NongHyup Financial Group has embarked on its project to expand its credit card business, heralding increased competition with the nation’s top four players.
The financial group has set the goal of spinning off its credit card unit from NongHyup Bank by next year, according to some market insiders and regulatory officials.
An official of the Financial Supervisory Service on Wednesday raised the possibility that NongHyup Financial would tender its application for the stand-alone credit card business to the Financial Services Commission later this year or early next year.
Yim Jong-yong
Mentioning the competitive market share of the group’s bank unit-based credit business, the official said that “NongHyup Card could make its debut as early as the first half of 2014” via several months-long regulatory approval procedures.
He also commented on recent remarks of the group’s chairman Yim Jong-yong, who took office two months ago. Yim was quoted by a newspaper as saying that he would take “a feasible synergy effect” into consideration in the group’s decisions on the money-spinning business.
Its credit card unit, currently belonging to NongHyup Bank, controls about 8.5 percent of the market, outperforming Woori Card, Lotte Card and Hana SK Card.
Under its mid and long-term vision to challenge major issuers such as Shinhan, Samsung, KB Kookmin and Hyundai, the group is aiming to pull up its credit card market share to 10 percent by the end of this year.
NongHyup Bank recently put out new TV commercials to aggressively promote its new products, which feature a variety of discount services for cardholders.
In addition, the group has declared “2013 is the base year for credit card business growth,” according to group spokespeople.
While its moves follow earlier card unit spinoffs at KB Financial Group and Woori Financial Group, signs are emerging of red-hot credit card competition, reminiscent of the 2003 bad debt fiasco.
Over the past few years, major card issuers have been fighting a marketing war, vying for a bigger slice of consumer spending as it begins to recover.
The average number of cards held by a Korean adult hovers at 4.6, exceeding the former record-high of 4.57 in early 2003, according to the Credit Finance Association.
By Kim Yon-se (
kys@heraldcorp.com)
