Hyundai Card
Encyclopedia
HyundaiCard is Korea's leading credit card company. Headquartered in Seoul, Korea, the HyundaiCard is a joint venture between Hyundai Kia Automotive Group and GE Capital. HyundaiCard was established in 2001.
HyundaiCard is the fastest-growing credit card company in South Korea with an eightfold market share increase in seven years. HyundaiCard is Korean market leader in premium cards and is one of the largest card issuers in the country with close to 8 million cardholders. HyundaiCard is a joint venture between Hyundai Motor Company (57%) and GE Capital (43%).
HyundaiCard was first in Korea to introduce card brand marketing using ‘alphabet marketing’, premium VIP card program and card design marketing. HyundaiCard scoured the world for top artists and designers to help create strong brand identity, incorporating unique, contemporary elements that resonate with today’s consumers. HyundaiCard was named “Talent Management Company of the year” and “Most Desired Company to Work for” among credit card companies in Korea in 2008 by Korea Management Association Consultant (KMAC), a leading consultancy association.
is engaged in the credit card business and derives revenues primarily from fees and interest in respect of credit
purchases (principally in single-payments and installment payments), cash advances and card loans.
As of March 31, 2010, the Hyundai Shareholders owned 53.98% of the Company’s outstanding shares,
and the GE Shareholder owned 43.00% of the Company’s outstanding shares. The partnership with GE Capital, a
global leader in consumer financing, has enhanced HyundaiCard’s management structure, financial profile and
competitiveness. GE Capital plays a significant role in the management of HyundaiCard under a joint management
structure and provides operational know-how through sub-committees such as the Risk Control Committee.
Since the joint venture formation with GE Capital in 2005, HyundaiCard has continuously sought to improve its
capital structure, financial stability and its risk control systems. As a result of the joint management structure and
active focus on balance sheet and risk control management, HyundaiCard has achieved substantial improvements
in its capital structure, lower funding costs, higher capital adequacy ratio and reduced debt to equity ratio. In
addition, leveraging GE Capital’s business know-how, HyundaiCard has adopted and implemented advanced
know-how and technologies in its operations, particularly in relation to its credit risk management practices.
As a result of the foregoing factors, HyundaiCard has been able to increase its market share, measured in
terms of credit purchase sales volume (excluding corporate accounts) since 2006 despite the highly competitive
and fragmented industry environment, from 11.0% as of March 31, 2006 to 15.5% as of March 31, 2010,
according to data compiled by HyundaiCard. HyundaiCard recorded net income of W59 billion and W70
billion in 2009 1Q and 2010 1Q, respectively. As of March 31, 2010, on a reported basis,
HyundaiCard had total assets of W7,467.3 billion (including W6,283.1 billion in card assets, which principally
consist of credit purchases, cash advances and card loans) and shareholders’ equity of W1,456.3 billion. In
addition to servicing its on-balance sheet assets, HyundaiCard manages credit card and card loan receivables
securitized in asset-backed securitization transactions. As of March 31, 2010, HyundaiCard had total
managed assets of W8,197.0 billion.
acquiring the credit card division from Korea Credit Circulation Co., Ltd. The former Diners Club Korea Co.,
Ltd. entered into a “workout” agreement under a debt restructuring program with the Creditor Financial
Institutions Council and was subsequently sold to Hyundai Capital's on October 9, 2001. Under Hyundai Capital’s management, HyundaiCard changed its trade name to HyundaiCard Co., Ltd. In June 2003, Hyundai Capital sold all of its shares in HyundaiCard to Hyundai Motors, Hyundai Steel and Kia Motors, each of which is a member of the Hyundai Motor Group. As of
March 31, 2010, the Hyundai Shareholders collectively held 53.98% of HyundaiCard’s common shares.
