KASIKORNBANKGROUP. Investor Presentation 10 February 2010

Transcription

1 KASIKORNBANKGROUP Investor Presentation 1 February 21 For further information, please contact Investor Relations Unit or visit our website at or 1 Agenda 29 Performance K-Strategy: Customer Centric Organization A Full Synergy 21 Financial Targets Credit Management Corporate / SME / es in 21 Appendix 2

2 29 Performance Consolidated Performance Highlights (Consolidated) 1Q9 2Q9 3Q9 4Q9* 29* Profitability - NIM 3.7% 3.8% 3.8% 3.7% 3.5% - ROE 13.1% 12.7% 12.6% 12.1% 12.6% - ROA 1.2% 1.2% 1.2% 1.1% 1.1% - YTD Loan growth (2.97%) (2.47%) (2.32%) 4.4% 4.4% - YoY Loan growth 9.7% 4.4% 1.3% 4.4% 4.4% - YoY Fee income growth 8.7% 12.5% 21.2% 17.3% 15.2% Cost control - Cost to income 52.4% 55.9% 54.9% 62.9% 56.8% Asset quality - NPL ratio 3.7% 3.7% 3.7% 3.8% 3.8% - Coverage ratio 87.8% 9.8% 91.4% 91.6% 91.6% Loan to Deposit 96.% 97.% 94.1% 96.7% 96.7% CAR 15.6% 15.9% 16.3% 15.2%** 15.2%** Note: * KBank completed the MTGH Acquisition on November 3, 29. The Bank acquired additional ordinary shares in MTGH to hold a 51% stake, valued at Bt7,529mn. The Bank s 29 consolidated Statement of Income included one month of operating results from companies in the MTGH Group **If include 2H9 profit, CAR = 15.9%, Tier I = 1.9% *** Companies in MTGH group consist of Muang Thai Group Holding Co., Ltd. (MTGH), Muang Thai Life Assurance Co., Ltd. (MTL) and Muang Thai Broker Co., Ltd. (MTB) Slow loan growth, in line with the economy. Loan growth was mainly from SME and retail businesses High NIM maintained, with a small dip in line with most commercial banks in the industry Double-digit fee income growth amid the economic downturn Cost to income ratio increased due to investment in strategic projects, particularly the Channel Expansion and Enhancement projects Asset quality stable; coverage ratio high; falling provisions and credit cost in second half Loan to deposit stabilized in mid-9s Strong capital base maintained 3 Agenda 29 Performance K-Strategy: Customer Centric Organization A Full Synergy 21 Financial Targets Credit Management Corporate / SME / es in 21 Appendix 4

3 Customer Centric Organization: KGroup s 7 Customer Segments Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass 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 < Bt1mn Individual wealth with KGroup* Bt1mn Individual wealth with KGroup* Bt15, to Bt1mn Individual wealth with KGroup* <Bt15, Note: * Wealth with KGroup is defined as savings and investments such as deposit products with KBank, mutual funds with KAsset, etc. 5 Agenda 29 Performance K-Strategy: Customer Centric Organization A Full Synergy 21 Financial Targets Credit Management Corporate / SME / es in 21 Appendix 6

4 21 Financial Targets ROE ROA NIM Loans Growth Non-interest income to average assets Fee Income Growth Provision Average per Q Targets Actual * Original Targets with MTGH ** (without MTGH) 12.6% 1.1% 3.5% 4.4% 2.5% 15.2% Bt9.4bn Bt2.35bn N/A N/A % 7-9% Above 2.% Above 25% Bt2.-2.3bn N/A N/A % 7-9% Above 3.5% Above 15%*** Bt2.-2.3bn Notes (Consolidated) Maintain strong NIM focusing on highyield lending markets Sensible growth corresponding to economic recovery and focusing on SME and retail customers Customer-centricity facilitates strengthening acquisitions, retention, and cross-selling capabilities Prudent and adequate Cost to Income Ratio 56.8% 56-58% 65-68%**** Cost to income ratio to peak in 21 from strategic projects investment NPL ratio (Gross) 3.76% Below 3.8% Below 3.8% Efficiently managed with effective monitoring system Please see the explanation of notes to 21 Financial Targets on slide number 7a 7 Explanation of Notes to 21 Financial Targets (Consolidated) Notes to 21 Financial Targets on Slide number 7 * The Bank s 29 consolidated Statement of Income included one month of operating results from companies in the MTGH Group ** 21 targets with MTGH reflect the targets after the accounting treatment (the elimination of intercompany transactions) due to the MTGH consolidation *** The 21 fee income target of above 15% in this column does not reflect a less ambitious target. The drop in the fee income growth target to above 15% from the original target of above 25% is a result of two main adjustments: the elimination of intercompany transactions due to the consolidation; and the 29 fee income base that has not been restated to reflect the acquisition. Since the MTGH acquisition completed in November 29, only one month of income from the MTGH acquisition was recognized in the Bank s 29 consolidated Statement of Income. The Bank chose NOT to restate the 29 fee base income as if the acquisition had taken place for the full year, except for December. As a result, the fee income base was bigger than if it had been restated, because the intercompany transactions were not eliminated. Had the Bank restated as if the acquisition fully taken place in 29, the fee income growth in 21 would have been in the range of 2-25% rather than above 15% as shown in the table. Please see more details on major accounting impacts from MTGH Acquisition in appendix page 27 and 28 ****Cost to income ratio can be separately consider between KGroup and MTGH. The 21 cost to income ratio increases due to the high cost nature of life insurance business that it realizes benefits payment to policyholders as expense plus it should set aside prudent insurance reserves expenses (called life policy reserve) since the time of policy sold until policies are paid-up or benefits are realized to ensure adequate benefits payment to policyholders. As a result, cost to income ratio of life insurance business is very high. Thus when consolidated with the Bank will result in higher cost to income ratio. Both benefits payment to life policy and Life policy reserve expenses are part of underwriting expense. 7a

