Bangkok--16 May--Krungthai+Card
Focuses on improving total customer experience,building long-term partnership and offering best value in all spending decisions expected to help double this year’s profits.
KTC announced financial results for its fiscal 2013 first quarter. The Company posted 1stquarter net profit of Bt422 million or profit of Bt201 million if deducting extraordinary items related to the sale of investments. With significantly decreased in NPLs, its loan portfolio was at Bt42.684 billion from the customer base of 2.19 million accounts. Backed by growing revenue from interest received in its personal loans segment in addition to effective cost reduction, improvements in work performance and sound debt quality management, the Company is launching a series of marketing campaigns to target new credit card and personal loans customers. It has also set up a dedicated market intelligence team to do research on consumers’ behavior and identify solutions to address changing market requirements. Offering best value in all spending decisions and helping card members to ‘shop more for less’ are part of the Company’s strategy to double profits this year.
Mr. Rathian Srimongkol, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited said, “Overall, the Thai economy is in positive growth mode as a result of the government stimulus package as well as increased purchasing power within the public sector, which has been continued from last year. However, the Bank of Thailand’s concern over an increasing ratio of household debt has resulted in a slow progress of credit card and personal loans business. Therefore, service providers have become more prudent in their expansion of loan portfolio and always apply a cautious approach to prevent risks.”
“For us at KTC, we concentrate on proactive marketing policy. We continuously control debts and use solid risk management measures, as a result we are less affected by the concern. Still, we always stick to reliable management principles and procedures for screening new quality customers rather than increasing numbers of card members. Customer retention and ultimate customer satisfaction are also business priorities as the Company is launching marketing activities to offer great value and spending delight to its card members throughout the year, which are expected to help encouraging card spending. For our personal loans business, efforts to help both existing and new members reduce the entire sum of debt burden, or some parts of it, are at the center of our attention.”
“Our 1stquarter net profit as of 31 March 2013 was Bt422 million, or Bt201 million after deducting extraordinary items related to the sale of investments. Total asset was Bt46.881 billion, compared to Bt45.743 billion as the same period last year. Accounts receivable totaled Bt42.684 billion, slightly increasing from Bt41.418 billion in the same period last year. Our current member base was 2.19 accounts in total, which includes 1,550,083 credit card accounts with Bt30.066 billion of outstanding balance. KTC Cash Personal Loans has 636,742 customer accountswith Bt12.345 billion of outstanding balance. Non-performing loans (NPLs) for our credit card business dropped to 3%, while NPLs for the personal loans segment declined to 2.7%, compared to the same period last year,” said Rathian.
“Growth of our 1stquarter profit can be attributed to strong revenue of Bt3.243 billion, which is exclusive of extraordinary items related to the sale of investments, from interest received from the personal loans business that grew 10% in combination with improved work performance, effective operating cost control and better management of debt quality. Operational expenses decreased by 8% (Bt115 million) and financial expenses dropped by 7% (Bt34 million). Bad debts and doubtful accounts were down by 8% (Bt99 million).”
He also explained, “The policy on operational cost reduction has given a cheerful result as KTC experienced Q1/2013 cost-to-income ratio of 40.8%, down from 46.4% the same period last year and 52% the end of 2012. Without marketing expenses, interchange Fee and other relevant transactions from extraordinary items related to the sale of investments, the quarter’s operating cost-to-income ratio shrank to 27.1% from 32.1% the same period last year and 30.1% the end of 2012.”
“For the first quarter of 2013, we have a total available credit line of Bt26.04 billion, with Bt18.03 billion of the credit line provided by Krungthai Bank). Average cost of fund lessened to 4.93% from 4.98% at the end of 2012. Net interest margin decreased from 13.8% to 13.2% from the same period last year. Debt to equity ratio was 7.73, lower than the maximum bond covenant of 10 times, and down from the end of 2012 which was 8.47.
“Our marketing strategies from now on will concentrate on quality and service excellence. For the credit card business, we will expand the network of shops accepting KTC credit cards and increase the numbers of KTC credit card Electronic Data Capture (EDC). We will also take a major step in expanding online stores as well as offering more privileges to customers throughout the year in order to encourage card spending. The Forever Rewards programme will continue to allow customers to redeem their favorite gifts and services they deserve. By encouraging new card members to activate their KTC cards and use them on a regular basis, some appealing campaigns like Best Deals allows the members to purchase special deals to make the most of their spending. For the personal loans segment, we are well prepared to introduce new products that meet the needs of our target customers focusing on marketing campaigns that set us apart from the crowd, strengthen our long-term relationship with customers and help them manage their personal finance and debt repayment more effectively.”
He said, “As a result of a very positive feedback in this year’s first quarter, we believe to see better results for the next quarters. Net profit for the year 2013 (without extraordinary items related to the sale of investments) is estimated to soar to more than a double from that of 2012.”