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SCB cuts growth target for credit card spending

Siam Commercial Bank has lowered its targets for credit-card spending this year and will tighten up on personal loans.

Araya Phuphanich, first executive vice president and head of the credit-card and personal-loan division, said yesterday that last September, SCB had projected spending via its credit cards to grow this year by 16-17 per cent.

"However, downside factors including the political uncertainty are key indictors that credit-card spending growth will not reach 16-17 per cent. We therefore slashed the growth target to 10 per cent," she said.

Total spending with SCB credit cards this year is expected to reach Bt220 billion, up from Bt200 billion last year.

The bank is working to minimise bad debts and defend itself against an economic slowdown. SCB will therefore shun aggressive programmes that encourage spending and tone down offers to increase credit limits for cardholders who have a record of being late with their payments.

SCB offers a debt-restructuring plan to cardholders who cannot pay at least 10 per cent of their outstanding debt by suggesting they convert it into a personal loan. The maximum repayment period for a personal loan is five years, so this can help ease the financial burden for cardholders who get into a tight cash-flow situation.

The bank this year targets new personal loans at only Bt7 billion compared with Bt8.5 billion last year. It will consider granting loans to existing customers first, and for new customers, it will focus on those with monthly incomes of at least Bt15,000.

To help customers avoid falling behind in their payments, SCB will send text-message reminders to their mobile phones. If they get more than two months behind anyway, the bank will outsource debt collection.

Araya said that during an economic slowdown, credit-card customers with monthly incomes of Bt15,000-Bt20,000 felt the major impacts. Therefore, the bank will focus more on "smart spenders", working people aged 30 and above with monthly incomes of up to Bt35,000.

For customers in this category, SCB yesterday launched an Xtra Platinum Card. It targets issuing 220,000 new credit cards this year, half of which will be SCB Xtra Platinum Cards.


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