Top executives of Woori Financial Group led by Chairman Lee Pal-seung and
President Chung Hyun-jin of Woori Card, cut the tape to
celebrate the spin off of Woori Card on April 22.
Woori Financial Group finally spun off its card unit on April 1 after receiving final approval from the Financial Services Commission on Feb. 22. The group decided to separate the credit card operation from Woori Bank on July 5, 2011.
Woori Card, the new credit card company, had 1,140,000 customers as of the end of last year and card members totaling around 6 million. The company’ s total sales amounted to 43.1 trillion won including 4.7 trillion won in cash advances and 38.4 trillion won in credit sales with operating profit of 117 billion won for 2012, the company said.
The new credit card company’ s capital amounted to 846.3 billion won and it employs a workforce of 1,110. The company will aim at securing a big share in the check card market, with a hybrid card whose use has been rising fast due to the benefits to users such as tax breaks as well as an advantage for the company as an affiliate of Woori Bank and having access to its customers.
Top executives of the credit card company are confident that the company can ultimately make the bank’ s customers convert to Woori credit cards from check cards with hybrid functions. The customers will be lured to the check cards by the various benefits that the government gives to encourage their use.
Woori Card will first introduce the Duet Card, with its platinum cards having dual functions of both credit and check cards and the capacity to check the remaining balance. The card will get favorable bus fares and may receive benefits in restaurants if the card’ s payment amount reaches certain levels. It will also have an overdraft privilege of 300,000 won.
President Chung Hyun-jin said Woori Card aims to be the top shareholder in the check card market in three years. The company currently ranks fourth.
The company aims to become the third largest credit card company in terms of sales in five years and the top in terms of market share in check cards by taking advantage of its synergy with Woori Bank. President Chung was promoted to the top executive of the new card firm in recognition of his achievements while he was vice president of Woori Financial Holdings in such matters as the spinoff of the card unit, the introduction of a matrix system, and the takeover of a savings bank, among others.
Chung recalled that they worked long and hard to take care of the spinoff plan and it is very fortunate that the move was a great success. The toughest problem was the ownership of the card company’ s building when getting the license from the FSC, but overall there were no big problems in getting official approval.
The first CEO of the card company said the company should first expand its customer base as far as the blueprint for the new card company was concerned; then it must strengthen its marketing campaign; find new growth engines; engage in preemptive risk management in order to be known as “clean card”; and ensure the stability of its organization °™ five key areas to make the new card company the top in the industry in three years.
Chung said the credit market has been growing an average of 34 percent annually since 2008, and this year it is expected to grow substantially owing to the expansion in the income tax exemption amount and other government support. “We ought to focus on increasing the market share of the check card market, as it will see great growth this year,” Chung said.
According to Chung, the company will go after the market for the hybrid check card in cooperation with Woori Bank to woo the bank’ s customers. The company will also strengthen its corporate credit card operation this year and will double the number of personnel in that area and reorganize the set up to expand the corporate marketing area. The company will provide tailor-made services for corporate customers, especially for those that deal with Woori Bank.