KTC declares a net profit for the end of Q3 of 3.911 billion Baht. Profits have grown 65 percent due to a surge in credit card spendings, receivables from credit cards and personal loans, along with the upholding of approval standards within appropriate risks of target audiences and high quality debt collection management.
In the final quarter of the year, the firm aims to utilize its proactive strategies in a tactful manner, and to prepare itself for diversification into Nano-Pico Finance in the near future.
It is estimated that KTC will earn approximately 5 billion Baht in profit, with a 10% profit increase goal in 2019 compared to 2018.
Mr. Rathian Srimongkol, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, states, “The Personal Loans industry for consumers is continuously growing, due to the growth of the Thai economy, owing to exports and tourism that have been expanding correspondingly to the world economy.
Moreover, consumption and domestic investment which have positive growth tendencies, as well as domestic demand that consistently display an upswing, have caused purchasing power to gradually improve.
Despite this, government spendings will become an important factor in driving the Thai economy to grow consistently.”
“Meanwhile, KTC’s overall operations in the first nine months of the year has exceeded expectations. The firm achieved 3.911 billion Baht in net profit, or a 65 percent boost compared to the previous year. Net profits within Q3 alone totaled 1.396 billion Baht.
The firm continues to consistently earn profits from credit card spendings and increases in receivables from credit cards and personal loans, despite a progressively intense competition among personal loans purveyors.
These include rapidly changing consume behavior and posing challenges of new emerging technologies. Consequently, the firm had to adjust its business plan and reorganize its system correspondingly to prepare and achieve better efficiency.
These efforts are evident in the increases in personal loans accounts and Q3 credit card spendings, along with a spike in cash withdrawals from “KTC PROUD” Revolving Loan cards members.
“As of September 30, 2018, KTC has a total asset value of 73.319 billion Baht, an 8 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 equated to 72.870 billion Baht, member base numbered 3.2 million (a 5.2 percent increase), comprising of 2,301,431 credit cards (a 3.6 percent surge.)
Total credit card receivable was 46.616 billion Baht (a 5 percent increase.)KTC credit card receivables compared to the industry was at 12.6 percent. KTC credit card spending growth totaled 8.7 percent, and credit card spending totaled 138.289 billion Baht (industry grew 10.5%)
Credit card spending market share totaled 11.1 percent. NPL (non-performing loan) continues to remain low at 1.2 from 1.5 percent.NPL for credit cards dropped from 1.2 percent to 1.1 percent (1.9 percent in the industry).
Personal loans numbered 929,634 accounts, a 9.5 percent surge. Personal loans receivable amounted to 25.917 billion Baht (an 8 percent growth),
While KTC personal loans receivables compared to the industry totaled 7.0 percent, and NPL for the personal loans business remains at 0.8 percent (2.6 percent in the industry) while coverage ratios remained at a high value of 615 percent compared to the same period last year which was at 565 percent.”
“In its merchant business transactions in the past nine months, KTC achieved 62.359 billion Baht in merchant sales, having grown 14.4 percent, with an increase of 35,311 merchants, an 11.4 percent increase.
These achievements are results of merchant outreach projects and card swipe machine installations, as well as increases in the endorsement of KTC QR Pay credit card payment system to a wider variety of brand new merchants.
This will allow KTC members to experience convenience through a new payment method that does not simply adhere only to the old one.”
“In the past nine months, KTC has a greater overall net revenue growth rate, and successfully controlled and reduced its overall expenses.
KTC generated an increase in income in Q3/2018 of 8 percent, totaling 5.376 billion Baht, comprising of 3.226 billion Baht from interest (including credit limit usage fees), 1.182 billion Baht from fees and miscellaneous income totaled 968 million Baht, amounting to 60 percent, 22 percent and 18 percent of income, respectively.
Miscellaneous income comprises 87 percent of recovered debt, overall expenses of 3.632 billion Baht, a 7 percent drop, which can be compartmentalized managerial expenses that increased only by 1 percent due to the firms’ high quality port of receivables, which did not increase provisions for doubtful accounts.
As a result, bad debt and doubtful accounts decreased to 16 percent, including financial expenses that are costs to drop to 7 percent. These factors contributed to lower the firm’s overall spendings at a rather high level.”
“At any rate, KTC additionally maintained its operating cost to income ratio at 26.4 percent, a decrease compared to the same period in the last year which was 27.2 percent, due to increases in efficient operational approaches and net profits that exceed increasing operational expenses.
The firm has an available credit line of 25.390 billion Baht, comprising of financial accounts of 18.030 billion Baht for Krung Thai Bank, and 7.360 billion Baht for other commercial banks.
Financial costs for Q3/2018 and nine months totaled 2.97 percent and 2.98 percent, a decrease of 3.28 percent and 3.22 respectively, compared to the same period in 2018. At the same time, the firm’s debt to shareholder equity is 3.85, the ratio 10 times lower than the contingency agreement value.”
“The firm had continuously adjusted its proactive marketing plans in a variety of ways to create competitive advantage, and are tactful and considerate of preparation against impending economic and external factors.
The firm also aims to create new business opportunities and is on its way to diversify into the “Nano Finance” (small business loans) and “Pico Finance” (provincial retail loans under supervision) businesses.
Currently, KTC’s request for approval to conduct Nano Finance and Pico Finance businesses from Krung Thai Bank and the Bank of Thailand is underway.
For 2018, KTC sets goals to increase overall credit card spendings over 15 percent, port of receivables of approximately 10 percent, and will control its NPL ratio to remain the same value as last year which was 1.2 percent.
A higher net profit of 5 billion Baht value is also expected in 2018, and sets a goal of 10% growth in net profit for 2019 from 2018.”