1.
Shareholding structure of KTC and subsidiaries
Krungthai Card Public Company Limited 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, KTC established the subsidiaries and added the occupational retail lending business and e-money business to support the Company's business operations to create sustainable long-term returns.
2.
What are the company’s core businesses?
3.
What are the Company’s major sources of income?
5.
The sources of funding and debt covenants
As of the end of 3Q24, the Group’s total borrowings amounted to Baht 60,054 million, comprising 35% short-term borrowings (including borrowings and debentures maturing within one year) and 65% long-term borrowings. KTC utilizes diverse borrowing sources, including Thai commercial banks, securities companies, insurance firms, and various funds. The breakdown of borrowings includes short-term loans from related financial institutions and affiliated companies totaling Baht 3,159 million and borrowings from other financial institutions amounting to Baht 3,599 million. Long-term loans from Krungthai Bank totaled Baht 9,500 million, and debentures amounted to Baht 43,796 million.
The D/E ratio was 1.78 times, a decrease from 2.07 times in the same period of the previous year. It remains well below the debt covenant limit, which is set at 10 times.
Additionally, the Group has a total short-term credit line from financial institutions amounting to Baht 28,371 million, which includes a credit line of Baht 18,061 million from Krungthai Bank. The Group has utilized Baht 5,170 million of the short-term credit line, resulting in a remaining balance of Baht 23,201 million. Furthermore, the Group has a long-term credit line from Krungthai Bank totaling Baht 5,000 million. Debentures and long-term loans due in the 4Q24 amount to Baht 5,245 million.
6.
KTC credit card and personal loan business compared to the industry
The consumer finance industry has experienced a contraction, accompanied by a deterioration in loan quality, largely attributable to the lower-than-expected growth of the Thai economy. The delayed in government spending during the first half of the year impeded the recovery of household incomes, thereby effecting the debt repayment capacity of vulnerable households. While credit card spending within the industry increased by 2.6% during 9M24, the total industry credit card receivables amounted to Baht 461,842 million, reflecting a decrease of 3.2% (YoY). Similarly, personal loan receivables (excluding auto title loan) totaled Baht 488,724 million, down 4.1% (YoY), whereas auto title loan continued to grow at 17.0% (YoY).
KTC, on the other hand, gained market shares compared to the same period in the previous year, both in terms of the Company’s card spending volume, which rose to 13.0% and the proportion of credit card receivables relative to the industry, which reached 15.0% for 9M24. Additionally, personal loan receivables’ market share (excluding auto title loan) saw a modest expansion, rising to 6.5% from 6.3% in the corresponding period of the previous year.
7.
Debt collection
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 to the debt collection process. As a result, the company could perform well on debt collection and has good credit quality. As a result of expedited bad debt write-offs, a new recovery base was established, amounting to Baht 1,030 million in 3Q24, representing an increase of 25.4% (YoY). This growth facilitated effective debt monitoring across all business segments, with bad debt recoveries totaling Baht 1,006 million from KTC and Baht 23 million from KTBL.
8.
The tendency of portfolio quality and allowance for expected credit loss
The Group’s non-performing loan ratio (%NPL) for 3Q24 was 1.93%, showing a decrease compared to 2Q24, which was 1.97%. In 3Q24, the %NPL for the credit card, personal loan, and leasing business stood at 1.30%, 2.21%, and 16.71%, respectively. The Group’s allowance for expected credit losses amounted to Baht 7,610 million, representing a decline of 19.6% (YoY), driven by accelerated write-offs this year, for which provisions had already been accounted for. The NPL Coverage Ratio, reflecting the allowance for expected credit losses relative to NPLs, remained robust at 373.31%, although slightly lower than the 381.53% recorded in Q3 2023.
The ratio of non-performing loans to total loans in the separate financial statements (%NPL) for 3Q24 was 1.61%, a decline from 1.92% in the same period last year. The allowance for expected losses stood at Baht 6,991 million, leading to an allowance for expected credit losses to NPLs (NPL Coverage Ratio) of 421.93%, down from 443.3% in the prior year.
As a result of the policy adjustment to accelerate the write-off of bad debts, the credit cost in the consolidated financial statements for 3Q24 was 6.1%, an increase from 5.5% in 3Q23.
9.
Expected credit loss
In 9M24, Expected credit losses amounted to Baht 4,985 million, reflecting a 16.4% (YoY) increase due to provisioning adjustments driven by changes in portfolio quality, accelerated write-offs resulting from implementing the new bad debt write-off policy effective January 1, 2024, and additional provisions aimed at prudent risk management to mitigate future volatility.
10.
Dividend payment policy
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 2019 – 2023.
11.
KTC’s Strategy Incorporating Sustainability Development
KTC has integrated sustainability into its strategy, focusing on economic growth (Better Products and Services), enhancing social well-being (Better Quality of Life), and promoting environmental responsibility (Better Climate). The Company operates responsibly, continuously developing its products, services, digital technologies and innovations, while investing in its workforce. This commitment aims to address business needs, build trust with stakeholders, increase access to financial products and services for Thai society, mitigate environmental impacts, and support the United Nations’ Sustainable Development Goals. For more information, please visit the website at https://www.ktc.co.th/en/sustainability-development
12.
Current events.
➢ Target & Growth Direction
➢ KTC Direction in 2025
In alignment with the projected expansion of the Thai economy in 2025, KTC is dedicated to fostering growth in accordance with the principles of Responsible Lending. The Company is committed to advancing information technology to enhance the capabilities of its personnel and streamline work processes, thereby improving overall operational efficiency. KTC has established growth targets for its 3 primary business segments: the Credit Card Business, KTC PROUD, and P BERM Car for Cash, recognizing the continued consumer demand for each of these financial products. The Company aims to achieve sustainable profit growth while maintaining a high-quality loan portfolio, expanding under a framework of acceptable risk control. Should the Thai economy in 2025 exceed current expectations, KTC is confident in its ability to outperform the established targets.
➢ Sustainable Household Debt Solution Approach and Potential Impacts
KTC has implemented ongoing debt relief measures per the BOT’s announcement No. SorKorChor. 7/2566 regarding Responsible Lending (RL) criteria, dated December 21, 2023. These measures aim to enhance the responsibility of service providers in managing customer debt throughout the debt cycle effectively. The Company will assess each debtor’s repayment capability to ensure no unreasonable increase in their debt burden relative to their original obligations. For further details on the debt relief guidelines, please refer to the link: https://www.ktc.co.th/about/news/measure
In the third quarter of 2024, which marks the first six months since the implementation of the Severe Persistent Debt (SPD) criteria on April 1, 2024, KTC debtors participating in the assistance program had an actual impact on interest income of 1.7% of the previously estimated effect of Baht 18 million per month, assuming full participation from all eligible debtors in the program.
Additionally, starting in August 2024, several areas in Thailand have been declared disaster zones due to flooding, affecting some debtors. In response, BOT has issued a letter “BOT.F.N. (01) Wor. 601/2024, Regarding Cooperation to Assist Debtors Affected by Natural Disasters dated August 30, 2024.” This letter requested cooperation from financial institutions, specialized financial institutions, and non-financial credit businesses to assist affected individuals as necessary and appropriate. In line with this, KTC has implemented measures to assist debtors in good standing—those who have not defaulted on principal or interest payments for more than 30 days from the date of their request to participate in the program—who reside in areas declared as disaster zones. Debtors can submit their requests to participate in the program from September 26 to November 30, 2024, via the following link: https://www.ktc.co.th/about/news/measures-flood
KTC anticipates that the debt relief associated with the measures mentioned above will not significantly affect the group's overall performance.