Card firms` default rate rises in Q4

SEOUL, Feb. 5 (Yonhap) -- The delinquency rate of South Korean credit card firms
rose last quarter from three months earlier, hit by the slowing economy, the
financial watchdog said Thursday.
The default ratio of Samsung Card Co. and four other card firms came in at 3.43
percent at the end of last year, up 0.15 percentage point from three months
earlier, according to the Financial Supervisory Service.
The delinquency ratio rebounded for the first time since 2003 when a credit card
bubble burst in South Korea.
After the default rate of the card companies reached 28.3 percent as of the end
of 2003, the rate had been on the downward trend as they beefed up risk
management, the watchdog said.
"Consumer spending is falling, hit by the global economic crisis. As the default
rate is feared to rise due to a possible gain in overdue card bills in the first
half, the watchdog plans to strengthen its monitoring," an official said.
The data comes as the South Korean economy is slowing more sharply than expected
amid tumbling exports and weak domestic demand.
Asia's fourth-largest economy shrank 5.6 percent last quarter from three months
earlier, the sharpest fall since the Asian financial crisis a decade ago. The
International Monetary Fund predicted Tuesday the South Korean economy will
shrink 4 percent this year.
sooyeon@yna.co.kr
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