Card Companies' First-Half Net Income Rises 5.6%... Delinquency Rate at 1.54%

Improved Earnings as Merchant and Installment Card Fee Income Increases

Delinquency Rate at 1.54%... Down 0.22 Percentage Points From End of First Half Last Year

In the first half of this year, the delinquency rate for credit card companies saw a slight increase, but net profit returned to an upward trend. Although the delinquency rate reached its highest point since the end of 2014 in the first half of last year, it has since declined. Driven by increases in merchant fee income and installment card fee income, thanks in part to the expansion of credit sales, performance improved.

According to the Financial Supervisory Service's announcement on August 27, 2026, titled "Provisional Business Performance of Specialized Credit Finance Companies in the First Half of 2026," the combined net profit of the eight major dedicated credit card companies—Samsung, Shinhan, Hyundai, KB Kookmin, Woori, Hana, Lotte, and BC Card—stood at 1.2934 trillion won in the first half of the year. This represents an increase of 68.3 billion won (5.6%) compared to the same period last year (1.2251 trillion won).

This resulted from total revenue increasing by 251.8 billion won year-on-year, outpacing the total cost increase of 183.5 billion won. Of the total revenue, merchant fee income increased by 196.3 billion won compared to the same period last year. In the first half of last year, this figure had actually decreased by 291.1 billion won from the previous year. Installment card fee income also rose by 100.2 billion won during the same period. In terms of total costs, bad debt expenses dropped by 66.1 billion won, while card expenses and selling & administrative expenses rose by 162.6 billion won and 143.2 billion won, respectively.

However, net profit after provision for bad debt reserves was 926.6 billion won, marking a decrease of 325.8 billion won (26.0%) from the same period last year. Whereas 27.3 billion won in bad debt reserves were reversed in the first half of last year, 366.8 billion won were provisioned in the first half of this year, leading to this result.

Asset quality indicators were mixed. As of the end of June, the overall delinquency rate for card company receivables was 1.54%, up 0.02 percentage points from the end of last year (1.52%). However, this still marks a decrease of 0.22 percentage points compared to the end of the first half of last year (1.76%), which had been the highest since the end of 2014 (1.69%).

The ratio of substandard or lower assets stood at 1.13%, down 0.02 percentage points from 1.15% at the end of last year. The allowance for bad debt coverage ratio was 105.6%, 0.6 percentage points lower than at the end of last year (106.2%).

Regarding capital adequacy, the adjusted capital ratio for all card companies exceeded the management guidance level of 8%. The combined adjusted capital ratio for the eight companies was 20.8%, down 0.3 percentage points from 21.1% at the end of last year.

In the first half of the year, total usage of credit and check cards reached 635.3 trillion won, an increase of 39.6 trillion won (6.7%) compared to the same period last year (595.7 trillion won).

The number of credit cards issued reached 137.18 million, up by 2.52 million (1.9%) from 134.66 million at the end of last year, while the number of check cards increased by 1.32 million (1.3%) from 105.26 million at the end of last year to 106.58 million.

The first-half net profit for non-card specialized credit finance companies, such as installment finance companies, leasing companies, and new technology finance companies, was 2.2352 trillion won, an increase of 452.3 billion won (25.4%) compared to the same period last year (1.7829 trillion won).

This was due to increases in lease, rental and installment profits, income related to marketable securities, and new technology finance income.

As of the end of June, the delinquency rate at non-card specialized credit finance companies stood at 2.29%, up 0.18 percentage points from the end of last year (2.11%). The ratio of substandard or lower assets also rose by 0.19 percentage points to 2.85%, compared to 2.66% at the end of last year.

The adjusted capital ratio was 19.1%, up 0.1 percentage points from 19.0% at the end of last year. All non-card specialized credit finance companies exceeded the management guidance ratio of 7%.

A Financial Supervisory Service official stated, "Asset quality indicators such as the delinquency rate and substandard or lower asset ratio for specialized credit finance companies remained at stable levels in the first half of the year," adding that, "the ability to absorb potential losses was generally sound, as the allowances for bad debt and adjusted capital ratios exceeded the regulatory levels."

The official continued, "We will continue to closely monitor the profitability trends of card and non-card companies this year, and will also guide the strengthening of soundness management by promoting debt restructuring and enhancing the management of potentially distressed assets."

This content was produced with the assistance of AI translation services.