KTC achieves new high profits consecutively for seven years with plans to pay dividends of not less than 40%. Puts plans to boost member base and receivables and control NPLs in motion, all set to face TFRS


KTC raises the bar consecutively for seven years, announcing 2019 net profits of 5.524 billion, a 7.5 percent growth. Credit card account soared the highest in the past three years. Managed to continue controlling NPLs at low levels. Announces 2020 goal of consistent and quality overall growth, and is all set to face the new Thai Financial Reporting Standards (TFRS9): Financial instruments.

Mr. Rathian Srimongkol, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, states, “The slowing down of the world economy stemming from the trade war between global superpowers that prolonged in 2019, had caused inevitable impact on the Thai economy. Moreover, Thailand’s adjustment to adopt the digital trend, whether it is improvements to the government’s law and regulations that are in favour of new technologies for citizens to experience usability conveniency, had distinctly affected marketing plans. Consequently, businesses have to adjust to handle these situations.”

“As for KTC, the firm has made short-term and long-term changes to face fast-changing factors, especially the Thai economy which is expected to slow down constantly in 2020. Planning strategies coupled with improving personnel capabilities to achieve set and common goals is important and a priority. This is the reason why KTC achieved its highest net profits ever for the seventh consecutive year. In 2019, KTC achieved a net profit of 5.524 billion while credit card account receivables soared the highest in the past three years. To boot, its overall receivables and credit card spendings have grown higher, with constant high quality of ports. The firm has a policy to pay dividends of not less than 40% of net profits after deduction of tax and legal reserves.”

“2020 will be a challenging year with high overall pressure from the state of the economy. KTC will aim to strengthen its portfolio quality, increase credit card member base, receivables of credit card and loan through increased marketing expenses to generate outcome that is efficient. The expected goal for the credit card, personal loan, and car title loan under the personal loan license include: credit card spendings totalling not lower than 15 percent, increase of approximately 10 percent in total receivables, strict NPL control with a possibility of a slight increase, and maintaining profits as the same level.”

“Regarding our three new businesses: car title loan, Pico Finance, and Nano Finance, they are following our set plans but it is too soon to make a clear estimate for future growth. However, KTC has intentions to develop said businesses as a strong base for the company in the future. Despite this, KTC aims to develop these businesses carefully and meticulously, especially with adopting new technologies as part of business operations that are different and

more modern. Testing and market penetration will have to proceed gradually with no rush especially amidst the current economy with high risks. The firm will have to clearly estimate its credit risk in between every testing. Concerning the enforcement of the TFRS9 reporting standards, KTC is all set and is ready for it. The standard will not have an impact on the firm’s actual business operations. Instead, there will be different numbers in financial reports.”

As of December 31, 2019, KTC has reported the financial result compared to the previous year as follows: a net profit of 5.524 billion (7.5 percent increase). A total receivable of Bt. 85.834 billion (9.8 percent increase). Membership base numbered 3.4 million (2 percent increase), comprising of 2,510,914 credit cards (5.2 percent spike). Credit card receivable totalled 56.653 billion (10.9 percent growth). KTC card spending growth for the entire year totalled 10.6 percent. Total NPL continues to remain low at 1.06 percent. NPL for credit cards is 0.93 percent. Personal loan numbered 888,342 accounts (6.7 percent decrease). Personal loan receivable amounted to 28.933 billion (7.9 percent growth) and NPL for the personal loan business totalled 0.92 percent.

In 2019, KTC has a total revenue of Bt. 22.625 billion, a 6.7 percent increase compared to the same period last year. Credit card interest grew 7.5 percent, personal loan interest grew 7.9 percent, fees (excluding usage fees) grew 4.9 percent, and other income, mostly from bad debt recovery, comprised 87.7 percent. Meanwhile, the firm has total expenses of Bt. 7.722 billion, a 2.6 percent increase (yoy) due to an increase of 11.5 percent in marketing expenses, surge in new credit card and personal loan members, and marketing promotional campaigns to entice credit card spendings. Personal expenses, other operational costs, and fee expense slightly increase to 3.2 percent, 0.5 percent, and 0.3 percent, respectively. Bad debt and Doubtful account increased to 12.8 percent due to provision and bad debt to maintain the quality of portfolio. Financial costs are similar to that of before as the firm is able to control funding cost, causing the business to continue to have higher profits. Along with this, customer base expansion will lead to achieving consistent profits in the future.

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