KTC less bullish on card spending in 2017

At a press conference last week, KTC president and chief executive officer Rathian Srimongkol said the company targeted a card-spending growth rate of 15 per cent. That is the same rate that was set for 2016, though he admitted that actual figures would fall slightly behind the target. 
“Spending in the first half of this year was within target, but in the second half sentiment was poor because of the slow economic recovery. Even the government’s shopping stimulus measures wouldn’t help. Any re-launched measure could not be as effective as the first time,” Rathian said. 
He noted that hard times would likely persist next year, making it difficult for credit-card companies, which would also face stiffer competition from non-credit-card companies. The cooperation of China’s Alibaba and Thailand’s Charoen Pokphand Group may dampen spending through conventional credit cards. 
“It’s us who must be prepared for that. We must be strong, ready for their actions. Technology changes fast and our people must be ready for that,” Rathian said. 

NPLs below industry average 
Despite the hardships, as of September, the company’s non-performing loans for the credit-card business stood at 1.37 per cent, well below the industry average of 5.1 per cent. Rathian attributed the low rate to outsourced debt collectors, although he said that collectors need to make more effort. 
As of September, KTC had 2.8 million credit-card holders. 
Pittaya Vorapanyasakul, KTC executive vice president for synergy business, said every customer group had shown a low spending appetite. While lower-middle-income cardholders suffer from lower spending power, the upper-middle-income segment also spent less. 
Spending on travel remains strong, but the figures remained unchanged from last year as the price of tour packages and airfares declined. 
“If we are to achieve the 15-per-cent annualised growth target, card spending this month must reach Bt20 billion,” Pittaya said. “That may be out of reach, as spending last December was only Bt14 billion although the overall sentiments were much better. Purchasing power remains the issue, and this should continue at least into early next year.” 
Rathian said KTC was ready to invest in technology to support business expansion, particularly when the popularity of e-commerce is on the rise. KTC will join the national e-payment system in 2017 and the e-tax system in 2018. It has already joined the Revenue Department’s e-filing system. 
New strategies will be launched to encourage applications for credit cards and personal loans through mobile channels. It also seeks to work with partners like Silkspan, Interspace and Masii to boost online applications. Next year, KTC plans to welcome 560,000 new customers – 400,000 for the credit-card business and 160,000 for the personal-loan business. 
KTC’s online business volume has increased by 40 per cent this year, and Rathian sees a chance for the growth rate to increase further. Transactions this year have amounted to Bt53 billion through a network of 14,800 online shops. 
He added that the system to facilitate online purchases is an open, depending on partners’ business models. 
“We are open but the business models must match ours, or they will entail risks. We now have partners on this but when it comes to fintech [financial technology companies], our screening radar will be intensified. We need to see their long-term capability and benefit sharing, among others. We are small and |we need to be selective,” Rathian said.