Banking giant launches first batch of credit cards to cash in on rising consumption power in the market

Banking giant HSBC has taken another major step forward in expanding into the Chinese mainland by launching its first credit cards there on Monday, as it strives to reap the benefits created by the market's growing consumption power.

The launch of the cards by Hong Kong's largest lender, in cooperation with China UnionPay and Mastercard, will further facilitate mainland people's spending in Hong Kong, especially frequent travelers to the SAR, as cardholders will be able to enjoy special privileges offered by more than 2,000 merchants in the city.

The three categories of credit cards to be issued - HSBC Premier Travel Credit Card, HSBC Travel Credit Card and HSBC Choice Credit Card - are designed to cater to mainland consumers' rising demand for travel and entertainment.

Helen Wong, (fifth from right) chief executive of HSBC Greater China, flanked by industry leaders and Shenzhen government officials, at the launch of the first batch of the bank's credit cards on the Chinese mainland in Shenzhen on Monday. Through cooperation with China UnionPay and Mastercard, HSBC aims to further facilitate mainland people's spending in Hong Kong, where special card privileges are offered by more than 2,000 merchants. Provided to China Daily

The cards will be issued in all cities in the Pearl River Delta (PRD) region, as well as 30 other mainland metropolises.

"The launch of HSBC- branded credit cards demonstrates progress in our plan to grow a full-scale digitally-driven retail banking and wealth management business in the PRD," said Helen Wong, chief executive of HSBC Greater China.

"Just as credit cards are a pillar of HSBC's market-leading business in Hong Kong, we expect credit cards to be a key touch point for us in attracting new customers and deepening existing customer relationships in the PRD, as well as the rest of China."

The issuance of the new credit cards comes as the mainland tries to shift its economy from an investment- and export-driven development model to one propelled by consumption. Industry insiders say the move is expected to benefit HSBC to a big extent.

Developing personal financial products has become the top choice of many banks as they transform themselves against the current economic backdrop, said Shi Wenchao, president of China UnionPay. "Card-based retail business, meanwhile, is one that's most realistic and where risks are most controllable," he said.

Yu Lingqu, a researcher with the finance and modern industry research center at the China Development Institute, a Shenzhen-based think tank, said consumer finance business has been growing at a fast speed on the mainland in recent years, laying a solid foundation for HSBC's development in the field.

According to a report by Beijing-based iResearch Consulting Group, the mainland's consumer credit market hit 19 trillion yuan ($2.8 trillion) last year, growing 23.3 percent year-on-year. The market is likely to expand to 41.1 trillion yuan by 2019.

"Consumer finance has become an important source of profits for banks," Yu told China Daily.

He added that HSBC has a long history in consumer finance business and its development in the area has been "quiet well".

"Compared with other banks, the biggest advantage of HSBC's issuance of credits cards on the mainland is that it has rich resources. It's also able to cooperate with various merchants, especially international ones like high-end luxury brands," Yu said.

According to HSBC, new credit-card holders can enjoy a string of benefits and discounts in shopping, dining, leisure and entertainment in some 150 countries and regions worldwide, especially popular tourist destinations like Thailand, Japan and the United States.

sally@chinadailyhk.com

(HK Edition 12/06/2016 page9)