Industrial & Commercial Bank of China Ltd expects to boost its credit cards in circulation to 50 million at the end of 2009 from 33 million now.
Chinese state-owned banks, including Industrial & Commercial Bank of China, intend to boost the contribution of the credit card business to their profits as they tap the rising demand to use plastic to pay for purchases.
ICBC, the country's biggest lender, expects to boost its credit cards in circulation to 50 million at the end of 2009 from 33 million now, Li Weiping, president of the Beijing-based bank's card center, told Shanghai Daily on Saturday in Shanghai.
The country's biggest bank, which had earlier planned to boost card number to between 35 million and 38 million, expects to achieve the target, going by the pace of its card issuance in the first half, Li said. The credit card business accounts for about 10 percent of the bank's intermediary business, or fee-based income, and is one of the main contributors.
Chinese banks are shifting from its traditional deposit-lending business as they expand their profit avenues.
''We expect the contribution (of credit cards to profit) to grow by 2 to 3 percentage points annually,'' Li said.
ICBC is among the country's "big four" state-owned banks to speed up the credit card business while their smaller joint stock rivals have already an edge in the market.
China Merchants Bank, the sixth biggest lender on the Chinese mainland, has one-third share of the credit card market. Other state-owned banks, including Agricultural Bank of China, said they are seeking growth as they pursue prudent risk control.
China Construction Bank expects to break even on its credit card business next year, said Wu Huitao, deputy general manager of the bank's credit card center. CCB targets card numbers at 20 million at the end of this year, from 16 million now, Wu said.
Credit cards will be the most important consumer credit product after mortgages, with profit forecast to reach US$1.6 billion by 2013, accounting for 22 percent of total consumer credit profits, said New York-based McKinsey & Co.
(Shanghai Daily July 7, 2008)