5 Agenda 29 Performance K-Strategy: Customer Centric Organization A Full Synergy 21 Financial Targets Credit Management Corporate / SME / es in 21 Appendix 8 Credit Risk Management Framework Portfolio Management Proactive portfolio management based on portfolio performance, industry risks, customer credit risks, and upcoming events Origination Efficient and sound credit underwriting based on customer exposure and risk profiles and a centralized post-approval procedure Monitoring Up-to-date credit performance tracking and a designated mechanism to detect early warning signs and prevent credit quality deterioration Collection & Recovery Best practice in debt collection management and delegated recovery network for loan work-out process 9

6 Asset Quality: Non Performing Loan December 29 (Consolidated) Asset Quality in line with the Bank s expectation; KGroup s 3.76% NPL Ratio in 29 remained the lowest among top Thai banks Bt bn NPL NPL are well managed; most are already in litigation NPL Status Litigation Process 4.45% 3.76% < 3.8% 3.9% < (Target) Public Auction 36% Execution 13% Under Negotiation 11% Pre-court (Notice) 12% In Court 28% Under Negotiation Pre-court (Notice) In Court Execution Negotiation, await approval, document preparation & lawyer process Issue notice & court filing Trial / wait for court ruling collecting payment ruled by court or foreclosing NPL amount NPL Ratio Public Auction Liquidation process Note: Total consolidated NPL as of December 29 = Bt37,152mn 1 Asset Quality: Provision December 29 (Consolidated) Loan Loss Reserve to Required Reserve shows improvement to 137% and NPL Coverage Ratio over 9% LLR and NPL Coverage Lower Credit Cost in 21 due to strengthened provision level and economic recovery Provisioning Expenses and Credit Cost > 14% 127% 137% 116% 88% 91% > 95% 74% (Target) Bt bn %Credit Cost.82%.93% 1.2% % -.9% Average per quarter (Target) LLR coverage Ratio NPL Coverage Ratio % Credit Cost Provisioning Expense 11

7 Asset Quality: Foreclosed Properties December 29 (Consolidated) Foreclosed Properties expected to drop in 21 Losses rose in 29 due to the economic slowdown, however, sales remained steady Outstanding Foreclosed Properties Foreclosed Properties Movement Bt bn Bt bn % 4% -1% -13% (Target) (Target) Outstanding Foreclosed Properties Sale of Foreclosed Properties Loss on Foreclosed Properties Sold 12 Agenda 29 Performance K-Strategy: Customer Centric Organization A Full Synergy 21 Financial Targets Credit Management Corporate / SME / es in 21 Appendix 13

8 Corporate 21: Market Position and Differentiation Strategy (Customer Segments: Multi-Corporate and Large Corporate ) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass KGroup Market Position Improve market share from 17% in 29 to 18.5% in 21 Improve main bank status from 23% in 29 to 25% in 21 Focused Industries Provide Funding Alternatives and Financial Advisory Align with the positive economic outlook trend Differentiation Strategy Customer Centricity to support customer business sustainability Corporate Strategy to deliver an Excellent Customer Experience Provide Total Solution Enhance Long Term Relationship Ensure Excellent Service and Process Leverage within KGroup Increase customer satisfaction as a trusted partner Offer services and efficiency leading to a new market standard 14 Corporate 21: Financial Target (Customer Segments: Multi-Corporate and Large Corporate ) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass Sensible corporate loan growth and strong fee income growth Corporate loan growth at around 2-4% Corporate deposit growth is about 1% Corporate fee income growth 25-3% from 29* Corporate incremental of fee income portion from 35% in 29 to 41% in 21 Corporate new products, service innovations, and higher cross-selling activities will continue Note: * 21 fee income growth target in each business segment shown here should be compared with the target of fee income growth of 25% (without MTGH), not the target of fee income growth of 15% (Please refer to slide number 7 21 Financial Targets ) 15

