TMB Bank Plc. Investors Presentation. Citi Asean Investor Conference August 2009

Transcription

1 TMB Bank Plc. Investors Presentation Citi Asean Investor Conference August 2009

2 TMB s strategy and transformation Key business updates 2Q09 results review Appendix [2]

3 Shareholding structure and management Shareholder structure as of March 2009 DBS Bank, 6.8% Ministry of Finance, 26.1% Thai NVDR *, 7.3% JP Morgan, 3.6% Military group, 2.2% Others, 28.8% Management team Mr. Boontuck Wungcharoen (Chief Executive Officer) Top Mgmt CEO ING, 25.2% Latest credentials KBANK: Head of corporate and capital market, SME Mr. Michal Szczurek (Chief Retail Banking Officer) Mr. Sayam Prasitsirigul (Chief SME Banking Officer) Wholesale SME KBANK: Head of large corporate KBANK: Head of supply chain financing & cash mgmt Mr. Piti Tantakasem (Chief Wholesale Banking Officer) Mr. Bart Hellemans (Chief Risk Officer) Retail ING: Mgmt Board of ING Nederlanden-Poland CRO COO ING: MD, Head of credit capital ING Direct Australia: Sales/operation/IT Mr. Thanomsak Chotikapraka (Chief Financial Officer) Mr. Simon Andrews (Chief Operating Officer) CFO Standard Chartered: CFO Note:* ING holds another 4.9% via Thai NVDR [3]

4 Operating platform and holding structure TMB Bank Banking Asset Management Leasing Insurance Investment Banking 6.1% loans market share 6.2% deposit market share 470 branches nationwide and 2,014 ATMs TMB Asset Management (75%) and ING Funds (strategic partner) having 12.2% of total asset market Thai Orix Leasing (46%) ING Life (life) Thai Insurance (nonlife) In house Source: As of December 2008 [4]

5 Revisit our 3-year aspiration to be the leading Thai bank, providing world class financial services Leading Thai Bank with World Class Financial Solutions Market Leadership 14% deposit market share with strong Saving& Current contribution Main bank status for wholesale,sme customers, and high penetration in retail Sustained Profitability Sustained profitability with 40% revenue contribution from consumer banking 35% revenue contribution from non-interest income Top quartile total shareholders return for Thailand Customers Top tier satisfaction/ Engagement level Regulators Good Rating Employees Employer of Choice For Financial Service [5]

6 And three-phase customer centric transformation Phase 2: Differentiation & Quality Growth Phase 3: Market Leadership Phase 1: Laying the Foundation onward Reorganization Branch transformation with service excellence for all segments End-to-end process HR Transformation & Risk Mgmt Product expansion Channel expansion Brand enhancement TMB Group offering New standards for customer service New standards for financial management [6]

7 2009 transformation plan and progress Q1/ 09 Q2/ 09 Q3/ 09 Q4/ 09 Reorganization Reorganization and employee deployment to become customer centric organization Clear business separation Detailed JD for all divisions Redeployment stabilized HR Transformation HR transformation & employee engagement for better working life New KPIs/PMS in place New compensation Scheme Career development & Training Branch Transformation Change current business model through Branch Transformation Customer migration Unnecessary work removed Process improvement (E2E) Re-design and implement bankwide End to End Process improvement New deposit process Centralize all types of limit setting Introduce LOS for SMEs Service & Sale Excellence Improve Service Excellence for better customer experience for all segments Service Excellence training & initiatives Customer Engagement Measurement & Scorecard [7]

8 Updates of branch transformations Target of transformation: to enable service and sale focus most appropriate for each customer segment Initiatives Projects Task, progress and completion Branch transformation SME/Corporate migration Branch operation excellence-removal of unnecessary works Branch sales & service improvement Branch modernization Customer migration to 50 hubs (SME) and HQ (corporate) completed in 1Q09 Relationship handoff to complete by July 2009 Tax payment completed in 2Q09 Line disbursement and countersign by 3Q09 Legal action and interest calculation completed in 2Q09 Non-home branch service completed in 1Q09 Cash van late delivery completed in 1Q09 Segregation of sales and services role completed in 1Q09 Sales & services skill training and monthly coaching ongoing New incentive plan completed in 2Q09 Branch manager development program - ongoing Branch signage upgrade by 3Q09 New style branch 8 new branches in 2Q09 and 4 more in Jul/09, all of which are in strong locations [8]

