Hyundai Cardis...Investor Presentation Hyundai CardMay 2012
DisclaimerThese presentation materials have been prepared by Hyundai Card Co., Ltd. (“HCC or the Company”),solely for the ...
The Premier Korean Credit Card Company                                                                                    ...
Growing Partnership with GE Capital                                                                                       ...
Management Strategy                                                                                03      Use analytic in...
Investment Highlights                                                                                   04      Effective ...
Compelling Business Environment                                                                                           ...
Conservative Strategy Focused on Credit Purchase                                                                          ...
Innovative Programs Strengthen Bonds with Customers                                                                       ...
Creative Branding Drives High Awareness                                                                                   ...
Pre-emptive Approach to Risk Management                                                                      09      Risk ...
Combining Strong Governance with Innovation                                                                               ...
Solid Profit Underscores Strong Fundamentals                                                                              ...
Excellent Asset Quality & Conservative Reserve Policy                                                                     ...
Solid Capital Base                                                                                                        ...
Well Diversified Funding Portfolio                                                                                        ...
Effectively Managed Liquidity                                                                                             ...
Investment Summary                                                                                  16     Effective marke...
Investor Relations ContactsJungsang Kim, Head of Investor Relations      Minchul Seo, Deputy General Manager of Investor R...
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IR presentation: Hyundai Card 1Q 2012

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IR presentation: Hyundai Card 1Q 2012

  1. 1. Hyundai Cardis...Investor Presentation Hyundai CardMay 2012
  2. 2. DisclaimerThese presentation materials have been prepared by Hyundai Card Co., Ltd. (“HCC or the Company”),solely for the use at this presentation and have not been independently verified. No representations orwarranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fair-ness or completeness of the information presented or contained in this presentation. Neither the Companiesnor any of theirs affiliates, advisers or representatives accepts any responsibility whatsoever for any loss or damage arising fromany information presented or contained in this presentation. The information presented or contained in this presentation is cur-rent as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither the Companies norany of their affiliates, advisers or representatives make any undertaking to update any such information subsequent to the datehereof. This presentation should not be construed as legal, tax, investment or other advice.Certain information and statements made in this presentation contain “forward-looking statements.” Such forward-lookingstatements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,”“estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project,” “trend,” and similar expressions. All forward-lookingstatements are the Companies’ current expectation of future events and are subject to a number of factors that could cause actualresults to differ materially from those described in the forward-looking statements. Caution should be taken with respect to suchstatements and you should not place undue reliance on any such forward-looking statements.Certain industry and market data in this presentation was obtained from various trade associations, and the Companies have notverified such data with independent sources. Accordingly, the Companies make no representations as to the accuracy or com-pleteness of that data, and such data involves risks and uncertainties and is subject to change based on various factors.This presentation does not constitute an offer or invitation to purchase or subscribe for any shares or other securities of the Com-panies and neither any part of this presentation nor any information or statement contained therein shall form the basis of or berelied upon in connection with any contract or commitment whatsoever. Any decision to purchase shares in any offering of sharesof the Companies should be made solely on the basis of the information contained in the offering document which may be pub-lished or distributed in due course in connection with any offering of shares of the Companies, if any.The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person orpublished, in whole or in part, for any purpose.
