KASIKORNBANK. Investor Presentation as of 2Q16. August 2016

Transcription

1 KASIKORNBANK Investor Presentation as of 2Q16 August 216 For further information, please contact the Investor Relations Unit or visit our website at 1 KASIKORNBANK at a Glance Established on June 8, 1945 with registered capital of Bt5mn (USD.14mn) Listed on the Stock Exchange of Thailand (SET) since 1976 Consolidated (as of June 216) Assets Bt2,75bn (USD76.9bn) Ranked #4 with 15.% market share** Loans* Bt1,664bn (USD47.3bn) Ranked #4 with 14.9% market share** Deposits Bt1,742bn (USD49.5bn) Ranked #4 with 15.5% market share** CAR 18.12% *** ROE (1H16) 13.2% ROA (1H16) 1.45% Number of Branches 1,121 Number of ATMs 9,7 Number of Employees 21,12 Share Information SET Symbol KBANK, KBANK-F Share Capital: Authorized Bt3.5bn (USD.9bn) Issued and Paid-up Bt23.9bn (USD.7bn) Number of Shares 2.4bn shares Market Capitalization Bt47bn (USD11.6bn) Ranked #2 in Thai banking sector 2Q16 Avg. Share Price: KBANK Bt (USD4.7) KBANK-F Bt (USD4.75) EPS (1H16) Bt7.97 (USD.23) BVPS Bt (USD3.56) Notes: * Loans = Loans to customers less Deferred revenue ** Assets, loans and deposits market share is based on C.B.1.1 (Monthly statement of assets and liabilities) of 14 Thai commercial banks as of June 216 *** Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from 1 January 213 onwards. CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT s to be financial conglomerate Exchange rate at the end of June 216 (Mid Rate) was Bt35.18 per USD (Source: Bank of Thailand) 2

2 Table of Contents Topic Slide Page Operating Environment Financial Targets 7 Composition of Growth 8-11 The K-Strategy Capital and Dividend Summary 16 Appendix Appendix Topic Slide Page KBank Strategic Issues Strategy and Segment Highlights Risk and Credit Management Financial Performance H16 Highlights Net Interest Margin 5 Interest Income - net 51 Non-interest Income Net Fee Income Net Premium Earned - net 56 Other Operating Expenses 57 Loan Asset Quality Investment in Securities and Funding Structure 67-7 The wholly-owned subsidiaries Muang Thai Life Assurance (MTL) Other Information Banking System and Regulations Update Government Policy Thai Economic Figures IR Contact Information and Disclaimer

3 Operating Environment: Economic Outlook for 216 % YoY Key GDP Forecasts and Assumptions F % YoY 216F* (Previous) 216F* (New) Base Case Range Base Case GDP Private Consumption Government Consumption Total Investment Gov't Budget Deficit (% of GDP) to Exports (Customs Basis) to Imports (Customs Basis) to Current Account (USD bn) Headline Inflation Policy Interest Rate** Notes: The current MPC s policy rate is at 1.5% Source: * KResearch (as of June 29, 216 vs forecast in April 216) ** KBank Capital Markets Research (as of May 2, 216) Key Points: Domestic spending has provided momentum for economic recovery in 1H16 However, heightened global economic uncertainties after BREXIT will restrain exports, resulting in a downward revision in export forecast in 216 to the 2.% contraction Given government stimulus efforts as well as visible progress on some large investment projects, Thai GDP growth forecast is maintained at 3.% (Base Case), while closely monitoring further development in the UK and EU Risk Factors: Chinese economic uncertainty Slow recovery in commodity prices Volatile funds flows Geopolitical tension Spillovers from BREXIT 5 Operating Environment: Economic Outlook for 216 Outlook Possible Impacts to Thai Economy Global Economy Government Stimulus Plan (App. pages ) Inflation (App. pages 123 and 126) Exports and Tourism (App. pages 123, 125 and ) Fed Policy Normalization (App. pages ) Global economy: recovery remains subpar amidst a high level of uncertainties US: economic recovery continues; very gradual increases expected in Fed funds rate will not derail economic recovery Eurozone: weak economic recovery amidst lingering political uncertainties, especially repercussions from BREXIT China: decreasing economic growth foreseeable, but more stimuli measures expected from China s government to prevent a hard-landing situation. ASEAN economies: growth will be stuck in low gear due to China s economic slowdown Accelerating investment in transport infrastructure projects and economic stimuli since September 215, including measures to boost the economy at the village and district levels, designed to reduce consumer expenses and help SMEs Low inflation, due to limited upside in oil prices Inflation will rise gradually in 2H16, due to a low base of comparison Export growth remains tepid amid challenges from slow global economic recovery (especially China); non-tariff measures by trade partners and structural issues such as changing consumer demand towards certain products will slow recovery of some products Due to a high base effect, growth in the number of tourist arrivals could slow from 215 level in term of over-the-year growth As a result of the UK referendum, global uncertainties have increased, especially in the medium-term. As such, we expect the Fed to keep fund normalization on hold this year In addition, the US election in November will warrant close monitoring Baht (App. pages 122) Even though the delay in Fed fund normalization could lead to increased inflows, these inflows will be periodic and will not lead to a sustained strengthening of the Baht However, as economic fundamentals are stronger in the US than Thailand, the Baht will likely continue to gradually weaken in the long-term Source: KResearch and KBank Capital Markets Research (as of August 1, 216) Pressure on export growth expected, due to weak global demand Weak global commodity prices will continue to limit upside in agricultural prices. Repercussions from BREXIT may lead to more fragile in global financial and capital market; thus Thailand may encounter some volatility. Bring hope for a pick up in growth momentum Improve private consumption and investment stimuli Policy rate is expected to remain accommodative to economic growth throughout 216. Export sector may not provide a lift for Thai economy Tourism will play a major role in boosting 216 economic growth. The delay in Fed fund normalization may periodically lead to increased inflows into emerging markets and could add appreciation pressure to the Thai baht Adjustment in foreign investors positions in Thai stock, bond, and money markets 6

4 216 Financial Targets Consolidated 215 Actual 1H16 Actual 216 Targets Notes ROE 14.54% 13.2% N/A ROA 1.6% 1.45% N/A NIM 3.67% 3.57% % Ranking maintained among large commercial banks (Page 5) Loan Growth 5.42% YoY 3.36% YTD 6.21% YoY 6-7% Decent and sustainable loan growth; in line with economic growth; subject to the success of government measures (Page 8 and 58-61) Non-Interest Income Growth* 12.57% YoY 3.69% YoY Up to 1% Sensible growth reflects large base effect; in line with the economy (Page 9 and 52-56) Non-Interest Income Ratio 42.37% 42.75% About 4% Cost to Income Ratio** 45.19% 39.32% % Focus cost management but expect seasonally higher in 2H (Page 11) Credit Cost per year (bps) 168 bps 245 bps Up to 19 bps Prudent (Page 1 and 63) NPL Ratio (Gross)*** 2.7% 2.89% % Manageable (Page 1 and 62) Note: * Non-Interest Income includes Net Premium Earned - net (Net Premium Earned less Underwriting Expenses) from Muang Thai Life Assurance PCL (MTL); KBank has a 38.25% economic interest in MTL; on the consolidated basis, Bancassurance fees are not included in net fee income, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation); Non-Interest Income = Total Operating Income net less Interest Income net ** Cost to Income Ratio = Total Other Operating Expenses to Total Operating Income net (Total Operating income less Underwriting Expenses) *** NPL Ratio (Gross) = NPL (gross) to total loans; NPL (gross) used in the calculation are loans to general customers and loans to financial institutions that are non-performing loans; total loans used in the calculation are loans to general customers and loans to financial institutions 7 Composition of Growth: Loans by Business Moderate loan growth momentum in line with full-year target Loan Portfolio Structure Loan Portfolio Bt bn Consolidated Amount (Bt bn) 1H16 1H , Dec15* 1H16 Loan Growth Yield Range Loan Growth Target (%) 1,527 1,61 1,664 Corporate 1,6 1,439 (%YTD) (%) 1,327 3% 29% 31% 1,2 31% Corporate Loans % 3-5% 4-6% 31% SME SME Loans % 6-8% 5-7% 8 36% 36% 37% 38% 38% Retail Retail Loans % 5-7% 5-7% 4 26% 27% 27% 26% 25% Other Loans 12 1 (1.8%) 7% 6% 6% 6% 6% Others Total Loans 1,61 1, % 5.8% 6-7% H16 * December 215 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8 Corporate Loans SME Loans 1H16 Mainly from Commerce, Utilities, and Gems and Jewelry Mainly from short-term domestic credits from agriculture, construction materials, commerce, and automotive and parts 216 Outlook Growth target comes from large public/private investment projects, so focusing on construction, construction materials, telecommunication, and real estate Also, focus on industries related to domestic consumption and tourism Growth target reflects domestic consumption demand and international trade benefits of AEC Focus industries: construction, construction materials, automotive and parts and hardware Retail Loans Mainly from mortgage loans with cautious growth, by selecting high potential customers and proactively monitoring loan portfolio quality Conservative growth target in line with industry; maintain leading market position in key products Focus on qualified customers with acceptable risk; proactively monitor and strictly control loan portfolio quality Loan Definition (more details on loans can be found in App. page 59-6) Corporate Loans: Loans of KBank and KBank s Subsidiaries in Corporate Segments (Annual sales turnover > Bt4mn) SME Loans: Loans of KBank and KBank s Subsidiaries in SME Segments (Annual sales turnover Bt4mn) Retail Loans: Loans of KBank and KBank s Subsidiaries in Retail Segments Other Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans) and other loan types Note: Since 1Q13, as per the Bank of Thailand s requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports 8

5 (Bt 15 Note: Composition of Growth: Net Fees and Non-interest Income June 216 (Consolidated) Total Operating Income - net (+6%) (+15%) (+15%) (+15%) 4% 42% % (+5%YoY) 39% 43% 5 61% 61% 6% 58% 57% H16 Non-interest Income Net Interest Income Non-interest Income (+13%) 6 (+17%) 2% % Other Operating Income Fee and Service Income - net (+17%) % (+2%) Net Premium Earned - net 4 3% 33.1 (+4%YoY) 61% 6% 4% Dividend Income 3 61% 2 6% 58% 2% Share of Profit from 2% 21% Investments on Equity Method 1.5% 18% 2% 3% 2% 2%.2%1% 2%.4%.2% 2% 3% 2% 2%.2% 3% Gain on Investment 14% 12% 11% 14% 11% Gain on Trading and FX H16 transactions Non-interest Income Ratio and Net Fee Income Ratio (%) 5 39% 39% 4% 42% 43% % 24% 24% 25% 25% H16 Non-interest Income Ratio Net Fee Income Ratio (Bt bn) (+19%) - Non-interest Income Ratio = Non-interest Income/Total Operating Income - net - Net Fee Income Ratio = Net Fee Income / Total Operating Income - net - Net Premium Earned - net = Net Premium Earned less Underwriting Expense Net Fee Income (+18%) (+18%) (+11%) (+3%YoY) H16 - The Bank and its subsidiaries have adopted TFRIC13: Customer Loyalty Programmes since January 1, 214 onwards and restated the comparative financial statements and financial ratios. There is no effect on net profit of the Bank and its subsidiaries Non-interest income growth continues to be a main driver helping to achieve long-term sustainable profitability, mainly from net fee income as a result of customer-centric strategy 1H16 non-interest income accounted for 43% of total net operating income and net fee income accounted for 25%; non-interest income rose 4% YoY, mainly from net fees and service income and gain on selling investment Net fee income rose 3% YoY, due to fees from underwriting and loan-related fees income 216 non-interest income growth will be up to 1%, in line with the economy and result of large base 9 (Bt bn) (%) Asset Quality and Impairment Loss of Loans and Debt Securities (Provision) June 216 (Consolidated) During 1997 Asian Crisis* Provision H16 During 1997 Asian Crisis* NPL was peak at 42.3% in 1Q (%) 15 1 NPL Ratio and Credit Cost NPL ratio Coverage Ratio Credit Cost H16 5 During 1997 Asian Crisis* (bps) 9 Notes: * Data in is KBank only; ** NPL ratio in retail business, excluding 18 dpd (days past due) of credit card and consumer loans for peer comparison H Asset quality remains manageable 1H16 NPL ratio was at 2.89%, with a coverage ratio of % 1H16 credit cost was 245 bps, prudent and aligned with the macro environment and credit cycle 216 asset quality is expected to remain manageable NPL Ratio by Business 214 1H Q16 1H16 Corporate Business <2% <2% <2% <2% <2% SME Business <3% <3% ~3% ~4% 4-5% Retail Business** <2% <2% ~2% ~3% ~3% 1

6 Cost to Income Ratio June 216 (Consolidated) Cost to Income Ratio (%) H16 (%) Cost to Average Assets Ratio H16 Cost to income ratio ranging below 4%; seasonally lower in 1H and higher in 2H 1H16 cost to income ratio was 39.32% 216 cost to income ratio will range between % * H15 1H16 1Q16 2Q16 * * * Cost to Income Ratio (%) Cost to Average Assets Ratio (%) Note: * The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards and restated the comparative financial statements and financial ratios. There is no effect on net profit of the Bank and its subsidiaries 11 The K-Strategy Long-Term Risk-Adjusted Sustainable Profitability Customer Centricity Customer Strategy TO BE CUSTOMERS MAIN BANK PRODUCT & SOLUTION BRANDING & MARKETING SERVICE QUALITY Excellent customer experience Innovate & be responsive Clear & consistent communication at all channels KASIKORNBANK, its wholly-owned subsidiaries, and its strategic ownership 8 Customer Segments* 4 Product Domains The Way We Work + I N T E G R A T I O N Strategic Capabilities Understanding Customer Needs Innovation & Product Management Note: * The definition of the eight customer segments can be found in App. page 28 Sales & Service Excellence Proactive Risk Management 12

7 % 3% 25% 2% 15% 1% 5% Segment Performance Highlights Performance improvement driven by the success of our customer-centric strategy and new IT capabilities Main Bank Status and Market Penetration on track with our customer segment aspirations 24% 17% 1% Main Bank Status* Old Definition 27% 27% 28% SME Business** 29% 29% 3% (Overall) Corporate Business** % 26% 26% 24% % 26% 24% Retail Business 23% 18% 2% % 11% 12% * Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investment bank and/or main borrowing bank; the Main Bank Status of Retail Business from 213 to 215 includes two out of four retail customer segments (Middle Income and Mass), which account for 99% of retail customers ** Since 214, Corporate and SME Business s main bank status is reported on every two years basis Average product holdings per customer increasing as a result of enhanced cross-selling capabilities Overall average rose to 2.96 in 215, from 2.71 in 211 Average Product Holdings per Customer (New) New Definition*** (New) (New) 214 (New) (New) (By Business Division) (New) 212 (New) 213 (New) 214 (New) Retail Business SME Business Corporate Business 215 (New) *** In 212, the Average Product Holding calculation is adjusted in all eight customer segments to align with our better understanding of customer behavior; 211 numbers were restated for comparison purposes No. of customers grew 97% since 27 Branch Customer Satisfaction was at 9 in Y215 No. of customers, as of June 216, rose to 13.6mn from 13.1mn in Y215, a growth of 4% Branch Customer Satisfaction No. of Customers (mn) **** H16 No. of Customers (mn) Branch Customer Satisfaction***** Branch Customer Satisfaction **** Customers in Retail Business account for 94%, SME Business 6%, and Corporate Business less than 1% of customer portfolio ***** Branch Customer Satisfaction Index by Nielsen (Retail Business 9%, SME Business 1% and Corporate Business less than 1%). Note: Branch Customer Satisfaction in 215 was at 9, ranking in the top percentile of global level for all industry and financial industry Capital (Reported Number: Excluding Net Profit of Each Period) June 216 (Consolidated) (%) Bank only H16 Tier1 Tier KASIKORNBANK FINANCIAL CONGLOMERATE* Basel II Basel III Basel II Basel III (%) H16 Tier1 Tier2 Capital adequacy remains sufficient to support business growth; maintained adequate Tier 1 ratio, as required under the Basel III** Basel II Basel III H16 Bank only CAR (%), excluding net profit of each period Tier 1 (%), excluding net profit of each period KASIKORNBANK FINANCIAL CONGLOMERATE* CAR (%), excluding net profit of each period Tier 1 (%), excluding net profit of each period Note: * KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT s to be financial conglomerate. Under Bank of Thailand regulations, net profit in the first half of the year is to be counted as capital after approval by the Board of Directors as per the Bank s regulations. Net profit in the second half of the year is also counted as capital after approval of the General Meeting of Shareholders. However, whenever a net loss occurs, the capital must be immediately reduced accordingly. ** The details on Basel III regulations can be found in App. Page

8 Dividend Dividend Per Share (Bt) Interim Dividend Dividend Payout Ratio (%) Dividend policy: both operating results and long-term returns to shareholders are taken into consideration in determining dividend payments Dividend payout ratio ranges 2-25%, in order to ensure a sustainable and adequate capital level through the changing economic environment and the ongoing adoption of Basel III Dividend Per Share (Bt) Dividend Payout Ratio (%) Summary Customer-centric strategy effectively executed: data-mining, analytic campaign management, multi-channel sales and services, and digital technology platforms have enhanced our capability to quickly acquire new customers; the result is a top-notch total customer experience, strong market position, and sustainable business performance Balanced growth: loans to grow carefully in line with economic conditions; appropriate liquidity maintained; manageable asset quality supported by strong risk management capabilities; appropriate loan loss reserves; sensible non-interest income growth; manageable cost to income ratio; appropriate ROE maintained Adequate capital: maintained adequate Tier 1 ratio, as required under Basel III Sustainable Development: embraced as an integral part of business operations, with the belief that corporate strength and sustainability are achieved through responsibility to the economy, society, and environment 16

9 Appendix 17 KBank: Strategic Issues 18

10 Cost Effectiveness High cost growth period incurred from investing in new IT business capabilities and channel infrastructure is passed; K-Transformation project was completed in July 215; channel expansion has reached coverage satisfaction Cost and productivity management will be addressed in: Cost Management Productivity Management 1) Fixed Asset Investment Improve asset utilization (e.g. office space, IT equipment) Tighten approval process for new assets 2) Other Expenses Focus on strategic sourcing Align marketing communication activities to ensure marketing effectiveness 1) Human Resources Management Redeploy work processes between front and back office Improve revenue per head 2) Branch Profitability Revisit branch & ATM optimization and profitability, including account planning, area planning, and branch relocation 19 Establishment of KASIKORN BUSINESS TECHNOLOGY GROUP Mr. Teeranun Srihong Chairman of KASIKORN BUSINESS TECHNOLOGY GROUP Mr. Somkid Jiranuntarat Vice Chairman of KASIKORN BUSINESS TECHNOLOGY GROUP A Bridge between KBank and KASIKORN BUSINESS TECHNOLOGY GROUP Group s Control Structure Enable Seamless Integration Idea Creation Software Development to Support Innovation and Business Requirements Control Infrastructure Resources for the Change, the Run, and the Gone Center of Excellence for Technical Resource Pool and Service* Create the Future Generate Business Value Ensure Service Continuity Deliver Service Excellence Note: - KASIKORN BUSINESS TECHNOLOGY GROUP established with 5 companies, as a wholly-owned subsidiary of KASIKORNBANK; included in the KASIKORNBANK FINANICIAL CONGLOMERATE, as approved by the BOT in October Registered capital in each company at Bt5mn, except for KASIKORN SERVE at Bt1mn - KASIKORN SERVE changed names from PROGRESS SOFTWARE COMPANY LIMITED; established in March

11 KBTG Technology Focus Open API Machine Learning IoT Blockchain Worldclass Design Open Platform for tech startups to connect with bank services End-to-end customer satisfaction through insight learning and cognitive computing Bring customer experience to the next level by connecting devices in everyday life Reshaping financial business with a secure decentralized ledger Enrich customer experience through our world-class UI/ UX designers Note: API = Application Programming Interface; IoT = Internet of Things; UI = User Interface; UX = User Experience 21 Collaboration with FinTech and Startups KBank View KBank Approach Positive influence in financial industry Partnership to integrate with KBank s products/services Customers will have more innovative products/services Proactively scanning innovation by FinTech and tech startups Reaching out to collaborate Collaboration in term of business and technology, and growing together Strengths Weaknesses FinTech/ Startups Innovative products/ ideas Enhanced efficiency Improved speed to market Culture UX/UI Lack of large customer base Not proficient in regulatory compliance Trust issues KBank & FinTech/ Startups are the Perfect Combination FinTech is filling the gap between bank offerings and customer preferences KBank Trust Branding & PR Market reach Large customer base Deep domain knowledge Established infrastructure Regulatory compliance Funding & exit strategy Slow to develop & implement Not proficient in UX/UI Requires operational process improvement 22

