Bangkok Bank launches ‘China UnionPay’ credit card, widely accepted in China, Hong Kong, Macau and 31 countries worldwide

Bangkok Bank, in collaboration with China UnionPay (CUP), the largest credit card and debit card provider in China, has introduced ‘Bangkok Bank China UnionPay’ as Thailand’s first platinum credit card widely accepted in China, Hong Kong, Macau and 31 other countries worldwide. Thai cardholders will receive the same privileges as local Chinese.


Bangkok Bank Credit Card Division Manager Mr. Shoke Na Ranong said that working with China UnionPay or CUP, the largest credit card and debit card provider in China; to create ‘Bangkok Bank China UnionPay’ was another important step for Bangkok Bank’s credit card services. Bangkok Bank China UnionPay is Thailand’s first platinum credit card offering the same privileges as local Chinese receive.

‘This emphasizes Bangkok Bank’s success and leadership in continuous financial innovation, including credit cards using modern technology. In 2005, the bank replaced magnetic stripes with EMV-chip technology in its credit cards while developing compatible merchant credit card payment terminals. In 2008, we launched the Bangkok Bank Blue Wave credit card, a contactless credit card and launched EMV-chip technology in its debit cards in 2009. All becoming the first bank in Thailand to provide both EMV-chip technology and contactless technology in a credit card, giving customer’s security in their credit card spending. The Bangkok Bank China UnionPay credit card will launch on February 2010 coincides with Bangkok Bank’s recent receipt of a license from the Chinese government to operate Bangkok Bank China, a locally incorporated bank in China, which will open on December 28, 2009. We will be the first Thai bank, and one of fewer than 30 foreign banks, to achieve this milestone,’ said Mr. Shoke.

The card is widely accepted by 1,350,000 merchants in China, Hong Kong, Macau and 31 other countries worldwide. Every transaction has strong security protection as cardholders need to enter their PINs at the point of payment. Credit card reader machines requiring PINs have been widely installed by merchants across China.

China UnionPay Global Business Development Head – International Division Mr.Wang Li Xin said the company is the largest credit card and debit card provider in China, established in 2002 with a head office in Shanghai. The company focuses on creating and expanding services to the international market. China UnionPay services provide convenience, safety and reliability for businesspeople and travelers in all their shopping and spending around the world. China UnionPay is widely accepted by 1,970,000 merchants and 3,000,000 point-of-service locations, while 890,000 ATMs around the world are available for cash withdrawals. China UnionPay has 190 million credit cardholders and 1,900 million debit cardholders worldwide.

Bangkok Bank China UnionPay is perfect for travelers to China, including businesspeople and students, and especially for Thai-Chinese. The cardholder will receive platinum discounts and privileges from China UnionPay as well as a special warm welcome and the convenience of shopping at 1,350,000 merchants in China, Hong Kong, Macau and 31 other countries worldwide. In Thailand, cardholders are also eligible for discounts and privileges from participating merchants. Bangkok Bank China UnionPay will be ready to launch its full service in February 2010.

SK Telecom to Acquire Stake in Hana Card

SK Telecom (NYSE:SKM) announced today that its board decided to take over a 49% stake (or 57,647,058 shares) in Hana Card Co. for some KRW 400 billion. The deal will make SK Telecom the second largest shareholder of Hana Card after Hana Financial Group Inc with 51% stake. With the deal, the company expects to bring its services to a new level by adding ICT-based advanced services to its current mobile settlement business including T Cash, thereby securing an edge in tomorrow’s commerce market.


SK Telecom’s CEO Man-Won Jung said, “The partnership is aimed at introducing and expanding the use of mobile credit cards while promoting next-generation payment and settlement services. With this deal, the two companies will maximize business synergies so as to create a new telecommunications and finance convergence market.”

Mobile credit card is a next-generation smart card that allows customers to use their mobile phones as credit cards and receive real-time information provided by card companies such as event notices and discount offers simply after inserting credit card information into their mobile phones.

It allows users to check credit card settlement information including details of credit card usage, remaining credit card limit and reward points as well as other real-time information like bank accounts and membership. At the same time, it provides optimal decision-making information based on user’s past purchasing record and location information while offering an integrated service that includes discount coupons, ads, membership and mileage points during credit card purchases.

All the stakeholders are expected to benefit from the widespread use of mobile credit cards: Customers will be able to receive information and benefits including coupons on their mobile phones; credit card merchants will be able to boost sales and attract more customers by using information such as consumer purchasing patterns; and card companies will generate greater sales with increases in micropayment transactions and number of merchants, reduce time for plastic credit card issuance and save costs of plastic credit card production, delivery and replacement.

SK Telecom plans to introduce mobile credit card and smart payment service in the second half of next year and deliver greater customer benefits by linking them with SK Telecom’s membership programs and SK Group’s OK Cashbag service.

Meanwhile, SK Telecom said it will later determine and finalize the number of its staffs to be dispatched to Hana Card by taking into consideration the number of employees requested by Hana Card and the result of its internal staff selection process.

dtac and KASIKORNBANK launch the “Sabaijai+4” promotion for customers who apply for auto recurring payment service via dtac bill through K-Credit Card

Krisada Lamsam, Executive Vice President of KASIKORNBANK and Thana Thienachariya, Chief Commercial Officer of Total Access Communication Public Company Limited (dtac) jointly introduce the “Sabaijai+4” promotion which offers 4 privileges worth over 2,000 baht to dtac customers who apply for K-Credit Card as well as dtac’s automatic recurring payment service. The automatic recurring payment service will automatically deduct dtac mobile phone bill through K- Credit Card within March 31, 2010. The privileges include:

1. Cash back to credit card account worth up to 900 baht (150 baht per month for 6 months) to deduct dtac call charges;

2. Cash back to credit card account of up to 1,000 baht to deduct spending amount via the credit cards if the spending meets the set amount in the first 2 months;

3. dtac bonus worth up to 150 baht (50 baht per month for 3 months) to deduct the charges of phone calls, SMS and MMS within dtac’s network; and

4. 1,000 points of Smart Value Choice from K-Credit Card that can be used to exchange for gift vouchers, credit card refunds and special rewards.

For dtac customers currently holding K-Credit Card are able to enjoy the 3rd and the 4th privileges when they apply for automatic recurring payment service through K- Credit Card accounts. Interested dtac customers can apply for the promotion and the credit card by contacting K-Contact Center at 0 2888 8888 or they can also inquire further about the promotion by contacting by contacting 1678 dtac call center.

KTC launches 4 promotions for card members at the end of 2009, introducing new idea of “Points for Cash Back”.

KTC launches 4 promotions for card members at the end of 2009, introducing new idea of “Points for Cash Back”. Feature the strength of KTC Forever Rewards.


KTC wants card members to think before spending and to choose only products or services that provide maximum and worthy return value during the holiday season at the end of the year 2009 by offering 4 special promotions that feature the strength of KTC Forever Rewards with more business partners and product categories that are responsive to both mass and high-end members. The promotions include: 1) Points for Discount of as much as 30%, 2) Value Pack – pay less for more, 3) Enjoy discount dining, during 15 November, 2009 to 28 February, 2010 and 4) Points for Cash Back, the first time to redeem points as cash transferring into the account during 1 December, 2009 to 28 February, 2010. It is expected to have more than 600 KTC Forever Rewards points exercised throughout the campaign.

