Bangkok--13 Nov--Krungthai Card
Net profit of 132 Million Baht or 64% growth, 450,000 new accounts in nine months while total revenue is 5,766 Million Baht or 37% growth over previous year
KTC discloses operational results of third quarter of 2006: net profit of 132 Million Baht or 64% growth over previous quarter, 9-month net profit of 348 Million Baht, and, 450,000 new accounts. This is achieved with improving economic factors, continued marketing and brand awareness campaigns through a diverse range of media including expansion of member base into provincial markets. For the second half of the year, KTC will focus on more benefits to personal loan members and tap into the young professionals market to secure potential clients for an even more promising future. More partner involvement is in order.
Mr. Niwatt Chittalarn, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited said “The Thai economy is showing signs of improvement: stable interest rates and lowering oil price. This has allowed us to attract many more new members during the past half year. We are still encouraging members to settle for goods and services through their credit cards, to make it more a part of their daily life. As for the personal loan business, we promote loaning only for necessary spending to customers who have discipline and responsibility.”
“Given the circumstances, during the past nine months, we have been able to attract new 453,165 accounts. This is a growth of 124% from the end of 2005. As of the end of the third quarter, we have total members from all businesses of 1,642,803 accounts. Of this number, 1,368,623 accounts are credit card, 270,523 accounts are personal loan and 3,657 accounts are entrepreneur loan. We have 180,948 new KTC CASH accounts in the past nine months or 357% of the same period of the previous year. This success is partly due to our brand awareness promotion attempt through more television and radio commercials as well as print ads in other publications. When clients need to engage in a credit card or a personal loan transaction, they would more likely choose our services than those of other financial institutions.”
“The continually rising number of members has resulted in the total income for the 9-month period of 2006 being 5,766 Million Baht or a growth of 37% from the previous year. This is nearly the same as total income of the whole year of 2005. The increased income is from interest income (including credit usage fee) and fee income, accounting for 68% and 28% of total income respectively. As for this third quarter of 2006, we have total income of 2,100 Million Baht or a growth of 39% from the same period of the past year. The increased interest income and credit usage fee are mostly generated by credit card business and KTC CASH.”
“Total expense in this quarter has risen marginally by only 5% from the previous quarter. Three main expenses affecting our operational results are administrative expenses which rose only by 3% due to our efforts to efficiently control expenses. The amount of bad debt and provision for doubtful accounts has decreased by 2% from the previous quarter as the number of new members in the third quarter is not as high as that of the second quarter and the amount of allowance for doubtful accounts are consequently lower. The last major expense is risen interest expense. Although the repurchase rate which affects our financial costs directly is beginning to become stable at 5%, our loan base continues to rise constantly with increased portfolio value, resulting in higher financial costs still. Our cost of fund for the nine months of 2006 is 4.8%.”
“Intentionally, having higher cost of fund and increase in marketing expense has an impact on KTC. However, KTC believes that results of having card usage marketing program and expanding customer base for the KTC CASH Revolve will generate sustainable benefits in the future. As for credit card, we have introduced more benefits to the members and encourage them to spend more through the card. KTC CASH members were also given benefits plus a special interest rate.”
“Our financial status as of September 30, 2006 involves total asset of 37,215 Million Baht or a growth of 26% from the end of 2005, net account receivable of 35,202 Million Baht comprising of 25,293 Million Baht in credit card receivables (inclusive of circle loan), 6,180 Million Baht in KTC CASH personal loan receivables and 3,729 Million Baht in entrepreneur loan (KTC Million) receivables.”
“KTC had the net profit of Baht 348 Million Baht and 132 Million Baht for the nine-month period and three-month period ended September 30, 2006, respectively. The 64% growth from the 2nd quarter 2006 was because KTC has controlled expenses to its best used. In addition, credit card business as a core still generated satisfying income. KTC CASH Revolve as a new product also produced an additional income.”
“As for the last quarter, we will focus on the increase of more new KTC CASH Revolve members than other businesses. We will also continue to tap into the mass of potential clients who are not yet qualified for a credit card or a personal loan. To this end, we have introduced KTC 24, a privilege card for new customers with aging of 18 years-old and above, and the young professionals market to help gain their confidence so that they will become our clients once they are ready for a credit card or a loan.”
“Additionally, we will try to attract more members in the provinces because of the lucrative marketing opportunities. The lifestyle of provincial consumers, particularly those in larger provinces, are becoming more similar to consumers in Bangkok. They have greater spending power and they need an efficient financial tool. And spending through a credit card would certainly give them more benefits than cash. We will still use our discretion in the approval of cards to new members as before, based on their repayment ability. This is to ensure secure income stream of ours and sound financial system of Thailand in the long run.”, said Niwatt in conclusion.
For more information:
Public and Corporate Affairs Department,
Krungthai Card Public Company Limited
Kandtharat Chermchitphong Tel. 0-2665-5057
Suchada Weerasakulrak Tel. 0-2665-5732
Prapatporn Chumchuwat Tel. 0-2665-5401
Fax. 0-2665-5046 E-mail: [email protected]