9 Updates of HR transformations Target of transformation: to build foundation for clear accountability, high performance and engagement Initiatives Projects Task, progress and completion HR transformation Reorganization Design of micro organization structure by 3Q09 Detailed job descriptions by 3Q09 Staff redeployment - ongoing KPI, compensation and career development Employee engagement and culture change New performance bonus scheme - completed in May 2009 Recruitment, mobility, transfer, exit, performance management, compensation management by 3Q09 Branch road-show by CEO completed in 1Q09 HQ road-show by CEO to complete by mid 3Q09 Employee engagement survey completed in June 2009 [9]

10 Updates of risk management upgrades Target of transformation: The bank has continuously strengthened its risk management to be in line with international best practice Initiatives Projects Task, progress and completion Risk management Loan classification Loan loss provisioning Risk rating Economic capital (RAROC) NPL classification from by account to by customer, 4Q08 Conservative recognition of second lien collateral, 4Q08 From expected losses basis to incurred losses basis for collective provisioning in line with IFRS standard, 1Q09 New risk rating system from 15 steps to 22 steps, in line with international rating standards, 2Q09 RAROC methodology to be introduced from 3Q09 [10]

11 TMB WAY: Five core values [11]

12 TMB s strategy and transformation Key business updates 2Q09 results review Appendix [12]

13 Retail: No fee savings accounts most innovative deposit product No fee savings accounts - features No fee up to 20 e-transactions with THB20,000 minimum balance, including access to other banks ATM Most innovative valued retail products to raise CASA and achieve transactional banking status No fee savings accounts performance update Achieved almost 50% of the 2009 year-end target in terms of account acquisition for 1-month product launch New accounts (including reactivated accounts) represent more than 50% of total account acquisition Average balance account was much higher than 20K minimum balance, but should decline going forward with more account acquisition [13]

14 Retail: TMB flexi home loan First to launch mortgage bundled with equity home loan TMB flexible home loan - features First bank to launch mortgage product bundled with equity home loan Provide flexibility for home buyers and yet being secured by home Credit line max at THB20 million with 80:20 or 90:10 line mix between mortgage loan and equity home loan Promotional rate to end in September 2009 Term loan: 1st to 8th month 9th - 12th month 2nd -3rd year 4th year and onward Housing loan 0.88% MLR 1.50% MLR 1.50% MLR 1.25% Premium home loan and refinance 0.88% MLR 1.75% MLR 1.75% MLR 1.50% Note: MLR as of Aug 2009 at 6.25% and MOR at 6.50%, Premium home = property by approved developers [14]

15 SME: Structured products with focus on supply chain 3x structured O/D accounts for working capital Attractive credit facilities (up to 3x of collateral) bundled with SBCG s credit guarantee program Structured drawdown (directly paid to business counter-party via fund transfer only) Attractive and competitive rate at MRR % Competitors currently offer 1-1.5x credit lines SBCG = Small Business Credit Guarantee Corporation, a state-owned enterprise [15]

16 Wholesale: Leading market share in custodian and establishing footprint in bond underwriting Leading bondholders representative with 32% market share Leading registrar and paying agents with 28% market share Recently awarded insurance asset custody from OIC, which oversees THB159 billion asset Lead underwriter for most recent bond deals with THB6 billion sales YTD TMB s No.1 Issuer Lead Underwriters AS Businesses Bondholders Representative Registrar and Paying Agent Local Custodian Foreign Custody Safekeeping Agent Market Share 31.84% 28.09% Customers Corporate, State Enterprises Corporate, State Enterprises AMC, Security Companies, Insurance, SEC, OIC Foreign Institutions NPL & NPA MC, Leasing [16]

17 revamp: on air since 1 Jul 09 Fresh & Clean Look [17]

18 TMB s strategy and transformation Key business updates 2Q09 results review Appendix [18]

19 Economic outlook: 2Q09 GDP growth still negative, but improved from 1Q09 Quarterly GDP growth 15% 5% -5% -15% -25% -35% Policy Rate 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 5.5% 3.25% 3.25% 3.25% 3.8% GDP Government consumption Gross fixed capital Imports 3.25% 3.50% -4.3% -7.1% -4.9% Private consumption Gross capital formation Exports 3.75% 3.75% 2.75% 2.00% 1.50% 1.25% Jan-08 Mar-08 May -08 Jul-08 Sep-08 Nov -08 Jan-09 Mar-09 May -09 Jul-09 2Q09 GDP dropped another 4.9%, but improved from a contraction of 7.1% in 1Q09 mainly due to strong government expenditure Core inflation in July 2009 was still a negative of 1.2% BOT has maintained the policy rate at 1.25% since June meeting. TMB expects the rate to hold for the rest of 2009 Given better-than-expected 2Q09 GDP growth, TMB revised up 2009 GDP growth to -3.7% (from -4.8%) GDP growth is expected to turn positive at 3.7% Source: the Bank of Thailand, NESDB [19]

