Citibank switches to retail-partner channel
CITIBANK Thailand has dropped an outsourcing firm and is now using its own exclusive-partners channel, so that it can control the quality of new cardholders and achieve lower non-performing loans (NPLs).
Tearavath Trirutdilokkul, director and head of Credit Payment Products, yesterday said the bank had ended the contract with an outsourcing company for attracting new cardholders in April this year.
It did so because the arrangement had made it impossible for the bank to control the quality of new cardholders, he said. It decided to change business model by acquiring cardholders through retail-partner channels.
“Engaging in unsecured loans, we have to be cautious about acquiring new customers, so our approval rate has been maintained at 50 per cent for many years. Meanwhile, having new cardholders through retail partners assures that Citibank will get quality customers who are active spenders,” he said.
Citibank Thailand has co-branded with BigC Supercentre to capture hypermarket customers, with Siam Makro to attract wholesale customers, and with The Mall Group to penetrate the department-store category.
The bank is also co-branded with Thai Airways International.
Tearavath said the exclusive co-branding strategy with local partners proved that a foreign bank, which has a limited ability to expand its Thai branch network, could compete with local banks.
Half of new card issuance comes from the co-brands channel, and the rest from Citibank’s three branches in the Kingdom, tele-sales and direct-sales channels.
He said the co-branding with retailers and Thai Airways generated sufficient cardholder business, as retail and airline spending accounted for the bulk of people’s spending via credit cards.
Citibank Thailand has 1.3 million credit-card holders with an average monthly spend of Bt10,000, which is double that for the local credit-card sector. The bank’s credit-card NPLs stand at 1 per cent.
In the first seven months of the year, spending by Citibank’s credit-card holders expanded by 15 per cent year on year, in line with the industry, he said.
Tearavath said the bank was still witnessing an upward spending spend, despite the overall economic slowdown in the Kingdom.
Citibank Thailand hopes to achieve spending growth of 25-30 per cent in the current quarter through two major campaigns.
It is joining hands with Thai Airways to launch “The Ultimate Experience in Paris” campaign, and is cooperating with nine retailers to promote a special programme for shoppers.