Mr. Woravut Nisapakulthorn, Executive Vice President – Credit Card Business, “KTC” or Krungthai Card Public Company Limited, said “Throughout the year 2009, KTC has been focusing its marketing strategy on educating card members to have secured financial planning and frugal spending behavior under the “Happiness is all around” concept in response to the current economic situation. During the end of this year which is considered a high-season for credit card business, KTC still launched the promotions which were in line with reasonable spending and also encouraged members to redeem KTC Forever Rewards points to get many privileges. This is to strengthen the leading position in reward points benefits. Currently, KTC has the support system to allow members to use KTC Forever Rewards points to exchange for products or services with total of 2,700 points of services nationwide with 80 business partners. This figure represents an increase of 900%, compared with the year 2007 when KTC first revolutionized the new reward points scheme with only 9 establishments.”

“The results of our marketing research on spending behavior of our card members during year-end season shows a difference of spending ratio among both the mass and the high-end segments of card members. At the end of 2009, KTC has chosen to respond to the different needs of members in these 2 segments as follows:

1. Points for Discounts: This is the first time that KTC credit card members can use the KTC Forever Rewards points in equal number to the cost of products or services in order to get the discount of up to 30% with 40 partners which 11 are from dining categories e.g. Zen Japanese restaurant, Sizzler and The Pizza Company. There are 29 partners from shopping and entertainment categories e.g Central, Robinson, The Mall, Paragon, Emporium, Zen and SF (only 7 partners joined in the previous promotion campaign). Zen Japanese restaurant and Sizzler will offer a total of 30% discount to KTC VISA Infinite and KTC VISA Platinum members, 20% immediate discount when making a payment and the other 10% discount will be credited back into the account within 60 days.

2. Value Pack – Pay Less for More: This promotion has been well received since 2006. This year, members will pay even less because they can redeem KTC Forever Rewards points starting at only 9 points for a discount or a coupon at the maximum of 900 Baht e.g. using 9 points to exchange for 200 Baht discount when making a purchase of 6,000 Baht at HomePro or HomeWorks plus the maximum 0% KTC Flexi installment payment for 10 months or using 999 points to exchange for 200 Baht coupon when buying gift voucher of 3,000 Baht at Cental and Zen department stores. Also, in this campaign, KTC has added more business partners into entertainment and auto segments such as the SF theaters and Wizard Auto Service. KTC card spending from this campaign is expected to reach the minimum of 670 million Baht or approximately 12% increase from this half year-end.

3. Enjoy Dining with maximum of 50% discount at more than 100 international restaurants at leading hotels nationwide, especially the high-end card members who enjoy dining in hotel restaurants, including activities and a New Year celebration with up to 50% discount e.g. an international restaurant of the Landmark Hotel and the Novotel Bangkok Hotel and over 50 hotels nationwide.

4. Points for Cash Back: Members who have spending via KTC credit cards or cash advance via KTC Cash Revolve card at every amount of 1,000 Baht can redeem 1,000 KTC Forever Rewards points for 100 Baht cash put back into the customer’s credit card account (Start collecting total spending between 1 December 2009 – 28 February 2010). The promotion would help save traveling time for the customers to the outlets to use the reward points by providing the IVR phone system at telephone 0-2665-5678 to facilitate the cashing in process. This is another option where members can use the KTC Forever Rewards points to exchange for their favorite goods or services.”

KTC expects that these New Year 2009 promotional packages will receive good response from KTC card members. The company projected that members would redeem the KTC Forever Rewards points for many privileges as much as 600 million Baht, or 10% of total KTC Forever Rewards of all card members, ,” said Mr. Woravut.

For more information, please call KTC Phone at 0-2665-5530 or visit www.ktc.co.th.

MasterCard profit beats expectations as costs fall

       MasterCard Inc reported higher-than-expected quarterly earnings on Tuesday as the world's second-largest credit card network aggressively trimmed marketing expenses and raised fees to banks, and consumers used their debit cards more.
       However, MasterCard anticipated marketing expenses would increase 20%in the fourth quarter, and rebates and incentives - which remained flat in the third quarter - would go up significantly in the last three months of the year.
       MasterCard's third-quarter net income was $452 million, or $3.45 per share,compared with a loss of $194 million, or $1.48 per share, a year earlier.
       Excluding special items, the credit card network posted earnings per share of $3.48, beating analysts' forecast of $2.94, according to Thomson Reuters I/B/E/S.
       The company said special items for the third quarter of 2009 represented $6.2 million of litigation settlement charges.
       The special item for the third quarter of 2008 represented an $827.5 million net pre-tax charge related to an antitrust litigation settlement.
       Revenue rose 2% to $1.4 billion, and also beat analysts' forecast, boosted by higher fees charged to banks and increased consumer use of credit and debit cards.
       These factors were partially offset by the impact of slightly lower cross border volumes.
       Operating expenses declined 13% to $685 million, as the company trimmed advertising and marketing spending 29%and reduced personnel and administrative costs 7.9%.
       Processed transactions grew 7.6% in the quarter to 5.8 billion boosted by a more intense use of credit and debit cards in Asia Pacific, Middle East, Africa and Latin America.
       MasterCard's gross dollar volume was up 0.3% on a local currency basis to $633 billion.
       The company also benefited from a lower tax rate.
       MasterCard's effective tax rate was 32.9% in the third quarter, down from 39.7% a year ago.
       "There are some positive signs emerging," chief executive Robert Selander told Reuters in an interview.
       He said worldwide cross-border volumes showed low single digits growth in October, compared with a 3% decline in the third quarter. In addition, US processed volumes grew slightly in October compared to low single-digit declines in the third quarter.
       Selander also said an improvement in retail sales in September and in credit and debit card spending in October was encouraging, but warned that more job losses and a historically low consumer confidence would slow any recovery.
       "I think it's not going to be an overly buoyant season," he told Reuters in an interview.
       "We are seeing improvements relative to prior months, and given that it was a weak fourth quarter last year, we think it will be viewed as good as or better than last year by the time the season is done," Selander added.
       The company reiterated that it did not expect to meet its average revenue growth target of 12% to 15%, but affirmed its forecast of more than 20% net income growth.
       Investors expectations were high about MasterCard's profits, after the company's larger rival, Visa Inc, reported betterthan-expected quarterly earnings last week.
       The world's largest payment network reported a profit of $514 million, or 69 cents per share, on revenue of $1.87 billion. That compares with a year-ago loss of $356 million, or 45 cents per share, on revenue of $1.71 billion.

