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KTC celebrates its fourth consecutive year of high profit records, reaching 2,495 million baht in 2016, shifting its focus to online markets and new businesses.

KTC just secured a promising future with its fourth consecutive year of record breaking profit and revenue. While the company’s growth continues to expand in every dimension, both the credit card and personal loans business in 2016, the company reported gross profit growth of 20% at 2,495 million baht, total member base expanded 10.6% to 2.9 million accounts, total account receivable grew 13% to 68,697 million baht, while total NPL (Non-Performing Loan) reduced to 1.7%. In 2017 KTC aims to expand its border towards new market platform, focusing on online market and building new businesses.

Mr. Rathian Srimongkol, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited stated that “Thailand’s economic trend in 2017 grew steadily. Along with the recovery of the world economy, Thai government’s stimulus package, the country’s tight fiscal position has started to improve. We can expect a recovery for both private consumption and investment. The consumer finance industry has grown at a slower pace than the previous year; however, it is still considered as a potential market for continuous growth, especially for the high-income segment and Gen Y customers who have just started to own  credit cards.”

“KTC is still growing continuously in every dimensions for both credit card and personal loans business, with credit card’s receivables to the industry receivables at 12.9%, increasing from 12.3% in 2015. The market share for credit card’s spending in 2016 was 11.1%, increased from the 10.5% in 2015. The ratio of personal loans receivables to the industry was at 6.5% which increased from 5.7% in the previous year”

In 2016, the company net profit was 2,495 million baht, which was a 20% increase from last year. This resulted from the revenue of the credit card and personal loans business, continuous low-cost of fund, stable cost to income ratio, as well as effective collection and good control of portfolio.

Company’s credit card spending growth beats the industry in every quarter throughout 2016, with the total spending amount of 164,991 million growing 13.2%, which was higher than the industry that grew 6.8%. The company report 61,340 million baht of merchant volume with the growth of 22.2% The number of merchant outlet increased 29.2% to 29,764 stores, resulted from campaigns to expand merchant outlet and EDC machine installation, campaigns to increase online stores, together with Virtual Terminal System and Alipay campaigns.

According to the information as of December 31, 2016, the company’s assets was 68,297 million baht, increased 13% from 60,179 million baht in the previous year. Total net receivable was 63,303 million baht. Total membership base is at 2.9 million accounts, increased by 10.6% from last year, which can be divided into 2,095,563 credit cards with net account receivable of 42,988 million baht, 818,068 of personal loans accounts with net receivable of 20,154 million baht, total portfolio NPL was to 1.7% from 2.1% in the previous year, NPL of credit card was 1.2% from 1.3% and NPL of personal loans was 0.9% from 1%.

The company’s total revenue in 2016 was 17,580 million baht, which increased by 13% from the same period of last year valued 15,559 million baht. Interest income (including credit usage fee) increased by 12% Fee income increased 13%, and 18% increase from bad debt recovery. Net interest margin increased from 14.5% to 15.1% as the company managed to lower costs of funds. Cost to Income Ratio was 39.3%, which was close to the previous year while the Operating Cost to Income Ratio was 28.5%, which decreased slightly from the same period of the previous year.

At the end of 2016 the company’s available credit line was 26,190 million baht, which was from Krungthai Bank’s 18,030 million baht and other commercial banks 8,160 million baht. Financial expense at the end of 2016 was 3.08%, decreased from 3.74% as the company replaced matured debt with lower interest rates, plus good credit rating of “A+” for company’s unsecured and unsubordinated debenture which has continuously reflected solid financial strength and placed the company in the position that was able to manage it businesses with low costs. Moreover, the company’s Debt-to-Equity ratio was 5.62, which was 10 times lower than the bond covenant.

Mr.Rathian also added, “KTC feels the intense competition of credit card and personal loans businesses; therefore, it never stops and alwaysprojects new campaigns to develop unique marketing strategies, both for online and offline markets, in order to gain competitive advantages. Definitely, our marketing style and activities will be presented clearly in every dimension. The company’s marketing strategies in 2017 will be focusing on increasing potential membership base, which are our upper segment and the young generation that expresses explicit lifestyle. We will also promptly serve our members’ demands more in digital ways, and provide various benefits that could fulfill members’ demands as well. For the store business, our main focus will be promoting new types of businesses. There will be “KTC Pay” for the online business, serving e-commerce and m-commerce and expanding the business out from the urban area, altogether with an aim to improve quality of loan products. At the same time, “KTC Proud” will deliver online experience and expand membership base to create a long-term relationship. Furthermore, our credit card spending target is projected to grow at least 15%, receivable account ports by 10%, and NPL will be kept at the same level as before by expecting to increase more than 10% of net profit comparing that of 2016.



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By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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