Lotte Card runs smoothly after MBK's takeover

The new headquarters building of Lotte Card near Gwanghwamun in Seoul / Courtesy of Lotte Card

By Park Jae-hyuk

Lotte Card has seen a sharp increase in its earnings since MBK Partners took control of the firm in November.

According to the company's regulatory filing, Monday, its first-quarter earnings rose 69 percent year-on-year to 50.9 billion won ($41.3 million).

As of the end of March, its net assets reached 13.7 trillion won, up 60.8 billion won from the end of last year. It posted 58.1 billion won in operating profit during the first quarter, a 51 percent increase from a year earlier.

“Our first-quarter earnings increased as we sold more bonds than in the previous year,” a Lotte Card official said. “Although the credit card fee reduction has had a negative impact on our profitability, we've offset losses with various cost-effective business strategies.”

The credit card issuer is also accelerating efforts to improve corporate culture.

It recently moved its head office to the Concordian building near Gwanghwamun Station, which was the former headquarters building of Kumho Asiana Group. The relocation was made 10 years after Lotte Card moved to the Lotte Insurance headquarters building near Namdaemun in 2010 from the A+Tower in Gangnam.

Both Lotte Card and Lotte Insurance were subsidiaries of Lotte Group, but the retail giant sold the two financial services companies last year to private equity firms ― MBK and JKL Partners.

Lotte Card said it designed its new office building with an intention of creating a “horizontal” and “agile” corporate culture. In this regard, the company decided not to offer seats at the heads of tables to its team leaders.

The new headquarters building also has working lounges on seven floors, each of which is themed and designed to resemble a cafe, an attic, a digital room, a garage, an arcade, a theater and a library.

“I think hardware can change software,” Lotte Card CEO Cho Jwa-jin said. “I expect the new headquarters building's interior design will show our employees the direction in which our company should go.”

The CEO, who joined Lotte Card in March after working for Oliver Wyman's Korean office and Hyundai Card, also vowed to offer better services to customers, focusing more on developing the company's core abilities.