Bangkok--16 Aug--Krungthai Card
KTC starts to generate profit for the second quarter.The firm is pleased with their cost-reduction plan. They are confident their nine months performance will be in the positive region. Moves are now being made to attract more mid to high level members.
KTC reports a net profit of 86 Million Baht for the second quarter of 2012 or a 71% growth from the same period last year. Total net receivable is 41,557 Million Baht with a total member base of 2.14 million accounts. This level of performance is achieved with the use of cost-reduction plan, the terminating of inactive credit cards and efficient collection process. The firm reveals an intense marketing plan for the second half of the year with the initiative to attract more mid to high level customers, as well as more revolving loan customers. KTC will engage more in online marketing. They are confident the nine months performance will be in the positive region.
Mr. Rathian Srimongkol, President and Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, said “During the first six months of this year, competition in the Thai consumer finance business was rather intense with more commercial banks entering the market. Overall credit card business has had a growth of approximately 10% with non-bank institutions and banking institutions enjoying 12% and 8% growth respectively. Personal loan business has grown by 16% with commercial banks achieving 33% growth, surpassing non-bank institutions at 8%.”
“We are satisfied with our performance in the second quarter with more profit generated compared to the first quarter. This is possible due to cost reduction policy has applied into many angle part of operation. Meanwhile, KTC has focused on managing debt in the early stage before it becomes delinquent (Pre-Delinquent) as well as fastening write-off to improve the portfolio quantity. Collection department also works efficiently in preventing delinquent and collecting debt; therefore, both of credit card’s NPL and personal loan’s NPL are significantly declined. That is why we believe we will see more profit in the third quarter and that it will help offset the loss in the first quarter of the year, placing our nine months performance in the positive region.”
“As for our financial standing as of June 30th, 2012, we have total assets of 46,073 Million Baht and net account receivables portfolio of 41,557 Million Baht down by 6% from 44,016 Million Baht of the same period last year. Total member base is 2.14 million accounts with 1,552,487 credit cards and 29,739 Million Baht in net credit card receivable plus 588,577 KTC Cash personal loan accounts and 11,518 Million Baht in net personal loan receivable.”
“We have a net profit of 86 Million Baht for the second quarter of 2012 or a 71% increase from the same period of 2011. Total revenue is 3,085 Million Baht or 2% lower than the same quarter of the prior year at 3,153 Million Baht. Total interest income (including credit usage fee), fee income and other incomes are 1,968 Million Baht, 793 Million Baht and 324 Million Baht respectively. Totalexpense excluding income tax has lowered from 3,059 Million Baht of the same period of the prior year by 5% to 2,918 Million Baht. Bad debt and doubtful account is at 793 Million Baht or 30% down from 1,131 Million Baht from the same period of the prior year due to efficient collection and enforcement process. With all these strategies are lower the reserve of credit card’s bad debt and doubtful account which significantly affected major portfolio.”
“Cost to income ratio in the second quarter of 2012 is at 53.1% which is higher than the same period of the prior year and the prior quarter at 46.4%. The increase actually came from cost reduction policy which KTC has migrated some outsources back to in-house. During transition, there were costs such as early termination fee with outsources.
“At the end of the second quarter of 2012, we have available credit line of 26,510 Million Baht. Net interest margin has not changed from 13.6% of the end of last year despite our cost of fund rising from 4.94% to 5.13% because we have been able to increase average interest received from 18.56% to 18.78%. The debt to shareholders’ equity ratio is at 8.5, lower than the 8.7 of the first quarter and lower than the bond covenant at the maximum D/E ratio of 10 times.
Starting form 3Q2012, credit card marketing strategies is targeting more on mass customers which is the company’s major portfolio and hi-end customers who generate high spending volume with lower risk level. Besides, KTC focuses more on Online Marketing strategies mainly attributed by believing that people will involve more and more to technology in order to provide fast and convenient financial services to customers. KTC offers benefits through “KTC Forever Rewards” program and establish more reward point redeemed stations all over the country. The strategies are also including the conversion of reward points into cash and the selective marketing campaigns to stimulate credit card spending. As for the revolving loan service, we will work with Krungthai Bank to seek new clients through their channels in order to broaden our customer base to cover more government officials and state enterprise employees,” said Rathian in conclusion.