The Financial Supervisory Service said on the 19th that net income at standalone credit card companies last year was 2.3602 trillion won, down 230.8 billion won (8.9%) from a year earlier.
In detail, merchant fee revenue fell by 442.7 billion won, but card loan revenue rose by 293.8 billion won and installment card fee revenue increased by 145.0 billion won, partially offsetting the decline. In contrast, interest expense rose by 106.8 billion won and credit loss expense increased by 117.9 billion won, with expanding expenses acting as the main driver of weaker results.
As of the end of last year, the arrears rate at standalone card companies was 1.52%, down 0.13 percentage points from the end of the previous year (1.65%). The ratio of substandard or below loans was 1.15%, down 0.01 percentage points from the end of the previous year (1.16%), and card receivables improved to 1.05%, by 0.03 percentage points. The adjusted capital adequacy ratio was 21.1%, up 0.7 percentage points from the end of the previous year (20.4%), exceeding the management guidance ratio (8%). The leverage multiple was 5.1 times, down 0.1 times from the previous year (5.2 times), below the regulatory limit (8 times, 7 times or less for high dividends).
Net income at 183 non-card specialized credit finance companies (installment finance companies, leasing companies, and new technology finance companies) last year was 3.5524 trillion won, up 1.0705 trillion won (43.1%) from the previous year (2.4819 trillion won). Total revenue was 30.7330 trillion won, up 1.3646 trillion won (4.6%). Growth in lease, rental, and installment revenue by 997.8 billion won and in securities-related revenue by 541.0 billion won were the main drivers. Interest revenue was 9.4048 trillion won, down 274.7 billion won, but lease revenue rose to 7.1360 trillion won, rental revenue to 4.7042 trillion won, and installment revenue to 2.4723 trillion won, respectively.
At the end of last year, the arrears rate at non-card specialized credit finance companies was 2.11%, up 0.01 percentage points from the end of the previous year (2.1%). In contrast, the ratio of substandard or below loans was 2.66%, down 0.2 percentage points from the previous year (2.86%). The loan loss allowance coverage ratio was 134.5%, up 1.0 percentage point from the previous year (133.5%), with every company exceeding 100%.
In terms of capital adequacy, the adjusted capital adequacy ratio at non-card specialized credit finance companies was 19%, up 0.4 percentage points from the previous year (18.6%), exceeding the management guidance ratio (7%). The leverage multiple was 5.5 times, unchanged from the previous year.
The Financial Supervisory Service will closely monitor profitability trends at card and non-card companies this year, while continuing to encourage activation of self-initiated debt restructuring and stronger management of potentially risky receivables.