[딜사이트 차화영 기자] Most domestic credit card companies were found to maintain their dividend payout ratio at the previous year’s level despite last year’s cold performance. Instead, Shinhan Card increased its dividend payout ratio. They appear to have judged that there was no need to reduce the dividend payout ratio as they responded to deteriorating industry conditions in advance by building up provisions conservatively.
According to the financial sector on the 15th, among the eight domestic credit card companies, the net profit of five credit card companies (Shinhan, Samsung, KB Kookmin, Hana, and Woori Card) that announced their performance to date decreased last year. . Woori Card, which had the biggest drop, fell by around 45.3% compared to the previous year. Samsung Card fell 2.1%.
It found that three credit card companies, including Samsung Card, KB Kookmin Card, and Woori Card, maintained their dividend payout ratio at a similar level to the previous year despite a decrease in net profit. Dividend payout ratio refers to the ratio of dividends to net profit.
Samsung Card set a dividend of 2,500 won per share for 2023. The total dividend is 266.7 billion won and the dividend payout ratio is 43.7%. In 2022, a total of 266.7 billion won was paid as dividends. At this time, the dividend payout ratio was 42.8%.
KB Kookmin Card’s dividend payout ratio was also not much different from 52.2% in 2022 to 52.7% in 2023. KB Kookmin Card posted a net profit of 351.1 billion won last year and decided to spend 185.3 billion won on dividends. In 2022, 200 billion of the net profit of 383 billion earned was spent on dividends.
Woori Card reduced the amount of dividends due to a decrease in net profit, but the dividend payout ratio did not change significantly. Woori Card’s dividend payout ratio of 19.9% in 2022 was calculated to be 19.6% in 2023. During the same period, net profit plunged from 204.7 billion won to 112 billion won, and the amount of dividends was cut in half from 40.8 billion won to 22 billion won during the same period.
Shinhan Card decided to spend 310.4 billion won, or 50% of last year’s net profit, as dividends. The dividend payout ratio increased significantly from 39.8% in 2022 to 50.0% in 2023.
Hana Card is the only one of the five card companies whose dividend payout ratio has fallen. Hana Card paid dividends for the first time since 2014, when the integrated Hana Card was launched, in 2022 and spent 28.6% of net profit on dividends, but decided to use only 16.3% of net profit as dividends in 2023.
The financial world cites the fact that credit card companies have strengthened their ability to absorb loss in preparation for worsening business conditions as a background for this dividend policy. Card companies have already tried to accumulate provisions conservatively, as a downturn in the industry is already expected from mid-2022 due to an increase in base interest rates.
In fact, Shinhan Card, the only company that increased its dividend payout ratio this time, responded to worsening industry conditions by lowering its dividend payout ratio by 10 percentage points in 2022 compared to the previous year. In February 2023, Shinhan Card announced ‘a change of more than 20% in dividends compared to the previous financial year’ and explained the reason for the change in dividends as ‘this is to respond to uncertain economic conditions and ensure financial resources for continued investment. in business in the future.’
KB Kookmin Card decided on the size of the dividend for 2022, but also adjusted it downwards to strengthen its ability to absorb loss. Initially, it was decided to pay 92.4% of net profit as dividends, but in February 2023, only 52.2% of net profit was used for dividends due to ‘strengthening loss absorption capacity to respond to a worsening external environment’.
Last year, credit card companies created provisions worth trillions to prepare for a deterioration in soundness caused by rising delinquency rates. Shinhan Card accumulated provisions of 882.6 billion won, an increase of 57.4% from the previous year, and KB Kookmin Card and Samsung Card also accumulated provisions of over 700 billion won. Woori Card and Hana Card also accumulated provisions worth 440 billion won and 350 billion won, respectively.
Some say that the fact that most credit card companies are wholly owned subsidiaries of financial holding companies also influenced the dividend policy. This is because it is not easy to reduce the dividend payout ratio arbitrarily from the point of view of having to follow the management strategy or financial plan of the holding company.
Shinhan Card, KB Kookmin Card, Hana Card, and Woori Card are 100% subsidiaries of Shinhan Financial Group, KB Financial Group, Hana Financial Group, and Woori Financial Group, respectively, and all their dividends flow to the holding company. Samsung Card’s largest shareholder is Samsung Life Insurance, which holds a 71.86% stake. Samsung Card is also the only listed credit card company.
An official from a credit card company said, “We built reserves conservatively and decided on the dividend payout ratio after considering the aspect of maintaining capital adequacy.”
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