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DESPITE
a bleak outlook on the global economy, Security Bank and
Trust Co. sees increased consumer spending in the
Philippines, which would help boost its credit-card
business.
In an
interview with select reporters, Security Bank chief
finance officer Carlos Borromeo said this optimism
pushed the bank’s decision to launch its newest
credit-card product, Platinum MasterCard.
He said
the credit-card market in the Philippines remains “undertapped,”
adding that more Filipino consumers are turning to
plastic for “financial flexibility” in order to pay
their bills.
He said
the bank issued 60,000 new credit cards last year, but
declined to reveal the exact number of
credit-cardholders. He also did not want to make any
projections on the growth of its credit-card business
this year.
Data
from the Bangko Sentral ng Pilipinas as of September
2007, showed credit-card receivables of the entire
banking system jumped by 23 percent to P106 billion from
September 2006. Universal banks and commercial banks
accounted for roughly P85 billion or 80 percent of total
credit-card receivables.
Despite
the rising credit-card debt of Filipinos, the same data
indicates their financial discipline as past due
receivables only grew by 14.3 percent in the third
quarter of 2007, compared to the 19.3-percent rate in
the same quarter in 2006.
No data
was available, however, on total credit cards issued by
the banking system.
For
Security Bank alone, Borromeo boasted “a relatively
lower-than-industry standard default rate,” of about 7
percent, compared to the 14-percent average for the
entire banking industry.
He
traced this to meticulous procedures the bank employs in
evaluating credit-card applications, as well as its
focusing on specific target markets. Platinum
MasterCard, for example, is geared toward the
“affluent.”
Borromeo
said the release of the new card was intended to
strengthen Security Bank’s position in the commercial
credit card industry among the community’s
“well-heeled”.
“The
past eight to 10 years have been changing largely due to
the contribution of the growing middle-class or mass
affluent,” he said. The card itself will feature more
personalized services: access to 24-hour concierge
services, travel and accident insurance of up to P12
million, accident medical expense of up to P500,00,
travel incentives, mileage incentive and higher credit
limits are among of the benefits for these cardholders.
With
other commercial banks such as Banco de Oro and Citibank
having released their own versions of platinum cards,
Security Bank is prepared for some tough competition,
according to Andrew Cajucom, vice president for
marketing, SBC.
He said
Security Bank released its own platinum credit card to
be able to increase their market share in the more
affluent market of platinum card holders as other banks
have already released such cards ahead of them.
The last
time they released a credit- card product to the public
was the Security Bank Gold and this was still in 2004.
The market since then has become more specialized and
the consumers more discerning; hence, the creation of a
new-premium card.
Cajucom
also doesn’t see rising inflation as a problem for their
new card as their target clients are more affluent.
Cajucom
disclosed that as of today, there are about 200,000
security bank cards being used, but with the
introduction of the platinum card, and other future
products, the bank expects to increase this number by
about 500,000 cards in 2011. |
