Bangkok--15 Aug--Krungthai Card Net profit of 279 Million Baht, 29% growth and member base of nearly 1.9 million accounts. The firm assures it will stand by Thai consumers despite economic slowdown. KTC discloses performance for the first six months ending June 30th, 2007. Total revenue reaches 5,002 Million Baht or a 36% rise from the same period of the previous year. Net profit of 279 Million Baht or a 29% growth over the same period of 2006. Credit card and personal loan member base expands continuously with latest member count of nearly 1.9 million accounts. Delinquency is at a rate lower than that of the industry. The firm is poised to alter marketing strategy for the second half of the year to counter the economic slowdown, maintain existing clients, manage receivables quality and repayment ability in all loan businesses, and, encourage members to spend more via their credit card on a daily basis. It plans to achieve these goals by using striking marketing campaigns that focus on the needs of clients and increase brand loyalty, by expanding the network of establishments where the cards are accepted, by engaging in new businesses, and, by offering niche privileges in accordance with the lifestyle segmentation method. KTC hopes to become the leading consumer finance business for Thai people. Niwatt Chittalarn, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, said “Current economic circumstances cause a slow down in the consumer finance business. Consumers are becoming more cautious with their spending while financial institutions engage in different tactics to encourage among clients spending and application of credit cards, loans, privileges or additional reward points. As for KTC, we have altered our strategy for the second half of the year to reflect the economy which we believe will continue to be in a recess. Using the advantage of our integrated partner network, we are able to offer privileges that make a difference, are of good value and satisfy the needs of our clients. This is to make sure that our members make payments regularly with their KTC credit card and apply for additional personal loan services. What is most important is that we want to focus on reasonable everyday spending on the part of our clients and efficient debtor quality management on our end. To this end, we will continue to expand our client base to cover all segments and bring them relevant privileges using the lifestyle segmentation strategy. Some of the segments introduced in the first half of this year are Metro Life, Divers, Golfers, and, Elderly.” “We have also revamped the traditional rules for the reward point campaign to make ours different from the competition with “Shop Now, Get Now” which allows members to use their KTC Forever Rewards points more quickly and at better value. All they need is 99 points on their KTC credit card or KTC CASH Revolve card and a sales slip from a transaction of 800 Baht or greater made anywhere to redeem products or services they desire without having to depend on chances on a catalogue. Our partners in the first phase of the campaign are Jiffy, Bond Polichem, The Body Shop, SF Cinema, Swensen’s, Dunkin’ Doughnuts, Au Bon Pain, Auntie Anne’s and Carrefour.” “With regard to our performance in the first half of 2007, we have a total member base of 1,895,966 accounts with most new members from credit card business and KTC CASH at the same ratio. Of all new KTC CASH members, more than 85% are KTC CASH Revolve members. Total number of credit cards issued as of June 30th, 2007 is 1,438,909. Total number of KTC CASH account is 453,383. Total receivables portfolio in the second quarter of 2007 is 41,407 Million Baht, up from 39,120 Million Baht at the end of 2006. This is achieved by constant debt quality management and the requirement of the Bank of Thailand which raises minimum repayment from 5% to 10% of outstanding debt. Total value of the portfolio does not increase significantly as a result.” “In the second quarter of 2007, we have total revenue of 2,569 Million Baht or a 32% rise from the same period of 2006. Total revenue in the first six months of 2007 is 5,002 Million Baht or a 36% growth over the same period of the previous year, driven by revenue from interests plus credit usage fee and revenue from fees which account for 70% and 26% of total revenue respectively. Interest receivable plus credit usage fee in the second quarter grew 36% compared to the same period of 2006. The majority of 90% of this is interest receivable from credit card business and KTC CASH personal loan business.” “Total expense including interest expenses and income tax in the second quarter is 2,427 Million Baht or 6% over the previous quarter. The majority of increased expenses are those from operating expenses which are proportional to the growth of receivables portfolio, increased spending via cards, increased number of transactions, lifestyle segmentation strategy implementation, and, marketing efforts to increase spending via the cards. Cost to income ratio for the first half of the year 2007 is at 52%, down from 56% at the end of 2006. This is more a result of increased revenue than operating expenses as we are engaged in operational expense control and incur less new member acquisition expenses than in the same period of the previous year.” “With regard to financial status as of June 30th, 2007, we have total assets of 43,960 Million Baht or a 5% rise from the end of 2006. Net Account receivables of 41,407 Million Baht or a 6% rise from the end of 2006. Of this figure, 27,418 Million Baht is net credit card receivables, 10,693 Million Baht is net KTC CASH personal loan receivables and 2,709 Million Baht is net KTC Million self-employed loan receivables. Net profit in the first half of the year is 279 Million Baht. Net profit in the second quarter of 2007 is 143 Million Baht or a 78% growth over 2006.” “We are still able to generate revenue continuously despite the fact that we have been affected by increased financial costs. We will continue to pay particular attention to receivables portfolio and repayment ability in order to avoid non-performing loans. Our delinquency rate is 30-179 days in all businesses which is low compared to the industry. KTC will strive for success while standing by consumers so that they will enjoy what is best for them as well as utmost convenience with their KTC membership.”, said Niwatt in conclusion. For more information: Public and Corporate Affairs Department Krungthai Card Public Company Limited Kandtharat Chermchitphong Tel. 0-2828-5057 Suchada Weerasakulrak Tel. 0-2828-5732 Fax. 0-2828-5046 E-mail: [email protected] Click for photo release at www.thaipr.net