9 SME 21: Market Position and Differentiation Strategy (Customer Segments: Medium and Small and Micro ) Corporate Multi-Corporate Large Corporate KGroup Market Position Strengthen #1 Position in SME Market - Bank for SME Improve market share from 27% in 29 to 29% in 21 SME Medium Small & Micro THE WISDOM Middle Income Mass Differentiation Strategy The Way We Lend and Assess Credit Risk Portfolio By Design Cost-Efficient Underwriting Model Proactive Monitoring & Recovery The Way We Support Our Customers Personal & Needs Innovative Solution Offerings The Way We Organize and Work Together & Unit Synergy Breaking the Silo 16 SME 21: Financial Target (Customer Segments: Medium and Small and Micro ) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass In 21 we will expect: SME loan growth 8-1% from 29 SME fee income growth 19-21% from 29* SME incremental of fee income portion from 21% in 29 to 22% in 21 Note: * 21 fee income growth target in each business segment shown here should be compared with the target of fee income growth of 25% (without MTGH), not the target of fee income growth of 15% (Please refer to slide number 7 21 Financial Targets ) 17

10 29 : Market Position (Customer Segments: THE WISDOM, Middle Income and Mass) Corporate Multi-Corporate Large Corporate THE WISDOM 29 Market penetration 34% Main Bank Status 16% Middle Income 29 Market penetration 27% Main Bank Status 13% Mass 29 E-Channel usage 82%* (as of November) SME Medium Small & Micro THE WISDOM Middle Income Mass Core Products: Deposit / Asset Management (Ranked #3 by volume) (Ranked #1 in total AUM market share with the highest mutual fund net AUM increased in 29) Housing Loan / Credit Card / Bancassurance (High volume growth (Outperform industry in First with low NPL) Year Premium growth in 29 ) Money Transfer / Debit Card / (Strong fee increased in 29) Consumer Loan / Mobile Banking (Ranked #1 in Number of Users) * 8% is best in class in E-Channel usage (Refer to research) 18 21: Differentiation Strategy (Customer Segments: THE WISDOM, Middle Income and Mass) Corporate Multi-Corporate Large Corporate Differentiation Strategy Leverage & Synergy Leverage among KGroup i.e. Dual Segment SME vs Wisdom, KAsset, KLeasing and KSecurities Synergy with Strategic Partners i.e. DTAC, Amway SME Medium Small & Micro THE WISDOM Middle Income Mass Advisory Simplified Advisory : 1, Branch Staffs Financial Advisory : 55 K-WePlan Financial Planners Dedicated Sales Team : THE WISDOM RM and Private Banking RM Holistic Customer Alternative Channels E-Channel : ATM&CDM Expansion with High Visibility (7,42 ATMs & 1, CDMs) Digital Experience : Total Mobile Solution, Internet Banking, KBank Live, K-Payment Gateway and Alert All Touch Touch-points Experience Optimal Channel Management : Perceived Convenience Relatively to Peers with Highest Branch Productivity (812 Branches) Service Quality : Improve Customer Satisfaction Index to 9 (91 in 211 as Global Benchmark Financial Industry *) * Source: Ac Nielsen 19

11 21: Financial Target (Customer Segments: THE WISDOM, Middle Income and Mass) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Market penetration 34% 45% Main Bank Status 16% 29% Middle Income Market penetration 27% 35% Main Bank Status 13% 16% loan will continue to grow at 14-16% in 21 from 16% in 29 Housing loan grew 13% in 29 Credit card grew 32% in 29 Consumer loan grew 18% in 29 Mass E-Channel usage 82% 81%* (As of November) THE WISDOM Middle Income Mass deposit growth at 8-1% from 3% in 29 Mutual fund grew 48% in 29 fee income growth at 36% in 21 from 23% in 29** Note: * 8% is best in class in E-Channel usage (Refer to research) ** 21 fee income growth target in each business segment shown here should be compared with the target of fee income growth of 25% (without MTGH), not the target of fee income growth of 15% (Please refer to slide number 7 21 Financial Targets ) 2 Agenda 29 Performance K-Strategy: Customer Centric Organization A Full Synergy 21 Financial Targets Credit Management Corporate / SME / es in 21 Appendix 21

12 Appendix 22 Economic Outlook in 21 GDP in 21 will rebound in line with the global economic recovery % YoY Key GDP Forecasts and Assumptions F 21F % YoY 28 29F 21F GDP Private Consumption Total Investment Gov. Budget (% of GDP) to -3. Exports Imports Current Account (USD bn) Headline Inflation Source: KResearch as of February 8, 21 Drivers: Growth in exports, resulting from economic up-trends in Thailand s major trade partners Government stimulus efforts via the FY21 budgetary deficit and the Stimulus Package 2 investment program Rising prices for soft commodities such as crops and agricultural products that may boost farm income Risks: Domestic political uncertainties and negative investment sentiment in some sectors Heightened inflationary pressure Global economic recovery -- challenged by monetary policy tightening, high unemployment and deteriorating fiscal status of some countries 23

