KASIKORNBANK. Investor Presentation as of 4Q14. March 2015

Transcription

1 KASIKORNBANK Investor Presentation as of 4Q14 March 215 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.15mn) Listed on the Stock Exchange of Thailand (SET) since 1976 Consolidated (as of December 214) Assets Bt2,389bn (USD72.5bn) Ranked #4 with 14.5% market share** Loans* Bt1,527bn (USD46.3bn) Ranked #4 with 14.8% market share** Deposits Bt1,63bn (USD49.4bn) Ranked #4 with 15.% market share** CAR 17.31% *** ROE 19.38% ROA 1.97% Number of Branches 1,124 Number of ATMs 9,853 Number of Employees 21,614 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 Bt548bn (USD16.6bn) Ranked #2 in Thai banking sector 4Q14 Avg. Share Price: KBANK Bt (USD7.13) KBANK-F Bt (USD7.15) EPS Bt19.28 (USD.58) BVPS Bt17.41 (USD3.26) 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) as of December 214 *** 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 December 214 (Mid Rate) was Bt32.96 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 Strategy and Segment Highlights Risk and Credit Management Financial Performance Highlights Net Interest Margin 45 Interest Income - net 46 Non-interest Income 47 Net Fee Income Net Premium Earned - net 5 Other Operating Expenses 51 Loan Asset Quality Investment in Securities and Funding Structure 6-63 The wholly-owned subsidiaries of KBank Muang Thai Life Assurance (MTL) Other Information 8-86 Banking System and Regulations Update Government Policy Thai Economic Figures IR Contact Information and Disclaimer

3 % YoY Operating Environment: Economic Outlook for Key GDP Forecasts and Assumptions Key Points: Risk Factors: Source: KResearch (as of February 18, 214) and *KBank Capital Markets Research (as of March 11, 215) Note: MPC = Monetary Policy Committee; at the latest MPC meeting on December 17, 214, the Policy Interest Rate was 2.% F % YoY F Range Base Case GDP Private Consumption Total Investment Gov't Budget Deficit (% of GDP) to Exports Imports Current Account (USD bn) Headline Inflation Policy Interest Rate* Thai economy is expected to grow 4.% (base case) in 215, with a forecast range between 3.5%-4.5% Growth in 215 will likely be driven by investment, as well as a recovery in private consumption Inflation will likely stay low, following a decline in supply-side pressure Recovery momentum in Thailand s major trading partners Progress of government budgetary disbursement and investment plans Repercussions in energy exporting countries due to a plummet in energy prices Impacts of downward commodities prices toward global economic recovery and farm income Capital volatility and monetary policy management 5 Operating Environment: Economic Outlook for 215 Government Stimulus Plan (App. pages 95-14) The government has an ambitious plan to promote investments in infrastructure projects, including setting up a task force to encourage related investments from the private sector Outlook on Europe, the US, China, and ASEAN Global economic recovery remains subpar, but will become more stable in 215 Eurozone: experienced several headwinds from Russia crisis. However, the recent move by the ECB to further reduce the interest rate to a record low and to start a European QE as well as a TLTRO* will be positive to the economy going forward US: economic recovery is rather broad-based and remains resilient; monetary normalization is on the way China: economic growth is expected to cool further in 215. However, a hard landing is not likely, given flexibility in China s monetary and fiscal policies. Some uncertainties remain, especially the fragile banking system and the health of the property sector. Going forward, China s reform ambitions will likely help sustain the Chinese economy in the longer term ASEAN economies: slow economic growth is expected with support from FDI, but weak global growth may restrict the pace of recovery. The change in Fed policy may pose downside risks to countries with weak external balances, leading to capital outflows Outlook on Inflation (App. pages 18 and 111) Headline inflation remains subpar in 215; however, the Thai government s energy restructuring plan may limit pass-though from a decline in global energy prices Outlook on Exports and Tourism (App. pages 11 and ) Some improvements expected in exports, but may experience some headwinds, especially a China slowdown and expiration of the EU GSP Revenue from tourism will gradually pick up in 215, with support from the Asian market Investment continues to depend on exports; however, there may be new investments in some BOI-promoted industries, i.e. automobile and utility sectors Impacts from Fed Policy Normalization (App. page ) Impacts on the Thai economy should be rather modest, given ample domestic liquidity as well as strong external balances e.g. high international reserves and low external debts Baht (App. page 17) Structural appreciation trend of the USD seen late last year is expected to continue throughout 215, mainly driven by the prospect of US monetary policy rate normalization expected in 3Q15, and thus putting downward pressure on the Thai Baht Note: * TLTRO = Targeted Longer-Term Refinancing Operations Source: KResearch (as of January 19, 215) and KBank Capital Markets Research (as of January 9, 215) 6

4 215 Financial Targets Consolidated 214 Actual 215 Targets Notes ROE 19.38% N/A ROA 1.97% N/A NIM 3.8% % Loan Growth 6.12% 8-9% Ranking maintained among large commercial banks (Page 45) Decent and sustainable loan growth; in line with economic growth (Page 8 and 52-55) Non-Interest Income Growth* 16.84% Low teens Mainly driven by fee income and insurance business Non-Interest Income Ratio 4.4% ~ 4% (Page 9 and 47-5) Cost to Income Ratio** 44.3% Mid-4s Credit Cost per year (bps) 96 bps Mid-9s NPL Ratio (Gross)*** 2.24% % Cost to income ratio continues to range in the mid-4s; seasonally higher in 2H (Page 11) Prudent and aligned with global market environment and credit cycle (Page 1 and 57) Manageable with lingering global economic environment (Page 1 and 56) Notes: * 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 Muangthai 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 Loan growth continues to be decent, sustainable, and in line with economic growth 1,5 1, 5 Loan Portfolio Structure 1,439 1,527 31% 36% 3% 37% 27% 27% 6% 6% Corporate Loans SME Loans Retail Loans Other Loans Loan Portfolio Consolidated Amount Y Dec 13 Dec 14 Loan Growth Yield Loan Growth Target (%) (%) Range (%) Corporate Loans % 4-6% 4-6% SME Loans % 7-8% 8-1% Retail Loans % 6-7% 6-9% Other Loans (.7%) Total Loans 1,439 1, % 6.3% 8-9% * December 213 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS Outlook Corporate Loans SME Loans Mainly from trade finance credit and long-term loans from real estate and commerce Mainly from both long-term and short-term credits and seasonal working capital, especially from agriculture industry Growth target on long-term investment and high capacity utilization industries with a focus on international trade customers Focused industries: construction materials, hardware, construction and communication Growth target reflects demand from domestic consumption and international trade benefits from the FTA and AEC Focused industries: commerce, construction materials, and hardware Retail Loans Mainly from mortgage loans; growth in line with industry; proactively monitoring loan portfolio quality Conservative growth target in line with industry; maintain leading market position Focus on high value customers; proactively monitor loan portfolio quality Loan Definition (more details on loans can be found in App. page 53-54) 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 6 5 3% 4 (+2%) % (+31%) 3 2% 6% 61% 61% 2 64% 21% 2% 18% 1 14% 16% 3%.2% 2% 2% 2% 2%.4%.4%.2% 2% 2%.5% 2% 2% 2% 16% 15% 14% 12% 11% Note: Composition of Growth: Net Fees and Non-interest Income December 214 (Consolidated) Total Operating Income - net (+15%) (+15%) (+2%) 39% 39% 4% (+22%) 38% 38% 62% 62% 61% 61% 6% Non-interest Income Net Interest Income Non-interest Income (+17%) % (+2%) (+17%) 2% 61% Other Operating Income Fee and Service Income - net Net Premium Earned - net Dividend Income (+15%) Share of Profit from Investments on Equity Method Gain on Investment Gain on Trading and FX transactions Non-interest Income Ratio and Net Fee Income Ratio (%) % 38% 39% 39% 4% 24% 23% 23% 24% 24% Non-interest Income Ratio Net Fee Income Ratio 4 - 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%) (+19%) (+13%) (+14%) (+18%) 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 and life insurance premiums as a result of customer-centric strategy 214 non-interest income accounted for 4% of total net operating income and net fee income accounted for 24%; non-interest income rose 16.8% YoY mainly from net fee income and life insurance premiums; net fee income rose 17.8% YoY mainly from card business, mutual fund business, transaction services and loan-related fees 215 non-interest income growth will be in the low-teens, mainly driven by net fee income and life insurance premiums 9 Asset Quality and Impairment Loss of Loans and Debt Securities (Provision) December 214 (Consolidated) Provision (%) NPL Ratio and Credit Cost Coverage Ratio Asset quality remains manageable 214 NPL ratio was at 2.24%, with a coverage ratio of % 214 credit cost was 96bps, prudent and aligned with the macro environment and credit cycle (%) Credit Cost NPL ratio (bps) NPL Ratio by Business 214 Corporate Business <2% 5 SME Business <3% Retail Business <2%* 215 asset quality is expected to remain manageable, with credit cost in the mid-9s bps Note: * NPL ratio in retail business, excluding 18 dpd (days past due) of credit card and consumer loans for peer comparison 1

