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Investor Presentation
February 2015
23.02.2015
1. Strategic priorities: overall trends 2. Competitive strength 3. Strategic focus
Bangkok Bank 2015
2
2015 Thai economy
GDP growth YoY (%)
4.6% 5.1% 5.0%
2.5%
-2.3%
7.8%
0.1%
6.5%
2.9%
0.7%
3.0-4.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f
• Yellow shirt protest • Coup
• Thai Rak Thai Party was dissolved • People Power Party (PPP) won the
election
• PPP was dissolved • Yellow shirts seized
the airport
• Red shirts burnt parts of Bangkok
•Global financial crisis
•Mega floods
• Pheu Thai Party won the election
• Govt passed amnesty bill
Source: National Economic and Social Development Board of Thailand and Bank of Thailand 2015f GDP forecasted by Bangkok Bank
• Coup
3
Higher household debt to GDP
48.4% 47.6%
54.6% 55.6% 61.4% 63.0%
70.6% 77.3%
82.3% 84.8%
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 Sep 2014
Source: National Economic and Social Development, Board of Thailand and Bank of Thailand
4
Source: Bank of Thailand, Center for Economic and Business Forecasting, and Thailand Stock Exchange
Thai economy is at an early stage of recovery
5
40
45
50
55
60
150
170
190
210
230
250
Aug Oct Dec2013
Feb Apr Jun Aug Oct Dec2014
Private investment index (L)
Manufactuing Production Index (L)
Business Sentiment Index (R)
-100%
-70%
-40%
-10%
20%
0
200
400
600
800
1,000
Dec2012
Mar Jun Sep Dec2013
Mar Jun Sep Dec2014
Exports
%YoY
0
30
60
90
120
150
140
142
144
146
148
150
Dec2012
Feb Apr Jun Aug Oct Dec2013
Feb Apr Jun Aug Oct Dec2014
Private Consumption index (L)
Consumer Confidence Index (R)
Exports Billion Baht
Investment indicators Index (2000=100)
Consumption indicators Index (2000=100)
Tourism indicators
0
1,000
2,000
3,000
Jan May Sep Jan May Sep Jan May Sep
Number of Foreign Tourists
Thousand persons
2014 2013 Dec
2012
405060708090
100110120
Jan-14 Mar-14 Jun-14 Aug-14 Nov-14 Jan-15
Crude Oil (Dubai)
45.69
107.54
World Economy
Source: Bloomberg, www.eppo.go.th
US$/bbl
1100
1150
1200
1250
1300
1350
1400
Jan-14 Mar-14 Jun-14 Aug-14 Nov-14 Jan-15
Gold
1,283.77
1,221.53
Source: Bloomberg, www.eppo.go.th
US$/ounce
6
U.S. Dollar Index (DXY) - Daily
Source: http://www.marketwatch.com
Commodity price (Sugar) - Daily
Source: http://www.nasdaqcom
3 Strategic priorities : overall trends
7
Regionalization
Urbanization Digitalization
Supported by
Government Policies
1. Regionalization
8
Note: Phase 1 (5 Economic zones), Phase 2 (7 Economic zones) CLMV refers to Cambodia, Laos, Myanmar and Vietnam Source: Department of Foreign Trade, www.nesdb.go.th
Linkages in the region and AEC Economic zones and border trade
Mae sai/ Chiang Saen/
Chiang Khong, Chiang Rai
Nongkhai
Nakhon Phanom
Mukdahan
Aranyaprathet, Sa Kaeo
Klongyai, Trat
Kanchanaburi
Mae Sot, Tak
Songkhla, Sadao
Narathiwat
Thailand
Laos
7.2%, +14.3%
Vietnam
5.6%, +52.2%
Cambodia
7.3%, +15.9%
Myanmar
8.5%, +17.8%
Malaysia
5.2%, -3.3%
2015f GDP, Export growth 2014
2. Urbanization
0
50
100
150
200
250
300
2001 2003 2005 2007 2009 2011
Bangkok & Vicinities Provincial
Gross regional product Index 2001=100
Source: NESDB, Bangkok Bank analysis
197.0 Bangkok & Vicinities
263.1 Provincial
0
2,000
4,000
6,000
8,000
10,000
12,000
Malaysia Thailand Indonesia Lao Cambodia
Income per capita 2013 US Dollar
Source: http://data.worldbank.org
2012
9
0
20
40
60
80
100
SG MY CHN TH INDO INDIA PH
3. Digitalization
94.3 million
Total Mobile Devices
Note: As at June 2014 Source: Digital Advertising Association (Thailand), Bank of Thailand
44.6 million