Americans travelling abroad find credit cards blocked

       Better pack some cash on your next trip abroad. Americans are finding that their credit and bank cards aren't as convenient as they once were while travelling overseas.
       The problem: American cards lack a special chip, now commonly used in many foreign countries, causing the cards to be rejected by some merchants and kiosks.
       That's what Nancy Elkind, a lawyer from Denver, discovered in Paris when she wanted to use the popular Velib bicycle rental system on a weeklong vacation with her husband last spring. They tried to swipe various cards at the rental kiosk, which doesn't take cash, and all the cards were rejected.
       Then, thinking the problem might be with the kiosk and not their cards, they tried other Velib locations around the city. But each time, their cards were not accepted.
       "We gave up, and kept walking around Paris, commenting occasionally on how much fun it would be to do some exploring by bike," Elkind said.
       The couple's cards, which rely on magnetic-stripe technology for transactions, lacked an embedded micropro-cessor chip, which stores and processes data and is now commonly used in Europe. Such chip-based cards - commonly referred to as chip-and-PIN cards because users punch in a personal identification number instead of signing for the purchase - offer an extra layer of protection against the theft of cardholder data and counterfeiting, and they are designed to replace magnetic stripe technology and signature payments.
       The chip-and-PIN technology usually isn't much of an issue when making purchases at a store, or paying for a meal in a restaurant, as most of those merchants still have credit card terminals that can read the magnetic stripes. Likewise, ATM's typically recognise and accept many cards whether they have a chip or a magnetic stripe.
       But American cardholders have had their cards rejected by automated ticket kiosks at train stations, gas pumps, parking garages and other places where there are no cashiers.
       The alternatives aren't ideal. Carrying around a wad of cash is a throwback,not to mention a security concern, for many travellers trained over the years to use plastic for purchases abroad.
       And as more countries around the world move to chip-and-PIN cards, it's inevitable that Americans will encounter more difficulties paying for things abroad.
       Twenty-two countries, including much of Europe, Mexico, Brazil and Japan, have adopted the technology, according to the Smart Card Alliance, a nonprofit association that promotes chip cards. About 50 other countries are in various stages of migrating to the technology in the next two years, including China, India and most of Latin America,according to the association.
       In the last year, Canada began rolling out chip-and-PIN cards and plans to stop accepting magnetic stripe debit cards at ATM's after 2012 and at pointof-sale terminals after 2015.
       These governments like the cards because they reduce fraud. With an embedded microcontroller, large amounts of data can be stored on the card itself rather than in a central database, and counterfeiting such a card is difficult.
       But the US banking industry has no immediate plans to adopt the technology.Part of the reason, experts say, is that fraud issues haven't been as prevalent here as in other countries.
       The expense of converting the country to chip-and-PIN technology is also a deterrent. Javelin Strategy and Research,a consulting company for the financial services industry, has estimated the cost for the United States to migrate to the technology at US$5.5 billion, mainly for new payment terminals - an expense that neither retailers nor banks want to shoulder.
       Doug Johnson, vice president for risk management policy at the American Bankers Association, said that American banks were concerned about security but that there were no plans to move to chip-and-PIN cards."There are a lot of hurdles," he said,"both from a cost standpoint as well as a network standpoint, we need to broach."
       It should be noted that chip-and-PIN cards are different from the radio frequency chip that some American credit cards now have, which allows customers to wave their card at a check-out scanner,instead of physically swiping it. Visa's payWave cards and Expresspay cards from American Express are two examples.
       But regardless of the technology used,merchants have a certain amount of control over what kinds of cards they accept. Veilb, for example, accepts American Express cards whether they have chip-and-PIN technology or not. But it doesn't accept Visa or MasterCards unless they have the chip-and-PIN technology.
       Credit card issuers acknowledge the problems but offer few solutions at the moment. Randa Ghnaim, a spokeswoman for Visa, said the company was working with banks and merchants across Europe to ensure that they accept magnetic stripe cards in addition to chipand-PINs.
       "We have heard of limited instances where merchants have refused to accept Visa magnetic stripe cards, but by and large, the majority of Visa cards are seamlessly accepted internationally," she said."It's usually a lack of understanding that could lead to any issues rather than any issue related to the type of card a consumer may carry."
       And at least one company, Travelex,the global payment services company,says it is working on a chip-and-PIN card for Americans that could be loaded with up to 6,000 or about US$7,400 at recent exchange rates. But that solution is still at least a year away.
       "It's definitely something we've been hearing more and more of," said Tracy Hammock, a senior vice president at Travelex.
       For now, though, there is little an American traveller can do besides insisting, if a cashier refuses your card,that the merchant swipe it anyway. Despite what the cashier thinks, the terminal may be able to read the magnetic strip and approve the purchase.
       But realistically, it's not a huge problem, and there are ways to work around it. You can still buy things like train tickets and subway cards online ahead of time, carry traveler's checks or simply pack a lot of cash.
       That's what Hope Einstein, a retired financial analyst from Stamford, Conn,decided to do on a trip to Great Missenden, England, last month, after she encountered chip-and-PIN issues two years ago. Lucky she did. Einstein still wasn't able to withdraw money from ATM's.But this time, she wisely exchanged some dollars for pounds before leaving the United States.
       Recalling her first visit, she said,"It's humbling to be walking around London with five bucks in your pocket."

PhotoHut launches smart purse

       PhotoHut Group (Thailand) yesterday joined with Thai Smart Card to launch the PhotoHut Smart Purse, giving customers to its shops the chance to collect points that can be redeemed for cash or premiums.
       "We expect to sell 5,000 digital cash cards by November," said Somchai Krongsomboon, president and CEO of PhotoHut Group (Thailand).
       The loyalty card programme will allow the company, which operates 213 PhotoHuts, to respond to the wide demands of customers and encourage them to buy photographic services, cameras and photo accessories at PhotoHut he said.
       The Photo Hut Smart Purse is now available for Bt500 but customers can get a card free by purchasing camera products worth at least Bt9,990.
       Chalermchai Chatchaiganan, chief commercial officer of Thai Smart Card, said the company provides digital cash card services to 32 companies in various businesses, covering 2.6 million cardholders and 1.4 million-1.5 million accounts in its database.
       "With the launch of the PhotoHut Smart Purse digital cash card. PhotoHut can benefit from the strong database of Thai Smart card and launch marketing campaigns with other partners within the Smart Purse network," he said.
       Somchai said the overall market for digital compact cameras dropped by 20 per cent in the second and third quarters of this year compared to the same periods last year.
       The decline was most apparent in upcountry stores and those located in tourist destinations such as Samui and Phuket.
       "We ourselves have felt the down-turn over the last three to four monghs, when we missed our sales target for cameras and accessories. We were able to grow by only 5-6 per cent in the first nine months due to the expansion of PhotoHut shops," he said.
       The company expects to open seven PhotoHuts by the end of the year, bringing the total to 220 from 213 currently and 109 last year.
       "We however have seen significant growth of 10-15 per cent in sales of digital single-lens reflex cameras so far this year, diriven by the sharp fall in retail prices, It encourages consumers to shift from digital compact cameras to more high-end models such as the ditigal SLR cameras," he said.
       Overall demand for digital caompact cameras is expected to pick up again this quarter as the tourist season begins. The government's economic stimulus campaigns are also expected to kick in this quarter. Political unrest is the only risk facotory for the country, he said.
       "We see great potential. The penetration of digital compact cameras is still low. Of a population of more than 60 million, only 6 million to 7 million people own digital compact cameras," he said.
       The market for digital compact cameras is estimated at nearly 1 million units this year, he added.

