KTC posts half-year net profit of 3,678 million baht in response to economic growth with confident that profit for the year will reach the target.

KTC posts the first half-year net profit of the Company’s consolidated financial statement and its subsidiaries of 3,678 million baht and Q2/2023 net profit of 1,806 million baht. The portfolio of all products grew as targeted with total portfolio grew 11.1% to 105,589 million baht and total credit card spending grew 16.3%, while the Non-Performing Loan (NPL) is at manageable level. The Company is confident that profit for the year will reach the target.

Mr. Rathian Srimongkol, President & Chief Executive Officer, “KTC”or Krungthai Card Public Company Limited, stated, “The consumer finance industry is continuously expanding due to improving demand of consumption expenditure and consumer confidence in response to economic trends. In the first 5 months of 2023, KTC’s credit card receivables accounted for 14.9% compared to the industry. The market share of credit card spending volume equaled to 12.2%, increased from the same period in 2022, while personal loan receivables (excluding car title loan) accounted for 6.2% compared to the industry.”

“In the past half-year, KTC’s performance reached satisfactory level in various aspects both the total portfolio grew 11.1% to 105,589 million baht and stable NPL level that close to previous quarter at 2.0%. Credit card portfolio continued to expand well in response to domestic demand. Credit card spending volume spiked up significantly, while personal loan portfolio also expanded continuously. Nevertheless, the Company also focuses on screening personal loans quality through a rigorous approval process by selecting members with risk suitable for the specified interest rate level. "KTC P BERM CAR FOR CASH" loan illustrates better response every month, even though the numbers of new booking are slower than expected but with quality portfolio. We are confident that "KTC P BERM CAR FOR CASH" will generate a significantly growing income base in the future.”

“For the second-half of 2023, “KTC P BERM CAR FOR CASH” new booking is expected to increase exponentially, considering the current acceleration of new receivables. Credit card and personal loan portfolio will grow according to set target. NPL is at a worry-free level as the Company able to manage it well. As such, the Company is confident that its profit for the year will reach the target of more than 7,079 million baht, with the growth of total receivables portfolio at 15%, credit card spending volume at 10% and personal loan portfolio at 7%.”

“Regarding KTC’s first half year performance, as of June 30, 2023, compared to the same period in 2022, KTC had a total net profit according toconsolidated financial statementsin the first half-year and in Q2/2023 of 3,678 million baht (a 1.0% increase) and 1,806 million baht (a 4.6% decrease) respectively. Total net profit according to KTC’sseparate financial statementsin the first half-year and in Q2/2023 equaled to 3,648 million baht and 1,805 million baht respectively.The total membership base numbered 3,358,994 accountswhile total loans to customers and accrued interest receivables equaled to 105,589 million baht. The total non-performing loan (NPL) ratio was 2.0%, comprising of2,605,984 cards in the credit card business, and total loans to credit card customers and accrued interest receivables of 68,664 million baht. The amount of credit card spending in the first half-year was 127,644 million baht, a 16.3% increase. NPL for credit card was at 1.2%. There are753,010 accounts in the KTC personal loan portfolio, with loans to “KTC PROUD” customers and accrued interest receivables of 31,727 million baht. NPL for personal loans portfolio was at 3.0%. The receivables of “KTC P BERM CAR FOR CASH” equaled to 1,658 million baht, and its new booking in the first half of 2023 shows positive response at 1,132 million baht, with increasing new booking every month.”

“The group of companies’ performance in Q2/2023 showed a growth intotal revenue of 8.8%, equaled to 6,240 million baht,mainly from increased interest income. Meanwhile,total expenses increased by 18.7%, equaled to 3,988 million baht, partly due to the portfolio expansion, resulting in an increase of NPL. Thus, expected credit losses (ECL) as well as bad debt write-offs increased. Cost of fund also slightly increased in response to higher interest rates in the financial market. As of June 30, 2023, KTC’s total credit line equaled to 35,371 million baht, comprising of short-term credit line amounted to 29,371 million baht (including KTB credit line of 19,061 million baht) and long-term credit line from KTB amounted to 6,000 million baht. The available credit line was at 20,480 million baht. Cost of fund were at 2.6% and debt to equity ratio was at 2.18 times, which was lower than the debt covenants at 10 times.”

“Furthermore, KTC has implemented various projects to assist debtors in accordance with guidelines for fair lending. As of June 30, 2023, the Company has provided assistance to debtors of all statuses according to the Notification of the Bank of Thailand (BOT.FCD.C 951/2564) amounted to 1,876 million baht, accounting for 1.9% of the total loan portfolio.”

“As today (July 21, 2023), the Bank of Thailand (BOT) has disseminated the “Sustainable Household Debt Solution Framework” to solve household debt problems in the long run. Firstly, the BOT will issue responsible lending guidelines for debtors in debt distress to receive appropriate, timely, quality and adequate assistance. And for new debtors, loan advertisements must not encourage excessive borrowing, which the BOT will implement this scheme in January 2024.”

“Regarding the persistent debt (PD), options will be provided so borrowers can restructure and pay off their debts. The BOT places importance on revolving personal loan borrowers whose income does not exceed 20,000 baht per month and have accumulated interest payments more than the principal for 5 years, which will be effective in April 2024. KTC will provide options to interested debtors where they can switch from revolving loan schemes to term loans with interest rate not exceed 15% per year, which will enable debtors to exit from the debt cycle within 5 years. Debtors must voluntarily participate in the program by themselves and pay off existing debts. KTC has assessed the impact on such measures, if all eligible KTC debtors participate in the program; KTC’s interest income will decrease approximately 18 million baht per month.”