Bangkok--Feb 24--Krungthai Card
KTC, the comprehensive consumer finance service provider, reports operational results for 2005 with net profit of 653 Million Baht or a rise of 14.6% as a result of exceedingly successful spending encouragement campaign. With credit card and self-employed’s loan client bases expanded, debt quality maintained and operational expense per head lowered, KTC is moving forward with more unique marketing campaigns to keep their position as the leader of Thai credit card industry.
Mr. Niwatt Chittalarn, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, disclosed on the operational results for the year 2005 ending the 31st of December 2005 “We have a net profit of 653 Million Baht or a rise of 14.6% compared to the net profit of the same period of 2004. This makes basic earning per share 2.55 Baht.”
“The increase of total revenue in 2005 is 5,883 Million Baht or 42.6% as a result of increases in interest income and fee income which continue to rise constantly by 57% and 39% respectively. The interest income is from the self-employed’s loan, a product which is generating significant additional revenue for us with the highest growth of 488 Million Baht or 8.3% of total interest income. However, credit card business remains our top earner and accounts for 72% of total revenue with income from personal loan in the second place.”
“Our total expense is 4,187 Million Baht or a 42.4% rise from the end of 2004. The greater amount of bad debts and doubtful accounts, which rise in proportion with the greater amount of loan, account for the increased expense. Administrative expense has increased as well following our
moving of certain parts of the office to Thai Summit Building and our launch of new KTC Boutique branches and KTC Touch Points, making current numbers 16 and 35 respectively, to facilitate the members.”
“As for financial status, as of the 31st of December 2005, we have total asset of 29,601 Million Baht, an increase of 30.2% from the end of 2004. Our main assets are comprised of 19,494 Million Baht credit card receivables, 708 Million Baht circle-loans receivables, 3,705 Million Baht personal loans (KTC CASH), and, 3,975 Million Baht self-employed’s loans (KTC Million). These amount to 27,881 Million Baht or 94.19% of total asset. The number of credit cards issued as of the end of 2005 is 1,205,316.”
“We had been able to generate revenue constantly in the past year. Although we are affected by higher financial cost as a result of constantly rising interest rates and inflation, we have always been determined to become successful while standing by the customers. This very well reflects our status as the leading Thai credit card and consumer finance company. Our success is based on proactive marketing innovations, effective economy of scale, professional staffs and executives, and, risk management capabilities.”
“KTC has added flare to the scene with the introduction of marketing campaigns that effectively attracted the interest of clients throughout the year. Beginning with the gasoline-related campaign, KTC Makes Sense which gives members the chance to spend through the card without having to pay for it, and, the last campaign of the year, “Live an Enviable Life with KTC” under which card members are entitled to numerous benefits. Our goal is to offer products and services which appeal to all consumer groups. They are meant to cover all lifestyles, activities and daily spending, to ensure spending convenience, to make KTC the most preferred brand and to create a long-term positive brand experience. All of these plus a variety of benefits in a single card under the Membership Company concept.”
“As we have a large client base, we can have an effective economy of scale in terms of lower operational cost and greater operational revenue. We are also able to cross sell our products, for instance, “KTC CASH” or personal loan to credit card members. This fosters a long-term relationship with the members. The fact that we have a credit card client base of more than 1.2 million also helps reduce our per unit operational cost. Cost is further controlled through outsourcing with respect to collection and acquisition. Consequently, our operational expense per head has reduced from 60% in 2004 to only 55% in 2005.”
“More importantly, we are graced with this team of experienced and professional executives who truly understand the needs of clients and quickly respond to them. They use a modern and international style of management with which we can keep up with the changes in consumer finance market. They can effectively manage risks and maintain portfolio quality. The delinquency rate of each business is considered low.”
“As for personal loan business, we have net “KTC CASH receivables of 3,705 Million Baht or a rise of 7.3% from the end of 2004. This is because we have altered our operational plan for this business because we need to maintain portfolio quality, following smaller overall economic growth than expected and in accordance with our policy of optimal debt quality. The total number of KTC CASH accounts as of the end of 2005 is 136,810 or a rise of 11.2%.”
“We have been very successful with KTC Million, a self-employed’s loan, whose first anniversary we celebrated in September 2005. KTC Million Club was also established as the hub of entrepreneurs who can network and engage in more businesses with one another. The net KTC Million receivables as of the end of 2005 is 3,975 million Baht or a rise of 2,107 Million Baht from 1,868 Million Baht as of the end of 2004. The total number of KTC Million accounts as of the end of 2005 is 2,786 as opposed to 909 in 2004.”
“With regard to risk management, we pay great attention to repayment ability of customers in all of our businesses. Portfolio quality analysis and loan approval departments manage risks involved in the granting of loans. Collection department handles defaulted customers and verify spending status with National Credit Bureau and internal client database, taking the total risks of each client into consideration. This has made it possible for us to achieve a delinquency rate of 30-179 days which is low compared to the industry.”
“Given the operational results above, our key financial ratios may be presented as follows. D/E ratio of 4.26, a slight increase as a result of long-term debenture issuance during the year. We are still able to maintain liquidity and repayment ability, however. ROA of 2.5%. ROE of 12.0%, a slight increase compared to the end of 2004 because our profit increases more than does shareholders’ equity from ESOP’s exercise of right. Our being able to expand into new businesses and different marketing promotions which generate more revenue for us are very good indications of our enhanced profit generation capability.”, said Mr. Niwatt in closing.
For more information, please contact
Public and Corporate Affairs Department
Krungthai Card Public Company Limited
Kandtharat Chermchitphong
Tel. 0-2665-5057
Suchada Weerasakulrak
Tel. 0-2656-5732
Fax. 0-2665-5046
E-mail : [email protected]
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