SEOUL, March 20 (Korea Bizwire) — South Korea’s credit card companies saw their combined net profit drop last year due to a sharp rise in loan-loss provisions and marketing costs, data showed Tuesday.
Eight standalone credit card firms posted a combined net profit of 1.22 trillion won (US$1.13 billion) in 2017, down 32.3 percent from a year earlier, according to the data released by the Financial Supervisory Service (FSS).
“The decline was mainly because marketing expenses and loan loss expenses increased in 2017,” the FSS said in a statement.
The number of credit cards issued here totaled 99.46 million at the end of last year, up 4 percent from a year ago.
Purchases with credit cards grew 5.3 percent on-year to 627.3 trillion won, with debit card purchases rising 7.2 percent to 160.8 trillion won.
Cash advances and credit card loans climbed 0.5 percent on-year to 98.4 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.