South Korea's largest credit card issuer, LG Card, said on March 10, that it had made money for the first time in more than two years in the fourth quarter to December last year. It had a 325.8 billion won (324.5 million dollars) net profit in the September-December period on sales of 809.7 billion won, compared with a net loss of 91.4 billion won on sales of 787.6 billion won. This is the first time that the financially troubled credit card issuer has produced a net profit since the third quarter in 2002.
For the whole of 2004, however, LG Card had 81.9 billion won of net loss and a 793.5 billion won recurring loss because of the huge deficits accumulated over the previous three quarters.
"Following the bolstering of the capital base in January, the financial health of the company has been improved greatly," a company spokesman said.
"We expect that profitability will continue improving," he said.
Creditors and LG Group contributed 500 billion won each in January in a recapitalization programme aimed at saving LG Card from a threatened liquidation and to put it on a solid path toward normalisation.
A credit bubble and cut-throat competition among card issuers over the past few years left LG Card and its competitors with huge debts.