CEO says company will focus on product diversity and convergence with telecom sector
KB Kookmin Card set out its ambition to take the No. 1 position in the domestic market as the former Kookmin Bank unit, restarted as a separate corporation on Wednesday.
KB Financial Group launched the stand-alone credit card firm eight years after the money-spinning unit was merged into the bank in 2003.
The unit had been renamed KB Kookmin Card while it had operated businesses as Kookmin Credit Card until before the credit card fiasco hit the nation’s financial markets.
During the launching event in Seoul, KB Kookmin Card president & CEO Choi Gi-eui unveiled his vision of capturing the dominant market share in the coming years.
The company ― while it was a unit of Kookmin Bank ― has been in second place following the No. 1, Shinhan Card, a subsidiary of Shinhan Financial Group.
KB Financial Group chairman Euh Yoon-dae (fifth from right), KB Kookmin Card president and chief executive Choi Gi-eui (fourth from right), Kookmin Bank president and chief executive Min Byong-deok (third from left) and other executives cut the tape at the card unit’s launch at its headquarters in Seoul on Wednesday. (Kim Myung-sup/The Korea Herald)
“The recent business environment surrounding the credit card industry is not favorable,” Choi said. “I believe we can retake first place on a mid- and long-term basis if we carry out goals with realistic possibilities rather than setting up reckless goals.”
He said the company will push ahead with diversifying products and expand the trendy credit card-telecommunication convergence sector including mobile-oriented products.
He also said the company will make the most of on the financial group’s branches nationwide to provide specialized services.
“We also plan to launch new services like consumer financing and insurance in order to overtake our rivals.”
The decision of KB Financial to float a stand-alone credit card affiliate was part of the group’s broader strategy to dilute its heavy dependency on banking profits and nurture earnings from non-banking units.
Group chairman Euh Yoon-dae also expressed his strong expectations in his congratulatory speech.
“I hope KB Kookmin Card to take the initiative in new paradigms of the credit card industry,” Euh said. “We will be able to regain the market power by pushing for marketing for the majority of Koreans.”
With the operation of the card business, strategic management goals for business diversification will also be attainable, he added.
The separation of the card unit is a key enterprise of Euh to improve the profitability of the struggling banking titan ― Kookmin Bank.
KB Kookmin, which has been 100-percent funded by KB Financial, has about 1,300 staffers with equity capital of 2.4 trillion won ($2.1 billion) and total assets of 12.4 trillion won.
Apart from Shinhan Card, close rivals of the re-launched KB Kookmin include BC Card, Samsung Card and Hyundai Card.
According to industry sources, Woori Bank, Citibank Korea, the National Agricultural Cooperative Federation and Korea Exchange Bank are also said to be mulling spin-offs.
The state-controlled Korea Development Bank and Korea Post are reportedly considering tapping into the card business.
According to Credit Finance Association, the average number of cards held by a Korean adult has reached about 4.6, exceeding the former record-high of 4.57 in early 2003.
Former entity Kookmin Credit Card once led the lucrative business in the market along with LG Card, which was later acquired by Shinhan Card due to the 2002-2003 credit card woes.
By Kim Yon-se (email@example.com