12 KBTG: K-Stadium and Innovation Center 23 Asset-light Regional Expansion into Strategically focusing on AEC+3 markets, KBank pursues an integrated regional operating model: physical footprint, digital platform, and regional partnerships South Korea Physical Footprint Lao PDR. Cambodia Myanmar Vietnam Indonesia Japan China Digital Platform X-border Multi-Currency Settlement X-border THB Direct Settlement X-border Retail Payment Partnership Note: - One subsidiary bank: KASIKORNTHAI BANK Limited, commercial banking business in Lao PDR - Four international branches: Cayman Islands, Hong Kong, Shenzhen, and Chengdu - One international sub-branch: Longgang (Longgang District, Shenzhen) - Ten representative offices: Los Angeles, Beijing, Shanghai, Kunming, Tokyo, Yangon, Ho Chi Minh, Hanoi, Phnom Penh, and Jakarta - Global partners with 75 banks in 13 countries: 51 Japanese partner banks; 2 Korean partner banks; 4 European regional banks (in Germany, Italy and Russia); 7 ASEAN partner banks (in Lao PDR, Vietnam, Cambodia, Indonesia, Malaysia, and Philippines); 1 Chinese partner banks and 1 Indian Bank (as of Jun 216) AEC and others 24

13 Regional Bank KBank aims to facilitate cross-border trade, investment, and settlement in the AEC+3 economies through 6 business frontiers Regional Cross-Border Businesses Business Frontiers Integrated Operating Model AEC * +3 A Trade B Investment C Settlement Thai Direct Investment Host Country Foreign Direct Investment International Trade Border Trade Cross-border Retail Lao PDR. Cambodia Myanmar Vietnam Indonesia Japan Korea China Regional Payment & Settlement Physical Footprint LII Cross-Border Direct Settlement Multicurrency Cross-Border Direct Settlement Digital Platform Banking Agent Model Wings Transfer Cross-Border Mobile Transfer Cross- Border Mobile Transfer Rep. Office Branch Collaborations with FinTech Partnership Branch RMB Settlement LII Note: *Target markets only. In other markets, partnership model is applied. LII = Locally Incorporated Institution Current Banking Platform Future Banking Platform (in ) 25 KBank: Strategy and Segment Highlights 26

14 KBank Digital Strategy KBank Digital Strategy To use Digital Technology and Data to enhance business performance by transforming: Customer Experience Customer Understanding Customer Offering & Interaction Sales & Service Channels % Market Share and Number of Transactions (Retail Customers) % Market Share (KBank Digital Banking Users)* Number of Transactions (%) 5.% 4.% 3.% 2.% 1.% 37% 38% 38% 38% 1,2 8 4 (Million Transactions) 423 (+69% YoY) 723 (+71% YoY) 1,135 (+57% YoY) 93 (+95% YoY).% Q H16 Note: * KBank Digital Banking Users to Total Digital Banking Users in Thailand (Internet and Mobile Banking) Source: The Bank of Thailand (Latest Market Share March 216) Operational Processes Process Digitization Worker Enablement Data-driven Execution Business Model Digitally-enabled Product & Services New Digital Business KBank Market Position in Digital Banking Retail Customers #1 Market share of Thailand Digital Banking users (BOT report, March 216) #1 Top Mobile Banking Application in Thailand (57%) from Priceza.com 215 #1 Digital Banking Top of Mind Brand perception rating (Nielsen, 215) Best Mobile Banking Product in Thailand (216) : The Asian Banker Digital Banking Initiative of the Year in Thailand (216) : Asian Banking & Finance Corporate & SME Customers Best Cash Management Bank in Thailand and Best Transaction Bank in Thailand : The Asian Banker Best Cash Management Bank in Thailand 216, Editors' Triple Star for PTT Fill&Go 216 and Best Cash Management Solution in Thailand for Thep Sombat 216: The Asset 27 Eight Customer Segments Corporate Business SME Business Multi-Corporate Business Large Corporate Business Medium Business Small & Micro Business High Net Worth Individual Company with annual sales >Bt5,mn Company with annual sales >Bt4mn to Bt5,mn Individual or company with annual sales >Bt5mn to Bt4mn Individual or company with annual sales Bt5mn, and with commercial credit limit Bt15mn Individual wealth with KBank and its wholly-owned subsidiaries* Bt5mn Retail Business Retail Business Affluent Middle Income Mass Individual wealth with KBank and its wholly-owned subsidiaries* Bt1mn to < Bt5mn Individual wealth with KBank and its wholly-owned subsidiaries* Bt15, to < Bt1mn Individual wealth with KBank and its wholly-owned subsidiaries* < Bt15, Customer-centric strategy: offering a full array of financial solutions and a satisfying experience to our customers Synergistic portfolio management by monitoring eight customer segments Offer financial solutions from among KBank, its wholly-owned subsidiaries, and the insurance company Make significant progress towards long-term aspirations; performance on track Note: * Wealth with KBank and its wholly-owned subsidiaries is defined as savings and investments, such as deposit products with KBank, mutual funds with KAsset; or the monthly income of an individual customer 28

15 Revenue by Eight Customer Segments June 216 (Consolidated) Loan Portion Average Loan Yield (%) Non-interest income * Multi-Corporate Business Large Corporate Business Medium Business Small & Micro Business High Net Worth Individual Affluent Middle Income Mass.4% 17.8% 14.3% 22.7% 19.3% 21.1%.4% 4.% 3.9% 4.1% 5.7% 7.9% 3.9% 1% 5.5% High Net Worth 6% 7.2% 9.2% Middle Income 26% Mass 1% Affluent 14% Multi- Corporate Business Large 15% Corporate Business 7% Medium Business Small & 12% Micro Business * Non-interest income excludes capital market business, treasury business and others Note: Loan portion and loan yield of each customer segment includes loans from the Enterprise Risk Management Division (NPL + Performing Restructured Loans); figures are not comparable with loan data in other pages 29 Business Direction in 216 Strategy To attain Main Bank status for all customer segments with strong brand positioning To maintain leadership position in digital banking To affirm our commitment to service excellence in business operations and to enhance our market position To become AEC+3 Bank to capture AEC growth opportunities plus China, Japan, and South Korea Corporate Business To become customers Bank of Choice in providing financial advisory and investment banking services Secure #1 position in transaction and digital banking using innovation and service excellence; continue to support customers operating business in the AEC World Business SME Business Build seamless cross border solutions in AEC+3 through Regional Value Chain and M&A Service Support customers investing in KBank international branches and partner banks Use Digital Banking System to serve cross-border payments and money transfers Continue to expand service channels by establishing KASIKORNBANK China (LII) and opening branches in CLMVI* * CLMVI = Cambodia, Laos, Myanmar, Vietnam, and Indonesia Maintain #1 position in SME business by providing customers a full solution service through K-Value Chain Solution Strengthen business network and enhance the competitiveness of SME customers under K SME Full Support for SMEs campaign Retail Business To attain #1 Main Bank, Advisory, and Digital Banking status for all retail customers Strengthen the lead position in digital banking and transaction banking by being the first successful mover in mobile and payment To achieve World Best-in-Class Financial Service Excellence Private Banking Business Cooperate with Lombard Odier to raise private banking service standards to international levels Increase service range to cover both domestic and overseas investment Provide integrated wealth planning services, advising families on wealth management, continuity, and growth 3

16 Corporate Business: Performance and Market Position Multi-Corporate Business Large Corporate Business Medium Business Small and Micro Business High Net Worth Individual Affluent Middle Income Mass Main Bank Status Corporate Bond Underwriting Cash Management Services 3% 2% 1% 3% 3% 23% 23% 24% 24% 21% 23% 24% 25% 26% 26% 27% 19% 2% 18% 17% 2% 16% 15% 14% 15% 11% 14% (#1) (#1) (#1) (#1) (#1) (#1) (#2) (#2) (#2) (#2) (#2) (#2) 1% 1% (#2) (#2) (#3) (#2) (#2) (#4) (#2) (#3) % Source: KBank Customer Survey (updated annually) Performance and Market Position Main Bank Status: maintained #1 ranking in 214 % H16 Source: The Thai Bond Market Association (ThaiBMA) Trusted Partner Bank: aim to be #1 through comprehensive fund raising solutions, integrated cash management solutions, and value chain solutions Corporate Bond Underwriting: ranked #3 with 14.6% market share in 1H16 Syndicated Loan Arranging: leading position with acclaimed expertise in a wide range of sectors Transaction Services: top player in transactional banking services Security Services (MFS): 38% market share as of May 216 Cash Management Services: 24% market share in 214 Trade Finance: 3% market share in 214 Industrial Expertise: leverage capability in utility, real estate, transportation, communication, and commerce Knowledge-based Organization: strive to be a knowledge-based organization for family businesses (KFAM Club) % Source: KBank Customer Survey (updated annually) Note: Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investment bank and/or main borrowing bank 31 SME Business: Performance and Market Position Multi-Corporate Business Large Corporate Business Medium Business Small and Micro Business High Net Worth Individual Affluent Middle Income Mass #1 in Market Share by Value #1 in Main Bank Status 3% 27% 29% 3% 3% 3% 3% 3% 27% 27% 28% 29% 29% 3% 2% 1% (#1) (#1) (#1) (#1) (#1) (#1) 2% 1% (#1) (#1) (#1) (#1) (#1) (#1) % Source: KBank Customer Survey (updated annually) % Source: KBank Customer Survey (updated annually) Performance and Market Position Main Bank Status: improved main bank status and strengthened #1 position Market Share: maintained 3% market share and strengthened #1 position Market Position: strengthened #1 position in SME market Bank for SMEs ; targeted to be SME market leader in all areas Improved capital usage efficiency by increasing total income to loan ratio Only bank to offer comprehensive solutions to SMEs through K SME program (launched in 26, with a total of 2 classes and about 12, participants so far) and K SME Knowledge Center (established in 29) Note: - SME Business in Thailand accounts for 39.6% of Thailand s GDP, or Bt5.21trn (as of December 214); supported by the government to become a key factor in economic and social growth (Source: The Office of Small and Medium Enterprises Promotion or OSMEP) - Market Share by Value = share of revenue (derived from both credit and non-credit products) that each bank gains from the market - Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investment bank and/or main borrowing bank 32

17 Retail Business: Performance and Market Position Multi-Corporate Business Large Corporate Business Medium Business Small and Micro Business High Net Worth Individual Affluent Middle Income Mass Bancassurance* (New Business, Total and Renewal Premium) #1 in Mutual Fund (KAsset) Mortgage Loan Ranked #1 in all (% Market Share) Bancassurance premiums (% Market Share) Ranked #1 in Mutual Fund AUM (% Market Share) Maintaining Top 3 with good quality portfolio (KAsset) 35% 32.1% 3% 1% 9.4% 23.5% 26.1% 27.6% 29.6% 3.1% 3% 27.4% 29.% 25.1% 24.3% 8.9% 22.3% 23.7% 25.7% 23.1% 22.9% 22.7% 22.5% 8.1% 25% 7.8% 21.1% 22.8% 7.7% 21.6% 2% New 2% Business 15% Total 5% Premium (#1) (#1) (#1) ( #1) (#1) (#3) (#3) (#3) (#3) (#3) 1% 1% Renewal 5% Premium % % % Q H Q16 Performance and Market Position Market Penetration**: strong market penetration to affluent customers and maintaining top tier market penetration to middle income customers Bancassurance: MTL ranked #1 in all Bancassurance premiums, with 32.1% market share in new business premium, 3.1% market share in total premium, and 29.% market share in renewal premium for 1Q16; moreover, MTL is focused on balancing First Year Premium and Single Premium to create a sustainable portfolio Fund Management Service: Mutual Funds: KAsset maintaining #1 position since 21, with highest market share at 22.5% in June 216; received Fund House of the Year (Thailand) Award from AsianInvestor (Hong Kong) and Best Fixed-Income Fund of 216 Award (mid/lt bonds) from Morningstar Research (Thailand) Mutual Funds + Private Funds + Provident Funds: ranked #2 position with total AUM over Bt1.2trn (2.2% market share, as of June 216) Mortgage Loans: ranked in top 3, with 7.7% market share in March 216; conservative growth and maintaining good quality portfolio Credit Cards: Total spending: ranked #1, with 22.7% market share in May 216 Number of cards: ranked #2, with 16.3% market share in May 216 Card-accepting merchant services (Online & Offline Platforms): ranked #1, with 37.8% market share by sales volume in May 216 Debit Cards: #1 in total debit card spending; maintaining top position by providing functions, features, security and benefits to match customer lifestyles; offering a variety of cards i.e, Co-Branded K-DEBIT 7PURSE,Thailand Football Club Debit Card, including new chip cards rely on BOT policies Note: * Total Premium = New Business Premium (NBP) + Renewal Premium; New Business Premium = First Year Premium (FYP) + Single Premium (SP) ** Market penetration = % of customers in the market who use at least one of the products of KBank and its wholly-owned subsidiaries 33 Channels: Corporate and SME Business Customer facilitation in areas with good potential via opening financial service centers and cheque points International Trade Service Center * Cheque Direct Service Q Q16 Corporate Business Center SME Business Center** Q Q16 Note: Reduction in the number of centers was a result of consolidation of some centers * Name changed from Corporate & SME Service Center to International Trade Service Center ** Excluding International Trade Service Centers; there could be more than one SME Business Center per branch 34

18 Channels: Retail Business 1,2 1, (+11) 865 (+49) 965 (+1) Branch 1,124 (+159) 1,12 1,121 1,12 15, (-4) (+1) 12,628 12,55 11,763 1,935 (+1,693) (-573) (-292) 11,611 9,1 8,433 (+1,934) 2,775 2,76 1, (+568) 2,693 2,195 (+58) 2,76 (-52) (-69) (-13) 1,67 1,398 (+797) (+53) (+331) 5, Self-Service Channel (ATM + CDM ) 1 7,366 7,63 (-15 2 ) (+237) 8,74 (+1,137) 9,853 9,349 9,7 8,95 (+1,113) (-54) (-279) CDM (Deposit) and CDM (Duo- Function) ATM H16 216F Key Strategies in Channel Expansion Branch: Maintain competitive number of branches to create perception of convenience Continually focus on improving branch productivity and e-channel migration in 216 Self-Service Channel: The total number of Self-service machine will be 11,611 in 216, after removal of outdated and low transaction machines; this is sufficient to create convenience in transactional services Relocate some channels to higher potential areas in order to improve efficiency and service availability Enhance Self-Service channel to support chip-card Focus in 216 on increasing efficiency and service availability through self-service channels Digital Banking: #1 market share of Thailand Digital Banking users (BOT report, March 216) #1 Top Mobile Banking Application in Thailand (57%) from Priceza.com 215 #1 Digital Banking Top of Mind Brand perception rating (Nielsen, 215) Best Mobile Banking Product in Thailand (216) : The Asian Banker Digital Banking Initiative of the Year in Thailand (216) : Asian Banking & Finance THE WISDOM Corner, Center, Lounge, and Lounge@: THE WISDOM Channels strengthen top positioning, available in all key flagship department stores, iconic locations, and Thailand s Suvarnabhumi international airport H16 216F H16 Branch ,124 1,12 1,121 - Bangkok and Metro 46% 45% 42% 39% 38% 38% - Upcountry 54% 55% 58% 61% 62% 62% ATM 7,366 7,63 8,74 9,853 9,349 9,7 - Bangkok and Metro 52% 51% 48% 44% 44% 44% - Upcountry 48% 49% 52% 56% 56% 56% CDM 1,67 1,398 2,195 2,775 2,76 2,693 - CDM (Deposit) 95% 76% 52% 46% 47% 47% - CDM (Duo-Function) 5% 24% 48% 54% 53% 53% K-Lobby THE WISDOM Corner, Center, Lounge and Lounge@ Note: 1 Self-Service Channel includes ATMs and all types of CDM machines providing 24 hour cash deposit, withdrawal, or money transfer services throughout the country 2 A drop in the number of ATMs reflects a relocation plan 3 Branch: Excludes 1 THE WISDOM channel models and 1 K-Express Credit Centers which BOT s adjusted definition now defines as branches, as they are physically located separately from regular branches 4 K-Lobby is an electronic banking service with multiple functions such as K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both outside of branch offices and as stand-alone machines in areas without branches 35 Sample of Channels Branch Department Stores K-Lobby An electronic banking service with multiple functions such as K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both outside of branch offices and as stand-alone machines in areas without branches Digital Banking Digital Banking includes: K-Mobile Banking K-Cyber Service (K-Cyber Banking, K-Cyber Trade and K-Cyber Invest) K-Payment Gateway K-PowerP@y (mpos) THE WISDOM Corner, Center and Lounge Thematic Branch An exclusive center providing a full range of services and facilities to High Net Worth Individual and Affluent segments The thematic branch is designed to blend with the local architecture and culture of each area THE WISDOM Suvarnabhumi Airport Thematic Central East Ville 36

19 KBank: Risk and Credit Management 37 KBank Risk Management Structure The Bank s organization is structured to facilitate all aspects of risk management; each business unit s responsibilities and segregation of duties are clearly identified in accordance with good internal-control practices Audit Committee Board of Directors Risk Management Committee Sub-committee Credit Risk Management Sub-committee Credit Process Management Sub-committee Asset and Liabilities Management Sub-committee Market Risk Management Sub-committee Operational Risk Sub-committee Business Continuity Management Sub-committee Capital Management Sub-committee Information Technology Strategy Sub-committee Approve risk appetite and all risk management policies and guidelines Ensure the effectiveness of risk management system and capital adequacy to facilitate current and future business undertakings both in normal and stress situations Establish risk management policies and risk appetites. Set the risk limits for the significant aspects of the various risks Formulate the strategy on the organization and resources to be used for the risk management operation, in line with the risk management policy. This strategy must enable the effective analysis, assessment, evaluation and monitoring of the risk management. Credit Risk Management Sub-committee and Corporate Governance Committee oversee project financing requests that could have adverse impacts on environment and society. Business Units CBS/ SME/ RBS/ CMB/ WBS/ CSP/ TS Risk Management and Control Function ERM/ CSF/ KBTG Internal Audit CAT Business units are responsible for continuous and active management of all relevant risks exposure to be in line with its returns and risk appetite. Risk management are responsible for providing independent and objective views on specific risk-bearing activities to safeguard the integrity of the entire risk process. Control units are set to ensure that risk levels are in line with our risk appetite. Internal Audit is responsible for evaluating the adequacy of risk management, control, and compliance to help the board understand risks the bank faces. CBS = Corporate Business Division, SME = SME Business Division, RBS = Retail Business Division, CMB = Capital Markets Business Division, WBS = World Business Division, CSP = Corporate and SME Products Division, TS = Central Treasury Department, ERM = Enterprise Risk Management Division, KTBG = KASIKORN BUSINESS-TECHNOLOGY GROUP, includes only IT risk management, CAT=Compliance and Audit Division, CSF=Customer Service Fulfillment Division 38

20 KBank Credit Risk Management Process The Bank continues to enhance credit risk management processes to promote risk strategies with justified risk-return tradeoff within the rapidly changing economic environment Portfolio Management Determine portfolio-by-design i.e., portfolio target setting by key credit concentration dimensions (Country, Industry, Large Customer Group) and other sub portfolio dimensions based on value-based analysis Manage portfolio according to the Bank s risk appetite and concentration Perform stress testing to identify portfolio weaknesses and proactively prepare appropriate management actions Origination Monitoring Collection & Recovery Enhance decision making/support tools for more efficient return and risk evaluation Setup specific prescreening criteria for potential industries Enhance customer income validation process Monitor customer behavior and detect early warning signs Leverage National Credit Bureau information for effective credit monitoring Ensure credit condition compliance (e.g. insurance, capital injection, project progress) Take prompt action to prevent credit deterioration Efficient collection and follow-up of customers with late payments Restructure viable customers to prevent NPLs Foreclose pledged assets to recover loan loss 39 KBank Credit Risk Management Process: Collection and Recovery Collection & Recovery Flow Efficient collection and follow-up of customers with late payments Restructure viable customers to prevent NPLs Foreclose pledged assets to recover loan loss Performing Loans* Loans with DPD > 1 day go to debt collection stage Debt Collections Debt Resolutions Reschedule Loans (such as Financial Aid Program on Page 66) Restructured Loans (Preventive Restructuring; not classified as NPL) Restructured Loans (Classified as NPL) Resume Original Debt-Service Terms Fully Repaid Restructured Loans NPL** Performing Loans Process Non-Performing Loans Move to Better Status Move to Worsen Status Liquidation Process Litigation Process (More information on Page 44) Write-off NPL Sales Note: * Performing loans = Pass loans (loans passing the due date less than 1 month) and Special Mention Loans (loans passing the due date by more than 1 month but not over 3 months) ** NPLs = Non-performing loans = loans passing the due date more than 3 months = Sub-standard Loans, Doubtful Loans, and Doubtful of Loss Loans 4

