S. Korean card firms' H1 net dips 12 pct

SEOUL, Sept. 3 (Yonhap) -- South Korea's credit card companies saw their combined first-half earnings decline 12 percent due to a decline in gains from cash advance services and a one-off factor, the financial watchdog said Thursday.

Samsung Card Co. and the country's four other credit card firms logged a combined
net profit of 981 billion won (US$785 million) in the January-June period,
compared with 1.11 trillion won a year earlier, according to the Financial
Supervisory Service (FSS).
"The weaker bottom line came as card companies saw their gains from cash advances
fall and did not enjoy one-off gains seen last year," the FSS said. Last year,
local card firms logged a combined profit of 354 billion won by selling stakes in
Visa Inc.
Shinhan Card Co. posted the biggest profit of 367 billion won in the first six
months of the year, followed by Samsung Card Co. with 362 billion won and Hyundai
Card Co. with 119 billion won.
Meanwhile, local card companies' financial health improved as they wrote off bad
debts and strengthened risk management. The average delinquency rate stood at
3.10 percent as of the end of June, down from 3.59 percent three months earlier
and 3.43 percent at the end of last year, the watchdog said.
Total credit card bills rose 0.2 percent on-year to 228.2 trillion won in the
first half. 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.
But the spending increased in the April-June period as an economic downturn
eased, it said.
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.
sam@yna.co.kr
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