6 Cost to Income Ratio December 214 (Consolidated) Cost to Income Ratio Cost to Average Assets Ratio (%) (%) Cost to income ratio ranging in the mid-4s; seasonally higher in 4Q cost to income ratio was 44.3% Cost to income ratio will be in the mid-4s in * 214 1Q14 * * 2Q14 3Q14 4Q14 * 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 CUSTOMER S MAIN BANK PRODUCT & SOLUTION BRANDING & MARKETING SERVICE QUALITY Excellent customer experience Innovate & be responsive Clear & consistent communication at all channels The Way We Work KASIKORNBANK, its wholly-owned subsidiaries, and its strategic partner + 8 Customer Segments* I N T E G R A T I O N 4 Product Domains Strategic Capabilities Understanding Customer Needs Innovation & Product Management Note: * The definition of the eight customer segments can be found in App. page 19 Sales & Service Excellence Proactive Risk Management 12

7 % 25% 2% 15% 1% 5% Segment Performance Highlights Performance improvement driven by the success of our customer-centric strategy and new IT capabilities No. of customers grew 83% since 27 Main Bank Status and Market Penetration increased on track with our customer segment aspirations Main Bank Status* * Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main saving and investing bank and/or main borrowing bank; the Main Bank Status of Retail Business in 213 includes two out of four retail customer segments (Middle Income and Mass), which account 99% of retail customers Average product holdings per customer increasing as a result of enhanced cross-selling capabilities Overall average rose to 2.89 in 213, from 2.8 in 212 Average Product Holdings per Customer Old Definition New Definition** SME Business % 27% 28% 29% 29% (Overall) % 26% % Corporate Business 24% 25% 23% 2% 17% 18% % Retail Business % 12% (New) (New) (New) 1% (By Business Division) (New) 212 (New) 213 (New) Retail Business SME Business Corporate Business ** 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 Overall Customer Satisfaction was at 85 in Y213 No. of customers as of November 214 rose to 12.6mn from 11.7mn in Y213, which grew 8.2% YTD Overall Customer Satisfaction No. of Customers (mn) *** M14 No. of Customers (mn) Overall Customer Satisfaction **** Overall Customer Satisfaction *** Customers in Retail Business Division (RBS) account for 94%, SME Business Division (SME) 6%, and Corporate Business Division (CBS) less than 1% of customer portfolio **** Overall Customer Satisfaction Index are calculated using the weighted average of each of segments customer satisfaction index; the Customer Satisfaction Index in 213 includes only SME business, and two out of four retail segments (Middle Income and Mass) Capital (Reported Number: Excluding Net Profit of Each Period) December 214 (%) Bank only Tier Tier (%) KASIKORNBANK FINANCIAL CONGLOMERATE* Basel II Basel III Basel II Basel III 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 Q14 2Q14 3Q14 4Q14 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 (Bt) Dividend Per Share (%) Dividend Payout Ratio Interim Dividend 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, and multi-channel sales and services platform have enhanced our capability to quickly acquire new customers; the result is a top-notch total customer experience and strong market position 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; moderate non-interest income growth; manageable cost to income ratio; strong ROE maintained Adequate capital: maintained adequate Tier 1 ratio, as required under Basel III 16

9 Appendix 17 KBank: Strategy and Segment Highlights 18

10 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 19 Revenue by Eight Customer Segments December 214 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% 15.2% 16.4% 21.9% 19.3% 22.5%.5% 3.8% 4.2% 4.4% 6.4% 9.4% 4.4% 12% 5.6% High Net Worth 6% 7.4% 1.% Middle Income 28% Mass 9% Affluent 11% Multi- Corporate Business 12% Large Corporate Business 9% Medium Business 13% Small & 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 2

11 Corporate, SME and Retail Business Direction in 215 Strategy To attain Main Bank status for all customer segments with strong brand positioning To become a leader in digital banking and transaction banking services To affirm our commitment to service excellence in business operations and to enhance our market position Corporate Business Provide financial advisory and investment banking services Secure #1 position in Transaction Banking Support customers operating business in the AEC in terms of international trade and investment SME Business Strengthen #1 position in SME business by supporting existing customers and attracting new clients through K-Value Chain Solutions Enhance the competitiveness of SME customers under K SME Full Support for SMEs campaign Support customers expanding business to AEC and China Retail Business To attain #1 Main Bank status in all retail customer segments Secure the lead position in Digital Banking and Transaction Banking Maintain differentiation with expertise in financial advisory services 21 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% % 23% 24% 25% 26% 26% 27% (#1) (#1) (#1) (#1) Source: KBank Customer Survey (#1) (#1) Performance and Market Position Main Bank Status: maintained #1 ranking in 214 3% 2% 1% % 18% 15% 14% Trusted Partner Bank: aim to be #1 through comprehensive fund raising solutions, integrated cash management solutions, and value chain solutions Outright Trading Volume of Corporate Bonds: ranked #2 with 18% market share in 214 Corporate Bond Underwriting: ranked #2 with 14% market share in 214 Syndicated Loan Arranging: leading position with acclaimed expertise in utility sector Transaction Services: a top player in transactional banking services Security Services (MFS): 38% market share in 1M14 Cash Management Services: 24% market share in 214 Trade Finance: 3% market share in 214 Industrial Expertise: leverage capability in utility, real estate, transportation, and commerce, etc; also, our executives have been invited to speak at seminars on green business and urbanization Knowledge-based Organization: strive to be a knowledge-based organization for family business (KFAM Club) 17% (#2) (#2) (#3) (#2) 11% 14% Source: The Thai Bond Market Association (ThaiBMA) 3% 2% 1% % 19% 21% (#2) (#2) (#2) (#2) 23% 23% 24% 24% Source: KBank Customer Survey 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 investing bank and/or main borrowing bank (#4) (#2) (#2) (#2) 22

12 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 27% 28% 29% 29% 29% 3% 3% 3% 3% 3% 27% 27% 2% 1% 2% (#1) (#1) (#1) (#1) (#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: strengthened #1 position by acquiring new trade credit customers and offering effective cross-selling cash management solutions and packages Market Share: maintained at 3% in 213; improved from 29% in 21 to 3% in 211 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 a 2-day credit approval process for small and micro SMEs, with receipt of funds within 5 days 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 37.% of Thailand s GDP, or Bt4.2trn; 2.73 million SME customers with.66 million registered as legal entities (as of December 212); 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 23 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* (Total Premium and New Business Premium) #1 in Mutual Fund (KAsset) Mortgage Loan Top tier in both total and new (% Market Share) business premium (% Market Share) Ranked #1 in Mutual Fund AUM (% Market Share) (KAsset) 3% 25.% 23.5% 26.1% 27.1% 23.7% 25.% 3% 25% 2.5% 22.1% 22.3% 23.7% 25.5% 24.3% 23.1% 1% 19.2% 22.9% 2% 2% New 15% Business 1% (#1) (#1) (#1) (#1) ( #1) 5% 5% % (#1) (#2) (#1) (#2) (#2) (#2) (#1) (#1) (#1) (#1) M14 Total Premium 1% % % 9.6% 9.4% Performance and Market Position Market Penetration**: strong market penetration to affluent customers, with 92.4% penetration in November 214 (continual increase from 4% in 21) Bancassurance: MTL ranked #1 in Bancassurance premiums, with 27.1% market share in new business premium and 25.% market share in total premium (9M14); while other players focus on Single Premium, MTL is balancing First Year Premium & Single Premium to create a sustainable portfolio Fund Management Service: Mutual Funds: KAsset maintaining #1 position since 21, with highest share at 22.9% in December 214 Mutual Funds + Private Funds + Provident Funds: maintaining #1 position for 6 consecutive years, the first Asset Management Company with total AUM over Bt1trn (21.3% market share as of December 214) Mortgage Loans: ranked in top 3, with 8.2% market share in 9M14; conservative growth (in line with industry) and maintaining a good quality portfolio Credit Cards: Total spending: ranked #1, with 22.4% market share in November 214 Number of cards: ranked #2, with 17.2% market share in November 214 Card-accepting merchant services (such as EDC, payment gateway, etc.): ranked #1, with 37.7% market share by sales volume in November 214 Debit Cards: #1 in total debit card spending, with 36.9% market share in November 214, also #3 in Asia Pacific (Source: VISA International 213) Maintaining top position by providing functions and features that match with customer lifestyles, with the launch of a new Character Card (Hello Kitty#2), Ducati Card, Co-Branded Robinson-KBank Debit Card, and Thailand Football Club Debit Card 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 % (#3) Maintaining good quality portfolio with lowest %NPL ratio among leading commercial banks 8.9% (#2) (#3) (#3) 8.2% (#3) M14 24

