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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, July 25, 2024 — Shinhan Card has fallen further behind Samsung Card in profitability, deepening concerns over its performance slump. The two companies’ first-half results show Shinhan Card lagging by roughly KRW 100 billion in net profit, with analysts projecting Samsung Card will hold the top spot for a second consecutive year.
According to the credit card industry, Shinhan Card posted KRW 246.6 billion in net profit for the first half of 2024, down about 35% from the previous year. By contrast, Samsung Card reported KRW 335.6 billion, a smaller decline of around 8%.
The entire card industry has faced headwinds from a deteriorating economic environment, but Shinhan Card’s losses have been steeper. Rising delinquency rates led to higher provisioning costs, and interest expenses also weighed heavily on results.
Second-quarter figures mirrored this trend: Samsung Card earned KRW 151.2 billion in net profit, surpassing Shinhan Card’s KRW 110.9 billion. Shinhan Card’s Q2 profit fell by nearly half year-on-year.
Shinhan Card, which lost its decade-long leadership position to Samsung Card last year, has been struggling to regain its footing. The company has undertaken a major organizational restructuring, cutting about 30% of team leader positions and consolidating departments.
In an unusual move, Shinhan Card launched a second round of voluntary retirement within six months, expected to remove over 100 team leaders and senior executives. This will incur severance costs worth several hundred billion KRW, making it even more difficult for the company to close the profit gap with Samsung Card in the second half.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
