Krungthai Card plans new business
KRUNGTHAI CARD, a subsidiary of Krungthai Bank and provider of unsecured loans, is developing a new business unit to strengthen its profitability as it acknowledges that if it sticks to the current model, its profit growth in the next few years could leve
Even though KTC enjoyed steady growth in net profit for the last three years, recording Bt255 million in 2012, Bt1.28 billion in 2013 and Bt1.75 billion in 2014, chief executive officer Rathian Srimongkol believes that the company needs to add a new unit to its current core businesses of credit cards and personal loans.
However, nano-finance is not part of this plan.
He said the new business unit should be unveiled by the second half of this year as the company improves its system of dealing with new business.
A KTC source said the company’s credit card issuance business is strong but income from that sector comes not only from issuance, but also from its merchant acquisition business, which KTC should focus more on to reinforce its profits.
Rathian said the two existing core businesses generated healthy income but if their customer bases mature, profit growth might level off.
Credit cards generate 64 per cent of KTC’s income and personal loans 35 per cent.
Last year, even though KTC missed its targets for new credit cards and loan growth, its bottom line and net interest margin showed impressive growth, while the proportion of non-performing loans dropped. NIM improved to 14.3 per cent from 13.4 per cent and NPLs declined to 2.4 per cent from 3 per cent.
KTC targets 15-per-cent loan growth from credit cards this year, and the same growth for personal loans.
Pittaya Vorapanyasakul, executive vice president for credit-card business, said the company planned to issue 400,000 new credit cards this year, the same target as last year, even though the actual number of new cards issued in 2014 was only 280,000.
As of the end of last year, KTC had a total of 1.81 million cards in circulation with outstanding loans of Bt34.715 billion, up 6 per cent from 2013.
KTC will focus more on capturing customers in 14 main provinces and those in the upper-income segment who earn more than Bt40,000 a month. This higher-income segment holds 20 per cent of KTC credit cards.
