SEOUL, Nov. 16 (Korea Bizwire) – South Korean credit card companies posted a small increase in their net profits in the first nine months of 2016, undeterred by commission cuts, data showed Wednesday.
They lowered the fee rates early this year for merchants with the annual sales of between 200 million won (US$170,000) and 300 million won to 1.3 percent from 2 percent.
The rates for smaller ones were halved to 0.8 percent amid the government’s push for revitalizing the economy.
There had been worries that card firms’ profits could be cut by as much as 670 billion won per year due to the lowered rates.
But the combined net profits of eight local card companies rose 0.3 percent on-year to 1.57 trillion won during the January-September period, according to the Financial Supervisory Service’s data system.
In the third quarter alone, their net profits grew 2.59 percent to 528.8 billion won.
With credit card use itself on the rise in South Korea, local card issuers have expanded their lucrative credit loan businesses, market watchers pointed out.
“Since providing card loans is the most profit-making, card firms are rushing to expand it,” an industry figure said.
Hana, Samsung, BC and Shinhan posted relatively good earnings.
Hana’s net profits more than doubled to 59.3 billion in the third quarter from a year earlier.
In contrast, KB Kookmin Card and Lotte Card saw their net profits dip 17.37 percent and 19.94 percent to 235.3 billion and 49.4 billion won, respectively.