20 2Q09 result review: Earnings continued to be affected by weak economy & branch transformation Net income and normalized PPOP THB million 3,000 2,000 1, ,000 Normalized PPOP 2,429 1,929 1,598 1,341 1,221 1,158 1, ,000-3,000-3,991-4,000 ROAE & ROAA Net income ROE (LHS) ROA (RHS) 15.0% 14.3% 5.0% 10.3% 1.1% 3.0% 5.0% 0.7% 3.8% 3.4% 1.0% -5.0% -1.0% -3.0% 0.3% 0.3% -15.0% -2.7% -5.0% 2Q09 net profit of THB393mn, a 9.9% decline 1Q09 with slightly lower ROE now at 3.4%. Weak earnings were due to continued weak economy and branch transformation implemented in 1Q09 Major actions in 2Q09: Pre-emptive qualitative review of performing loan portfolio, which resulted in THB3,081 million loan loss provision THB3,174 million* gains from buyback of US$153mn Hybrid Tier 1 and unwinding interest rate swap Completion of THB14.9 billion NPL and THB4.3 billion NPA sales -25.0% -35.0% -34.2% -7.0% -9.0% -11.0% Source: consolidated financial statements, * of which THB436 million IRS unwinding gains were booked in 1Q09 [20]

21 2Q09 results review: major actions taken in 2Q09 Major actions done in 1Q09 Financial impact Remark Pre-emptive qualitative review of performing loan portfolio Buy-back of US$153mn out of US$200mn hybrid Tier 1 securities (HBT1) issued in General provisions of THB3,081mn, of which THB2,843mn were booked under loan loss provision and another THB238mn under provision for obligation of contingent liabilities. Recognized THB2,302mn gains from buyback and THB873 mn gains from unwinding the associated interest rate swap contract. Precautionary step in anticipating economic outlook Out of THB873 mn gains from unwinding the interest rate swap, THB436 mn was already booked in 1Q09. Completion THB14,932mn NPL sales and THB4,286mn NPA sales to local NPL management company. Wrote off THB14,932mn NPL and THB4,286mn propertied foreclosed from balance sheet. Additional losses from NPL sales at THB115 million. Most impacts to P/L were booked in 1Q09 at THB1,371 million from NPL sales and THB1,551 million from NPA sales [21]

22 2Q09 result review: NII lowered QoQ, but with stable NIM Net interest income and NIM THB million NII (LHS) NIM (RHS) 4,000 3,998 4,088 3,000 3,489 3,229 3,113 2, % 2.8% 2.4% 2.2% 2.2% 1,000 0 Funding cost Average yield Cost of fund 6.0% 4.8% 5.0% 5.0% 4.2% 3.6% 4.0% 2.0% 2.4% 2.5% 2.9% 2.2% 1.6% 1 8.0% 6.0% 4.0% 2.0% Net interest income (NII) lowered slightly QoQ mainly due to: Declining interest rate and weak loan growth High allocation to highly liquid and low-risk assets But NIM now stable QoQ at 2.2% due to bank strategy to exit high cost deposit and dwindling mismatch Funding cost dropped further to 1.6% in 2Q09 from 2.2% due to bank s strategy to exit high cost deposit and continued rise in CASA. Source: consolidated financial statements [22]

23 2Q09 result review: Improving fee income from bancassurance and mutual fund Fee income THB million 1,400 1, Fee income (LHS) Growth rate (RHS) 1,287 1,222 1,153 1,034 1, % -4.7% -5.0% -5.6% -10.4% Fee income breakdown Mutual fund & Bancassurance Others 6% Credit-related 13% 26% Cash Credit card/ management & merchant & Payment ATM 16% 39% % 1 5.0% -5.0% % 2Q09 fee income improved slightly QoQ mainly from better bancassurance and mutual fund sales Fee income structure: 39.0% credit card/merchant and ATM, 26.3% bancassurance and mutual fund, 13% credit-related, 16.0% cash management and payment Credit related fee has remained on the downward But fees from mutual fund bancassurance rose 56% and 26% QoQ respectively Source: consolidated financial statements [23]

