China Merchants Bank (CMB), the country's sixth-largest lender, said it will focus on its credit card business to offset its lack of outlets and compete with state-owned counterparts.

Although the bank has the lead in the country's lucrative credit card business, it intends to pusha its advantage by issuing more options for cardholders, said Chi-wei Joong, head of the lender's credit card center.

CMB said the circulation of its dual currency-denominated credit cards would reach 10 million at the end of the year, a jump of 100 percent from December 2005, and account for 35 percent of the credit card market in China.

Joong attributed the increase to an easier reviewing process, partly due to the nationwide information database for individual credibility started by the central bank in 2005.

Facing harsh competition from the Big Four state-owned lenders, which have more outlets, Joong said a convenient payment solution is needed to help CMB acquire a larger customer base.

In anticipation of the opening of China's banking industry to full foreign competition, much of the mounting excitement from international analysts and institutions has centered on the potential of retail banking, especially of credit cards.

Existing card issuers have already begun bombarding the Chinese market with cash bonuses and other gifts in a battle to win over consumers.

In late October, Bank of Communications, the mainland's fifth-largest lender and the strategic partner of HSBC, released a new credit card targeting China's growing group of young professionals and executives.

Foreign lenders are not allowed to launch credit cards in China without a domestic partner.

The Shenzhen-headquartered CMB is venturing into the corporate card business, which could help enhance its individual credit card business by keeping track of clients' consumption for business records.

Along with AirPlus International, a German provider of business travel management solutions, it launched a new corporate card yesterday.

(China Daily December 1, 2006)