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 ratings of "A-" to KTC's proposed up to Bt2,500 million senior debentures. The rating outlook has been revised to "stable" from "positive". The ratings reflect KTC's capable management and efficient operation and risk management systems that enable the company to sustain its strong market position in the credit card business, and its policy to diversify into the personal loan and the self-employed loan businesses. The ratings also take into consideration the strong support it receives from its major shareholder, Krung Thai Bank PLC (KTB). However, these strengths are partially constrained by the intensely competitive environment, unfavorable business factors, and regulatory risk, which might limit the company's business expansion and profitability in the future.
The "stable" outlook reflects TRIS Rating's expectation that KTC will be able to maintain its leading position in the credit card business despite the intensely competitive environment and risk factors associated with the business environment, and should be able to sustain acceptable credit quality of its growing portfolio from new products: personal loans and self-employed loans. The company's strong capitalization and its good operational and risk management systems are expected to help mitigate future downside risk from any adverse changes in the business environment.
TRIS Rating reported that KTC continues to maintain its strong market position in the credit card business with a market share of about 12% as of June 2005. However, changing business conditions (strict regulations and interest rate cap on both credit card and personal loan businesses, rising interest rates, economic slower down and higher inflation rate) have limited KTC's loan portfolio growth and profitability. As of June 2005, KTC had Bt26,113 million of loan receivables, a 20% increase from Bt21,747 million at the end of December 2004, far slower growth than the 63% y-o-y growth in 2004. KTC had Bt328 million of net profit in the first half of 2005, up by 8% from Bt303 million for the same period in 2004, which was lower than the 61% y-o-y growth for the year 2004.
TRIS Rating will closely monitor KTC's asset quality as its delinquency rate (loans with more than 90 days past due) of 3.20% of average loans as of December 2004 was higher than 2.22% in 2003. The rate slightly declined to 2.78% as of June 2005, as the company reported rapid loan expansion in the personal loan and the self-employed loan businesses. -- 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- Bt1,500 million senior debentures due 2007 Affirmed at A- KTC083A: Bt3,500 million senior debentures due 2008 Affirmed at A- Bt1,000 million senior debentures due 2009 Affirmed at A- Up to Bt2,000 million senior debentures due 2007 A- Up to Bt500 million senior debentures due 2008 A- Rating Outlook: Stable from Positive
The "stable" outlook reflects TRIS Rating's expectation that KTC will be able to maintain its leading position in the credit card business despite the intensely competitive environment and risk factors associated with the business environment, and should be able to sustain acceptable credit quality of its growing portfolio from new products: personal loans and self-employed loans. The company's strong capitalization and its good operational and risk management systems are expected to help mitigate future downside risk from any adverse changes in the business environment.
TRIS Rating reported that KTC continues to maintain its strong market position in the credit card business with a market share of about 12% as of June 2005. However, changing business conditions (strict regulations and interest rate cap on both credit card and personal loan businesses, rising interest rates, economic slower down and higher inflation rate) have limited KTC's loan portfolio growth and profitability. As of June 2005, KTC had Bt26,113 million of loan receivables, a 20% increase from Bt21,747 million at the end of December 2004, far slower growth than the 63% y-o-y growth in 2004. KTC had Bt328 million of net profit in the first half of 2005, up by 8% from Bt303 million for the same period in 2004, which was lower than the 61% y-o-y growth for the year 2004.
TRIS Rating will closely monitor KTC's asset quality as its delinquency rate (loans with more than 90 days past due) of 3.20% of average loans as of December 2004 was higher than 2.22% in 2003. The rate slightly declined to 2.78% as of June 2005, as the company reported rapid loan expansion in the personal loan and the self-employed loan businesses. -- 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- Bt1,500 million senior debentures due 2007 Affirmed at A- KTC083A: Bt3,500 million senior debentures due 2008 Affirmed at A- Bt1,000 million senior debentures due 2009 Affirmed at A- Up to Bt2,000 million senior debentures due 2007 A- Up to Bt500 million senior debentures due 2008 A- Rating Outlook: Stable from Positive