THE merged units of AIG Consumer Finance Group Inc. would focus on the American International Group Inc.’s insurance base as well as the overseas Filipino workers, executives bared recently.
Folding up the Philam Savings Bank Inc. and AIG Credit Card Co., surviving entity AIG Philam Savings Bank would tap the full potentials of its insurance customer base, as what the AIG has done in Hong Kong, Thailand, and other countries in Asia, Joven D. Reyes of AIG CFGI said in an interview.
Likewise, the Harvard Business School alumnus said the Group has not fully tapped the potential consumer spending of OFW households.
“I don’t see a need for a stand alone credit card firm,” said Reyes, who was formerly chief executive of Bankard Inc., the credit card business of the Rizal Commercial Banking Corp.
He admitted though that there is still room for credit cards, with an estimated 5.6 million potential cardholders forming the market in the urban areas. As of end 2005, credit card holders in the country amounted to 4.7 million, from only 600,000 in 1990.
“Today, the penetration rate (of credit cards) is between 40 percent to 45 percent,” Reyes said, adding that AIG’s active credit card base is 200,000.
Reyes said this credit card base would be “synergized” with the insurance products of Philamlife. He said that of the one million Philamlife policy holders, currently only 25,000 use their credit cards to pay for their insurance products.
Reyes said they would open a new branch in Ortigas this year, bringing to nine the bank’s branches. According to Rawa, the combined loan portfolio of the merged firm would hit P5.4 billion--P4-billion deposit liabilities in the credit card business, P2.2 billion in auto loans, and the rest from unsecured notes.
Compared to an industry level of 20 to 22 percent, the AIG credit card business has an 11-percent delinquency level, Reyes said.
According to central bank data, OFW remittances accounts for 75 percent of actual amounts flowing into the economy, effectively fueling P1.4-billion of personal expenditure. Dennis D. Estopace
http://www.businessmirror.com.ph/0525/comp06.php
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