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SCB slashes 2014 credit card growth

January 28, 2014

By Somruedi Banchongduang, Bangkok Post, Thailand

Jan. 28 -- Siam Commercial Bank has revised down a growth target for credit card spending this year to 10% from the earlier projection of 17% on the back of heightened political tension. The bank has set 2014 spending growth for the plastic card at 16-17% since October last year before the anti-government protests kicked off. But ongoing political instability has prompted the bank to cut its target to 10% growth to reach 220 billion baht by the end of this year, said Araya Phupanich, first executive vice-president, head of credit card and personal loan division. It booked total spending via the plastic card at 200 billion baht last year. "Domestic uncertainties have affected cardholders' spending power, in particular the middle income group, whose monthly income is 50,000 baht maximum, with average monthly spending via plastic card around 7,000 baht . Those who earn 50,000 to 100,000 baht fall into the upper middle income group. Spending by the upper income group, those who earn a minimum income of 100,000 baht per month, has not yet seen any impact as their spending remains steady at around 200,000 to 300,000 baht per card per month. "This indicates that high income customers will help facilitate our credit card spending growth for this year," said Ms Araya. She said the bank has tightened loan approval for unsecured loan products, covering credit cards and personal loans, this year in line with economic environment. For credit card loans, the bank has reduced the debt servicing ratio for new applicants to 50-70% of their monthly income from the previous 80-85%. Additional credit lines for existing customers also needed more prudential consideration. Personal loan offering would mainly focus on existing clients whose debt payment record is good, she said, rather than new loan expansion. The bank has raised the minimum monthly income requirement for personal loan applicants to 15,000 baht since the middle of last year. New personal loans are expected to rise by 7 billion baht this year, slightly lower than the 8.5 billion baht new loans of the year before. SCB, the country's third largest bank by total assets, has also tightened unsecured loan collection by increasing the frequency of debtor's alerts. It also increased its outsource-debt collectors, especially in provincial areas. The bank aims to maintain non-performing loans (NPLs) for credit cards at lower than 1% and personal loan at 2%. The bank yesterday launched the SCB Xtra Platinum Card, targeting customers 30 and above with monthly income in the range of 15,000-35,000 baht. ___ (c)2014 the Bangkok Post (Bangkok, Thailand) Visit the Bangkok Post (Bangkok, Thailand) at Distributed by MCT Information Services

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Source: Bangkok Post (Thailand)

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