[Alpha Biz= Paul Lee] Hyundai Card has been urged by the Financial Supervisory Service (FSS) to enhance its credit risk management practices.
According to industry sources on May 26, the FSS notified Hyundai Card on May 15 of eight items requiring managerial attention and fifteen improvement measures. The FSS highlighted an increase in the proportion of low-credit borrowers within Hyundai Card’s card loan portfolio, noting that delinquency rates among low-credit borrowers exceed the overall card loan delinquency rate.
As of the end of September 2024, Hyundai Card’s card loan balance stood at 5.6378 trillion KRW, marking an 18% rise compared to 4.7762 trillion KRW at the end of 2023. This growth rate is more than three times higher than the 7.8% average increase reported by eight major card companies during the same period, according to the Credit Finance Association.
The FSS pointed out deficiencies in risk management, citing instances where loan amounts were calculated based on reasons unrelated to creditworthiness. It recommended close monitoring of delinquency rates and enhanced credit limit controls.
Additionally, the FSS urged Hyundai Card to strengthen risk management of revolving credit payments. The rise in low-credit borrowers using revolving payment options and those subject to the 10% minimum payment rate may indicate worsening repayment capacity.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
