Seoul: Credit card companies in South Korea experienced a 9 percent decline in their combined net profit last year, attributed to reduced commission income and increased financial costs, as indicated by recent data.
According to Yonhap News Agency, the combined net profit of eight credit card firms amounted to 2.36 trillion won (US$1.57 billion) in the previous year, a noticeable decrease from the 2.59 trillion won recorded the year before. This information was sourced from the Financial Supervisory Service (FSS).
While the overall revenue for these companies saw a slight increase of 0.1 percent, or 25 billion won, reaching 28.24 trillion won, their expenses rose by a more substantial 1 percent, or 256 billion won, amounting to 25.88 trillion won over the same timeframe. The delinquency ratio stood at 1.52 percent as of the end of December, reflecting a decrease of 0.13 percentage points from the previous year.
In terms of transaction volume, credit and debit card usage grew by 3.5 percent year-on-year, or 42 trillion won, totaling 1,225 trillion won last year.
Meanwhile, the financial regulator noted that the combined net profit of specialized credit finance companies, excluding credit card firms, reached 3.55 trillion won last year, marking a significant 43 percent increase from the previous year. The Financial Supervisory Service reported that there were 183 specialized credit finance firms, which include installment financing, leasing, and new technology venture businesses.