CIMB plans soft launch of credit cards
CIMB Thai Bank plans to make a soft launch of its credit cards by the end of this year to ensure the efficiency of its core banking system.
The bank has implemented 1-Platform, a single standard to be implemented among CIMB branches throughout Asean. Late last week, CIMB Thai became the first subsidiary of Malaysia-based CIMB to put the platform into effect. The successful launch here will encourage CIMB Malaysia to be the next to make the change.
Subhak Siwaraksa, president and chief executive officer of CIMB Thai, said the bank would not aggressively tap the credit-card business during the first year of the new platform because it would require a major investment for the first few years.
“We decided to make a soft launch during implementation of 1-Platform. We will issue 10,000 credit cards by end of this year and gradually increase the number over the next few years.”
He said the bank aimed to have 300,000-400,000 credit cards in circulation within three or four years.
Retail banking is a key strategy of CIMB Thai and the group wants to see the growth of this segment in Thailand, he said. However, this would not always entail acquiring portfolios from other financial houses.
Subhak said the bank would work together with business partners to strengthen retail banking, beginning with mortgages.
“We have joined with property developers to offer exclusive benefits to home-loan customers. These partnerships can help accelerate loan growth of retail banking,” he said.
Retail banking is CIMB Thai’s focus because it helps cross-selling and generates long-term returns, he added.
Retail banking currently contributes 35-40 per cent of the total loan portfolio, while small and medium-sized enterprises account for 30 per cent and corporate loans another 30 per cent.
The bank plans to reduce the proportion of corporate loans to 20 per cent and increase SME loans to 35-40 per cent as they provide a higher net interest margin than corporate loans. However, the bank will emphasise boosting fee income from corporate customers by providing investment-banking services.
Subhak said the bank would seek approval from the shareholders’ meeting on April 12 to increase its registered capital from Bt8.16 billion to Bt13.05 billion.
The increase would facilitate loan expansion by 20-30 per cent, with new loans of between Bt24 billion and Bt36 billion this year. In addition, the plan will raise the bank’s BIS ratio to 15-16 per cent from the current 13 per cent. Without an increase in registered capital, the bank would face risks.
