Korean credit card companies saw their combined earnings rise in the first half of this year from a year earlier due to increased profits from card loans and cash advance services during the coronavirus pandemic, data showed Sunday.
The combined borrowing expenses of seven card issuers came to 957.2 billion won ($821 million) in the January-June period.
Through the financing, the firms raised profits of 2.56 trillion won, recording earnings of 167 percent. The profit figures were up 100 billion won and 10 percentage points on-year, according to data obtained by the Democratic Party of Korea’s Park Kwang-on from the watchdog Financial Supervisory Service.
As the economy continued to reel under the prolonged epidemic crisis, credit card operators took advantage of low borrowing costs while charging customers high interest rates, according to the lawmaker.
The Bank of Korea earlier this year slashed its key policy rate to a record low of 0.5 percent to bolster the economy, and the government approved a series of fiscal programs to increase market liquidity.
“By exploiting the COVID-19 economic crisis, local card companies have been monopolizing the benefits of low interest rate and ample liquidity,” Park said, calling for thorough investigations of the firms’ actual costs and preparation of countermeasures.
By Jie Ye-eun (firstname.lastname@example.org