24 2Q09 result review: Cost to income remains under pressure Cost to income ratio and operating cost % 102.6% % 76.5% 65.9% % 71.3% 50.3% 64.3% % 2 Cost to income ratio Operating cost to income Operating cost break down Cost to income dropped QoQ to 50.3% from 115.8% in 1Q09, mainly due to gains from Hybrid Tier 1 buy back and sale of investments as well as lower losses on impairment of NPA Operating cost to income still rose to 75.1 % mainly due to increase in personnel expenses Contributions to FIDF, 881 Other expenses, 883 Personnel expenses, 2,908 Directors' remuneration, 14 Fees and Taxes and duties, 362 Premises and equipment expenses, 1,259 Source: consolidated financial statements [24]

25 2Q09 result review: NPL ratio lowered to 14.4% NPL and gross NPL ratio THB million 60,000 40,000 20,000-70, % 70, % 69, % 73, % NPL (LHS) Gross NPL ratio (RHS) 59, % Excess reserves 3.0% % excess reserves to performing loan-bank only (LHS) % reserves over BOT's requirement (RHS) 2.5% 2.0% 2.5% 2.3% 2.2% 2.4% 1.5% 1.5% 1.0% 0.5% 128.8% 132.8% 125.5% 125.5% 117.0% 200% 175% 150% 125% 100% NPL coverage % 68.2% 65.8% % 59.9% 4 2 2Q09 NPL at THB59,884 million, lowered by THB14bn QoQ mainly from NPL block sales Coverage ratio was flat QoQ With general provision booked in 2Q09, TMB s excess reserve to performing loans now at 2.4% Source: consolidated financial statements, % excess reserve is based on bank only [25]

26 2Q09 result review: Continued negative loan growth Loan and loan growth THB million Total loan (LHS) Loan growth, QoQ (RHS) 400, , , , , , , , % -0.7% -2.0% -6.4% 100, % 0 45% 35% 25% 15% 5% -5% -15% 2Q09 loans continued to drop 7.9% QoQ, or 13.7% YTD, mainly due to NPL sale, weak economy, stringent underwriting standard and impacts from branch transformation Most declines were still from repayment of trade finance and working capital loans 2Q09 Corporate/SME/Retail loan breakdown at 48:34:18 Loan breakdown by segment (2Q09) Loan breakdown by segment (1Q09) Retail, 17.5% Corporate, 48.4% Retail, 16.4% Corporate, 45.6% SME, 34.1% SME, 37.9% Source: consolidated financial statements, * loan breakdown is based on bank only [26]

27 2Q09 result review: Still lower deposits but strong CASA mix Deposit and deposit growth THB million 400, , , , , , , % 200, % -2.2% Deposit breakdown Total deposit (LHS) Deposit growth, QoQ (RHS) 100, % -8.8% -5% 0-15% Current Savings Fixed % 62.6% 61.2% 53.2% 49.4% % 40.4% % 33.8% 44.5% 25% 15% 5% 2Q09 deposits dropped 8.8% QoQ, 10.9% YTD due to bank strategy to exit high cost deposits Saving & current accounts (CASA) mix continue to rise to 50.3% in 2Q09 from 46.6% in 1Q09 and 38.7% in 4Q08 Deposit mix continued to improve since 4Q08 with implementation of Bank s Deposit-Led Strategy and contribution from new deposit products No fee savings accounts 4.2% 4.5% 4.9% 6.2% 5.8% Source: consolidated financial statements [27]

28 2Q09 result review: Continued strong liquidity with stable LDR Earning asset allocation Cash Interbank Investment Loans % 73.9% 72.9% 67.4% 68.0% % 18.2% 14.0% 19.9% 20.6% 5.7% 6.0% 11.2% 11.3% 9.5% 1.8% 1.9% 1.9% 1.5% 2.0% Loan to deposit ratio Loan to deposit ratio Loan to deposit ratio + ST borrowing % 98.6% % 91.2% 90.2% % 90.3% 87.4% % 83.5% Continued strong liquidity with cash, interbank and short term investment representing 27.7% of total earning assets vs. 24.5% in 1Q09 Investment portfolio comprised mainly with state-enterprise and government bonds. In 2Q09, significant portion of listed equity investment were reduced Loan to deposit ratio included ST borrowing stable QoQ at 83.5%. Excluding ST borrowing, LDR rose slightly QoQ 7 Source: consolidated financial statements [28]

