Banking News
- Guangdong Bank sees boom in credit cards
Date: 20-Sep-2007 Sources: (Shenzhen Daily)
GUANGDONG Development Bank (Guangdong Bank), a China partner of Citigroup Inc., issued 1 million new credit cards over the past six months as it focuses on a boom in financial services for China's fast-growing middle class, its president said yesterday.
Guangdong Bank, based in the southern city of Guangzhou, had issued 5 million credit cards by August, up from 4 million as of February, said Michael Zink, the bank's president.
Zink, who was previously Citigroup's South Korea-based senior executive vice president, gave no forecast for how many credit cards Guangdong Bank expected issue by the end of the year.
'Guangdong Bank will not only be looking at the number of cards on issue as our target but will also focus on customer demands, loyalty and efficiency,'he said.
A source close to the bank said, however, that it expected to push its total issuance to 10 million by the end of 2007 or early 2008.
'Credit cards have always been the brightest area of business for Guangdong Bank, both before and after Citigroup invested in it,'said the source, who declined to be identified.
'In terms of other businesses, including corporate banking in particular, it will definitely take time for Citigroup to consolidate and restructure, so it is important for Guangdong Bank's credit card business to remain strong in the near term,'the source added.
China's big banks are aggressively expanding in financial services for the country's rising ranks of wealthy and middle class consumers, including credit cards and wealth management.
China Merchants Bank chief executive Ma Weihua said in March that his bank, the country's biggest non-State lender and the market leader in the credit card business, expected to double the number of its credit cards to 20 million by the Beijing Olympics in August 2008.
McKinsey & Co. estimated that credit card profits in China could hit US$1.6 billion by 2013, although less than 1 percent of China's population currently has credit cards and more than half of those accounts are inactive.
Guangdong Bank and its bigger rival Bank of China were the first two domestic credit card issuers in China in the early 1980s, when the country's economy began to boom.
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