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| Samsung Card CEO Kim Dae-hwan, left, and Renault Samsung Motors CEO Dominique Signora / Korea Times file |
By Park Jae-hyuk
Samsung Card is drawing keen attention from market observers here who are wondering when the card issuer will unload its 19.9 percent stake in Renault Samsung Motors.
The trademark contract between the Korean conglomerate and the French automotive company will end Aug. 4. If they disagree with its renewal, Renault Samsung will need to remove "Samsung" from its company name after a two-year grace period. Samsung Card will also have no reason to hold its stake in the carmaker.
Given that their partnership has hardly benefited Samsung these days, most industry officials accept their breakup as inevitable, although both of them have emphasized nothing has been decided yet regarding this issue.
Renault Samsung's dividends paid to Samsung Card during the first quarter dropped 9.7 billion won ($8 million) from 21.2 billion won a year earlier, causing the card firm's first-quarter net profit to fall 6.8 percent to 112.2 billion won. It was the only company that suffered an earnings decrease during the first quarter among the nation's seven card issuers.
The carmaker was a lucrative source of income for Samsung Card until last year, because it had been distributing 70 percent of its net profit to shareholders.
However, Renault Samsung cut its dividend payout ratio to 30 percent amid a labor dispute and the pandemic. It is unlikely to increase its dividends within this year, considering its labor and management are still in conflict.
Vehicles using the name of Samsung are also bothersome to the conglomerate which seeks to join hands with various carmakers worldwide to sell its electronic parts and batteries to them.
In particular, Samsung Electronics Vice Chairman Lee Jae-yong held a series of meeting recently with Hyundai Motor Group Executive Vice Chairman Chung Euisun to seek cooperation. Lee visited the carmaker's Namyang R&D Center in Hwaseong, Gyeonggi Province, Tuesday, following Chung's May visit to Samsung SDI's plant in Cheonan, South Chungcheong Province.
Observers, however, say it will take some time for Samsung Card to sell its share in Renault Samsung, because the card firm will likely face difficulties in finding a buyer of its stake in the financially struggling carmaker.