13 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 Corporate Business Center SME Business Center ** 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 Channels: Retail Business 1,2 1, (+23) (+11) Branch (Y214 target: +18 = 1,145) 865 (+49) 965 (+1) 1,124 (+159) 1,145 (+21, delayed from 214 ) F Key Strategies in Channel Expansion Branch: In 214, we expanded our branches to serve each customer segment and lifestyle, including engaging local customers with thematic branches - bringing the local culture into the bank In 215, the number of branches will remain at 1,145, which is considered sufficient to provide customer convenience Focus in 215 will be on branch productivity improvement and e-channel migration Self-Service Channel: #1 in number of Self-Service Channels in Thailand, with 12,628 machines in 214 with a variety of functions and models serving a variety of customer needs and behaviors In 215, the number of self-service channels will be reduced to 12,9 machines, by removing outdated and low transaction machines; this is sufficient to create convenience in transactional services Focus in 215 will be to increase efficiency and service availability through self-service channels Digital Banking: #1 with 29% market share of Thailand Digital Banking customers (BOT report, September 214) #1 Top Mobile Banking Application in Thailand (36%) from Zocial inc. Survey 214 (Independent Research House) #1 Digital Banking Top of Mind Brand perception rating (Nielsen, 213) THE WISDOM Corner, Center, Lounge and Lounge@: THE WISDOM Corner, Center, Lounge and Lounge@ aim to provide superior financial/ non-financial services to our Affluent and High Net Worth Individual customer segments in key provincial areas 15, 1, 5, Self-Service Channel (ATM + CDM ) * 9,1 8,485 8,433 (+568) (+557) (-52) 1,14 1,67 1,398 (+41) 7,471 7,366 7,63 (+516) (+53) (-15**) (+331) (+237) 1,935 (+1,934) 2,195 (+797) 8,74 (+1,137) 2,775 12,9 2,696 9,853 9,394 (+1,113) F CDM (Deposit) and CDM (Duo- Function) Branch ,124 - Bangkok and Metro 46% 46% 45% 42% 39% - Upcountry 54% 54% 55% 58% 61% ATM 7,471 7,366 7,63 8,74 9,853 - Bangkok and Metro 51% 52% 51% 48% 44% - Upcountry 49% 48% 49% 52% 56% CDM 1,14 1,67 1,398 2,195 2,775 - CDM (Deposit) 1,14 1,16 1,66 1,138 1,278 - CDM (Duo-Function) ,57 1,497 K-Lobby *** THE WISDOM Corner, Center, Lounge and Lounge@ 12,628 (+1,693) (+58) Note: * Self-Service Channel includes ATMs and all types of CDM machines providing cash deposit, withdrawal,or money transfer services 24 hours throughout the country ** A drop in the number of ATMs reflects a relocation plan *** 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 ATM

14 Sample of Channels Branch Thematic Branch The thematic branch is designed to blend with the local architecture and culture of each area Department Stores Thematic Pua (Nan Province) THE WISDOM Corner, Center and Lounge K-Lobby Digital Banking THE WISDOM Central Embassy An exclusive center providing a full range of services and facilities to High Net Worth Individual and Affluent segments 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 includes: K-Mobile Banking K-Cyber Service (K-Cyber Banking, K-Cyber Trade and K-Cyber Invest) K-Payment Gateway K-PowerP@y (mpos) 27 KASIKORNBANK to Capture AEC+3 Opportunities GDP Thailand ASEAN Size of Economy (GDP) in USD Trillion for GDP Forecast 4.% 5.2% Contribution to GDP (by NESDB) 212 Y215F Greater Bangkok : Provinces 45 : : 56 Note: 1. Size of economy for 214 from IMF and compiled by KResearch (as of October 15, 214) GDP forecast is projected by KResearch (as of December 12, 214) 3. ASEAN economic growth are averaged growth among ASEAN member countries in national currencies 4. Greater Bangkok includes Nonthaburi, Samut Prakarn, Nakorn Pathom, Samut Sakhon, and Patumthani To become AEC+3 Bank to capture AEC opportunities plus China, Japan, and South Korea ASEAN Economic Community (AEC): ASEAN member countries to become a single market by December 215; free flow of goods & services and non tariff barrier among 1 member nations Greater opportunities available through AEC + 3 KBank continues to enhance business in International Trade Border Trade Cross Border Investment Retail Customer (Tourist / Expatriate / Transit) Host Country Business Higher revenue generation and expansion of customer base AEC Plus framework is established to cover ASEAN, China, Japan, and Korea through our presence and collaborative business networks with partner banks China model developed to ensure KBank s presence in China 28

15 AEC Plus Framework and China Model Los Angeles International Branch Germany Tokyo Rep. Office Italy South Korea Japan Cayman Islands Branch Yangon Rep. KBank (Lao PDR) Office Hanoi Rep. Office Phnom Penh Rep. Office Cambodia Ho Chi Minh Rep. Office Indonesia China Chengdu Branch Beijing Rep. Office Shanghai Rep. Office Kunming Rep. Office Shenzhen Branch Hong Kong Branch Longgang Sub-branch Note: - One subsidiary bank: KASIKORNTHAI BANK Limited, a subsidiary company in Lao PDR to operate commercial banking business - Five international branches: Los Angeles, Cayman Islands, Hong Kong, Shenzhen, and Chengdu - One international sub-branch: Longgang - Eight representative offices: Beijing, Shanghai, Kunming, Tokyo, Yangon, Ho Chi Minh, Hanoi, and Phnom Penh - Global partners in 11 countries: Japan, China, South Korea, Germany, Italy, Lao PDR, Vietnam, Cambodia, Indonesia, Philippines and Malaysia Business Direction Establish branches in Phnom Penh, Cambodia; build connectivity and collaborative business networks; enhance employees capabilities; aim to become the Main Operating Bank for Japanese investors in Thailand Establish KASIKORNBANK China (Local Incorporated Institution, LII) AEC Plus Framework: Collaborative business networks established with partner banks overseas Global partners with 69 banks in 11 countries: 51 Japanese partner banks; 2 Korean partner banks; 3 European regional banks (in Germany and Italy); 7 ASEAN partner banks (in Lao PDR, Vietnam, Cambodia, Indonesia, Malaysia and Philippines); and 6 Chinese partner banks (as of December 214) Established a subsidiary bank in Lao PDR China Model: Three branches in China include Shenzhen, Chengdu, and Hong Kong; one sub-branch in Longgang District, Shenzhen; and three representative offices in China SME lending and international trade business are key strategic business directions for expansion in China 29 KASIKORNBANK to Capture Urban Growth Opportunities Bangkok Strategic Provinces expansion* started to capture urban growth opportunities and to prepare for the upcoming AEC Different industries, customer segments, and behaviors in each strategic province in Thailand identified to capture various business opportunities with different approaches Key areas include: Tourist Hub, Logistic Hub, Education Centre, Industrial Estate, and AEC Linkage Aspiration to become No.1 in customers mind in each strategic province Higher revenue generation from both net interest income and non-interest income expected, with a gradually increasing proportion of loans and revenue generation from the upcountry Wider customer base in all customer segments expected, along with higher Market Penetration (especially retail customers), higher Market Share by Value, and higher Main Bank Status As of 4Q14, the proportion of KBank s outstanding loans in Bangkok and its metropolitan area is around 64% vs. around 36% in the upcountry * In 214, 25 provinces were selected as strategic provinces Note: Market Penetration = % of customers in the market who use at least one of the products of KBank and its wholly-owned subsidiaries 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 investing bank and/or main borrowing bank 3

16 K-Transformation Project Strategic Capabilities Understanding Customer Needs Innovation & Product Management Sales & Service Excellence Proactive Risk Management K-Transformation Foundation Capabilities Know Our Customers (KOC) Multichannel Sales And Services (MSS) Information Technology Capital (ITC) Financial Information System (FIS) K-Transformation Supporting Solution (KSS) Completed New Loan Core Banking System in 1Q14 Full completion of New Deposit Core Banking system is expected by 215 Implemented 31 New IT Business Capabilities Highlights Average Product Holdings Y27-28: Old Financial Presentation Y29 onwards: New Financial Presentation Non-interest Income Ratio (%) Cost to Income Ratio (%) ROE (%) Key Highlights Y28: Know Our Customer (KOC) and Financial Information System (FIS) completed KOC key business capabilities: customer analytics; data mining; campaign management FIS key business capabilities: new chart of accounts (CoA); enhanced financial controls; enhanced budgeting capabilities; enhanced procurement capabilities Y211: New branch infrastructure platform rollout under Multi-Channel Sales and Services (MSS) completed Key business capabilities: increased the effectiveness of campaign execution from MSS and KOC integration through new branch platform Y212: Multi-Channel Sales and Services (MSS); branch roll-out completed nationwide since 1Q12 Key business capabilities: enhanced sales & service capabilities; single view of customer; multi-channel integration; legacy risk mitigation Y214: IT Capital (ITC): Deployed new loan core banking system in 1Q14 Y215: IT Capital (ITC): Plan to deploy new deposit core banking system; K-Transformation completed Y215: Total remaining expenditure for K-Transformation project ~ Bt5.3bn (Total Fixed Asset Investment ~7%; Total Expense ~ 3%) Note: - In 212, Average Product Holding calculation was adjusted in all eight customer segments to align with customer behavior; 211 numbers were revised for comparison purposes - Since January 1, 211, financial statements have been reclassified per the Bank of Thailand s requirements; the 29 and 21 financial statements were restated and adjusted for comparison purposes - The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards 32