Mobile Internet Users
49% Smartphone Users
Smartphone penetration (%)
49
0
25
50
75
100
2010 2014e 2015f
Thailand Smartphone penetration (%)
63%
87 80
71
23 18 15
49%
18%
10
Promote special economic zones
Promote trade and investment outside Thailand
Promote Thailand to be a logistics hub for north ASEAN
Promote digital economy
Key economic policies of Thai government
Promote Thailand to be international headquarters
11
Key positioning and strengths SUSTAINABLE AND PROFITABLE GROWTH ACROSS BUSINESS CYCLES
12
Leading bank for business enterprises
Extensive network locally and internationally
Industry-leading position in capital and liquidity
Strong asset quality driven by prudent and independent risk management
Leading bank for consumers from large deposit base
Customer Focus Organization
Note: As at December 2014 Note: Consolidated
The leading bank for business enterprises Largest market share in lending to business enterprise across all sizes
13
29% market share in business loans
System/2 (exc. BBL)
71%
BBL
29%
Note: As at December 2014 Note: /2 System refers to 17 commercial banks Note: /4 registered in Thailand Source: Bank of Thailand (FI_CB_016_S2), Source: Bangkok Bank analysis
17% market share in total loans
System/1 (exc. BBL)
83%
BBL
17%
Note: As at December 2014 Note: /1 System refers to 17 commercial banks Note: /2 registered in Thailand Source: Bank of Thailand (FI_CB_002_S4), Source: Bangkok Bank analysis
Large Corporates
41%
Mid-sized SMEs
19%
Small-sized SMEs
11%
Consumer 13%
International 16%
A leading bank for consumers with large deposit base
19% market share in deposits
17 million deposit accounts
70% of deposits are retail deposits
14
Note: As at December 2014 /1 System refers to 17 commercial banks registered in Thailand
System/1 (exc. BBL)
81%
BBL
19%
1,197 domestic branches
30 international operations in 14 economies
Extensive network in North Asia and ASEAN
Note: As at December 2014
15
Beijing 1986
1955 Tokyo Singapore 1957
London
Kowloon 1954
Central District 1961 Hong Kong
Osaka 1970
1972 Jakarta
1965 New York Taipei
1990 Kaohshiung
Ho Chi Minh City 1992
1959 Kuala Lumpur
Hanoi 1995 Manila Taichung
Note: * Plan to open
1993 Shanghai Vientiane
1998 Xiamen
Shenzhen 2007
2009 Bangkok Bank (China)
Jalan Bakri 2010 Penang Taman Molek
2011 Bandar Botanic Klang
Surabaya 2012 • 2012
2013 Medan
2015 Myanmar*
(Rep. Office since 1995) Pakse (Laos)*
Chongqing 2014 Phnom Penh Shanghai Pilot Free Trade Zone
1944 Bangkok
Strong asset quality driven by prudent and independent risk management
16
BBL vs System
Loan loss reserves coverage ratio 204.1% vs 139.1%/1
Loan loss reserves / Loans 5.2% vs 3.7%/1
Provisioning expenses / Loans 49bps vs 79bps/1
Excess reserves over BOT requirement 177.3% vs 77.5%/2
Note: /1System refers to 17 commercial banks registered in Thailand. As at December 2014 /2System refers to 6 commercial banks. As at September 2014
17
Note: /1System refers to 17 commercial banks registered in Thailand. As at December 2014
Industry leading position in capital and liquidity
BBL vs System/1
Loan-to-Deposit Ratio 86.6% vs 94.6%
CET 1 Capital Ratio 16.0% vs 12.8%
Tier 1 Ratio 16.0% vs 13.0%
Capital adequacy Ratio 18.3% vs 16.5%
70 years of Bangkok Bank
เพอนคคด มตรคบาน
(puan koo kit mit koo baan)
18
Strategic focus
Maintain leadership position for business enterprises and consumers
Improve customer focus by building on existing relationships and understanding customer needs
Leverage scale to increase
revenues through synergy and cross selling
Further refine risk management practices
