TMB Bank Plc. · Analysts & Investors Presentation. July 2009 [2] 2Q09 results review

TMB Bank Plc.

Analysts & Investors PresentationJuly 2009

[2]

2Q09 results reviewTMB’s strategy and transformation Key business updates Appendix

Source: the Bank of Thailand, NESDB [3]

Economic outlook: 1Q09 GDP growth affected by global economy and political uncertainty

Thai economy contracted by 7.1% in 1Q09, down further from a 4.3% GDP growth in 4Q09.Weak global economy and political uncertainty hit export and tourism sectors, resulting in weak household consumption and investment. Nevertheless, BOT decided to maintain the policy rate in June meeting at 1.25%.TMB maintains our 2009 GDP growth midpoint forecasts at -4.8% (ranging from -6.5% to -3.8%), assuming stable political risk outlook

Quarterly GDP growth

-4.3%

6.2% 5.5%3.8%

-7.1%

-35%

-25%

-15%

-5%

5%

15%

1Q08 2Q08 3Q08 4Q08 1Q09

GDP Private consumptionGovernment consumption Gross capital formationGross fixed capital ExportsImports

One-day repo rate

3.25% 3.25% 3.50% 3.75%

2.75%

2.00%1.50% 1.25% 1.25% 1.25%

3.75%

0%

1%

2%

3%

4%

Apr-08 May-08

Jul-08 Aug-08 Oct-08 Dec-08 Jan-09 Feb-09 Apr-09 May-09

Jun-09

Source: consolidated financial statements, * of which THB436 million IRS unwinding gains were booked in 1Q09 [4]

2Q09 result review: Earnings continued to be affected by weak economy & branch transformation

2Q09 net profit of THB393mn, a 9.9% decline 1Q09 with slightly lower ROE now at 3.4%. Weak earnings were due to continued weak economy and branch transformation implemented in 1Q09Major actions in 2Q09:

Pre-emptive qualitative review of performing loan portfolio, which resulted in THB3,081 million loan loss provisionTHB3,174 million* gains from buy-back of US$153mn Hybrid Tier 1 and unwinding interest rate swapCompletion of THB14.9 billion NPL and THB4.3 billion NPA sales

Net income and normalized PPOP

1,1581,666

-3,991

436 393

2,4291,929

1,598 1,341 1,221

-4,000

-3,000

-2,000

-1,000

-

1,000

2,000

3,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

Net incomeNormalized PPOP

ROAE & ROAA

3.4%3.8%

-34.2%

14.3%10.3%

0.3%0.3%-2.7%

1.1%0.7%

-35.0%

-25.0%

-15.0%

-5.0%

5.0%

15.0%

2Q08 3Q08 4Q08 1Q09 2Q09

-11.0%

-9.0%

-7.0%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

ROE (LHS) ROA (RHS)

[5]

2Q09 results review: major actions taken in 2Q09

Major actions done in 1Q09 Financial impact Remark

Pre-emptive qualitative review of performing loan portfolio

General provisions of THB3,081mn, of which THB2,843mn were booked under loan loss provision and another THB238mn under provision for obligation of contingent liabilities.

Precautionary step in anticipating economic outlook

Buy-back of US$153mn out of US$200mn hybrid Tier 1 securities (HBT1) issued in 2006.

Recognized THB2,302mn gains from buy-back and THB873 mn gains from unwinding the associated interest rate swap contract.

Out of THB873 mn gains from unwinding the interest rate swap, THB436 mn was already booked in 1Q09.

Completion THB14,932mn NPL sales and THB4,286mn NPA sales to local NPL management company.

Wrote off THB14,932mn NPL and THB4,286mn propertied foreclosed from balance sheet. Additional losses from NPL sales at THB115 million.

Most impacts to P/L were booked in 1Q09 at THB1,371 million from NPL sales and THB1,551 million from NPA sales

Source: consolidated financial statements [6]

2Q09 result review: NII lowered QoQ, but with stable NIM

Net interest income (NII) lowered slightly QoQ mainly due to:

Declining interest rate and weak loan growthHigh allocation to highly liquid and low-risk assets

But NIM now stable QoQ at 2.2% due to bank strategy to exit high cost deposit and dwindling mismatchFunding cost dropped further to 1.6% in 2Q09 from 2.2% due to bank’s strategy to exit high cost deposit and continued rise in CASA.

Net interest income and NIM

3,998 4,088

3,4893,229 3,113

2.7% 2.8% 2.4% 2.2% 2.2%

0

1,000

2,000

3,000

4,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%NII (LHS) NIM (RHS)

Funding cost

4.2%5.0%5.0%4.8%

3.6%

1.6%2.2%2.9%2.5%2.4%

0.0%

2.0%

4.0%

6.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Average yield Cost of fund


2Q09 fee income improved slightly QoQ mainly from better bancassurance and mutual fund sales.Fee income structure: 39.0% credit card/merchant and ATM, 26.3% bancassurance and mutual fund, 13% credit-related, 16.0% cash management and payment.Credit related fee has remained on the downward. But fees from mutual fundbancassurance rose 56% and 26% QoQ respectively.