13 Life Insurance Industry in Thailand Taiwan Y Y South Korea Singapore Australia Source: Swiss Reinsurance Premium per %GDP by Country India Malaysia China Thailand Indonesia Philippines Vietnam Low penetration rate of 2.1% in Thailand, with a high opportunity to grow insurance business in Thailand Muang Thai Life Assurance (MTL) is ranked # 3 in life insurance industry in Thailand with 8.3% market share as of 29 (Bt bn) Size of Market by Premium CAGR 1-9: 13.5% (Bt bn) 1 Total Premium First Year Premium Source: The Thai Life Assurance Association Market Share* in Life Insurance Source: The Thai Life Assurance Association *Market share by total premium Y28 Y AIA TLI MTL BLA SCNYL AACP KTAL TLA Others 24 Muang Thai Life Assurance (MTL) Information Summary Established on 6 April, The first life insurance company to be granted Royal Patronage (since 1959) Joined hands with Fortis Insurance International NV since 24, and joined hands with KBank since 25 Credit Rating: BBB+/Stable and Axa+ (ASEAN) from S&P Credit Rating: AA(tha) / BBB+/Stable form Fitch Rating Financial Information and Targets(Admitted) Bt bn (F) Total Asset % Growth 25% 2% 25% 24% Total Investment N/A % Growth 27% 2% 26% Net Profit % Growth 33% 18% 29% 8% Total Revenue N/A % Growth 39% 21% 26% ROE 18% 2% 18% N/A ROA 2.5% 2.4% 2.3% N/A Total Premium* % Growth 37% 26% 25% 42% First Year Premium N/A Single Premium N/A Renewal Premium N/A Capital N/A Capital to Capital Requirement Ratio 85% 669% 781% Investment to Life Policy Reserve * 113% 11% 112% N/A * The standard level for investment to life policy reserve is >= 1% Total Premium by Channels: Bancassurance accounted for 5% in 29 with increasing proportion from Bancassurance (Bt bn) (F) Partnership, Direct Marketing, and Group Bancassurance Sale Agents Non-financial Information and Targets Market Share 6.8% 7.8% 8.3% Rank #4 #3 #3 Source: The Thai Life Assurance Association(Y27-28) 25

14 MTL s Life Insurance Product Profile MTL s Product Portfolio Total Premium (29): Bt21.5bn MTL Portfolio mainly focus on Ordinary product, with high concentration on endowment-type. Group insurance is the second largest product sold. 4 major types of Life Insurance 1. Ordinary Life Insurance Products: Provide life protection for a fixed amount to an insured person. Can be further classified into 3 sub-categories; Endowment Life Insurance: Saving type product, insured person receive face amount at the certain period of time or a designated beneficiary receive death benefit upon the death of the insured person within the insured period e.g. Pro Saving 715, Pro Saving614 Term Life Insurance: provides temporary protection with no saving component. Insured person can claim upon death within the stated term period e.g. MRTA Home, Credit Shield Insurance 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 9/5 2. Group Life Insurance Products : term insurance covering a group of people, usually employees of a company or members of a union or association 3. Industrial Insurance Products : life insurance with modest amount of coverage, low premium and does not require health check 4. Personal Accident : a limited life insurance designed to cover the insured under personal accident Source: The Thai Life Assurance Association 26 Highlights: Consolidated Financial Statements Impacts from MTGH Acquisition The impacts mainly come from MTL performance Balance Sheet (Consolidated): The impacts mainly come from MTL performance Assets Liabilities - Life Policy Reserve (new item) Equity (+) MTL s assets, mainly investments in securities, loans and PP&E (+) Goodwill (-) Investment in MTL (+) MTL s liabilities, mainly life policy reserve (+) Minority interest from 61.7% of MTL equity at fair value Income Statement (Consolidated): The impacts mainly come from MTL performance Total Income - Net Premium Written (new item) Non-interest Expense - Underwriting Expense (new item) (+) MTL s income mainly investment income (NII) and net premium written (Non-interest Income) (-) Intercompany transactions, mainly Bancassurance fee (Fee income) (+) MTL s non-interest expense, mainly underwriting expense (-) Intercompany transactions, mainly expense paid to KBank Financial Ratio (Consolidated): The impacts mainly come from MTL performance NIM Non-interest Income to Average Asset Cost to Income Ratio Slightly higher from higher yield in MTL investment portfolio Higher from including MTL s net premium written, although asset size is higher Significantly higher as cost to income ratio for life insurance business is quite high 26a

