem the miles for round-trip tickets to selected destinations.
With the campaign, the bank also aims to increase the number of new cards by 30% from between 5,000 and 6,000 cards per month now.
Cardholders who earn at least 30,000 baht with high purchasing power and good repayment records are its main target.
The Bank of Thailand set the minimum monthly income of credit card applicants at 15,000 baht and the maximum interest rate charge for consumer loan products at 20% per year.
Ms Auraratana added that the credit card loan margin has declined across the industry due to strong competition through promotional campaigns to attract cardholders.
To survive, card issuers cross-sell to maintain profitability.
The bank is also trying to improve its cross-selling ratio from the current rate of two or three products per customer.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter