Banks are ignoring calls by Hong Kong's banking regulator to throttle back on credit-card business, hoping to take advantage of the post-Sars euphoria to widen their market share. International credit-card issuer American Express Bank and Hong Kong lender Dah Sing Bank have launched plans to encourage local consumers to spend on their credit cards, under the guise of post-Sars economic stimulus. Both are also encouraging consumers to sign up for new credit cards. Two of Hong Kong's largest lenders - HSBC and subsidiary Hang Seng Bank - are expected to announce similar schemes. 'It's a commercial decision to increase their [credit-card] market share, and the faster they come out with it the better,' said GK Goh banking analyst Steven Chan. This comes despite warnings from Hong Kong Monetary Authority (HKMA) deputy chief executive David Carse that over-aggressive credit-card business could translate into deteriorating asset quality as more became unemployed. Mr Chan said: 'The banks' view is that once economic recovery strengthens, they will have to do something to get back what they lost in April and May. Bankers are paid to earn profits for the shareholders so I don't think the HKMA's warning will be suitable for the banks.' American Express chief executive Anthony Lee declined to comment. Dah Sing Bank managing director Derek Wong Hong-hing said this week: 'It is one of the initiatives that we would like to demonstrate that we are supporting Hong Kong ... but on the other hand we want more business as well.' Credit-card spending at banks dropped in April as people stayed home to avoid catching Sars. But most lenders reported that local spending on cards had returned to pre-Sars levels. Despite the HKMA's warning, most bankers say the schemes, which hope to attract customers through free gifts and extra reward points, should not hurt the asset quality of credit-card portfolios despite rising unemployment. HSBC general manager Raymond Or Ching-fai said recent measures to clamp down on credit-card bad debt should be enough to keep up asset quality. 'The credit-card portfolio ... is going to improve year on year. We have been making provisions and writing off debt on some individual card holders so the quality will improve.' Mr Wong said: 'It is too early to draw any conclusions. Those people who spend always operate within whatever limit we allow, so there is already risk management tied to our credit cards.' But Dao Heng Securities banking analyst Joanna Ng said: 'I expect personal bankruptcies to go up, and it will impact on credit-card charge-off ratios.'