CTBC Financial Holding Co (中國信託金控) yesterday said that fee incomes last quarter fell 1.5 percent annually, due to high rewards provided by its co-branded Line Pay credit cards, but added that the card helped it reach younger clients.
Fee incomes reached NT$7.71 billion (US$249.6 million), up 5.3 percent from the previous quarter, CTBC said.
Cumulative fee incomes for the first nine months of the year were NT$24.23 billion, down 1.5 percent from NT$24.59 billion a year earlier, it said.
The wealth management business remained its biggest source of fee incomes, accounting for 44 percent of the total, ahead of the credit card segment’s 12.01 percent, or NT$926 million in fee incomes last quarter, CTBC said.
Line Pay credit cardholders earn two credit points, also known as “Line points,” for every NT$100 they spend. Each Line point is valued at NT$1 in transactions.
CTBC Financial head of financial management Chiu Ya-ling (邱雅玲) said Line points mostly appeal to people younger than 30, allowing the bank to sell other financial products to Line Pay card holders, such as insurance or fund products.
As of the end of September, the bank had issued 1.83 million Line Pay credit cards since launching them in December 2016, it said.
The bank expects the number of Line Pay credit cardholders to reach 2 million by the end of this year, with total card spending growing from NT$160 billion to NT$200 billion, it added.
“We have never seen any credit card attract 2 million cardholders within two years, but Line Pay, which is promoted on the Line messaging app, shows us the power of community software,” CTBC Financial Holding Co (中信金控) president Daniel Wu (吳一揆) said at an investors’ conference.
Wu said that banks generally do not like cardholders to redeem their credit points, as that increases their costs, “but we encourage our cardholders to redeem their points as much as possible, so that we can truly understand consumer behavior and the market.”
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