KTC announces 1,634 million Baht in Q1 profits, a delightful credit rating upgrade to "AA-" from "A+", with aims to strengthen its core business in all aspects
KTC reports its Q1/2021 business operations, announcing 1,634 million Baht in net profits, a growth of 23.6 percent from Q4/2020 during a situation with high variability factors. The Company sets strict measures on expenses, quality of portfolio, and NPL to remain at satisfactory levels and risk tolerance. Recently in April 2021, TRIS Rating has upgraded KTC's company credit rating to "AA-" from "A+", which will enhance KTC's image and strength in financing at a lower cost. KTC will continue to strengthen its main business' portfolio for both credit cards and personal loans to be fully integrated, as well as developing sustainability in digital technology, supporting consumers to access the company's products and services thoroughly in an equal, and fair manner.
Mr. Rathian Srimongkol, President & Chief Executive Officer, "KTC" or Krungthai Card Public Company Limited, states, "The overall picture of the consumer finance industry in early 2021 is still growing slightly with the uncertainty of the spread of COVID-19 and interest rate ceiling reductions. KTC's percentage of credit card receivables compared to the industry in the first two months of 2021 amounted to 13.6 percent, an increase from 2020. Credit card receivables grew 3.7 percent, greater than the industry's 0.8 percent growth, while the percentage of personal loan receivables compared to the industry equaled 5.0 percent."
"Regarding to KTC's performance during the first trimester, as of March 21, 2021, KTC has a net profit of 1,634 million Baht, a growth of 23.6 percent from Q4/2020, similar to 1,641 million Baht at Q1/2020 (a 0.4 percent decrease). Total loans (including accrued interest) totalled 86,854 million Baht (5.8 percent growth) compared to last year. NPL to total loans was at 1.9 percent (1.8 percent in Q4/2020) as a result of a decrease in the debtor's ability to pay off debt. Member base numbered 3.4 million, comprising of 2,544,635 credit cards, with a total credit card receivable (including accrued interest) of 57,393 million Baht. NPL to credit cards receivables was at 1.4 percent, while credit card spending was at a total of 48,420 million Baht. Personal loans numbered 809,981 accounts. Total personal loans receivables (including accrued interest) amounted to 29,461 million Baht, and NPL to personal loans receivables totalled 2.9 percent."
"In Q1/2021, the Company accumulated a total Revenue of 5,320 million Baht, a 6.2 percent decrease due to the COVID-19 epidemic that affected the confidence of consumers in spending along with the Bank of Thailand's measures to reduce the interest ceiling for both credit card and personal loan businesses. This lead to an interest income (including credit usage fees) totalling at 3,357 million Baht, a 7.1 percent decrease, comprising of 1,604 million Baht in interest from the credit card business and 1,753 million Baht from the personal loans business. Meanwhile, fee income (excluding credit usage fees) totalled 1,082 million Baht, a 8.6 percent decrease, as a result of the reduction in income from cash advance fee, debt collection, interchange fees, and other fees, while KTC's income from fees earned from merchants that support credit card payments surged by 3.5 percent."
"Despite this, owing to its prioritisation on strict expense management concordantly with the current situation and effective debt collection management, KTC was able to maintain its overall expenses at 3,281 million Baht, a 9.6 percent decrease compared to the same period last year. This was also achieved by reducing 3 main expenses: -11.2 percent in total operating fees, -8.0 percent in expected credit losses, and -7.6 percent in financial expenses respectively. Bad Debt Recovery totalled 834 million Baht, a 2.4 percent increase compared to the same period last year. As a result, KTC's expenses to total income decreased slightly in this first quarter, causing the net profit to remain almost the same."
"It is also a pleasure that TRIS Rating Company Limited has upgraded KTC's company credit rating to "AA-" from "A+" in early April 2021, which will enhance KTC's image and strengthen the financing of the company in refinancing new debentures at an even lower financial cost. As of March 31, 2021, the Company has an available credit line of 23,260 million Baht, while financial costs is at 2.64 percent, debt to equity ratio is at 2.43, which is lower than the stipulated obligation at 10 times."
"In terms of KTC's business direction in 2021, the Company will aim to strengthen its main portfolio to become a leader in the completely integrated credit business. After the shareholders' meeting, participants unanimously resolved to acquire a majority stake in Krungthai Leasing Company Limited, focusing on organizational and business development for sustainable growth with 2 key elements: 1) Usage of digital technology in product presentation, services, and payment systems through online channels that meet all needs, with emphasis on 3 cores digital transformation: Digital Product, Digital Service and Digital Channel, and 2) Creation of a comprehensive, equitable and fair access to the Company's products and services. Additionally, contribute to society by developing financial literacy and establish a spending discipline, and placing emphasis on transferring this knowledge to everyday life and building a sustainable portfolio quality."
"In addition, since March 26, 2020, the Company has been supporting the government in helping to alleviate the burden of customers affected by COVID-19. This period will be extended until June 30, 2021. Debtors who participated in the assistance measures has a total balance of 1,169 million Baht (16,066 accounts)."