Fiercer competition expected
Commercial banks are expected to be the biggest players in the credit card market, amid increasing competition as minimum wage hike is luring state-owned banks into the market.
TMB Analytics, a research unit of TMB Bank, said that based on the outstanding credit card loans, commercial banks' portion increased to 44 per cent in 2011, while non-bank issuers' portion dropped from over 50 per cent in 2005 to 39 per cent. The rest was shared by foreign bank branches.
"The industry shows high growth potential, particularly with the minimum pay for those holding bachelor degrees which is now raised to Bt15,000. As they are now qualified to apply for credit cards, the market looks attractive particularly to state-owned banks. Though being the champions now, commercial banks cannot stay idle, with many existing and future competitors," it said.
Competition, first focused on the volume of cards, is now on campaigns to boost spending.
According to TMB Analytics, in the past few years, the number of new cards increased by only 5 per cent per annum on average, from over 10 per cent before that. In the past five years, commercial banks witnessed the 18 per cent annualised increase in credit card spending (excluding cash withdrawals), compared to 10 per cent by foreign banks and 8 per cent by non-bank issuers. This is despite the 3 per cent annualised increase in goods prices.
On average, commercial banks' credit card clients spend Bt5,600 per card per month from Bt3,600 five years ago. Foreign banks' per-card spending is Bt7,800 from Bt6,000. Non-bank issuers' record slightly changes from Bt3,100 to Bt3,200.
Overall, only 2 per cent of the outstanding loans is non-performing.
