Hanacard Overcoming Poor Performance, Travelog Also Playing a Key Role 'Effectively'

3Q Net Profit 54.8 Billion KRW... 17% YoY Increase
Contrasting Decline in KB Kookmin, Woori, Shinhan, Samsung
Growth in Corporate and Overseas Sectors... Travelog Effective
Delinquency Rate Management Remains a Challenge

Hanacard is rebounding by escaping the downward trend in performance despite the unstable business environment. The increase in corporate and overseas sales is credited as the main factor. In particular, 'Travelog,' which is expanding into a travel platform based on online currency exchange, has played a significant role.

According to the industry on the 2nd, Hanacard recorded a net profit of 54.8 billion KRW in the third quarter of this year. This is a 16.8% increase compared to the third quarter of last year. It also increased by 4.6% compared to the previous quarter. Although the cumulative net profit from the first to the third quarter of this year decreased by 23.1% compared to the same period last year, it is gradually recovering on a quarterly basis. Hanacard's quarterly net profit had been declining from the third quarter of last year to the first quarter of this year but turned to an upward trend from the second quarter of this year.

Compared to other card companies, the performance is also commendable. KB Kookmin Card's net profit in the third quarter of this year was 79.5 billion KRW, a sharp decline of 25.3% compared to the same period last year. Woori Card also saw a 20% decrease in net profit during the same period. The industry leader Shinhan Card recorded a net profit of 152.2 billion KRW in the third quarter of this year, down 13% from the same period last year. Samsung Card, which is considered to have performed relatively well, recorded 139.5 billion KRW, a 0.8% decrease compared to the same period last year.

Hanacard explained that the increase in corporate sales and overseas sales had a significant impact. In particular, the popular product 'Travelog' played its part in overseas sales. Travelog is a type of overseas prepaid charging service. Users exchange currency through the app, charge the amount to the Travelog card, and use it locally. Unlike traditional credit card overseas payments, it offers free currency exchange fees (for some major currencies), overseas usage fees, and overseas ATM withdrawal fees. Unlike reservations for airline tickets, accommodations, and exhibition visits, which are mostly online, Travelog has established currency exchange, which was mainly offline, in the online domain.

It took about 10 months to reach 1 million subscribers after its launch in July last year, but it only took 3 months to add another 1 million. It is expected to surpass 3 million members within this month. Currently, 90% of members use check cards. Although the fee rate is relatively lower than credit cards, it is somewhat free from the recent unstable factor in the card industry, which is funding costs. Above all, it is evaluated that the potential value is greater than immediate profitability. It is believed that customers can be attracted to Hanacard and Hana Financial Group through Travelog. This is why the group is providing full support.

While showing solid performance and growth potential, there are also challenges to address. First, Hanacard's delinquency rate stood at 1.66% as of the end of the third quarter, up 0.18 percentage points from the end of the previous quarter. This is the highest among the five companies?Shinhan, Samsung, KB Kookmin, Woori, and Hanacard?that recently announced their results. Samsung Card maintained 1.1%, and Shinhan Card actually decreased by 0.07 percentage points to 1.35% compared to the previous quarter. The industry considers a delinquency rate of 2% as the level that card companies can withstand. The non-performing loan (NPL) ratio, an indicator of asset soundness for card companies, was also the highest among the five at 1.25%. It rose by 0.73 percentage points compared to the same period last year, nearly doubling. An industry insider explained, "Considering the increase in low-income or low-credit groups who cannot repay loans due to high interest rates and high inflation, proactive management will be necessary."