Samsung Card's Q3 net profit falls 13.5% on higher funding costs, debt restructuring

Samsung Card's net profit for the period fell 13.5% in the third quarter from a year earlier, as rising funding costs and increased debt restructuring drove up financial and credit loss expenses, even as higher card spending lifted operating revenue.

According to preliminary earnings Samsung Card disclosed Tuesday, net profit for the period in the third quarter came to 139.8 billion won ($106 million), down 13.5% from the same period last year.

Total transaction volume over the same period rose 9.1% to 49.79 trillion won. Of that, card business volume reached 49.55 trillion won, up 8.9% year on year. Credit card sales volume stood at 45.02 trillion won, while the financial segment — including card loans — recorded 4.52 trillion won.

Transaction volume grew as expanded partnerships with premium affiliates drove up membership and per-capita spending. However, profitability deteriorated as financial costs climbed on higher borrowing levels and funding rates, and credit loss expenses widened alongside increased debt restructuring.

Financial costs in the third quarter reached 196.8 billion won, up 28.8% from a year earlier. Credit loss expenses also rose 15.4% to 223 billion won. As of end-September, the outstanding borrowing balance stood at 23.14 trillion won, up 2.73 trillion won from the end of last year. The funding rate on new borrowings rose to 3.90% from 3.67% in the previous quarter.

The delinquency rate showed a modest improvement. The rate for overdue accounts of one month or more stood at 0.87% as of end-September, down 0.02 percentage points from the previous quarter.

Samsung Card said it expects financial cost pressures to persist into the fourth quarter. The company plans to focus on asset quality management and growth centered on premium members, while also pursuing future growth drivers such as AI and stablecoins.