KTC reveals fragile economic conditions and household debt situations, pressuring lending, adjusting flexible plans with the BOT to solve problems, impact less than expected, profits still growing strongly Mrs. Pitiya Vorapanyasakul, Chief Executive Officer of 'KTC' or Krungthai Card Public Company Limited, said that the economic uncertainty has caused private consumption to slow down. In addition, the debt repayment ability of vulnerable households has decreased due to slow income recovery, which has had a continuous impact on the consumer finance industry as a whole. However, KTC still maintains the quality of its loan portfolio within the set target framework. The credit card debt portfolio will slow down somewhat, partly due to the increase in the minimum payment rate, but the amount of spending via cards continues to grow well. For personal loan portfolio, it is still expanding gradually while NPL Coverage Ratio is at a strong level. KTC has adjusted its working process to be more flexible. The ratio of NPLs to loans is still within the specified target framework. 'KTC has also collaborated with the government sector to continuously issue debt relief measures in accordance with the Bank of Thailand's announcement, including the Responsible Lending (RL) criteria and Severe Persistent Debt (SPD) assistance for debtors, which have been effective since April 1, 2024. Up until now, KTC debtors have applied to join the project, resulting in an impact on actual interest income of 1.7% of the previously estimated impact of 18 million baht per month if all eligible debtors join the project. In addition, additional assistance measures have been added for debtors affected by the flood situation, who are in areas declared disaster zones. Debtors with normal status or who have not been in arrears with principal or interest payments for more than 30 days from the date of notification of their intention to join the measures can notify their intention until November 30, 2024. KTC expects that assistance for debtors unde r the above measures will not have a significant impact on the overall operations of the group of companies,' said Ms. Pitiya. KTC and the group's performance compared to the same period in 2023 showed a net profit in the third quarter of 2024 of 1,919 million baht (an increase of 3.4%). Total revenue was 6,890 million baht, an increase of 6.6% from higher fee and service income and bad debt recovery from faster write-offs. Total expenses were 4,524 million baht, an increase of 8.5%, mainly from higher fee and service payments in line with higher card spending and higher marketing expenses, including higher expected credit loss (ECL) from quality provisioning and faster write-offs following the implementation of the new bad debt policy from January 1, 2024, as well as higher financial costs in line with higher interest rates in the money market. For the first 9 months of 2024, net profit was 5,549 million baht. The cost of finance was 2.9%, increasing in line with higher interest rates in the money market c ompared to the same period of 2023, which was 2.7%. As of September 30, 2024, compared to the same period in 2023, KTC has a total member base of 3,445,286 accounts, total loans to debtors and accrued interest receivables of 106,183 million baht (down 0.5%), a non-performing loan to total loans (NPL) ratio of 1.93%, divided into 2,758,150 credit card members (up 5.4%), total loans to credit card debtors and accrued interest receivables of 69,093 million baht (down 0.2%), credit card NPL at 1.30%, card spending volume in the first 9 months of 2024 was 211,459 million baht (up 10.0%), KTC personal loan members of 687,136 accounts (down 3.9%), total loans to personal loan debtors and accrued interest receivables of 34,806 million baht (up 2.1%), personal loan NPL at 2.21%. The total amount of the 'KTC Big Brother Car for Cash' loan is 2,959 million baht, while the debtors under the lease contract in Krungthai Business Leasing Co., Ltd. (KTBL) are worth 2,284 million baht (a decrease of 32.2%). KTC has stopped i ssuing this type of loan since August 2023 and is currently focusing on debt collection and managing the quality of the existing loan portfolio. In terms of funding sources, the Group has total borrowings of 60,054 million baht, divided into short-term borrowings (including borrowings and debentures due within 1 year) 35% and long-term borrowings 65%. The debt-to-equity ratio was 1.78 times, down from 2.07 times in the same period of the previous year, which is 10 times lower than the specified debt covenants. The Group has an available credit line of 28,201 million baht (short-term 23,201 million baht and long-term 5,000 million baht). The Group has debentures and long-term borrowings due in the fourth quarter of 2024 totaling 5,245 million baht. Source: Thai News Agency
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