Fee income

1,2871,222 1,153

1,034 1,050

-4.7% -5.0% -5.6%-10.4%

1.6%

-

350

700

1,050

1,400

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Fee income (LHS) Growth rate (RHS)

2Q09 result review: Improving fee income from bancassurance and mutual fund

Fee income breakdown

Others6%

Cash management &

Payment16%

Credit card/ merchant &

ATM39%

Credit-related13%Mutual fund &

Bancassurance26%


Cost to income dropped QoQ to 50.3% from 115.8% in 1Q09, mainly due to gains from Hybrid Tier 1 buy back and sale of investments as well as lower losses on impairment of NPA.Operating cost to income still rose to 75.1 % mainly due to increase in personnel expenses

2Q09 result review: Cost to income remains under pressure

Operating cost break down

Personnel expenses, 2,908

Taxes and duties, 362

Fees and

Other expenses, 883Contributions

to FIDF, 881

Directors' remuneration , 14

Premises and equipment

expenses , 1,259

Cost to income ratio and operating cost

65.9%76.5%

102.6%115.8%

50.3%58.6%

64.3% 70.2% 71.3%

74.9%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Cost to income ratio Operating cost to income

Source: consolidated financial statements, % excess reserve is based on bank only [9]

2Q09 NPL at THB59,884 million, lowered by THB14bn QoQ mainly from NPL block salesCoverage ratio was flat QoQWith general provision booked in 2Q09, TMB’s excess reserve to performing loans now at 2.4%

NPL coverage

69.5% 68.2% 65.8%60.1% 59.9%

0.0%

20.0%

40.0%

60.0%

80.0%

2Q08 3Q08 4Q08 1Q09 2Q09

NPL and gross NPL ratio

59,884

73,95769,77770,74170,500

14.4%16.0%14.3%15.4%15.2%

-

20,000

40,000

60,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

0.0%

10.0%

20.0%

30.0%

40.0%

NPL (LHS)Gross NPL ratio (RHS)

2Q09 result review: NPL ratio lowered to 14.4%

Excess reserves

2.4%

1.5%

2.2%2.3%2.5%

132.8%117.0%125.5%125.5%128.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2Q08 3Q08 4Q08 1Q09 2Q09100%

125%

150%

175%

200%

% excess reserves to performing loan-Bank only (LHS)% reserves over BOT's requirement (RHS)

Source: consolidated financial statements, * loan breakdown is based on bank only [10]

2Q09 loans continued to drop 7.9% QoQ, or 13.7% YTD, mainly due to NPL sale, weak economy, stringent underwriting standard and impacts from branch transformationMost declines were still from repayment of trade finance and working capital loans2Q09 Corporate/SME/Retail loan breakdown at 48:34:18

Loan and loan growth

439,444 430,790 427,582400,396 368,911

-2.7% -2.0% -0.7%-6.4% -7.9%

0

100,000

200,000

300,000

400,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

-15%

-5%

5%

15%

25%

35%

45%

Total loan (LHS)Loan growth (QoQ) (RHS)

Loan breakdown by segment (2Q09)

Retail, 17.5%

SME, 34.1%

Corporate , 48.4%

Loan breakdown by segment (1Q09)

Retail, 16.4% Corporate , 45.6%

SME, 37.9%

2Q09 result review: Continued negative loan growth


2Q09 deposits dropped 8.8% QoQ, 10.9% YTD due to bank strategy to exit high cost depositsSaving & current accounts (CASA) mix continue to rise to 50.3% in 2Q09 from 46.6% in 1Q09 and 38.7% in 4Q08Deposit mix continued to improve since 4Q08 with implementation of Bank’s Deposit-Led Strategy and contribution from new deposit products “No fee savings accounts”

Deposit breakdown

33.8% 40.4% 44.5%

57.9% 61.2% 53.2% 49.4%

4.2% 4.5% 4.9% 6.2% 5.8%

37.8% 32.6%

62.6%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Current Savings Fixed

Deposit and deposit growth

401,385440,207450,297

433,500434,846

-9.5% -8.8%-2.2%

3.9%-0.3%

0

100,000

200,000

300,000

400,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

-15%

-5%

5%

15%

25%

Total deposit (LHS)

Deposit growth (QoQ) (RHS)

2Q09 result review: Still lower deposits but strong CASA mix


Continued strong liquidity with cash, interbank and short term investment representing 27.7% of total earning assets vs. 24.5% in 1Q09Investment portfolio comprised mainly with state-enterprise and government bonds. In 2Q09, significant portion of listed equity investment were reduced. Loan to deposit ratio included ST borrowing stable QoQ at 83.5%. Excluding ST borrowing, LDR rose slightly QoQ

Earning asset allocation

11.2% 11.3% 9.5%19.7% 14.0% 19.9% 20.6%

72.8% 73.9% 72.9% 67.4% 68.0%

2.0%1.5%1.9%1.9%1.8%6.0%5.7%18.2%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Cash Interbank Investment Loans

