KTC seeks 10% loan growth

SET-listed Krungthai Card Plc is maintaining its 10% growth target for personal loans this year, though the goal will challenge KTC as it grapples with tighter regulations and a swelling household debt load.

KTC’s personal loans outstanding are set to grow by 8% year-on-year in the three months to June after surging 8.2% in the first quarter, said vice-president Phichamon Jitpentham.

To achieve 10% loan growth for the full year, KTC must deliver 10% year-on-year growth in the second half, Ms Phichamon said.

She said the high household debt level at 79% of GDP as of last year and the central bank’s stringent regulations on personal loans have prompted consumers to exercise caution in spending and borrowing.

The Bank of Thailand is expected to require lenders to take into account a borrower’s debt service ratio (DSR) after tightening rules governing unsecured loans, including personal loans, in September 2017, Ms Phichamon said.

According to the central bank’s measures to control unsecured loans, personal loan borrowers who earn less than 30,000 baht a month have been granted no more than 1.5 times monthly income per creditor and have been limited to three personal loan creditors.

The central bank tightened controls on unsecured loans to put a lid on household debt and rising bad loans.

Ms Phichamon said KTC’s personal loan accounts are up 12.5% from a year ago to 967,000 currently, with loans outstanding of 26.4 billion baht.

KTC aims for 177,000 new personal loan accounts this year. It has a 5.4% share of the personal loan market, which has total accounts numbering 14.6 million.

Non-performing loans in the personal loan segment fell to 0.78% of loans outstanding at the end of March from 0.82% a year earlier. The industry ratio of bad personal loans is 3.49%.

To make its target for personal loans reachable, KTC has launched loan products with specific borrowing purposes.

KTC launched education loans for those who planning a personal loan to fund their education at four leading language institutions. Borrowers can apply for the loan at the participating language institutions.

KTC shares closed yesterday on the SET at 44 baht, up 1.25% baht, in trade worth 1.15 billion baht.