Shinhan Card is initiating its second voluntary retirement program this year, following the sale of its headquarters last month. Although the company reported a slight increase in net profit for the first half of the year, concerns about future profitability persist due to declining merchant fee revenues and rising procurement costs, prompting a push for greater operational efficiency.
According to the financial sector on the 15th, Shinhan Card will accept applications for voluntary retirement from regular employees with over 15 years of service from today until the 21st. There are no age or rank restrictions, and the planned retirement date is set for the 31st.
Retirees will receive special severance pay of up to 24 months, depending on their age and rank, along with additional compensation. A re-employment program will also be available, with a basic operational period of up to two years, extended to four years for employees born between 1970 and 1973.
Since Park Chang-hoon took office, Shinhan Card has conducted voluntary retirement programs in June of last year and January of this year. This marks the third program since his appointment and the second this year.
Prior to restructuring its workforce, the company also streamlined its assets, selling its headquarters building, Fine Avenue A, in Euljiro, Seoul, last month to enhance asset efficiency.
Shinhan Card's net profit for the first half of this year was 253.4 billion won, a 2.8% increase from 246.6 billion won in the same period last year. However, the company has remained in second place in the industry since losing the top spot in annual net profit to Samsung Card in 2024.
A Shinhan Card representative explained, "This decision was made after considering the need to overcome the management crisis and strengthen organizational competitiveness, as well as the demand from employees seeking new career paths after retirement."
In the card industry, KB Kookmin Card previously announced a voluntary retirement program for the end of 2024, while Hana Card, Woori Card, and Hyundai Card implemented similar programs last year. Faced with sluggish domestic demand and stricter household loan regulations, companies are taking steps to reduce costs and restructure their workforce.
According to the Financial Supervisory Service, the net profit of all eight major card companies last year was 2.36 trillion won, an 8.9% decrease from the previous year. This decline was attributed to a 442.7 billion won drop in merchant fee revenues and increased interest and bad debt costs.
While the net profit for the first half of this year reached 1.29 trillion won, a 5.6% increase from the same period last year, there are concerns that prolonged high-interest rates could accumulate procurement cost burdens, putting pressure on profitability in the second half of the year.
* This article has been translated by AI.
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