KTC eyes regional presence ahead of AEC

Rathian Srimongkol, president and chief executive officer of KTC, yesterday said the listed company needed to pursue regional business opportunities ahead of the upcoming Asean Economic Community (AEC). It will consider the matter again after improvements to its information-technology system are completed in February.
The company’s collection system would become more efficient once the revised IT system is completed, he said, adding that this was crucial to business expansion in the run-up to AEC implementation in 2015.
KTC is initially interested in expanding into Laos because of the country’s shared relationship with Thailand in terms of language and culture, which would make it easier for the company to communicate and conduct marketing activities locally, he sai.
Meanwhile, Rathian said that the company had decided to bring forward to this quarter a marketing campaign originally scheduled for next year, because of intense competition in the domestic market.
The company previously wanted to reduce its cost-to-income ratio and clear its accumulated loss before embarking on further marketing campaigns, but it is clear that the ratio in the second half of this year will not decline as significantly as expected, hence it has decided to resume marketing activities, he said.
The company chief earlier said that the priority was to cut the cost-to-income ratio to 40 per cent, which is the industry average. In the second quarter, KTC’s ratio stood at 63 per cent.
However, the company’s bottom line in the third quarter will be higher than the net profit of Bt86 million achieved in the prior quarter, thanks to the cancellation of contracts with outsourcing companies, an improvement in debt collection and inactive-card cancellation, he said.
KTC was also able to clear an accumulated loss of Bt69 million in the third quarter and, coupled with the higher net profit, this has enabled the company to put aside a marketing budget of Bt10 million in the current quarter.
“Marketing activities in the fourth quarter will lead to healthy revenue, which we want to use to offer value benefits to active cardholders. Active cards at present account for 70 per cent [of overall cards issued], against 60 per cent last year. KTC is confident of achieving targeted revenue growth of 10 per cent this year,” he added.
With the current quarter being the high season for credit card and persona loan businesses, KTC hopes revenue from October to December will grow by at least 20 per cent year on year, compared with 10 per cent in the previous quarters.
KTC’s non-performing loans will be below 4 per cent at year-end, significantly lower than the 10-per-cent level at the end of last year.
He said the high 2011 NPL figure was driven by the severe flooding in the final quarter of the year, which resulted in a huge net loss of Bt1.6 billion in the period. This improved to a net loss of Bt155 million in the first quarter of this year, followed by a net profit of Bt86 million in the second three months.