Subscribe
E-Paper
 |
| Lotte Card CEO Kim Chang-kwon, fourth from left, shows an MOU agreement for business partnership with Vietnam's VTV Cab Chairman Hoang Ngoc Huan, fourth from right, at Lotte Hotel in central Seoul, Nov. 9. / Courtesy of Lotte Card |
By Jhoo Dong-chan
The nation's credit card firms are tapping into the Southeast Asian market to overcome their deteriorated profitability and the government's pressure to lower the transaction fees.
Not only financial group-affiliate card firms but also business-affiliate card firms are establishing a foothold in the region as their future growth engine.
Choosing Vietnam as the firm's first overseas market, Lotte Card, retail giant Lotte Group's credit card unit, acquired Hanoi-based Techcom Finance from Techcombank to become Korea's first credit card company entering the Vietnamese market in March.
On Nov. 9, it also signed memorandum of understanding with a local cable VTV Cab in a bid to facilitate the firm's advance into the market. The partnership between the two firms includes small-loan service and sales advertisements.
Fully owned by state-run broadcasting station VTV, VTV Cab operates 70 analog cable channels, including 30 HD channels, with about 4.5 million paid-up views.
"Lotte Card and VTV Cab will jointly develop a business model to maximize synergy through the partnership," said Lotte Card CEO Kim Chang-kwon.
"Lotte Card will look into various business opportunities based on its existing networks in Vietnam, including Lotte Department, Lotte Mart, Lotteria, Lotte Hotel, Lotte Cinema, and Lotte Members."
 |
| BC Card CEO Lee Mun-hwan, right, and LienVietPostBank Chairman Nguyen Dinh Thang hold up an agreement to develop a platform for digital transactions at an event in Hanoi, Vietnam, Nov. 12. / Courtesy of BC Card |
BC Card also recently entered into a partnership with Vietnam-based LienVietPostBank to develop a joint digital transaction service and platform, according to BC Card, Tuesday.
LienVietPostBank is one of the top 10 commercial banks in the Southeast Asian country, with retail networks in more than 60 cities, including Hanoi where it is headquartered.
Of the nation's financial group-affiliate card companies, Shinhan Card has been the most active player.
It is operating corporate bodies in several countries, including Myanmar, Kazakhstan and Indonesia. In January, Shinhan Card acquired a full stake of Prudential Vietnam Finance Company Limited for 161.4 billion won ($150.7 million).
Shinhan Card, which launched a business in Kazakhstan in 2015, posted a 742 million won net profit in the first half of this year in the country. It also started a business in Myanmar in 2016, and managed to turn profit this year.
KB Kookmin Card, a card unit of the nation's largest financial group KB, has also entered Cambodia's auto finance market as part of the group's efforts to expand into Southeast Asian countries.
KB Kookmin Card and Southeast Asia-based Korean -motorcycle manufacturer LVMC Holdings jointly set up its first overseas subsidiary KB Daehan Specialized Bank in Phnom Penh in April and started engaging various businesses such as financing for LVMC vehicles and provide property-backed loans.
Starting next year, KB Daehan Specialized Bank will begin a debit card business for customers of KB Kookmin Bank's wholly-owned Cambodian subsidiary Kookmin Bank Cambodia PLC.
Citing the region's rapid growth rate, the nation's credit card companies are making a foray into Southeast Asian countries in a bid to overcome their worsening profitability in Korea.
"Earnings are still not very significant there," said a Hyundai Card official.
"However, the business environment is getting worse for credit card firms here due to lowered transaction fees. They have chosen the region as a future growth engine to overcome it."