In October 2005, HyundaiCard and the Hyundai Shareholders entered into a strategic alliance with GE Capital
whereby the GE Shareholder acquired a 43.0% equity interest in HyundaiCard for W313 billion. Concurrently
with the GE Shareholder’s share acquisition, a GE Capital affiliate subscribed to W200 billion of HyundaiCard’s
subordinated bonds with warrants due October 31, 2010, exercisable into shares of HyundaiCard’s common stock
at the exercise price of W8,831 per common share. Under the terms of the warrants, GE Global Finance Ireland
may exercise such warrants only to the extent the shareholding of GE Capital (including its affiliates) does not exceed
43.0% of HyundaiCard’s issued and outstanding shares. The exercise period expired on April 30, 2009, and a
total of 3,652,457 shares valued at W32.3 billion were issued to GE Capital and its affiliates pursuant to the exercise
of such warrants during the exercise period. As of the date hereof, there are no outstanding warrants issued to
GE Capital or its affiliates. In January 2006, the GE Shareholder participated in a rights offering and HyundaiCard’s
paid-in capital increased by W165 billion, increasing the total investment by GE Capital in HyundaiCard to W710.5
billion (including W200 billion in subordinated debt).
In May 2003, HyundaiCard launched its flagship credit card HyundaiCard M and in February 2005, The
Black card, the first super-premium brand targeting the top 0.05% of cardholders. In February 2006, HyundaiCard launched The Purple card, an exclusive premium brand targeting the top five percent of cardholders. In
July 2008, to further expand its target base of premium customers who have high net-worth and are more inclined
towards luxurious consumption patterns, HyundaiCard introduced The Red card, which have a lower annual
membership fee and lower qualification requirements than The Purple card or The Black card. In March
2009, HyundaiCard launched the HyundaiCard R10 card, a rewards focused card designed to tailor to the needs
of frequent shoppers.
To enhance customer satisfaction as well as brand recognition, in April 2006, HyundaiCard unveiled the
PRIVIA, an internet based shopping mall which offers various products and services exclusively to HyundaiCard
members. In 2006 and 2007, HyundaiCard won the prestigious “Korea’s Most Respected Company” honors in
the credit card category from the Korea Association of Management Consultants, and in 2009 HyundaiCard was
ranked number one for the fifth consecutive year in the credit card category according to the National Customer
Satisfaction Index, a well-regarded survey sponsored by the Ministry of Knowledge Economy, which
quantitatively measures the level of customer satisfaction by product. As of March 31, 2010, HyundaiCard
had over 9.0 million cardholders.
HyundaiCard is the fastest-growing credit card company in South Korea with an eightfold market share increase in seven years. HyundaiCard is Korean market leader in premium cards and is one of the largest card issuers in the country with close to 8 million cardholders. HyundaiCard is a joint venture between Hyundai Motor Company (57%) and GE Capital (43%).
HyundaiCard was first in Korea to introduce card brand marketing using ‘alphabet marketing’, premium VIP card program and card design marketing. HyundaiCard scoured the world for top artists and designers to help create strong brand identity, incorporating unique, contemporary elements that resonate with today’s consumers. HyundaiCard was named “Talent Management Company of the year” and “Most Desired Company to Work for” among credit card companies in Korea in 2008 by Korea Management Association Consultant (KMAC), a leading consultancy association.
Overview
HyundaiCard is a joint venture between the Hyundai Shareholders and the GE Shareholder. HyundaiCardis engaged in the credit card business and derives revenues primarily from fees and interest in respect of credit
purchases (principally in single-payments and installment payments), cash advances and card loans.
As of March 31, 2010, the Hyundai Shareholders owned 53.98% of the Company’s outstanding shares,
and the GE Shareholder owned 43.00% of the Company’s outstanding shares. The partnership with GE Capital, a
global leader in consumer financing, has enhanced HyundaiCard’s management structure, financial profile and
competitiveness. GE Capital plays a significant role in the management of HyundaiCard under a joint management
structure and provides operational know-how through sub-committees such as the Risk Control Committee.
Since the joint venture formation with GE Capital in 2005, HyundaiCard has continuously sought to improve its
capital structure, financial stability and its risk control systems. As a result of the joint management structure and
active focus on balance sheet and risk control management, HyundaiCard has achieved substantial improvements
in its capital structure, lower funding costs, higher capital adequacy ratio and reduced debt to equity ratio. In
addition, leveraging GE Capital’s business know-how, HyundaiCard has adopted and implemented advanced
know-how and technologies in its operations, particularly in relation to its credit risk management practices.