29 2Q09 result review: Solid capital base maintained CAR and BOT min requirement 22.0% 18.0% 16.38% 17.30% 13.90% 14.09% 14.98% 14.0% CAR BOT requirement 1 6.0% 8.50% 8.50% 8.50% 8.50% 8.50% 2.0% Tier I capital and BOT min requirement 12.78% 14.0% 11.69% 10.10% 10.56% 10.98% 12.0% Tier I and total capital adequacy ratio (CAR) were 11.0% and 15.0% (Basel II calculation), well above minimum requirement by BOT 2Q09 CAR improved QoQ due to lower risk-weighted assets US$153 million buy-back of HBT1 did not affect capital position due to THB4 billion issuance of TMB-IT1 in April % 6.0% Tier I Capital BOT min requirement 4.0% 2.0% 4.25% 4.25% 4.25% 4.25% 4.25% Source: bank only, under Basel II calculation [29]

30 TMB s strategy and transformation Key business updates 2Q09 results review Appendix [30]

31 Balance sheet Unit : THB million 2Q09 1Q09 % Δ QoQ 2Q08 % Δ YoY 1H09 1H08 % Δ YOY Cash, Interbank and repurchase 70,410 81, % 54, % 70,410 54, % Investments 113, , % 120, % 113, , % Loans and Accrued Interest Receivable 368, , % 439, % 368, , % Less Allowance for doubtful accounts (35,897) (44,453) N/A (49,023) N/A (35,897) (49,023) N/A Loans and AIlowance - net 333, , % 390, % 333, , % Properties foreclosed - net 14,522 17, % 21, % 14,522 21, % Premises and equipment - net 13,270 14, % 12, % 13,270 12, % Goodwill from transferred business - net % % Other assets 24,081 13, % 22, % 24,081 22, % Total Assets 568, , % 621, % 568, , % Deposits 401, , % 434, % 401, , % Interbank and Money Market Items 22,733 12, % 11, % 22,733 11, % Borrowings 62,099 63, % 79, % 62,099 79, % Other liabilities 36,462 39, % 49, % 36,462 49, % Total Liabilities 522, , % 575, % 522, , % Shareholders' equity 46,002 46, % 44, % 46,002 44, % Minority Interests % % % LIABILITIES & SHAREHOLDERS' EQUITY 568, , % 621, % 568, , % Source: consolidated financial statements [31]

32 Profit and Losses (Unit:THB million) 2Q09 1Q09 % Δ QoQ 2Q0 8 % Δ YoY 1H09 1H08 % Δ YOY Interest and dividend income 5,092 6, % 7, % 11,196 14, % Interest expenses 1,978 2, % 3, % 4,854 6, % Net income from interest and dividend (NII) 3,113 3, % 3, % 6,342 8, % Bad debts and doubtful accounts (reversal) 3,734 (1,113) N/A % 2,621 1, % NII after provision (621) 4, % 3, % 3,721 6, % Non-interest income 5, % 2, % 6,191 4, % Non-interest expenses 4,188 4, % 3, % 9,057 7, % Net income (loss) before income tax % 1, % 856 2, % Income tax % % % Minority interests in net profit % % % Net income % 1, % 829 2, % Source: consolidated financial statements [32]

33 Non interest income and expenses (Unit:THB m illion) 2Q09 1Q09 % Δ QoQ 2Q08 % Δ YoY 1H09 1H08 % Δ YOY Gain/loss on investments 873 (955) N/A % (82) % S hare of profit (loss) from investments accounted for using the equity method % % % Fees and service income 1,050 1, % 1, % 2,084 2, % Acceptances, avals and guarantees % % % O thers % 1, % 1,883 2, % Gain on exchange % % % Gain on sale of assets 110 (49) N/A % % Other income 2, % % 3, % Total non-interest income 5, % 2, % 6,191 4, % N on interest expenses P ersonnel expenses 1,546 1, % 1, % 2,908 2, % P remises and equipment expenses % % 1,259 1, % Taxes an d d uties % % Fees and service expenses % % % D irectors rem une ration % 7 8.9% % Loss on impairment of properties foreclosed and other assets 276 1, % % 1, % Contributions to the FIDF % % % Loss on provisions of obligations from transferred non-performing assets % Loss on provisions of obligations - others 262 (204) N/A (5 ) N/A % G oodwill amortization 0 0 N/A 0 N/A 0 0 N/A Loss on impairment of goodwill 0 0 N/A 0 N/A 0 0 N/A Loss on sales of assets 0 0 N/A 0 N/A 0 0 N/A O ther expense % % 883 1, % Total non-interest expense 4,188 4, % 3, % 9,057 7, % Source: consolidated financial statements [33]