15 Example: Major Accounting Impacts from MTGH Acquisition: Balance Sheet * Muang Thai Life Assurance (MTL) is used as an example, as it is the main revenue contributor of the MTGH acquisition. The numbers shown are for example only and are not the real numbers of KBank and MTL A MTL at Fair Value B KBank C KBank (Consolidated with MTL) (B/S total = 75,1) (B/S total = 1,2,) (B/S total = 1,27,) Asset 1 Liability 1 Asset 2 Liability 2 Asset (D) Liability (D) - Life Policy Reserve - Investments - Others - Loans - Cash & Deposits - PP&E Total = 62, - Others Equity 1 Total = 75,1 Total = 13,1 Value of the co. increased (FV > BV) MTL s equity at FV = 13,1 Equity 1.1 KBank (38.3%) Equity 1.2 MI (61.7%) - Investment in MTL 7,1 Total = 1,2, Total = 1,, Equity 2 Total = 2, Consolidate MTL at FV with KBank - Goodwill 2,* (7,1-5,) Total = 1,27, - Life Policy Reserve Total = 1,62, Equity (D) Total = 28, KBank Equity2 Total = 2, Goodwill* = Investment in MTL > Equity1.1 Asset (D) = Asset1 + Asset2 Investment in MTL + Goodwill Liability (D) = Liability1 + Liability2 Equity (D) = Equity1 + Equity2 - Equity1.1 MI Equity 1.2 Total = 8, A BB C MTL balance sheet: MTL s primary asset is their investment portfolio. The majority of their investments are held-to-maturity (HTM) investments type. Consolidation with KBank: MTL assets that are recorded at book value (i.e. HTM investments and PP&E) are converted to fair value (FV) via mark-to-market on assets. Major accounting impacts include an increase in value of investments (primarily from HTM investments) and PP&E. Thus, equity of MTL rose at the same rate. 38.3% of MTL s equity at FV belongs to KBank and 61.7% to the Minority Interest. KBank s balance sheet: KBank recorded the additional shares purchased in MTL as investment of 7,1MB. KBank s consolidated balance sheet: Three major impacts are: 1) Intercompany items are cancelled. Major items include KBank s 7,1 investment in MTL and KBank s 38.3% share ownership in MTL s equity. The difference between investment and equity is labeled as goodwill. 2) A new life policy reserve liability item 3) An increase in minority interest in equity (MI) item as a result of the 61.7% contribution from MTL belonging to other shareholders. 27 Example: Major Accounting Impacts from MTGH Acquisition: Statements of Income * Muang Thai Life Assurance (MTL) is used as an example, as it is the main revenue contributor of the MTGH acquisition. 1 All items in MTL s Statements of Income are added to KBank s Consolidated Statement of Income. Two new items from MTL are reported on KBank Consolidated Statements of Income: 1) Net Premium Written is reported under Non-interest Income and 2) Underwriting Expenses is reported under Non-interest Expenses. MTL s net investments income are added to multiple areas KASIKORNBANK Net Interest and Dividend Income Provisioning Expense Non-interest Income - Fees and Service Income - Other Income Non-interest Expense -Other Expense Net Income Muang Thai Life Assurance (MTL) 1. Net Premium Written 2. Net Investments Income 3. Gains on Investments in Securities such as interest income on investments, interest income on loans, other non-interest income, personnel expense, other non-interest expenses. Intercompany transactions are cancelled. Two major items are 1) KBank s Fee and Service Income and MTL s Underwriting Expenses (from Bancassurance commission fees that KBank receives from MTL) and 2) KBank s Other Income and MTL s Other Expenses (from intercompany transaction between KBank and MTL). An increase in value of investments (primarily from HTM investments) are amortized as contra account to interest income on investments and of PP&E are depreciated as non-interest expense. 61.7% of MTL s net income after amortization and depreciation of an increase in value of investments and PP&E, which belongs to Minority Interest (MI), is excluded from net income attributable to equity holders of KBank on the Consolidated Statements of Income. Add to Add to Add to Consolidate to KASIKORNBANK (Consolidated) Net Interest and Dividend Income - Loans - Interbank and MM - Investments Provisioning Expenses Non-Interest Income - Gain on investments - Fees and Service Income - Gain on Exchange - Net Premium Written (NEW ITEM) - Other income 4. Underwriting Expenses Add to Non-Interest Expense 5. Personnel Expenses Add to - Personnel Expense 6. Premises and Equipment Expenses Add to - Premises and Equipment Expenses 7. Bad Debt and Doubtful Accounts Add to - Underwriting Expenses (NEW ITEM) 8. Other Expenses Add to - Other Expenses Net Income KBank (38.3%) 4 Net Income MI (61.7%) 1 3 Amortize premium on HTM investments and Depreciate additional PP&E 28