As a result of the foregoing factors, HyundaiCard has been able to increase its market share, measured in
terms of credit purchase sales volume (excluding corporate accounts) since 2006 despite the highly competitive
and fragmented industry environment, from 11.0% as of March 31, 2006 to 15.5% as of March 31, 2010,
according to data compiled by HyundaiCard. HyundaiCard recorded net income of W59 billion and W70
billion in 2009 1Q and 2010 1Q, respectively. As of March 31, 2010, on a reported basis,
HyundaiCard had total assets of W7,467.3 billion (including W6,283.1 billion in card assets, which principally
consist of credit purchases, cash advances and card loans) and shareholders’ equity of W1,456.3 billion. In
addition to servicing its on-balance sheet assets, HyundaiCard manages credit card and card loan receivables
securitized in asset-backed securitization transactions. As of March 31, 2010, HyundaiCard had total
managed assets of W8,197.0 billion.
History
Since June 16, 1995, HyundaiCard operated under the trade name of Diners Club Korea Co., Ltd. afteracquiring the credit card division from Korea Credit Circulation Co., Ltd. The former Diners Club Korea Co.,
Ltd. entered into a “workout” agreement under a debt restructuring program with the Creditor Financial
Institutions Council and was subsequently sold to Hyundai Capital's on October 9, 2001. Under Hyundai Capital’s management, HyundaiCard changed its trade name to HyundaiCard Co., Ltd. In June 2003, Hyundai Capital sold all of its shares in HyundaiCard to Hyundai Motors, Hyundai Steel and Kia Motors, each of which is a member of the Hyundai Motor Group. As of
March 31, 2010, the Hyundai Shareholders collectively held 53.98% of HyundaiCard’s common shares.
In October 2005, HyundaiCard and the Hyundai Shareholders entered into a strategic alliance with GE Capital
whereby the GE Shareholder acquired a 43.0% equity interest in HyundaiCard for W313 billion. Concurrently
with the GE Shareholder’s share acquisition, a GE Capital affiliate subscribed to W200 billion of HyundaiCard’s
subordinated bonds with warrants due October 31, 2010, exercisable into shares of HyundaiCard’s common stock
at the exercise price of W8,831 per common share. Under the terms of the warrants, GE Global Finance Ireland
may exercise such warrants only to the extent the shareholding of GE Capital (including its affiliates) does not exceed
43.0% of HyundaiCard’s issued and outstanding shares. The exercise period expired on April 30, 2009, and a
total of 3,652,457 shares valued at W32.3 billion were issued to GE Capital and its affiliates pursuant to the exercise
of such warrants during the exercise period. As of the date hereof, there are no outstanding warrants issued to
GE Capital or its affiliates. In January 2006, the GE Shareholder participated in a rights offering and HyundaiCard’s
paid-in capital increased by W165 billion, increasing the total investment by GE Capital in HyundaiCard to W710.5
billion (including W200 billion in subordinated debt).
In May 2003, HyundaiCard launched its flagship credit card HyundaiCard M and in February 2005, The
Black card, the first super-premium brand targeting the top 0.05% of cardholders. In February 2006, HyundaiCard launched The Purple card, an exclusive premium brand targeting the top five percent of cardholders. In
July 2008, to further expand its target base of premium customers who have high net-worth and are more inclined
towards luxurious consumption patterns, HyundaiCard introduced The Red card, which have a lower annual
membership fee and lower qualification requirements than The Purple card or The Black card. In March
2009, HyundaiCard launched the HyundaiCard R10 card, a rewards focused card designed to tailor to the needs
of frequent shoppers.
To enhance customer satisfaction as well as brand recognition, in April 2006, HyundaiCard unveiled the
PRIVIA, an internet based shopping mall which offers various products and services exclusively to HyundaiCard
members. In 2006 and 2007, HyundaiCard won the prestigious “Korea’s Most Respected Company” honors in
the credit card category from the Korea Association of Management Consultants, and in 2009 HyundaiCard was
ranked number one for the fifth consecutive year in the credit card category according to the National Customer
Satisfaction Index, a well-regarded survey sponsored by the Ministry of Knowledge Economy, which
quantitatively measures the level of customer satisfaction by product. As of March 31, 2010, HyundaiCard
had over 9.0 million cardholders.