34 Selected key financial ratios 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 FY08 FY07 Profitability & ROAE 3.4% 3.8% -34.2% 14.3% 10.3% 14.3% 1.0% -95.6% Margin ROAA 0.3% 0.3% -2.7% 1.1% 0.7% 1.0% 0.1% -6.4% Cost to Income (proforma) 50.3% 115.8% 102.6% 76.5% 65.9% 61.9% 75.0% 153.9% Yield on avg earning assets 3.6% 4.2% 5.0% 5.0% 4.8% 4.9% 4.9% 5.1% Funding costs 1.6% 2.2% 2.9% 2.5% 2.4% 2.3% 2.5% 2.8% NIM, avg earnings assets 2.2% 2.2% 2.4% 2.8% 2.7% 2.8% 2.6% 2.5% Liquidity Loan to deposit 91.2% 90.2% 94.2% 98.6% 100.3% 93.3% 94.2% 99.9% Loan to depsosit + ST borrowing 83.5% 83.5% 87.4% 90.3% 89.7% 88.7% 87.4% 95.3% Cash & interbank to earning assets 11.5% 12.8% 13.2% 7.9% 7.6% 9.4% 13.2% 8.5% Fee income Fee income/total income 12.6% 24.6% 24.0% 22.4% 21.3% 20.8% 22.0% 23.5% Fee income, yoy growth -18.4% -23.4% -21.3% -13.1% 0.3% 6.7% -7.5% 14.5% Loan & deposit Loan, yoy Growth -16.0% -11.4% -8.7% -11.6% -13.7% -14.3% -8.7% -14.1% growth Loan, qoq Growth -7.8% -6.4% -0.7% -2.0% -2.7% -3.6% Deposit, yoy Growth -7.7% -8.4% -3.3% -16.0% -11.7% -8.0% -3.3% -18.1% Deposit, qoq Growth -8.8% -2.2% 3.9% -0.3% -9.5% 3.2% Capital Tier I 11.0% 10.6% 10.1% 12.8% 11.7% 11.2% 10.1% 10.5% (Bank only) Total CAR 15.0% 14.1% 13.9% 17.3% 16.4% 15.0% 13.9% 14.4% Asset quality Reported NPL (THB million) 59,884 73,957 69,777 70,741 70,500 73,996 69,777 76,512 Gross NPL 14.4% 16.0% 14.3% 15.4% 15.2% 15.1% 14.3% 16.1% NPL coverage 59.9% 60.1% 65.8% 68.2% 69.5% 66.0% 65.8% 68.1% Source: consolidated financial statements [34]

35 Asset growth and leverage Asset and asset growth THB million 630, , , , , % 480, % Total asset (LHS) Asset growth, QoQ (RHS) 601, , , % -0.1% -5.4% 30% 20% 10% 0% Equity and equity growth THB million 50,000 48,330 45,000 44,982 40,000 35, % -0.5% 30,000 44,955 46,072 46, % Total equity (LHS) Equity growth, QoQ (RHS) 2.5% -0.2% 50% 40% 30% 20% 10% 0% 430,000-10% 25,000-10% ROAE & ROAA ROE (LHS) ROA (RHS) 15.0% 10.3% 14.3% 5.0% 3.8% 3.4% -5.0% -15.0% 0.7% 1.1% -2.7% 0.3% 0.3% -25.0% -35.0% -34.2% 1 5.0% -5.0% -1 Liability to equity ratio (x) % % Liability to equity ratio (LHS) Growth rate (RHS) % % 50% 30% 10% -10% -30% Source: 2Q09 consolidated financial statements [35]

36 Key balance sheet item breakdown Earning asset allocation Cash Interbank Investment Loans Interest-bearing liabilites 72.8% 73.9% 72.9% 67.4% 68.0% LT borrowing ST borrowing Interbank and money market Deposit 5.5% 6.0% 6.0% 5.5% 5.1% 9.8% 7.8% 6.7% 6.9% 7.7% 2.0% 1.9% 1.6% 2.1% 4.5% % 84.3% 85.8% 85.5% 82.7% % 18.2% 14.0% 19.9% 20.6% 5.7% 6.0% 11.2% 11.3% 9.5% 1.8% 1.9% 1.9% 1.5% 2.0% 2 Loan breakdown by segment* Corporate SME Retail Deposit breakdown Current Savings Fixed % 16.4% 17.5% 39.0% 37.9% 34.1% % 62.6% 61.2% 53.2% 49.4% % 45.6% 48.4% % 32.6% 33.8% 40.4% 44.5% 4Q08 1Q09 2Q09 4.2% 4.5% 4.9% 6.2% 5.8% Source: 2Q09 consolidated financial statements [36]