  3. 3. The Premier Korean Credit Card Company 01 Industry leader across key quality metrics - Excellent asset quality with the industry’s lowest delinquency rate of only 0.6% Strong customer loyalty with high card usage per customer Marketing innovations differentiate brand and drive growth - Strategic marketing program with Hyundai Motor Group - Leadership position in super premium segment Seven-year-long partnership between two global leaders : Hyundai Motor Group and GE Capital - Strong governance with GE Capitals active involvement in management & daily operations Increasingly profitable since the inception of the joint venture(JV)
  4. 4. Growing Partnership with GE Capital 02 - Innovative “Point Programs” 2010 - GE Capital provides USD 200mm - Stable & solid operational base back-up credit line 54.0% - Extensive sales network - Total Investment : USD 649mm (as of March 31st 2012) - Powerful financing arm 2008 2006 ~ 2008 Exercising of Warrants - Effective marketing tool (Additional equity investment) - Most successful joint venture - Sole consumer finance 2006 GE Capital increases paid in window in Korea capital by KRW 165bn 2005 - Establishment of joint venture with GE Capital - Advanced knowledge on risk of - GE Capital purchases KRW 200bn management Subordinated bond - Financial support - Active involvement in management - GE Capital acquires KRW 313bn 43.0% equity interest in HCC and daily operations
  5. 5. Management Strategy 03 Use analytic insight and creative marketing to drive sustainable growth Redress the balance between growth and risk management Maintain strong capital structure and sound liquidity position Place top priority on credit risk management Maintain a diversified and stable funding portfolio
  6. 6. Investment Highlights 04 Effective marketing lead to an increase in market share to 14.4% in 1Q12 Strong operating profit of KRW 79 billion and net income of KRW 75 billion Maintained healthy asset quality with a 30+ day delinquency rate of only 0.6%, the lowest among Korean FIs Reinforced strong commitment to abide by the target leverage of 4x Strengthened liquidity management indicated by CP coverage of 784.6%
  7. 7. Compelling Business Environment 05GDP Growth Trend Characteristics of Korean Credit Card Industry GDP growth rate was 2.8% in 1Q12 (YoY) Payment service oriented ; similar to charge card concept - Proportion of revolving balance carried over : approximately 7.0% 6.1% Settlement ratio through credit card, 62.0%* of total private consumption 3.6% 2.8% Strong credit infrastructure - Preemptive and conservative regulation by 2.2% the Financial Supervisory Service - Well-developed credit bureau system 0.2% * Source: the Credit Finance Association, as the end of 2011 2008 2009 2010 2011 1Q12Source : Bank of Korea
  8. 8. Conservative Strategy Focused on Credit Purchase 06Asset Portfolio (Unit: KRW Bn) Market Share Trend Lump Sum Installments Cash Advance Credit Purchase* Market Card Loan Other Total Credit Card Market (credit purchase*+ financial products) 9,563 9,438 9,186 21.0% 7,136 21.6% 22.8% 15.7% 15.7% 15.5% 10.6% 15.5% 15.0% 10.1% 12.6% 10.7% 25.0% 25.7% 14.3% 14.4% 14.1% 25.0% 13.1% 25.8% 42.8% 41.1% 48.5% 40.7% 2009 2010 2011 1Q12 2009 2010 2011 1Q12Source : Company * Excludes corporate accounts Source : Company
  9. 9. Innovative Programs Strengthen Bonds with Customers 07Innovative Point Program with Diversified Product PortfolioHyundai Motor Group Income Level Car Purchase Card Usage Super Premium Premium Prime Middle Multiple Point benefit 4330 GOOD THRU GOOD THRU MONTH / YEARSave Pre-reward 4330 MONTH / YEAR GOOD THRU M Pre-reward Repayment M2 PlatinumAuto D/C benefit M3 Platinum 5433 MONTH / YEAR GOOD THRU V Shopping 4330 MONTH / YEAR 5433 MONTH / YEAR GOOD GOOD THRU THRU M Discount Point 4330 GOOD THRU MONTH / YEAR 4028 GOOD THRU MONTH / YEARPoint within Points Accumulation V2 Platinum M Lady/ R R3 Platinum T&E 4330 4330 5289 4330 4330 H / YEAR 4330 MONTH / YEAR the Black the Red GOOD THRU the Purple A2, K2, E2 Platinum-Increased card usage & loyalty -Increased tendency to purchase H3, T3 Platinum HMC/KMC vehicles-Continuous inflow of new Niche MONTH / YEAR applicants -Enhanced customer retention GOOD THRU 4028 MONTH / YEAR GOOD THRU capabilities 5433 MONTH / YEAR GOOD THRU 4028 MONTH / YEAR-Able to offer more attractive GOOD THRU mileage term -Strong target-marketing practices C/ T/ H/ O ZERO/ DIRECT through the analysis of cardholders’ lifestyle MONTH / YEAR GOOD THRU DIRECT ZERO
