Card Companies' 1Q Net Profit Declines One After Another... Only Hyundai Card Performs Well

Most Net Profit Decreases in Double Digits
Hana, Woori, Lotte at 63%, 46.4%, 40.5% Respectively
Apple Pay Effect Helps Hyundai Card Hold Steady
Operating Profit Up Year-on-Year, Net Profit Decline in Single Digits

Credit card companies' net profits have been declining one after another in the first quarter of this year. This contrasts with the record-breaking performance last year. The increase in funding costs and rising delinquency rates this year have led to higher provisions for bad debts. Only Hyundai Card posted relatively strong results thanks to the 'Apple Pay' effect.

According to the industry on the 15th, Hana Card recorded a net profit of 20.2 billion KRW in the first quarter of this year, a 63% decrease compared to the same period last year. Woori Card (45.8 billion KRW, -46.4%), Lotte Card (54.4 billion KRW, -40.5%), and KB Kookmin Card (82 billion KRW, -31%) also showed double-digit declines one after another. Samsung Card recorded a net profit of 145.5 billion KRW, down 9.5% from the same period last year.

In the case of BC Card, a net loss of 1.32 billion KRW was recorded due to the evaluation of the put option for internet-only bank K-Bank being reflected as non-operating expenses. Shinhan Card, the industry leader, also recorded a net profit of 166.7 billion KRW, down 5.2% from the same period last year.

Operating profits declined even more sharply. Hana Card's operating profit plunged 66.2% year-on-year to 24.3 billion KRW. Woori Card's operating profit was halved (-50.3%) to 57 billion KRW compared to the previous year. KB Kookmin Card (111.8 billion KRW, -32.5%), Samsung Card (191.8 billion KRW, -11.4%), BC Card (11.5 billion KRW, -66%), and Lotte Card (68 billion KRW, -38.6%) also saw decreases ranging from 11% to 66%.

Delinquency rates are also on the rise. Shinhan Card, ranked first, recorded 1.37%, up 0.33 percentage points from the previous quarter. All credit card companies have delinquency rates exceeding 1%.

Only Hyundai Card stood out. Its operating profit in the first quarter was 95.7 billion KRW, a 1.5% increase compared to the same period last year. Although net profit during the same period decreased by 7.9% to 70.8 billion KRW, it was the best performance among credit card companies. This is attributed to the launch of Apple Pay, which increased credit sales volume by about 4.7 trillion KRW year-on-year, as well as a 910,000 increase in membership compared to the same period last year. The delinquency rate also decreased by 0.09 percentage points year-on-year to 0.95%. Bad debt expenses also fell by 21% to 62.9 billion KRW during the same period.

Photo by Getty Images Bank

This content was produced with the assistance of AI translation services.