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Korean credit card companies saw their net profits nearly double in the first quarter from three months earlier, as more people favored cards for their transaction convenience and benefits, data showed Tuesday.
The combined net profits of seven credit card firms reached 921 billion won ($804 million) in the January-March period, compared with 481 billion won in the previous quarter, according to industry data.
No. 2 player Samsung Card Co. logged a profit of 509 billion, followed by industry leader Shinhan Card Co. with 186.4 billion won, Hyundai Card with 74.9 billion won and KB Kookmin Card Co. with 71 billion won in the same period.
Koreans’ credit card usage as a percentage of total consumption reached a record 63.3 percent in the first quarter, the data showed.
Analysts say their total profit will surely surpass the 2-trillion won for this year, despite regulatory pressure to cut down commission rates the firms charge vendors and slowing economic growth.
Credit card firms basked in a profit of 2.11 trillion won, and 2.72 trillion won in 2011 and 2010, respectively.
Early this month, the Financial Supervisory Service, the country’s financial watchdog, rolled out a measure to lower commission rates in an effort to help reduce smaller stores’ financial burdens, which credit card firms complain will hurt their profitability.
To overcome an expected fall in their profits, the local credit card firms are scurrying to reduce various optional services and benefits offered to cardholders such as cashback or flight mileage savings. (Yonhap News)
The combined net profits of seven credit card firms reached 921 billion won ($804 million) in the January-March period, compared with 481 billion won in the previous quarter, according to industry data.
No. 2 player Samsung Card Co. logged a profit of 509 billion, followed by industry leader Shinhan Card Co. with 186.4 billion won, Hyundai Card with 74.9 billion won and KB Kookmin Card Co. with 71 billion won in the same period.
Koreans’ credit card usage as a percentage of total consumption reached a record 63.3 percent in the first quarter, the data showed.
Analysts say their total profit will surely surpass the 2-trillion won for this year, despite regulatory pressure to cut down commission rates the firms charge vendors and slowing economic growth.
Credit card firms basked in a profit of 2.11 trillion won, and 2.72 trillion won in 2011 and 2010, respectively.
Early this month, the Financial Supervisory Service, the country’s financial watchdog, rolled out a measure to lower commission rates in an effort to help reduce smaller stores’ financial burdens, which credit card firms complain will hurt their profitability.
To overcome an expected fall in their profits, the local credit card firms are scurrying to reduce various optional services and benefits offered to cardholders such as cashback or flight mileage savings. (Yonhap News)
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Articles by Korea Herald