17 KOC and MSS Benefits Highlights (No. of Branch) 1,5 1, 5 2 New Branch Sales & Service Rollout Branch roll-out completed since 1Q12; new platform is continuously implemented for new branch opening ,54 1, Q1 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Note: - KOC = Know Our Customer - MSS = Multi-channel Sales and Services Sample of Key Benefits from KOC and MSS Faster customer responsiveness and more consistent customer experience across channels Integrated MSS with KOC capabilities; the benefits have become part of business as usual; the new MSS system: Increase effectiveness in campaign execution through the new branch and call center platform Increase lead referrals creation, cross-selling, and up-selling Increase marketing campaign response rates Increase product holdings and sales per customer; the overall average product holding per customer rose from 1.69 in 27 to 2.89 in 213 Increase in number of customers from 6.9mn in 27 to 12.6mn as of November 214 Improve overall customer satisfaction 33 New IT Business Capabilities Long-term Strategic Positioning Develop a constructive and harmonious corporate culture; new IT platform to provide unique tools to support our customer-centric strategy; overcoming IT obstacles makes KBank a leader among peers Key Deliverables and Benefits in New Core Banking System on Loans - Open possibilities to capture new business opportunities - Help shorten product development time - Enhance product innovation capability New Branch Sales & Service and Call Center System Enhancement - Created unique and consistent customer experience across channels including new infrastructure - Enhanced cross selling capability via diverse sales and service channels New Core Banking System on Deposits - Deployed legacy system in multiple groups to mitigate risk of big bang deployment - To complete Big Bang Core Banking System on Deposits in 215 The K-Transformation project is expected to be completed by 215 New capabilities will help enhance new product development capability, shorten product development time, and significantly reduce maintenance costs in the long-term; as well as open possibilities to capture new business opportunities Gradual deployment of the K-Transformation project will make the project KBank s new standard business system platform; the project budget will be included as a part of KBank s regular annual IT budget KBank s cost to income ratio will range in the mid-4s June 213: Changes to some parts of deposit core banking system development New deposit core banking vendor provides more benefits in the long-term, including faster data processing, mitigated risk concerning for staff competence in maintaining system stability, and reduction in maintenance costs 1Q14: Deployed new loan core banking system; new capabilities will help enhance new product development capability, shorten product development time, and significantly reduce maintenance cost in the long term Y215: Plan to deploy new deposit core banking system to complete the K-Transformation project 34

18 KBank: Risk and Credit Management 35 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 Approve risk appetite and all risk management policies and guidelines Ensure the adequacy and effectiveness of risk management system and internal controls Risk Management Committee Sub-committee Credit Policy and Risk Management Sub-committee Credit Process Management Sub-committee Market Risk Management Sub-committee Asset and Liabilities Management Sub-committee Operational Risk Management Sub-committee Capital Management Sub-committee Business Continuity Management Sub-committee IT Strategy Sub-committee Approve risk limits according to the risk appetite approved by the Bank s Board of Directors Oversee and monitor risk management policies and overall risk profile under the policies and guidelines approved by the Bank s Board of Directors Credit Policy and Risk Management Sub-committee and Corporate Governance Committee oversee project financing requests that could have significant adverse environmental and social impacts Business Functions CBS/ RBS/ SME CMB/ CSP/ WBS Risk Functions ERM Business functions are accountable for managing all risks inherent in their day-to-day activities Risk functions are responsible for risk management policies, methodologies, and processes in order to effectively measure, monitor, and control all related risks CBS = Corporate Business Division, RBS = Retail Business Division, SME = SME Business Division, CMB = Capital Market Business Division, CSP = Corporate and SME Products Division, WBS = World Business Division, ERM = Enterprise Risk Management Division 36

19 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 followup of customers with late payments Restructure viable customers to prevent NPLs Foreclose pledged assets to recover loan loss 37 KBank Credit Approval Process Corporate SME Retails Approval Process MB > Bt5,mn Policy Lending CB > Bt4-5,mn 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 ME > Bt5 4mn Formula Lending SM Bt5mn Housing Loan/ Secured Consumer SME Credit and Housing Loan Approval Dept. Application Score FICO Score Bureau information/credit history Debt service capacity LTV Formula Lending Credit Card/ Unsecured Consumer 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) 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 Credit Service Fulfillment Dept. Bank-wide Risk Asset Review Asset Quality Management Operation Dept. Unsecured Credit and Merchant Product Service Fulfillment 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: MB = Multi-Corporate Business, CB = Large Corporate Business, ME = Medium Business, SM = Small & Micro Business, FICO = Fair Isaac Corporation 38

20 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 KBank: Financial Performance 4

21 214 Performance Highlights Consolidated 213 1Q14 2Q14 3Q14 4Q Net Profit Profitability - NIM 3.55% 3.61% 3.75% 3.79% 3.85% 3.8% - ROE 2.45% 21.18% 2.1% 2.59% 15.76% 19.38% - ROA 1.89% 2.8% 2.2% 2.11% 1.66% 1.97% - YTD Loan growth 8.46%.79% 2.29% 4.32% 6.12% 6.12% - YoY Loan growth 8.46% 6.98% 5.88% 6.24% 6.12% 6.12% - YoY Net fee income growth 17.75% 1.8% 12.42% 32.94% 15.95% 17.82% - YoY Non-interest income growth 16.69% 19.13% 7.34% 22.24% 19.48% 16.84% Cost control - Cost to income 43.44% 39.95% 44.31% 41.98% 5.63% 44.3% Asset quality - NPL ratio 2.11% 2.14% 2.14% 2.16% 2.24% 2.24% - Coverage ratio % % 14.83% 142.4% % % Loans to Deposits 94.6% 93.34% 93.9% 92.61% 93.7% 93.7% Tier 1 Ratio 12.57% 12.39% 12.92% 13.98% 13.49% 13.49% CAR 15.78% 15.6% 16.6% 16.98% 17.31% 17.31% 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 since January 1, 214 onwards 214 net profit rose 11.68% YoY, driven by both net interest income and non-interest income Loans grew 6.12% YoY, from all businesses; mainly driven by SME and retail business High NIM maintained, helped by lower cost of fund and a focus on high yield lending markets Net fee income continued to grow due to customer-centric strategy; growth entails strengthening acquisition, retention, and cross-selling capabilities 214 cost to income ratio was at 44.3%; cost to income ratio in 215 will range in the mid-4s NPL slightly higher but remained manageable; high coverage ratio maintained Strong capital base maintained 41 Consolidated Financial Statements Statements of Comprehensive Income (Bt mn) Q14 2Q14 3Q14 4Q Interest income 96,174 16,226 27,778 27,88 28,471 29,45 113,578 Interest expenses 32,593 33,428 8,283 7,3 7,177 7,686 3,446 Interest income - net 63,581 72,797 19,494 2,58 21,294 21,765 83,132 Fee and serv ice income 31,429 36,613 9,977 1,433 11,237 11,43 42,69 Fee and serv ice expenses 6,961 7,83 2,97 2,127 2,116 2,45 8,746 Fee and service income - net 24,467 28,81 7,88 8,35 9,121 8,638 33,944 Total operating income 144, ,2 49,366 5,93 5,17 5, ,975 Underwriting expenses 4,19 48,685 16,23 15,933 14,546 14,638 61,319 Total operating income - net 14,35 12,317 33,163 34,16 35,624 35,79 138,656 Total other operating expenses 46,934 52,27 13,247 15,137 14,954 18,8 61,419 Impairment loss of loans and debt securities 8,39 11,743 3,66 3,36 3,661 3,886 14,243 Operating prof it bef ore income tax expenses 48,981 56,33 16,255 15,987 17,9 13,742 62,994 Income tax expenses 11,136 11,457 3,237 3,265 3,368 2,822 12,692 Net prof it attributable: Equity holders of the Bank 35,26 41,325 11,939 11,732 12,516 9,967 46,153 Non-controlling interest 2,585 3,522 1, , ,148 Statements of Financial Position (Bt mn) Q14 2Q14 3Q14 4Q Loans to customers (less def erred rev enue) 1,326,732 1,438,978 1,45,381 1,471,922 1,51,23 1,527,8 1,527,8 Total Assets 2,77,442 2,29,45 2,38,996 2,339,798 2,415,588 2,389,137 2,389,137 Deposits 1,391,38 1,529,835 1,553,899 1,567,499 1,621,56 1,629,831 1,629,831 Total Liabilities 1,876,621 2,53,38 2,57,979 2,8,975 2,143,653 2,18,451 2,18,451 Total Equity attributable to equity holders of the Bank 184, , , , , ,59 257,59 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 42

22 Earnings Before Provision and Tax (EBPT) and Net Profit December 214 (Consolidated) EBPT Net Profit * * EBPT and net profit in 214 grew 13.5% and 11.68% YoY, respectively * Q14 2Q14 3Q14 4Q14 EBPT EBPT Growth (% YoY) 22.97% 27.86% 2.81% 18.61% 13.5% 15.68% 8.51% 18.68% 1.99% Net Profit Net Profit Growth (% YoY) 36.7% 2.85% 45.55% 17.2% 11.68% 18.14% 6.85% 16.84% 4.61% Note: * 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 43 ROA and ROE December 214 (Consolidated) ROA ROE (%) (%) * * * Q14 2Q14 3Q14 4Q14 ROA (%) ROE (%) Note: * 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 items adjustment; there was no effect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries 44

