Krungthai Card plans Bt30-bn debenture
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Tighter rules on sales of B/Es prompt move
Krungthai Card plans to issue debentures worth Bt30 billion, including some with a term not exceeding 270 days, to replenish its liquidity after the Securities and Exchange Commission tightened rules on the sale of bills of exchange.
“The short-term debenture is similar to the B/E product,” Chutidej Chayuti, senior executive vice president for corporate finance, said yesterday.
“The company does not know what impact the rule on the issuing of B/Es will have on the market, so KTC will have to issue debentures both short term and long term to ensure liquidity,” he said.
“We have current debentures of Bt13 billion, and will have to redeem short-term debentures of Bt10 billion this year,” he said.
The proposal to issue debentures will be submitted to shareholders for approval, he added.
Chief executive officer Rathian Srimongkol said the company would continue to witness a loss this quarter after taking a huge operating loss of Bt1.62 billion last year. The expected loss this quarter is due to extra provisioning for customers who were flood victims, he said.
However, the credit-card company expects to turn profitable next quarter because it is improving its cost-to-income ratio. This year, KTC plans to reduce the ratio to 40 per cent from 46 per cent currently.
“Our cost-to-income should be in line with the market at 40 per cent. For every percentage-point reduction in cost-to-income, we can save Bt100 million,” Rathian said.
The company will work down its non-performing loans this year to below 4 per cent from the current 4 per cent. At present, NPLs stand at 3.9 per cent of the credit-card portfolio of Bt33.60 billion, and at 4.2 per cent of the Bt12.7-billion personal-loan portfolio.
KTC projects revenue this year to grow by 10 per cent. Last year revenue rose 3 per cent to Bt12.5 billion.
