LG Card Co., South Korea’s largest card issuer, reported a net loss of 5.6 trillion won ($4.8 billion) for 2003 on Monday, reversing a net profit of 350.4 billion won the year before because of surging delinquent payments from credit card users.
The ailing company’s full-year revenue dropped to 4.39 trillion won ($3.74 billion) from 6.06 trillion won in 2002 on declining card assets, the company said in a filing to South Korea’s Financial Supervisory Service.
During the fourth quarter alone, LG Card posted net loss of 4.58 trillion won ($3.9 billion), compared with a loss of 196 billion won a year ago, said an official at the company’s investor relations department.
LG Card, affiliated with South Korea’s third-largest conglomerate, LG Group, saw its bad loans rise sharply last year as consumer defaults increased amid a sluggish economy.
The company narrowly avoided default last fall, rattling investor confidence in the country’s card firms and the stability of financial markets in the world’s 12th largest economy.
LG Card had to suspend lending services before a group of 16 creditors organized a last-minute 4.8 trillion won ($4.1 billion) bailout with government help.