SEOUL, September 28 (AJP) — South Korea's corporate credit card spending topped 60 trillion won ($45.4 billion) for the first time in the second quarter, rising 10.6 percent from a year earlier in line with a surge in corporate earnings from chip boom, central bank data showed.
Corporate credit card spending reached 61.7836 trillion won in the April-June period, the highest in the quarterly series, according to data from the Bank of Korea (BOK). Corporate users include companies, associations and public institutions.
The number of corporate credit cards stood at 11.75 million, up 1.3 percent from a year earlier, while the number of transactions increased 1.5 percent.
Average spending per transaction rose 9.0 percent to 179,320 won from 164,540 won a year earlier, compared with a 1.5 percent increase in transaction volumes.
Personal credit card spending increased 6.2 percent from a year earlier to 231.521 trillion won during the same period. Average spending per transaction rose just 0.7 percent to about 48,950 won.
The increase in corporate card spending came as corporate earnings improved sharply, led by the semiconductor industry.
The BOK said gross operating surplus, which reflects income generated through corporate production, jumped 48.2 percent from a year earlier in the second quarter, the strongest increase since quarterly distribution-income statistics began in 2010.
Operating profits at semiconductor manufacturers increased sharply, while the improvement spread to other industries including chemicals, transport equipment, services and wholesale and retail trade, according to the central bank.
A separate second-quarter analysis by the Credit Finance Association also cited stronger global semiconductor demand, improved terms of trade and better corporate earnings among factors supporting card spending.
Under the association's separate approval-based measure, corporate card approvals rose 8.7 percent from a year earlier to 63.4 trillion won, while the number of approvals increased 1.4 percent.
The BOK expects the sharp increase in corporate income to spread gradually to households and the government through bonuses, dividends and tax payments, with the effects becoming more visible in the second half of the year.
AJP Takeaways
- South Korea's corporate credit card spending increased 10.6 percent from a year earlier to a record 61.7836 trillion won in the second quarter, topping 60 trillion won for the first time.
- Corporate credit card spending per transaction rose 9.0 percent while transaction volumes increased 1.5 percent, indicating a much larger increase in payment size than frequency.
- The Bank of Korea separately reported a 48.2 percent surge in corporate operating surplus, led by sharply higher semiconductor profits, while industry card data also pointed to improving corporate earnings as a factor supporting spending.
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