Frequestly Asked Questions

Krungthai Card Public Company Limited (“the Company” or “KTC”) operates a credit card business as its main business, including credit card related business, merchant acquiring business, payment service, as well as a personal loan business which includes personal loan business under supervision and auto title loan. In response to changes in technology and society, the Company established the subsidiaries and added the occupational retail lending business, e-money business, hire purchase and leasing business, as well as holding business to support the Company's business operations to create sustainable long-term returns.

KTC operates in retail consumer finance business including unsecured loan which are credit card and personal loan business and secured loan which are prepaid service, auto title loan, leasing and hire purchase business. In 2023, Total receivables are stated below.

The revenue structure of KTC consisted of interest income and fee income from two main businesses: credit card business and personal loan business, including leasing business. details shown in the chart below.

For the year 2023, the Group’s total borrowings amounted to THB 66,404 million, showing an increase of 7.7%. The structure of capital sources is distributed with 32.9% from short-term borrowings (short-term loans and current portion of long-term borrowings due within 1 year) and 67.1% from long-term borrowings. The funds were from various sources, including commercial banks, securities companies, insurance companies, and asset management, including the short-term borrowings from related parties accounted for THB 2,860 million, other financial institutions accounted for THB 6,597 million, as well as THB 9,500 million of long-term loans from Krung Thai Bank and THB 47,447 million of debentures.

The debt-to-equity ratio is 2.15 times, slightly lower than the 2.22 times at the end of the previous year, and below the Debt Covenants threshold of 10 times.

Additionally, the total short-term credit line is THB 29,371 million (including THB 19,061 million from Krung Thai Bank), utilized for THB 4,981 million, leaving a remaining balance of THB 24,390 million.

The consumer finance industry continues to expand, driven by consumer spending demands and consumer confidence. As the end of 2023, the total credit card receivables for the industry were THB 498,861 million, showing a 3.3% increase. However, the overall credit card spending for the industry in 2023 expanded by 8.1%. Personal loan (excluding auto title loan) reached THB 505,680 million, decrease 1.9%, while auto title loan receivables amounted to THB 336,495 million, with a substantial 35.9% growth compared to the same period in 2022.

For the year 2023, KTC holds 14.9% of the credit card receivables market share, and the market share in credit card spending is 12.2%, indicating an increase compared to the same period in 2022. The market share for personal loan receivables (excluding auto title loan) compared to the industry is 6.4%

The Company pays good attention on every step of the operation. We are very selective on approval process and performs very well on debt collection. In addition, our management always pays close attention in debt collection process. As a result, the Company could perform well on debt collection and has good credit quality. However, growth rates in the coming years may not be high due to (1) Currently high recovery base (2) Lower write-off (3) Better debt quality. The overall bad debts recovery for the entire year 2023 totaled Baht 3,249 million, indicating a decrease of 5.0% (YoY). This overall recovery is distributed into Baht 3,143 million for KTC and Baht 106 million for KTBL. The company continues to emphasize in the importance of debt collection processes and adjusts strategies to suit the prevailing circumstances, aiming to enhance efficiency in debt collection processes.

Many factors affect the calculation of the allowance for doubtful accounts such as the change of the portfolio, portfolio quality, and the provision rate. Allowance is calculated by the following formula:

Where :
  ECL = Expected Credit Loss
  PD = Probability of Default
  LGD = Loss Given Default
  EAD = Exposure at Default

The Non-Performing Loans (NPL) to total receivables of the separate financial statement (%NPL) for 2023 was at 1.7%, slightly increased compared to the operating result for 2022 which was at 1.6%. The overall portfolio quality remains robust, with effective NPL control. The expected credit loss equaled THB 8,931 million, contributing to an NPL Coverage Ratio of 476.4%, a decrease from 502.1% in the same period last year.

In contrast, NPL ratio for consolidated financial statement 2023 was at 2.2% increased from 1.8% in 2022. The majority of this increase was attributed to the delinquencies of leasing customers. Furthermore, the NPL ratio for credit card, personal loans, and leasing portfolio in 2023 stood at 1.1%, 3.0%, and 17.7%, respectively. The expected credit loss of the Group was equivalent to THB 9,763 million, representing an increase of 11.0% (YoY). The NPL Coverage Ratio for the Group is 400.3%, dropped from 476.3% in the same period of 2022

The expected credit losses in Y2023 amounted to Baht 5,894 million, representing an increase of 21.1% (YoY) derived from higher provisioning due to portfolio expansion.