21 KBank Credit Approval Process Corporate SME (Medium) SME (Small & Micro) Retails (Housing and Unsecured Loans) Approval Process Policy Lending Credit Underwriting Dept. Sufficiency of cash flow Growth trends and ability to compete Management experience and depth Leverage, Liquidity, and Asset Quality Credit Risk Mitigation Facilities Structure Formula Lending SME Credit and Housing Loan Approval Dept. Application Score FICO Score Bureau information/credit history Debt service capacity LTV Formula Lending Unsecured Credit and Merchant Product Service Fulfillment Dept. Application Score FICO Score Bureau information/credit history Debt service capacity LTV (only housing loan/secured consumer) Credit Service Fulfillment Dept. Unsecured Credit and Merchant Product Service Fulfillment Dept. Post Approval Legal document Limit set up Customer Review by Relationship Manager (RM) Credit Portfolio Monitoring Unit to facilitate RM in customer monitoring Credit Clinic Bank-wide Risk Asset Review Asset Quality Management Operation Dept. Legal document Limit set up Automated collection system Efficiently utilize available behavior scoring and collection tools i.e. SMS, automated letter generation, phone Note: FICO = Fair Isaac Corporation 41 Environmental, Social and Governance Risk Management KBank has integrated ESG considerations into the risk management framework, with particular attention given to risks related to lending, products, and services Risk Management Committee At the management level Lending activities are structured so as to demonstrate environmental and social responsibility as follow Board of Directors Corporate Governance Committee Approving risk management policy, frameworks, risk limits and risk appetites Risk Management Committee Formulating risk management policy and all relevant risk appetite Overseeing and monitoring risk management policy in all aspect Corporate Governance Committee Overseeing and providing recommendation concerning sustainable development At the transaction level The Bank ensures that lending transactions violate neither the law nor social ethics Credit Policy and Risk Management Sub-committee Business Units Monitoring and Controlling units Approving credit policy addressing environmental and social impact management in lending activities Ensuring effective practice of environmental and social risk management Business units Screening environmental and social risks of projects to be supported Ensuring and monitoring projects compliance with regulations/ environmental and social management plans Monitoring and Controlling units Ensuring credit policy and procedure compliance Reporting project finances and concerning environmental and social issues to the Corporate Governance Committee Environmental and Social Assessment Classify project finance type and conduct environmental and social impact assessment (ESIA) Request Management approval to conduct project feasibility study (If not approved, the project is terminated) Consider all details and initiate negotiations on environmental and social issues as well as on credit possibility Approve/reject application within delegated lending authority along with designating environmental and social impact conditions 42

22 Credit Bureau Summary National Credit Bureau (NCB)* Two Types of Credit Reports Offered by NCB: Consumer credit report for individuals Commercial credit report for businesses Credit report (monthly reported by members) Customer information (Name, address, identification number, birth date, occupation, etc.) Credit information (History of application, approval history, loan payment history, etc.) Data Record of Credit Report Individuals: Credit report remains on file for 3 years Businesses: Credit report remains on file for 3 years Members: Financial institutions including commercial banks, specialized financial institutions (SFIs), non-bank financial institutions, finance companies, securities companies, insurance companies, etc. Optional to (Large companies normally have reliable financial statements) Corporate Business Multi- Corporate Business Good credit KBank s Policy Lending KBank Practice KBank s customers applying for loans Large Corporate Business Sign agreement to allow the Bank to get credit report from NCB Reject application Required to SME Business Medium Business Small & Micro Business Required to Retail Business 4 Customer Segments in Retail (HN, AF, MI and MA) Poor credit Good credit Poor credit KBank s Credit Scoring Reject application Note: * The concept of a credit bureau started in 1961 and central credit registration started in The Central Information Service was established in 1999 and its name was changed to Central Credit Information Service in 2 and to the National Credit Bureau in Litigation Process Litigation process in Thailand takes about 2-3 years Under Negotiation Litigation Process Negotiate, await approval, document preparation & lawyer process Period Approximately 2 months Pre-court (Notice) Issue notice & court filing Approximately 2 months In Court Trial / wait for court ruling Approximately 9-18 months Execution Collect payment ruled by court or foreclose Approximately 4 months Public Auction Liquidation process Approximately 6-9 months 44

23 KBank: Financial Performance 45 1H16 Performance Highlights Consolidated Q16 2Q16 1H16 Net Profit (Bt bn) Profitability - NIM 3.8% 3.67% 3.62% 3.49% 3.57% - ROE 19.38% 14.54% 13.41% 12.79% 13.2% - ROA 1.97% 1.6% 1.48% 1.41% 1.45% - YTD Loan growth 6.12% 5.42%.23% 3.36% 3.36% - YoY Loan growth 6.12% 5.42% 4.22% 6.21% 6.21% - YoY Net fee income growth 17.82% 1.55% 7.62% (1.44%) 2.97% - YoY Non-interest income growth 16.84% 12.57% 14.84% (6.55%) 3.69% Cost control - Cost to income 44.3% 45.19% 37.21% 41.54% 39.32% Asset quality - NPL ratio 2.24% 2.7% 2.81% 2.89% 2.89% - Credit Cost.96% 1.68% 2.8% 2.13% 2.45% - Coverage ratio % % % % % Loans to Deposits 93.7% 94.4% 92.33% 95.51% 95.51% Tier 1 Ratio 13.49% 14.53% 14.88% 14.69% 14.69% CAR 17.31% 18.% 18.36% 18.12% 18.12% Note: - Under Bank of Thailand regulations, net profit in the first half of the year is counted as capital after approval by the Board of Directors as per Bank regulations. Net profit in the second half of the year is counted as capital after approval of the General Meeting of Shareholders. However, when a net loss occurs, the capital must be reduced immediately - Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from January 1, 213 onwards. CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisting of KBank, K Companies, and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd., and other subsidiaries within the permitted scope of the BOT s definition to be a financial conglomerate - The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes from January 1, 214 onwards 1H16 net profit dropped 2.13% YoY, due mostly to high provisioning expenses, while EBPT grew 1.15% YoY Loans grew 3.36% YTD and 6.21% YoY, mainly from corporate business NIM was 3.57% in 1H16 Net fee income continued to grow due to customer-centric strategy; capturing digital banking and recurring transactional fees with strong cross-selling capabilities 1H16 cost to income ratio was at 39.32%; cost to income ratio in 216 will range between % NPL increased; coverage ratio was % Capital base maintained 46

24 Consolidated Financial Statements Statements of Comprehensive Income (Bt mn) Q15 3Q15 4Q15 1Q16 2Q16 1H16 Interest income 113, ,354 28,68 28,496 28,647 28,787 28,613 57,4 Interest expenses 3,446 29,341 7,561 7,42 6,822 6,587 6,49 13,77 Interest income - net 83,132 85,13 21,119 21,94 21,825 22,2 22,123 44,323 Fee and serv ice income 42,69 46,413 11,587 11,588 11,966 12,87 11,814 23,91 Fee and serv ice expenses 8,746 8,887 2,39 2,188 2,421 2,366 2,43 4,769 Fee and service income - net 33,944 37,526 9,548 9,41 9,545 9,721 9,411 19,132 Total operating income 199,975 22,555 55,725 53,132 55,586 62,566 58,149 12,715 Underwriting expenses 61,319 73,39 17,969 15,987 19,232 22,815 2,479 43,294 Total operating income - net 138, ,515 37,756 37,145 36,355 39,751 37,67 77,421 Total other operating expenses 61,419 66,656 15,947 15,46 19,832 14,793 15,647 3,44 Impairment loss of loans and debt securities 14,243 26,377 6,37 7,57 8,827 11,293 8,721 2,14 Operating prof it bef ore income tax expenses 62,994 54,482 15,772 14,178 7,696 13,665 13,32 26,967 Income tax expenses 12,692 1,527 2,924 2,743 1,54 2,717 2,439 5,156 Net prof it attributable: Equity holders of the Bank 46,153 39,474 11,479 1,117 5,477 9,646 9,428 19,74 Non-controlling interest 4,148 4,481 1,37 1, ,32 1,435 2,737 Statements of Financial Position (Bt mn) Q15 3Q15 4Q15 1Q16 2Q16 1H16 Loans to customers (less def erred rev enue) 1,527,8 1,69,887 1,566,691 1,577,78 1,69,887 1,613,577 1,663,968 1,663,968 Total Assets 2,389,137 2,555,35 2,511,723 2,538,678 2,555,35 2,643,79 2,75,154 2,75,154 Deposits 1,629,831 1,75,379 1,669,174 1,677,8 1,75,379 1,747,634 1,742,114 1,742,114 Total Liabilities 2,18,451 2,243,92 2,213,568 2,231,867 2,243,92 2,325,31 2,375,345 2,375,345 Total Equity attributable to equity holders of the Bank 257,59 285,8 272,745 28, ,8 289,72 3,31 3,31 Notes: - KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 3, 29. As the MTGH acquisition was completed on November 3, 29, the Bank s consolidated financial statements from 21 include the performance of companies in the MTGH Group for the whole year. - In accordance with the corporate income tax rate reduction from 3% of taxable profit to 23% in 212 and 2% in 213, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax item adjustments; there was no effect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries - The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards 47 Earnings Before Provision and Tax (EBPT) and Net Profit June 216 (Consolidated) EBPT Net Profit (Bt bn) H (Bt bn) H16 EBPT grew 1.15% YoY, but net profit dropped 2.13% YoY in 1H16 because KBank has set aside higher allowance for impairment loss on loans to reserve for uncertainty from economic slowdown H15 1H16 1Q16 2Q16 EBPT (Bt bn) EBPT Grow th (% YoY) 2.81% 18.61% 13.5% 4.69% 9.54% 1.15% 19.75%.98% Net Profit (Bt bn) Net Profit Grow th (% YoY) 45.55% 17.2% 11.68% (14.47%).89% (2.13%) (22.22%) (17.87%) 48

25 ROA and ROE June 216 (Consolidated) ROA ROE (%) H (%) H H15 1H16 1Q16 2Q16 ROA (%) ROE (%) Net Interest Margin June 216 (Consolidated) NIM Yield on Earnings Assets and Cost of Fund (% ) H H16 Yield on Loans Yield on Earnings Assets Cost of Fund Cost of Deposit* NIM was 3.57% in 1H16, remaining the highest level among large commercial banks High portion of CASA at 75% helped support low cost of fund H15 1H16 1Q16 2Q16 NIM (%) Yield on Earnings Assets (%) Yield on Loans (%) Cost of Fund (%) Cost of Deposit (%), incl DPA Note: * Cost of deposits including contributions to the Financial Institutions Development Fund (FIDF) and Deposit Protection Agency (DPA) 5

26 Interest Income - net June 216 (Consolidated) Interest Income and Interest Expenses (Bt bn) H16 Interest Income Interest Expenses 1H16 net interest income grew 5.29% YoY Interest Income - net (Bt bn) H16 Interest Income - net H15 1H16 1Q16 2Q16 Interest Income (Bt bn) Interest Expenses (Bt bn) Interest Income - net (Bt bn) Interest Income - net (% Growth YoY) 12.55% 14.5% 14.2% 2.26% 5.4% 5.29% 5.84% 4.75% Note: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 3, 29. As the MTGH acquisition was completed on November 3, 29, the Bank s consolidated financial statements from 21 include the performance of companies in the MTGH Group for the whole year (%) Non-interest Income and Structure June 216 (Consolidated) Non-interest Income to Average Assets H16 (%) Non-interest Income Ratio H16 Non-interest Income Structure 6% 58% 2% 21% 2% 18% 2% 3% 2% 2%.2% 2%.4%.2% 1%.5% 2% 2% 2%.2% 3% 3% 14% 12% 11% 14% 11% 1H16 non-interest income increased, due to an increase in revenue from net fees and service income and gain on selling investment H15 1H16 1Q16 2Q16 Non-interest Income (Bt bn) Non-interest Income Growth (%YoY) 19.72% 16.69% 16.84% 12.57% 17.15% 3.69% 14.84% (6.55%) Non-interest Income Ratio (%) Note: - Non-interest Income Ratio = Non-interest Income/Total Operating Income - net - Net Premium Earned - net = Net Premium Earned less Underwriting Expense - The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards (+2%) 3% (+17%) 2% 61% (+17%) 2% 61% 62.5 (+13%) 2% 6% 6% 33.1 (4%YoY) 4% H16 Other Operating Income Fee and Service Income - net Net Premium Earned - net Dividend Income Share of Profit from Investments on Equity Method Gain on Investment Gain on Trading and FX transactions 52

27 Exposure related to PromptPay and EDC and Card Acceptance Expansion Y215 (Consolidated) Non-interest Income Others* (2%) Net Premium Earned - net (2%) Net Fee Income by Product Five projects of National e-payment* Others (32%) Trade Finance (5%) 1. PromptPay (Any ID) 2. EDC and Card Acceptance Expansion 3. E-tax 4. Government e-payment 5. Market Education Net Fee and Services Income (6%) Cash Management (4%) Commercial Credit (2%) Credit Card Business (15%) Exposure related to PromptPay and EDC and Card Acceptance Expansion is 4%+ Transaction Services (24%) Exposure related to 1) PromptPay (Any ID): Money transfer fee via Mobile, Internet, and ATM; and bill payment 2) EDC and Card Acceptance Expansion: Debit card merchant fee 4% of non-interest income.5% of non-interest income Note: * More details of National e-payment can be found on page Net Fee Income June 216 (Consolidated) Net Fee Income Net Fee Income to Net Total Operating Income (Bt bn) (%) 3. 23% 24% 24% 25% 25% H H16 1H16 net fee income grew 2.97% YoY, due to investment banking, money transfers, and card-related fee Net fee income growth will continue to be helped by the cross-selling capabilities of our customer-centric strategy Net fee income to net total operating income was 24.71% in 1H H15 1H16 1Q16 2Q16 Fee Income (Bt bn) Fee Income-net (Bt bn) Fee Income Growth (%YoY) 2.55% 16.5% 16.6% 8.72% 12.% 4.56% 7.23% 1.96% Net Fee Income Growth (%YoY) 18.56% 17.75% 17.82% 1.55% 14.8% 2.97% 7.62% (1.44%) Net Fee Income to Net Operating Income Ratio Note: - On the consolidated basis, Bancassurance fees are not included in net fee income since November 3, 29, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation) - The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards and restated the comparative financial statements and financial ratios. There is no effect on net profit of the Bank and its subsidiaries 54

28 Net Fee Income Structure (Bank only) June 216 (Consolidated) Net Fee Income by Product Others 13% Bancassurance 16% Credit Card Business 14% Trade Finance 5% Cash Management 5% Commercial Credit 21% Transaction Services 26% Loan Related and Non-loan Related Fees - net Credit Card Business (mainly from credit card merchant fees) Transaction Services (such as ATM & debit cards, bill payments, money transfers, etc.) Commercial Credit (mainly from commercial credit related fees) Cash Management (such as fees from payroll accounts) Trade Finance Bancassurance (fee income obtained from selling Bancassurance products) Others (such as mutual funds, securities services, capital market business, etc.) Nonloan related 79% Loanrelated 21% Note: - On the consolidated basis, Bancassurance fees are not included, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation) - On the consolidated basis, Net Premium Earned - net (Net Premium Earned Less Underwriting Expenses) from Muang Thai Life Assurance (MTL) is reported as a part of non-interest Income; KBank has a 38.25% economic interest in MTL 55 Net Premium Earned - net June 216 (Consolidated) Net Premium Earned and Underwriting Expenses Net Premium Earned net (Bt bn) H (Bt bn) H16 Net Premium Earned - net Net Premium Earned Underwriting Expenses Net Premium Earned - net = Net Premium Earned less Underwriting Expense H15 1H16 1Q16 2Q16 Net Premium Earned (Bt bn) Underwriting Expenses (Bt bn) Net Premium Earned - net (Bt bn) Net Premium Earned - net (% Growth YoY) 35.41% 32.79% 2.96% 4.86% 15.14% (3.36%) 14.84% (16.91%) Note: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 3, 29. As the MTGH acquisition was completed on November 3, 29, the Bank s consolidated financial statements from 21 include the performance of companies in the MTGH Group for the whole year. 56

29 Other Operating Expenses June 216 (Consolidated) (Bt bn) %.2% 8% 21% Other Operating Expenses Structure % 24%.2% 8% 2% 46% 44% %.2% 7% 2% 46% % 27%.2% 6% 2% 43% 2% 7%.3% 25% 48% H16 Impairment on Application Software & Related Expenses Others Directors' remuneration Taxes & Duties Premises & Equipment Employee's expenses 1H16 other operating expenses decreased 2.95% YoY, mainly from a decrease in premise and equipment expenses and other expenses H15 1H16 1Q16 2Q16 Other Operating Expenses (Bt bn) Other Operating Expenses Growth (%YoY) 9.1% 11.37% 17.5% 8.53% 1.5% (2.95%) (4.4%) (1.88%) 3.44 Note: The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards 57 Loan Growth June 216 (Consolidated) Loan Growth (% YoY) (% ) H16 Loans grew sensibly at 3.36% YTD and 6.21% YoY, from all businesses, mainly driven by corporate and SME business H15 1H16 1Q16 2Q16 Loans (Bt bn) 1,327 1,439 1,527 1,61 1,567 1,664 1,614 1,664 Loan Growth (% YoY) 9.57% 8.46% 6.12% 5.42% 6.44% 6.21% 4.22% 6.21% Loan Growth (% YTD) 9.57% 8.46% 6.12% 5.42% 2.59% 3.36%.23% 3.36% 58

30 Loan Structure and Loan Growth Targets June 216 (Consolidated, TFRS 8: Operating Segments*) Bt bn 2, 1, 6 1, ,327 Loan Portfolio Structure 1,527 1,439 1,61 1,664 31% 31% 3% 29% 31% 36% 36% 37% 38% 38% 26% 27% 27% 26% 25% 7% 6% 6% 6% 6% H16 Corporate SME Retail Others Loan Structure, Loan Yield and Loan Growth Targets (Amount in Bt bn) Dec15** Y215 1H16 YTD 1H Loan Loan Yield Loan Growth Target (%) Growth Growth Range (%) (%) (%) 1) Corporate % 4-6% Multi-Corporate Business Large Corporate Business 23 (1.) 223 (3.) 2) SME % 5-7% Medium Business Small and Micro Business ) Retail % 5-7% 4) Others (1.8) Total Loans 1, , % 6-7% ** December 215 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8 Loan Definition (TFRS 8: Operating Segments) Corporate Loans: Loans of KBank and KBank s Subsidiaries in Corporate Segments (Annual sales turnover > Bt4mn) SME Loans: Loans of KBank and KBank s Subsidiaries in SME Segments (Annual sales turnover Bt4mn) Retail Loans: Loans of KBank and KBank s Subsidiaries in Retail Segments Other Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans), and other loan types Note: * Since 1Q13, as per the Bank of Thailand s requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports Y215 Loan Growth Target (%): Corporate 3-5%, SME 6-8%, Retail 5-7%, Total Loans: around 6% Y214 Loan Growth Target (%): Corporate 5-7%, SME 6-8%, Retail 6-9%, Total Loans: Less than 8% 59 Loan by Retail Products (All Segments) June 216 (Consolidated, TFRS 8: Operating Segments*) Loan by Retail Products (Amount in Bt bn) Dec15** Y215 Jun16 YTD % Portion Loan Loan to Growth Growth Total Loan (%) (%) Housing Loans Credit Cards (5.) 4.7 Consumer Loans (.3) 3.2 KLeasing 89 (1.2) ** December 215 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8 Loan Definition (TFRS 8: Operating Segments) Housing Loans: KBank s housing loans to retail customer segments Credit Cards: KBank s credit card loans to all eight customer segments Consumer Loans: KBank s consumer loans to retail customer segments KLeasing: KLeasing s loans to all eight customer segments Note: * Since 1Q13, as per the Bank of Thailand s requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports 6

31 Loan Portfolio Breakdown by Industry, Currencies, and Interest Rate June 216 (Consolidated) (Bt bn) 1,8 1,6 1,4 1,2 1, , % 15.5% 1.7% 5.7% Loan Portfolio by Industry (March 216)* 1,327 1, % 11.6% 16.% 16.% 13.% 12.4% 6.2% 6.5% 1, % 15.5% 1, % 14.8% 13.% 12.5% 6.7% 6.9% 14.5% 14.4% 14.6% 14.6% 13.2% 13.1% 6.6% 6.5% 54.3% 51.2% 48.9% 48.9% 48.1% 49.1% 49.5% 2.5% 2.5% 2.4% 2.3% 2.% 1.9% 1,61 1, % Q16 Others Housing Loans Utilities & Services Real Estate & Construction Manufacturing & Commerce Agricultural and Mining By Currencies (December 215)* / ** US Dollar*** 6.4% *** Mainly trade finance products Thai Baht 93.% Other Currencies***.6% Definition of Loans 1) by industry = Gross loans = Loans to customers less deferred revenue 2) by currency = Loans to customers and AIR - net 3) by maturity of interest repricing = Loans to customers less deferred revenue By Maturity of Interest Repricing (December 215)* / ** Others, 13.7% Note: Loans by Bangkok and Metropolitan vs. Upcountry Proportion of KBank's Outstanding Loans H16 Bangkok and Metropolitan 65% 65% 64% 64% 62% Upcountry 35% 35% 36% 36% 38% * The data as of June 216 is not available until the release of the audited financial statements **The information on loans breakdown by currencies and maturity of interest repricing are disclosed on half year basis 6 months and over, 14.3% <6 months, 1.5% Immediate Repricing, 61.5% 61 Asset Quality June 216 (Consolidated) NPL Ratio Coverage Ratio SML* to Total Loans (%) (%) (%) H H H16 NPL ratio was 2.89% in 1H16 Coverage ratio was %; this ratio has been maintained above 1% since 2Q1 216 asset quality is expected to remain manageable H15 1H16 1Q16 2Q16 NPL Ratio (%) Coverage Ratio (%) SML to Total Loans Ratio (%) Note: * SML = Special Mention Loans are loans passing the due date by more than 1 month but not over 3 months 62

32 Impairment Loss of Loans and Debt Securities (Provision) and Credit Cost June 216 (Consolidated) Impairment Loss of Loans and Debt Securities (Bt bn) H16 Credit Cost (bps) H16 1H16 credit cost decreased to 245 bps, to be prudent and aligned with macro environment and credit cycle 216 credit cost will be up to 19 bps H15 1H16 1Q16 2Q16 Impairment Loss of Loans and Debt Securities (Bt bn) Credit Cost (bps) Proactive risk management to counter economic slowdown and high household debt Continue to deploy proactive credit portfolio/ risk management/ asset quality management to mitigate an adverse impact from prolonged economic recovery and high household debt Corporate Business SME Business Retail Business Focus on high potential industries, less impacted by economic slowdown Closely monitor customers in high risk industries and supply chains Actively monitor early waning signs Promptly respond to adverse events Selective on quality of customers Proactive risk management by visiting customers; raise productivity of sales teams and relationship managers Efficient collection process Shift toward customers that are less sensitive to high household debt (high income customers) Proactive and efficient collection process Analyze behavior regularly to identify weak spots Slow growth with focus on high-income customers 64

33 Bad Assets Resolution June 216 (Consolidated) Restructured Loans Outstanding Foreclosed Properties 12% % of Restructured loans to Total loans 8% 9.1% 6.9% 7.4% 8.2% 6.9% 4% % (Bt bn) 6.3% 6.2% 5.9% 6.1% 7.% 8.7% H % % 62% 73% 78% 76% 78% 74% 78% 83% 83% 38% 27% 22% 24% 22% 26% 22% 17% 17% 23% 21% H16 Not classified as NPL Classi fied as NPL Outstanding Restructured Loans was Bt in 2Q16; 77% were not classified as NPL Definition: Outstanding Restructured Loans is the outstanding amount of restructured loans, comprised of not classified as NPL and classified as NPL Write-offs NPL Portfolio Sales Sales of Foreclosed Properties H16 Write-off : KBank sold NPLs totaling Bt14.6bn to TAMC* 27: KBank and Phethai AMC sold NPLs totaling Bt11.4bn to Standard Bank Asia Limited and Morgan Stanley Emerging Markets Inc. at Bt7.6bn and Bt3.8bn, respectively 28-1Q16: NPLs continued to decline without bulk NPL sales 2Q16: KBank sold NPLs worth Bt4.9bn to JMT Network Services PCL Note: * On September 11, 213, the Bank was formally notified of its final loss sharing portion under the asset transfer agreement with TAMC established in October 21. This amounted to Bt26mn. An amount of Bt1,159mn relating to the provision for losses recorded in prior years has been reversed through profit or loss in 213. (Bt bn) Restructured loans* * Note: the information of restructured loans on this page are linked with the restructure loans on page (Bt bn) (Bt bn) H H Financial Aid Program: Periodic Relief of Debt-service Burden to Customers During the Economic Slowdown Two kinds of debt resolution: 1) Financial aid program or rescheduling of loans, and 2) Debt restructuring There are some performing restructured loans in the financial aid program KBank has offered the financial aid program to customers since February 214; the accumulated amount (Feb14 - Jun16) is Bt17bn, with Bt25bn remaining in the program as of June 216 Financial Aid Composition (data as of June 216) Restructured Loans* Accumulated Amount Feb14 - Jun16 Current Status As of Jun16 Bt22bn (13% of Bt17bn) NPL Restructured loans are 8.7% of total loans* Bt145.6bn Bt17bn Bt123bn (72% of Bt17bn) Bt25bn Outstanding Amount (Remaining loans in the financial aid program) Resume Original Debt-service Terms Outstanding Amount (Bt25bn or 1.5% of total loans) As of June 216 Pass = 96% Special Mention Loan 4% Breakdown by Loan Classification Retail =.2% SME = 99.8% Breakdown by Business Performing Loans with Financial Aid Program = 81% Restructured Loans, not classified as NPL with Fin. Aid Program = 19% Breakdown by Restructuring Approach Restructured loans in the financial aid program are a part of not classified as NPL Restructure Loans, not classified as NPL = 79% Restructure Loans, classified as NPL = 21% * Note: Information on restructured loans on this page is linked with restructured loans on page 65 Note: 1) Pass = loans in Class 1 (loans passing the due date less than 1 month); SML = Special Mention Loans = loan in Class 2 (loans passing the due date by more than 1 month but not over 3 months) 2) Total loans as of June 216 was Bt1,664 bn 1.2% of Total loans.3% of total loans 66

34 Investment in Securities Portfolio and Structure June 216 (Consolidated) Instrument Type Holding Type 69% 7 (Bt bn) % 3.1%.7% 2 33% 1 64% 382.4%.4%.4% 29% 68% %.7%.3%.14%.13%.4%.3%.2%.3%.3%.3% 35%.4% 29% 55% 52% 68% 6% 45% 41% 2% 2% 2% 4% 2% 4% H16 Trading Available-for-sales Held-to-maturity General Investment in Receivables Investments Subsidiaries Note: Accounting for investments 1) Trading: Stated at fair value (FV). Unrealized gains or losses arising from changes in FV are recognized in the income statement 2) AFS: Stated at FV. Unrealized gains or losses arising from revaluation are reflected in the equity 3) HTM: Stated at amortized cost, after deduction of any allowance for impairment KBank continues to manage its investment portfolio by focusing on ensuring sufficient liquidity at all times and adjusting investment position according to interest rate trend to enhance risk-adjusted return H15 1H16 1Q16 2Q16 Investment Portfolio (Bt bn) Investment Portfolio (% Grow th YoY) 5.21% 44.66% 29.97% 14.24% (15.83%) 6.29% (7.25%) (13.75%) (7.25%) 67 Deposits Growth and Loans to Deposits Ratio June 216 (Consolidated) Deposits & B/E Loans to Deposits Ratio (Bt bn) 2,1 1,8 1,5 1,242 1, ,391 1,53 1,63 1,75 1,742 1% 95% 9% 97.5% 94.7% 95.4% 94.1% 94.1% 93.7% 92.9% 93.2% 94.4% 94.1% 95.5% 95.5% H16 85% H16 Deposits B/E Loans to Deposits Loans to Deposits + B/E Deposits have grown at a consistent pace providing a stable source of funding H15 1H16 1Q16 2Q16 Deposits (Bt bn) 1,242 1,391 1,53 1,63 1,75 1,669 1,742 1,748 1,742 Deposits (% YoY) 12.9% 12.% 1.% 6.5% 4.6% 6.5% 4.4% 5.7% 4.4% Deposits (% YTD) 12.9% 12.% 1.% 6.5% 4.6% 2.4% 2.2% 2.5% 2.2% Loans to Deposits Ratio (%)

35 Funding Structure and Interest Rate Movement June 216 (Consolidated) Funding Structure (Bt bn) 1,769 1,793 1,862 1,964 1,9 1,654 7% 4% 4% 1,7 1,368 4% 11% 1% 5% 4% 1,5 1,228 4% 4% 5% 1,3 2% 5% 1,1 8% 9 91% 84% 86% 91% 92% 89% 7 5 9% H16 Interbank and Money Market ST and LT Borrowings Deposits 1,8 1,6 1,4 1,2 1, % 55% Deposit Structure (Bt bn) 1,63 1,75 1,742 1,53 1,391 25% 1,242 36% 33% 28% 1,1 34% 4% 32% 6% 58% 61% 67% 7% 6% 5% 6% 6% 6% 5% 5% H16 Current Savings Term CASA = 75% (%) KBank Interest Rate Movement (Retail customers) Aug- 16 MLR Savings Fixed 3M Deposit Rates (Aug 1, 216) Savings.5 Fixed 3M-12M Fixed 24M-36M Lending rates (Apr 25, 216) MLR 6.25% MOR 7.12% MRR 7.62% ST and LT Borrowings (Bt bn) % % 78% 74% 89% 87% 92% 59% 51% 7% 4% 22% 26% 11% 13% 8% H16 ST Debentures B/E & Others LT Borrowing 69 Long-term Senior/Subordinated Debentures Issued Date Name Type Embedded Option Amount Maturity Years Call Date Interest Rate (Per annum) PP/PO Interest Payment period Credit Rating Thai Currency Long-term Senior/Subordinated Debentures 14/7/216 Subordinated debentures of KASIKORNBANK PCL No. 1/216 (Basel III-complaint Tier 2) Unsecured Callable after 5.5 years Bt7,5mn 1.5 years (14/1/227) First Call date : 14/1/222 (then can call every interest payment date) 3.5% PP Quarterly AA (tha) by Fitch Ratings 9/1/215 Subordinated debentures of KASIKORNBANK PCL No. 1/215 (Basel III-complaint Tier 2) Unsecured Callable after 5.5 years Bt6,5mn 1.5 years (9/4/226) First Call date : 9/4/221 (then can call every interest payment date) 3.95% PP Quarterly AA (tha) by Fitch Ratings 3/1/214 Subordinated debentures of KASIKORNBANK PCL No. 1/214 (Basel III-complaint Tier 2) Unsecured Callable after 5.5 years Bt14,mn 1.5 years (3/4/225) First Call date : 3/4/22 (then can call every interest payment date) 5.% PP Quarterly AA (tha) by Fitch Ratings 15/2/212 Subordinated debentures of KASIKORNBANK PCL No.1/212 Unsecured Callable after 5 years Bt22,mn 1 Years (15/2/222) First Call date : 15/2/217 (then can call every interest payment date) 4.5% PO Quarterly AA (tha) by Fitch Ratings & axa by S&P Foreign Currency Long-term Senior/Subordinated Debentures 26/8/215 Senior Unsecured Debentures of KASIKORNBANK PCL Unsecured - USD26mn 5.5 Years (26/2/221) - 3m Libor+1.% N/A Quarterly - 25/4/214 2/9/212 Senior Unsecured Debentures of KASIKORNBANK PCL Senior Unsecured Debentures of KASIKORNBANK PCL Unsecured - USD35mn Unsecured - USD5mn 5.5 Years (25/1/219) 5.5 Years (2/3/218) - 3.5% N/A Semi-annually - 3.% N/A Semi-annually Baa1 by Moody s BBB+ by S&P and BBB+ by Fitch Ratings 21/8/1996 Subordinated debentures of KASIKORNBANK PCL Unsecured - USD183.31mn 2 Years (21/8/216) % N/A Semi-annually BBB by S&P Baa3 by Moody s 7

36 KBank: The wholly-owned subsidiaries, and Muang Thai Life Assurance 71 The wholly-owned subsidiaries of KBank: Business Profile and Aspiration June 216 KAsset EST KResearch EST KSecurities EST. Jul 25 KLeasing EST. Aug 25 KF&E EST.199 Company Name KASIKORN ASSET MANAGEMENT CO., LTD. KASIKORN RESEARCH CENTER CO., LTD. KASIKORN SECURITIES PCL KASIKORN LEASING CO., LTD. KASIKORN FACTORY AND EQUIPMENT CO., LTD. Company Profile A leader in fund management business (i.e. mutual funds, provident funds, and private funds) Professional in providing knowledge in economics, business, money, and banking Only research house which is an affiliate of a bank Professional in providing a complete range of professional and excellent financial solutions and services, including investment banking, securities underwriting, and securities brokerage Professional in providing three core products: hire purchase, financial lease, and floor plan Professional in providing a complete range of machinery and equipment leasing services Asset Size Bt2.19bn Bt.8bn Bt18.46bn Bt89.35bn Bt13.86bn Market Share 2.22% N/A 3.72% (#9) 7.84% N/A 216 Targets Maintain Top Tier position Top of mind research house for media and for the clients of KBank and its whollyowned subsidiaries Maintain leading position in securities business under local bank parent Maintain a good asset quality portfolio 4-6% YoY growth on outstanding loans 3-year Aspiration Maintain Top Tier position Top of mind Research house Top of mind securities firm Provide complete range of financial solutions and maintain good asset quality Maintain leading position in equipment leasing industry 72

37 The wholly-owned subsidiaries of KBank: 1H16 Key Operating Performance June 216 KAsset EST KResearch EST KSecurities EST. Jul 25 KLeasing EST. Aug 25 KF&E EST.199 1H16 Key Operating Performance Assets Under Management (AUM): Bt1.22trn (+8.93% YoY) Most quoted research house in the media - Trading volume: Bt 371bn - Number of customers grew 18% YoY Outstanding loans: Bt89.35bn (+.5% YoY) Outstanding loans: Bt13.71bn (+2.1% YoY) The wholly-owned subsidiaries of KBank: Net Profit (Bt bn) Net profit continues to rise, along with synergy among KBank and its wholly-owned subsidiaries H16 Note: Since January 1, 211, financial statements have been reclassified per the Bank of Thailand s requirements; the 21 financial statements were restated and adjusted for comparison purposes; in 4Q1, KBank early adopted TAS 19 (Employee Benefits) and TAS 12 (Income Taxes) to align with international practices and standards; 29 financial statements were restated for comparison purposes 73 KAsset Highlights in 1H16 June 216 AUM (KAsset vs. Industry) (Bt bn) (Bt bn) 6, 5,534 6,52 1,5 5,118 4,253 4, 3,633 1,224 3,15 2,883 1,9 1,132 1, 2, ,228 2, , 1, H16 Industry Outlook: 1H16 industry AUM at Bt6.5trn, growing 11.19% YoY KAsset AUM at Bt1.22trn, growing 8.93% YoY KAsset Highlights: Ranked #1 in Mutual Fund with market share of 22.5%. Total AUM market share was 2.2% in 1H16 Mutual fund accounts for 81% of KAsset AUM Total Industry AUM KAsset AUM 4 2 Market Share by AUM (%) H KAsset SCBAM KTAM MFC BBLAM Other KAsset AUM Breakdown by Type Private Fund 7% Provident Fund 12% Mutual Fund 81% 74

38 KResearch Highlights in 1H16 June 216 Number of News Quotes No. of News Quotes 1,974 2, 1,885 1,7 1,528 1,562 1,623 1,678 1,499 1,5 1,383 1,116 1, H16 Industry Outlook: The only bank affiliated research house providing knowledge in economics, business, money, and banking KResearch Highlights: Most quoted research house in the media. Top of mind research house for media and for the clients of KBank and its wholly-owned subsidiaries Newspaper Online Newspaper Other Online News 75 25, 2, 15, 1, , 5 KSecurities Highlights in 1H16 June 216 (Bt bn) Trading Volume (KSecurities vs. Industry) 7,967 8,544 7,962 8, ,37712,486 13, ,551 2,34519,549 1,296 1, , H16 Total Industry Trading Volume* KS Trading Volume ** Market Share by Trading Volume (Bt bn) 1,4 1,2 1, KS** SCBS KTZ BLS TNS MBKET Industry Outlook: 1H16 industry trading volume* was Bt9.98trn, increasing 5% YoY KS trading volume was Bt371bn KSecurities Highlights: KS ranked #9, with 3.72% market share; maintaining position as one of the leading local bank-based securities firms Majority of revenue came from brokerage Number of customers account grew 18% YoY, to 1,993 customers in 1H16 KSecurities Revenue by Business (%) Investment Banking H16 8.3% Brokerage 91.7% Note: * Industry trading volume excluding proprietary trades ** In February 212, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie Securities (Thailand) are traded under a new ticket, KSMACQ. The exclusive strategic alliance agreement ended in February 215; KS trading volume includes one month of MACQ volume. 76

39 KLeasing Highlights in 1H16 June 216 KLeasing vs. Industry* (Thousand Units) 1,435 1,5 1, , H16 Total Car Sales in Thailand KLeasing Outstanding Loans (Bt bn) 1 5 Industry Outlook: 1H16 industry car sales totaled 368,63 units, declining.13% YoY KLeasing Highlights: 1H16 KLeasing loans totaled Bt89.35bn, increasing.5% YoY 1H16 KLeasing NPL ratio was 1.54%, lower than the Thai commercial bank average ratio Market Share by Total Outstanding Loans (%)* (%) TBANK AYCAL TISCO SCB KK KLeasing H16 KLeasing Outstanding Loans Breakdown** Fleet / Financial Lease 3% Floor Plan 7% Hire Purchase 63% Used K-Car Car to Cash.2% 11% New Car 89% Note: * Excluding captive and non-bank leasing ** Definition of loan type: Hire Purchase = car loans to retail customers; Fleet = a bulk of car loans to corporate and SME customers; Floor Plan = a bulk of car loans to car dealers 77 KF&E Highlights in 1H16 June 216 (Bt bn) KF&E Outstanding Loans H16 Industry Outlook: Growth in Equipment Leasing (EQL) business forecasted using numerous factors including total import volume of machinery and equipment, direction of government policy, domestic and international business growth opportunities, and Capital Investment Index KF&E Highlights: KF&E outstanding loans were Bt13.71bn, rising 2.1% YoY KF&E currently ranked #2; maintaining lead position in equipment leasing industry Note: In 21, KASIKORN FACTORING (KFactoring) was renamed KASIKORN FACTORY AND EQUIPMENT (KF&E) to better reflect their business, focusing on offering leasing services for machinery and equipment; the factoring business operation of KFactoring was transferred to KBank 78

40 Life Insurance Industry in Thailand (%) 15.6 Premium per % GDP by Country Size of Market by Premium(%) Source: Swiss Reinsurance Y Y Taiwan South Korea Singapore Australia India Malaysia Total Premium First Year Premium (Bt bn) (Bt bn) Q16 China Thailand Indonesia Philippines Y213 Vietnam In 214, low penetration rate of 3.6% in Thailand with a high opportunity for growth Muang Thai Life Assurance (MTL) ranked #2 in life insurance industry in Thailand, in 1Q16 #2 in total premium with 19.2% market share and 15% growth #1 in new business premium with 24.3% market share Market Share by Total Premium in Life Insurance (%) (%) Q AIA MTL TLI SCBLife KTAL BLA AZAY PLT FWD OLIC Others Total Premium * First Year Premium in 1Q16 = Bt bn First Year Premium Source: The Thai Life Assurance Association Source: The Thai Life Assurance Association Note: Total Premium = New Business Premium + Renewal Premium; New Business Premium = First Year Premium + Single Premium 79 Bancassurance Highlights in 1Q16 (%) Bancassurance Market Share by Total Premium (%) Q MTL SCBLife BLA KTAL PLT TLI FWD AZAY AIA DLA Others Bancassurance Market Share by New Business Premium (%) (%) Q MTL SCBLife KTAL BLA PLT FWD TLI AIA DLA AZAY Others The Bancassurance Life industry: total premium improved 1% YoY, and new business premium also improve 1% YoY MTL ranked #1 in Bancassurance market #1 in Bancassurance total premium with 3.1% market share and 21% growth #1 in Bancassurance new business premium with 32.1% market share and 3% growth Source: Muang Thai Life Assurance (MTL) Note: Bancassurance premium include all bank partners premiums of MTL 8

41 KBank s Strategic Acquisition in Muangthai Group Holding (MTGH) MTGH MTI MTL MTB MTIB Current KBank Economic Interests Muangthai Group Holding Co. Ltd (MTGH) Muang Thai Life Assurance PCL (MTL) Muang Thai Insurance PCL (MTI) Muangthai Broker Co, Ltd (MTB) MT Insure Broker Co, Ltd (MTIB) Note: OIC = Office of Insurance Commission 51.% 38.3% 1.1% 5.5% 38.2% Established April 6, 1951 First life insurance company to be granted Royal Patronage (since 1959) Joined hands with Ageas in 24 (formerly known as Fortis Insurance International NV) and joined hands with KBank in 25 Credit Rating: BBB+/Stable and axa+ (ASEAN) from S&P s, A-/Stable and AAA(tha)/Stable from Fitch Ratings Life Insurance Company with Outstanding Management Award from OIC eight years in a row Life Insurance Company of the Year 214 Award from Asia Insurance Industry Awards 214 Ageas holds 7.8% in MTGH and holds 25% in MTL 81 Muang Thai Life Assurance (MTL) Information Summary Strong fundamentals and revenue generation, helped by process efficiency and service quality enhancements; platform and synergy alignment between MTL and KBank Risk-Based Capital (RBC) remains strong, sufficient to support business growth and much higher than OIC minimum requirement Statements of Comprehensive Income (Bt bn) Q16 Net premiums earned Net investment income Total revenues Life policy reserve increase from the previous period Net benefit payments and insurance claims Commissions and brokerages Other underwriting expenses Operating expenses & Other Total Expenses Profit before income tax expense Income tax expense Net profit (loss) Statements of Financial Position (Bt bn) Q16 Total Assets Total Liabilities Total Equities Source: Muang Thai Life Assurance, data based on book value except for RBC Note: OIC = Office of Insurance Commission z Strategy in 216 To be a regional insurer with focus on customer centric strategy by providing innovative products and seamless services across touch points with concentration on digitized process along endto-end customer journey in order to truly serve needs and lifestyle and enhance experiences of all customers. 216 Key Financial Targets Bt bn T Total Premium after refund >1. % Growth 28% 29% 23% 25% 17% Q16 ROE (%) 24.6% 21.6% 2.5% ROA (%) 3.2% 2.7% 2.6% Risk-Based Capital (RBC) 546.8% 449.4% 511.6% 82

