Mixed Results for Financial Holding Company Card Subsidiaries: KB and Woori Rise, Shinhan Falls Back

Net Profit Rises, but Profitability Diverges
KB Closes in on Shinhan
Hana and Woori Achieve Stable Growth

In the first quarter of this year, the financial performance of credit card subsidiaries under major banking groups showed mixed results. While total net profit saw a slight increase, clear differences emerged among companies depending on their cost burdens and ability to manage asset quality. KB Kookmin Card and Woori Card posted strong results and enjoyed the gains, whereas Shinhan Card experienced a slowdown. In a business environment where top-line growth alone is no longer sufficient to defend profitability, analysts point out that the key driver of earnings is shifting from "increased transaction volume" to "cost control and risk management."

According to financial industry sources on April 27, the aggregate net profit of the four major banking group card companies (Shinhan, Woori, Hana, and KB Kookmin) in the first quarter of this year reached 32.43 billion won, marking a 5.4% increase compared to the same period last year.

Although the overall scale of earnings grew, the underlying quality varied by company. With rising funding costs, ongoing pressure to lower merchant fees, and increased marketing expenses, the structure where simple top-line expansion is no longer enough to protect profits has become entrenched. In particular, the burden of provisioning for credit losses emerged as a decisive variable. Companies that proactively improved their asset quality indicators were able to reduce provisioning burdens and increase profit, while those with higher management costs saw net profit decline despite business growth.

Shinhan Card maintained its industry-leading position with a net profit of 115.4 billion won, but this represented a 14.9% year-on-year decline. This was due to a combination of one-off factors such as expenses from voluntary retirement programs and increases in fees and selling and administrative expenses. Shinhan Card has recently implemented several rounds of voluntary retirements to streamline its organization in response to deteriorating market conditions.

In contrast, KB Kookmin Card, which strengthened its fundamentals through asset quality management, recorded a net profit of 107.5 billion won, up 27.2% from the same period last year. Improvements in delinquency and non-performing loan ratios led to a significant reduction in provisions, which played a key role. As a result, KB Kookmin Card has narrowed the net profit gap with the top player, Shinhan Card, to just 7.9 billion won.

Hana Card and Woori Card also demonstrated stable growth. Hana Card's first-quarter net profit was 57.5 billion won, up 5.3%. Strong performance in corporate cards and the expansion of overseas payment services such as "Travelog" are believed to have driven the increase in transaction volume.

Woori Card achieved the steepest growth rate among its peers, with a 43.9 billion won net profit, representing an increase of over 30% year-on-year. Efforts to strengthen its revenue base, such as expanding its own merchant network, are seen as contributing factors reflected in its results.

An industry official commented, "Aggressive marketing or expanding the card salesforce as in the past is no longer effective in winning market share. Going forward, the ability to control costs and manage asset quality will be the key variables determining the performance of credit card companies."

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