Loan to deposit ratio

91.2%90.2%

98.6%100.3%

94.2%

89.7% 90.3% 87.4%83.5% 83.5%

70.0%

80.0%

90.0%

100.0%

110.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Loan to deposit ratio

Loan to deposit ratio + ST borrowing

2Q09 result review: Continued strong liquidity with stable LDR

Source: bank only, under Basel II calculation [13]

Tier I and total capital adequacy ratio (CAR) were 11.0% and 15.0% (Basel II calculation), well above minimum requirement by BOT2Q09 CAR improved QoQ due to lower risk-weighted assetsUS$153 million buy-back of HBT1 did not affect capital position due to THB4 billion issuance of TMB-IT1 in April 2009

2Q09 result review: Solid capital base maintained

Tier I capital and BOT min requirement

10.56%10.10%

12.78%11.69%10.98%

4.25%4.25%4.25%4.25%4.25%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Tier I Capital BOT min requirement

CAR and BOT min requirement

14.98%16.38% 17.30%

13.90% 14.09%

8.50% 8.50% 8.50% 8.50% 8.50%

2.0%

6.0%

10.0%

14.0%

18.0%

22.0%

2Q08 3Q08 4Q08 1Q09 2Q09

CAR BOT requirement

[14]


[15]

Revisit our 3-year aspiration

… to be the leading Thai bank, providing world class financial services … to be the leading Thai bank, providing world class financial services

Leading Thai Bank with World Class Financial Solutions

MarketLeadership

14% deposit market share

by 2011with strong Saving& Current contribution

Main bank statusfor wholesale,SME customers, and high

penetration in retail

Sustained Profitability

Sustained profitability

with≥40% revenue contribution from consumer banking

≥35% revenue contribution from non-interest income

Top quartile total shareholders’

return

for Thailand

Customers

Top tier satisfaction/Engagement level

Regulators

‘Good’

Rating

Employees

Employer of ChoiceFor Financial Service

[16]

And three-phase customer centric transformation

Phase 3:Market Leadership

Phase 2:Differentiation &Quality Growth

Phase 1: Laying the Foundation

2008-2009 2009-2010 2011 onward

•

Reorganization•

Branch transformation with service excellence for all segments

•

End-to-end process•

HR Transformation & Risk Mgmt

•

Product expansion•

Channel expansion•

Brand enhancement•

TMB Group offering

•

New standards for customer service

•

New standards for financial management

[17]

2009 transformation plan and progress

Q1/ 09 Q2/ 09 Q4/ 09Q3/ 09

Change current business model through “Branch Transformation”

Improve “Service Excellence” for better customer experience for all segments

Re-design and implement bankwide “End to End Process” improvement

Reorganization and employee deployment to become “customer centric organization”

HR transformation & employee engagement for “better working life”

Clear business separation Detailed JD for all divisions

New deposit process

Introduce LOS for SMEsCentralize all types of limit setting

Redeployment stabilized

New KPIs/PMS in placeNew compensation Scheme

Customer migration Unnecessary work removed

Career development & Training

Service Excellence training & initiatives

Reorganization

BranchTransformation

HR Transformation

Process improvement

(E2E)

Service & Sale Excellence

Customer EngagementMeasurement & Scorecard

[18]

Updates of branch transformations

Initiatives Projects Task, progress and completionBranch transformation

SME/Corporate migration

Customer migration to 50 hubs (SME) and HQ (corporate) –completed in 1Q09

Relationship handoff – to complete by July 2009

Branch operation excellence-removal of unnecessary works

Tax payment – completed in 2Q09Line disbursement and countersign– by 3Q09Legal action and interest calculation – completed in 2Q09Non-home branch service – completed in 1Q09Cash van late delivery – completed in 1Q09

Branch sales & service improvement

Segregation of sales and services role – completed in 1Q09Sales & services skill training and monthly coaching – ongoingNew incentive plan – completed in 2Q09Branch manager development program - ongoing

Branch modernization

Branch signage upgrade – by 3Q09New style branch – 8 new branches in 2Q09 and 4 more in

Jul/09, all of which are in strong locations

Target of transformation: to enable service and sale focus most appropriatefor each customer segment

[19]

Updates of HR transformations

Initiatives Projects Task, progress and completionHR transformation

Reorganization Design of micro organization structure – by 3Q09Detailed job descriptions – by 3Q09Staff redeployment - ongoing

KPI, compensation and career development

New performance bonus scheme - completed in May 2009Recruitment, mobility, transfer, exit, performance management,

compensation management – by 3Q09

Employee engagement and culture change

Branch road-show by CEO – completed in 1Q09HQ road-show by CEO – to complete by mid 3Q09Employee engagement survey – completed in June 2009

Target of transformation: build foundation for clear accountability, high performance and engagement

[20]

2Q09 results reviewTMB’s strategy and transformationKey business updates Appendix

SBCG = Small Business Credit Guarantee Corporation, a state-owned enterprise [21]

SME: Structured products with focus on supply chain

Attractive credit facilities (up to 3x of collateral) bundled with SBCG’s credit guarantee program

Structured drawdown (directly paid to business counter-party via fund transfer only)