42 MTL Investment Portfolio and Insurance Premium MTL Investment Portfolio: Fixed Income accounted for around 8% MTL Total Premium: Growth continues to outpace the industry (bn) Q16 Total Premium Growth (%YOY) Y211 Y212 Y213 Y214 Y215 1Q16 MTL 28% 29% 23% 25% 17% 15% Industry 11% 19% 13% 14% 7% 6% First Year and Single Premium Renewal Premium Total Premium Assets Under Management (AUM)* (1Q16): Bt31.7bn 1% 8% 6% Total Premium by Products: Ordinary product accounted for around 9% Source: The Thai Life Assurance Association 1% 8% 6% Total Premium by Channels: Bancassurance accounted for about 7% in 1Q16 4% 4% 2% 2% % Q16 % Q16 Group Personal Accident Industrial Ordinary Other Direct Marketing Bancassurance Agents Note: * AUM = Invested Assets + Investment Property 83 MTL s Life Insurance Product Profile Four Major Types of Life Insurance Product Ordinary Life Insurance Products: Provide life protection for a fixed amount to an insured person Can be further classified into four sub-categories; Endowment Life Insurance: Savings type product; insured person receives an amount at the certain period of time or a designated beneficiary receives death benefits upon the death of the insured person within the insured period (e.g. Pro Saving products) Term Life Insurance: Provides temporary protection with no savings component. Claim can be made upon death within the stated term period (e.g. MRTA products) Whole Life Insurance: Provides life time protection (to the age of 9 or 99) with the death benefit paid to the beneficiary upon the death of the insured (e.g. Pro Life products) Rider: Additional coverage desired by the insured (sample of additional coverage: medical expense, accident) Group Life Insurance Products: Term insurance covering a group of people, usually employees of a company or members of a union or association Industrial Insurance Products: Life insurance with a modest amount of coverage, low premium, and no health check requirement Personal Accident : A limited life insurance designed to cover the insured in case of personal accident 84

43 Sample of K-Bancassurance and MTL Products K-Bancassurance Products* Endowment Life Insurance Pro-Savings 615 Life insurance with a premium payment of only 6 years, but the coverage continues for 15 years Muang Thai Life Assurance Products** Endowment Life Insurance Ormsap 2/14 Pay premium for only 14 years, but the coverage continues for 2 years End of Policy Year Life Coverage at 1% of the sum insured amount Premium Payment at the Beginning of Policy year Maturity Benefit 1% Term Life Insurance MRTA-Home (Mortgage Reducing Term Assurance) Term Life Insurance Healthy Value 1 year coverage period, covered medical expenses up to Bt2mn End of Policy Year Life Coverage at 1% of the sum insured amount Premium Payment at the Beginning of Policy year Maturity Benefit 1% * K-Bancassurance products are MTL s life insurance products selling through KBank ** Muang Thai Life Assurance products are MTL s life insurance products selling through MTL sales agents, and/or other channels 85 Sample of K-Bancassurance and MTL Products K-Bancassurance Products* Whole Life Insurance Pro Life 8/4 Life insurance that provides coverage up to the age of 8 with term of premium payment only 4 years while receiving cash bonus every 2 year from the end of policy year 2 and onwards as well as life coverage at 1% of the sum insured throughout the contract Muang Thai Life Assurance Products** Whole Life Insurance Kumkrong Talodcheep Saving plan with whole life coverage: pay premium for only 2 years and get coverage to the age of 99 PA Plus Accident coverage Rider Health Care Plus Hospital and surgery benefit rider Rider Pure Cancer Additional cancer insurance which provides cash benefits up to Bt1mn * K-Bancassurance products are MTL s life insurance products selling through KBank ** Muang Thai Life Assurance products are MTL s life insurance products selling through MTL sales agents, and/or other channels 86

44 KBank: Other Information 87 Shareholder Structure April 11, 216 (Closing Registration Date) Shareholder Structure Top 1 Shareholders* % Thai Shareholders 51% (NVDR = 22.7%**) Foreign Shareholders 49% Note: Thai Shareholding Limit 51% Foreign Shareholding Limit 49% 1. THAI NVDR CO., LTD** 2. STATE STREET BANK EUROPE LIMITED 3. CHASE NOMINEES LIMITED 4. STATE STREET BANK AND TRUST COMPANY 5. NORTRUST NOMINEES LIMITED-NT SEC LENDING THAILAND CL AC 6. THE BANK OF NEW YORK MELLON 7. GIC PRIVATE LIMITED*** 8. SOCIAL SECURITY OFFICE 9. NORBAX, INC. 1. HSBC (SINGAPORE) NOMINEES PTE LTD Other Shareholders Total Note: * The Top 1 Shareholders are based on individual accounts ** Thai NVDR Co., Ltd (Thai NVDR) is responsible for issuing and selling Non-Voting Depository Receipts (NVDRs) to investors. The Stock Exchange of Thailand (SET) is the major shareholder, holding 99.99% of the total shares, of Thai NVDR. The NVDR limit for KBank is 35%. *** GIC holds KBank shares via two accounts. Combining those two accounts, GIC holds 2.164% of KBank shares, ranking them at number 6 **** Thailand Securities Depository Company Limited (TSD), a subsidiary of the Stock Exchange of Thailand, provides three types of securities post trade services: securities depository services, securities registration services, and provident fund registration services; the shareholders booked under TSD are those who are not eligible for dividend payments as their investment is not aligned with their citizenship (i.e. foreign investors buying KBank shares on the local board or Thai investors buying KBank shares on the foreign board) Source: Thailand Securities Depository Company Limited (TSD), the Stock Exchange of Thailand website ( and KBank 88

45 Credit Ratings As of August 24, 216 KBank Thailand Foreign Currency Local Currency/ National Outlook Government Outlook Long-term * Senior Unsecured Notes Subordinated Debts Long-term Subordinated Debts Foreign Local Currency Currency Moody's Baa1 Baa1 Baa3 Baa1 N/A Stable Baa1 Baa1 Stable S&P's BBB+ BBB+ BBB N/A N/A Stable BBB+ A- Stable Fitch BBB+ BBB+ N/A AA+ (tha) *** AA (tha) *** Stable BBB+ BBB+** Stable Note: * Moody's: Foreign Currency Long-term Deposit Rating; S&P's: Long-term Counterparty Credit Rating; Fitch Ratings: Foreign Currency Long-term Issuer Default Rating ** July 22, 216: Fitch downgraded Thailand's Long-Term Local Currency Issuer Default Rating (LTLC IDR) to 'BBB+' from 'A-, in line with updated guidance contained in Fitch's revised Sovereign Rating Criteria dated July 18, 216; Fitch concluded that Thailand's credit profile no longer supports a notching up of the LTLC IDR above the LTFC IDR *** August 2, 216: Fitch upgraded the National Long-Term Ratings of nine financial institutions in Thailand (including KBank); KBank s National Rating of KBank reflects its standalone credit strengths; the standalone profile has remained unchanged despite the Thai sovereign rating action, which has led to a narrowing of the gap relative to the sovereign on the national scale ratings 89 Organization Chart Auditor Corporate Secretary Corporate Secretariat Division Corporate Strategy Management Division Shareholders Board of Directors Management Committee Advisory Council to the Board of Directors/ Legal Adviser Independent Directors Committee Corporate Governance Committee Human Resources and Remuneration Committee Audit Committee Risk Management Committee Compliance and Audit Division Corporate Business Division Corporate and SME Products Division SME Business Division Retail Business Division Private Banking Business Division Capital Markets Business Division Investment Banking Business Division World Business Division Customer and Enterprise Service Fulfillment Division Enterprise Risk Management Division Finance and Control Division Human Resource Division 9

46 Board of Directors Structure 17 board members: 1 Independent Directors, 4 Executive Directors, and 3 Non-Executive Directors Director age limit is not to exceed 72 years old Term limit of directorship for Independent directors is not more than three consecutive terms of directorship, effective after the Annual General Meeting of Shareholders (AGM) in 213 Lead Independent Director and Independent Directors Committee were appointed in order to ensure proper checks and balances Executive Directors (4) Mr. Banthoon Lamsam (Chairman of the Board and Chief Executive Officer) Mr. Predee Daochai (President) Mr. Teeranun Srihong (President) Ms. Kattiya Indaravijaya (President) Non-Executive Directors (3) Ms. Sujitpan Lamsam (Vice Chairperson and Chairperson of the Risk Management Committee) Dr. Abhijai Chandrasen (Legal Adviser) Mr. Sara Lamsam Independent Directors (1) Prof. Khunying Suchada Kiranandana (Vice Chairperson, Lead Independent Director and Chairperson of the Human Resources and Remuneration Committee) Prof. Dr. Yongyuth Yuthavong (Chairman of the Corporate Governance Committee) Prof. Dr. Pairash Thajchayapong Sqn. Ldr. Nalinee Paiboon, M.D. Mr. Saravoot Yoovidhya Dr. Piyasvasti Amranand (Chairman of the Audit Committee) Mr. Kalin Sarasin Ms. Puntip Surathin Mr. Wiboon Khusakul Ms. Suphajee Suthumpun Note: More information on the Board of Directors biographies can be found on our website 91 Sustainable Development KASIKORNBANK embraces sustainable development in the economy, society and environment as the foundation of our operations. This guiding concept enhances our business innovation and ensures the maximum benefit to all stakeholders, thus paving the way towards being a Bank of Sustainability for our society and nation. Economic Aspect Corporate Governance Customer Centricity Innovation Social Aspect Labor Relations Management and Employee Caring Employee Development Occupational Health and Safety Youth Development Community and Social Development Environmental Aspect Professionalism Financial Knowledge Risk Management Environmentally Friendly Business Operation Environmental Management Policies i.e. Water, Energy, and Climate Change (3R) Cultural of Environmental Awareness and Protection Bank of Sustainability SUSTAINABILITY IN ACTION Human Rights Policy: aims at fostering greater awareness and enhancing our capability to identify and manage human rights issues related to our employees, customers, suppliers, and communities Layoff Policy: it is KBank policy not to terminate any employee unless that employee commits severe disciplinary action or the Bank s business operation is in trouble or there is an economic crisis or any serious incident that affect the Bank s business continuity Voluntary Leave Policy: allows employees to take 1 day leave for volunteer programs related to environment, society, and economy ESG 1 company certified by Thaipat ON-GOING ASSESSMENT Sustainability Award 216 Sustainability Report 216 Note: More information on our Sustainable Development can be found on our website and KBank s Sustainability Development Report

47 Key Corporate Governance Highlights Reviewing KBank practices under CG criteria of Thai IOD, ASEAN CG Scorecard, and Dow Jones Sustainability Indices (DJSI) e.g., Announcement of Corporate Citizenship Strategy Appointment of Chief Environmental Officer Determination of climate change policy Target to reduce greenhouse gas emissions from operations Implementation of KBank Supplier Code of Conduct Implementing a strategic plan for CG activities to enhance compliance of directors, executives, and staff with CG principles, Code of Conduct, and Anti-Corruption Policy through Organization of training courses Continual dissemination of knowledge on the Code of Conduct and Anti-Corruption Policy via e-learning system, and production of video presentation on anti-corruption matters Reviewing guidelines to prevent fraud and operational mishandling and non-compliance with regulatory requirements. Reviewing CG Policy and related Charters, keeping them up-to-date in accordance with Ongoing business operations of the Bank Compliance with the laws, international practices, and best practices as prescribed by regulatory agencies and competent agencies 93 Anti-corruption KBank, KAsset, and KSecurities co-signed a declaration of the Private Sector Collective Action Coalition Against Corruption (CAC) project and have been recognized as CAC certified companies since 213. BOD approved the Anti-Corruption Policy, including the issues of bribes and inducements, gifts and benefits, charitable contributions and sponsorships, and political participation. The policy is reviewed annually. KBank recognizes the importance of communications on the Anti-Corruption Policy for proper practices and actions within the organization Organize training courses for executives and employees to equip them with knowledge on the Anti- Corruption Policy Communicate the Anti-Corruption Policy with all directors, executives, and employees via KBank electronic networks and website KBank has extended its operational direction to all suppliers, including Introducing and requiring their acknowledgement of a KBank Supplier Code of Conduct, including our Anti-Corruption Policy Revision of Procurement Handbook for Suppliers and Service Providers Holding supplier meetings to clarify our procurement processes and encouraging all suppliers to follow the Anti-Corruption Policy and operational guidelines requesting all parties to refrain from offering gifts or other benefits to employees of KBank Procurement Management Department 94

48 Public Recognition Highlight: 214 1H Platinum Awards in Financial Performance, Corporate Governance, Social Responsibility, Environment Responsibility and Investor Relations - Project Finance Bank of the Year, Thailand - Project Finance Deal of the Year / Best Power Deal, Thailand - Best Energy / Renewable Energy Deal, Thailand - Best Service Providers Cash Management, Thailand - Best Service Providers Trade Finance, Thailand - Deal of the Year Asia s Best CEO (Investor Relations) - Best Investor Relations Professional (Thailand) - Best Investor Relations Company (Thailand) - Thailand Domestic Retail Bank of the Year - Thailand Online Banking Initiative of the Year - Thailand Domestic Cash Management Bank of the Year - Best Branch Innovation of the Year - Best Disclosure and Transparency in Thailand - Best for Investor Relations in Thailand - The Best Service Strategy Contact Center - The Best Effective Software Contact Center - Best Cash Management Bank - Best Bank in Thailand - Best Retail Bank in Thailand - Best Cash Management Bank in Thailand - Best Bank in Thailand - Best Debt Capital Market House in Thailand - Best Cash Management in Thailand - IR Magazine Global Top 5 - Best Investor Relations by a Thai Company Best Payment Service Provider - Best CEO Award - Outstanding Company Performance Awards - Outstanding Investor Relations Awards - Thailand Sustainability Investment - Banker for Equity Fund - Best Retail Bank of The Year Best Card Design Asia-Pacific - Highly Commended: Best Credit Card Offering-Thailand -Thailand ICT Excellence Awards 215: Innovations Project - Best Local Trade Finance Bank in Thailand - KBank s corporate governance rated excellent - ASEAN Corporate Governance Awards: by the Thai Institute of Directors Association - Top 5 Publicly Listed Companies for ASEAN 1H16 - Best Retail Bank in Thailand Best CEO in Thailand - Best Management Bank in Thailand - Best Cash Management Bank in Thailand - Best Transaction in Thailand - Best Bank in Thailand - The Most Trusted Credit Card Brand 216 ThaiBMA Best Bond Awards - Best Bond House - Best Bond Dealer - Deal of the Year - Excellent ESCO Financial Supporting Awards - Asia s Best CEO (Investor Relations) - Best Investor Relations Company - Best Investor Relations Professional - Triple A Cash Management - Triple A Editor s Triple Star PTT Fill & Go - Triple A The Best Cash Management Solution:Thep Sombat 214 -Thailand Top Company Award 214: Finance & Banking Sector - Best Retail Bank in Thailand - Best Social Media Project - The Best Cash Management Bank in Thailand - Best Thai SME Bank in Treasury & Working Capital - Domestic Retail Bank of the Year - Thailand - Online Banking initiative of the Year - Thailand - Best branch Innovation Silver - Thailand Domestic Cash Management Bank of the Year - Best Retail Bank of The Year Consumer Protection Thailand Call Center Awards 214 -Top Companies for Leaders - Best Cash Management Bank - Best Retail Bank of the Year IAA Awards for Listed Companies Best CFO: Finance & Banking Sector - Best IR: Finance & Banking Sector - Asia s Best CEO - Asia s Best Corporate Governance - Trade Finance Award for Excellence - Best Merchant Acquiring Initiative of the Year - Best Debit Card of the Year (Thailand) - Best Card Design of the Year APAC (Highly Commended) - Global Finacial Services Awards Digital Market - SET Award of Honor for Excellence in Corporate Governance Report Best Investor Relations Awards -- Outstanding Investor Relations Awards - Outstanding Corporate Social Responsibility Awards - Best Investor Relations by a CEO - Best Investor Relations by a Thai Company Banking System and Regulations Update 96

49 Thai Commercial Banks and Specialized Financial Institutions (SFIs) Market Share (% of Total Loans) Market Share (% of Total Deposits) 6 SFIs 14 Commercial Banks 2, (Bt bn) (Bt bn) 2, 16,68 16,741 16, 13,573 14,918 15,866 16,29 16,536 16, 28.3% 29.4% 29.9% 29.9% 14,75 15,651 11,793 13,439 12, 29.% 25.3% 25.2% 26.4% 1,74 12, 25.7% 28.1% 9,935 1, % 8, 26.9% 8, 25.9% 28.5% 73.6% 4, 73.1% 71.9% 71.% 71.7% 7.6% 7.1% 7.1% 4, 74.1% 71.5% 74.4% 74.3% 74.7% 73.8% Jun Jun-16 Commercial Banks SFIs Commercial Banks SFIs Net Loans (Bt bn) 12, Deposits (Bt bn) 12, 1,888 11,196 11,227 1,47 1,517 1,225 1,5 9,892 9,493 1, 9, % 21.2% 2.8% 9, 8, % 22.7% 22.7% 24.4% 23.5% 8, 23.3% 9.% 9.4% 9.2% 7,5 25.1% 8.7% 1.6% 1.9% 11.3% 11.4% 7.4% 17.6% 17.1% 16.8% 17.2% 6, 8.3% 6, 17.2% 16.9% 16.8% 16.9% 17.3% 15.% 14.8% 14.8% 15.3% 15.5% 4,5 17.3% 4, 14.8% 14.2% 14.4% 14.6% 14.6% 3, 17.9% 18.2% 19.5% 19.1% 18.6% 17.2% 17.% 18.1% 18.1% 17.8% 1,5 2, 17.2% 16.6% 16.2% 16.4% 16.5% 19.% 18.1% 18.1% 18.2% 18.6% Jun Jun-16 BBL KTB KBank SCB BAY Others BBL KTB SCB KBank BAY Others Note: 6 SFIs include Government Saving Bank (GSB), Government Housing Bank (GHB), Export-Import Bank of Thailand (EXIM Bank), Bank for Agriculture and Agricultural Co-operatives (BAAC), Small and Medium Enterprise Development Bank of Thailand (SME Bank), and Islamic Bank of Thailand (IBank) 97 Regulations Update Capital (Basel III) January 216 onwards: Liquidity Coverage Ratio (LCR) will be implemented on a phase-in basis, from 6% to 1% over 5 years Expected impacts on Thai banks and KBank: Manageable impacts expected BCBS is in the process of revising the requirements for calculating Risk Weighted Asset (RWA) including Credit risk, Market risk and Operational risk. The main objectives of this revision are to reduce variability in RWA across banks and jurisdictions, and to balance simplicity and risk sensitivity of capital requirements Financial Sector Master Plan II (FSMP II) Year : The BOT s FSMP II consists of three key policies: 1) Reducing system-wide operating costs 2) Promoting competition and access to financial services 3) Strengthening financial infrastructure, including market liberalization, increased access by foreign financial institutions via granting licenses in some business areas, and permission for an increased number of branches and ATMs Year : The BOT established licensing framework for new types of business operation for underserved specific markets, i.e. Nano-finance Expected impacts on Thai banks: Move toward further liberalization, along with enhanced competition from non-bank companies Expected impacts on KBank: Ability to maintain competitiveness over both existing and new players, helped by an effective customer-centric strategy and preparation for a changing environment Financial Sector Master Plan III (FSMP III) 22 Mar 216: The cabinets approved FSMP III (216 22), with aims to establish strategic framework for continuous financial sector development and to ensure that challenges arising from the changing environments will be effectively managed Overall: FSMP III comprises of four main initiatives; 1) Promote electronic financial and payment services as well as enhance efficiency of Thai financial system 2) Support regional trade and investments linkage 3) Promote financial access and 4) Develop relevant infrastructure Thai and International Financial Reporting Standards (TFRSs / IFRSs) Year 216 onwards: The time frame is specified by the Federation of Accounting Professions (FAP); new and revised TFRSs have been implemented since January 216 including TFRS 4: Insurance Contracts; full IFRS conversion is expected in 219 (1 year after the IFRS9 effective in EU) Expected impacts on Thai banks: More logical and transparent presentation and disclosure, with different impacts on each bank Expected impacts on KBank: Manageable impacts expected; early adopted some IASs and IFRSs and continues to prepare for full implementation Source: The Bank of Thailand, KResearch 98

