Banking News
- Credit cards posted big 2006 loss
Date: 9-May-2007 Sources: (Shenzhen Daily)
CHINA'S credit card industry posted a loss of US$232 million last year as mainland customers were unwilling to roll over their debt, and further losses are in store for the industry, according to a report by financial services research firm Lafferty Group.
Citigroup and HSBC are among the foreign banks with co-branded cards in China, where the market for retail banking opened up in December under the country's World Trade Organization obligations.
Credit cards are a potentially huge profit maker in China, which has more than US$2 trillion in personal savings and an ever-growing number of wealthy people from its economic boom, but the market has been tough going thus far.
'Rollover rates - or the proportion of interest-bearing balances compared to the total outstandings on credit cards - remain stubbornly low, meaning interest income is limited,'the report said.
The outlook is improving, however, with Lafferty projecting 2007 losses of US$219 million and US$59 million in 2008 as the market grows beyond the 56 million credit cards issued at the end of last year.
China Merchants Bank Co., the mainland's biggest non-State lender, dominates the credit card market with about a 35 percent share.
Sponsor Results:
