Lotte Card's Q1 Operating Profit Soars 201%... Membership Recovers to Last Year's Level

Lotte Card announced on May 6 that its operating profit for the first quarter reached 41.5 billion won, up 201.4% from 13.8 billion won in the same period last year.

Exterior view of Lotte Card Headquarters in Jongno-gu, Seoul. Lotte Card

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The company reported that its number of members rebounded from January, recording 9,566,000 members in the first quarter, similar to the 9,556,000 members seen in the same period last year.

Lotte Card also stated that its risk management indicators are improving. As of the end of March, the delinquency transition ratio stood at 0.318%, returning to the pre-Legoland crisis level of 0.311% in 2022. The delinquency transition ratio refers to the proportion of healthy loans that become delinquent for more than two months.

The company maintained a market share in the 10% range. According to credit sales performance data for individuals and corporations at the eight major card companies published by the Credit Finance Association for the first quarter, Lotte Card’s market share was 10.6%, remaining at double digits following 11.0% in the previous quarter.

The company explained that the improvement in operating profit is interpreted as the result of strengthening its fundamentals and internal soundness.

Lotte Card stated that it built a portfolio centered on high-quality customers this year to secure a stable revenue base, and pursued cost efficiency through ongoing reinforcement of risk management and reduction of bad debt expenses.

The company is also collaborating with its labor union. Last month, at a labor-management council meeting, CEO and President Jung Sangho and the union agreed to work together to overcome challenges and ensure employee stability.

CEO Jung said, "After last year's cyberattack incident, this was a crucial time to demonstrate the company’s resilience. Our employees united and achieved the valuable result of increased operating profit. Going forward, as 'One Team Loca,' we will wisely respond to internal and external uncertainties."

A Lotte Card official stated, "We will expand our customer base by diversifying sales channels and continuously launching new products. We also plan to maintain proactive asset soundness management, diversify funding structures, and pursue cost efficiency to continue improving our mid- to long-term profitability and strengthen our fundamentals."

Meanwhile, regarding the recent decision by the Financial Supervisory Service Sanctions Review Committee, Lotte Card stated, "Since the Financial Services Commission's final decision is still pending, we will sincerely explain our efforts to prevent accidents and minimize damage in order to seek mitigation of the sanctions."

On April 30, the Financial Supervisory Service reportedly decided at the sanctions review committee to impose a 4.5-month business suspension and a fine of 5 billion won on Lotte Card, which experienced a customer information leak due to a hacking incident, and issued a "reprimand warning" to former CEO Jo Joajin.

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