Digital proposition catered to servicing customers’ changing needs
19
International Large Corporates
Mid-sized SMEs
Small-sized SMEs
• 30 operations • 14 economies • 9/10 ASEAN countries • 16% of total loans
• 90%+ listed companies • 25 divisions • 41% of total loans
• 237 business centers • 19% of total loans
Deposits 17 million accounts
Bualuang Securities
Bangkok Life Assurance
Bangkok Insurance
Leverage leadership positions and enhance collaborations
• 237 business centers • 11% of total loans
BBL Asset Management
20
Loei
Kalasin Tak
Ratchaburi
Sa Kaeo
Prachuap Khiri Khan
11 new business centers
8 opened in border provinces
1,197 domestic branches
774 located in provinces
Nakhon Pathom
Thailand Myawaddy Border
Singkhon Border
Paoy Paet Border
Trat
Ranong
Nakhon Phanom
Yasothon
Strengthen network and operations in provincial areas
Myanmar
Laos
Vietnam
Cambodia
21
Note: Business centers opened during 2013 – 2014 Border crossing point
As at December 2014. Branches included 85 self-service. Business Centers are offices to service SME customers
Note: /1As at December 2014, and including the representative office
Continuously expand international operations
China (28 years)
Singapore (57 years)
Vietnam (22 years)
Hong Kong (60 years)
London (57 years)
Indonesia (46 years)
Malaysia (55 years)
Philippines (19 years)
Taipei (49 years)
22
30 Numbers of
International operations/1
16.4% International lending as a % of total lending
23
Promote and invest intensively in digital banking
0% 20% 40% 60% 80% 100%
Talking with advisors
Making complaints
Checking balances
Viewing transactions
Transferring money
Paying bills
Online Mobile Call Center Branch
2013 Global Survey: Preferred channels for banking activities
Simple
Convenient
Secure
• Streamline working process and paper work
• Offer most advanced cheque clearing system
• Launch online loan applications
• Launch Bualuang mBanking with new features
• All ATMs support EMV chip cards
• ATMs have 8 languages available
• Implement branch front-end view
Source: Datamonitor Financial 2013 FSCI Survey
0
10
20
30
40
50
0
2
4
6
8
10
12
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
Dividend Dividend payout ratio (R)
… and results enabling steady growth in Net profit and Dividend payments
0
10
20
30
40
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
36.6%
6.50 Baht
Net profit Dividends and Payout ratio
36.3 Bn
24
Financial results Sustainable growth across business cycles
December 2014
1,143 1,256 1,470
1,604 1,753 1,782
0
500
1,000
1,500
2,000
2009 2010 2011 2012 2013 2014
Loans flattened mainly due to repayments by large corporates in the first half; however, demand started to
recover in 4Q14
Baht bn
+9.2%
-3.2% +9.9%
+17.1% +9.1%
+1.7%YTD
Loan amount Loan portfolio
26
Large Corporates
41%
Mid-sized SMEs 19%
Small-sized SMEs 11%
Consumer 13%
International 16%
55.6
45.6 42.6 42.3 43.2 45.0
0
20
40
60
80
2009 2010 2011 2012 2013 2014
Asset quality remained manageable
NPL amount Baht bn
4.4%
3.0% 2.7%
2.3% 2.2% 2.1%
0%
2%
4%
6%
2009 2010 2011 2012 2013 2014
NPL ratio
27
Steady provisioning policy with excess of reserves over required reserves by 177%
7.6 7.6
12.0
7.2 8.6
8.7
66 60
82
45 49 49
-15
0
15
30
45
60
75
90
0
5
10
15
20
2009 2010 2011 2012 2013 2014
Provisioning expenses (Baht bn)
Provisioning expenses / loans (Bps)
One-time provisioning expenses (Baht bn)
Baht bn Bps Baht bn
36.6 37.3 38.1 36.0 36.0 33.1
28.5 35.2
46.7 51.6 56.6 58.8
0
30
60
90
120
2009 2010 2011 2012 2013 2014
Excess reserves over BOT requirement(Baht bn)Allowance required by BOT (Baht bn)