BANKS' NET PROFITS JUMP IN Q3

       Most banks delivered stunning net profits in the third quarter due mainly to decline in funding and operating costs and increase in fee income.
       Bank of Ayudhya was the best performer in the third quarter. Its consolidated quarterly net profit jumped 114 per cent year-on-year to Bt2.18 billion, thanks to a 135per cent surge in non-interest income.
       "Although loan portfolio remained flat as a result of the weak economy, net interest and dividend income increased 2 per cent while noninterest expenses grew only 7 per cent. The bank's costtoincome ratio thus improved markedly from 61 per cent down to 52 per cent," the bank's president and chief executive officer, Tan Kong Khoon, said in a statement.
       For the ninemonth period ended September 30, the bank recorded a consolidated net profit of Bt4.96 billion, a 22-per-cent year-on-year increase.
       The improved ninemonth earnings could be ascribed to a 55-per-cent increase in noninterest income, and a 2percent increase in net interest and dividend income.
       The thirdquarter earnings of four small-sized banks - ACL Bank, Thanachart Capital, Tisco Financial Group, and Kiatnakin Bank - grew more than 10 per cent.
       ACL Bank showed an 80.94-per-cent year-on-year increase in its third-quarter financial results to Bt234.58 million while its ninemonth net profit soared 39.71 per cent from the same period last year to Bt448.66 million.
       Siam Commercial Bank (SCB) reported unaudited consolidated third-quarter net profit of Bt5.2 bilฌlion, up 7.7 per cent from the same period last year, because its noninterest income shot up 30.1 per cent, mainly from fee income and investment profit. The slight increase of 1.4 per cent yearonyear in its expenditures also gave the bank's quarterly earnings a boost.
       Non-performing loan (NPL) decreased to 4.7 per cent of outstanding credit as at the end of September from 5.2 per cent at the end of last year.
       However, the bank's net profit during the first nine months this year was down by 8.3 per cent to Bt15.98 billion from Bt17.43 billion during the same period last year.
       Vichit Suraphongchai, chief executive officer of SCB, said the main factor boosting the net profits of the bank was fee income, especially from the creditcard business, bancassurance, and mutual funds.
       Fee income in the third quarter was Bt4.85 billion, up 12.8 per cent on year.
       State-owned Krung Thai Bank (KTB)'s thirdquarter net profit was Bt4.25 billion, up 9.5 per cent from Bt3.88 billion in the third quarter of last year. The net profit in the first nine months of this year was at Bt9.47 billion, decreasing by 4.7 per cent from Bt9.94 billion from the same period of last year.
       CIMB Thai Bank's quarterly net profit amounted to Bt461 million, down 54.3 per cent from the same period last year to Bt10.09 billion. However, the bank had a net loss of Bt40 billion for the first nine months this year, compared with a net loss of Bt974 million in the same period last year.
       Subhak Siwaraksa, president and CEO of CIMB Thai Bank, said yesterday that the bank's netinterest margin (NIM) widened from 2 per cent to 2.4 per cent in the third quarter this year because the bank's deposits fell to Bt97 billion from Bt160 billion at the end of last year.
       The bank expected to restructure its deposits by increasing current and savings accounts to 50 per cent of total from the current 25 per cent. As a result, the bank's NIM was expected to widen further.
       He said the bank was expected to record net profit in hundreds of millions of baht and be able to pay dividend from this year's earnings.
       The country's largest bank by assets, Bangkok Bank (BBL) announced that its third quarter net profit of Bt5.07 billion was up 17.45 per cent on year from Bt4.32 billion in the same period last year.
       Higher fee income and lower operating costs were the main reasons for the improved earnings.
       For the first nine months, BBL reported net profits of Bt14.8 billion, marginally down by 1.2 per cent from the same period of last year.
       Kasikornbank recorded net profit of Bt3.72 billion in the third quarter, down 3 per cent from the same period of last year at Bt3.84 billion.
       Meanwhile, its net profit for the first nine months dropped 10.5 per cent yearonyear to Bt11.22 billion.
       TMB Bank reported net profit of Bt526 million in the third quarter of this year, down 68 per cent from Bt1.66 billion in the third quarter of last year.
       For the first nine months of this year, the bank's net profit was Bt1.36 billion, down 69 per cent from Bt4.41 billion in the same period last year.

KTC sees personal loan approvals rising

       Krungthai Card Plc (KTC), the country's largest card issuer, expects its approval rate of personal loans might return to its normal 35% of applications in the fourth quarter with an improving economy and its tighter lending criteria.
       Sudaporn Janwatanagool, executive vice-president for the personal loan business, said approvals had dropped to 15%-20% in the second quarter this year from 30-35% in normal economic times.
       The rate improved in the third quarter to 25% on signs of economic recovery.
       "We'll watch the economy the last quarter to make sure it is recovering,then we might ease up our approving rate to the same as last year," Ms Suda-porn said."We might consider easing approval criteria for sectors such as automobiles that have appeared to pick up."
       Since the beginning of this year, the company has focused on building quality customers who have stable income sin order to reduce its loan default risk.
       For KTC Cash Revolve personal loans,it raised the minimum monthly income requirement to 10,000 baht from 8,000.Minimum income for a KTC fixed income loan is 15,000 baht, up from 10,000.
       Non-performing loans decreased from 2.5% of outstanding personal loans in June to 2.3% in September. The company expects the NPL rate to remain between 2% and 2.5% at the end of the year.
       In the first nine months of the year,KTC lent 1.181 billion baht with 33,500 customer accounts. It has a 5% share of the total personal loan market worth 250 billion baht.
       The company aims to have 519,600 personal loan accounts at the end of 2009, up from 503,000 currently.
       At the end of June, KTC had 35 billion baht in net credit card receivables and 10.9 billion in KTC Cash personal loan receivables. Total assets stood at 48.87 billion baht.
       The Krung Thai Bank affiliate earned a net profit in the first half of 201.67 million baht, down from 317.68 million a year earlier. Revenue rose 7% to 6.21 billion baht.
       KTC shares closed yesterday on the SET at 12.50 baht, down 70 satang, in trade worth 38.6 million baht.

US CONSUMERS REDUCE BORROWING BY $12 BN

       US consumers reduced their borrowing for the seventh straight month in August, as households worked to pay off debt and banks reduced credit card limits.
       Americans are saving more and borrowing less as widespred job losses, stagnant wages and dwindling home values have spureed a move to greater frugality. While that's a positive trend in the long run, economists say, it can weaken the fledgling recovery as consumer spending powers about 70 per cent of the economy.
       The Federal Reserve said on Wednesday that total outstanding consumer debt fell in August by $12 billion (Bt400 billion), a 5.8-per-cent annual rate. Wall Street economist expected a $10 billion decline.
       That follows a downwardly revised drop of $19 billion, or 9.1 per cent, in July, the largest decline in dollar terms on records dating from 1943. July's decrease was the steepest percentage drop since a 16.3-per-cent decline in June 1975.
       "Consumers are clearly becoming much more conservative about their spending habits [and] paying down debts," said Zach Pandl, an economist at Nomura Securities. "This is likely to continue."
       The declines reflect both a drop in demand for credit by consumers, as well as tighter standards among banks and other lenders.
       Total outstanding consumer credit is now $2.46 trillion, down about 4.6 per cent from its peak in July. The Fed's report covers credit cards, store cards, auto and other personal loans. It doesn't include mortgages or other real-estate-related debt.
       The retrenchment in August occurred even as consumer spending increased 1.3 per cent, according to a report last week from the Commerce Department. That suggests consumers are increasingly buying with cash rather than credit, Pandl said.
       The Cash for Clunkers auto rebate programme helped boost personal spending in August. Economists noted that auto loans and other non-revolving debt dropped only 1.6 per cent that month, according to the Fed, compared with a 12.6-per-cent fall in July.
       Credit card debt, meanwhile, fell 13.1 per cent, its steepest drop since February.
       That may also reflect cuts in card limits. A report earlier this year by FICO, which produces the most widely known credit scores, found that companies slashed limits for an estimated 58 million card holders in the 12 months ended in April.
       Consumers also are likely to restrain spending as long as jobs remain scares. The Labour Department reported last week that the unemployment rate rose to 9.8 per cent in September, the highest in 26 years. Many economists believe the rate will peak above 10 per cent sometime next year.
       Retailers already are bracing for another meager holiday season. The National Retail Federation (NRF) said that it expects sales during November and December to fall 1 per clent from last year. While that's not as steep a drop as in 2008, last year's holiday sales saw the worst annual drop on record dating to 1967.
       The NRF also expects retail sales for all of 2009 to fall 3 per cent.
       AT A GLANCE
       Americans are saving more and borrowing less as wide-spread job losses, stagnant wages and dwindling home values have spurred a move to greater frugality.
       The Federal Reserve said on Wednesday that total outstanding consumer debt fell in August by $12 billion (Bt400 billion), a 5.8-per-cent annual rate. Wall Street economists expected a $10 billion decline.
       The Labour Department reported last week that the unemployment rate rose to 9.8 per cent in September, the highest in 26 years. Many economists believe the rate will peak above 10 per cent sometime next year.

