Hyundai Capital's Delinquency Rate at 0%... Lowest Among All Card and Capital Companies

"Proactively Managing Risks Since 2022"

Amid prolonged high interest rates and a significant deterioration in asset soundness across the credit finance industry, including card and capital companies, Hyundai Capital is maintaining a delinquency rate in the 0% range.

According to the financial sector on the 29th, Hyundai Capital's total delinquency rate stood at 0.95%, with a delinquency rate over 30 days at 0.92%. Among credit finance companies, not only capital companies but also compared to all specialized card companies, it is the lowest except for Hyundai Commercial (0.7%), which specializes in corporate finance.

According to the Financial Supervisory Service's Financial Statistics Information System, as of the end of last year, the average delinquency rate of eight domestic specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Hana, BC, and Woori Card) was 1.63%. This is 0.43 percentage points higher than the end of 2022 (1.20%), showing a steep rise in delinquency rates. The delinquency rates by card company range from 2.00% to 0.97% (Hyundai Card). Except for Hyundai Card, all card companies’ delinquency rates worsened compared to 2022. This year, due to rising funding costs caused by high interest rates and sluggish domestic demand, the burden of delinquency rates on card companies is expected to increase further.

Delinquency rates for capital companies have also shown a continuous upward trend. The repayment capacity of borrowers has deteriorated due to high interest rates, causing delinquency rates to rise. Coupled with the risk of defaults in real estate project financing (PF), where capital companies have aggressively expanded investment scale, capital company delinquency rates have risen to the mid-1% range since the second quarter of last year.

The reason Hyundai Capital’s delinquency rate remains low is that it proactively engaged in risk management even before the liquidity crisis emerged. In August 2022, although its own delinquency rate indicators were stable, Hyundai Capital judged that key macroeconomic and credit market indicators had exceeded risk levels and declared a company-wide ‘Credit Crisis Stage 1.’ Since then, it has reduced the proportion of unsecured pure credit loans with a high likelihood of delinquency in the personal finance sector while focusing on acquiring high-quality customers. Additionally, it established four regional headquarters responsible for bond management and introduced a sophisticated artificial intelligence (AI) risk management system to prepare for the crisis.

A Hyundai Capital official evaluated, “Considering that our main financial products support Hyundai Motor Group’s automobile sales and that we inevitably provide financial services to customers with relatively low credit ratings, this low delinquency rate is a result achieved under adverse conditions for risk management.”