United States insurance giant American International Group (AIG) has stepped into the Hong Kong credit card business, despite a weak economy and rising instances of bad credit card debt.
The parent of Hong Kong's largest insurer - American International Assurance (AIA) - launched its credit card service last week to the surprise of rival bankers considering the SAR is suffering its worse recession in more than a decade.
Credit card loans overdue for more than three months hit 1.28 per cent of total outstanding credit card debt in the quarter to June 30, up from 0.94 per cent a year earlier, according to Hong Kong Monetary Authority figures.
However, AIG Credit Card (Hong Kong) general manager Panky Poon Sau-hung defended the timing of its entry to the market.
'We believe the SAR has seen the early signs of economic recovery,' she said.
'We would apply a very prudent approach to access the credit qualities of the clients before we would issue the credit cards for them.' Although credit card problem loans in Hong Kong were rising, the level of bad debt was still much lower than in US and Europe, Ms Poon said.
The firm launched a credit card in Philippines last year and in Taiwan in June.