South Korea's major credit card firms saw their combined earnings spike nearly 51 percent in the first half thanks to increased card usage and greater income from credit card loans, the financial regulator said Thursday.
The combined net profit of eight card issuers, including Shinhan Card Co., Samsung Card Co. and KB Kookmin Card Co., came to 810.1 billion won (US$718 million) in the January-June period, up 50.9 percent from a year earlier, according to the Financial Supervisory Service (FSS).
The sharp rise was attributed to a combination of increased fee income, earnings from card loans and decreased loan-loss reserves.
Despite a cut in swipe fees, their commission income jumped by 195.3 billion won in the three-month period, with loan-loss reserves declining by 178.5 billion won.
The financial authorities have made efforts for years to lower the rates to ease the burden on small shop owners. Under the current system, merchants who accept credit cards have to pay swipe fees of an average 2.1 percent on all credit-card transactions to the service provider. For debit cards, a 1.6 percent commission is imposed on each purchase.
Woori Card posted the highest profit growth rate of 193 percent in the first half, with earnings of Samsung Card, Shinhan Card and KB Kookmin Card soaring more than 50 percent.
The number of credit cards issued came to 102 million as of end-June, up 4.9 percent from a year ago, with that of debit cards rising 1.2 percent to 111 million.
The amount of credit card purchases rose 3.9 percent on-year to 323.3 trillion won in the first half, with cash advances and card loans rising 3.4 percent to 30.2 trillion won and 16.4 percent to 22.7 trillion won, respectively.
The overall credit card delinquency ratio came to 1.47 percent as of end-June, up 0.01 percentage point from six months earlier, with that for card loans dropping 0.01 percentage point to 2.33 percent, according to the FSS. (yonhap)