Banks lighten overdraft rules

       As US lawmakers prepare to implement sweeping credit card reforms, Bank of America Corp and JPMorgan Chase & Co are moving to overhaul overdraft fees and practices that have been criticised industrywide as excessive and harmful to consumers.
       Bank of America Corp said on Tuesday it would cap the fees it charges customers for overdrawing their accounts, backpedaling on the hikes the company imposed just this year.
       Starting on Oct 19, Bank of America will no longer charge overdraft fees when a customer's account is overdrawn by less than $10 in one day. A $35 fee will still be levied if the account isn't brought into balance within five days.
       The Charlotte, North Carolina-based bank will also limit to four the number of times an overdraft fee can be charged on an account per day. Just this year,the bank had raised that cap from five to 10.
       It also raised the fee this year for the first overdraft in a 12-month period to $35 from $25- a hike that still stands.
       "Enrollment in the bank's overdraft programme is currently automatic for new customers, and opting out is possible only in very limited circumstances,"said Anne Pace, a Bank of America spokeswoman.
       But now customers will be able opt out, meaning that transactions will be denied at the register if customers don't have enough money in their accounts to cover a purchase.
       Pace said the company didn't have an estimate on how many people might opt out of the overdraft programme,noting that many consider it a useful back-up."Customers will need to visit their local branches to opt out. They will also be able to call," Pace said,"but the appropriate phone number hasn't yet been determined."
       When asked about the reversal from the fee hikes earlier this year, Pace said the company "is responding to the changing needs of customers in the difficult economic environment."
       "JPMorgan Chase & Co will also be overhauling its overdraft fees," a spokeswoman said late Tuesday.
       Starting in the first quarter of 2010,the bank will make overdraft protection opt-in for all customers, post transactions to accounts as they occur, and eliminate fees when accounts are overdrawn by $5 or less. It will also reduce the maximum number of fees per day to three from six.
       "The changes will apply to all customer accounts," the spokeswoman said.
       The banks' turnaround comes as credit card reforms passed earlier this year will soon limit banks' ability to raise fees and interest rates and require greater disclosure about costs. Banks also will have to give customers the choice to opt into over-the-limit programmes for credit cards, which are similar to overdraft programs and charge consumers for spending beyond their credit limit.
       The credit card law doesn't address debit cards, however, and banks can still automatically enroll cardholders into overdraft programs. Three-quarters of large banks have automated overdraft programmes, according to a 2006 study by the Federal Deposit Insurance Corp.
       Consumer advocates say automatic enrollment in overdraft programmes is misleading, because most people assume they can only spend the money they have when using debit cards. But the programmes have become an industry standard in the past several years,and a hefty source of revenue for banks.
       Initial overdraft fees at banks range from $16 to $36, according to a survey by the Consumer Federation of America conducted in March.
       Some banks also charge sustained fees if consumers fail to bring their accounts up to balance with a couple days; CFA says 10 of the 16 largest banks make such assessments.

KBANK TAKES FACTORING FROM UNIT

       Kasikornbank will take over the factoring portfolio of its subsidiary Kasikorn Factoring Co, leaving KFactoring with only a machinery and equipment leasing business.
       "Usually K-Factoring's customers also use other financial services of Kasikornbank, so once the factoring portfolio is transferred to the bank, customers will receive more flexible pricing offers. Besides they can share their assets as collateral with other financial products," president Prasarn Trairatvorakul said yesterday.
       KBank aims to become the king of the factoring business by expanding its market share to 30 per cent in 2011 from 21 per cent currently.
       The factoring business worldwide has ballooned by an average of 27 per cent a year over the past five years.
       The bank found that the local facฌtoring business had become increasฌingly interrelated with the bank's foreign business.
       However, K-Factoring did not hold a foreignexchange licence, so the bank, which can conduct a foreignexchange business, would operate this service on its own in order to expand the business.
       Besides, KBank's service channel also has been broadened with 60 foreign business centres nationwide that can offer factoring.
       The factoring industry, now about Bt100 billion, has been growing at 12 per cent per year during the past five years, faster than the banking industry's growth rate of 9 per cent a year.
       KBank's customer base is expected to gain about 20 per cent after the transfer.
       Machinery and equipment leasing still has strong potential because industry is growing rapidly in Thailand. Last year machinery and equipment purchases reached Bt600 billion.
       However there are not many machinery and equipment financing firms, so the bank would partner up with machinery and equipment suppliers in order to expand its leasing portfolio.
       Pannee Lertchanyakul, managing director of K-Factoring, said three financing plans were available - hire purchase, financial lease and operating lease. Under hire purchases, customers could take ownership of their machine after the instalment period.
       Under financial leases, they could choose to own the asset or return the asset to the company.
       Under operating leases, they would not be allowed to own the asset.
       KFactoring's machinery leasing portfolio runs Bt2.2 billion, equal to the factoring portfolio, but the size of the overall business is about Bt23 billion per year.
       The company expects its leasing business to double next year and reach Bt7 billion-Bt8 billion in three years, handing it the market crown.

Helping poor settle debts

       The Finance Ministry's directive to the Government Savings Bank and the Bank of Agriculture and Agricultural Cooperatives that they tackle the protracted underground or illegal debt problem of the poor, is indeed welcome news - even if this is yet another populist initiative of the Democrat Party.
       Of course, whether this attempt by the government to help the poor bears fruit, remains to be seen.
       Of late there have been increasing news reports of debtors being badly beaten up by thugs after they failed to pay on time.
       Some desperate debtors even committed suicide because they could not stand the pressure of repayment deadlines imposed by loan sharks or their intimidation tactics.
       The example of a debtor taking out 10,000 baht from a loan shark and ending up servicing only the 20%monthly interest for years, with the principal still standing,is a common one among those who have fallen victim to the vicious cycle of underground debt.
       The debt problem has been identified as the most pressing issue faced by low-income earners in various occupations, and these debtors include government officials and state enterprise employees, according to a survey conducted in June by the Suan Dusit Poll.
       About 47% of the farmers polled admitted that their most worrisome problem was their debts to the BAAC and to loan sharks.
       For the two state-owned banks to start preparing lists of those in need of a refinancing arrangement would be too time-consuming. To expedite the process and make matters less complicated, the banks could simply update the previous lists of poor people prepared by the Interior Ministry during the Thaksin government.
       It will be remembered that in 2004 the Thaksin regime attempted to solve the underground debt problem of people in the low-income bracket.
       At the time, the Interior Ministry's debt settlement centre reported back to the Thaksin cabinet that it had brought together debtors and creditors for talks and managed to settle 97% of the debts owed by 1.6 million people, with total debt amounting to 108 billion baht.That was indeed a remarkable achievement.
       Given the results of the recent Suan Dusit Poll,which show that the problem of debt remains the most pressing worry for people in various occupations and professions, two assumptions may be drawn:1) the claim by the Thaksin administration was exaggerated;and 2) new debts have been incurred.
       One of the first challenges for the banks is how to convince lenders of these underground debts to come to the negotiating table and agree to a compromise settlement that would be fair to the debtors and acceptable to the banks.
       Since many of these creditors are known to be mafia figures with ruthless thugs in their employ, or are unscrupulous police officers who double as loan sharks,it is doubtful whether bank officials will be able to carry out the job effectively.
       In this matter, the involvement of officials from other agencies such as the Anti-Money Laundering Office, could be helpful and provide bank officials with some "teeth" to tackle the problem.
       But the biggest challenge will be how to prevent these "rescued" debtors from again falling into the trap of underground debt. Which means the government may have to explore ways and means that would allow low-income earners a less complicated and less expensive access to new funding.

