Combined net income for South Korea’s six credit card companies dropped by 8.7% during the first six months of this year compared with the same period last year primarily because two of them reported losses, data from the country’s Financial Supervisory Commission reveal.
The combined net income of the issuers totaled 895.3 billion won (US$770 million or 580 million euros); they reported net income of 980.7 billion won over the same period last year, the commission says.
The six issuers include Hana SK Card Co. Ltd., Samsung Card Co. Ltd., BC Card Co. Ltd., Shinhan Card Co. Ltd., Hyundai Card Co. Ltd., and Lotte Card Co. Ltd.
BC Card had a net loss of 48.9 billion won; it reported a net income of 18.2 billion won during the same period last year. Hana SK recorded a net loss of 23.4 billion won after it reported a net income of 137.8 billion won for the first half of 2009, the commission says.
BC Card had to distribute 135.5 billion won it made from the Visa Inc. initial public offering last year to its member firms, resulting in the loss for the period, while Hana SK Card reported losses stemming from its spin off from parent Hana Financial Group last November.
Out of the six issuers, Shinhan recorded the highest net income at 367.1 billion won, followed by Samsung at 362.6 billion won, Hyundai at 136.3 billion won and Lotte at 72.7 billion won.
Profit margins should get tighter for all issuers for the second half of the year, the commission says. “The growth of credit card use is likely to slip in the second half of the year due to slowing consumer spending,” the commission noted in the statement. “Tightening sales competition between credit card issuers and rising marketing costs are also forecast to squeeze the operating profit margin.”
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