Card issuers' net profit dropped 7.8 percent last year

By Nam Hyun-woo

The overall net profit of eight local credit card firms decreased 7.8 percent last year, largely due to non-bank card firms’ weak performance, data showed, Friday.

According to data from the Financial Supervisory Service (FSS) and credit card firms, the aggregated sum of the issuers’ net profits last year stood at 2.05 trillion won, down 7.8 percent from 2.22 trillion won in 2014.

Credit card firms which have banking affiliates saw their net profits rising, with Shinhan Card leading the surge with 694.8 billion won, up 9.4 percent from 635.2 billion won in 2014. During the same period, KB Kookmin Card’s net profit also increased by 6.7 percent to 355 billion won, while Woori Card displayed a 31.1 percent hike with 116.9 billion won.

Of note was KEB Hana Card, which was established after Hana SK Card and KEB Card merged on Dec. 1, 2014. The firm’s net profit swelled 98.8 percent in 2015, standing at 10.1 billion won.

While the bank-affiliated issuers were enjoying solid numbers last year, non-banking card firms were suffering a decrease in their net profits, with BC Card being the only company earning more than the year before.

Samsung Card posted 333.7 billion won of net profit last year, almost half of its 656 billion won in 2014. According to the company, the sharp decrease is attributed to a 486.1 billion won one-off profit in the first half of 2014, incurred by the card firm’s sales of shares in its affiliates -- Samsung Fire and Cheil Industries (now Samsung C&T) _ netting the company an extra 209.1 billion won profit. In the next half of the year, it also sold its Cheil Industries share worth 278 billion won.

“The 2015 number includes some nonrecurring profits. When it comes to ordinary profit only, Samsung Card posted 287.5 billion won in 2014. Its 2015 profit has risen by 16.1 percent,” an official at the card firm said.

Other card issuers also struggled last year. Hyundai Card posted 186.8 billion won, down 16.4 percent from a year earlier, and Lotte Card netted 134.3 billion won, down 9.7 percent from 2014. BC Card, the only non-bank player that saw a rise in its net profit, recorded a net profit of 219 billion in 2015, up 62.9 percent from 134.5 billion won in 2014.