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By Kang Yoon-seung
SEOUL, April 1 (Yonhap) -- South Korea's top banking group Woori Finance Holdings Co. officially launched a separate credit card affiliate on Monday in an effort to increase its presence in the local market.
The company, named Woori Card Co., has an initial capital of 846.3 billion won (US$760.3 million), with shares owned entirely by Woori Finance Holdings. Jung Hyun-jin, an executive vice chairman of Woori Finance, was nominated to head the firm.
The launch came after South Korea's financial regulator in February gave Woori Bank, the country's second-largest lender, the final approval to spin off its credit card segment. Woori Card merged with Woori Bank in 2004, when South Korea underwent a credit card debt crisis.
The banking group had sought to spin off the credit card unit last year, but it failed to win approval from the regulator, which feared it could lead to excessive competition in the local credit card industry.
The firm aims to increase its presence by taking up a larger market share in debit card issuances and plans to issue the so-called hybrid cards that combine credit and debit cards.
Market watchers said South Korea's debit cards issuance is expected to increase down the road in response to the government's tougher regulation on credit cards, while tax incentives on debit cards are anticipated to increase.
With the credit card sector spinoff, the local plastic money market will have a total of eight credit card firms vying for a larger market share, including No. 1 Shinhan Card Co.
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