American Express stops issuing new credit cards

American Express Bank Ltd has decided to stop issuing new credit cards and will only consider resuming the issuance of cards when conditions in the consumer banking market improve, a company official said yesterday.

"Because of the current market environment and the fact that many banks are now becoming more prudent when issuing new cards, we will temporarily stop approving applications. But the rights and interests of our existing customers remain unchanged," said Kelly Yang (楊永玲), a public relations official for American Express, during a phone interview.

She said the company will review the approval system for card applicants and only start issuing new cards when the nation's bad consumer loan problem stabilizes.

American Express had 259,840 credit cards in circulation in Taiwan as of December, with its non-performing loan (NPL) ratio standing at 3.21 percent, according to the latest statistics provided by the Financial Supervisory Commission.

Due to snowballing bad consumer debt, major issuers of credit and cash-advance cards have started to feel the pinch with shrinking revenues showing in their financial statements.

Chinatrust Financial Holding Co (中信金控), the nation's largest credit card issuer, said it expected its profitability to weaken this year. Its flagship unit Chinatrust Commercial Bank (中國信託商銀) booked provisional expenses of NT$14.79 billion (US$456.6 million) last year, up NT$3.25 billion from the previous year.

Taishin International Bank (台新銀行), Taiwan's largest cash-card issuer, has stepped up its standards for the approval of new cards and only 60 percent, down from the previous 70 percent, of new applicants are granted cards.