Friday, November 22, 2019
Samsung Denies Rumors about Sale of Samsung Card
Sale Vortex
Samsung Denies Rumors about Sale of Samsung Card
  • By Jung Min-hee
  • November 18, 2015, 03:45
Share articles

 

On Nov. 17, the market was shaken by a rumor about the sale of Samsung Card and the Samsung Group’s subsequent denial. This is because Samsung Card is an affiliate directly related to the instant payment service “Samsung Pay,” which Lee Jae-yong, the vice chairman of the Samsung Group, has a big interest in, even though some of the Samsung Group’s affiliates were sold off to Hanwha and Lotte.

The reason for similar steady rumors about the sale of Samsung Card is that the largest shareholder of the credit card service company is not Samsung Life Insurance, which is Samsung’s flagship company in the financial business. The largest shareholder of Samsung Card is Samsung Electronics, which has a 37.5 percent stake. Unlike Samsung Card, Samsung Life Insurance is the largest shareholder of Samsung Fire & Marine Insurance and Samsung Securities.

The Samsung Group is rebuilding the corporate governance structure of its financial sector with Samsung Life Insurance as the center. This is why it is predicted that the Samsung Group will make Samsung Life Insurance the largest shareholder of Samsung Card through the sell-offs of equities in Samsung Card among Samsung affiliates, or scratch off Samsung Card from the list of the group’s financial affiliates. Moreover, an outlook on Samsung Card’s future business is not so rosy. This does not stop fueling such a rumor.

According to the Financial Supervisory Service, Samsung Card ranked second with a market share of 15.97 percent as of the end of last year. Samsung Card has a wide gap with first ranked Shinhan Card (20.18 percent). Including check cards, Samsung Card’s market share fell to 13.59 percent.

This is because Samsung Card has disadvantages as a credit card service-only company compared to Shinhan Card, KB Kookmin Card and KEB Hana Card, which are implementing all-around sales strategies under their financial holding company systems. Moreover, pressure to slash loan commissions has been growing since financial regulators decided to reduce commissions of financial weak and small and mid-sized member shops recently. This fact is making a lot of financial market experts say that Samsung Card will hardly increase profits a great deal in the future. So, similar rumors are expected to surface again.

“Samsung Card is very attractive to credit card companies of banking-centered financial holding groups,” said a representative in the credit card industry. “Credit card-only companies and credit card companies of banking-centered financial holding groups do not have many overlapping customers. Most of all, Samsung Group affiliates’ demand for corporate credit cards and extensive joint marketing areas with the affiliates are attractive enough to make the mouths of credit card companies of banking-centered financial holding groups water."