Korean Operator Moves Into Credit Cards

South Korea's top credit card firm by revenue, Shinhan Card, plans to sell a 14.9% stake in BC Card to KT, the country's second largest mobile operator, by year-end 2010. The deal will only be completed if Woori Bank, the third largest lender in South Korea, transfers 20% of its 27.65% share in BC to KT by the same period. This agreement follows incumbent SK Telecom's acquisition of 49% stake in the credit card unit of Hana Financial Group for US$350mn in December 2009. CFW believes that the limitations in the domestic mobile market have prompted KT and alternative operators to diversify their operations into other business areas instead of engaging in the detrimental behaviour of a price competition.

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