TMB Bank to focus more on credit cards

Kanchana Rojvatunyu, executive vice president and head of the retail marketing group, said the bank had not previously been very active in the credit-card business as its priority was to increase its retail customer base through innovative deposit products. 

During two years of this policy, TMB has focused on developing innovative deposits to learn about customers’ transactions. But deposit products did not help the bank understand their spending behaviour much, so now TMB considers that it is time to focus on credit cards. This should lead to the development of products for cross-selling, Kanchana said.

“We want to see what kinds of products our customers spend their money on so as to design other products for them. Therefore, we have to increase our focus on customers who do not yet hold our credit cards,” she said.

TMB has issued 250,000 cards, of which about half are active.

The credit-card business currently represents about 20 per cent of its consumer-loan portfolio of Bt80 billion. Housing is the major component at Bt50 billion, and the rest personal loans.

The target is to grow the credit-card business next year by at least 30 per cent, similar to personal loans, while housing loans are projected to grow by 5 per cent. Outstanding retail loans next year are expected to expand to Bt90 billion.

“Even though this market is regarded as mature, we believe we can grow from this business by promoting credit cards with attractive features to TMB depositors,” she said.

There are currently 17 million credit cards held by the more than 60 million Thai citizens, but only half are active. So what the bank will do is encourage customers to use the TMB credit card as their main one, she added. TMB has 5 million customers, half of whom are active. About 1.5 million are middle-income earners, and they are the targeted customers for TMB credit cards, Kanchana said.

The definition of “active customer” is one who has a deposit balance of more than Bt10,000 or who has one transaction per month at the bank.

TMB is currently promoting its credit cards through the “So Good” campaign, allowing its credit-card holders to pay three-month instalments at zero interest. The bank will keep So Good because one-third of people who were not TMB depositors who applied for its credit card did so because of this feature.

TMB’s credit-card approval rate is only 30 per cent, compared with 50 per cent at other banks. Kanchana said this was a risk-management policy to avoid bad debts.

She said the bank would revamp all of the features (other than So Good, which will be retained) of its credit cards to attract customers.