Bangkok Bank (BBL) is set to cut its credit card growth target this year following sluggish performance, weighed down by the domestic political instability.
The bank's credit card growth in terms of new cards and spending fell short of targets during the three months through March and the situation is continuing into April, said Shoke Na Ranong, executive vice-president of the card division.
Typically the first quarter is low season for credit card spending, but it surges in the second quarter because of Songkran.
"We will monitor the market during April to May, especially regarding politics. If formation of a new government is delayed and it erodes consumer confidence, the bank will scale back our credit card growth target this year," he said.
A new government will be completely installed by June. However, the razor-thin difference in parliamentary member seats won by the two political party camps has fanned fears of delay in the new government's set-up and its instability.
According to informal results released by the Election Commission recently, the pro-regime Palang Pracharath Party won more than 8.4 million votes, while the pro-exiled former premier Thaksin Shinawatra Pheu Thai Party won the most seats at 137, 19 more than the PPRP (assuming 21 party-list seats for the PPRP). Official election results will be announced on May 9.
The murky political picture undermines consumer confidence and then squeezes spending despite the Songkran holiday season, said Mr Shoke.
BBL has no plan to launch marketing campaigns to boost its credit cardholders' spending for fears of asset quality, he said.
The country's third largest commercial lender by assets aggressively set its new card and spending growth of 12% each.
Around 2.2-2.3 million credit cards of BBL are circulating in the market.
Apart from credit card expansion, BBL has developed digital payment for both credit and debit cards in line with the digital age.
With more convenience of digital card spending and better match consumer lifestyle, it would help facilitate card business for a long run, Mr Shoke said.
BBL shares closed on April 12 on the Stock Exchange of Thailand at 210 baht, up one baht, in trade worth 287 million baht.
