이 기사는 2021년 05월 12일 07:50 thebell 에 표출된 기사입니다.

Lotte Card, which was acquired by North Asia-focused private equity firm MBK Partners two years ago, is gearing up for growth after strengthening its digital capabilities and hiring talent to expand into new businesses.

The South Korean card company’s operating assets has continued to grow in the past years, first surpassing the 10 trillion won mark in 2018 and amounting to 12.4 trillion won ($11 billion) at the end of 2020. Its pre-provision operating profit also rose 16.7% year on year to 498.3 billion won in 2020, with the return on assets rising from 0.4% to 0.9% in the same period.

Lotte Card’s asset quality also improved significantly, with its delinquency rate declining to 1.2% last year, the lowest in five years. Its non-performing loans ratio and allowance for loan losses to non-performing loans ratio stood at 1.1% and 258.8%, respectively.

Enhanced asset quality was largely attributable to efforts by MBK Partners to strengthen the card company’s risk management capabilities in the face of Covid-19-driven uncertainty. Lotte Card implemented a stronger risk management strategy to cushion against the impact of the pandemic on its asset quality.

MBK Partners also hired two industry veterans, Won Man-ho and Ko Young-hyun, in September last year to lead Lotte Card’s digital and analytics businesses. Prior to joining Lotte Card, Won held managerial positions at software companies Camp Mobile and BalanceHero as well as Naver and Hyundai Card. Ko, a big data expert, previously worked at Samsung Card, NexCloud and AgileSoDA, a machine learning solutions provider.

The hirings were seen as part of efforts by the company to expand its business to include so-called MyData service, which allows clients to see their financial data in one glance. Lotte Card last month filed an application with financial authorities for a license to do such business.

Lotte Card has also stepped up investment in digital infrastructure, pouring more than 10 billion won to revamp its mobile app.

The company is 20% owned by Lotte Shopping, maintaining a link with Lotte Group after being acquired by MBK Partners. Last year, Lotte Card launched a private label credit card, LOLA, which led to a stronger partnership between the company and the conglomerate’s retail channels including Lotte Department Store, Lotte Mart and Lotte Hi-Mart.

Its new credit card series, LOCA, amassed users of more than 200,000 in five months since the launch in August last year. Lotte Card is the fifth largest player in the country’s credit card market, with more than an 8% share, after Shinhan Card, Samsung Card, KB Card and Hyundai Card.

MBK Partners acquired a controlling stake in Lotte Card in 2019. Shortly after the deal closed, the private equity firm appointed industry experts into leadership roles and revamped the organization with a focus on digital expansion and efficient operations.

Lotte Card has two wholly-owned subsidiaries, transportation card unit LOCA Mobility and Lotte Finance Vietnam. Under MBK Partners’ ownership, LOCA Mobility achieved cost reduction and is stepping up efforts to expand into new businesses. The Vietnamese unit also strengthened its risk management in the face of the pandemic. (Reporting by Hee-yeon Han)