KB Kookmin Card seeks top spot on high quality

KB Kookmin Card is seeking to take the No. 1 position in the local credit card market on a “gradual basis” by focusing on quality-based growth, not reckless sales activities.

Though the company has secured the No. 2 status since its establishment a year earlier, it plans not to be hasty in overtaking Shinhan Card.

“For the second-year management strategies, we will reinforce market dominance by prioritizing customer-oriented and quality-based growth,” the company said in a statement.

Its vision comes under the business policy of its president and CEO Choi Gi-eui, who is skeptical about establishing impractical goals.

Choi has stressed that he believes KB Kookmin can retake first place on a mid- and long-term basis if it carries out “goals with realistic possibilities” rather than setting up reckless goals.

According to the Financial Supervisory Service, Shinhan Card tops the market with the share of more than 20 percent in terms of cardholders’ usage amount while KB Kookmin Card is grabbing about 15 percent of the market.

Other major players include Samsung Card and Hyundai Card, grabbing about a 10 percent-level market share respectively.

KB Kookmin, under the wing of KB Financial Group, recently mapped out a project for global marketing, while major credit card companies have engaged in heated sales battles in the saturated Korean market.

It is considering tapping the Chinese and Southeast Asian market.

“As part of our second-year management plan, we are seeking to make inroads into China by pushing for business tie-ups with Chinese banks,” the company said in a statement.

Among its targets are several Southeast Asian countries, including Vietnam and Indonesia.

Its challenge for the overseas market could be a stepping stone in the industry amid the situation that the recent business environment surrounding the credit card sector is not favorable.

KB Financial Group launched the stand-alone credit card firm in March 2011, eight years after the money-spinning unit was merged into the bank.

The unit had been renamed KB Kookmin Card while it operated businesses as Kookmin Credit Card up until the credit card fiasco hit the nation’s financial markets.

The company is pushing ahead with diversifying products and expanding the trendy credit card-telecommunication convergence sector including mobile-oriented products.

It is striving to make the most of the financial group’s branches nationwide to provide specialized services.

According to company executives, KB Kookmin also plans to launch new services like consumer financing and insurance in order to overtake rivals.

The decision of KB Financial to float a stand-alone credit card affiliate was part of the group’s broader strategy to dilute its heavy dependency on banking profits and nurture earnings from non-banking units.

The company, which has been 100-percent funded by KB Financial, has about 1,300 employees with equity capital of about 2.5 trillion won ($2.2 billion) and total assets of 13.4 trillion won.

It has been making the most of its sales network of branches of KB Kookmin Bank, which numbered about 1,200 nationwide.

By Kim Yon-se (kys@heraldcorp.com)