Credit card spending up 20% in second quarter
Credit card spending in Thailand during the second quarter of this year increased by more than 20% and is expected to continue throughout the year, with an increase of no less than 20% for the whole of 2023.
According to Thakorn Piyapan, President of TMBThanachart Bank, credit card spending in the first half of the year reached 175 billion baht, a 13% increase, leading the bank to remain confident about achieving its target of 350 billion baht in spending and new credit lines of 97 billion baht.
This growth in credit card usage is believed to be due to the bank's marketing promotions and increased customer engagement, Thakorn said, adding that almost 25,000 cards had been issued in the previous month alone.
The spending trend is expected to rise steadily in the coming months, as the latter half of the year is a season of increased spending, particularly towards the end of the year. It is anticipated that credit card spending will maintain a continuous growth rate of over 20%.
The non-performing loans (NPLs) ratio remains at a stable 1% due to a majority of existing customers who are well-known to the bank. These include customers with existing home loans, personal loans, car loans, and salaried employees, especially high-spending groups.
Krungsri also saw a growth in credit care use, according to Nayanee Peaugkham, head of Krungsri Consumer Group, with spending exceeding 173 billion baht, a 13% increase, and new credit lines totalling 44 billion baht, a 6% increase. The number of new customer accounts grew by 270,000, a 35% increase compared to the previous year.
Credit card spending has been notably high in areas such as insurance, fuel, home decor, kitchen appliances, online shopping, e-wallets, hypermarkets, and supermarkets. The top growing categories include airline ticket purchases via credit cards, which increased by 137%, travel agency transactions, which grew by 133%, hotel expenses, which rose by 53%, and car rentals, which saw a 46% increase.
The NPLs ratio for credit cards stands at 1.05%, and for personal loans and installment loans, it's at 2.47%, indicating effective risk management.
For the upcoming months, credit card spending is expected to continue following the set target, with a goal of 350 billion baht in credit card spending and new credit lines totaling 97 billion baht within this year, Nayanee said.
