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. (image: KobizMedia/ Korea Bizwire)
SEOUL, March 28 (Korea Bizwire) — Card firms in South Korea saw their combined earnings in 2021 jump thanks to a hike in commission revenue boosted by rebounding consumption from a pandemic-caused slowdown, industry data showed Monday.
The combined net income of eight major card firms came to 2.71 trillion won (US$2.21 billion) last year, up 33.9 percent from a year earlier, according to the preliminary data from the Financial Supervisory Service (FSS).
The rise was attributed to increased commission revenue, which expanded 613.8 billion won last year from a year earlier. Revenue from card loans also grew 187.8 billion won over the same period, the data showed.
Credit and debit card spending rose 9.5 percent on-year to 960.6 trillion won in 2021. In particular, credit card spending jumped 10.4 percent to 779 trillion won.
Card loans issued in 2021 came to 107.2 trillion won, up 0.1 percent from a year before, though the growth rate was slower than a 1.8 percent on-year rise tallied in 2020.
The delinquency ratio for card loans stood at 1.09 percent last year, down 0.2 percentage point from the previous year, the data showed.
The number of credit cards issued had come to 117.7 million as of end-2021, up 3.5 percent from the previous year. The issuance of debit cards fell 3.6 percent to 106 million.
The FSS said local card firms are still faced with the growing possibility of their debt going bad amid heightening geopolitical risks and major economies tightening their pandemic-era loss monetary policy, which will send borrowing costs higher.
“We will induce them to beef up their shock-absorbing capability by setting aside more loan loss reserves,” the regulator said.
(Yonhap)