50 Basel III: BOT minimum capital requirement Transitional Arrangement for Capital Requirement All dates are as of 1 January Conservation Buffer* % 1.25% 1.875% 2.5% CET1: Min. Common Equity Tier 1 Ratio (after conservation buffer) 4.5% 4.5% 4.5% 5.125% (4.5%+.625%) Tier 1: Min. Tier 1 Ratio (after conservation buffer) 6.% 6.% 6.% 6.625% (6.%+.625%) CAR: Min. Total Capital Ratio (after conservation buffer) 8.5% 8.5% 8.5% 9.125% (8.5%+.625%) 5.75% (4.5%+1.25%) 7.25% (6.%+1.25%) 9.75% (8.5%+1.25%) 6.375% (4.5%+1.875%) 7.875% (6.%+1.875%) 1.375% (8.5%+1.875%) 7.% (4.5%+2.5%) 8.5% (6.%+2.5%) 11.% (8.5%+2.5%) Countercyclical Buffer (Subject to the BOT consideration)** %.-2.5%.-2.5%.-2.5% Leverage Ratio (Tier 1 / Exposure) 3% Parallel run period Effective Liquidity Coverage Ratio (LCR) Effective (Phase-in) (Liquid Assets / Net Cash Outflows within 3 days) 1% LCR 6% LCR 7% LCR 8% LCR 9% LCR 1% Net Stable Funding Ratio (NSFR) (Available Stable Funding / Required Stable Funding) 1% Effective * Conservation Buffer is to ensure adequate capital to absorb losses during periods of financial and economic stress. Banks with a CET1 ratio less than the required conservation buffer (i.e. 2.5% CET1) will face various degrees of constraint on distribution of dividends and bonuses ** In periods of excess aggregate credit growth, the BOT may require banks to set a Countercyclical Buffer up to 2.5% to achieve the broader macroprudential goal of protecting the banking sector Source: Bank of Thailand (BOT) 99 Tier 1 capital Capital Definition Change (Consolidated) Basel II Tier 1 Issued and paid-up share capital Premium on ordinary shares Legal reserve and Retained earnings Hybrid Tier 1 (<15% of total Tier 1) Minority interest, Preferred stock Deduction of Tier 1 Goodwill, Treasury stock, Deferred tax asset Investment in insurance (5% Tier 1 and 5% Tier 2) 1 2 Basel III Common Equity Tier 1 Issued and paid-up share capital Premium on ordinary shares Legal reserve and Retained earnings Other comprehensive income (OCI) e.g. surplus on AFS bond and equity (1%), surplus on land & premises (1%) Additional Tier 1 Hybrid Tier 1 with loss absorbency feature* Minority interest, Preferred stock* Deduction of Common Equity Tier 1 Goodwill, Treasury stock*, Deferred tax asset Intangible assets (new item: gradually deduct CET1, since 214) Investment in insurance (Threshold Deduction) - Amount 1% of CET1, %RW = 25% (KBank s Case) - Amount > 1% of CET1, deduct CET1 Tier 2 capital Long-term subordinated debt Hybrid Tier 1 (exceeds from Tier 1 limit) General Provision Surplus on AFS equity (45%) Surplus on land & premises (7% and 5%) 1 3 Long-term sub-debt with loss absorbency feature** General Provision * Currently, KBank has no Hybrid Tier 1, Preferred Stock, or Treasury Stock ** Long-term subordinated debentures must have loss absorbency feature, if issued since 1 January 213 1

51 Financial Sector Master Plan (FSMP) Implementation Stages FSMP I (Y24-29) Increase efficiency of the financial institutions system - One Presence policy - Expand scope of business: Universal Banking - New licenses for retail banks and foreign bank subsidiaries Promote financial inclusion - Strengthen financial institutions (FIs) by promoting voluntary mergers Protect customers Source: BOT and KResearch FSMP II (Y21-214) Looking forward to liberalization Reducing system-wide operating costs Streamlining regulations Tackling remaining NPLs and NPAs Promoting competition and access to financial services Promote competition Promote financial access Strengthening financial infrastructure Promote development of financial products that help support risk management Enhance information systems for risk management Push for draft/review of necessary financial laws to support risk management and an expedited resolution to NPLs Promote information technology utilization Develop human resources in the financial sector Note: There are four types of Commercial banks in Thailand; Full service banks; Foreign bank branches; Retail banks; and Subsidiaries GMS = Greater Mekong Subregion = Cambodia, China, Lao PDR, Myanmar, Thailand, and Vietnam FSMP III (Y216-22) competitive, inclusive, connected, and sustainable 1) Promote electronic financial and payment services, as well as enhance efficiency of the financial system Promote the adoption of digital banking & electronic payment services in the government, business, and retail sectors Enhance operational efficiency of financial institutions and other service providers Evaluate future financial landscape to promote operational efficiency of financial institutions and other service providers 2) Support regional trade and investment linkages Facilitating and reducing obstacles for banks international expansion, including The establishment of Qualified ASEAN Bank (QAB) The development of cross-border financial infrastructures The creation of suitable financial environments among neighboring countries to foster international trade and investment in the GMS 3) Promote financial access For households: encouraging development of financial products and services appropriate for changing customer demands For SMEs: improving necessary SME database within the financial institution system and supporting credit extension to SMEs For Corporate: promoting and facilitating suitable environment for private sector s raising of capital 4) Develop relevant infrastructure (Enablers) Developing key infrastructures in the financial system Strengthening regulations and supervision in line with international standards to ensure stability of the overall financial system 11 TFRS and IFRS Implementation* 4Q (Tentative) 31 Dec 21: TAS Implementation TAS 19: Employee Benefits (KBank early adopted in 4Q1; the formal effective date is January 1, 211) Use actuarial techniques to determine retirement reserve for eligible staff TAS 12: Income Taxes (KBank early adopted) (KBank early adopted in 4Q1; the formal effective date is January 1, 213) Use deferred income tax concept to record tax asset/ liability TAS/TFRS Implementation TAS 21: Effects of Changes in Foreign Exchange Rates Translate Functional Currency to Presentation Currency TFRS 8: Operating Segments Disclose operating results for each key segment TFRS Conversion TFRIC 13: Customer Loyalty Programmes Deferred portion of income for reward credit granted TFRS Conversion TFRS 13: Fair value Measurement Clear required factors and disclosure about fair valuation TFRS Conversion TFRS 4: Insurance Contracts Measure insurance liability based on cash flow estimation Additional disclosure regarding risk exposure Full IFRS Conversion IFRS 9 (IAS 39), IFRS 7 & IAS 32: Financial Instruments Thai banks have implemented a new provisioning rule under IAS 39, since December 26 Thai banks have complied with IAS 39 when reporting embedded derivatives, since 28 1 Jan 211: New financial statement presentation BOT s New Financial Statement Presentation/Convention New and reclassified presentation lines in financial statement in order to align with revised TAS Note: TAS = Thai Accounting Standard; TFRS = Thai Financial Reporting Standard; TFRIC = Thai Financial Reporting Interpretations Committee * Only financial and disclosure impact to Thai Banks 12

52 Updates on the Deposit Protection Agency (DPA) DPA Objectives and Missions Enhanced understanding of the deposit protection scheme Close cooperation with related authorities to maintain stability of the financial institution system Establishment of an appropriate system for premium collection and sound management of the Deposit Protection Fund Development of an effective information system to ensure fairness of the deposit protection scheme, with accurate and rapid reimbursement Management according to Good Governance Principles and in compliance with international standards established by the International Association of Deposit Insurers Amount of Insured Deposits Insured deposits include deposits and accrued interest denominated in Thai Baht accounts, excluding non-resident Thai Baht accounts Blanket guarantee will be gradually phased-out to a limited coverage of Bt1mn per depositor per institution Until 211, Thai banks paid.4% per year of the daily average deposit amount (paid in June and December), excluding deposits in foreign currencies and deposits from financial institutions not insured by the DPA Since January 27, 212, the contribution rate has increased from.4% to.47%, of which.46% is paid to the BOT to manage FIDF debts* and.1% is paid to the DPA Royal Decree on an extension of deposit protection coverage was announced in the Royal Gazette on September 24, 212 The Cabinet approved an amendment to the Deposit Protection Agency Act to reduce the deposit insurance scheme in 4 steps, from Bt25 million to Bt1 million in August 22 Deposit Accounts in Thailand (as of June 216) Insured Deposit Under the amending the Deposit Protection Agency Act 11 August August 215 Up to Bt5mn 11 August August 216 Up to Bt25mn 11 August August 218 Up to Bt15mn 11 August August 219 Up to Bt1mn 11 August August 22 Up to Bt5mn 11 August 22, onwards Up to Bt1mn Deposits (Corporate and Retail Deposits) # of Accounts % Amount (Bt mn) % Less than Bt1mn 87,776, % 2,766, % More than Bt1mn, but less than Bt1mn 1,29, % 3,264, % More than Bt1mn, but less than Bt25mn 75,572.1% 1,126, % More than Bt25mn, but less than Bt5mn 22,326.% 794, % More than Bt5mn 19,688.% % Total 89,184,315 1.% 12,279,714 1.% Source: DPA, Bank of Thailand (BOT), KBank, KResearch * According to the BOT announcement in the Royal Gazette, per the authority of the emergency decree dated May 11, 212, financial institutions are required to pay.46% of the average deposit amount, B/Es, debt instrument (excluding the amount counted as capital), borrowings, and securities transactions under repurchase agreements, beginning January 27, Government Policy 14

53 Sources and Uses of Public Funds FY217 Budget Tax Revenue + Non-Tax Revenue (Bt2.34trn) + Borrowing under FY217 Budget Act (Bt39bn) Budget Planning FY217 Budget (Bt2.73trn) = General Budget (Bt2.18trn or 8%) + Investment Budget (Bt.55trn or 2%) Budget Execution Budget Disbursement (96% target disbursement rate + carry-over) General Administration (Bt982.bn or 36%) Defense Debt services Economic Services (Bt543.5bn or 2%) Promote R&D program to enhance national innovation Subsidize SOEs (e.g. Infrastructure project, free bus and train service policy) Infrastructure/Agricultural Development Social and Community Services (Bt1,27.5bn or 44%) Disaster Aids Universal Healthcare Extra-Budget Borrowing under Special Act/Decree Extra-Budget Borrowing Government has no policy for using extra-budget borrowing to finance investment projects; however, the PPP and IFF are preferable choices for funding SFIs taking deposits, borrowing, as well as government subsidy Quasi-Fiscal Instrument Quasi-fiscal activities (e.g Soft Loan Program) Notes: Thai government's fiscal year (FY) begins on 1 October and ends on 3 September of the following year. IFF = Infrastructure Fund, PPP = PPP = Public-Private Partnership, SFIs = Specialized Financial Institutions 15 Government Fiscal Budget Billion Baht 1, FY213 FY214 FY 215 FY 216F FY 217F Budget Deficit Financing Extra-budget borrowing The Government submitted a budget budget for FY217 to Thai parliament on June 23, 216 The FY 217 budget deficit is Bt39bn, unchanged from the previous year Government plans to use PPP as an alternative funding source for infrastructure projects to offload its fiscal burden In addition to growth in commercial bank loans, government funding activities may affect liquidity in the system Economic Policies 216 Budget Act 217 Budget Act Key Points Implementation Process Possible Impacts/ Expected Budget FY216 budget at Bt2.72trn with a deficit of Bt39bn FY217 budget at Bt2.73trn with a deficit of Bt39bn FY216 Effective date: October 1, 215 after announcement in the Royal Gazette on September 25, 215 FY217 Effective date: October 1, 216 after announcement in the Royal Gazette (To be announced in September 216) Government spending will help maintain economic momentum Fiscal sustainability to remain manageable in the near-term; however, continued debt creation, both from budget deficit and other borrowings, may impact long-term fiscal sustainability Note: - FY212 is actual data. FY213, FY214, FY215 and FY216 budget deficits are based on budget documentation, whereas extra-budget borrowing is projected by KResearch - Thai government's fiscal year (FY) begins on 1 October and ends on 3 September of the following year - NLA = National Legislative Assembly; PPP = Public-Private Partnership Sources: MOF, KResearch (as of July 216) 16

54 Billion Baht Public Debt to GDP and Fiscal Budget 6,5 6, 5,5 Public Debt Public Debt % to GDP , Sep-14 Mar-15 Sep-15 Mar-16 Public debt to GDP ratio was 43.35% as of May 216, still under the 6% limit set under the fiscal sustainability framework. Thai government is committed to keeping the ratio of public debt to GDP under 5%. Total Budget Bt2.78trn - General Budget Bt2.28trn - Investment Budget Bt.5trn Note : Debt to GDP has declined since January 215, due to a change in GDP computation Source: Ministry of Finance (MOF), Fiscal Policy Office (FPO), and Public Debt Management Office (PDMO) % to GDP % Cumulative Budget Disbursement Rate (%) FY 216 FY 215 FY Oct Nov Budget Disbursement Rate Dec Jan Feb FY16 target Bt2.61trn (96%) Bt2.13trn (98%) Bt.47trn (87%) Mar 9M FY16 actual Bt2.5trn (74%) Bt1.79trn (79%) Bt.27trn (52%) Unused FY16 Budget Bt.73trn (26%) Bt.49trn (21%) Bt.23trn (48%) Government budget disbursement rate for 9MFY216 is 73.9%, above the 72.% in 9MFY215. FY216 budget disbursement target is 96%, unchanged from FY215. Apr May Jun Jul Aug Sep 17 Government Policy: Long-term and Short-term Policies Long-term policies Transport Infrastructure Development Plan: The Action Plan on Transport (Urgent Phase) worth Bt1.796trn approved by the Cabinet in November 215. The project will reduce logistical costs, increase transportation speed of goods and people, as well as connect Thailand to neighbors along the East-West and North-South Economic Corridors Digital Economy: The Cabinet approved in principle the National e-payment Master Plan The Cabinet approved Bt15bn to be spent on the expansion of broadband internet access The National Broadcasting and Telecommunications Commission (NBTC) awarded 4G licenses in 18 MHz and 9 MHz BOI Measures for Supporting Private Investment: The Cabinet approved tax and non-tax incentive measures to support private investment, such as Special Economic Zones (SEZs), six targeted clusters, and ten targeted industries as new engines of growth Promote the establishment of an international headquarters (IHQ) and an international trading center (ITC) in Thailand: to help Thailand become one of the key trading nations in the region Join the Regional Comprehensive Economic Partnership (RCEP): to deepen economic cooperation among sixteen countries and promote export sector Energy Policy: reform petroleum concessions and energy price structures, including an LPG subsidy Tax Reform: reform tax collection, generate sufficient revenue for the government, and boost competitiveness for local businesses, especially SMEs Legislation overhaul: covering social justice, consumer protection, humantrafficking, and business and financial law Note: SOE = State Owned Enterprise; GSB = Government Saving Bank Sources: Newspaper and KResearch (as of April 7, 216) Short-term policies Government Budget: Higher fiscal budget deficit in FY216: a deficit of Bt39bn in FY216 vs a deficit of Bt25bn in FY215: provide more money to support Thai economy An additional central budget of Bt56bn for FY216: Bt15bn to be spent on the expansion of broadband internet access, Bt8.3bn on replenishing the state coffers, and Bt32.6bn on projects to strengthen and push the country forward in line with the national reform plan Short-term Stimuli: Low income aids: provide funds to villages, allocate money into community investment projects Tax incentives to induce private spending: give personal tax income rebate up to Bt15,, double (2%) corporate income tax deduction for staff training/seminar expenses, and personal income tax deduction for shopping during the festive season from December 25-31, 215 Provide financial support and tax incentives for SMEs: special loan rate for SMEs, lower credit guarantee fee for SMEs, venture capital for SMEs, and tax-exemption for targeted start-up SMEs Property sector stimulus: lower transfer and mortgage fees: 2% tax deduction for five years to individuals (first-time home buyers), including special loan rate from Government Housing Bank (GHB) Bt93bn softloan via BAAC: help ease the burden of drought-affected farmers Ban Pracharat (civil state) project: help low income earners to buy first home with cheap housing loans below Bt1.5mn Quicken 14 SOE investment: promote SOE to invest in planned projects to bring about other investment from private sectors Farmer s aid for 216/17 crop cycle: provide money to farmers, up to Bt1, per farmer, to help with crop costs and provide low-interest loans at 4.% with a grace period on debt payment of up to 3 years Soft loans for urban low-income families: provide soft loans to urban low-income families and 3-year debt suspension on principal for current GSB customers 18

55 The Action Plan on Transport (Bt1.796trn*) The Action Plan on Transport, worth Bt1.796trn, approved by the Cabinet in November 215; aimed at facilitating social stability and economic growth Notes: * The total investment may be reduced due to cutting the scope of works, especially Rail Transportation Cooperation projects EIA = Environmental Impact Assessment; SOE = State of Enterprise; PPP = Public-Private Partnership; MRTA = Mass Rapid Transit Authority of Thailand; SRT = State Railway of Thailand TOR = Team of Reference Source : Office of Transport and Traffic Policy and Planning, Newspaper, KResearch (as of July, 216) 19 Budget Disbursement Schedule for the Action Plan on Transport Cabinet resolved to spend about Bt14bn over the next five fiscal years to build 2 motorways (Bang Pa-in-Nakhon Ratchasima and Bang Yai Kanchanaburi) Thai government will gradually invest in transport infrastructure projects; bidding for several projects in 216; construction to begin in 217, with peak expected around PPP fast track measure has been approved to quicken process from 22 months to 9 months Budget Disbursement Schedule (FY ) The Motorway Fund,.8% Source of Funds SOE, 3.1% PPP, 21.% Regular Investment Budget, 4.7% Government Borrowing, 7.5% Billion Baht FY215 FY216 FY217 FY218 FY219 FY22 FY221 FY222 FY223 FY224 FY225 Notes: - Thai government's fiscal year (FY) begins on 1 October and ends on 3 September of the following year - PPP = Public-Private Partnership; SOE = State of Enterprise; MRTA = Mass Rapid Transit Authority of Thailand; SRT = State Railway of Thailand Type of Projects Source : Office of Transport and Traffic Policy and Planning and KResearch (as of January 2, 216) 11

56 BOI Measures for Supporting Private Investment Cabinet approved measures for supporting private investment xxxx Special economic zones (SEZs) (January 19, 215) Targeted provinces Launched a pilot project to set up 6 special economic zones in 5 provinces, namely Tak, Mukdahan, Sa Kaeo, Songkhla, and Trat Second phase of special economic zones to be established in 5 additional provinces Chiang Rai, Kanchanaburi, Nong Khai, Nakhon Phanom, and Narathiwat Incentives Projects in special economic zones: Tax exemption for first 8 years and 5% tax reduction in following 5 years Six targeted clusters (September 22, 215) Targeted clusters and provinces Incentives Super Clusters (Four clusters): Automobile and Parts, Electronics Appliances and Telecommunications, Petrochemicals and Other Environmental Friendly Chemical Products, and Digital Other Clusters (Two clusters): Garment and Clothing and Processed Food 9 Provinces: Nakorn Ratchsrima, Ayutthaya, Pathum Thani, Prachin Buri, Chachoengsao, Chon Buri, Rayong, Chiang Mai, and Phuket Super Clusters: Tax exemption for first 8 years and 5% tax reduction in following 5 years Other Clusters: Tax exemption for first 3-8 years and 5% tax reduction in following 5 years Non-tax incentives: granting land ownership to foreign juristic persons, and granting permanent residence to foreign specialists Accelerating private investment (November 3, 215) Incentives Additional 1-4 year tax exemption, not to exceed 8 years, and 5% tax reduction in following 5 years for BOI applications from January 1, 215 to June 3, 216; must operate business in targeted industries for new engines of growth (November 17, 215) 1 targeted industries First S-Curve (to enhance efficiency of existing production, boosting short and medium-term of economic growth) consists of Next Generation Automotive, Smart Electronics, Affluent Medical and Wellness Tourism, Agriculture and Biotechnology, and Food for the Future New S-Curve (for new growth) consists of Robotics, Aviation and Logistics, Biofuels and Biochemicals, Digital, and Medical Hub Incentives Expected to be announced in December 215 Source : Newspaper, KResearch (as of November 27, 215) 111 Short-term Stimuli Cabinet approved economic packages to stimulate the economy: village / district levels, SMEs, and property Measures for boosting the economy at the village and district levels (September 1, 215) Village funds (Bt6bn) 7-year loans to village funds by GSB and BAAC Village funds will lend to villagers: rate = % for 1-2 years; rate <= 4% for 3-7 years Villagers prohibited from using the funds to refinance their existing debts Community investment projects (Bt36bn to districts) Interior Ministry will grant Bt5mn each to 7,255 districts (tambons) to implement community investment projects by the end of 215; financing will come from central fund in FY Small state-run projects (Bt4bn) Government will accelerate budget disbursement for small state-run projects worth < Bt1mn by the end of 215 Measures to help SMEs (September 8, 215) Soft loans (Bt15bn) Loans guaranteed by TCG (Bt1bn) GSB will provide Bt15bn in loans with.1% interest rate to financial institutions Financial institutions will lend those loans to SMEs with no more than 4% interest rate TCG will absorb as a loss the first 15% of NPLs and share loss of the second 15% of NPLs with financial institutions Guarantee fee will drop to % in 1st year,.5% in 2nd year, 1.5% in 3 rd, and 1.75% for the remaining years Lower corporate income tax rate Corporate income tax rate for SMEs will be lowered to 1%, from 15-2%, in Venture capital fund for SMEs 5-year tax exemption for start-up SMEs GSB, KTB, and SME banks will provide Bt6bn in venture capital funding for start-up SMEs with insufficient capital Start-up SMEs registering during Oct Dec 216 and in targeted industries (such as food processing, high technology or innovation, or digital) will receive a 5-year tax exemption Measures to help property sector (October 13, 215) Housing transfer / mortgage fees Cut housing transfer fee to.1% from 2% and mortgage fee to.1% from 1% (effective: Oct 29, Apr 28, 216) Extra incentives for homebuyers 2% tax deduction for five years to individuals (first-time home buyers) buying houses priced below Bt3mn GHB special loans (Bt1bn) GHB will set aside Bt1bn in housing loans to help low income customers Source : Newspaper, KResearch (as of April 27, 216) Note: GSB = Government Savings Bank; BACC = Bank of Agriculture and Agricultural Cooperatives; TCG = Thai Credit Guarantee Corporation; GHB = Government Housing Bank 112

