Mr. Rathian Srimongkol, President & Chief Executive Officer/ Director, KTC or Krungthai Card Public Company Limited, reveals, "The Thai economy is recovering at a slow pace. However, improvements are generally expected in the second half of 2016, with political certainty, expansion of certain private sectors, growing tourism industry and more spending by the state. These are all positive factors driving the Thai economy. Consumers' confidence index is expected to improve as well, giving them more power to purchase."
"KTC remains strong from the ability to generate more income than the increase in total expense. This is despite our payment of fee to outsourced debt collection service providers which we have been using since May 2015, and despite increase in marketing expense, bad debt and doubtful accounts. Our ability to manage financial expense have brought financial cost down. As a result, KTC has a net profit of 1,215 Million Baht in the first six months. This represents 17% rise and translates to 4.71 Baht of earning per share. The net profit for the second quarter is 580 Million Baht."
One element contributing to this satisfactory performance is our effort to maintain non-performing loan at an appropriate level. Compared to the industry, our growth is more positive in all areas, such as 15.4% expansion in credit card spending, which is higher than the industry's average at 8.0%. This is due to our marketing activities which touch upon all key spending categories of the consumers, as well as our privileges which are interesting and continuous. Moreover KTC focus on portfolio quality and cost management.
"As of June 30th, 2016, we have total account receivable of 61,282 Million Baht or a 12% rise from the same period of the previous year. Total member base is 2.8 million accounts or a growth of 6% from the same period of the prior year. This comprises 1,988,842 card accounts with total credit card receivables of 41,102 Million Baht and 784,395 personal loan accounts with total personal loan receivables of 19,597 Million Baht. Total NPL is 1.9%, down from 2.2% of the same period of the previous year. NPL for credit card and personal loan businesses are stable at 1.4% and 1%, respectively."
"We have total income of 4,285 Million Baht in the second quarter of 2016. The increase is due to the 12% growth of total portfolio, driving income from interest – which is inclusive of credit usage fee – up to 12%. Income from fee rises to 15%. Meanwhile, administrative expense rises by 19% to 1,705 Million Baht due to the 28% increase in fee expense to our outsourced collection service. Marketing expense rises 54% over the same period of the previous year. However, it is 1% lower once compared with the first quarter of 2016. Bad debt and doubtful accounts have risen by 9%. However, we are still able to manage financial expense and bring financial cost down from 4.04% in the second quarter of 2015 to only 3.30% in the same period of this year."
"For the second quarter of 2016, our available credit line was at 25,290 Million Baht. This comprises 18,030 Million Baht from Krungthai Bank and 7,260 Million Baht from other banks. The debt to shareholders' equity ratio is 5.62, which is lower than our obligation of 10."
"In order to achieve the goal of sustainable growth, our plans for the second half of the year will be proactive, meaning that we will tap into all business sectors with our credit card, personal loan, retail business, sales channels management and online engagements. We will try to attract more credit card members and launch more campaigns in the provinces, focusing on the premium segment with the potential to spend. As well, we will work with those young people with interesting lifestyle throughout the POME or Point of Market Entry strategy which will impress the consumers, prompt them to sign up with us as their first credit card and stay with us for a long time. At the same time, we will maintain our mass market, develop creative and integrative marketing ideas, and, stay informed about new trends so that our cards will be the primary one for the consumers."