23 Net Interest Margin December 214 (Consolidated) NIM Yield on Earnings Assets and Cost of Fund (%) 8 (%) Note: * Cost of deposits including contributions to the Financial Institutions Development Fund (FIDF) and Deposit Protection Agency (DPA) Yield on Loans 5.55 Yield on Earnings Assets NIM was 3.8% in 214, remaining the highest level among large commercial banks 214 cost of fund dropped, mainly due to early redemption of the Subordinated Debentures, the maturity of high-rate deposits, and a decrease in average interest rate on deposits NIM will be maintained, focusing on the high-yield lending market; however, pressure from competition is expected to rise in Cost of Fund Cost of Deposit* Q14 2Q14 3Q14 4Q14 NIM (%) Yield on Earnings Assets (%) Yield on Loans (%) Cost of Fund (%) Cost of Deposit (%), incl DPA Interest Income - net December 214 (Consolidated) Interest Income and Interest Expenses Interest Income Interest Expenses 214 net interest income grew 14.2% YoY Interest Income- net Interest Income - net Q14 2Q14 3Q14 4Q14 Interest Income Interest Expenses Interest Income - net Interest Income - net (% Growth YoY) 17.28% 2.85% 12.55% 14.5% 14.2% 13.31% 14.77% 15.% 13.69% 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. 46

24 Non-interest Income and Structure Non-interest Income to Average Assets (%) December 214 (Consolidated) (%) Non-interest Income Ratio (+17%) % (+2%) % (+2%) % (+31%) Non-interest Income Structure 61% 2 64% 2% 21% 18% 1 16% 2% 2% 14% 2% 3% 2%.5%.4%.2%.2%.4% 2% 2% 2% 2% 2% 16% 15% 14% 12% 11% 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 Non-interest income continued to grow, mainly from net fee income and life insurance premiums Q14 2Q14 3Q14 4Q14 Non-interest Income Non-interest Income Growth (%YoY) 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% 6% 61% (+17%) 2% 61% 47 Net Fee Income December 214 (Consolidated) Net Fee Income Net Fee Income to Net Total Operating Income (%) 3 24% 23% 23% 24% 24% net fee income grew 17.82% YoY, driven by a rise in card business, mutual fund business, transaction services and loan-related fees 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% in Q14 2Q14 3Q14 4Q14 Fee Income Fee Income-net Fee Income Growth (%YoY) Net Fee Income Growth (%YoY) Net Fee Income to Net Operating Income (%) Note: - On the consolidated basis, Bancassurance fees are not included in net fee income since 3 November 29, due to the elimination of inter-company transactions (the accounting treatment from the Muangthai 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. 48

25 Net Fee Income Structure (Bank only) December 214 Net Fee Income by Product Others 12% Bancassurance 17% Trade Finance 5% Cash Management 5% Credit Card Business 15% Commercial Credit 22% Transaction Services 24% 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.) Loan Related and Non-loan Related Fees - net Loanrelated Nonloan 23% related 77% Note: - On the consolidated basis, Bancassurance fees are not included, due to the elimination of inter-company transactions (the accounting treatment from the Muangthai 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 49 Net Premium Earned - net December 214 (Consolidated) Net Premium Earned and Underwriting Expenses Net Premium Earned net Net Premium Earned Underwriting Expenses Net Premium Earned - net Net Premium Earned - net = Net Premium Earned less Underwriting Expense Q14 2Q14 3Q14 4Q14 Net Premium Earned Underwriting Expenses Net Premium Earned - net Net Premium Earned - net (% Growth YoY) n.a 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. 5

26 Other Operating Expenses December 214 (Consolidated) %.3% 7% 23% Other Operating Expenses Structure %.2% 7% 22% %.2% 8% 21% 43% 46% 46% % 24%.2% 8% 2% 44% 27%.2% 7% 2% 46% Impairment on Application Software & Related Expenses Others Directors' remuneration Taxes & Duties Premises & Equipment Employee's expenses 214 other operating expenses rose 17.5% YoY, the majority came from employee s expenses, and marketing expenses Q14 2Q14 3Q14 4Q14 Other Operating Expenses % Growth (YoY) Note: The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 214 onwards 51 Loan Growth December 214 (Consolidated) Loan Growth (% YoY) 2 (%) Loans grew sensibly at 6.12% YoY from all businesses, mainly driven by SME and retail business Q14 2Q14 3Q14 4Q14 Loans 1,77 1,211 1,327 1,439 1,527 1,45 1,472 1,51 1,527 Loan Growth (% YoY) Loan Growth (% YTD)

27 Loan Structure and Loan Growth Targets December 214 (Consolidated, TFRS 8: Operating Segments*) 1,5 1, 5 Loan Portfolio Structure 1,439 1,527 31% 36% 3% 37% 27% 27% 6% 6% Corporate Loans SME Loans Retail Loans Other Loans Loan Structure, Loan Yield and Loan Growth Targets (Amount in Bt bn) Dec 13** Y213 Dec-14 Y Y215 Loan Loan Yield Loan Growth Growth Growth Range Target (%) (%) (%) (%) 1) Corporate % 4-6% Multi-Corporate Business Large Corporate Business ) SME % 8-1% Medium Business Small and Micro Business ) Retail % 6-9% 4) Others 92 (2.9) 91 (.7) Total Loans 1, , % 8-9% ** December 213 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 Y214 Loan Growth Target (%): Corporate 5-7%, SME 6-8%, Retail 6-9%, Total Loans: Less than 8% 53 Loan by Retail Products (All Segments) December 214 (Consolidated, TFRS 8: Operating Segments*) Loan by Retail Products (Amount in Bt bn) Dec 13 Y213 Dec 14 Y214 % Portion Loan Loan to Growth Growth Total Loan (%) (%) Housing Loans Credit Cards Consumer Loans KLeasing ** December 213 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 54

28 Loan Portfolio Breakdown by Industry, Currencies, and Interest Rate December 214 (Consolidated) Loan Portfolio by Industry (December 214) By Currencies (December 214)* 1,8 1,6 1,439 1,527 1,327 1,4 15.7% 1, % 1,2 1, % 11.6% 15.5% 14.8% 1, 11.4% 16.% 16.% 13.% 12.5% 15.5% 8 13.% 12.4% 6.7% 6.9% 1.7% 6.2% 6.5% 6 5.7% % 51.2% 48.9% 48.9% 48.1% 2 2.5% 2.5% 2.4% 2.3% 2.% Others Housing Loans Utilities & Services Real Estate & Construction Manufacturing & Commerce Agricultural and Mining US Dollar 7.% Other Currencies.8% Thai Baht 92.1% By Maturity of Interest Repricing (December 214)* Note: 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 *The information on loans breakdown by currencies and maturity of interest repricing are disclosed on half year basis Other 12.7% 6 months and over 14.% Immediate Repricing 61.5% < 6 months 11.8% 55 Asset Quality December 214 (Consolidated) NPL Ratio Coverage Ratio 8 (%) (%) NPL ratio was 2.24% in 214 Coverage ratio was %; this ratio has been maintained above 1% since 2Q1 215 asset quality is expected to remain manageable Q14 2Q14 3Q14 4Q14 NPL Ratio (%) Coverage Ratio (%)

29 Impairment Loss of Loans and Debt Securities (Provision) and Credit Cost December 214 (Consolidated) Impairment Loss of Loans and Debt Securities Credit Cost (bps) credit cost increased to 96bps, to be prudent and aligned with the macro environment and credit cycle 215 credit cost will continue to range around mid-9bps Q14 2Q14 3Q14 4Q14 Impairment Loss of Loans and Debt Securities Credit Cost (bps) Bad Assets Resolution December 214 (Consolidated) Restructured Loans Outstanding Foreclosed Properties 16% 12% 8% 4% % % of Restructured loans to Total loans 9.1% 6.9% 7.4% 8.2% 6.9% 6.3% 6.2% 5.9% 6.1% Write-off % 83% 62% 78% 76% 78% 74% 78% 4 73% 2 Restructured loans 38% 27% 22% 24% 22% 26% 22% 17% 17% % of Performing Restructured loans to Restructured loans % of Non-Performing Restructured loans to Restructured loans Outstanding Restructured Loans was Bt93.52bn in 214; 83% were performing restructured loans Definition: Outstanding Restructured Loans is the accumulated outstanding amount of restructured loans, comprised of performing restructured loans and non-performing restructured loans. Non-performing restructured loans are already counted as part of Non-Performing Loans (NPLs) 21-24: 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 : NPLs continued to decline without bulk NPL sales 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 Write-offs NPL Portfolio Sales Sales of Foreclosed Properties