Attractive and competitive rate at MRR + 0.5-1.5%

Competitors currently offer 1-1.5x credit lines

3x structured O/D accounts for working capital

[22]

Wholesale: Leading market share in custodian and establishing footprint in bond underwriting

Leading bondholders’ representative with 32% market share

Leading registrar and paying agents with 28% market share

Recently awarded insurance asset custody from OIC, which oversees THB159 billion asset

Lead underwriter for most recent bond deals with THB6 billion sales YTD

Lead UnderwritersIssuer Lead UnderwritersIssuer

28.09%

31.84%

Market Share

NPL & NPA MC, Leasing Safekeeping Agent

Corporate, State EnterprisesBondholders’ Representative

Corporate, State EnterprisesRegistrar and Paying Agent

AS Businesses Customers

Local Custodian AMC, Security Companies, Insurance, SEC, OIC

Foreign Custody Foreign Institutions

28.09%

31.84%

Market Share

NPL & NPA MC, Leasing Safekeeping Agent

Corporate, State EnterprisesBondholders’ Representative

Corporate, State EnterprisesRegistrar and Paying Agent

AS Businesses Customers

Local Custodian AMC, Security Companies, Insurance, SEC, OIC

Foreign Custody Foreign Institutions

TMB’s No.1TMB’s No.1

[23]

www.tmbbank.com revamp: on air since 1 Jul 09

Look Fresh & Clean

http://www.tmbbank.com/

[24]


SegmentationClearer


[25]


expandablemenu


[26]


Q uick login links


[27]


eye-catchingm arketing space


[28]


tv commercialsavailable online


[29]

The TMB Bank

Vision: To be the Leading Thai Bank with World Class Financial Solutions

Strategy : Customer Centricity the TMB Way

Aspirations : 1. Create Long-term Healthy and Sustainable Profit

2. Moving Towards Market Leadership

TMB is striving to be theto be the life time partner for the customerslife time partner for the customers by building trusted relationships through deep understanding of the customers’ financial needs in all life stages and to deliver creative excellence to deliver creative excellence from our products and services

[30]


Note: *ING holds another 4.9% via Thai NVDR [31]

Shareholding structure and management

Management teamManagement team

Mr. Boontuck Wungcharoen (Chief Executive Officer)

Mr. Simon Andrews (Chief Operating Officer)

Mr. Piti Tantakasem (Chief Wholesale Banking Officer)

Mr. Bart Hellemans (Chief Risk Officer)

Mr. Sayam Prasitsirigul (Chief SME Banking Officer)

Mr. Thanomsak Chotikapraka (Chief Financial Officer)

Mr. Michal Szczurek (Chief Retail Banking Officer)

Top Mgmt Latest credentials

CEO KBANK: Head of corporate and capital market, SME

Wholesale KBANK: Head of large corporate

SME KBANK: Head of supply chain financing & cash mgmt

Retail ING: Mgmt Board of ING Nederlanden-Poland

CRO ING: MD, Head of credit capital

COO ING Direct Australia: Sales/operation/IT

CFO Standard Chartered: CFO

Shareholder structure as of March 2009

Military group**, 2.2%

DBS Bank, 6.8%

Thai NVDR*, 7.3%

Ministry of Finance, 26.1% Others, 28.8%

ING , 25.2%

JP morgan, 3.6%

Source: As of December 2008 [32]

Operating platform and holding structure

TMB BankTMB Bank

BankingBanking Investment Investment BankingBanking

ING Life (life)Thai Insurance (non-life)

Thai Orix Leasing (46%)

TMB Asset Management (75%) and ING Funds (strategic partner) having 12.2% of total asset market

6.1% loans market share6.2% deposit market share470 branches nationwide and 2,014 ATMs

Asset Asset ManagementManagement LeasingLeasing InsuranceInsurance

In house


Balance sheet

Unit: THB million 2Q09 1Q09 % Δ QoQ 2Q08 % Δ YoY 1H09 1H08 % Δ YOYCash, Interbank and repurchase 70,410 81,415 -13.5% 54,030 30.3% 70,410 54,030 30.3%Investments 113,388 119,658 -5.2% 120,180 -5.7% 113,388 120,180 -5.7%Loans and Accrued Interest Receivable 368,911 400,396 -7.9% 439,444 -16.1% 368,911 439,444 -16.1%Less Allowance for doubtful accounts (35,897) (44,453) N/A (49,023) N/A (35,897) (49,023) N/ALoans and AIlowance - net 333,014 355,944 -6.4% 390,421 -14.7% 333,014 390,421 -14.7%Properties foreclosed - net 14,522 17,026 -14.7% 21,684 -33.0% 14,522 21,684 -33.0%Premises and equipment - net 13,270 14,174 -6.4% 12,620 5.1% 13,270 12,620 5.1%Goodwill from transferred business - net 60 60 0.0% 323 -81.4% 60 323 -81.4%Other assets 24,081 13,101 83.8% 22,320 7.9% 24,081 22,320 7.9%Total Assets 568,745 601,379 -5.4% 621,578 -8.5% 568,745 621,578 -8.5%Deposits 401,385 440,207 -8.8% 434,846 -7.7% 401,385 434,846 -7.7%Interbank and Money Market Items 22,733 12,006 89.4% 11,870 91.5% 22,733 11,870 91.5%Borrowings 62,099 63,467 -2.2% 79,942 -22.3% 62,099 79,942 -22.3%Other liabi lities 36,462 39,532 -7.8% 49,316 -26.1% 36,462 49,316 -26.1%Total Liabilities 522,678 555,212 -5.9% 575,974 -9.3% 522,678 575,974 -9.3%Shareholders' equity 46,002 46,072 -0.2% 44,982 2.3% 46,002 44,982 2.3%Minor ity Interests 65 95 -32.3% 623 -89.6% 65 623 -89.6%LIABILITIES & SHAREHOLDERS' EQUITY 568,745 601,379 -5.4% 621,578 -8.5% 568,745 621,578 -8.5%


