KTC announces Q2 2018 achievements, declaring a net profit of 2.515 billion Baht. Profits having grown consistently strong by 66 percent due to receivables, card issuance and merchant business transactions, along with lower expenses control growth.
The firm aims to maintain high portfolios quality and debt collection management, to achieve an overall lower bad and doubtful debts, as well as increased recovery income.
In the second half of the year, the firm is in full force to boost business, striving to prioritize customer needs. Also, expand collaboration with all business alliances, and develop personnel and the firm.
Technologies are utilized as facilitators to execute new services and develop the “TapKTC” application to create convenience and great customer experiences on an ongoing basis.
Mr. Rathian Srimongkol, President and Chief Executive Officer of “KTC” or Krungthai Card Public Company Limited, states, “The Thai economy has demonstrated a clear indication of a positive and constant growth tendency due to increasing efforts in exports and tourism that have adjusted correspondingly to the growing economy and drives from domestic demand.
In terms of the overview of the personal loans industry in the first half of the year, the industry indicates a growth as a result of surges in the number of overall credit card debtors and credit card spending.”
“Meanwhile, KTC’s overall operations continue to operate at a satisfactory level. The firm achieved 2.515 billion Baht in net profit, or a 66 percent boost compared to the previous year.
While Q2 net profits equaled 1.306 billion Baht despite the intense competition within the personal loans industry, changing consumer spending behavior,and the effects caused by the rapid development of new technologies.
In response to these factors, the firm had to improve its communication system with consumers, and periodically self-improve to better adapt to the ever so changing environment.
Additionally, the firm also had to adjust its strategies to increase the number of clients and credit card spending value, in preparation of challenges that arose from rules and regulations that have been implemented.”
“As of June 30, 2018, KTC has a total asset value of Bt. 71.919 billion Baht, a 9 percent increase compared to the same period in the previous year. The assets that generated the most income for the firm is in the form of net trade receivables which comprise 92 percent of total assets.
Total receivable was 72.037 billion Baht, member base numbered 3.1 million, or a 2.8 percent increase, comprising of 2,249,933 credit cards, a 3.2 percent surge. Total credit card receivable was 46.251 billion Baht.
KTC credit card receivables to the industry was at 12.6 percent. KTC credit card spending growth totaled 7.7 percent (industry grew 11.9) and credit card spending market share totaled 11.1 percent. NPL (non-performing loan) continues to remain low from 1.6 to 1.3 percent.
NPL for credit cards dropped from 1.2 percent to 1.1 percent (1.9 percent in the industry). Personal loans numbered 867,236 accounts, a 2.0 percent surge.
Personal loans receivable amounted to 25.423 billion Baht, while KTC personal loans receivables compared to the industry totaled 7.0 percent, and NPL for the personal loans business totaled 0.8 percent, having dropped from 0.9 percent (2.5 percent in the industry) while coverage ratios remained at a high value of 605 percent compared to the same period last year which was at 528 percent.”
“In Q2 2018, KTC has a greater overall net revenue growth rate, and successfully controlled and reduced its overall expenses.
KTC generated an increase in income of 9 percent, totaling Bt. 5.259 billion Baht 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 93 percent by bad recovered debt, and net expenses control of Bt. 3.626 billion Baht,
A 5 percent decrease from marketing expenses which dropped due to a decrease in new member approvals than estimated, and budgeting for marketing that has been undertaken more efficiently through technology, thereby causing lowered expenses.
Simultaneously, bad and doubtful accounts have also decreased due to slower growth of the portfolio, 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 additionally maintained its operating cost to income ratio at 26.8 percent, a decrease compared to the same period in the last year, an indication of the firm’s ability to uphold competent operational approaches.”
“The firm has an available credit line of Bt. 24.890 billion Baht, comprising of financial accounts of Bt. 18.030 billion Baht for Krung Thai Bank, and Bt. 6.860 billion Baht for other commercial banks.
Financial costs for Q2/2018 totaled 2.99 percent, a decrease of 3.23 percent compared to the same period in 2017. In the first half of the year, the financial costs amounted 2.97 percent (3.12 percent at the end of 2017) 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 shareholder equity is 4.24, the ratio 10 times lower than the contingency agreement value.”
“Although the firm was not able to meet its receivables and credit card spending goal that was set in the first half of the year, as a consequence of the economy which is overall at the recovery stage and regulations that were set out that posed challenges, the firm had adjusted its various strategies for competitive advantage in the business.
For 2018, KTC sets the same 10 percent increase receivables in both credit card and personal businesses, overall credit card spending over than 15 percent, and will control the NPL ratio to remain the same value as last year which was 1.3 percent. A higher net profit which exceeds the 3.304 billion Baht value from last year is also expected.