87.6 92.6
84.8
72.5 65.1
91.9
Provisioning expenses Loan loss reserves
28
Loan loss reserves to NPLs and loans higher than system
29
Note: 1 As at December 2014 Note: /1 System refers to 17 commercial banks registered in Thailand
50%
100%
150%
200%
250%
2009 2010 2011 2012 2013 2014
System/1 139%
BBL 204%
Loan loss reserves / NPLs
2%
4%
6%
8%
2009 2010 2011 2012 2013 2014
System/1 3.7%
BBL 5.2%
Loan loss reserves / Loans
Retail deposits the major source of funds
30
1,361 1,394 1,588
1,835 1,935 2,059
0
500
1,000
1,500
2,000
2,500
2009 2010 2011 2012 2013 2014
Baht bn
+13.9%
+2.5% +2.9%
+15.5% +5.5%
+6.4% YTD
Lower cost of funds than system
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
2009 2010 2011 2012 2013 2014
System/1
2.2%
BBL
2.0%
Deposits
Note: 1 As at December 2014 Note: /1 System refers to 17 commercial banks registered in Thailand Source: Bangkok Bank filings
Liquid assets at 1/3 of total assets
As at December 2014
Liquid assets
33% Other assets 67%
“Liquid assets” consists of cash, interbank and money market assets, claims on securities and trading & available-for-sale securities
Deposits grew faster than loans, resulting in a lower loan to deposit ratio
31
60%
70%
80%
90%
100%
110%
2001 2003 2005 2007 2009 2011 2013
System/1 94.6%
BBL 86.6%
LDR always lower than system
Note: 1 As at December 2014 Note: /1 System refers to 17 commercial banks registered in Thailand Source: Bank of Thailand, Bangkok Bank analysis
2014
Net interest margin maintained at 2.37% although lower interest rate, due mainly to successful deposit mobilization
Note : 28 May 2013 policy rate cut by 25 bps to 2.50%, 27 Nov 2013 policy rate cut by 25 bps to 2.25% and 12 Mar 2014 policy rate cut by 25 bps to 2.00% Source: Bank of Thailand, Bangkok Bank analysis
2.76%
2.55%
2.36% 2.37%
2.28% 2.30%
2.44% 2.44%
2.32%
2.0%
2.2%
2.4%
2.6%
2.8%
2011 2012 2013 2014 4Q13 1Q14 2Q14 3Q14 4Q14
Yearly Net Interest Margin (%) Quarterly
Lending yield -9 bps Deposit cost -15 bps
Lending yield +6 bps Deposit cost +12 bps
32
Fee income better diversified. Recent growth drivers mainly came from consumer products, especially mutual funds
and bancassurance
13%
16%
26% 24%
9%
12%
Bancassurance & Mutual funds Loan-related feesCredit cards Transaction servicesGlobal market services Others
/2
4%
15%
23% 35%
16%
7%
2007 2014
Note: /1 CAGR of fee income during 2007-2014 Note: /1 CAGR +8.7% of fee income during 2007-2013 Note: /2 CAGR +28.1% of bancassurance & mutual funds during 2007-2014 Note: /2 CAGR +29.9% of bancassurance & mutual funds during 2007-2013
Bualuang Family Banking
Supply Chain
Cash Management
Debit Card
33
Net fee income growth slowed in line with economic situation. However, increase in fees from consumer products
helped compensate for lower loan-related fees.
18.1 19.1 21.2 21.7
5.1 5.2 5.3 5.5 5.8
0
5
10
15
20
25
2011 2012 2013 2014 4Q13 1Q14 2Q14 3Q14 4Q14
Baht bn
+11.1%
Net fee income
+4.8% QoQ +12.3% YoY
Yearly Net Fee Income Quarterly
+4.9% +5.5%
+2.3%
34
43
.8%
43
.5%
41
.5%
44
.5%
47
.9%
41
.4%
45
.2%
40
.9%
50
.6%
0%
10%
20%
30%
40%
50%
60%
2011 2012 2013 2014 4Q13 1Q14 2Q14 3Q14 4Q14
BBL’s cost-to-income ratio
Normalized cost to income is lower than the system, due to economies of scale and efficiency improvements
Note: /1 For 2013 operating expenses include the one-time item of the reversal of estimated loss on the impaired assets transferred to Thai Asset Management Corporation (TAMC), amounting to Baht 2.58 billion. If this is not included, the cost to income ratio would be 44.3% for 2013.