16 29 Financial Performance Highlights Financial Performance KBank completed the MTGH Acquisition on November 3, 29. The Bank acquired additional ordinary shares in MTGH, to hold a 51% stake, valued at Bt7,529mn. The Bank s 29 consolidated Statement of Income included one month of operating results from companies in the MTGH Group Assets grew significantly mainly from the investment in MTGH 29 net income was Bt14.9bn, above market expectations; a slight 2.9% YoY decline despite the slow economy Loans grew 4.4% YoY, mainly driven by SME and businesses Fee income continued double-digit growth, 15.2% YOY Lowest NPL ratio among 4 large banks, with a coverage ratio reaching 92% Note: Muang Thai Group Holding Co. Ltd. (MTGH) is formerly known as Muangthai Fortis Holding Co., Ltd. Companies in MTGH Group consist of MTGH, Muang Thai Life Assurance Co., Ltd. (MTL), and Muang Thai Broker Co., Ltd. (MTB) 29 Earnings Before Provision and Tax (EBPT) and Net Profit December 29 (Consolidated) EBPT (Bt bn) Net Profit (Bt bn) Q9 2Q9 3Q9 4Q9 4Q8 EBPT (Bt bn) Net Profit (Bt bn)

17 ROA and ROE December 29 (Consolidated) ROA ROE ROE and ROA declined temporarily, due to higher loan loss provisions being set aside as a shield against the economic turbulence as well as continued investment in strategic projects Q9 2Q9 3Q9 4Q9 4Q8 ROA ROA (excl MTGH) ROE Net Interest Margin December 29 (Consolidated) Q9 2Q9 3Q9 4Q9 NIM in 29 declined to 3.51% from 3.98% in 28, due to the lower interest rate trend Q9 2Q9 3Q9 4Q9 4Q8 NIM NIM (excl MTGH) Yield Cost of Fund

18 Loan Growth December 29 (Consolidated) Loan Growth (% YoY) Slow loan growth, in line with the economy. Loan growth was mainly from SME and retail businesses Loan growth increased 4.35% YoY, with the majority of increases occurring in 4Q Q9 2Q9 3Q9 4Q9 4Q8 Loans (Bt bn) Loan Growth (% YoY) Loan Growth (% YTD) (2.97) (2.47) (2.32) Note: KBank s Definition CBS: Corporate Division, SME: SME Division, RBS: Division, CMT: Credit Management Division, Others: Loans of the Bank s subsidiaries and other loan types and 21 Loan Growth December 29 (Consolidated) Loan Portfolio Structure (Bt bn) % 763 6% 7% 8 7% 677 5% 7% 16% 17% 9% 4% 6 15% 14% 38% 39% 4 38% 39% 2 35% 34% 34% 3% CBS SME RBS CMT Others (Amount in Bt bn) Dec 8* 28 Dec 9 YoY Y21 growth growth target 1) Corporate Division (CBS) (7.4) 2-4 Multi-Corporate (7.4) Large Corporate (7.3) 2) SME Division (SME) Medium Small and Micro ) Division (RBS) Mortgaged Loans Credit Cards Consumer Loans ) Credit Management Division (CMT) ) Others Total Loans Note: * Dec 8 loan base is not comparable with previous reports, due to customer migration to larger segments KBank s Definition CBS: Corporate Division (Annual sales turnover Bt4mn) SME: SME Division (Annual sales turnover < Bt4mn) RBS: Division CMT: Credit Management Division (NPL + Performing Restructured Loans) Others: Loans of the Bank s subsidiaries and other loan types 34

19 Non-interest Income and Structure December 29 (Consolidated) (Bt bn) Non-interest Income Non-interest Income to Total Income 29% 34% 35% 39%* *Non-interest income to total income excl. MTGH = 37% Bt bn % 12% 1% 1%.2% 1% 6% 7%.3% 3% Non-interest income continued to grow, despite the slow economy, from fee and service income and life insurance premiums Non-interest income to total income was 39% in Q9 2Q9 3Q9 4Q9 4Q8 Non-interest income (Bt bn) % Growth (YoY) (1.55) % Non-interest Income Structure % 14% 71% % 15% % 8% 14% 75% 72% Other Income Net premium written Gain on Exchange Fee and Services Income Share of Profit from Investments on Equity Method Gains on Investments 35 Fee Income December 29 (Consolidated) Fee Income Fee Income to Total Income (Bt bn) % 24% 26% 28% Fee income grew 15.16% YoY in 29; continued growth is expected as a result of our customer-centric strategy Fee income to total income grew to 28%; fees from retail businesses were a main contributor Q9 2Q9 3Q9 4Q9 4Q8 Fee Income (Bt bn) Fee Income Growth (%YoY) Fee Income to Total Income

