S. Korean card firms' Q1 net dips 34 pct

SEOUL, May 8 (Yonhap) -- South Korea's credit card companies saw their combined
first-quarter earnings decline 34.1 percent due to a one-off factor and rising
bad-debt expenses, the financial watchdog said Friday.

Samsung Card Co. and the country's four other credit card firms logged a combined
net profit of 419.2 billion won (US$332 million) in the January-March period,
compared with 635.8 billion won a year earlier, according to the Financial
Supervisory Service (FSS).
"The weaker bottom line comes as card companies booked one-off gains last year
that stem from Visa Inc.'s stock listing," the FSS said. "Also, increased
provisioning against bad assets helped to reduce their earnings."
Samsung Card posted the biggest profit of 176.3 billion won in the first three
months of this year, followed by Shinhan Card with 142.6 billion won and Hyundai
Card with 59 billion won.
Meanwhile, local card companies' financial health was dented by the slumping
economy. The average delinquency rate stood at 3.59 percent as of the end of
March, up from 3.43 percent three months earlier.
Total credit card bills fell 0.4 percent on-year to 112.1 trillion won in the
first quarter. Card spending, which has markedly slowed since the third quarter
of 2008, declined in the January-March period due to falls in cash advances, it
added.
The FSS said it plans to step up its monitoring of local card firms as the
slowing economy could deal a blow to their business profitability and asset
quality.
sooyeon@yna.co.kr
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