China's ICBC sees credit cards doubling in '07

SHANGHAI (Reuters) - Industrial and Commercial Bank of China (601398.SS) (1398.HK), the country's biggest lender, expects its total credit card issuance to double to 20 million by the end of this year from 10 million cards at the end of 2006, a senior ICBC executive said on Monday.

ICBC last year set a 2009 target for reaching the 20 million mark but moved it forward, mainly due to rapid acceptance of credit cards by both Chinese merchants and consumers, said Li Weiping, head of ICBC's credit card centre.

ICBC also expects spending via its credit cards to rise to 140 billion to 150 billion yuan ($18.3-19.6 billion) this year from 100 billion last year, Li told Reuters in an interview on the sidelines of a ceremony launching a new card.

"Thanks to our country's strong economic growth, Chinese people are becoming richer and richer, so our card holders are also willing to spend more money than before," said Li.

"ICBC will maintain a rapid pace of credit card issuance and will expand our market share this year from the present 27 percent," he said.

ICBC had issued 15 million credit cards by the end of May, he said.

On Monday, ICBC launched a co-branded credit card in partnership with American Express Co. (AXP.N) and Staples Inc. (SPLS.O), targeting business travelers and enterprises.

"We will launch more and more co-branded cards in partnership with leaders from different markets this year," said Li.

"The credit card is just a platform ... First, we want more clients for our credit cards, and then our clients can be linked to ICBC's retail banking products through the cards," he added.

State-owned ICBC's major domestic rivals in credit card services include China Construction Bank (0939.HK) and Merchants Bank Co. (3968.HK) (600036.SS).

Merchants Bank Chief Executive Ma Weihua told Reuters in March that his bank, the country's biggest non-state lender, expected to double the number of its credit cards to 20 million by the Beijing Olympics in August 2008.

Credit card use started to become common in big Chinese cities just a few years ago and Beijing is encouraging more shops and hotels to accept them, as part of an effort to improve payment services before the 2008 Olympics.

Beijing is also encouraging officials to use credit cards to pay for goods and services as a way to reduce corruption, as they can help it to trace transaction records, government and regulatory sources have said.

Foreign banks including HSBC Holdings Plc. (HSBA.L) (0005.HK) and Citigroup (C.N) have issued joint cards with local partners in China over the past few years.

($1=7.648 Yuan)