KBank eyes first-time cardholders for growth
KASIKORNBANK has set an average annual growth rate of 17-19 per cent in cards issued by focusing on people who don't own a credit card.
The newcomers will help drive annual spending up by 25-32 per cent and non-performing loans (NPLs) down.
Only 7 million people out of |the population of over 60 million hold a credit card and there are only 19 million credit cards in circulation, meaning that the segment offers opportunities to grow, Chatchai Payuhanaveechai, executive vice president at KBank, said yesterday.
KBank, the marker leader in credit card spending and the merchant business, aims for 5 million credit cards and Bt570 billion in spending by 2016.
The key to the growth of credit cards and spending is signing up consumers who are new to K-Credit cards and are not customers of KBank.
The bank will earn fee income from issuing cards and servicing merchant customers.
In the first five months of this year, KBank issued 280,000 credit cards, of which 150,000 were to newcomers. Card spending rose 19 per cent year on year to Bt120 billion, which was better than 10 per cent in the credit-card market.
This year, KBank targets 700,000 new credit cards and total spending of Bt315 billion.
New cardholders can help reduce the bank’s worries over the debt burden of customers and NPLs because the bank will not approve applications from anyone with more than four credit cards or a balance of over four times monthly income.
So far this year, the rejection rate at KBank has climbed to 40 per cent from 30 per cent as some applicants possess more than four credit cards.
KBank’s credit-card NPL ratio has accelerated to 1.72 per cent last month from 1.38 per cent at the end of last year. The bank wants to limit credit-card NPLs to 1.5 per cent by year-end.
Generations Y and Z
Generations Y and Z are the target. The bank has to develop innovations to meet the requirements of the young generation.
Yesterday, KBank introduced an innovation called the “K-Wave Sticker” credit card, which is a development of the existing K-Wave credit card by using near field
communication technology. This credit card is the first of its kind in the country. It will be formally launched next quarter.
Customers can stick the K-Wave sticker on a mobile phone or portable device and tap it on a payment terminal at merchants accepting Visa payWave.
Transactions are quick as no signature is required. Transactions are limited to Bt1,500 per time to reflect the micro payments of young generations.
KBank expects 200,000 K-Wave and K-Wave NFC Sticker credit cards will help boost spending besides its general credit cards.