Your health problems could include identity theft

       Brandon Sharp, a 37-year-old manager at an oil and gas company in Houston, has never had any real health problems and, luckily, he has never stepped foot in an emergency room.So imagine his surprise a few years ago when he learned he owed thousands of dollars worth of emergency-service medical bills.
       Mr Sharp, as it turned out, was a victim of a fastgrowing crime known as medical identity theft.
       At the time, Mr Sharp was about to marry and buy his first home. Before applying for a mortgage he requested a copy of his credit report. That is when he found he had several collection notices under his name for emergency room visits throughout the country.
       "There was even a $19,000[647,000 baht] bill for a Life Flight air ambulance service in some remote location I'd never heard of," said Mr Sharp, who made this unhappy discovery in 2003."I had emergency room bills from places like Bowling Green, Kansas, where I've never even visited. I'm still cleaning up the mess."
       The last time federal data on the crime was collected, for a 2007 report, more than 250,000 Americans a year were victims of medical identity theft. That number has almost certainly increased since then, because of the increased use of electronic medical records systems built without extensive safeguards, said Pam Dixon, executive director of the nonprofit World Privacy Forum and author of a report on medical identity theft.
       And uncountable, Ms Dixon said, are the people who do not yet know they are victims. They may not know that their medical information has been tampered with for months or even years until, as in Mr Sharp's case, it shows up in collections on a credit report.
       Medical identity theft takes many guises. In Mr Sharp's case, someone got hold of his name and Social Security number and used them to receive emergency medical services, which many hospitals are obliged to provide whether or not a person has insurance. Mr Sharp still does not know whether he fell victim to one calamitous perp who ended up in several emergency rooms or a ring of accident-prone conspirators.
       In another variant of the crime, someone can use stolen insurance information, like the basic member ID and group policy number found on insurance cards, to impersonate you - and receive everything from a routine physical to major surgery under your coverage. This is surprisingly easy to do, because many doctors and hospitals do not ask for identification beyond insurance information.
       Even more common, however, are cases where medical information is stolen by insiders at a medical office. Thieves download vital personal insurance data and related information from the operation's computerised medical records, then sell it on the black market or use it themselves to make fraudulent billing claims.
       In a widely reported case in 2006, a clerk at a Cleveland Clinic branch office in Weston, Florida,downloaded the records of more than 1,100 Medicare patients and gave the information to her cousin, who in turn, made US$2.8 million in bogus claims.
       When people are not aware their medical identities have been stolen, insurance companies may simply continue to pay the fraudulent claims without the victim's knowledge. The person might learn of the fraud only when trying to make a legitimate claim, and the insurance company informs them they have reached their lifetime cap on benefits.
       Or victims may eventually discover erroneous information in their medical files during a doctor or hospital visit. And that may pose a bigger danger than the financial risks. The medical records may now contain vital information like blood type, allergies, prescription drug use or a history of disease that is just plain wrong. In an emergency,doctors could treat you based on this erroneous information.
       And there are none of the consumer protections for medical identity theft victims that exist for traditional identity theft. Under the Fair Credit Reporting Act, Americans can get a free copy of their credit report each year, put a fraud alert on their account and get erroneous charges deleted from their record. If their credit card is stolen and the thief goes on a spending spree, they're not liable for more than $50 worth of the charges.
       With medical identity theft, though, the fraudulent charges can remain unpaid and unresolved for years, permanently damaging their credit rating.Under the federal Health Insurance Portability and Accountability Act (HIPAA) you are entitled to a copy of your medical records, but you may have to pay a hefty fee for them.
       Worse, HIPAA privacy rules can actually work against you. Once your medical information is intermingled with someone else's, you may have trouble accessing your files. Privacy laws dictate that the thief's medical information now contained in your records must be kept confidential, too.
       Even when you are able to correct a record,say in your doctor's office, the erroneous information may have been passed on to dozens of other health care providers and insurers. Victims must track down and resolve these errors largely on a case-by-case basis, Ms Dixon says.
       Medical providers contend that they are taking precautions against identity theft. At Cleveland Clinic, for example, security personnel routinely audit electronic medical record systems, and all records are password-protected. Many Blue Cross Blue Shield insurers use software to screen for spikes in claims from providers that look suspicious. They also work with providers on encrypting medical files and carrying out data access restrictions, said Calvin Sneed, senior anti-fraud consultant at the Blue Cross and Blue Shield Association.
       And some medical centres and doctors' offices now require patients to show photo ID and attach photos to patient charts.
       But privacy advocates worry that these steps do not go nearly far enough, especially in light of President Barack Obama's plans to spend $20 billion to increase the use of electronic medical records nationwide as part of the stimulus package."Without aggressive safeguards, we could be building an infrastructure for massive medical fraud,"said Ms Dixon.

Stealing the show

       Prosecutors in Miami arrested 28-year-old Albert Gonzales and charged him and two unnamed Russians with leading a gang that stole,oh, roughly 130 million credit- and debit-card account details; debit cards,which are roughly ATM cards which can be used like credit cards, take cash directly out of the owner's account;the worst identity theft case in US history came about because firms like 7-Eleven stood around while hackers walked through their alleged "security" to steal the card information; Gonzales, when arrested, was in prison in New Jersey for stealing information on credit cards from other firms that lied to customers that their information was safe.
       Google wants to archive every book in the world and make it available in digital form; a rich, high-flying, hardhitting coalition led by Microsoft, Amazon and Yahoo do not; with amazing chutzpah, the anti-Google crowd called itself the Internet Archive, and claimed that Google could be guilty of "massive copyright infringement" with its initial plans to digitise works in the New York Public Library and the libraries at Stanford and Harvard universities; Google, of course, will show adverts to anyone who wants to read its digitised works, but Amazon and others stand to lose a lot by having them available for free instead of for certain amounts of baht and readable only on devices like the Kindle ebook reader.
       So who is outsourcing in China?;take a step forward,Infosys Technologies of India, the country most people think of when they hear the word "outsourcing"; India's second largest technology firm thinks that if it gives some jobs to its China office, it can start tapping the world's second biggest market, which is kosher; but the irony is that Infosys is the second largest outsourcing company in India.
       The White House s-l-o-w-l-y admitted spamming millions of Americans over President Barack Obama's health insurance reform plan; it even used taxpaper money to hire a company,Govdelivery , to send the partisan, political spam to a still-secret list of people it will eventually have to make public,probably embarrassingly; originally, the White House lied that it did not sent any such email, and then, caught in the act, bragged that it had stopped doing it, blaming strong Obama supporters for signing up friends (and enemies) for the email; the revelation came after the White House opened an illegal "snitch email line" to collect information on opponents to the insurance plan, and then bragged that it had closed it down; thanks to the aptly named Can-Spam Act passed by the US Congress several years ago, the proObama spam was perfectly legal.
       The US justice department said that Oracle can acquire Sun Micrososystems , no (anti-trust) sweat.The big news from Sony Corp ofJapan was little PlayStation 3 Slim, due for release worldwide right now; and Sony is also finally updating the Playstation Network (PSN) to go back on the Internet and serve the teensy PSP Go, also known as a Mini; Sony is hoping that moving down in size will result in moving up in the list, where it trails both Microsoft (XBox) and Nintendo (Wii) for the set-top console market;there will be 15 games available for download immediately - but you are much too foreign for that, only Europeans qualify.
       Post offices in India, Korea, Malaysia and Singapore joined a 21-nation consortium to see if RFID chips can speed up moving stuff, including mail; the five-month experiment, monitored from Japan by the Universal Postal Union, will see volunteers mail 24,000 test letters from 38 countries, each with a 10-baht chip in the envelope; the chips may be utilised to help express mail reach higher and more reliable standards by eliminating the need for tracking by hand.
       American media mogul Rupert Murdoch decided to buy the iLike social music network to hook up with his slowly dying MySpace social network;iLike folks got a lot less than they hoped,just $20 million of Mr Murdoch's money, and it is unclear what Facebook will do about iLike.