  10. 10. Creative Branding Drives High Awareness 08Creative and Differentiated Continuous growth in brand awarenessMarketing StrategiesInnovative Commercial Global Alliance 88.1%Strengthen and Elaborate Brand Activity 83.4%- Launch a ‘Culture Project’ as an experimental attempt- Release Liquid Metal designed card to boast the unique identity 80.4% 76.0%Super Series The Modern Times- Associate HCC with a “premium and - New communication artistic” image 2008 2009 2010 2011 Source : Company
  11. 11. Pre-emptive Approach to Risk Management 09 Risk Control Committee - Sets policies and reports to BOD - Equal membership between Hyundai Motor Group and GE Capital - Includes GE Capital’s Asia Chief Risk Officer Using GE Capital’s expertise in risk management - Tailored use of GE Capital’s credit scoring system - Rigorous compliance and anti-fraud processes - Dynamic monitoring of payments, status changes - Adoption of GE Capital’s risk reporting format Pursuing growth with a focus on stringent risk management - Application of Risk-Based Pricing(RBP)
  12. 12. Combining Strong Governance with Innovation 10 Committed to excellence in governance - Active board oversight supported by three key committees . Risk Control Committee . Executive Finance Committee . Asset & Liability Committee - Transparent corporate governance - GE Capital has veto rights on all major decisions Supporting innovative culture and meritocracy - Merit-based culture with performance-linked compensation - Rewards for innovation and development of new business opportunities - High quality employees from diverse background
  13. 13. Solid Profit Underscores Strong Fundamentals 11Income Statement (Unit : KRW Bn) Operating Income (Unit: KRW Bn) Profit on sale of Daewoo International share 2010 2011 1Q11 1Q12 YoY 375Operating Revenue 2,336 2,408 608 615 1.3% 101 324(luding FX Effect) 2,259 2,378 584 600 2.8% 286Operating Expense 1,961 2,084 510 537 5.3%(Excluding FX Effect) 1,884 2,054 486 521 7.4% 98 278 79Bad debt expense 185 200 53 42 -19.9%Provision for 14 1 3 2 -34.1%unused Credit Line 2009 2010 2011 1Q11 1Q12Operating Income 375 324 98 79 -19.7% - Regulatory changes had a negative effect onROA 4.8% 3.6% 4.3% 3.4% operating income - Pursue income stability through conservativeNet Income 281 239 74 75 1.3% risk management - Maintain a steady M/S and number of card holders
  14. 14. Excellent Asset Quality & Conservative Reserve Policy 1230+ Delinquency Rate(%) Total Reserve VS Regulatory Requirement (KRW Bn) Regulatory Requirement Reserve under K-IFRS Supplemental Tatal Reserve/ Regulatory Requirement 199.1% 197.3% 127.7% 123.9% 381 378 0.6% 0.6% 204 210 0.4% 0.3% 189 23 190 193 174 171 166 142 148 114 2009 2010 2011 1Q12 2009 2010 2011 1Q12Source: Company
  15. 15. Solid Capital Base 13Leverage Trend (Unit: KRW Bn) Capital Adequacy Ratio (Unit: KRW Bn) Managed Borrowings Leverage Shareholder’s Equity Adjusted Capital CAR Maximum Leverage According to 22.5% 20.0% Dividend Policy : 19.6% 4.0x 18.7% 3.5X 4.1X 3.5X 3.4X 2,077 1,997 1,869 1,843 1,845 1,699 1,737 7,197 7,090 1,483 7,068 5,165 2009 2010 2011 1Q12 2009 2010 2011 1Q12Source : Company Source : Company
  16. 16. Well Diversified Funding Portfolio 14 Funding Portfolio by Product Funding Principles Maintain the proportion of ABS under 20% and CP under 10% Diversify funding portfolio in terms of currency, region and product ABS Maintain the average maturity ratio of liability-to-asset 12.7% at over 100% CP 3.0% Contingency plans under regular reviewLoan1.7% Bond 82.7% 2012 Plan Take advantage of favorable domestic funding environment : Funding Balance : KRW 7,090Bn Uphold stability of the funding portfolio Long-term funding : 72.0%
  17. 17. Effectively Managed Liquidity 15CP Coverage Ratio (Unit: KRW Bn) Debt Maturity Profile (Unit: KRW Bn) CP Cash Credit Line CP Coverage Ratio* Bond CP Loan ABS 784.6% 23.5% 22.7% 1,666 1,608 20.6% 323.2% 149 1,457 173.9% 40 298 72.1% 50 450 841 838 13.3% 940 30 11.3% 498 70 800 8.7% 1,477 618 1,260 743 810 140 1,007 20 660 840 800 570 650 490 391 478 210 2009 2010 2011 1Q12 2Q12 2H12 2013 2014 2015 2016~* CP Coverage Ratio = (Cash + Unused Committed Credit Line) / CP Balance Source : CompanySource: Company
  18. 18. Investment Summary 16 Effective marketing lead to an increase in market share to 14.4% in 1Q12 Strong operating profit of KRW 79 billion and net income of KRW 75 billion Maintained healthy asset quality with a 30+ day delinquency rate of only 0.6%, the lowest among Korean FIs Reinforced strong commitment to abide by the target leverage of 4x Strengthened liquidity management indicated by CP coverage of 784.6%
  19. 19. Investor Relations ContactsJungsang Kim, Head of Investor Relations Minchul Seo, Deputy General Manager of Investor RelationsPhone +82 2 2167 7034 Phone +82 2 2167 7051jungsang.kim@hyundaicard.com mcseo@hyundaicapital.comBrett Moffat, Manager of Investor Relations Youn Chung, Manager of Investor RelationsPhone +82 2167 5510 Phone +82 2 3770 973brett@hyundaicapital.com youn.chung@hyundaicapital.comhttp://ir.hyundaicard.com

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