TRIS Rating Co., Ltd. has affirmed the ratings of Krungthai Card PLC (KTC) and its current senior debentures at "A-". At the same time, TRIS Rating has assigned the rating of "A-" to KTC's proposed up to Bt1,500 million senior debentures. The rating outlook of KTC remains "positive". The ratings reflect KTC's strong market position in the credit card business and the strong support it receives from its major shareholder, Krung Thai Bank PLC (KTB). The ratings also reflect the company's management capabilities and efficient operational and risk management systems. However, these strengths are partially constrained by intense competition from bank and non-bank credit card operators and development of a more rigorous regulatory regime.
The "positive" outlook reflects the expectation that KTC will be able to maintain its leading position in the credit card business and sustain acceptable credit quality of its growing portfolio. KTC's new products, personal loans and self-employed loans, successfully launched in 2003 and 2004, respectively, are expected to have further improvement in the company's performance. It will take some time after the product launch to prove that the new products add to KTC's winning strategy.
TRIS Rating reported that as of December 2004, KTC had Bt21,747 million of loan receivables, a 63% increase from Bt13,347 million as of December 2003. KTC had Bt570 million of net profit in 2004, compared with Bt353 million in 2003, making its profitability ratios further improved from 2003. Asset quality deterioration has been a cause for concern, when KTC's non-performing loans (more than 90 days past due) were 3.20% of average loans, increased from 2.22% the previous year. Existing competition and regulatory risk (arising from expected interest rate control for personal loans) are expected to limit interest yields in the future. - End
Krungthai Card PLC (KTC) Company Rating: Affirmed at A- Issue Ratings: KTC064A: Bt5,000 million senior debentures due 2006 Affirmed at A- KTC074A: Bt1,500 million senior debentures due 2007 Affirmed at A- Bt1,000 million senior debentures due 2007 Affirmed at A- Bt1,000 million senior debentures due 2009 Affirmed at A- Bt210 million senior debentures due 2006 Affirmed at A- Bt3,500 million senior debentures due 2008 Affirmed at A- Up to Bt1,500 million senior debentures due 2007 A- Rating Outlook: Positive