30 Proactive risk management to counter political economic impact and high household debt Continue to deploy proactive credit portfolio/ risk management/ asset quality management to mitigate an adverse impact from former political unrest and high household debt High-impact customers: review policy/ process, and offer financial aid programs Low-impact customers: closely monitor SME Business Selective on quality customers Proactive risk management by visiting customers; raise productivity of sales teams and relationship manager Efficient collection process Offer financial aid package for SMEs who need urgent financial aid to temporarily alleviate customer burden Cut overdraft (OD) rate of 3% for 3 months Offer 6-month grace period for principal payment Retail Business Shift towards 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 Efficient collection process Improve asset quality better than the market 59 Investment in Securities Portfolio and Structure December 214 (Consolidated) % 5% 3% 8% 83% Instrument Type 264.1% 5% 4% 12% 78% 382.5% 5% 4% 11% 79% 497.4% 5% 4% 9% 81% 568.3% 5% 4% 1% Other Investment (Investments in Receivables, Investments in Subsidiaries and Other Investments) Equity Investment Foreign Bonds Corporate Bonds Government & State Enterprise Bonds 81% %.6%.7%.1%.6%.7% 28% 33% 65% 64% Holding Type 382.4%.4% 29% 68% %.8%.4%.3%.3%.3% 29% 35% 68% 6% 2% 2% 2% 4% 6% 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 to reflect interest rate trend and enhance risk-adjusted return Q14 2Q14 3Q14 4Q14 Investment Portfolio % Grow th (YoY) (1.48) % 6

31 Deposits Growth and Loans to Deposits Ratio December 214 (Consolidated) Deposits & B/E Loans to Deposits Ratio 1,8 1,5 1,2 1, ,242 1,391 1,53 1,63 1% 95% 9% 97.9% 93.5% 97.5% 94.7% 95.4% 94.1% 94.1% 92.9% 93.7% 93.2% Deposits B/E 85% Loans to Deposits Deposits have grown at a consistent pace providing a stable source of funding Loans to Deposits + B/E Q14 2Q14 3Q14 4Q14 Deposits 1,1 1,242 1,391 1,53 1,63 1,554 1,567 1,621 1,63 Deposits (% YoY) 12.8% 12.9% 12.% 1.% 6.5% 8.8% 6.8% 4.4% 6.5% Deposits (% YTD) 12.8% 12.9% 12.% 1.% 6.5% 1.6% 2.5% 6.% 6.5% Loans to Deposits (%) 97.9% 97.5% 95.4% 94.1% 93.7% 93.3% 93.9% 92.6% 93.7% 61 Funding Structure and Interest Rate Movement December 214 (Consolidated) Funding Structure Deposit Structure (%) ,8 1,6 1,4 1,2 1, ,228 3% 7% 9% 1,368 4% 5% 91% 1,654 11% 5% KBank Interest Rate Movement (Retail customers) 84% 1,769 1,793 4% 1% 5% 4% 86% 91% Deposits ST and LT Borrowings Interbank and Money Market Jan15 MLR Savings Fixed 3M Deposit and Bill of Exchange Rates (Jan 1, 215) Savings.5 Fixed 3M-12M Fixed 24M-36M 1.9 B/E 14D-1M Lending rates (March 14, 214) MLR 6.75% MOR 7.4% MRR 8.1% 1,6 1, ,53 1,63 1,391 1,242 1,1 34% 36% 33% 32% 4% 6% 58% 61% 62% 55% 6% 5% 6% 6% 6% Current Savings Term ST and LT Borrowings % % 78% 74% 89% 59% 51% 7% 4% 22% 26% 11% LT Borrowing B/E & Others ST Debentures 62

32 Long-term Senior/Subordinated Debentures Issued Date Name Type Embedded Option Amount Maturity Years Interest Rate (Per annum) Interest Payment period Credit Rating Thai Currency Long-term Senior/Subordinated Debentures 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) 5.% 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) 4.5% Quarterly AA- (tha) by Fitch Ratings and axa by S&P 22/6/21 Subordinated debentures of KASIKORNBANK PCL No.1/21 Unsecured Callable after 5 years Bt7,5mn 1 Years (22/6/22) 4.5% Quarterly AA- (tha) by Fitch Ratings Foreign Currency Long-term Senior/Subordinated Debentures 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% 3.% Semiannually Semiannually A3 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) 8.25% Semiannually BBB by S&P Baa3 by Moody s Note: * The issued note is drawn from the Bank s USD2.5bn Euro Medium Term Note Programme 63 KBank: The wholly-owned subsidiaries, and Muang Thai Life Assurance 64

33 The wholly-owned subsidiaries of KBank: Business Profile and Aspiration December 214 Company Name Company Profile KAsset EST KASIKORN ASSET MANAGEMENT CO., LTD. A leader in fund management business (i.e. mutual funds, provident funds, and private funds) KResearch EST KASIKORN RESEARCH CENTER CO., LTD. Professional in providing knowledge in economics, business, money, and banking Only research house which is an affiliate of a bank KSecurities* EST. Jul 25 KASIKORN SECURITIES PCL Professional in providing a complete range of professional and excellent financial solutions and services, including investment banking, securities underwriting, and securities brokerage KLeasing EST. Aug 25 KASIKORN LEASING CO., LTD. Professional in providing three core products: hire purchase, financial lease, and floor plan KF&E EST.199 KASIKORN FACTORY AND EQUIPMENT CO., LTD. Professional in providing a complete range of machinery and equipment leasing services Asset Size Bt1.75bn Bt.76bn Bt15.9bn Bt9.13bn Bt12.67bn Market Share 21.3% (#1) ** N/A 6.15% (#2)* 7% (9M14) N/A 215 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 Maintain a good asset quality portfolio 5-7% YoY growth on outstanding loans 3-year Aspiration Maintain Top Tier position Top of mind research house Maintain position as a leading securities firm Provide complete range of financial solutions and maintain good asset quality Maintain leading position in equipment leasing industry * 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 called KSMACQ ** Asset Under Management of KAsset; Mutual Fund as of December 214, Private Fund and Provident Fund as of November The wholly-owned subsidiaries of KBank: 214 Key Operating Performance December 214 KAsset EST KResearch EST KSecurities* EST. Jul 25 KLeasing EST. Aug 25 KF&E EST Key Operating Performance Assets Under Management (AUM): Bt1.9trn** (15.29% YoY) Most quoted research house in the media - Trading volume: Bt1.25trn - Number of customers grew 43% YoY Outstanding loans: Bt89.78bn (.63% YoY) Outstanding loans: Bt12.38bn (14% YoY) The wholly-owned subsidiaries of KBank: Net Profit Net profit continues to rise, along with synergy among KBank and its wholly-owned subsidiaries 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 * 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 called KSMACQ ** Asset Under Management of KAsset; Mutual Fund as of December 214, Private Fund and Provident Fund as of November

34 KAsset Highlights in 214 December 214 AUM (KAsset vs. Industry) 6, 4,253 5,118 1,5 1,756 2,228 2,167 2,576 2,883 3,15 3,633 4, 1, 1,9 2, Industry Outlook: 214 industry AUM at Bt5.12trn, rising 2.34% YoY KAsset AUM at Bt1.9trn, growing 15.29% YoY KAsset Highlights: Continuously ranked #1 since 29, with 21.3% market share in 214 Mutual fund accounts for 8% of KAsset AUM Total Industry AUM KAsset AUM Market Share by AUM KAsset AUM Breakdown by Type (%) KAsset SCBAM KTAM MFC BBLAM Other Private Fund 7% Provident Fund 13% Mutual Fund 8% Note: Asset Under Management of KAsset and Industry (9M14) come from Mutual Fund as of December 214, Private Fund and Provident Fund as of November KResearch Highlights in 214 December 214 Number of News Quotes No. of News Quotes 2, 1,885 1,974 1,7 1,528 1,562 1,623 1,5 1,71 1,38 Industry Outlook: Only bank affiliated research house providing knowledge in economics, business, money, and banking 1, Newspaper Online Newspaper Other Online News 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 68

35 KSecurities Highlights in 214 December 214 Trading Volume (KSecurities vs. Industry) 21,551 2,345 1,4 2, ,2 15, 12,377 12,486 13,772 1,296 1, 8 1, 7,967 8,544 7,962 8, , Total Industry Trading Volume KSMACQ Trading Volume Market Share by Trading Volume (%) ** KSMACQ SCBS KTZ BLS TNS MBKET Industry Outlook: 214 industry trading volume* was Bt2.35trn, decreasing 6% YoY KSMACQ** trading volume was Bt1.25trn KSecurities Highlights: KSMACQ** ranked #2, with 6.15% market share; maintaining position as one of the leading securities firms Majority of revenue came from brokerage Number of customers grew 43% YoY, to 74,895 customers in 214 KSecurities Revenue by Business Investment Banking 8% Brokerage 92% Note: * Industry trading volume excluding proprietary trade ** 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 called KSMACQ 69 KLeasing Highlights in 214 December 214 (Thousand Units) 1,5 1, 5 KLeasing vs. Industry* 1,435 1, Total Car Sales in Thailand KLeasing Outstanding Loans 1 5 Industry Outlook: 214 industry car sales totaled 881,832 units, declining 34% YoY KLeasing Highlights: 214 KLeasing loans totaled Bt89.78bn, growing.63% YoY NPL ratio remained in a very low single digit range, better than industry average (%) Market Share by Total Outstanding Loans (%)* TBANK AYCAL TISCO SCB KK KLeasing M14 KLeasing Outstanding Loans Breakdown** Fleet / Financial Lease 27% Floor Plan 7% Hire Purchase 66% K-Car to Cash 1.4% Used Car.1% New Car 89.5% 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 7

