Krungthai Card (KTC), a leading credit card provider under Krungthai Bank (KTB), anticipates increasing challenges in its personal loan business for the remainder of the year amid economic headwinds.
According to Phichamon Jitpentham, head of personal loans at KTC, although the company recorded positive personal loan growth in the first quarter, business operations for the rest of the year are expected to be challenging. As a result, KTC plans to proceed cautiously, she said.
Precarious outlook
Ms Phichamon said the personal loan segment is typically sensitive to economic conditions. The loan market is expected to face heightened risks and uncertainties -- both globally and domestically -- for the rest of this year, largely due to persistent economic pressures.
A key external factor weighing on Thailand's economy is the recent US tariff hike. In addition, the World Bank slashed its 2025 GDP growth forecast for Thailand to 1.6% from 2.9%.
Last week, the Bank of Thailand's Monetary Policy Committee (MPC) lowered the policy interest rate by 0.25 percentage points to 1.75%.
Despite the softer economic outlook, KTC does not see a need to tighten its personal loan approval criteria, thanks to its robust credit scoring model.
The company will continue to prioritise asset quality over loan expansion, adopting a selective growth strategy, said Ms Phichamon.
Modest Loan Expansion
KTC aims to grow its personal loan portfolio this year by a modest 3%, following several years of strong growth.
In the first quarter of 2025, the company achieved its target, expanding the value of its total personal loan portfolio to 34.9 billion baht, a 5.2% increase year-on-year.
KTC managed its non-performing personal loans, reducing the ratio to 2.35% in the first quarter, down from 2.46% in the previous quarter.
"We continued to see positive growth in personal loans during the first quarter, despite marginal growth in the overall consumer loan market," she said.
According to data from the central bank, as of February this year, total consumer loan growth across the industry was just 1% year-on-year.
For unsecured loans, outstanding credit card debt tallied 460 billion baht, down 2.8%, while the personal loan portfolio rose slightly to 851 billion baht, up 1.2%.
Within the personal loan segment, clean loans accounted for 476 billion baht in total, reflecting a 5.6% contraction.
Meanwhile, the value of the car title loan portfolio increased 1.2%, reaching 375 billion baht over the same period.
Offering support
Regarding the recent policy rate cut, Ms Phichamon said the move should support overall liquidity in Thailand's financial markets amid tight credit conditions.
KTC is monitoring potential fiscal measures by the government to stimulate economic activity, lift household income, and enhance customers' access to credit and their ability to repay debt.
However, the rate cut is unlikely to significantly affect KTC's business operations due to regulatory caps on unsecured loan interest rates.
The central bank set the maximum annual interest rate at 18% for credit cards and 25% for personal loans.
"Regardless of whether interest rates are rising or falling, we have consistently provided financial assistance to our customers through various support programmes," she said.
One such initiative is the company's debt clearance programme, which aims to help customers break free from the debt cycle.
Over the past 15 years, 6,000 customers with total loans amounting to 51 million baht have benefited from the programme, said Ms Phichamon.