20 Fee Income Structure December 29 (Bank only) Fees by Division 1% 8% 6% Loan Related and Non-loan Related Fees 21% 2% 19% Loan Related Fee Non-loan Related Fee SME 14% 62% Corporate 24% In 29, loan related fee income made up around 2% of total fee income The Bank will continue to focus on non-loan related fees 4% 2% % Bt bn % 8% 81% % 5% 8% 9% 2% 23% 24% Fees by Product % 6% 8% 8% 2% 22% 24% % 8% 6% 8% 19% 24% 24% Note: a portion of the previous year had changes in the same definition of loanrelated as this year Others Bancassurance Trade Finance Cash Management Commercial Credit Transaction Services Credit Card 37 Non-interest Expenses and Structure December 29 (Consolidated) Non-interest Expenses (Bt bn) Bt bn % 11% 11%.3% 9% 2% 32% Non-interest Expenses Structure % 1%.3% 11% 8% 21% 32% % 9%.3% 12% 6% 2% 35% 15% 5% 9%.2% 11% 5% 21% 34% Others Underwriting expenses Contributions to FIDF and DPA Directors' remuneration Fee & Service Taxes & Duties Premises & Equipment Personnel Non-interest Expenses increased mainly due to greater personnel expenses and premises and equipment expenses related to the Bank s strategic projects, in particular the Channel Expansion and Enhancement projects and underwriting expenses from the life insurance business Q9 2Q9 3Q9 4Q9 4Q8 Non-interest Expense (Bt bn) % Growth (YoY)

21 Cost to Income Ratio December 29 (Consolidated) Cost to Income Ratio Cost to Asset Ratio Investment in strategic projects, particularly the Channel Expansion and Enhancement projects, continued to keep our cost to income ratio high KGroup s cost management is in place in key areas Q9 2Q9 3Q9 4Q9 4Q8 Cost to Income Ratio Cost to Income Ratio (excl MTGH) Cost to Asset Ratio Asset Quality December 29 (Consolidated) NPL Ratio Coverage Ratio NPLs stayed at 3.76%, as of 4Q9; well within expectations NPL ratio remained below 4% Coverage ratio continued to rise due to a more prudent loan loss provisioning policy during the economic downturn Q9 2Q9 3Q9 4Q9 4Q8 NPL Ratio Coverage Ratio

22 Provision Expense and Credit Cost December 29 (Consolidated) Provision Expense Credit Cost (Bt bn) Provision expense remained prudent and adequate Higher provision expense reflected the Bank s policy to be more prudent during times of economic downturn. As a result, credit cost climbed to 12bps in Q9 2Q9 3Q9 4Q9 4Q8 Provision Expense (Bt bn) Credit Cost Investment in Securities Portfolio and Structure December 29 (Consolidated) Instrument Type Holding Type Bt bn Bt bn % 25 4% 25 1% 5% % 189 6% % 2% 2% 2% 164 3% 1%.1% 2%.1% 2% 1% 1% 6% 2% 15 7% %1% 1% % 1 4% 3% 85% 1.6% 8% 2% 73% 4% 94% 11% 3% 93% 2% 4% 91% 94% 94% 9% 3% % 82% 81% 73% 4% 8% 3% 1% 2% 3% Q9 2Q9 3Q9 4Q Q9 2Q9 3Q9 4Q9 Trading Available-for-sales Held-to-maturity Govt & State Ent. Bonds Corp Bonds Foreign Bonds Equity Investment General Subsidiaries & assoc. 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 shareholder s equity 3) HTM: Stated at amortized cost, after deduction of any allowance for impairment Government, State Enterprise, and Corporate Securities increased sharply QoQ due to investments held by Muang Thai Life Assurance (MTL) Equity securities increased because of the additional investment in MTGH Q9 2Q9 3Q9 4Q9 4Q8 Investment Portfolio (Bt bn) % Growth (YoY)

23 Funding Structure and Interest Rate Movement December 29 (Consolidated) Bt bn % 2% KBank Funding Structure KBank Deposit Structure 1,122 1,4 1% 1,21 1,68 1,11 12% 4% 856 1% 11% 3% 5% 8% 8% 7% 7% 2% 6 86% 88% 89% 88% 89% 4 92% 91% 2 Bt bn % 47% 39% 41% 39% 6 48% 45% 4 55% 46% 5% 46% 48% 55% 54% Q9 2Q9 3Q9 4Q9 Deposits ST and LT Borrowings Interbank and Money Market 6% 5% 5% 5% 6% 5% 6% Q9 2Q9 3Q9 4Q9 Current Savings Term % KBank Interest Rate Movement ( customers) Q9 2Q9 3Q9 4Q9 MLR Savings Fixed 3M Deposit and Bill of Exchange Rates (December 29) Savings Fixed 3M-12M Fixed 24M-36M B/E 3M, 6M, 12M MLR MOR MRR.5%.65% 1.5%-1.75%.75% Lending rates (December 29) 5.85% 6.15% 6.45% Bt bn % 4 42% 3% 43% 55% 24% KBank ST and LT Borrowings % 38% % 55% 51% 53% 6% 49% 2% 45% 47% 2% % % Q9 2Q9 3Q9 4Q9 ST Debentures B/E & Others LT Borrowing 43 Solid Capital December % * Tier2 Tier Note: *If 2H9 profit included, CAR = 15.87%, Tier 1 = 1.93% Capital adequacy remains solid to support business growth Strong Tier I capital from continued Bank profit; the Bank has adopted Basel II regulations and is wellprepared for the BOT s new consolidated supervision Tier II capital, primarily long-term sub-debt which increased in December 28 from a Bt17bn issuance to support future business expansion Q9 2Q9 3Q9 4Q9 4Q8 CAR Tier I Tier II

