News Column

Growth on the cards at KTC

June 20, 2014

By Somruedi Banchongduang, Bangkok Post, Thailand

June 20--Krungthai Card (KTC) is going upcountry to tap increasing demand for credit cards as purchasing power rises in provincial areas.

"This is a way to grow the credit-card business in a greater-opportunity market," said executive vice-president Pittaya Vorapanyasakul.

While the upcountry credit-card base now represents 40% of the company's 1.6 million cardholders, spending with cards in the provinces is just 15% of total spending at 120 million baht.

KTC does not set specific ratios of card base and spending between Bangkok and the provinces, but it plans to expand its new cards by 400,000 and increase card spending by 15% nationwide this year.

Purchasing power upcountry has risen significantly in line with economic growth and greater business activity in the larger provinces.

The personal financial behaviour of consumers in the provinces has changed in a way similar to their big-city counterparts, with growing comfort in spending through plastic cards instead of cash.

"Even though a lot of credit-card providers are paying attention to the growing provincial market, it still has room to grow," Mrs Pittaya said.

"KTC is ready to go to 13 strategic provinces nationwide in order to boost both the card base and spending."

With the support of parent Krungthai Bank, which boasts one of the country's strongest networks in provincial areas, KTC has strengthened its collaboration with KTB at bank branches in the 13 targeted provinces.

KTC sees great potential in Chon Buri, Phetchaburi, Prachuap Khiri Khan, Chiang Mai, Phuket, Khon Khaen and Udon Thani, among others.

For the upcountry market, KTC plans to focus on middle- and upper-income customers earning 40,000 to 80,000 baht a month, in accordance with the company's overall policy.

The market segment represents 80% of the total card base.

Mrs Pittaya said KTC will launch a new credit-card offering in August focused on high-income customers earning more than 80,000 baht a month.

The goal is to issue 50,000 cards under the new product.

Despite plans to expand further in the credit-card market, KTC wants to keep non-performing loans from credit cards at the existing level of 2.2% this year.


(c)2014 the Bangkok Post (Bangkok, Thailand)

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Source: Bangkok Post (Thailand)

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