Independent credit cards launched

By Zhang Fengming  |   2008-12-24  |     NEWSPAPER EDITION

THE Bank of East Asia is aiming to break even on its new yuan credit card market on the mainland in four to five years.

The Hong Kong-based bank launched its yuan-backed credit cards in Shanghai yesterday, the first overseas bank to offer yuan credit cards independently on the Chinese mainland.

The fifth-biggest Hong Kong lender by market value launched its yuan debit card in May, also the first overseas bank to offer yuan debit cards on the mainland.

"Credit cards can help us cross-sell our banking products," its China Vice Chairman Chan Kay-cheung said in Shanghai yesterday.

"China's mainland still enjoys strong growth, though slowing down, when compared with overseas markets and we will ride on the mainland's growth," Chan said.

It takes about four to five years for banks to break even on credit card business and the Bank of East Asia will endeavor to reach that aim for its yuan credit cards on the mainland, said Lam Chi-man, executive vice president of the Bank of East Asia (China) Ltd.

The bank was among the first batch of overseas banks to be locally incorporated on the mainland in April. It has 61 outlets on the mainland.

Rivals such as HSBC and Citibank have teamed up with local banks to offer co-branded credit cards.

China is expected to have accumulated bank cards of 1.8 billion by the end of this year, 150 million of them credit cards, said Xu Luode, president of China UnionPay Co.

Credit cards will be the most important consumer credit product in China after mortgages, with profits of US$1.6 billion by 2013, management consultants McKinsey & Co said in a report.