36 KF&E Highlights in 214 December KF&E Outstanding Loans Industry Outlook: Growth in Equipment Finance (EQF) business forecasted using numerous factors including total import volume and total registration volume of equipment and machinery from the Department of Industrial Works and Capital Investment Index KF&E Highlights: KF&E outstanding loans were Bt12.38bn, rising 14% YoY KF&E currently ranked #3; maintaining the 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, which is focused on offering leasing services for machinery and equipment; the factoring business operation of KFactoring was transferred to KBank 71 Life Insurance Industry in Thailand (%) Premium per % GDP by Country Source: Swiss Reinsurance In 213, low penetration rate of 3.8% in Thailand with a high opportunity for growth Muang Thai Life Assurance (MTL) ranked #2 in life insurance industry in Thailand, in 214 #2 in total premium with 14.9% market share and 25% growth #1 in new business premium with 2.7% market share and 28% growth Total Premium Size of Market by Premium(%) First Year Premium Market Share by Total Premium in Life Insurance (%) (%) AIA MTL TLI BLA KTAL SCBLife AZAY PLT OLIC FWD Others Total Premium * First Year Premium in 214 = Bt18.28bn 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 72

37 Bancassurance Highlights in 214 (%) (%) Bancassurance Market Share by Total Premium (%) MTL SCBLife BLA KTAL PLT TLI FWD AZAY AIA DLA 27.6 Bancassurance Market Share by New Business Premium (%) MTL SCBLife BLA KTAL PLT TLI FWD AIA DLA The Bancassurance Life industry continued its positive trend in 214 with total premium growth of 29% and new business premium growth of 3% MTL ranked #1 in Bancassurance market #1 in Bancassurance total premium with 25.1% market share and 29% growth #1 in Bancassurance new business premium with 27.6% market share and 3% growth Source: Muang Thai Life Assurance (MTL) Note: Bancassurance premium include all bank partners premiums of MTL 73 KBank s Strategic Acquisition in Muangthai Group Holding (MTGH) MTGH MTI MTL MTB 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) 51.% 38.3% 1.1% 5.5% 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 five years in a row Ageas holds 7.8% in MTGH and holds 25% in MTL Note: OIC = Office of Insurance Commission 74

38 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 Net premiums earned Net investment income Total revenues Life policy reserve increase from the previous period Benefits payments to life policyholders Insurance claims and loss adjustment expenses 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 Total Assets Total Liabilities Total Equities Strategy in 215 Enhance the process and quality of services especially regarding technology as the aspiration is to become digital insurer and at the same time, develop products and services to effectively satisfy the needs of all customer groups 215 Key Financial Targets Bt bn T Total Premium after refund % Growth 28% 29% 23% 25% 18% ROE (%) 22.8% 26.1% 24.6% ROA (%) 3.1% 3.4% 3.2% Risk-Based Capital (RBC) 436.6% 431.6% 477.4%* Remark: *Data as of 9M14 Source: Muang Thai Life Assurance, data based on book value except for RBC Note: OIC = Office of Insurance Commission 75 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) Total Premium Growth (%YOY) Y21 Y211 Y212 Y213 Y214 MTL 38% 28% 29% 23% 25% Industry 14% 11% 19% 13% 14% First Year and Single Premium Renewal Premium Total Premium Total Investment (214): Bt 229. bn Total Premium by Products: Ordinary product accounted for around 9% Source: The Thai Life Assurance Association Total Premium by Channels: Bancassurance accounted for about 7% in 214 1% 1% 8% 8% 6% 4% 2% % Group Personal Accident Industrial Ordinary 6% 4% 2% % Other Direct Marketing Bancassurance Agents 76

39 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 77 Sample of K-Bancassurance and MTL Products K-Bancassurance Products 1 Muang Thai Life Assurance Products 2 Endowment Life Insurance Pro-Savings 615 Life insurance with a premium payment of only 6 years, but the coverage continues for 15 years 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% 1) K-Bancassurance products are MTL s life insurance products selling through KBank 2) Muang Thai Life Assurance products are MTL s life insurance products selling through MTL sales agents, and/or other channels 78

40 Sample of K-Bancassurance and MTL Products K-Bancassurance Products 1 Muang Thai Life Assurance Products 2 Whole Life Insurance Pro Life 9/5 Whole life coverage to the age of 9 with annual cash bonus payment from the end of policy year 1 and requires only 5 years premium payment 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 1) K-Bancassurance products are MTL s life insurance products selling through KBank 2) Muang Thai Life Assurance products are MTL s life insurance products selling through MTL sales agents, and/or other channels 79 KBank: Other Information 8

41 Shareholder Structure September 12, 214 (Closing Registration Date) Shareholder Structure Top 1 Shareholders* % Thai Shareholders 51% (NVDR = 29.17%**) 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 STATE STREET BANK AND TRUST COMPANY 5. HSBC (SINGAPORE) NOMINEES PTE LTD 6. NORTRUST NOMINEES LIMITED-NT SEC LENDING THAILAND 7. CHASE NOMINEES LIMITED 1 8. GIC PRIVATE LIMITED C*** 9. THAILAND SECURITIES DEPOSITORY COMPANY LIMITED FOR DEPOSITORS (THAI SECURITIES HOLDER ACCOUNT)**** 1. THE BANK OF NEW YORK MELLON Other Shareholders Total Source: Thailand Securities Depository Company Limited (TSD), the Stock Exchange of Thailand website ( and KBank 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 2.2% 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) 81 Credit Ratings As of March 1, 215 KBank Foreign Currency Long-term * Senior Unsecured Notes Subordinated Debts Long-term Local Currency/ National Ratings Subordinated Debts Thailand Outlook Government Outlook Moody's Baa1 A3 Baa3 A3 N/A Stable Baa1 Stable S&P's BBB+ BBB+ BBB N/A N/A Stable BBB+ Stable Fitch BBB+ BBB+ N/A AA(tha) AA-(tha) Stable 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 82

42 Organization Chart Auditor Corporate Secretary Corporate Secretariat Division Corporate Strategy Management Division Shareholders Board of Directors Advisory Directors to the Management Committee 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 Capital Markets Business Division Investment Banking Business Division World Business Division Customer Service Fulfillment Division Enterprise Risk Management Division Finance and Control Division Systems Division Human Resource Division 83 Board of Directors Structure 16 board members: 8 Independent Directors, 3 Executive Directors, and 5 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 (3) Mr. Banthoon Lamsam (Chairman of the Board and Chief Executive Officer) Mr. Predee Daochai (President) Mr. Teeranun Srihong (President) Non-Executive Directors (5) Mr. Krisada Lamsam (Vice Chairman and Chairman of the Corporate Governance Committee) Ms. Sujitpan Lamsam Dr. Abhijai Chandrasen (Legal Adviser) Mr. Somkiat Sirichatchai (Chairman of the Risk Management Committee) Mr. Rapee Sucharitakul Independent Directors (8) Mr. Somchai Bulsook (Vice Chairman, Lead Independent Director and Chairman of the Human Resources and Remuneration Committee) Prof. Khunying Suchada Kiranandana (Chairperson of the Audit Committee) Prof. Dr. Pairash Thajchayapong Sqn. Ldr. Nalinee Paiboon, M.D. Mr. Saravoot Yoovidhya Dr. Piyasvasti Amranand Mr. Kalin Sarasin Ms. Puntip Surathin 84

43 Sustainable Development Statement of Corporate Governance Principles: The Board of Directors strongly believes that good corporate governance will enhance the sustainable growth of performance of the Bank, and is central to achieving the Bank s primary objective of maximizing shareholder value. The corporate governance practices at KASIKORNBANK provide the structure which enables this objective to be achieved, whilst ensuring that the business and affairs of the Bank are conducted competitively under high ethical standards and in accordance with the law. Shareholders Social Community Environment and Society Board of Directors Environmental Labor Relations Management and Employee Caring Employee Development Occupational Health and Safety Youth Development Community and Social Development Creditors Social Economic Environ mental Employees Environmentally Friendly Business Operation Environmental Management Policies i.e. Water, Energy, and Climate Change (3R) Cultural of Environmental Awareness and Protection Competitors Customers Counterparties Economic Corporate Governance Customer Centricity Professionalism Financial Knowledge Innovation Risk Management Note: More information on our Sustainable Development can be found on our website and KBank s Sustainability Development 213 report 85 Public Recognition Highlight: 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 214 IAA Awards for Listed Companies Best CFO: Finance & Banking Sector - Best IR: Finance & Banking Sector - Consumer Protection Thailand Call Center Awards Asia s Best CEO Asia s - Best Corporate Governance of Asia - Best Retail Bank of the Year - Asia s Best CEO (Investor Relations) - Asia s Best CFO (Investor Relations) - Best Investor Relations Company (Thailand) - The Asset s Platinum Awards, Banking and Finance Sector - Best in Treasury and Working Capital SMEs, Thailand - Best Regional Cash Management Solution - Best Retail Bank in Thailand - Best Cash Management Bank in Thailand - The Best Managed Banks Achievement Awards The Achievement in Credit Risk Management Award - Best Local Bank in Thailand - Trade Finance Award for Excellence - Best Use of Social Media in Customer Service - Channel Excellence in Branch - Branch Innovation of the Year - Bronze - Thailand Domestic Cash Management Bank of the Year - Thailand Domestic Trade Finance Bank of the Year - 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 -Top Companies for Leaders SET Awards 214: - SET Award of Honor for Excellence in Corporate Governance Report Best Investor Relations Awards - Outstanding Investor Relations Awards - Outstanding Corporate Social Responsibility Awards - Best Cash Management Bank - Trade Finance Award for Excellence - Best Investor Relations by a CEO - Best Investor Relations by a Thai Company Thailand Zocial Award 213: Top Finance brand in Social network - SME Bank of the Year Asia 213 SET Awards 213: - SET Award of Honor for Excellence in Corporate Governance Report Outstanding Investor Relations - Outstanding Corporate Social Responsibility - Outstanding company performance - Best Bank - Best Cash Management Bank IAA Awards for Listed Companies Best CEO: Finance & Banking Sector - Best IR: Finance & Banking Sector - Best Bond House The Best Acquiring Institution in SEA (K-PowerP@y (mpos)) - Best Investor Relations by a Thai Company ESCO Excellent Supporting Bank Awards Best Retail Bank of the Year

