Oct. 30--Credit card issuers are hopeful of a pickup in activity in the fourth quarter, despite signs of spending cutbacks due to the global economic crisis.

Political uncertainties and the poor economic outlook have already hurt the market in the first half of the year.

According to the Bank of Thailand, 12.5 million credit cards with outstanding loans of 179.7 billion baht were recorded as of August. This represents growth from January of only 4.7 percent in outstanding cards and 2.17 percent in outstanding loans.

Thawatchai Thitisakdiskul, a senior executive vice-president of Krungthai Card, said credit card spending typically picks up in the fourth quarter with the year-end holidays.

KTC, one of the country's largest consumer finance companies, expects 20 percent to 30 percent growth in card spending in the fourth quarter, although growth for the year will be below previous forecasts due to weaker consumer confidence.

Mr Thawatchai said KTC forecast an even greater slowdown in 2009. The company now plans to shift to a more defensive strategy of protecting its existing market share rather than focusing on new card expansion.

Risk management would also be tightened while marketing activities would be reduced.

"We have basically had to redo our 2009 business plan due to the uncertain picture. We will consider the market situation quarter by quarter and adjust accordingly," said Mr Thawatchai.

KTC, a Krung Thai Bank subsidiary, said its third-quarter spending per card was 7,000 baht, up 16 percent year-on-year. The company expects its card base to reach 1.65 million by the end of the year, up from 1.5 million last year.

Anchalee Charasyosvuthichai, a first vice-president at Kasikornbank, agreed that card spending in the fourth quarter was normally 20 percent to 30 percent higher than in the first three quarters.

She said that even with the downturn, spending would continue to rise in the latter half of the year.

Kasikornbank hopes to double its new card figures in 2009 from 200,000 new cards this year. The bank is shifting to increase its card base to help compensate for a projected decline in per-card spending, which at Kasikornbank currently averages 12,000 baht per month.

Wichit Phayahanaveechai, head of personal financial services at HSBC, said the bank was launching new marketing and promotional campaigns to help maintain card spending figures going into the holiday season.

"Certainly the global financial turmoil will affect the Thai market, although to what extent remains uncertain," he said.

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