37 Employees and number of branches and channels movement Total number of employee 10,000 9,000 8,832 8,636 9,039 9,119 9,319 Number of ATM 2,500 2,000 1,500 1,742 1,825 1,946 2,014 2,180 8,000 1, ,000 0 Domestic branches Branch distribution as of 1H Northeastern, Southern and Western, BMA, Northern provinces, 53 Eastern, 44 Central, 52 Source: 2Q09 consolidated financial statements [37]

38 Credit ratings Standard & Poors Long Term Debt BB+ Hybrid Tier I B+ Short Term Debt/Deposits B Bank Fundamental Strength Rating D+ Outlook Stable Moody's Investor Services Long Term Deposits Hybrid Tier I Short Term Debt/Deposits Outlook Bank Fundamental Strength Rating-Outlook Baa3 B1 Prime-3 Stable D-/Stable Fitch Rating FCY - Long Term/Short Term Sub Debts/Hybrid Tier I Individual Support Rating Floor/Support Outlook BBB-/F3 BB+/B C/D BB/3 Negative Local Rating TRIS-Long Term Debt A+ TRIS - Sub Debt A TRIS - Hybrid Tier I BBB+ Fitch - Long Term/Short Term A+/F1 (tha) Fitch - Subordinated debt A (tha) Fitch - Outlook Stable Note: updated as of 30 Sep 09 [38]

39 Peer comparison and market share Asset market share THB billion 2,000 1,600 1, % 14.5% 1, % 11.9% 1,447 1,275 1, % % % 3.6% 1.3% 1.2% % 1 5.0% THB billion Deposit market share 1,500 1, % 1, % 1, % 13.2% % % % 3.7% 0.9% 1.1% % % 1 5.0% BBL KTB SCB KBANK BAY TMB SCIB TBANK TISCO KK BBL KTB SCB KBANK BAY TMB SCIB TBANK KK TISCO Loan market share 1, % 16.8% 20% Revenue market share 20, % 17.2% 16.3% 2 THB billion 1, % 13.4% 1,102 1, % % 4.3% % 1.7% % BBL KTB SCB KBANK BAY TMB SCIB TBANK TISCO KK 16% 12% 8% 4% 0% THB million 15,000 10,000 5, ,977 17,624 16, % 10.1% 8.1% 7.7% 13,022 10,351 8,280 7, % 5, % 1.6% 2,202 1,612 BBL SCB KBANK KTB BAY TMB TCAP SCIB TISCO KK 15.0% 1 5.0% -5.0% -1 Source: C.B 1.1 as of June 09 [39]

40 Peer comparison and market share (Cont.) NPL coverage Allowance/BOT requirement % 96.4% 93.5% 91.2% 67.6% 62.2% 61.0% 55.4% 51.4% 42.5% % 134.7% 131.1% 127.3% 10 BBL KBANK TBANK SCB BAY SCIB TMB TISCO KK KTB 123.5% 118.1% 117.7% 104.4% 103.6% 102.4% BBL KBANK BAY TMB SCB SCIB TISCO KTB KK TBANK Loan to deposit ratio % 113.3% 106.5% 106.2% 96.6% 96.3% 91% 90.2% 83.7% 81.3% Loan growth, QoQ 3.0% 2.8% 2.7% 2.4% 1.5% 1.4% 0.4% 0.2% -0.3% TISCO KTB KK TBANK BAY KBANK SCIB SCB BBL TMB -3.0% -2.7% 3-6.0% TISCO KK TBANK BAY KBANK KTB TMB SCB SCIB BBL -9.0% -7.9% Source: C.B 1.1 as of June 09 [40]

41 Peer comparison and market share (Cont.) Excess reserve to performing loans 3.0% 2.0% 1.0% 2.6% 2.4% 1.3% 1.0% 0.9% 0.9% 0.2% 0.2% 0.2% 0.1% BBL TMB BAY SCIB KBANK SCB TISCO KTB KK TBANK Total NPL THB billion KTB BBL TMB SCB BAY KBANK SCIB TBANK KK TISCO Provision to gross loan (basis points) Cost to income ratio % % 51.0% 51.1% 53.2% 55.4% 55.9% 57.7% 63.5% TCAP BAY TMB TISCO KBANK SCIB BBL SCB KTB KK 2.3 KK TMB BBL TISCO SCB SCIB BAY KBANK KTB TCAP Source: 2Q09 consolidated financial statements and C.B.1.1 as of June 09 [41]