Profit and Losses

(Unit :THB million) 2Q09 1Q09 % Δ QoQ 2Q08 % Δ YoY 1H09 1H08 % Δ YOYInterest and dividend income 5,092 6,104 -16.6% 7,193 -29.2% 11,196 14,589 -23.3%Interest expenses 1,978 2,875 -31.2% 3,195 -38.1% 4,854 6,373 -23.8%Net income from interest and dividend (NII) 3,113 3,229 -3.6% 3,998 -22.1% 6,342 8,216 -22.8%Bad debts and doubtful accounts ( reversal) 3,734 (1,113) N/A 827 351.6% 2,621 1,630 60.8%NII after provision (621) 4,342 -114.3% 3,171 -119.6% 3,721 6,586 -43.5%Non-in terest income 5,216 975 434.9% 2,032 156.7% 6,191 4,314 43.5%Non-in terest expenses 4,188 4,869 -14.0% 3,975 5.4% 9,057 7,996 13.3%Net income (loss) before income tax 408 448 -9.0% 1,229 -66.8% 856 2,904 -70.5%

Income tax 9 8 17.1% 17 -47.7% 17 63 -73.2%Minority interests in net profit 6 4 41.9% 54 -89.5% 10 93 -89.7%

Net income 393 436 -9.9% 1,158 -66.1% 829 2,748 -69.8%


Non interest income and expenses(Unit :THB million) 2Q09 1Q09 % Δ QoQ 2Q08 % Δ YoY 1H09 1H08 % Δ YOYGain/loss on investments 873 (955) N/A 35 2422.1% (82) 500 -116.5%Share of profit (loss) from investments accounted for using the equity method 30 38 -20.6% 71 -56.9% 69 132 -47.7%Fees and service income 1,050 1,034 1.6% 1,287 -18.4% 2,084 2,636 -20.9% Acceptances, avals and guarantees 88 113 -22.3% 109 -19.6% 201 266 -24.4% Others 963 921 4.6% 1,177 -18.2% 1,883 2,370 -20.6%Gain on exchange 213 341 -37.4% 253 -15.8% 554 589 -6.0%Gain on sale of assets 110 (49) N/A 157 -29.5% 61 173 -64.7%Other income 2,939 567 418.4% 231 1174.1% 3,506 284 1133.1%Total non-interest income 5,216 975 434.9% 2,032 156.7% 6,191 4,314 43.5%

(Unit :THB million) 2Q09 1Q09 % Δ QoQ 2Q08 % Δ YoY 1H09 1H08 % Δ YOYPersonnel expenses 1,546 1,362 13.5% 1,257 23.0% 2,908 2,449 18.8%Premises and equipment expenses 641 617 3.9% 673 -4.7% 1,259 1,285 -2.0%Taxes and duties 168 193 -13.0% 213 -21.1% 362 452 -20.0%Fees and service expenses 365 310 17.9% 305 19.6% 675 584 15.5%Directors’ remuneration 8 6 23.2% 7 8.9% 14 14 1.6%Loss on impairment of properties foreclosed and other assets 276 1,441 -80.8% 247 12.0% 1,717 350 390.3%Contributions to the FIDF 438 443 -1.0% 474 -7.4% 881 947 -6.9%Loss on provisions of obligations from transferred non-performing assets 0 300 -100.0% 288 -100.0% 300 288 4.2%Loss on provisions of obligations - others 262 (204) N/A (5) N/A 58 560 -89.6%Goodwill amortization 0 0 N/A 0 N/A 0 0 N/ALoss on impairment of goodwill 0 0 N/A 0 N/A 0 0 N/ALoss on sales o f assets 0 0 N/A 0 N/A 0 0 N/AOther expense 483 400 20.5% 515 -6.3% 883 1,067 -17.2%Total non-interest expense 4,188 4,869 -14.0% 3,975 5.4% 9,057 7,996 13.3%


Selected key financial ratios

2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 FY08 FY07Profitability & ROAE 3.4% 3.8% -34.2% 14.3% 10.3% 14.3% 1.0% -95.6%Margin ROAA 0.3% 0.3% -2.7% 1.1% 0.7% 1.0% 0.1% -6.4%

