A Fast-growing Region with a Large Population
South Korean credit card and insurance companies are rapidly expanding their overseas businesses in China and Southeast Asia.
Shinhan Card is currently doing business in Vietnam, Indonesia and Myanmar. In the first half of this year, its overseas net profit was 11.33 billion won, up 400 percent from a year ago. KB Kookmin Card has Southeast Asian branches in Cambodia, Indonesia and Thailand and their net profit increased eight-fold to over 12 billion won in that period.
Woori Card founded TUTU Finance in Myanmar in 2016 and Woori Finance Indonesia early this month. BC Card acquired 67 percent of Indonesian IT developer Cranium on Aug. 12. The developer’s clients include multiple state-run enterprises such as Telkom and Bank Mandiri.
Samsung Fire & Marine Insurance is aiming to raise its overseas general insurance sales ratio to at least 50 percent by 2027 from the current level of 30 percent. Its overseas branches are currently located in the seven countries including China, Indonesia, Vietnam and Singapore.
Hanwha Life Insurance entered the Vietnamese market in April 2009 and expanded its overseas business to China and Indonesia later. Mirae Asset Life Insurance currently owns half of Prevoir Life Insurance in Vietnam and is increasing its presence in the local variable insurance market.
Those companies’ concentration on the Asian markets is because their credit card and insurance sectors are yet to be further developed in the fast-growing region with a large population. For instance, the population and annual economic growth rate of Indonesia are approximately 280 million and 5 percent and those of Vietnam are approximately 100 million and 8 percent, respectively.
“Credit card use is still very rare in China and Southeast Asia and this is because of the lack of personal credit assessment systems for credit limit setting,” said an industry source, adding, “This is why South Korean credit card companies’ big data-based credit assessment has a chance there.”