24 Dividend December 29 Bt Dividend Per Share H9* Interim Dividend Payment % Dividend Payout Ratio H9* Gradual improvement in dividend payments, since the first payment in 24, due to sustainable earnings growth Dividend policy: both operating results and long-term returns to shareholders are taken into consideration in determining dividend payments H9* Dividend Per Share (Bt) Dividend Payout Ratio Note: *Interim dividend payment for 1H9 operating results 45 KASIKORNBANK Information Summary Established on June 8, 1945 with registered capital of Bt5mn (USD.15mn) Listed on the Stock Exchange of Thailand (SET) since 1976 Consolidated (as of December 29) Assets Bt1,359bn (USD41bn) Ranked #3 in Thai banking industry Loans Bt943bn (USD28bn) Ranked #3 with 15.6% market share* Deposits Bt975bn (USD29bn) Ranked #3 with 15.% market share* CAR** 15.2% ROE 12.6% ROA *** 1.1% Number of Branches 782 Number of ATMs 6,955 Number of Employees 15,46 Share Information SET Symbol Share Capital: Authorized KBANK, KBANK-F Bt3.5bn (USD.9bn) Issued and Paid-up Bt23.9bn (USD.7bn) Number of Shares 2.4bn shares Market Capitalization Bt23bn (USD6.1bn) Ranked #3 in Thai banking sector 4Q9 Avg. Share Price: KBANK Bt83.6 (UDS2.51) KBANK-F Bt87.7 (USD2.63) EPS (4Q9) Bt1.5 (USD.5) BVPS Bt51.4 (USD1.54) Note: * Loan and deposit market share is based on C.B. 1.1 (Monthly statement of assets and liabilities) ** If include 2H9 profit, CAR = 15.87% *** ROA (Excluding companies in MTGH group) = 1.14% Exchange rate at the end of December 29 was Bt33.36 per USD (Source: Bank of Thailand) 46

25 Corporate : Selected Awards and Recognition (Customer Segments: Multi-Corporate and Large Corporate ) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass Best Brand Equity Index Among Commercial Banks in Thailand, surveyed by Nielsen Company (Thailand) Limited Best IT and Communications Enabler Award of the Thailand ICT Excellence Awards 28 by the Thailand Management Association (TMA) Best IT Solution for Trade Finance for an Innovation Banking Application award of The Asian Banker IT Implementation Awards 29 by the Asian Banker magazine Best Cash Management Bank award of the FinanceAsia Country Awards for Achievement 29 by FinanceAsia magazine Best Trade Finance Provider Award 29 for Thailand, in the World s Best Trade Finance Providers 29 by Global Finance magazine 75 eq TM Customer Satisfaction by The Nielsen Company (Thailand) Limited Best Securities Company in SET Awards 29 for KSecurities by the Stock Exchange of Thailand and Money and Banking magazine 47 SME : Selected Awards and Recognition (Customer Segments: Medium and Small and Micro ) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass A total of nine awards from six projects for a series of commercials called "Fast Long Large, standing for fast credit turnaround time, longer loan terms, and larger loan amounts. These awards included the 1.The Silver Prize of the Asia Pacific Advertising Festival (ADFEST) award 2. The Cannes Silver Lion Award of Banking Investment & Insurance 3.The Third Winner Award from the Office of the Consumer Protection Board 4.Four Adman Awards by the Bangkok Art Directors' Association 5.The SPIKES ASIA 29 Award by the Bangkok Art Directors' Association 6.The Bangkok Art Directors Association (B.A.D.) Award by the Bangkok Art Directors' Association The Best Cash & Liquidity Management Bank (Thailand) by Alpha Southeast Asia magazine Excellence in SME Banking (27 & 28) by The Asian Banker magazine 48

26 : Selected Awards and Recognition (Customer Segments: THE WISDOM, Middle Income and Mass) Corporate SME Multi-Corporate Large Corporate Medium Small & Micro THE WISDOM Middle Income Mass Excellence in Mortgage by The Asian Banker Excellence in Mobile Phone Banking for K-MOBILE BANKING ATM SIM by The Asian Banker Best Private Wealth Management House (Thailand) by Alpha Southeast Asia CE Award 28 for our attempt to use the Voice of Customers in our retail customer experience management by G-CEM Best Bank 29 by Money & Banking Magazine Most Attractive Booth Awards in the large-space category & the creativity category by Money & Banking Magazine Best Co-Brand Product Carrefour-KBank Credit Card (Visa) by Lafferty Cards Awards 29 Best Debit Card K-My Debit (Visa) by Lafferty Cards Awards Thailand National Call Center Awards Corporate In-house over 5 seats the First Runner Up by Call Center Industry Association (CCIA) 49 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 5

27 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 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 6 days from the end of the period for 2Q and 4Q Following good governance practice, KASIKORNBANK maintains a "silent period" for approximately 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 51