CTBC Bank (中信銀行) is aiming to outperform its peers in credit-card spending this year, although it failed to maintain the No. 1 position for a couple of months due to the loss of its exclusive partnership with retail giant Costco Wholesale Co, senior executives said yesterday.
The banking arm of CTBC Financial Holding Co (中信金控), the nation’s third-largest financial services provider by assets, expects credit-card spending to climb to NT$330 billion (US$10.98 billion) this year, topping last year’s NT$320 billion, after it achieved NT$160 billion as of June, senior vice president Frank Hsu (徐峰志) said.
The target would enable CTBC Bank to maintain its leading position with a market share of 15.5 percent, slipping from 17 percent last year, as Cathay United Bank (國泰世華銀行) is rapidly gaining customers after securing the exclusive partnership with Costco.
Cathay Bank, a subsidiary of Cathay Financial Holding Co (國泰金控), overtook CTBC Bank in credit card spending in April and May as the conglomerate aggressively pursuing a balanced growth strategy, shifting away from its heavy reliance on life insurance unit Cathay Life Insurance Co (國泰人壽).
CTBC Bank reclaimed first place last month thanks to a successful campaign that offered generous reward points for customers paying their income tax by credit card, Hsu said.
Consequently, credit-card spending rose to a record high of NT$37.48 billion in June, Hsu said.
While promotional campaigns help boost spending, they are limited when trying to generate profits. Card spending is likely to be between NT$27 billion and NT$28 billion on the back of new campaigns targeting summer vacationers, Hsu said.
CTBC Bank is seeking to ease its Costco losses by partnering with Pxmart (全聯福利中心), the nation’s largest supermarket chain, and it expects revenues to grow by NT$10 billion during Ghost Month which begins in the middle of next month, senior vice president Vincent Lee (李章偉) said.
The lender is also eyeing the third-party payment business and has launched an Internet platform called “pokkii” to provide settlements for online shopping transactions.
The new venture has grown rapidly, but remains modest in terms of volume at about NT$40,000 a month, up from NT$8,000, Lee said.
That value is likely to increase as third-party payments become more popular with local shoppers, he said.
Citibank Taiwan ranks third in terms of credit-card spending, trailed closely by E.Sun Commercial Bank (玉山銀行).
As of May, there were 36.66 million credit cards in circulation with the number of cards in force standing at 23.35 million, while spending rose to NT$167 billion, up NT$3.5 billion from a month earlier, Financial Supervisory Commission data showed.
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