Thanachart puts off its credit-card launch plans

       Thanachart Bank has postponed the launch of credit card business following the Bank of Thailand's advice to wait out the rough economy.
       The central bank advised the bank to reconsider the economic environment and credit-card market conditions before introducing a credit card product, even though the central bank approved the bank's proposal in the first quarter of this year.
       The recession has led to higher nonperforming loans for the country's credit card issuers. The central bank reported credit card NPLs of 3.1% of total outstanding credit in the first quarter of this year, an increase from 2.9% in the previous quarter.
       This is the second postponement by TBank as it originally planned to offer the service in April after receiving central bank approval in March. The bank does offer a credit card to existing clients and its staff.
       TBank has not finalised when it will launch a general public credit card, but claims market segmentation is a key factor motivating it to enter this sector.
       "It's not easy for a new player in the market during a sluggish economy and given the industry's tough competition.But the bank is ready to enter this business when the time is right," said executive vice-president Nophadon Ruengchinda.
       Scotiabank, the bank's major shareholder, fully supports the introduction of credit cards to generate higher income.TBank wants to offer a full range of financial services under a universal banking policy.
       In addition, the bank wanted to expand its deposit base to 330 billion baht this year from total outstanding deposits of 310 billion in 2008. The bank has raised deposits to around 312 to 315 billion baht for the first seven months of the year, despite falling liquidity affected by the government's savings bond issue.The bank has around one million customer accounts including deposit and automobile loan clients.

LOAN DEMAND EXPECTED TO RISE

       More borrowers are likely to seek housing and other conฌsumer loans this quarter due to the positive outlook for the property market, according to a Bank of Thailand survey.
       Demand for corporate loans will possibly also rise, particularly from small and mediumsized enterprises, said the survey on financial institutions' lending.
       The institutions will, however, continue to tighten lending standards as a result of concerns over asset quality. The debtrepayment ability of both the business and household sectors remains fragile until any economic recovery is sustainable.
       "Financial institutions anticipate that the demand for housing loans and other consumer loans will slightly increase. This is a result of an expected improvement in the property sector in the second quarter of the year while lending interest rates have been low," said the central bank's report.
       Demand for creditcard loans, however, is expected to decline in the current quarter because of the worsening creditworthiness of debtors.
       The financial institutions will increasingly tighten their credit standards for all types of the consumer loans, due to the concerns over asset quality - particularly for housing loans.
       "It indicates the financial institutions are more cautious about running businesses while the global and domestic economies have been fragile," the central bank said.
       Deputy Governor Bandid Nijathaworn said earlier that the banking system's loans had dropped Bt220 billion over the first six months of the year or 3.4 per cent from the end of last year, due to lower demand and tighter credit approvals.
       In the second quarter, the demand for housing and other consumer loans slightly increased from the previous quarter, thanks to attractive lending rates.
       The government's measures to boost the property sector, particularly townhouses, also helped bolster the demand for mortgages.
       Demand for other consumer loans rose in the second quarter after demand for essential goods picked up. But consumers continued to be cautious about their spending, indicating fragile confidence.
       Demand for creditcard loans, however, dropped from the first quarter because consumers were not confident about income security and their job status.
       The survey, financial institutions tightened their housingloan standards more than had been expected in the second quarter, despite higher demand. They were concerned about economic recovery and people's debtrepayment ability.
       They continued to tighten the criteria for creditcard loans because cardholders' ability to repay debt declined.
       An increasing number of debtors were unable pay their debt in time, while those who could not repay within 90 days and had their cards cancelled also rose.
       The survey found that demand for corporate loans from large companies declined in the second quarter, in line with demand for inventory production.
       Demand for loans for fixed investment and working capital was stable from the first quarter, indicating the economy had already bottomed out.

SCB aims for 20% in card spending

       Siam Commercial Bank aims to raise its share of credit card spending to 20% this year and will shift its marketing focus to encouraging card spending over extending its card base.
       Spending via SCB's credit cards currently accounts for 18-19% of the total card market, up from 16% at the end of last year.
       SCB expects to hit a 20% market share by the year-end, taking the industry's top spot, said Rungruang Sukkirdkijpiboon, an SCB executive vice-president.
       Spending via SCB's credit card is currently about 10 billion baht per month, up from 8 billion last year, bolstered by the bank's marketing campaigns as well as improvements in the economy.
       After plummeting in the first quarter of this year with the downturn, the credit card market has picked up from the second quarter. Bankers expect spending will further improve in line with better economic signs and seasonal factors.
       Economic recovery would support the credit card business overall, and credit card spending is expected to edge up this year from last year.
       SCB will concentrate on boosting spending rather than enlarging its card base under the current economic climate. The bank will aim to maintain about 1.8 million cards, the industry's largest base, throughout this year.
       The bank's normal credit-card cancellation rate is between 5% and 10% of all cards, due to inactive cards, customers' dissatisfaction and non-performing loan problems. SCB's distressed debt is 2% of total outstanding loans of 23 billion baht and its delinquency rate is about 4%.
       The bank yesterday launched the Beyond Platinum Card to capture the upper market segment earning at least 100,000 baht per month. With the high-end card's benefits, SCB targets issuing 60,000 cards within the first year and 100,000 in the next three year.

Hacker arrest shows card security flaws

       Consumers and companies are vulnerable to hackers and identity thieves even after US authorities arrested a man they said was a master hacker who stole 170 million credit and debit card numbers.
       Estimates on the total financial impact of breaches vary, but a study by Forrester Research put the cost at up to $305 (10,400 baht) per compromised record when noting the cost of upgrades, notifying customers and legal and marketing expenses.
       "Under our banking laws, it's the financial institutions that will be stuck paying for fraudulent use of credit cards.We have the consumers responsible for $50 and the rest winds up on the card issuer," said Joel Reidenberg, a professor at Fordham Law School who teaches privacy law.
       On Monday, three men were indicted on charges of stealing more than 130 million credit and debit card numbers in what US authorities said they believed was the largest hacking and identify theft case ever prosecuted in the United States.
       Former government informant Albert Gonzalez,28, in jail in connection with other hacking cases, has been accused of masterminding the theft. He was charged along with two Russians with conspiracy to gain unauthorised access to computers, to commit fraud in connection with computers and conspiracy to commit wire fraud.
       Card numbers were stolen in those breaches from credit-card processor Heartland Payment Systems and retail chains 7-Eleven Inc and Hannaford Brothers Co, a unit of Belgium's Delhaize Group, prosecutors said. They said the men targeted two other corporations,which they did not name.
       Mr Gonzalez pleaded not guilty to last year's charges of hacking into the systems of several major retailers,including TJX Cos Inc. Prosecutors have said that 41 million numbers were stolen in the TJX case.
       "Charging this individual is a great development, but hacking and other forms of fraud are pervasive these days,"said Beth Givens, executive director of the Privacy Rights Clearinghouse, a nonprofit organisation in San Diego.
       Mr Gonzalez is accused of breaching computer networks of companies that have said they met tough standards set by the payment processing industry.
       His alleged crimes would account for a majority of compromised records,which Ms Givens' group estimates at around 263 million.