Cost to Income (proforma) 50.3% 115.8% 102.6% 76.5% 65.9% 61.9% 75.0% 153.9%Yield on avg earning assets 3.6% 4.2% 5.0% 5.0% 4.8% 4.9% 4.9% 5.1%Funding costs 1.6% 2.2% 2.9% 2.5% 2.4% 2.3% 2.5% 2.8%NIM, avg earnings assets 2.2% 2.2% 2.4% 2.8% 2.7% 2.8% 2.6% 2.5%

Liquidity Loan to deposit 91.2% 90.2% 94.2% 98.6% 100.3% 93.3% 94.2% 99.9%Loan to depsosit + ST borrowing 83.5% 83.5% 87.4% 90.3% 89.7% 88.7% 87.4% 95.3%Cash & interbank to earning assets 11.5% 12.8% 13.2% 7.9% 7.6% 9.4% 13.2% 8.5%

Fee income Fee income/Total income 12.6% 24.6% 24.0% 22.4% 21.3% 20.8% 22.0% 23.5%Fee income, yoy growth -18.4% -23.4% -21.3% -13.1% 0.3% 6.7% -7.5% 14.5%

Loan & deposit Loan, yoy Growth -16.0% -11.4% -8.7% -11.6% -13.7% -14.3% -8.7% -14.1%growth Loan, qoq Growth -7.8% -6.4% -0.7% -2.0% -2.7% -3.6%

Deposit, yoy Growth -7.7% -8.4% -3.3% -16.0% -11.7% -8.0% -3.3% -18.1%Deposit, qoq Growth -8.8% -2.2% 3.9% -0.3% -9.5% 3.2%

Capital Tier I 11.0% 10.6% 10.1% 12.8% 11.7% 11.2% 10.1% 10.5%(Bank only) Total CAR 15.0% 14.1% 13.9% 17.3% 16.4% 15.0% 13.9% 14.4%Asset quality Reported NPL (THB million) 59,884 73,957 69,777 70,741 70,500 73,996 69,777 76,512

Gross NPL 14.4% 16.0% 14.3% 15.4% 15.2% 15.1% 14.3% 16.1%NPL coverage 59.9% 60.1% 65.8% 68.2% 69.5% 66.0% 65.8% 68.1%

Source: 2Q09 consolidated financial statements [37]

Asset growth and leverage

Liability to equity ratio

12.8011.27

12.39 12.05 11.36

1.1%

-12.0%

10.0%

-2.7% -5.7%

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

2Q08 3Q08 4Q08 1Q09 2Q09

(x)

-30%

-10%

10%

30%

50%

Liability to equity ratio (LHS)Growth rate (RHS)

Asset and asset growth

621,578

592,987 601,985 601,379

568,745

-4.6%

1.5% -0.1%

-5.4%

0.5%

430,000

480,000

530,000

580,000

630,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

-10%

0%

10%

20%

30%

Total asset (LHS) Asset growth (RHS) Equity and equity growth

44,98248,330

44,955 46,072 46,002

7.4%

-7.0%2.5% -0.2%-0.5%

25,000

30,000

35,000

40,000

45,000

50,000

2Q08 3Q08 4Q08 1Q09 2Q09

THB

milli

on

-10%

0%

10%

20%

30%

40%

50%

Total equity (LHS) Equity growth (RHS)

ROAE & ROAA

10.3%14.3%

-34.2%

3.8% 3.4%

0.7% 1.1% -2.7% 0.3% 0.3%

-35.0%

-25.0%

-15.0%

-5.0%

5.0%

15.0%

2Q08 3Q08 4Q08 1Q09 2Q09

-10.0%

-5.0%

0.0%

5.0%

10.0%

ROE (LHS) ROA (RHS)


Key balance sheet item breakdown

Earning asset allocation

11.2% 11.3% 9.5%19.7% 14.0% 19.9% 20.6%

72.8% 73.9% 72.9% 67.4% 68.0%

2.0%1.5%1.9%1.9%1.8%6.0%5.7%18.2%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Cash Interbank Investment Loans Interest-bearing liabilites

82.8% 84.3% 85.8% 85.5% 82.7%

2.0% 1.9% 1.6% 2.1% 4.5%9.8% 7.8% 6.7% 6.9% 7.7%5.5% 6.0% 6.0% 5.5% 5.1%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2Q08 3Q08 4Q08 1Q09 2Q09

LT borrowingST borrowingInterbank and money marketDeposit

Deposit breakdown

33.8% 40.4% 44.5%

57.9% 61.2% 53.2% 49.4%

4.2% 4.5% 4.9% 6.2% 5.8%

37.8% 32.6%

62.6%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2Q08 3Q08 4Q08 1Q09 2Q09

