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HSBC presents plans to issue new credit cards

Seeking to enhance the company's brand name and secure a bigger market share in Taiwan's saturated credit-card market, the UK-based Hongkong and Shanghai Banking Corp (HSBC) yesterday presented what it called "exciting" incentives yesterday to lure card applicants.

"Our market share [in credit cards] is small. But this is exactly our competitive edge, because it's much easier for us to find new customers, compared with most domestic banks," Tiger Chan (詹文虎), senior vice president of HSBC Taiwan's credit-card center, told a press conference yesterday.

HSBC, the second largest foreign bank in Taiwan, had nearly 800,000 credit cards in circulation as of the end of last month, according to the latest figure provided by the Financial Supervisory Commission. It holds a tiny 1.8 percent market share among the nation's 52 card issuers.

Restricted by their small number of branches and limited resources to promote financial tools for consumers, foreign banks have issued a total of around 4 million credit cards in Taiwan, a market share of 9 percent.

"Since Taiwan has 10 million adults qualified to hold credit cards, we see the [remaining] 6 million people -- who have not been approached by foreign banks -- as our potential targets," Chan said.

With an ambitious goal of attracting 300,000 new cardholders in five months, HSBC is using entrance tickets to Hong Kong Disneyland, which is scheduled to open its doors for business in September, as an incentive.

Described by Chan as a "bomb dropped in deep water," the promotional activity, which will run till the end of August, offers tickets to clients who succeed in getting three new people to sign up for HSBC credit cards. Those who refer 10 new clients are being offered a round-trip Cathay Pacific Airways plane ticket to Hong Kong, in addition to the theme-park ticket.

HSBC's campaign underlines the increasing difficulty banks are facing to expand their credit-card business.

Figures released by the Financial Supervisory Commission show that banks issued a total of 630,000 new cards last month, although 480,000 cards were suspended during the same period. The suspension ratio of 76 percent reflects the soaring costs financial institutions have to bear.

"It's indeed becoming more and more difficult to launch new cards," said Michael Chang (張智銓), director of the credit-card division at Chinatrust Commercial Bank (中國信託), the nation's biggest credit-card issuer.

Aside from issuing new cards, Chinatrust has also focused on boosting its clients' usage of credit cards by promoting revolving credit plans and installment schemes, Chang said.

Union Bank of Taiwan (聯邦銀行) plans to launch 10 themed credit cards this year, catering to niche markets.

"As office workers have become a saturated market, we are devising co-branded cards to get in touch with new clients, which allows us to cultivate small but new markets," said Meiji Chen (陳明智), assistant vice president of Union Bank's credit-card center.
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