KTC achieves a new all-time high profit of THB 7.14 billion

KTC announces its operating results for the year 2022 which better than expected and achieves a new all-time high profit once again. Net profit in the separate financial statements equaled to 7.14 billion baht, increased by 14.2% and in the consolidated financial statements equaled to 7.079 billion baht, increased by 20.4%, while total receivables portfolio equaled to Baht 104.194 billion. KTC is preparing to drive the organization towards a strong foundation under the concept of “A Transition to the New Foundation”, emphasizing its reputation as a trusted organization among all group of stakeholders.

Mr. Rathian Srimongkol, President & Chief Executive Officer, “KTC” or Krungthai Card Public Company Limited, states “The recovery of tourism sector and private sectors consumption from 4Q22 until now causes the Thai economy to expand accordingly, employment and labor income risen. As a result, the overall picture of the credit card and personal loan businesses resumed to grow continuously. This reflects consumer confidence and demand for personal loan still has room to grow.”

“In 2022, KTC operated its main business according to strategies and targets in various areas and the operating performance was better than expected accordingly compared to the same period of 2021. Both credit card receivables portfolio expanded by 15.4% and personal loan portfolio expanded by 10.4%, as well as KTC credit card spending volume with a noticeable growth of 21.7%, amounted to 238.257 billion baht, higher than the same period of 2019, which was the pre-COVID-19 period. It is likely that credit card spending volume will continue to increase in 2023. The new booking of “KTC P BERM CAR FOR CASH” receivables portfolio equaled to 1.055 billion baht after the announcement of the adjusted target in 3Q22. Nevertheless, KTC will focus on cooperating closely with KTB so that “KTC P BERM CAR FOR CASH” portfolio will achieve the new booking target of 9 billion baht by the end of 2023.”

“Although KTC’s credit card and personal loan portfolios have expanded in the past year, KTC still pays attention to the strict criteria for acquiring new customers from the beginning in order to maintain the quality of portfolio with low NPL ratio. Moreover, provisions and write-offs were adjusted properly according to portfolio nature in each business as it should be which cover risks that may occur in the future. The Company also managed to lower its finance costs, while the administrative expense increased from recruiting new members and marketing promotional campaign was also higher in order to invest in portfolio building. Total revenue grew mainly from an increase of interest income and fee income which expanded in response to an increase in business volume. Consequently, the Company was able to achieve the new highest profit record once again.”

“KTC's operating results as of December 31, 2022; KTC has a total member base of 3,289,839 accounts; total loans to customers and accrued interest receivables amounted to 104.194 billion baht; NPL Ratio (% of total NPL) was at 1.8%. Credit Card Business has a total of 2,550,592 cards; credit card receivables equaled to 69.462 billion baht, NPL of credit card was at 1.1%. Personal Loan Business has a total of 739,247 accounts; personal loan receivables equaled to 32.283 billion baht; NPL of personal loan was at 2.8%. KTBL Lease Receivables amounted to 2.449 billion baht; NPL of lease receivables was at 8.9% which decreased significantly due to the written-off of existing debt with full provisions. The Company also focuses more on acquiring new commercial loan customers in 2023. The number of new booking portfolio by the end of 2022 equaled to 1.372 billion baht.”

“In 2022, KTC’s total revenue equaled to 23.231 billion baht, increased by 8.3% compared to the year 2021 mainly from an increase of interest income (including credit usage fee) and fee income by 5.6% and 15.8% respectively. Total bad debt recovery equaled to 3.421 billion baht, increased by 4.7%. Total expense equaled to 14.377 billion baht, increased by 1.3% due to administrative expense increased by 10.8% mainly from an increase of marketing expense by 34.5% and an increase of fee expense by 16.2%. Expected credit loss decreased by 10.8% and finance costs dropped by 1.6%.” 

“KTC still focuses on efficient cost of fund management. At the end of 2022, KTC’s total borrowing equaled to 61.635 billion baht, increased from 2021 by 13.3% whereas sources of fund structure were both from short-term and long-term borrowings at the ratio of 24%:76% respectively, comprising of loans from KTB amounted to 6 billion baht, from other financial institutions and related financial institutions amounted to 10.179 billion baht and debentures amounted to 45.456 billion baht. Cost of fund stood at 2.4%. Debt-to-equity ratio stood at 2.2 times, which is well below the bond covenant limited at 10 times and available credit lines equaled to 20.709 billion baht.”

“The business direction for 2023 is to drive KTC towards a strong organizational foundation under the concept of “A Transition to the New Foundation” where KTC will make a big change in terms of organizational structure, strategies, processes, technologies and services in 3 core dimensions which are 1) Enterprise Architecture - manage and align the whole business structures, IT systems and operating systems together 2) Enterprise Skill Assets - encourage KTC employee to develop important skills in various areas in order to move forward with the Company and 3) Enterprise Data Assets - manage information from planning, storing, accessing as well as data destruction, focusing on safety, accuracy and transparency so that KTC has a quality database supporting efficient operations.”

“KTC also foresees opportunities and strives to grow its payment business and retail lending business by paying special attention to increase “KTC P BERM CAR FOR CASH” receivables portfolio in order to acquire new customers to generate strong profit base. Meanwhile, credit card and personal loan businesses will grow at the accelerated rate by emphasizing on acquiring new customers as well as creating marketing activities in accordance with the changing circumstances. As a result, marketing expense and provisions may increase in accordance with the expanding portfolio.  For the upcoming economic conditions, KTC may face higher cost of fund, as well as higher expense from marketing expense and provisions according to portfolio quality. For the loyalty platform “MAAI by KTC” (My by KTC) which was categorized in a constant developing business model, it may not generate income in the early stage. Nevertheless, KTC is confident that it will achieve growth target in terms of credit card spending and receivables portfolio expansion.”

“For KTBL’s business, the Company focuses on commercial loans acquisition such as trucks, etc., with a target of new booking for the year 2023 equaled to 3 billion baht. The company will also continue to offer loans to retail customers; however, the Company will grant loan according to the credit quality of customers. Thereby, this business expects to generate profit in 2023.”