ASEAN KEY DESTINATIONS
Intensive marketing strategy launched to be “first of mind” for online and provincial customers
KTC posted an increase in second quarter net profit of 2013 to Bt324 million, or Bt299 million after deducting extraordinary items related to the sale of investments. It was a 247% increase from Bt86 million in the same period of 2012, with total loan portfolio of Bt44.137 billion gained through a customer base of 2.21 accounts.
The results came on the back of strong performance in the company’s growing personal loan business. Not only having effective controlled expenses, which resulted a decline in administrative expense, and finance cost but it also proceeds with further marketing strategy targeting at the online segment and provincial markets by collaborating with Krung Thai Bank and many other business partners.
“KTC” or Krungthai Card Public Company Limited President and Chief Executive Officer Rathian Srimongkol said, “In the first half of this year we saw steadily rising competition in Thailand’s consumer finance. However, the overall credit card market grew 14% while the personal loans market rose 22%. Backed by this promising environment, KTC has remained in a positive mode with continuously profitable business and ‘better-than-before’ in many parts of our operations. This achievement can be attributed to our successful performance optimization strategy, streamlined work process and effective collection, resulting in noticeable cost reduction. Other performance drivers include our ability to network with partners and customized marketing campaigns for different groups of card members, focusing on an attempt to help reduce their daily expenses and relentlessly minimize repayment load for our personal-loan customers.”
He said, “As of 30 June 2013, our total asset value was Bt48.438 billion, up from Bt46.073 billion the year earlier. Net Account Receivables totaled Bt44.137 billion, up from Bt41.557 billion in the same last year. Member base
was 2.21 accounts in total, which are comprised of 1,587,594 credit card accounts with Bt30.744 billion of outstanding balance. KTC Cash personal loan accounts reached 626,426 with Bt13,133 billion of outstanding balance. Non-performing loans (NPLs) for our credit card business dropped to 3.3%, while NPLs for the personal loans segment declined to 2.3% compared to the previous year which reached 4.2% and 4.1% respectively.”
“Our second quarter net profit rose to Bt324 million, or Bt299 million after deducting extraordinary items related to the sale of investments. Half-year net profit totaled Bt746 million, or Bt500 million after deducting extraordinary items related to the sale of investments. Total revenue for the second quarter touched Bt3.387 billion, a 10% increase from the same period of 2012 which contributed Bt3.085 million. Interest income (inclusive of credit usage fee), fee income and other income topped Bt2.073 billion, Bt902 million and Bt412 million respectively. Overall expenses (exclusive of income tax) amounted to Bt2.976 billion, up 2% from the same period in the year earlier, which as Bt2.918 billion.”
“Bad debts and doubtful accounts grew from Bt793 million in the same period last year to Bt1.274 billion this year. This is largely a result of the provision for doubtful accounts to match expanding credit-card and personal-loan portfolios as well as effects of the change in delinquency recognition date according to a new core system switching in the first quarter. Despite of having an increase in provision, write-off and bad debt actually declined comparing to the last year due to better portfolio quality.”
“Cost-to-income ratio in second quarter of 2013 was 36.8%, dropped from 53.1% in the same period of the previous year and 40.8% in last quarter. This improvement can be attributed to effective performance boost and streamlined work process. Operating cost-to-income ratio was reduced to 26.2% from 33.5% in the same period last year and 27.1% in the previous quarter.”
“For the second quarter of 2013, we have available credit line of Bt24.490 billion, with Bt18.03 billion of the credit line provided by Krung Thai Bank. Debt-to-equity ratio was 7.7, lower than the bond covenant of 10 times, and down from the end of 2012 which was 8.5. Net interest margin increased to 13.8% from 13.2% at the end of 2012.”
“For the second half of 2013 we will concentrate more on product quality and service excellence. Our credit card business will see an expanding network of shops accepting KTC cards, plus a series of online marketing activities to greater awareness of KTC as easily accessible financial service experience.”
“Customers get access to our services quickly and more convenient through online channels and their smart devices. Our proactive marketing campaigns will encourage people to spend more in their daily life and get more value from using our credit cards rather than cash, and provide them with tips and tricks for our point redemption program from which they will easily redeem free gifts they wish. This will help encourage our card members to spend and use KTC cards on a regular basis.”
“Regarding the personal loan segment, we will be promoting KTC Cash Revolve as the key product, which is positioned as a tool to help increase cash flow for our customers. For this part, we will be introducing differentiated marketing campaigns that make card members financially comfortable as well as cultivate good spending habits and repayment disciplines. Moreover, we plan to expand KTC member base with the help of our nationwide network of Krung Thai Bank’s branches and stimulate spending among provincial card members by launching customized campaigns that match with their specific needs and lifestyles,” said Rathian.
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