Current Savings FixedLoan breakdown by segment*

34.1%

15.9% 17.5%

48.4%45.6%45.1%

37.9%39.0%

16.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

4Q08 1Q09 2Q09

Corporate SME Retail


Employees and number of branches and channels movement

Domestic branches

470 470 470 470 477

300

400

500

2Q08 3Q08 4Q08 1Q09 2Q09

Total number of employee

8,6368,832

9,039 9,1199,319

7,000

8,000

9,000

10,000

2Q08 3Q08 4Q08 1Q09 2Q09

Branch distribution as of 1H09

Northeastern, 49

BMA, 220

Central, 52

Southern and Western,

Eastern, 44

Northern provinces, 53

ATM

1,742 1,8251,946 2,014

2,180

0

500

1,000

1,500

2,000

2,500

2Q08 3Q08 4Q08 1Q09 2Q09

Note: updated as of 30 June 2009 [40]

Credit ratings

Standard & PoorsLong Term Debt BB+Hybrid Tier I B+Short Term Debt/Deposits BBank Fundamental Strength Rating D+Outlook Stable

Fitch RatingFCY - Long Term/Short Term BBB-/F3Sub Debts/Hybrid Tier I BB+/B+Individual C/DSupport Rating Floor/Support BB/3Outlook Negative

Moody's Investor ServicesLong Term Deposits Baa3Hybrid Tier I B1Short Term Debt/Deposits Prime-3Outlook StableBank Fundamental Strength Rating-Outlook D-/Stable

Local RatingTRIS-Long Term Debt A+TRIS - Sub Debt ATRIS - Hybrid Tier I BBB+Fitch - Long Term/Short Term A+/F1 (tha)Fitch - Subordinated debt A (tha)Fitch - Outlook Stable

Source: C.B 1.1 as of March 09 [41]

Peer comparison and market share

Deposit market share

1,3391,114 981 915

528 268 75 64344441

18.8%15.7% 13.8% 12.9%

7.4% 6.2% 4.8% 3.8%1.1% 0.9%

-

500

1,000

1,500

2,000

BBL KTB SCB KBANK BAY TMB SCIB TBANK KK TISCO

THB

billio

n

-10.0%-5.0%

0.0%5.0%

10.0%15.0%

20.0%25.0%

Asset market share

1,7261,395 1,297 1,218

730415 352 126 118

600

17.1%13.8% 12.8% 12.0%

7.2% 5.9% 4.1% 3.5%1.2% 1.2%

-

500

1,000

1,500

2,000

BBL KTB SCB KBANK BAY TMB SCIB TBANK TISCO KK

THB

billio

n

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Loan market share

81518

876

107267279400

1,1331,068

882

17.2% 16.2%13.4%

13.3%

7.8% 6.1%4.2%

1.2%4.1%

1.6%

-

200

400

600

800

1,000

1,200

BBL KTB SCB KBANK BAY TMB SCIB TBANK TISCO KK

THB

billio

n

0%

5%

10%

15%

20%

Revenue market share

18,83016,85016,427

13,797

9,476 8,4814,205 1,773 1,212

4,254

19.8% 17.7% 17.2%14.5%

9.9% 8.9%4.4%

1.9% 1.3%4.5%

0

5,000

10,000

15,000

20,000

25,000

BBL SCB KBANK KTB TCAP BAY TMB SCIB TISCO KK

THB

milli

on

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Source: C.B 1.1 as of March 09 [42]

Peer comparison and market share (Cont.)

Loan to Deposit Ratio

81%85%90%91%96%96%98%100%108%

167%

0.0%

50.0%

100.0%

150.0%

200.0%

TISCO KK TBANK BAY KTB KBANK TMB SCB BBL SCIB

NPLCoverage

43%49%61%61%61%62%

89%91%93%103%

0.0%

30.0%

60.0%

90.0%

120.0%

BBL KBANK TBANK SCB BAY TISCO SCIB TMB KK KTB

Allowance/BOT requirement

102%104%105%113%117%118%122%124%

129%

175%

100.0%

150.0%

200.0%

BBL KBANK SCB TISCO BAY SCIB TMB KK KTB TBANK

Loan Growth (YoY)

-11.6%

5.0%5.9%6.1%9.7%10.6%10.7%12.2%12.3%

23.3%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

TISCO TBANK KK SCB SCIB KBANK KTB BAY BBL TMB


Cost to Income ratio

48.2% 48.7% 51.7% 52.4%61.3% 63.7%

51.7% 69.6%65.9%

115.6%

70.8%

20.0%

45.0%

70.0%

95.0%

120.0%

BBL SCB TCAP BBL KBANK BAY KTB SCIB KK TMB


Normalized Cost to income Ratio

Excess Reserve to Performing Loans

2.4%

0.9% 0.9% 0.8% 0.8%

0.3% 0.2% 0.1% 0.1%

1.5%

0.0%

1.0%

2.0%

3.0%

BBL TMB SCB SCIB KBANK BAY TISCO KK KTB TBANK

Provision to Gross Loan (basis points)