/1
35
/2
1.6%
2.5%
Cost-to-average assets
BBL System
44.5% 45.1%
Cost-to-income
Low cost-to-assets and cost-to-income ratio For 2014
Note: 1 As at December 2014 Note: /2 System refers to 17 commercial banks registered in Thailand Source: Bangkok Bank filings
Operating expenses increased in 2014 due to one-time reversal of expenses in 2013
36.1 37.1 37.9 43.1
10.6 9.4 11.0 10.7 12.1
0
10
20
30
40
50
2011 2012 2013 2014 4Q13 1Q14 2Q14 3Q14 4Q14
Operating expenses breakdown
For 2014
52%
23%
8%
17%
Personnel expenses
Premises and equipment
Tax and duties
Others
/1
Note: /1 Including directors’ remuneration /2 If excluding the one-time item of the reversal of estimated loss on the impaired assets transferred to Thai Asset Management Corporation (TAMC), amounting to Baht 2.58 billion, other operating expenses growth would be 1.6% YoY
Operating expenses
Baht bn
/3
Note: /3 For 2013 if excluding the one-time item of the reversal of estimated loss on the impaired assets transferred to TAMC, amounting to Baht 2.58 billion, operating expenses growth would be 9.1% YoY /4 If excluding the one-time item of the reversal of estimated loss on the impaired assets transferred to TAMC, amounting to Baht 2.58 billion, operating expenses growth would be 6.3% YoY
+13.1% QoQ +14.2% YoY
+2.2%
+13.5%
6.7% YoY
56.9% YoY
5.1% YoY
9.5% YoY
/2
/4
36
Proven and consistent delivery of net profits across business cycles
17.9 19.2 20.2 20.6 24.6
27.3 31.8
35.9 36.3
7.7 9.0 9.0 9.6 8.8
0
10
20
30
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 4Q13 1Q14 2Q14 3Q14 4Q14
Baht bn
Note: Corporate tax rate reduced from 30% to 23% in 2012 and to 20% in 2013 onwards
+1.2%
+14.0% YoY -8.5% QoQ
+12.7%
Yearly Net profit (owners of the Bank) Quarterly
37
ROE at 12% while ROA at 1.4%. Improvement in ROE will be from growing revenues
1.1
9%
1.3
4%
1.3
6%
1.4
1%
1.4
5%
1.3
9%
1.2
0%
1.4
7%
1.3
0%
0.0%
0.5%
1.0%
1.5%
2.0%
2009 2010 2011 2012 2013 2014 4Q13 3Q14 4Q14
11
.23
%
11
.50
%
11
.57
%
12
.35
%
12
.62
%
11
.66
%
10
.47
%
12
.02
%
10
.83
%
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
2009 2010 2011 2012 2013 2014 4Q13 3Q14 4Q14
ROA ROE
Note: 2006-2009 ROE, ROA was bank only 2010-2014 ROE, ROA was consolidated
38
Progressive dividend payments, meaning payout are stable or higher in terms of absolute amount
Dividends and Payout ratio
Baht
0.75 0.75 1.00 1.00 1.00 1.00 1.50 2.00 2.00 2.00 1.00 1.25 1.75 2.00 2.00
3.00 3.50
4.00 4.50 4.50
0
10
20
30
40
50
0
2
4
6
8
10
12
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Interim (L) Final (L) Dividend payout ratio (R)
5.00
3.00 4.00
6.00 6.50 6.50
36.6%
3.00 2.75 2.00 1.75
Percent
39
Common Equity Tier 1 Capital Adequacy Ratio
Note: /1 The ratios include net profit for the second half of 2014 Note: /1 Consolidated
/1
0%
5%
10%
15%
20%
4.5%
16.0%
7.0%
Basel III
16.0%
6.0%
8.5%
Basel III
Tier 1 Capital Adequacy Ratio
18.3%
8.5%
11.0%
Basel III
Total Capital Adequacy Ratio
/1
/1
BOT’s Basel III requirements until the end of 2015
BOT’s Basel III requirements as of the year 2019
BBL’s Basel III ratio as of December 31, 2014
Capital ratio is higher than requirement under Basel 3
40
2011 2012 2013 2014
Branches
ATMs
CDMs
Employees
1,063
6,770
1,036
22,599
1,131
7,547
1,108
24,091
1,183
8,472
1,142
25,384
1,226
8,877
1,237
26,132
Note: Consolidated
+68
+777
+72
+1,492
+52
+925
+34
+748
+43
+405
+95
+1,293
Number of branches increased at a slower pace while we invested more heavily in non-branch channels
Number of employees increased mainly to improve services and increase sale effectiveness
41
This presentation is made by Bangkok Bank and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Bangkok Bank. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Bangkok Bank. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Bangkok bank as being accurate. Neither Bangkok Bank nor any of its directors, officers, employees, and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein are as up to date as is reasonably possible and may be subject to revision in the future. Neither Bangkok Bank nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation. Neither Bangkok Bank nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. This presentation may contain projections or other forward-looking statements related to Bangkok Bank that involve risks and uncertainties. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. All forward-looking statements are based on information available to Bangkok Bank on the date of its posting and Bangkok Bank assumes no obligation to update such statements unless otherwise required by applicable law. This presentation does not constitute an offer or invitation to subscribe for, or purchase, any shares of Bangkok Bank.
Contact: Investor Relations Team Tel (66) 2 626 4981-2 Fax (66) 2 231 4890 Email: [email protected] Bangkok Bank Website www.bangkokbank.com
For further information
