Krungthai Card (KTC) has set ambitious business growth targets for next year amid greater uncertainties, especially economic circumstances and regulatory risk.
Regulatory factors represent a key challenge affecting the company's business in terms of both business expansion and business management amid global economic uncertainties, rising interest rates, and new regulations from the Bank of Thailand, said Pittaya Vorapanyasakul, KTC's executive vice-president for credit card marketing, who was appointed as the company's new chief executive, effective as of Jan 1, 2024.
The Bank of Thailand's Monetary Policy Committee has repeatedly raised its policy rate since 2022. It increased it by a quarter of a percentage point at its seventh consecutive meeting to reach the current rate of 2.5%.
Under this scenario, the company's average financial costs increased from 2.5% in 2022 to 2.8% in 2023 and would continue to increase next year.
However, the company aims to control funding costs to no more than 3.1% in 2024 by using efficient cost management.
Ms Pittaya said the company plans to issue new debentures worth 13 billion baht in total next year.
She said the company intends to adjust the ratio between its short-term and long-term bonds to a 20/80 split this year, from a 30/70 split last year, as part of its risk management.
"If the company can manage funding costs at up to 3.1%, we can grow the business on target and control NPLs [non-performing loans] at a satisfactory level for next year," she said.
Pittaya: Ready to handle regulations
In 2024, the company anticipates greater uncertainty, especially with regard to global economic circumstances and regulatory factors. However, the company insists it is confident it can handle the challenges and all three core businesses will expand as expected, which includes credit cards, personal loans, and auto refinance loans.
In addition, the company would pay greater attention to digital point collection and redemption services.
For its credit card business, the company aims to expand the card base by 230,000 cards from the existing level of 2.6 million cards, which it attributed to 230,000 client accounts.
In addition, the company plans to increase card spending by focusing on upper-income customers, who have a minimum income of 50,000 baht per month.
She said the company also plans to expand its new personal loan customers by 100,000 and grow its loan portfolio by 5% in 2024.
In addition, the company expects to increase the number of orders for its car title loan known as "KTC P Berm Car For Cash" by 6 billion baht next year.
Moreover, Ms Pittaya said KTC is ready to handle the Bank of Thailand's new regulations, which would not significantly impact the company.
The central bank is scheduled to increase the minimum payment ratio for credit cards to 8% of the total balance on Jan 1, 2024, and to 10% in 2025 once the regulator relaxes the current 5% minimum payment rate.
The central bank will implement responsible lending guidelines to control the country's level of household debt.
Krungthai Bank's logo is displayed at a Money Expo. The bank's Krungthai Card plans to expand its new personal loan customers by 100,000 and grow its loan portfolio by 5% in 2024. Nutthawat Wicheanbut