Korea’s banking giants are tapping China, Vietnam and other Asian countries as they wade through competition in the highly saturated local credit card market, industry watchers said Tuesday.
The overseas push comes as Korean card firms have been beefing up their marketing expenses in a bid to lure more subscribers with spin-offs and new entries expected to further intensify competition to grab a bigger slice of the pie.
According to the market watchers, Shinhan Financial Group Co., the country’s third-largest financial services company, plans to launch credit card business in Vietnam via its flagship Shinhan Bank and its credit card arm Shinhan Card Co.
“Consumer finance is forecast to prosper in Vietnam on the back of its recent economic growth,” said a company official. “Moreover, since the country’s credit card market is in its infancy, there is a bigger chance of dominating the market.”
Hana Financial Group Inc., Korea’s No. 4 banking group, is set to expand its business network in China and has long-term plans for launching credit card business in the world’s most populous market.
In January, the banking group forged a strategic partnership with China Merchant Bank, China’s credit card industry leader with a market share of around 23 percent. The deal is expected to boost Hana Financial’s credit card unit Hana SK Card Co., if the unit makes inroads into China.
The group is also forecast to expand its banking branches in Southeast Asian countries such as Indonesia and Vietnam, according to the watchers.
Korea’s credit card business is expected to grow 8.5 percent on-year in 2011 to reach 486 trillion won ($440 billion).
The growth rate, however, comes lower than last year’s 11.1 percent due to slowing economic growth and subdued consumer spending, according to a report by Hana Institute of Finance, a think thank affiliated with Hana Financial.