KTC on top form in Q1 2018, having boosted net profit by 65 percent to Bt. 1.209 billion.

Stocks and Financial Services Press Releases Wednesday May 16, 2018 10:43
Bangkok--16 May--Krungthai Card

KTC announces Q1 2018 achievements, grew strongly by 65 percent with a net profit of 1.209 billion despite influences of regulations and administrative measures and intense competition in the industry. KTC is in full force to execute a unique marketing plan to create good customer experiences and to develop its product qualifications to cater to customers' needs. Sets expansion rate of approximately 10% for port of receivables, and aims to maintain NPL in the same level compared to the previous year.

Mr. Rathian Srimongkol, President and Chief Executive Officer of "KTC" or Krungthai Card Public Company Limited, states, "The Thai economy has a tendency to gradually fluctuate due to world economy support factors that are starting to recover, domestic regulations set out to stimulate the economy, investments in infrastructure from the governmental sector that are established in succession, as well as advances on reform measures to create domestic employment and income, including the Eastern Economic Corridor (EEC) economic integration that is much more defined, that will all contribute to the restoration of private expenses of both consumption and investments."

"The overall picture of the consumer private loans industry for the first 3 months continues to be constant growth, in spite of the slowing down progress in the previous year. On KTC's part, its work progress is beyond expectations. KTC achieves Bt. 1.209 billion net profit, or a 65 percent boost compared to the previous year despite significant challenges of rules and regulations set to control credit card limits and accessibility of personal loans, and effects of a drop in personal loans credit card interest from 20 percent to 18 percent, which caused the port of receivables and amount of credit card spendings to grow slower. Regardless, due to KTC's prowess in collecting debt and managing quality debtors from the screening process, NPL remains consistently low at 1.3 percent from 1.7 percent compared to the same period last year, lower than the industry level, and of which causes bad debt recovery to be increasingly returned while overall expenses decreased."

"As KTC of 31 March 2018, the firm has a total asset value of Bt. 69.965 billion, a 7 percent increase compared to the same period in the previous year. The asset that generates the most income for the firm is in the form of net trade receivables which comprise 92 percent of total assets. Port of ending net account receivables with allowance for doubtful accounts totaled at Bt. 64.592 billion, member base numbered 3.0 million or a 3.3 percent increase, comprising of 2,207,773 credit cards, a 3.5 percent surge. Net credit card account receivable ports have a ratio of 65 percent of total account receivables, with net credit card receivables of Bt. 42.137 billion. Ratio of credit card receivables compared to the industry value was at 12.6 percent at present. KTC credit card spending growth totaled 8.4 percent (10.1 percent in the industry) and market share in credit card spendings totaled 11.0 percent. NPL for credit cards valued 1.14 percent, a drop from 1.26 percent (2.26 percent in the industry), personal loans numbered 857,613 accounts, a 2.8 percent surge, while net receivable for personal loans business is set at Bt. 22.315 billion. Personal loans receivables compared to the industry totaled 6.9 percent and NPL for the personal loans business totaled 0.82 percent, dropped from 0.89 percent (2.67 percent in the industry) while coverage ratios remained at a high value of 591 percent compared to the same period last year which was at 500 percent."

"In Q1 2018, KTC has a net revenue growth rate that exceeds expenses. KTC generated an increase in income of 10 percent totaling Bt. 5.108 billion from interest, mainly from personal loans account receivables, which has a positive growth momentum (including credit limit usage fees) and other income and fees that are comprised 86 percent by bad recovered debt, and net expenses control of Bt. 3.603 billion, a 3 percent decrease from marketing expenses which dropped due to decreased new member approvals than estimated, and the establishment of a marketing budget that is executed more efficiently through technology, causing expenses to be lowered. Simultaneously, bad debt and doubtful account have also decreased due to slower growth of port of receivables, which in effect causes loan loss reserves and capital financial expenses to decrease, as the firm launched new debentures with an extended time frame and costs that are lower than that of the original. KTC also maintained operating cost to income ratio at a previously low rate and maintained it at 27.2 percent, equivalent to the same period in the last year, an indication of the firm's ability to uphold competent operational approaches."

"The firm has available credit line of Bt. 24.670 billion, comprising of financial amounts of Bt. 18.030 billion from Krungthai Bank and Bt. 6.640 billion from other commercial banks. Cost of fund of Q1 2018 totaled 3.02 percent (3.12 percent at the end of 2017), having decreased from the same period in 2017 of 3.21 percent, due to the firm's procurement through the launch of new debentures with extended periods with costs that are lower than original. At the same time, the firm's debt to equity is 4.08, the ratio 10 times lower than the debt covenant."

"For 2018, KTC sets a higher revenue goal than 2017 at Bt. 3.304 billion, alongside an approximate 10 percent increase in port of receivables in credit card and personal businesses, overall credit card spendings higher than 15 percent, and will control the NPL ratio to remain the same value as last year which is 1.3 percent. KTC strives to pinpoint true customer needs, coupled with expanding collaboration with alliances that are specialized in their own business fields, expanding merchant credit card alliances, developing technologies and applications that cater to the needs in the digital age, including transformation to present valuable services and creating good customer experiences to all relevant stakeholders."


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