Analysis on Credit Card Market

Bangladesh

Prepared by:ANM Farukh

Farukhrana@Gmail.Com

May 04, 2009May 04, 2009

54321GOGO

Agenda Current Card Status of PBL Brand Shares Latest Position of Three

Banks Advances & CL of SCB,

BRAC & PBL Acquiring Income Acquiring Business Market Size Potential Market Size Market Tapped & Untapped Growth Rate of Card

Advance

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Market in 2010 Market Trend Trend Attributes Trend Factors to Ponder Strategy to Decide Infrastructure Products Merchant Acquiring Fees & Charges Branding & Communication Proposed Flow Chart

Sources of Info

Notes: All Information in this report

is based on:

Bangladesh Bank (Dec 2008) Bangladesh Bureau of Statistics (2007) ABC’s internal information (March 2009)

unless and otherwise expressed explicitly.

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Current Card Status of ABC … (2)

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Growth Rate (Number of Accounts)

0.46

0.170.16

-0.050.100.150.200.250.300.350.400.450.50

2004-05 2005-06 2006-07 2007-08All Banks FCB PCB PBL

Growth Rate (Advances)0.70

0.260.25

-

0.10

0.20

0.30

0.40

0.50

0.60

0.70

2004-05 2005-06 2006-07 2007-08

All Banks FCB PCB PBL1.11

1.34

In Number of Cards & Advances, Growth rate of PBL is lower than all.

Growth Trend =

“PCB > Industry > FCB > ABC”

Current Card Status of ABC … (3)5/49

All parameters is growing in course of time.

Card Parameters Growing

39.83

14.68

1.28

11.69

31.89

26.1023.81

11.169.887.65

1.553.002.546.37 8.34 8.61

0

5

10

15

20

25

30

35

40

45

2005 2006 2007 2008

Taka

in C

rore

Total Advances Total RevenueTotal Net Income Total Expense

Brand SharesAdvance

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,

All PCBs 55.75%

SCB, 41.21%

Other FCB, 3.06%

BRAC 21%

Other PCB29%

PBL6%

Latest Positions of 03 Banks7/49

Latest Advances(Lac Taka)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

SCB Brac PBL

31-Dec-08 31-Mar-09

-2%

8%

1%

% Indicates quarter to quarter changes.

Advances & CL of SCB, BRAC & ABC

As of Dec – 2008 in crore taka

Advances C.L. CL %

SCB 297.734 28.5 9.57%

BRAC 151.95 8.91 5.86%

PBL 39.83 3.9442 9.90%

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Classified Loan as % of Advances

9.57%

5.86%

9.90%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

SCB

BRAC

PBL

Market Size (No. of Customers)

FCB share 2.21 Lac PCB share 1.81 Lac Total Card Customers Total Card Customers 4.02 Lac4.02 Lac

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Potential Market Size:

Current Active Cards: 4.02 LacPotential Customer: Urban Monthly Income >= Tk

10,000

37.30 Lac(Earning people)

Female & Student Card Market

Urban Income group of MHI Tk

10,000 or moreData : BBS Statistical Book 2008

(Minimum size) Lac Household: 20.3 Female: 20.3 Students: 20.3

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Market Tapped & Untapped

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• Tapped: 4.02 Lac (11%)

• Untapped: 33.3 Lac (89%)

• Total: 37.3 Lac (100%)

Tapped 11%

Untapped 89%

Market Tapped & Untapped Demography of Current Card Users of PBL

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We have smaller (5%) share at the Larger pie (59%) of the population, earning 10K - 20K.

Urban Population by Monthly Income

10K to 20K2.1959%

More than 20K1.5441%

PBL Card Users by Monthly Income

10K to 20K5%

More than 20K95%

Market Size: (Advances)

Total market size is Tk 722 722 crore.

Foreign banks market is Tk 320 crore. 44%.

Local banks market is Tk 402 crore. 56%.

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Market Share Dec 2008

FCB44%

PCB56%

Growth Rate of Card AdvanceAverage Annual Growth Rate in recent years (2004 – 2008):

Local banks 64.2% Foreign banks: 20.4% Overall market: 36.1%

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20.4%

36.1%

64.2%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

All

FCB

PCB

A

A

A

A

Market: 1000 Crore (2010)Market: 193 Crore (2004)

Outstanding advance amount

is expected to be around:Taka 1000 crore by

Dec 2010

Market in 2010(Advances)

Market Trends: Point to Point

Foreign banks have gradually lost market share to PCBs.

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Market Share Dec 2008

FCB44%

PCB56%

Market Share Dec 2004

FCB75%

PCB25%

Market Trends: Continuous

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Market Share of FCB is going down.

75% 74%69%

60%

44%

25% 26%31%

40%

56%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2004 2005 2006 2007 2008

FCB

PCB

Trend Attributes

Local banks are increasing Retail Business at mass level

Local banks can operate country wide but foreign banks can’t

Foreign banks are focusing on serving upper niche

PCBs are enjoying extended distribution channel and improved customer service with competitive fees and charges than FCBs.

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Trend Factors to Ponder:

Global Economy is in severe recession. Our economy is also feeling the pressure to get squeezed.

As par GOB, credit card holders’ TIN will be verified and new card holders will have to have a genuine TIN from now.

Though in the long run, all is expected to have proper TIN and credit card as well. However, this GOB notification, has a SHORT TERM impact in reducing the credit card market’s growth at the moment.

Therefore Question is: Should we follow a moderate strategy instead of highly aggressive strategy for the moment?

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The End20/49

THANKTHANK YOUYOU ALLALLContents are reduced and edited for purpose. For a full copy please send an email.