China Merchants Bank
As a big bank issuer of credit cards in China, China Merchants bank stood out because of the rapid expansion of its customer base for credit cards and for its customers’ active use of the cards.
After maintaining double-digit increases in new credit card issuance in the past several years, CMB became the third Chinese bank where the total number of credit cards issued topped 100 million in early 2018; the other two to achieve this are state-owned commercial banks, Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB).
According to the latest available data, in the first half of 2018, the number of new credit cards CMB issued was 121% higher than the same period a year earlier. As a result, by the end of June last year, the bank had issued more than 114 million credit cards in total, up 19.5% from the end of 2017.
Given its rapid growth in new card issuance, CMB is poised to overtake CCB to become the second-largest credit card issuer among Chinese banks. The total number of credit cards issued by CCB was 115 million at the end of June 2018.
Data also shows that credit card holders made more frequent use of CMB’s credit cards than cards issued by other Chinese banks. In the first half of last year, the volume of transactions conducted through CMB’s credit cards reached Rmb1.82 trillion ($270 billion), up 41.2% year on year.
CMB has benefited from its buoyant credit card business. In the first half of 2018, the interest income brought by its credit card unit rose 14.1% from a year earlier, while the non-interest income generated by the unit jumped 44.5%.
While achieving explosive growth in credit card issuance, CMB did not drop the ball in terms of managing credit risks. By the end of June 2018, its credit card default rate was 1.14%, inching up 0.03 percentage points from the end of 2017, but the rate was well below the industry average.