Banking News

StanChart toughening up on credit cards

StanChart toughening up on credit cards

(Hong Kong) - Standard Chartered Bank is slicing the spending limits of credit card for some customers in Hong Kong in a pre-emptive move to avoid being stung by the growing wave of personal bankruptcies. Standard Chartered's move follows close on the heals of other local banks agreeing to share credit information in a bid to stem the rise in personal bankruptcy cases, although this will take some time to implement with the Government and the Territory's Hong Kong Monetary Authority (HKMA) seeking Privacy Council rulings on a revision of guidelines governing banks sharing customers' credit data.

Standard Chartered has some 2.1 million credit cards circulating in Hong Kong, with the Territory recording a record 9,151 bankruptcies last year.

HKMA data shows a total of 8.4 million credit card accounts in the Territory for 6.8 million people as at the end of September last.

Analysts estimate the number of "problem" cardholders could climb to 168,912 this year from an estimated 128,800 in 2001, with investment analysts GK Goh suggesting that local lenders may have to write off HK$3.41 billion in credit card receivables this year versus HK$2.62 billion in 2001 - a significant 30 percent jump.

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