South Korea Financial Supervisory Service reports H1 2025 credit card company net income down to KRW1.2251 trillion as delinquency rises

South Korea’s Financial Supervisory Service published preliminary first-half 2025 earnings and soundness indicators for specialized credit finance companies, showing weaker profitability at the eight credit card companies alongside a deterioration in asset quality metrics. Net income under IFRS at credit card companies fell 18.3% year on year to KRW1.2251 trillion, while non-card specialized credit finance companies recorded higher net income over the same period. For credit card companies, revenues increased to KRW14.3358 trillion, driven mainly by higher loan-related revenues and installment fees, but expenses rose faster to KRW13.1106 trillion due to higher loan loss and interest expenses, with merchant fees declining year on year. The aggregate delinquency rate on assets rose to 1.76% at end-June 2025 (credit card assets: 1.80%), the substandard-or-below ratio increased to 1.30%, and the NPL coverage ratio decreased to 106.3%, while the adjusted capital adequacy ratio edged up to 20.7%. For specialized credit finance companies excluding credit card companies, preliminary net income under regulations increased 14.5% year on year to KRW1.7829 trillion; delinquency rose to 2.43%, the substandard-or-below ratio increased to 2.99%, the NPL coverage ratio fell to 129.1%, and the adjusted capital adequacy ratio increased to 19.1%. Activity indicators showed credit cards issued rising to 134.87 million at end-June 2025, card purchases up 2.7% year on year to KRW595.7 trillion in H1 2025, and cash advances and card loans down 0.6% to KRW51.5 trillion.