Yunus opens centre at AIT

       Nobel laureate Muhammad Yunus who introduced micro-credits in rural Bangladesh - has launched a centre at the Asian Institute of Technology to explore new avenues for tackling poverty in the region.
       "If you want to see poor people get out of poverty, you have to change the system," Mr Yunus said yesterday after the official launch of the Yunus Center at the AIT in Pathum Thani province.
       The winner of the 2006 Nobel Peace Prize for his pioneering concept of microcredits and this year's winner of the US Presidential Medal of Freedom, has chosen the 50-year-old AIT as his povertyfighting partner.
       "We have challenged the financial institutions who do not lend money to the poor," Mr Yunus said of his past successes in introducing micro-credit systems to the rural poor in Bangladesh.
       His micro-credit model has become popular in many developing countries.
       "This is particularly remarkable at a time when big banks, with lots of collateral and lawyers around them, are collapsing," he said."While micro-credit is working everywhere without collateral,without lawyers and repayments have remained as high as ever."

LOBBY WEAKENS US CAMPAIGN

       Nearly 5 million of the worst-polluting vehicles in the US have been quietly excluded from the popular "Cash for Clunkers" progrkamme after lobbyists for antique auto-parts suppliers and car collectors persuaded the government to shut out cars built before 1984.
       The restriction has prevented consumers who own older cars and pickups from cashing in on the US$3-billion (Bt102 billion) federal programme even though many do not consider their jalopies to be collectors' items.
       When the federal government announced the rebates of up to $4,500, Chris Hurst said it looked like the perfect time to unload his gas-guzzling 1981 Ford F-150, California, was surprised to discover his pickup was too old to qualify.
       "If we could have gotten that rebate, it would have worked perfectly for us," said Hurst, who is now trying to sell the vehicle, equipped with Ford's biggest V8 engine, for $1,600.
       The restrictions were pushed by lobbyists fot the Specialty Equipment Market Association (Sema), a California group representing companies that sell parts and services to classic and antique car collectors. The group, as well as classic car enthusists, have oppesed "Cash for Clunker", because they do not want older vehicles to be destroyed.
       When the proposals for the clunker buy-back programme surfaced early this year, Sema opposed the entire concept, because such a programme could shrink the size of the market for after-market parts. Sema eventually succeeded in getting lawmakers to adopt the aage restriction.
       "We are very pleased that Congress was able to include that in the programme," said Stuart Gosswein, director of regulatory affairs at Sema.
       The organisation represents more thna 7,000 comapnies that make all manner of auto-related products, including reproduction Model T tyres and AMC Gremlin upholstery. The powerful interest group earlier won legislative batteles to protect owners of classic cars and hot rods from laws covering vehicle noise and emissions tests, among other things.
       Consumer kand environmental groups reluctantly went along with the Sema provision, because they were too busy fighting for any rule that would push consumers to buy more fuel-efficient vehicles than the ones they were using.
       "I don't know that the programme makes a whole lot of environmental sense," said Lena Pons, a policy analyst for Public Citizen, which pushed for tougher fuel-economy standards.
       "There is not a whole lot of justification for the classic-car industry to block older vehicles from being traded in."
       Other critics fault the age limit on economic grounds, saying it makes little sense even for collectors.
       "If I own a 30-year-old Mustang, the value of my car goes up if others get destroyed," said Chris Edwards, an economist for the libertarian Cato Institute.
       "It is a typical industry loophole that doesn't protect the little guy but does protect some special-interest groups."
       Many Americans do not have the money to buy a new car, said Dan Baker, a part-time handymand and gardener in South Carolina who said he wished he could have qualified for a rebate to upgrade to a better used vehicle.
       "I'm the kind of person this programme could have helped," he said.
       Baker is trying to sell a brown 1980 Oldsmobile Cutlass SS with a broken air-conditioner and rusty fenders for $1,200.
       "It's just an old car with 101,000 miles on it," Baker said. "It is not a classic."
       Groups representing salvajge yards and service garages also derailed a provision in the bill that would have required the entire drive train of traded-in clunkers to be destroyed. Junkyards are now permitted to strip and resell all parts of the vehicles, exept the engines.

CARD OFFERS MAY INDICATE US TURNAROUND

       Could a sign of economic recovery in the US be in American's mail-boxes?
       Synovate, which tracks credit-card solicitations, last week reported card offers mailed to consumers in that country dropped 6 per cent quarter on quarter in the second quarter, a far milder decline than recently before. And some big issuers, such as Bank of America and Citibank, actually have increased their offerings.
       "That's the flattening out or bottoming out," said Anuj Shahani, director of competitive tracking services at Synovate's financial services group.
       Of course, card issuers are still stingy with credit and picky about whom they send offers to. Shahani said only the most creditwrothy consumers with Fair Isaac credit scores of 700 points or higher were receiving offers. And even if you are among this select group, you probably will notice one change: no more fixed-rate cards.
       Meanwhile, everyone else with a credit card may soon see other changes when some provisions of the new credit-card-reform law kick in on August 20.
       It was only in last year's second quarter when card issuers stuffed 1.06 billion offers in consumer mailboxes, Synovate said.
       Since then, issuers overall have reduced their mailings by double-digit percentages from quarter to quarter, including a 44-per-cent drop between last year's fourth quarter and this year's first quarter.
       In this year's second quarter, mailings reached 349.1 million, down 6.2 per cent quarter on quarter, Synovate said.
       Yet some major issuers ramped up offers. Bank of America sent out 55.2 million mailings in the second quarter, up 77 per cent quarter on quarter, Synovate said. Citibank increased its mailings 65 per cent to 56.1 million.
       Card issuers do not want to go too far out on a limb, Shahani said. But they do not want to be the last to extend credit either.
       "Otherwise, someone else will get in and take customers away," he said.
       Most solicitations also occurred laste in the second quarter, another sign issuers might be overcoming a reluctance to extend credit, Shahani said. But do not expect an industrywide uptick in offers until next year, he said.
       If you do receive card solicitations, they will not be for a fixed-rate card.
       "They are a dying breed," said Curtis Arnold, founder of www.cardratings.com, which tracks cards.
       He said much of that had to do with credit-card-reform legislation that was signed into law in May.
       Card issuers for years have had great leeway in changing a fixed rate with little notice.
       Credit-card reforms will allow issuers to claim a card has a fixed rate only if it cannot be changed for a certain period that is clearly spelled out, Arnold said. Card issuers, worried of running a foul of the new law, are sticking with variable-rate cards.
       Most card reforms kick in next February, but two provisions take effect next week.
       The first requires card companies to mail bills at least 21 days before payment is due instead of the 14 days that has become the norm for some issuers.
       The second requires card issuers to give 45 days' notice before raising the interest rate or significantly changing card terms. (No notice is necessary if the rate on a variable interest card goes up, because its benchmark rate has risen.)
       Consumers often complain about the short time they have to mail in their payments, so the extra week will be helpful, said John Ulzheimer, president of consumer education at www.credit.com.
       But the 45-day notice provision will probably have little effect, because consumers tend to ignore notices anyway, he added.

       "Card issuers are still stingy with credit and picky about whom they send offers to. Only the most creditwrothy consumers with Fair Isaac credit scores of 700 points or higher are receiving offers."