57 Short-term Stimuli (Con t) Cabinet approved economic packages to stimulate the economy: village / district levels, SMEs, and property Measures to alleviate the impact from the drought as well as promote enterprise in local communities (Feb 25, 216) BAAC softloan (Bt93bn) Low-interest loans to 5, farmers affected or to be affected by drought (Bt6bn) Soft loans to help strengthen small or medium-sized enterprises in each Tambon, with 4% interest per annum in first 7 years (Bt72bn) Provide soft loans to farmers in 26 drought-stricken provinces for a one-year term at.1% interest Measures to support consumer spending (Mar 22, 216) Baan Pracharat (Bt7bn) To provide cheap housing loans for either new or second-hand houses valued of no more than Bt1.5mn, as well as a low interest loans for the purpose of home refurbishment worth Bt4bn via GHB and GSB The remaining Bt3bn loan will be provided to private property developers who join the scheme Measures to support consumer spending and tourism (Mar 29, 216) Tax incentive for domestic tourism Measures to uplift farmer livelihood (Jun 21, 216) Farmer s aid for 216/17 crop cycle by BAAC (Bt45bn) Extend Bt15, tax deduction for individuals staying at hotels and spending on travel until 31 Dec 216 Income tax deduction of up to Bt15, for individual taxpayers who dine at restaurants that issue complete tax invoices during the Songkran festival from Apr 9-17, 216 Provide Bt1, per rai to farmers, up to Bt1, per farmer, to help with crop costs Low-interest loans at 4.% with a debt payment grace period of up to 3 years Subsidize crop insurance premium of Bt6 per rai, covering 3 million rais of rice fields to BAAC customers Measures to support low income family under Pracha Rat scheme (Aug 2, 216) Soft loan for urban low-income family (Bt2bn) Provide low-interest loans for urban low income families, interest-free for the first year and 1% in the second to fifth year, up to Bt5, per person 3-year debt suspension on principal, up to Bt2,, for current GSB customers Source : Newspaper, KResearch (as of August 2, 216) Note: GSB = Government Savings Bank; BACC = Bank of Agriculture and Agricultural Cooperatives; TCG = Thai Credit Guarantee Corporation; GHB = Government Housing Bank 113 Ongoing Government Measures to Assist Cost of Living Measures Household Assistance Energy Prices Baht/Litre Elimination of some Oil Fund levies (effective Aug. 29, 211) Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Retail Price Price moves in accordance with global oil prices Diesel Price Price without Subsidy Details Train and Bus Fares: A subsidized fare for buses and trains; some buses and trains provided for free Electricity: A full subsidy on electricity bills for households using less than 5 units of electricity per month Diesel Fuel: Government intends to restructure diesel fuel prices to reflect global prices NGV and LPG Price: Government lowered the NGV and LPG subsidy, allowing retail selling prices to reflect global market prices NGV price declined to Bt12.55/kg since June 216, align with global price LPG prices are as follows: Household sector: refrained from subsidizing general households. Current household LPG price is Bt2.29/kg. However, the government is exempting the oil fund levy for low income households; LPG price for low income households is Bt18.13/kg Transport sector: adjusted to market price at Bt2.29/kg Industrial sector: adjusted in line with relevant production costs, currently at Bt2.96/kg FT Rate: Fuel Adjustment Tariff (FT) Rate for electricity is set to increase by less than the actual cost (from May-August 216, FT rate at Bt-.3329/unit ) Value-added-tax (VAT) Rate On July 14, 215, the Government announced the following VAT Rates: Maintain the 7% value-added-tax (VAT) rate until September 3, 216 After September 3, 216, the VAT rate will be increased to 1% Source: KResearch 114

58 Highlight of Legislation and Politics National Legislative Assembly (NLA): passed 17 laws, as of July 31, 216 Highlight of Legislation The Amendment of the Bankruptcy Act (No. 8) B.E (Effective Aug 18, 215) - Shorten time of debt repayment by giving authority to official receivers in considering and examining the creditors claims for debt repayment (previously, only courts had this authority) - Extend the time for claims submission in case of force majeure (previously, the time for claims submission was 2 months after sequestration announcement) Business Security Bill, B.E (Passed third reading Aug 7, 215) - Create a new type of contract, a business security contract, which provides that a person, known as the security provider, grants a security interest over property to another party, typically a financial institution known as the security receiver - Allow more types of assets to be used as security, such as machinery, inventory, accounts receivables, businesses, and intellectual property; also, borrowers do not need to transfer assets to creditors or pledge assets to creditors Act of Facilitation for Consideration of Approvals from Government Agencies B.E (Effective Jul 21, 215) - Require government agencies to disclose a manual for licenses, permits, registrations, renewals, paying taxes, customs procedures, etc. to public; manuals are to include instruction, process, consideration criteria, processing time period, document requirement, fees, etc. - Assign the Public Sector Development Commission (OPDC) to review process and report to the cabinet when agencies cannot pass the service standard Passed several decrees by the Cabinet to solve concerns over Thai airliners raised by the International Civil Aviation Organization (ICAO) and illegal, unreported, and unregulated (IUU) fishing activities in the country The CDC to public the draft constitution on January 29, 216 Highlight of Politics 5 Oct 15: NCPO appointed 21 members of a new constitutional drafting committee (CDC) 29 Mar 16: CDC submitted the constitution draft to the government 7 Aug 16: National Referendum approved the constitution draft and the extra question By Nov 16: CDC to amend the constitution draft by adding provisional clauses in line with the extra question; Constitutional Court to ensure for correctness on the constitution draft; Royal assent to be given for a new Constitution Note: NCPO = National Council for Peace and Order; CDC = Constitutional Drafting Committee, NLA = the National Legislative Assembly Source: Newspaper and Royal Gazette, compiled by KResearch (as of August 1, 216) 115 The Constitution and Election Roadmap 7 Aug 216 Nov 216 Jul months 6 months 5 months Nov or Dec 217 National Referendum approved the constitution draft and the extra question* CDC amends the constitution draft by adding provisional clauses in line with the extra question* Constitutional Court considers the adjusted constitution draft The King endorses to enforce the constitution CDC drafts organic laws regarding election Organic laws endorsed The Election Commission prepares to arrange the General Election General Election Notes: *If the Parliament - comprising 25 appointed Senators and 5 elected members of House of Representatives - cannot select the Prime Minister from the list submitted by the political parties of the House of Representatives in the first round, the Constitution allows the Parliament to consider a qualified person to be appointed as the Prime Minister for the first five years after the Parliament is set up per the Constitution CDC = Constitution Drafting Committee 116

59 National e-payment: Scope and Objectives Scope: Create an integrated e-payment infrastructure in Thailand for funds transfer and payment for consumer, business, and government, with an integration of tax and social security disbursement systems Objectives and Benefits: Aim for payment infrastructure development, e-tax system, e-social welfare, financial inclusion, and cashless society Reduce cash usage and payment costs throughout the system; save Bt75bn a year or.8% of GDP in printing and transporting banknotes & cheques Five Projects under National e-payment Master Plan: (More details on page ) 1) PromptPay (Any ID), 2) EDC and Card Acceptance Expansion, 3) E-Tax, 4) Government e-payment, 5) Market Education Lower income population receives social welfare faster and more accurately, reducing wealth disparities More accurate identification of lower income population, hence greater reach to support citizens in need More transparent social welfare disbursement, lowering corruption More efficient and higher tax coverage expansion for revenue department Source: National e-payment Master Plan Benefits of the National e-payment Master Plan Greater access to money transfer at more reasonable cost Rural consumers can use card for purchases, less need to carry cash more convenient and safe More efficient to accept non-cash payment at reasonable lower cost, enhancing customer service Reduction of time, administrative labor, and paper usage costs for business Shorten execution time frame of invoicing and payment settlement transactions 117 National e-payment: Overview of Five Projects 1. PromptPay (Any ID) 2. EDC and Card Acceptance Expansion 3. E-tax 4. Government e-payment 5. Market Education Objective Principle More convenient money transfer Use registered ID (e.g. National ID, Mobile number) as a virtual bank account number Expand card acceptance network Promote cashless payment transaction Reduce merchant fee to encourage usage and participating merchants Set up new local switching network Integrate tax filing system More accurate sales records Expand tax coverage Electronic tax system E-tax invoice system More transparent and accurate More convenient Promote cashless society Register citizen income Manage social welfare database Direct social welfare payment through PromptPay (Any ID) Promote e-payment nationwide along with many benefits Timeline 1 st Phase (P2P) 1Jul16: Pre-register 15Jul16: Register 31Oct16: Implement 2 nd Phase (B2C) Dec16: finish request to pay system for e-commerce 3 rd Phase (B2B) Sep16: expand EDC terminals 216: gradually implement throughout the year Sep16: Pilot project with selected organizations 4Q15-1Q17: synchronized with other projects Key Changes New fee structure New merchant fee structure Change paper based tax document to e-tax document and info Migrate cash and cheque tax payment to e-payment Change government payment to e-payment Integrate database for government social payments Educate and communicate to public Source: National e-payment Master Plan, KBank 118

60 1) PromptPay (Any ID) Project: P2P To develop more convenient money transfer using registered ID (e.g. National ID and mobile number) to replace bank account number Registration Channel: Internet banking, mobile banking, ATM, bank branches Date: from July 15, 216 (pre-registration starts July 1, 216) Implementation Channel: Internet banking, mobile banking, ATM Date: October 31, 216 Samples of Linking ID Cards and Mobile Phones with Bank Account New Money Transfer Fee via Electronic Channels* (Internet and Mobile Banking) Transaction Value Bt5, PromptPay Fees Free > Bt5, to Bt3, < Bt2 per Transaction > Bt3, to Bt1, < Bt5 per Transaction > Bt1, to a maximum amount set by each bank < Bt1 per Transaction Note: * The new money transfer fee will be based on transaction value, regardless of whether the money is being transferred to the same or different banks, to the same or cross-clearing zone Source: Bank of Thailand, InfoQuest Limited 119 2) EDC and Card Acceptance Expansion Project: EDC To expand card acceptance network and promote card adoption/usage 2.1) Existing Local Switching for Debit Card Spending: National ITMX 2.2) Additional Local Switching for Debit Card Spending: Thai Payment Network (TPN) 12

61 Thailand Economic Figures 121 Currency and Interest Rate Outlook Bt USD/THB: End Period Q1 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16F USD/THB The Fed is expected to refrain from lifting the Fed funds rate further this year as a result of uncertainties arising from the BREXIT vote. We expect the Fed funds rate to remain between.25-.5% in 216 No further rate hike in 216 should support the Thai baht in the near-term. We expect USD/THB to hover around 35.5 for year-end 216 The Fed should be able to resume policy rate normalization in 217, after uncertainties including the U.S. Presidential election pass. This would allow the dollar to more significantly regain strong momentum next year, following the rising U.S. interest rate outlook Note: F is estimated by KBank Capital Markets Research (as of Aug 1, 216) % p.a Interest Rate Trend Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16F Fed Funds rate BOT's 1-Day Repurchase rate Domestic growth has shown positive development in recent months, driven by good performance in the tourism sector and continued public spending and investment The passing of the referendum to accept the new constitution provided a sense of certainty regarding a general election in 217. This supports policy continuity and reduces pressure for more easing by the BOT The BOT is expected to maintain the policy rate at 1.5% for the rest of 216. Fiscal policy should take the front seat in driving growth while the BOT focuses on maintaining financial stability 122

62 Monthly Economic Conditions: June - July 216 Units: % over-year, otherwise indicated Q 1Q 2Q Apr May Jun Jul YTD. Private Consumption Index (PCI) Non-durables Index Durables Index Service Index Passenger Car Sales Motorcycle Sales Private Investment Index (PII) Domestic Sales Volume of Cement Domestic Machinery Sales at constant prices Imports of Capital Goods at constant prices Commercial Car Sales Manufacturing Production Index Capacity Utilization Agriculture Production Index Agriculture Price Index No. of Tourists Exports (In terms of US Dollars) Price Volume Imports (In terms of US Dollars) Price Volume Trade Balance (USD millions) 34,565 9,626 13,31 9,747 2,45 3,56 3,791 23,48 Current Account (USD millions) 31,958 1,55 16,576 8,375 3,164 2,234 2,978 24,95 Headline CPI Core CPI Key figures in June 16 suggest Thai economic growth has softened Private consumption grew at a lower rate, led by non-durable items due to a stagnation in farm income Exports reported a positive sign due to gold and automotive exports Current account surplus remains solid amid a considerable decline in imports July 216 headline inflation eased, along with fuel and raw food prices Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), Office of Industrial Economics (OIE), and Office of Agricultural Economics (OAE) 123 KR Household Economic Condition Index (KR-ECI) Most Thai households are cautious about living condition, as reflected in the 3-month Expected KR-ECI dropping for the sixth straight month to a 26-month low of 43.3 in June. This was attributable to the uncertainty of Thai economy. KR Household Economic Condition Index (KR-ECI) Components of 3-month Expected KR-ECI KR-ECI Source: KResearch 4 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Household savings Household income Household debt Household expenses excluding debt Prices of consumer goods Source: KResearch 3-month Expected KR-ECI Jun May Current KR-ECI 3-month Expected KR-ECI Notes: - The KR Household Economic Condition Index (KR-ECI) has been devised by KResearch to monitor household sentiment toward economic conditions at the current level and over the next three months. Any reading above 5 reflects positive sentiment and below 5 negative sentiment. - Research sample includes households in Bangkok and Metropolitan Area (BMA). - Components of KR-ECI are household savings, household income, household debt, household expenses excluding debt, and prices of consumer goods. 124

63 Economic Condition Highlights: June - July 216 CCI Jul16 CCI picked up amid post-drought economic recovery 65 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Million Person Consumer Confidence Index (CCI) Business Sentiment Index (BSI) Jun16 Foreign arrivals cooled during low season 17.2% % 18.7% % % Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), and Office of Industrial Economics (OIE) % % M 216 Jun-16 No of Foreign Tourist Arrival % Tourist Arrival YoY (RHS) BSI 25% 2% 15% 1% 5% % -5% -1% %YoY 4% 2% % Jun16 Private consumption grew at a lower rate, led by non-durable items, due to stagnation in farm income 3.6% 1.3% 7.2% 6.9% -4.5% -4.8% -2% PCI PII Car Sales Construction Imports of Consumer's Materials Capital Goods Durable 1Q16 1Q162 May-16 Jun-16 Jun16 Exports rose on gold exports, while demand from China and ASEAN remained weak Export Value (USD Million) 25, 2, 15, 1, 5, Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May % % -1.6% -1% Exports Exports (excluding gold) % YoY for Exports % YoY for Exports exc Gold -2% % YoY 125 Economic Condition Highlights: June - July 216 %YoY of MPI %MoM Jun16 MPI and CapU declined, partly due to a high base effect MPI (lhs) %Capacity Utilization (rhs) Jul16 Headline inflation eased, along with fuel and raw food prices % YoY % YoY Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Headline CPI (MoM-lhs) Core CPI (MoM-lhs) Headline CPI (YoY-rhs) Core CPI (YoY-rhs) Sources: BOT, MOC, OIE, and REIC (Real Estate Information Center) Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May %YoY %Capacity Utilization Rate % YoY Activity in the property market surged in 1Q16 due to 4% government stimulus 3% 2% 1% % 53% 18% -.1% -1% 1Q9 1Q1 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 Construction areas permitted in municipal zone Condominium Registration Nationwide New Housing registered in BKK and Vicinity Property prices rose at a slower pace in 1Q16; Land price declined slightly in tandem with a slow property investment % YoY Single House (With Land) Townhouse (With Land) Land 1Q9 1Q1 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 126

64 Exports and Imports: 1H16 Exports by Country Imports by Country Others 23.6% ASEAN 25.5% USA 6.2% Others 2.3% Japan 16.2% Middle East 4.5% Hong Kong 5.2% Japan 9.6% EU 1.3% China 1.% USA 11.2% EU 9.1% Middle East 7.1% China 21.7% ASEAN 19.3% Top 1 Exports by Product (BOP Basis) 1H16 Total Exports (BOP Basis) USD Millions Weight %YoY Exports, f.o.b. (BOP basis) 13,286 1.% -2.2% Automotive 16, % 2.1% Electronics 14, % -6.6% Agro-manufacturing Products 12, % -.3% Machinery & Equipment 9, % -4.9% Electrical Appliances 6, % 1.3% Petro-chemical Products 5, % -6.8% Metal & Steel 4, % -6.4% Other Manufacturing products 4, % 1.8% Jewellery 3, % -.7% Apparels and Textile Materials 3, % -6.3% Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis Top 1 Imports by Product (BOP Basis) 1H16 Total Imports (BOP Basis) USD Millions Weight %YoY Imports, f.o.b. (BOP basis) 8,238 1.% -11.1% Machinery, equipment, and supplies 2, % -1.2% Electronics parts and electrical appliances 11, % -8.% Fuel 1, % -34.7% Materials of base metal 7, % -9.2% Non-durables Consumer goods 6, % 2.3% Chemicals 5,3 6.6% -13.5% Automotive 4, % 6.4% Agricultural and agro-manufacturing products 4,4 5.5% -8.3% Plastics 3, % -4.1% Non-monetary gold 2, % -32.1% 127 Export and Import Data: USD Million 25, 2, 15, 1, 5, Exports by Country ASEAN EU China Japan USA Hong Kong Middle East Others Top 1 Exports by Product (BOP Basis) Jewellery 7,6 3.3% -1.3% Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis 25, Imports by Country 2, 25.% 23.2% 22.8% 22.5% 23.1% 21.8% 21.9% 4.7% 5.1% 21.6% 21.8% 5.7% 5.1% 12.9% 14.1% 5.4% 5.8% 5.2% 4.9% 5.5% 15, 13.3% 12.8% 9.8% 9.9% 5.5% 11.2% 5.9% 5.% 5.8% 6.4% 1.7% 1..2% 1.% 1.5% 9.7% 9.6% 19.8% 9.4% 15.6% 1, 18.4% 16.4% 11.8% 11.7% 11.9% 11.% 11.1% 1.9% 16.9% 1.2% 13.3% 14.8% 15.% 9.5% 9.8% 1.3% 5, 7.8% 8.1% 9.1% 8.5% 24.3% 24.6% 26.% 26.1% 25.7% 16.2% 16.1% 16.6% 18.% 215 Total Exports (BOP Basis) USD Millions Weight %YoY Exports, f.o.b. (BOP basis) 212,19 1.% -5.6% Automotive 32, % 2.5% Electronics 32, % -3.7% Agro-manufacturing Products 25, % -5.4% Machinery & Equipment 19, % -.2% Electrical Appliances 12,47 5.7% -2.1% Petro-chemical Products 11, % -11.8% Metal & Steel 9, % -4.1% Other Manufacturing Products 8, % -3.3% Petroleum Products 8, % -28.3% USD Million ASEAN EU China Japan USA Middle East Others 2.5% 9.% 6.8% 15.4% 2.3% 8.9% 19.% Top 1 Imports by Product (BOP Basis) 215 Total Imports (BOP Basis) USD Millions Weight %YoY Imports, f.o.b. (BOP basis) 177,516 1.% -11.3% Machinery, Equipment, and Supplies 42, % -4.4% Fuel 29, % -37.4% Electronics Parts and Electrical Appliances 26, % -.4% Materials of Base Metal 16, % -15.9% Non-durables Consumer Goods 12, % -.3% Chemicals 11, % -12.5% Automotive 9, % -4.2% Agricultural and Agro-manufacturing Products 9,18 5.1% 1.2% Plastics 7, % -4.% Non-monetary Gold 7, % 9.4% 128

