Card firms’ profits fall for 1st time in 3 years

The yearly earnings of credit card firms dropped in 2011 for the first time in three years amid financial regulators’ stricter policy on blocking reckless business expansion.

According to the Financial Supervisory Service, six major credit card issuers saw their combined net profit stay at about 1.3 trillion won ($1.15 billion) in 2011, down 51 percent from 2.7 trillion won a year earlier.

This was the first fall since their net profit fell from 2.6 trillion won in 2007 to 1.6 trillion won in 2008.

The card issuers included Shinhan, BC, Samsung, Hyundai and Hana-SK.

The performance of KB Kookmin Card, the nation’s second-largest issuer, was excluded from the combined figure as it spun off from Kookmin Bank in March 2011.

As card firms have entered excessive business expansion mode, the FSS unveiled updated regulatory instructions including “weekly monitoring” during the first half of last year.