"Woori Card Faces Longest-Ever Slump Amid Soaring Delinquency Rates, Seeks Turnaround with Innovative Products"

'Card Eojeongseok' Series Featuring Human Expressions
Innovative Products Raise Hopes for a Turnaround in the Second Half

Among the major credit card companies, only Woori Card showed a decline in its core business area of personal credit sales. As the nominal delinquency rate soared to nearly 2% last year-a level considered risky-the company adopted a management strategy focused on asset quality, which inevitably led to sluggish credit sales. However, since Jin Sungwon, formerly of Hyundai Card, took office as CEO and began launching innovative products, the financial sector is closely watching to see if credit sales performance will rebound in the second half of the year.

Jin Sungwon, President and CEO of Woori Card. Woori Card

According to an analysis conducted on the 12th using the Financial Supervisory Service's Dynamic Visualization Analysis System (DIVA), Woori Card's personal credit sales at the end of the second quarter stood at 49.9152 trillion won, a decrease of 2.5482 trillion won (4.9%) compared to the same period last year (52.4634 trillion won). Woori Card's personal credit sales have declined for five consecutive quarters since the end of the first quarter of 2024. This is the longest period of decline since the Financial Supervisory Service began compiling statistics at the end of the second quarter of 2013. Woori Card has experienced a decrease in personal credit sales only twice: in the first and second quarters of 2014, and from the first quarter of 2024 to the second quarter of this year.

Other card companies, despite challenging market conditions, all increased their personal credit sales. The total personal credit sales of the eight major credit card companies (Samsung, Shinhan, KB Kookmin, Hyundai, Hana, Woori, Lotte, and BC Card) reached 707.0449 trillion won at the end of the second quarter, up 3.5% (23.8459 trillion won) from 683.199 trillion won in the same period last year. All seven companies except Woori Card increased their personal credit sales.

The sluggish credit sales also negatively impacted operating revenue. Credit sales revenue-which includes sales from credit cards for purchases and accounts for 26-28% of total operating revenue-also declined. According to Woori Card's business report, credit sales revenue at the end of the second quarter was 316.697 billion won, down 1.8% (5.721 billion won) from 322.418 billion won in the same period last year.

Both inside and outside the financial sector, there are concerns about the prolonged slump in Woori Card's credit sales, which is a key indicator of a card company's fundamental competitiveness. According to the Financial Supervisory Service's Financial Statistics Information System, Woori Card's actual delinquency rate soared to 2.41% at the end of the first half of last year, reaching a dangerous level, and rose by 0.19 percentage points to 2.6% in the second quarter of this year. Based on Woori Card's disclosures, the nominal delinquency rate also jumped to 1.87% at the end of the first quarter, the highest in five years since 2020. However, it slightly decreased to 1.83% in the second quarter and 1.8% in the third quarter.

The nominal delinquency rate excludes delinquent receivables from refinancing loans, while the actual delinquency rate includes them. Typically, the actual delinquency rate is higher than the nominal delinquency rate, and a nominal delinquency rate exceeding 2% is interpreted as a warning sign for asset quality.

A Woori Card official explained, "Last year, we focused our business strategy on asset quality management, and the decline in credit sales performance resulted from prioritizing soundness management."

However, many believe that product competitiveness remains strong. Card companies are struggling due to reduced merchant fees, increased bad debt and interest costs, and a shrinking loan portfolio. As a result, instead of so-called "benefit cards" with low annual fees, they are seeking breakthroughs by expanding premium lineups and developing co-branded private label credit cards (PLCCs). Some say that product innovation is the only realistic way to increase personal credit sales.

Woori Card is looking to its flagship innovative "Card Eojeongseok" series to drive a rebound in personal credit sales. The industry is watching closely to see if this series can reverse Woori Card's longest-ever decline in credit sales. A Woori Card official stated, "The third quarter's personal credit sales performance will soon be reflected in the Financial Supervisory Service's DIVA, and we expect a slight increase. We believe that performance will turn upward in the second half of the year."

A C-level executive at another card company commented, "Regardless of customer preferences, the 'Card Eojeongseok' series made me realize just how far Woori Card has come. As it is an innovative product that defied industry expectations, its future performance is worth watching."

On the 22nd of last month, Woori Card's innovative product "Card Eojeongseok" was selected as a finalist at the digital video advertising festival "YouTube Works Awards 2025". Woori Card

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