65 Economic Condition Highlights: CAPEX and Investment Cycle Capacity Utilization by Key Industries Investment value of BOI-approved applications (Total)* Household Electrical Appliances Integrated Circuits & Parts Vehicles Basic Metal Rubber & Plastic Products Chemical & Chemical Products Paper and Paper Products Garments Investment Value (Bt bn) Investment Value (Bt bn) 1,2 1, % YoY +4% YoY , % YoY %YoY %YoY M 216 Investment value of BOI-approved applications (by Industry)* 26 Tobacco Food and Beverage M 216 Avg M 216 Source: BOT, MOC, OIE (Data as of July 216) Source: The Board of Investment of Thailand (BOI) Note: *Figures above indicate investments of approved projects requesting investment promotion benefits from BOI 129 Supply Side: New Housing Completions and New Projects Launched in BMR* 1, Units New Housing Completions New Projects Launched % (YoY) Avg. 5-year price growth before the crisis ( ): Land 9.4%; Single House 6.3%; Townhouse 6.3% Avg. price growth in last 5-years ( ): Land 7.9%; Single House 4.7%; Townhouse 6.1% Property Market: Cool down in 2H16 is expected after stimulus program ends Demand Side: Transferred Properties in BMR* 1, Units Q1/15 Q1/ Price Growth of Properties Land Single House Townhouse Sources : National Economic and Social Development Board (NESDB), BOT, Real Estate Information Center (REIC), Agency for Real Estate Affairs (AREA), and KResearch Note: * Including Condominium, Single House, and Townhouse; BMR = Bangkok and Metropolitan Area Outstanding Mortgage Loans to Individuals and Property Developers to GDP % Q216 % Outstanding mortgage loans to GDP % Outstanding loans to Property Developers to GDP In 4M16, property market may grow at a high rate due to property stimulus measures Mortgage loans to GDP is higher than the pre-crisis level, due to several factors such as changes in consumer behavior, intense competition among banks, and a more accessible credit market Outstanding loans granted to property developers (including contractors) to GDP was 6.3% in 215, still lower than the pre-crisis level Supply Side: in 1Q16, new housing projects declined due to economic slowdown Demand Side: property stimulus measures boosted the number of transferring properties in 1Q16 Prices: property prices declined due to slow growth in the property market, however, land prices increased due to high demand in the business sector Mortgage loan NPLs among Thai commercial banks remained low at 2.66% in 2Q16, compared with 2.55% in 1Q16 13

66 12% 1% 8% 6% 4% 2% % Household Borrowing 12.2% Old Definition 87.2% 79.5% 89.1% Household Borrowing to GDP Old Definition: Data from : lending from commercial banks and SFIs to individual persons for consumption only New Definition: Data from 21 onwards: takes into account individual persons outstanding loans from all types of financial institutions, including savings Co-ops and non-banks Cross-Country Comparison of Household Debt* 75.% 81.1% 4% 3% 2% 1% % New Definition Debt Service Ratio of Thai households** 27.9% 28.1% 27.2% 28.4% % 2% 1% % NPL for Consumption Loans of Thai Commercial Banks % 19.% 19.4% 13.5% 9.7% 6.2% 5.% 4.1% 3.4% 3.1% 2.3% 2.% 1.9% 2.2% 2.4% 2.6% 2.6% Q216 Household borrowing to GDP declined to 81.1% in 1Q16. For the 216 year-end, we expects that it will rise to %, down from our previous forecast at 83-84%. Household borrowing to GDP is higher than pre-crisis level, due to factors such as changes in consumer behavior, intense competition among banks, and a more accessible credit market. Thailand s household debt to GDP is comparable to other countries; debt service ratio of Thai households is still well below 4%**, indicating the household debt situation is unlikely to trigger any problems in the foreseeable future. NPL ratio for consumption loans of Thai commercial banks was steady at 2.6% in 2Q16 Note: Data on Thailand as of 1Q16, Malaysia as of 215, US, Australia and Korea as of 3Q15 Singapore as of 214 Source: BOT, Bank for International Settlements (BIS), National Statistical Office (NSO), and KResearch 131 Key Regulations for Mortgage Loans The BOT has taken preventive actions and closely monitored risk in the property market Risk weights for mortgage loans dropped from 5% to 35% under Basel II since 28 However, the BOT announced revised criteria in on mortgage loan risk weights with a different effective date Price Condominium House Loan to Value (LTV) Bt1mn > 8% Risk Weights Effective Date March 29 < Bt1mn > 9% 75% January 211 < Bt1mn > 95% January 213* Bt1mn 8% March 29 < Bt1mn 9% 35% January 211 < Bt1mn 95% January 213* Note: * The effective date is postponed from January 212, due to the severe floods in 211 Source: The Bank of Thailand 132

67 Fed Policy Normalization and Thailand Economic Impacts 3.% 2.5% 2.% 1.5% 1.%.5% Fed raised interest rates for the first time in almost a decade in Dec-15 Federal Funds Target Rate - Upper Bound Federal Funds Target Rate - Lower Bound.% Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Source: KResearch and *FOMC (Jan216) Fed tapered QE program in January 214; program concluded in October 214 Fed began raising the interest rate in December 215, from -.25% to.25-.5% In instances where QE tantrum results in drastic fund outflows, Thailand s external stability will likely be maintained; FX reserves should be more than enough to meet all obligations Thai banking system excess liquidity slightly decreased due to managing financial costs; CAR and NPL ratios remained good (17.% and 2.7% as of 4Q15, respectively), with net profit of Bt18bn in 215 Source: Kresearch, KBank Capital Markets Research (as of January 14, 216) $ Billion Thailand has enough FX reserves to meet all internal and external obligations FX Reserves Net Forward Position $197.1 Billion Source: BOT, KResearch Last Update: August 5, $ Billion 3 months of imports 2 Reserves backing banknotes ST external debt Excess liquid Thai commercial assets in Thai banks commercial have high banks liquidity slightly Assets decreased Note: Liquidity includes cash as well as net positions in short-term money market and net investments $142. Billion 133 Thailand s external balances remain relatively strong compared to peers Number of Month High international reserve / Imports (Import Coverage) High international reserve ratio / External debts India Indonesia Phillippines South Korea Malaysia Singapore Thailand Source: Bloomberg, KResearch (data as of June 216) 7.3 5% 4% 3% 2% 1% % Low foreign holding ratio in Thai government bonds 38.5% 1.1% 34.4% 4.% 13.6% Indonesia South Korea Malaysia U.S. Thailand Note: Retrieved from Asia Bond Monitor (Volume June 216), based on March 216 data Source: Asian Development Bank 2% 15% 1% 5% % 75.1% 34.7% 18.2% 95.9% 143.6% 127.% India Indonesia Phillippines South Korea Malaysia Thailand Source: Bloomberg, KResearch (data as of March 216) Notes: 1) Thailand s international reserve was USD178.7bn (as of June 216) 2) Foreign investor holdings (as of June 216): - Thai Government bonds: Bt567bn or 16% of the total Bt3.6trn in Thai Government bonds - Thai bonds: Bt72bn or 6.6% of the total Bt1.4trn in Thai bond market size Thailand s economy and financial markets are able to withstand impacts from QE tapering and its aftermath due to: High import coverage (international reserves/monthly imports) compared with the IMF s three month import coverage guideline More than 1% of external debt covered by international reserves Low portion of foreign holdings in Thai government bonds compared with other countries 134

68 BREXIT s impact toward Thai Economy is rather muted On the base case, impacts would transmit from depreciation of GBP and contraction in the UK economy as well as repercussions toward EU economic growth, which will transmit to GDP from three key channels equivalent to Bt1bn or.7% of 216 GDP Channels of exposure from BREXIT % of size in each activity EU UK Exports Tourism FDI Source : MoF, MoTS, BOT and KResearch BREXIT may pose a risk to the Thai economy with slower economic growth in the UK as well as the EU. Transmission from two main channels: exports and tourism; however, total impact toward Thailand economy is rather muted Exports: moderate impact to exports expected with an estimated loss to GDP growth of around.6% for 216 due to weak demand in exports such as foods, auto parts, and white goods Tourism: impact spillover from tourism sector is around.1% of 216 GDP as Britain ranked #3 in spending. Rising cost to travel in Thailand may reduce total spending. Meanwhile, the effect to EU tourists is much less FDI: very little impact in terms of FDI inward as Britain is not Thailand s main investor. Total value of FDI from the UK in 215 was less than one billion Baht 135 Net impacts of decreasing oil price for the Thai Economy Continued decline in global crude oil price should benefit countries with net oil import, including Thailand Lower price pressure should improve the efficiency of companies cost management, especially businesses with high energy costs, including transportation and fishery industries Lower crude oil price benefits 215 GDP Average 215: 51.3 USD/bbl Boost trade surplus: gains from less energy imports outweigh losses from tourist revenues and exports which depend on those oil exporters (Russia & OPEC countries), as well as related agricultural products Dubai Average 216f: 41. USD/bbl Lower inflation: a 1% drop in crude oil price would lead headline inflation to decrease by around.4% Enable domestic energy restructuring: the Oil Fund status becomes surplus and the government receives more excise taxes on diesel Better manage production costs: particularly industries with high energy costs Increase consumer purchasing power (except farmers): given widespread product price drops Positive Impact Industries Note: Calculated from I-O Table Negative Impact Industries Rubber: due to competition from synthetic rubber Agricultural products used in alternative energy: sugar cane, cassava, and oil palm 136

69 Challenges: Exports and Drought Export recovery expected, amid many challenges that could derail the pace of recovery Drought due to El Nino reducing rainfall, especially in Northern and Central Thailand. Drought may be an obstacle to a pick up in farm income Exports Drought Short-term Challenges Key Structural Problems Key Affected Products Short-term Measures from Authorities and Related Parties Sub-par global economic recovery, especially China Falling commodity prices, especially oil Depreciation of major trading partners currencies, especially EUR and JPY High dependence on China s market Changing demand in electronic products and loss of competitiveness in some areas (e.g., HDD) More effort needed to comply with global fishing standards Electronics and Electrical Appliances Fishery and agriculture products Petrochemical products Extending products to catch up with changing consumer trends Enhancing practices to comply with international standards regarding IUU fishing and human trafficking issues Setting up export promotion board Limited water balance for start of new crop cycle (May- October), leaving a marginal chance to grow off-season crops Low crop productivity Agricultural systems rely heavily on monoculture cropping Crops needing a large amount of water, such as rice Setting drought problems as the national agenda Providing support for affected farmers via BAAC, such as debt suspension, interest rate reduction, and debt contract extension. Farmers also encouraged to grow more drought tolerant crops or seek temporary work elsewhere Long-term Measures from Authorities and Related Parties Negotiating FTA and regional trade agreements, including TPP Relocating factories to GSP eligible countries Promoting BOI s privileges which grant merit based on competitiveness enhancements Enhancing productivity Improving water supply management efficiency Enhancing water allocations from 4 major dams in Chao Phraya River area Seeking more sources of groundwater under Bt372.9mn budget Stronger endorsement of zoning arrangement for farmers sustainable livings Source: KResearch, Data as of January 2, Other Figures Thai Bond Market Size (Gov't and Private bonds) Bond Yields Million Baht 12,, 1,, 8,, 6,, 4,, 2,, 57% 56% 63% 64% 65% 69% 7% 71% 74% 77% 4,888,177 5,85,98 6,118,237 6,962,136 7,327,1 8,579,957 8,991,819 9,287,288 9,824,84 1,42, Q 16 Thai Bond Outstanding (LHS) Bond Market Size to GDP (RHS) Foreign Holdings of Thai Bonds 9% 8% 7% 6% 5% 4% 3% % 1% 2% Percent to GDP % M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 1Y 15Y * Dec-13 Dec-14 Dec-15 Aug-16 * Data as of Aug 1, 216 Current Account and FX Reserve Million Baht 9, 7, 5, 3, 1, -1, 49,15 76,455 65,892 1.% 1.5% 1.1% 28,459 4.% 8.3% 8.4%7.4% 5.9% 6.% 6.6% 418,549 71,467 77,92 683, ,19 72, Q 16 9% 8% 7% 6% 5% 4% 3% 2% 1% % %of Total Bond Market USD Million 4, 3, 2, 1, -1, -2, USD178.7bn (Jun16) (+)USD25.bn (Jun16) 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, USD Million Foreign Holding Outstanding (LHS) % of Thai Bond Market (RHS) Current Account (LHS) FX Reserves (RHS) 138

70 Other Figures Million Baht 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Source: BOT, NESDB - Housing Loans/GDP 17.7%17.5% 18.%18.3%19.4% 15.8%16.1% 1,438, ,56, ,79, ,885, ,34, Note : Housing loans represent outstanding housing loans for personal consumption granted to individuals of householders by financial institutions (including Commercial banks, Finance companies, Credit financiers, SFIs, and Insurance companies but excluding Saving Cooperatives and others financial Institution) 2,263, Housing Loans for Personal Consumption (LHS) 2,51, % 22.3%22.8% 2,781, ,21, ,14,972 2Q16 25% 2% 15% 1% 5% % Percent to GDP Housing Loans to GDP (RHS) Million Baht 4, 35, 3, 25, 2, 15, 1, 5, 179, ,227 Credit Card Loans/GDP 2.% 1.9% 2.% 2.% 2.% 2.1% 2.2% 2.4% 2.5% 2.3% , , , , Credit Card Loans Outstanding (LHS) Note : 1) Credit card loans represent outstanding credit card loans from commercial banks and non-banks, excluding SFIs, saving cooperatives and others financial Institutions 2) GDP as of 2Q15 Million Baht 35, 3, 25, 2, 15, 1, 5, 211,89 229,137 29, , Personal Loans/GDP 213, , , , , , , , ,557 2Q %2.4% 2.2% 1.7% 1.9%2.1%2.3% 2.4%2.4%2.4% ,169 2Q216 3.% 2.5% 2.% 1.5% 1.%.5%.% 3.% 2.5% 2.% 1.5% 1.%.5%.% Total Personal Loans Outstanding (LHS) Personal Loans to GDP (RHS) Note : 1) Personal Loans represent outstanding personal loans under supervision (including commercial banks and non-banks, excluding SFIs, saving cooperatives and others financial Institution) 2) GDP as of 2Q Percent to GDP Percent to GDP Other Figures %YoY Thailand Korea Singapore USA China Malaysia Japan 25.% 2.% 15.% 1.% 5.%.% 65.4% 86.4% 11.6% 16.1% 122.5% 149.% 138.8%.% 5.% 1.% 15.% 2.% 14.%13.5% Loans to GDP as of 215 Note: Data on China, Korea and Japan include loans from commercial banks as well as financial institutions, the rest include loans only from commercial banks Credit Card Statistics 6.3% 15.7% 13.1% 19.6% 11.1% 9.7% 6.7% 8.5% 4.8% 5.6% 3.9% 1.1% 5.8% 14.3% 11.% 9.5% 5.8% 6.2% Q216 Credit Card Loan Growth Spending Growth Note: The credit card statistics number includes foreign bank and non-bank credit cards Source: BOT, NSO, CEIC, and KResearch %YoY 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% -2.% 5.3% -.5% 29 Thai Banks Net Loans and NPLs 4.1% 3.% 2.5% 2.3% 2.3% 2.7% 2.9% 12.5% 15.1% 14.% 1.5% 4.2% 3.4% 3.% %YoY Net Loan 212 Note : %YoY Net loans represent growth of net loans in 14 Thai commercial banks from CB1.1 Baht 2, 9.8% 8.3% 7.9% 15, 5.8% 1, 5, - 18, , , GDP Per Capita 136, , % 11.1% 15, %Gross NPLs 3.9% 155, % 167,51 174,338 2Q ,958 6.% 4.% 2.%.% % Gross NPLs to Total loans 12.% 1.% 8.% 6.% 4.% 4.8% 2.% 1.5%.% -2.% GDP Per Capita % YoY 14

71 Other Figures Population and Labour force Million Jun-16 Population Labour force % of Unemployment Unemployment Rate Source: NESDB, National Statistical Office (NSO), and KResearch 1. Jun-16 Net Foreign Direct Investment Foreign Direct Investment Position by Countries 466,71 4,94 494,52 1.% 6, 6.% 9.% 23.6% 23.2% 22.1% 22.2% 21.9% 27.5% 25.% 5, 8.% 469.5% 4.% 9.2% 9.3% 9.6% 8.2% 7.7% 4, 7.% 7.4% 7.7% 288,337 24,4 6.% 3, 224, % 7, , % 2.% 5.% 31.7% 3.% 31.7% 34.6% 34.8% 32.3% 34.% 2, 4.% -3.2% 23.4%.9% 1.2% 1.4% 1.9% 1.7% -22.2% 3.% 1, -84.9% -75.8% 17.5% 16.5% 1.9% 1.8% 17.%.% 16.1% 16.9% 14.8% 14.5% 2.% -13.3% 1.% 17.% 19.8% 18.2% 17.1% 17.% 16.1% 16.9% -1, -4,55-2.%.% Q M16 Asean EU China Japan USA Others Note: FDI %YoY - FDI refers to equity investment, lending to affiliates, and reinvested earnings; investment in equity is treated as a direct investment when the direct investors own 1% or more of ordinary shares - Net FDI is the net flow of FDI data in each year as per flow concept - FDI position by countries is an investment outstanding that nonresident investors have with resident enterprises as stock concept THB Million 141 Member of ASEAN Economic Community (AEC) Since December 31, 215, ASEAN has transformed into the ASEAN Economic Community, with free movement of goods, services, investment, and skilled labour, and a freer flow of capital Size of ASEAN Economy (USD Trillion) Average Projected GDP Growth around 5 % GDP Thailand ASEAN Size of Economy (GDP) in USD Trillion for Single Market and Production Base AEC by 215 Competitive Economic Region Equitable Economic Development Integration With the Global Economy Since Dec 31, 215, skilled labour under ASEAN Mutual Recognition Agreement (MRA) will have a freer flow 216 GDP Forecast 3.% 4.6% Contribution to GDP (by NESDB) 212 Y216F Greater Bangkok : Provinces 45 : : 56 Note: - Size of economy for 215 from IMF and compiled by KResearch (as of October 14, 215) GDP forecast is projected by KResearch (as of October 14, 215) - ASEAN economic growth: average growth among ASEAN member countries in national currencies - Greater Bangkok includes Nonthaburi, Samut Prakarn, Nakorn Pathom, Samut Sakhon, and Patumthani Source: The Association of Southeast Asian Nations and KResearch Source: IMF (October 215) and KResearch 142

72 AEC as a Growth Driver to Thailand 1) Regional Connectivity 2) The Pluralism of Economic Integration 3) High Growth Environment Strategically located, Thailand is the most essential area for GMS connectivity Physical connectivity and ease of customs formalities will spur regional trade and promote regional supply chain The emergence of AEC and RCEP, as well as other FTAs, will attract even more FDIs into the region, especially from the +3 countries 215 marks the completion of ASEAN Free Trade Zone amidst CLMV lowering their import tariffs close to zero Thailand will constitute the center of production in Mainland SEA, while low-value, labor-intensive processes will be moved to CLMV The materialization of regional supply chain will help maintain the region s competitiveness through labor division The establishment of Thailand s SEZs along the border is to tap into plentiful resources of CLM Consumer markets in CLMV will grow along with GDP increase and urbanization Note: CLMV = Cambodia, Laos, Myanmar and Vietnam; GMS = Greater Mekong Subregion; SEZs = Special Economic Zones, RCEP = Regional Comprehensive Economic Partnership 143 For Further Enquiries, Contact KASIKORNBANK Investor Relations: Chief Investor Relations Officer Tel (66) Fax (66) Investor Relations Team Tel (66) Tel (66) Fax (66) IR@kasikornbank.com IR Website Investor Relations Disclosure Practice: Unreviewed/unaudited quarterly financial reports are released within 21 days from the end of each period Reviewed financial reports are released within 45 days from the end of the period for 1Q and 3Q; Audited financial reports are released within 2 months from the end of the period for 2Q and 4Q Following KASIKORNBANK Disclosure Policy and good governance practice, KBank maintains a "silent period" for 7 days prior to the unreviewed/unaudited earnings announcement. During this period, the Bank refrains from replying to questions or commenting on the earnings announcement and arranging one-on-one or group meetings with analysts and investors 144

73 DISCLAIMER: This document is intended to provide material information relating to investment or product in discussion and for reference during discussion, presentation or seminar only. It does not represent or constitute an advice, offer, contract, recommendation or solicitation and should not be relied on as such. In preparation of this document, KASIKORNBANK PUBLIC COMPANY LIMITED ( KBank ) has made several crucial assumptions and relied on the financial and other information made available from public sources, and thus KBank assumes no responsibility and makes no representations with respect to accuracy and/or completeness of the information described herein. Before making your own independent decision to invest or enter into transaction, the recipient of the information ( Recipient ) shall review information relating to service or products of KBank including economic and market situation and other factors pertaining to the transaction as posted in KBank s website at URL and in other websites including to review all other information, documents prepared by other institutions and consult financial, legal or tax advisors each time. The Recipient understands and acknowledges that the investment or execution of the transaction may be the transaction with low liquidity and that KBank shall assume no liability for any loss or damage incurred by the Recipient arising out of such investment or execution of the transaction. The Recipient also acknowledges and understands that the information so provided by KBank does not represent the expected yield or consideration to be received by the Recipient arising out of the execution of the transaction. Further the Recipient should be aware that the transaction can be highly risky as the markets are unpredictable and there may be inadequate regulations and safeguards available to the Recipient. KBank reserves the rights to amend either in whole or in part of information so provided herein at any time as it deems fit and the Recipient acknowledges and agrees with such amendment. Where there is any inquiry, the Recipient may seek further information from KBank or in case of making complaint, the Recipient can contact KBank at IR@kasikornbank.com or +(662) to 1, +(662) to 74. * The information herewith represents data in the Bank's consolidated financial statements, some of the numbers and ratios are calculated before netting with KBank s non-controlling interest