Card Companies Diminished Despite Financial Holding Company's ₩18 Trillion Profit: A Growing Imbalance in Revenue Distribution

According to a report by Maekyung on April 6th, South Korean financial holding companies have generated a substantial ₩18 trillion in profit, yet the presence of their core subsidiaries, the card companies, appears relatively diminished. This suggests an overly skewed revenue structure within the financial holding companies, where card companies are not receiving adequate compensation relative to the value they generate. This analysis will delve into the causes of this revenue distribution imbalance and explore ways to strengthen the competitiveness of card companies and foster a harmonious relationship with their financial holding companies.

Card Companies Diminished Despite Financial Holding Company's ₩18 Trillion Profit

Growing Imbalance in Revenue Structure

South Korean financial holding companies have recently achieved remarkable results, generating substantial profits. However, according to a report by Maekyung, a significant portion of these profits is concentrated in the financial holding company headquarters and investment divisions, resulting in relatively low profitability for card companies. This is attributed to the fact that card companies still rely heavily on traditional financial services such as lending and payments, and face difficulties in discovering new revenue models.

Causes of Weakened Card Company Competitiveness

• Increased Regulation: Government regulations, such as credit card fee reductions and lending restrictions, directly impact card company profitability.


• Intensified Competition: The emergence of easy payment services and fintech companies has intensified competition in the card market, accelerating the decline in card company profitability.


• High Operating Costs: Card companies' operating costs, such as managing offline merchants and operating call centers, remain at a high level.

Ways to Foster a Harmonious Relationship Between Financial Holding Companies and Card Companies

Accelerating Digital Transformation

Card companies need to improve operational efficiency and discover new revenue models through digital transformation. FireMarkets provides real-time data across diverse asset classes and professional-grade market analysis content, supporting informed investment decisions.

Improving Revenue Distribution Structure

Financial holding companies need to provide adequate compensation for card company performance and expand investments for long-term growth. This is an essential element for strengthening card company competitiveness and ensuring the sustainable growth of the entire financial holding company.

Discovering New Business Models

Card companies need to expand their business areas beyond financial services to secure new revenue streams. For example, they can strengthen their competitiveness by developing customized financial products based on data and collaborating with fintech companies.