HSBC Holdings Plc., Europe's largest bank by market value, said it expects to issue one million dual-currency credit cards by July with partner Bank of Communications Ltd., outpacing rival Citigroup Inc. in the world's fastest-growing consumer market.

"We are on track to meet our target," Ron Logan, head of the credit card venture, said. "The number of cards issued has been growing significantly."

HSBC, Citigroup and American Express Co. are banking on dual-currency cards to build brand awareness and customer bases in an economy with US$1.65 trillion household savings. China's government wants 30 percent of retail sales to be made through bank and debit cards, within three years.

Bank of Communications and shareholder HSBC started offering credit cards denominated in Chinese and foreign currencies in 29 cities in July. As of Aug. 30, they issued more than 180,000 cards. Logan declined to provide a more recent figure.

The venture, part of HSBC's expansion plan in China, has 600 employees and is recruiting more marketing and processing staff, Logan said.

HSBC is also issuing cards through Bank of Shanghai's 201 branches in the city of 17 million people. The London-based lender bought an 8 percent stake in Bank of Shanghai in 2001.

Citigroup and partner Shanghai Pudong Development Bank Co. began offering co-branded credit cards in Shanghai, Beijing, Tianjin and seven other Chinese cities in April 2004. The two banks issued more than 88,000 such cards as of the end of June.

HSBC, which has operated in China for 140 years, made its biggest acquisition in the nation in August 2004 when it paid US$1.75 billion for a 19.9 percent stake in Bank of Communications, China's fifth-largest lender.

Bank of Communications posted a first-half profit of 4.6 billion yuan (US$567 million), reversing its loss of 1.9 billion yuan a year earlier, as it paid less tax and set aside fewer provisions for bad loans.

(Shenzhen Daily November 11, 2005)