First credit card firm KEB to lose name
By Kim Jae-won
The nation’s first credit card company KEB Card will lose its name as its major shareholder Hana Financial Group decided to merge the credit card company’s information technology (IT) system with that of Hana Card.
Hana Card said that it will introduce a new IT system on July 20 by integrating those of Hana and KEB. The two have used separate system even though they were merged in December.
With the new system, customers of KEB Card will no longer be able to get services under the name which the company has kept since 1978 when it launched Korea’s first credit card.
“On July 20, 2015, this website will be closed and integrated into www.hanacard.co.kr. Some English services, including information on card products and card usage, will be provided on the integrated site,” said KEB Card in a statement posted on its website (www.yescard.co.kr).
KEB Card has undergone ups and downs over its 37-year history. It led the industry in the 1990s by introducing a bonus point system in 1995, a debit card in 1999 and a revolving system in 1999.
However, it suffered from a credit card crisis in the early 2000s and was under the control of U.S. private equity Lone Star Funds as the fund bought Korea Exchange Bank (KEB), the credit card firm’s parent company, in 2003.
Lone Star merged KEB and KEB Card in 2004, forcing hundreds of its employees to leave the company. Some of them turned to activists, opposing speculative foreign investors. At the time, Lone Star was accused of manipulating stock price of KEB Card to merge it at a lower price.
In 2012, Hana Financial Group bought a 51 percent stake in KEB from Lone Star for 4.7 trillion won. Later in December 2014, KEB Card was merged with Hana Card, a credit card affiliate of the group.
Market watchers expressed regret over Korea’s first credit card service company losing its identity. KEB Card survived the Asian financial crisis in the late 1990s and the credit card crisis in the early 2000s, but failed to keep its name this time.
Meanwhile, unionists of KEB and the management of Hana Financial Group are negotiating over the early merger of KEB and Hana Bank. The union opposes the plan, urging the group to keep its agreement to give the lender a five-year grace period three years ago. But, Hana Financial has pushed for the merger, saying it will create synergy effects by cutting costs.