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Card firms' net profit sinks 25 pct through Sept.

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(Globalpost/GlobalPost)

SEOUL, Nov. 21 (Yonhap) -- South Korea's card firms suffered a 25 percent decline in their earnings in the first three quarters of the year due mainly to a slump in consumers' sentiment, data showed on Thursday.

The combined net profit of seven local credit card firms for the January-September period came to 1.45 trillion won (US$1.37 billion), falling sharply from 1.92 trillion won tallied a year earlier.

Shinhan Card Co., the country's No. 1 player, saw its net profit fall 8.6 percent over the cited period to reach 534.8 billion won, while Hyundai Card Co. suffered a 22.5 percent decrease to reach 127.2 billion won.

Samsung Card Co., an affiliate of South Korea's No. 1 conglomerate Samsung Group, saw its net profit fall 70.8 percent on-year to reach 219 billion won.

Samsung's decline came mainly as its net income for 2012 increased nearly two-fold to 749.9 billion won from a year earlier on the sale of its stake in Samsung Everland Inc.

Market watchers said the overall decline in earnings of credit card firms came as South Korean consumers' sentiment was dented by the prolonged economic slump, which induced them to refrain from making purchases with plastic.

"The increase in the number of debit cards, which are less profitable than credit cards, also continues to weigh down on companies," a market insider said.

The government has been making efforts to promote debit cards to consumers since 2011 as a part of its bid to secure a more stable source of tax revenue.

Purchases made with debit cards surged 17.1 percent on-year in October to reach 8.39 trillion won from a year earlier, growing at a faster pace than the 2.8 percent on-year rise in purchases made by credit cards.

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