Bankard cardholders seen growing by 100,000/yr

Major credit card player Bankard Inc. expects the number of its credit card holders to increase by 50,000 to 100,000 per year for the next three to five years.

Already, the number of My Dream JCB credit card holders, which is a joint venture between Bankard and JCB International, has been growing at an average of 5,000 per month for the past three months since the credit card was introduced.

The My Dream credit card has the lowest monthly revolving interest rate of 2.5 percent per month against the industry average of 3.25 percent.

Bankard president and chief executive officer Joven D. Reyes said they are moving on the conservative side as long as the credit quality is high.

"The key is credit quality where cardholders are content with our cards, and we are experiencing high repayment ratio and high card spending averages," Reyes said.

The conservative stance is likewise reflected in the company’s net income target for the whole of 2003.

The firm recorded a net income of P83.9 million last year. In 2001, its net income reached P118 million and P125 million in 2000.

Sources said the main reason for the conservative growth in net earnings is provisioning for losses, much like the process undertaken by the banking system.

It made more than P635 million in allowances for probable losses and it would be increased to over P700 million before the end of the year.

Meanwhile, Bankard’s spending ratio of 18 percent to 20 percent surpassed the industry average of 12 percent to 14 percent.

The credit card industry has more than 20 issuers responsible for the P130 billion in transactions as a direct result of credit card transactions.

Bankard, an affiliate of the Yuchengco Group of Companies, has a card holder base of 280,000 as of end 2002, placing it sixth position in terms of volume and market share.