The shareholders’ meeting no. 1/2003 on March 25, 2003, approved the dividend payment policy to pay approximately 40 percent of net profit after deduction of income tax and appropriation for a legal reserve since 2003 onward. The table below shows the dividend payment for the operating result during 2018 – 2023.

(*) The Board of Directors' Meeting No.02/2024, approved the Company dividend payment for Business operation 2023 to the shareholders at the rate of Baht 1.27 per one ordinary share. However, the right to receive dividend is not confirmed without the 2024 Annual General Shareholders' Meeting approval.

KTC's strategy has integrated sustainable economic, social, and environmental dimensions through Better Product and Service, Better Quality of Life, and Better Climate. KTC conducts its business with responsibility and continuously develops products, services, technology, digital innovation, and human resources to meet business demands, build trust with stakeholders, increase access to financial products and services for Thai society, alleviate environmental impacts, and support sustainable development goals of the United Nations. For more information, please visit the website at https://www.ktc.co.th/en/sustainability-development.

➢ Target & Growth Direction in 2024

➢ Sustainable Household Debt Solution Framework & Its Effects

Bank of Thailand (BOT) published the regulations for Responsible Lending (RL), according to the Notification of Bank of Thailand No. SorKorChor 7/2566, The objective is to reinforce the role of service providers in responsibly serving customers throughout the credit lifecycle. These criteria have been effective since January 1, 2024.

These lending management criteria encompass 8 main areas: (1.) Product Development (2.) Advertising (3.) Sales Process (4.) Consideration of customers’ debt repayment capability (affordability) (5.) Discipline Promotion and Financial Management during the indebtedness period (6.) Assistance for Customers with Persistent Debt (PD) (7.) Assistance for Customers with Payment Problems including restructuring of non-NPL debt for both Preemptive Debt Restructuring (Preemptive DR) and Troubled Debt Restructuring (TDR) (8.) Compliance with Laws and Debt Transfers

KTC has implemented measures to assist debtors in the long term in compliance with the announcement of BOT as follows.

Regarding the adjustment of the minimum credit card payment rate from 5% to 8% which was effective from January 1, 2024, to December 31, 2024, KTC believes that most customers can afford the increased minimum payment. However, recognizing that some customers may not have the ability to pay, the company has prepared various initiatives to provide assistance.

Additionally, KTC will propose assistance measures for non-performing loans (Non-NPL) customers. This involves proactively and preemptively adjusting the debt structure (Pre-Emptive DR) to prevent potential issues when there are early signs that a customer may face difficulties in repayment at least once. The aim is to help customers manage their debt effectively and avoid transitioning into Non-Performing Loans (NPL) status. Besides, KTC will also propose assistance measures for customers with Non-Performing Loans (NPL), particularly before taking legal actions, debt sales, contract cancellations, or asset seizures. This assistance will be provided at least once. KTC will assess these support measures in alignment with the customer’s ability to repay, ensuring that the assistance doesn’t unduly increase the customer’s debt burden.

As the implementing these assistance measures, KTC already considered and assured that it would not have any significant adverse impact on the overall operations.

Furthermore, KTC has assessed the impact of BOT’s guidelines for assisting customers with Persistent Debt (PD) issues, effective from April 2024 onwards. If all eligible customers participate in the program, it is estimated to result in a reduction of approximately THB 18 million in monthly interest income.

Regarding the progress in the Risk-Based Pricing (RBP) concept, there is still a wait for the official testing phase, expected to commence in mid-2024. As for the determination of the Debt Service Ratio (DSR) threshold, specific details have not been opened for public input yet. BOT anticipates initiating its implementation in 2025, subject to further economic assessments as originally planned.

Over the year, KTC has implemented various programs to provide assistance to debtors following the guidelines regulated by BOT for responsible and fair lending. As of December 31, 2023, KTC had provided assistance to debtors in all statuses, totaling THB 1,833 million, accounting for 1.7% of the total receivable portfolio.