SEOUL, March 6 (Korea Bizwire) – South Korea’s credit card companies suffered a drop in their net profit last year on a sharp increase in marketing cost and loan loss expenses, data showed Monday.
Eight standalone credit card firms here posted a total of 1.81 trillion won (US$1.5 billion) in net profit, down 9.9 percent from 2015, according to the country’s state financial watchdog.
“Merchant fee income and card loan interest revenues rose compared with the previous year. However, provisions against soured assets and marketing expenses increased by 281.6 billion won and 519.4 billion won, respectively,” the Financial Supervisory Service (FSS) said.
Samsung Card was the only winner with its net income growing 12.5 percent on-year to 322.7 billion won.
The number of credit cards issued here totaled 95.6 million at the end of 2016, up 2.7 percent from a year ago.
Purchases with credit cards grew 11.4 percent on-year to 59 trillion, with debit card purchases rising 14.5 percent to 150.0 trillion won.
Cash advances and credit card loans climbed 3.5 percent on-year to 97.9 trillion won.
The FSS said it will tighten the monitoring of the card firms’ financial soundness, as uncertainty grows over economic conditions at home and abroad including the possibility of further hikes in the U.S. interest rate.