KTC announced a profit of 1,803 million baht for Q1/2024, up 2.4% from Q4/2023. Total credit card spending volume and receivables portfolio increased slower as the economy grew more sluggish than expected. The Company has remained confident that we can reach the profit growth target by focusing on a marketing strategy with clear operational goals and growing the total receivables portfolio in parallel with asset quality control according to our responsible and fair loan-approval guidelines.
Pittaya Vorapanyasakul, President and Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, stated, “The consumer finance industry is growing at a slow pace with pressure from debt repayment ability and a high level of household debt. However, the Consumer Confidence Index in March 2024 was satisfactory and should continue supporting the industry. KTC’s market share of credit card and personal loan receivables (excluding auto title loans) from January to February 2024 was 13.2% and 6.1%, respectively, and the market share of credit card spending volume equaled 12.4%.”
“KTC’s performance for Q1/2024 did not reach the target as the economy was weaker than our expectations. Nevertheless, KTC made a total net profit of 1,803 million baht on a consolidated basis (+2.4% QoQ) and 1,893 million baht on a separate financial statement basis (+7.4% QoQ). KTC believes that building a high-income credit card customer base, robust screening of credit card and personal loan portfolios and applications, and proactively communicating to target customers to create awareness of KTC loan product, “P BERM Car for Cash,” should enable KTC to achieve its target ultimately.”
“KTC has increased the credit card minimum payment rate from 5% to 8%, effective January 1, 2024. We found that during Q1/2024, most of KTC’s debtors could pay the minimum payment of 8%, with only a small portion experiencing difficulty. Furthermore, KTC is ready to propose assistance measures to non-NPL debtors, which is a pre-emptive debt restructuring (DR) from an early stage when there are signs that debtors are about to encounter problems in repaying their debts at least once so that they can pay back the debt and they will remain good loans. The Company will also offer assistance measures to NPL debtors quickly, at least once, especially before taking legal actions, transferring debt, terminating contracts, or seizing assets. Those assistance programs are evaluated per the debtor’s ability to repay debts as the measure[s] should not add inappropriate burdens to their original obligations, in line with the Bank of Thailand Notification No. SorKorChor 7/2566 regarding Responsible Lending (RL).”
“KTC strongly believes that the provision of these assistance measures should not significantly impact KTC’s operations. Moreover, the guidelines regarding persistent debt (PD), which have been effective since April 1, 2024, will lower KTC’s interest income by approximately 18 million baht per month if all eligible KTC debtors participate in the program.”
As of March 31, 2024, the total loans portfolio grew well, and credit card spending volume increased continuously compared to the same period in 2023. KTC has also been able to maintain its asset quality prudently and appropriately. The total membership base numbered 3,423,147 accounts; total loans to customers and accrued interest receivables equaled 105,347 million baht (a 2.0% increase); the NPL Ratio (% of total NPL) was at 2.0%.
The credit card business had a total of 2,695,453 cards (a 4.0% increase); loans to credit card customers and accrued interest receivables equaled 69,213 million baht (a 2.3% increase); NPL for credit cards was at 1.2%; credit card spending volume was 69,419 million baht (an 8.5% increase). The personal loan business had 727,694 accounts (a 2.6% decrease), with loans to personal loan customers and accrued interest receivables of 33,149 million baht (a 2.4% increase). NPL for personal loans was at 2.1%. KTB Leasing Company Limited (KTBL)’s lease receivables equaled 2,985 million baht (a 9.6% decrease) as KTBL has stopped granting this type of loan since August 2023. “KTC P BERM Car for Cash” new booking equaled 611 million baht (an 82.6% increase).
Total revenue in Q1/2024 compared to the same period in 2023 showed a growth of 11.7%, equaled to 6,763 million baht, mainly from interest income (including credit usage fee), fee income, and recovery income, which was increased 5.4%, 14.7%, and 26.7% respectively. Meanwhile, total expenses increased by 20.4%, equal to 4,504 million baht, in response to increased transaction volume, portfolio expansion, work system development, and a higher number of write-offs according to faster write-off timeframe to reflect the genuine situation of the portfolio quality. Total operating expenses equaled 2,369 million baht, expected credit losses (ECL) equaled 1,683 million baht, and cost of funds equaled 451 million baht. The cost-to-income ratio was 35.0%, which increased from 32.8% in Q1/2023.
As of March 31, 2024, the group’s total borrowings equaled 59,344 million baht, comprising short-term borrowings (including loans and debentures due within one year) 23.3% and long-term borrowings 76.7%. The debt-to-equity ratio was 1.83 times, which decreased from 2.0 times in the same period in 2023 and was lower than the debt covenants, which were 10 times. The available credit line was 24,990 million baht.
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