KTC beats the economic hardship with a 9-month net profit of 5,534 million baht with continuously growing total receivables portfolio. The Company is confident that profit for the year will reach the target.
KTC posts the first 9 months net profit of the Company and its subsidiaries of 5,534 million baht, increased by 2.2%, and Q3/2023 net profit of 1,857 million baht, increased by 4.7%. Total receivables portfolio grew 10% amounted to 106,701 million baht, mainly supported by private consumption driving the portfolio of all products grew in parallel with quality screening at an appropriate and acceptable risk level. The Company is confident that profit for the year will reach the target.
Mr. Rathian Srimongkol, President & Chief Executive Officer, "KTC" or Krungthai Card Public Company Limited, stated, "In the past 8 months, the consumer finance industry is continuously expanding due to improving demand of consumption expenditure and consumer confidence, causing KTC's operating results to continue growing. KTC's credit card receivables accounted for 14.9% compared to the industry. The market share of credit card spending volume equaled to 12.1%, increased from the same period in 2022, while personal loan receivables (excluding car title loan) accounted for 6.2% compared to the industry."
"In the past 9 months, the credit card and personal loan portfolio grew 10% as targeted with total portfolio of 106,701 million baht and total NPL level was at manageable level of 2.3%. Credit card portfolio continued to expand well in response to increasing credit card spending volume, resulting from consumption spending demand. Likewise, "KTC PROUD" cash card portfolio continued to grow well by emphasizing on growing the portfolio together with screening the quality of debtors at an appropriate risk level. "KTC P BERM Car for Cash" new booking equaled to 1,929 million baht."
KTC's performance as of September 30, 2023, compared to the same period in 2022, KTC had a total net profit according to consolidated financial statements in the first 9 months and in Q3/2023 of 5,534 million baht (a 2.2% increase) and 1,857 million baht (a 4.7% increase) respectively. The total membership base numbered 3,331,065 accounts, comprising of 2,616,269 cards in the credit card business, while total loans to credit card customers and accrued interest receivables equaled to 69,225 million baht. The amount of credit card spending in the first 9 months was 192,270 million baht, a 13.7% increase. NPL for credit card was at 1.3%. There are 714,796 accounts in the KTC personal loan portfolio, with loans to "KTC PROUD" customers and accrued interest receivables of 30,246 million baht. The receivables of "KTC P BERM Car for Cash" equaled to 2,058 million baht. NPL for personal loans was at 3.1%. The new booking of "KTC P BERM Car for Cash" in Q3/2023 was 794 million baht and for the first 9 months was 1,929 million baht. The lease receivables amounted to 3,369 million baht, with the new booking of KTBL commercial loan for the first 9 months of 2023 of 1,446 million baht. Nevertheless, KTC continues to delay the loan approval after seeing signs of increasing bad debts.
"Total revenue in Q3/2023 compared to the same period in 2022 showed a growth of 9.8%, equaled to 6,461 million baht, mainly from interest income and fee income. Meanwhile, total expenses increased by 13.4%, equaled to 4,170 million baht, mainly from the portfolio expansion, resulting in an increased provisions. Thus, expected credit losses (ECL) increased by 15.7% to 1,477 million baht, while operating expenses also increased. Cost of fund increased in response to higher interest rates in the financial market."
As of September 30, 2023, KTC's total borrowings increased by 9.8% equaled to 62,730 million baht, comprising of short-term borrowings (including loans and debentures due within one year) 23% and long-term borrowings 77%. Total short-term credit line amounted to 29,371 million baht (including KTB credit line of 19,061 million baht) with utilized short-term credit line of 5,221 million baht. As a result, the available credit line was at 24,150 million baht. Cost of fund was at 2.7% and debt to equity ratio was at 2.07 times, decreased from the same period in 2022 at 2.14 times and lower than the debt covenants at 10 times.
"In addition, KTC is still implementing various projects to assist debtors in accordance with the Bank of Thailand's guidelines for fair lending. As of September 30, 2023, the Company has provided assistance to debtors of all statuses amounted to 1,802 million baht, accounting for 1.8% of the total loan portfolio."
"Regarding progress in the Bank of Thailand's sustainable solutions to the household debt problems that opened for the consultation paper about the draft of "Responsible Lending: RL measures" and the draft of "Risk-Based Pricing: RBP mechanism" recently as a guidelines to adjust both creditors and debtors behaviors through raising the standard of responsible lending processes throughout the debt cycle. KTC's guidelines are always clear by providing loan services responsibly with advertising and sales guidelines that are in line with the Bank of Thailand. Thus, the Company is confident that the regulations that will be enforced will not have any significant impact on KTC's operations."
"Regarding the persistent debt (PD) which will be effective in April 2024, KTC will provide options to interested debtors, especially severe persistent debtors, where they can switch from revolving loan schemes to term loans with interest rate not exceed 15% per year, which will enable debtors to exit from the debt cycle within 5 years. Debtors must voluntarily participate in the program by themselves and close a previous credit balance. KTC has assessed the impact on such measures, if all eligible KTC debtors participate in the program; KTC's interest income will decrease approximately 18 million baht per month."
"In 2024, KTC targets to grow 3 main businesses: credit card business; "KTC PROUD" cash card and "KTC P BERM Car for Cash" loan as the Company believes that there is a strong demand for each type of loan in the market. The Company will also promote the MAAI by KTC business, a CRM service business. Combining 3 main components: People-Process-Technology together as one will enable KTC to grow efficiently and sustainably. As such, profit for 2024 will be higher than 2023, total loan portfolio will be expanded by 10% under appropriate risk management, total NPLs will be the same level as in 2023, total credit card spending will grow by 15% from 2023, "KTC PROUD" cash card will grow by 5%, and "KTC P BERM Car for Cash" new booking for the year 2024 will reach 6,000 million baht."