Aug. 13--Bangkok Bank expects to see little impact on its revenue from its move to cut credit card interest rates, according to a senior executive.

BBL, the country's largest bank, surprised the markets last month by cutting its credit card rates to 18 percent per year from the 20 percent maximum permitted by regulators.

The bank made the rate cut to reduce the financial burden on customers during the economic downturn, said Shoke Na Ranong, a senior executive vice-president at BBL.

He said the credit card industry this year was expected to post a modest growth of just 1 percent, both in terms of outstanding cards and spending.

"Our rate cut wasn't a promotional campaign. We will continue to maintain the lowest rates in the market until we find we cannot shoulder the costs. For now, we can maintain our rates thanks to good management in cost of funds," Mr Shoke said.

BBL currently has 900,000 cards, up from 850,000 at the end of last year. The bank expects its card base to rise to 950,000 by the year-end.

Average card spending is 5,000 baht per month. The bank expects modest growth of 3 percent to 5 percent by the year-end.

Asset quality, rather than business growth, remains BBL's main priority this year, said Mr Shoke.

Non-performing loans for the bank's card portfolio stood at 2.5 percent of total loans at the end of June, up from 2.2 percent at the end of 2008. BBL expects the recession to push bad loans to as high as 2.7 percent by the year-end.

Card cancellations are on the rise as households clamp down on debt and spending, he said.

But improvements in the local and global economy should help boost consumer confidence and spending going into the second half, he said.

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