42 Peer comparison and market share (Cont.) Net profit THB million 24.7% 22.9% 5,000 5, % 4,000 4,859 3,000 3, % 8.3% 2, % 2, % 1,000 1, % 2.4% 1, % 393 SCB BBL KBANK KTB BAY SCIB TCAP KK TISCO TMB 25.0% % 1 5.0% Net profit growth, QoQ % % 60.5% % -0.2% 2-2 SCIB BAY KK TISCO BBL KBANK SCB TMB KTB TCAP -2.5% -5.6% -9.9% -12.5% % ROAE & ROAA % 15.0% 17.7% 1 1.6% 1.6% 5.0% 3.4% 14.1% ROE (LHS) 12.9% 11.9% 10.9% 10.6% 1.2% 1.2% 1.1% 1.1% ROA (RHS) 8.7% 8.1% 3.5% 0.6% 1.0% 0.3% 4.0% 3.0% 2.0% 1.0% Net interest margin 5.0% 4.7% 4.3% 4.1% 4.0% 4.0% 3.0% 2.0% 1.0% 3.9% 3.4% 3.3% 3.1% 3.0% 2.3% TISCO SCB KK KBANK SCIB BBL TCAP KTB BAY TMB TISCO KK TCAP BAY KBANK SCB SCIB BBL KTB TMB Source: 2Q09 consolidated financial statements [42]

43 Peer comparison and market share (Cont.) Number of branch % 15.9% 15.1% % % No. of branch % % % market share 0.7% 0.7% SCB BBL KTB KBANK BAY TMB SCIB TBANK KK TISCO 18.0% 16.0% 14.0% 12.0% 1 8.0% 6.0% 4.0% 2.0% Branch distribution 2,000 1,600 1, TMB Industry market share 8.7% 9.2% 8.1% 7.5% 8.8% 1,881 1, BMA Centre Northeastern North South 1 8.0% 6.0% 4.0% 2.0% Overhead expense to total income Total revenue per employee % 32.5% 31.3% 30.6% 30.5% 29.4% 29.4% 26.5% 26.3% 18.8% THB million TISCO KBANK BAY BBL KTB SCB KK SCIB TMB TCAP KBANK BAY SCB BBL TMB TCAP KK TISCO SCIB KTB Source: BOT as of June 09, 2Q09 consolidated F/S [43]

44 Company history 1957 TMB Bank Plc. was established on November 1957 with Field Marshal Saridi Dhanarajata as the first Chairman of the Board of Directors and initial registered capital of THB10 million The Bank was listed on the Stock Exchange of Thailand (SET) on December 23, TMB was merged with DBS Thai Danu and IFCT effectively on September 1, Total assets grew to THB700 billion The Bank rebranded to TMB Bank Public Company Limited with a new slogan of Better Partner, Better Value The Bank issued US$200 million non-cumulative hybrid debt capital instruments (Hybrid Tier 1) The Bank succeeded in raising THB37.6 billion new capital. ING Group, the new major shareholder, holds 30.1% (including via NVDR) and MOF holds 26.1%. [44]

45 Awards and mandates Lead underwriter of Thai Airways International unsecured debenture of THB 7.5bn & 7.0billion (Oct 08) Lead underwriter of Home Product Center unsecured debenture of THB630million (Nov 08) Co-lead underwriter of PTT Chemical unsecured debenture of THB12billion (Dec 08) Lead underwriter of Advance Info Service unsecured debenture of THB7.5billion (Jan 09) Full service cash management to Central Retail Corporation (Feb 09) Cheque payment to National Housing Authority (Feb 09) Lead underwriter of PTT Aromatics unsecured debenture of THB15 billion (Apr 09) Co-lead underwriter of PTT Exploration and Production unsecured debenture of THB40bn (May 09) Lead underwriter of Bangkok Dusit Medical Services unsecured Debenture of THB3bn (June 09) [45]

46 Thank you IR contacts: Head of IR department Passakorn Linmaneechote CFA Tel: Jittrawadee Srivichit Tel: Taweechai Chachiamchen Tel: my way your way [46]