45.136.8

27.2 26.917.3 16.2 13.3

-11.4

14.1

-27.8

-30.0

-15.0

0.0

15.0

30.0

45.0

TCAP BAY TISCO KBANK BBL SCB KTB SCIB KK TMB

Total NPL

91

5945 40

32 25 8 7 3

70

-

20

40

60

80

100

KTB TMB BBL SCB BAY KBANK SCIB TBANK KK TISCO

THB

billio

n


Net profit growth

5.8% -0.3%-14.0% -14.4% -16.4% -18.3%

115.7%

-51.2%-41.3%-72.6%

-100.0%

-60.0%

-20.0%

20.0%

60.0%

100.0%

TCAP TISCO BAY BBL KBANK KK SCB KTB SCIB TMB


Net interest margin

4.0%3.7% 3.5% 3.5% 3.5% 3.3%

2.3%3.1% 3.0%

4.0%

3.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

TISCO KK KBANK BAY SCB TCAP KTB SCIB BBL TMB Aver age

Net profit

5,5474,869

3,800

2,513 2,1901,028 454 379651 436

25.4% 22.3%17.4%

11.5% 10.0%4.7% 2.1% 1.7%3.0% 2.0%

0

2,000

4,000

6,000

SCB BBL KBANK KTB TCAP BAY SCIB TISCO TMB KK

THB

milli

on

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

ROAE & ROAA

32.0%

3.8%

17.1% 13.1% 11.0% 9.8%6.3% 4.8%

11.8%11.0% 8.8%

1.7% 1.1% 1.2% 1.1% 0.7%2.1%

0.6% 0.6% 1.3%3.3%0.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

TCAP SCB BBL KBANK BBL KTB KK SCIB BAY TMB Average

-10.0%-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%

ROE (LHS) ROA (RHS)

Source: BOT as of March 09, *2008 consolidated F/S [45]


Overhead expense to total income*

37.6% 36.4%29.6% 29.1% 28.9% 28.7%

24.5% 22.2%29.3%

38.0%

0.0%

10.0%

20.0%

30.0%

40.0%

TMB BAY TISCO KBANK SCIB KTB BBL SCB KK TCAP

Number of branches

637522 519 492

369317

131 38 29

470

0

100

200

300

400

500

600

KTB BBL SCB KBANK TMB BAY SCIB TBANK KK TISCO

Branch distribution

161 139 49 62 59

500 481 456

1,2611,211

12.8%11.5%

9.8%12.9% 12.9%

-200400600800

1,0001,2001,400

BMA Centre Norheastern North South0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%

TMB Industry market share

Total revenue per employee*

4.80

3.963.52 3.35

2.85 2.822.47 2.37

3.34 2.52

1.0

2.0

3.0

4.0

5.0

KBANK SCB BBL BAY KTB KK SCIB TMB TCAP TISCO

THB

mill

ion

[46]

Company history

1957 TMB Bank Plc. was established on November 1957 with Field Marshal Saridi Dhanarajata as the first Chairman of the Board of

Directors and initial registered capital of THB10 million.1983 The Bank was listed on the Stock Exchange of Thailand (SET) on

December 23, 1983.2004 TMB was merged with DBS Thai Danu and IFCT effectively on

September 1, 2004. Total assets grew to THB700 billion.2005 The Bank rebranded to “TMB Bank Public Company Limited”

with a

new slogan of “Better Partner, Better Value”.2006 The Bank issued US$200 million non-cumulative hybrid debt capital

instruments (Hybrid Tier 1).2007 The Bank succeeded in raising THB37.6 billion new capital. ING

Group, the new major shareholder, holds 30.1% (including via NVDR) and MOF holds 26%.

[47]

Awards and mandates

Lead underwriter of Thai Airways International unsecured debenture of THB 7.5bn & 7.0billion (Oct 08)

Lead underwriter of Home Product Center unsecured debenture of THB630million (Nov 08)

Co-lead underwriter of PTT Chemical unsecured debenture of THB12billion (Dec 08)

Lead underwriter of Advance Info Service unsecured debenture of THB7.5billion (Jan 09)

Full service cash management to Central Retail Corporation(Feb 09)

Cheque payment to National Housing Authority (Feb 09)

Lead underwriter of PTT Aromatics unsecured debenture of THB15 billion (Apr 09)

Co-lead underwriter of PTT Exploration and Production unsecured debenture of THB40bn (May 09)

Lead underwriter of Bangkok Dusit Medical Services Unsecured Debenture of THB3bn (Jun 09)

[48]

Disclaimer

This presentation contains some information from other sources, that TMB Bank Public Company Limited does not make any representations regarding the use, validity, accuracy, or reliability of, or the results of the use of information, data but not limited to, all text, and images (“the Content”) on this presentation. Some content may contain forward looking statements, that based on management’s view upon the information currently available to us. These statement are subject to certain risks and uncertainties that could cause the actual results materially differed from what had been previously stated. The materials in this presentation shall not,

and are not intended to, constitute or contain an offer to sell or the solicitation of an offer to buy, any securities of TMB Bank Public Company Limited.

[49]

Thank you

IR contacts:Head of IR departmentPassakorn Linmaneechote CFATel: 662 299 2519Email: [email protected]

Jittrawadee SrivichitTel: 662 299 1178Email: [email protected]

Taweechai ChachiamchenTel: 662 242 3574Email: [email protected]

mailto:[email protected]



Documents

TMB Bank Plc. · Analysts & Investors Presentation. July 2009 [2] 2Q09 results review