The Financial Supervisory Service notified Hyundai Card of its management caution due to a rapid increase in card loan balances.
According to the financial industry on the 25th, the FSS notified Hyundai Card of eight management cautions and 15 improvement measures, urging the company to check the soundness of card loans and strengthen the management of card loan limits.
According to the Credit Finance Association, as of the end of September last year, the card loan balance handled by Hyundai Card was 5.6378 trillion won, an 18% increase compared to the end of the previous year (4.7762 trillion won). During the same period, the card loan balances of nine card companies (Lotte, BC, Samsung, Shinhan, Woori, Hana, Hyundai, KB Kookmin, and NH Nonghyup Card) increased by 7.8%.
The FSS pointed out that the proportion of card loan users with mid- to low-credit ratings is on the rise, and the balances of multiple debtors have also increased. It added that, although loan amounts should be differentiated based on credit ratings and other factors, there have been cases where card loan amounts were calculated based on reasons not directly related to credit ratings, indicating inadequate risk management.
The FSS also raised issues regarding Hyundai Card's interest rate calculation system. The FSS stated that, although interest rate inversion occurred due to the expansion of marketing for discounts on card loan interest rates, no action was taken, resulting in cases where borrowers with high credit ratings were subjected to higher rates than those with low credit ratings, and instructed the company to improve its related operational methods.
Hyundai Card is required to report the results of corrective actions within three months for management improvement demands and within six months for management caution advice. A Hyundai Card official said, "We plan to take corrective action regarding the points raised this time" and added, "We will strengthen our management policy focused on soundness based on proactive risk management."