44 Banking System and Regulations Update 87 Thai Commercial Banks and Specialized Financial Institutions (SFIs) 6 SFIs 14 Commercial Banks Market Share (% of Total Loans) Market Share (% of Total Deposits) As of Nov-14 2, 2, 15,687 14,918 16, 14,75 15,44 16, 13,573 13, % 11, % 28.3% 29.6% 12, 12, 1,74 29.% 9,935 1, % 8,872 9, % 26.9% 28.1% 8, 25.9% 23.6% 74.7% 8,25.5% 74.3% 4, 71.5% 74.4% 4, 74.5% 73.1% 71.9% 71.% 71.7% 7.4% 76.4% 74.1% Nov Nov-14 SFIs Commercial Banks SFIs Commercial Banks As of Nov-14 1,5 9, 7,5 6, 4,5 3, 1,5 Net Loans 9,493 9,754 8,591 1, 7, % 33.% 6, % 5, % 33.1% 17.6% 17.1% 33.9% 17.3% 16.3% 15.3% 15.5% % 14.8% 14.5% 15.1% 14.9% 17.8% 18.4% 18.4% 17.2% 17.4% 18.3% 17.9% 17.4% 17.9% 17.2% 17.% 16.5% Nov-14 Others SCB KBank KTB BBL Deposits 9,315 1,224 1,74 7, % 29.5% 8, 6,856 6, % 6, 17.8% 17.3% 31.4% 29.9% 27.7% 17.3% 15.% 15.% 15.1% 4, 14.6% 15.9% 16.3% 15.% 16.1% 17.2% 18.5% 18.2% 17.8% 17.9% 18.4% 2.1% 2, 2.5% 2.% 21.1% 19.% 18.3% 17.9% Nov-14 Others SCB KBank KTB BBL 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) 88

45 Regulations Update Capital (Basel III) January 213 onwards: Basel III implementation on bank only and consolidated basis (early adopt). Requirements are in line with international guidelines Expected impacts on Thai banks: Manageable impacts expected based on quantitative impact study by the BOT Expected impacts on KBank: Manageable impacts to KBank expected Financial Sector Master Plan II (FSMP II) Year 215 onwards: The FSMP III remains under BOT s revision, with focus being paid toward promoting Thai banks to do overseas businesses, in line with AEC inception. Attention will also be paid to reducing system-wide operating costs, including establishment of central cash logistics facilities, and enhancement of fund transfer flexibility and efficiency nationwide 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 June 213: The BOT announced the new Guidelines and Conditions for Establishing a Branch and Undertaking the Business of a Branch of Foreign Commercial Bank s Subsidiary, allowing for new subsidiaries licenses of foreign commercial banks to open up to 2 branches and 2 off-premise ATMs Year 214: The BOT established a licensing framework for new types of business operation for underserved specific markets, i.e. Islamic banking, investment banking and micro-finance Expected impacts on Thai banks: Move toward more liberalization, along with higher competition 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 Thai and International Financial Reporting Standards (TFRSs / IFRSs) Year 214 onwards: The time frame is specified by the Federation of Accounting Professions (FAP); 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, as the Bank early adopted some IASs and IFRSs and continues to prepare for full implementation Source: The Bank of Thailand, KResearch 89 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 FSMP II (Y21-214) Looking forward to liberalization Reducing system-wide operating costs Streamlining regulations Tackling remaining NPLs and NPAs (Allow banks to partner with private firms to work on raising attractiveness of NPAs, promote efficiency in the trading of NPLs and NPAs by establishing an NPA Information Center, and encourage write-offs of fully provisioned doubtful of loss loans) Promoting competition and access to financial services Promote competition - Encourage voluntary mergers to lower operating costs - Enhance the role of existing service providers (Liberalization of branch network, widen business scope, upgrade qualified retail banks to commercial banks, and expand branch network of foreign banks) - Introduce new entry to fill gaps and create value-added - Reduce government ownership in the commercial banking sector Promote financial access - Facilitate bank expansion of business, as well as support Specialized FIs in focusing on providing services to the populations without access to banks - Introduce new service providers with microfinance expertise into the system Strengthening financial infrastructure (including market liberalization, increased access for foreign financial institutions via grants of licenses for some business areas, and permission for an increased number of branches and ATMs) Promote development of financial products that help support risk management Enhance information system for risk management Push for draft/review of necessary financial laws to support risk management and an expedited resolutions to NPLs Promote information technology utilization Develop human resources in the financial sector FSMP III (Y215 onwards) Further development based on FSMP II results Another feasibility study in light of empirical results No official announcement regarding FSMP III Note: There are four types of Commercial banks in Thailand; Full service banks; Foreign bank branches; Retail banks; and Subsidiary Source: BOT and KResearch 9

46 Basel III: The BOT Implementation Timeframe The BOT implementation timeframe is mostly in line with the BCBS timeframe Effective implementation: Since January 1, 213 onwards Full Implementation: January 1, 22 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 Parallel run period Effective Liquidity Coverage Ratio (LCR)*** Net Stable Funding Ratio (NSFR)*** Effective (Phase-in) LCR 6% LCR 7% LCR 8% LCR 9% LCR 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 *** Requirements and implementation timeline for liquidity ratios have not been finalized. Banks are required to submit data to the BOT for further calibration Source: Bank of Thailand (BOT), KBank 91 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) 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

47 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 Re-measuring insurance liability to reflect current market situation Unbundling deposit components 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 impact 93 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 Insured Deposit Under new Royal Decree 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 11 August August 215 Up to Bt5mn institutions not insured by the DPA Since January 27, 212, the contribution rate has increased from.4% to.47%, of which 11 August August 216 Up to Bt25mn.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 Deposit Accounts in Thailand (as of November 214) 11 August 216, onwards Up to Bt1mn Deposits (Corporate and Retail Deposits) # of Accounts % Amount (Bt mn) % Less than Bt1mn 85,14, % 2,659, % More than Bt1mn, but less than Bt25mn 1,269, % 4,189, % More than Bt25mn, but less than Bt5mn 22,247.3% 793, % More than Bt5mn 18,246.2% 3,992, % Total 86,323,89 1.% 11,636,129 1.% * 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, 212 Source: DPA, Bank of Thailand (BOT), KBank, KResearch 94

48 Government Policy 95 Sources and Uses of Public Fund FY215 Annual Budget Budget Planning Budget Execution General Administration (Bt917.9bn or 36%) Defense Debt services Tax Revenue + Non-Tax Revenue (Bt2.325trn) + Borrowing under the Annual Budget Act (Bt25bn) Annual Budget (Bt2.575trn) Budget Disbursement (96% target disbursement rate + carry-over) Economic Services (Bt549.9bn or 21%) Promote R&D program to enhance national innovation Subsidy to SOEs (e.g. Infrastructure project, free bus and train service policy) Infrastructure/Agricultural Development Social and Community Services (Bt1,17.2bn or 43%) Disaster Aids Universal Healthcare Extra-Budget Borrowing under Special Act/Decree Extra-Budget Borrowing The 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) 96

49 Government Investment and Stimulus: Progress Update FY214 Budget Disbursement Calendar Year Total Disbursed Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Bt2.525trn FY213 = Bt2.25trn (Disbursement rate = 89.%) FY215 Budget Total Disbursed Bt2.575trn Bt946.3bn or 37.4% (Cumulative disbursement as of January 215) Emergency Decree for Water Management Total Disbursed Bt35bn Bt22.9bn or 6.6% (Cumulative disbursement as of January 215) The project was terminated in January 215 as the Cabinet ordered the PDMO to forfeit the term loan contract with financial institutions. However, a long-term water management plan worth Bt7bn is proposed to replace the old project Infrastructure Development Project The NCPO approved a framework of infrastructure development projects worth Bt2.4trn to be implemented via traditional funding sources, i.e. annual budget or SOE borrowing, or PPP and IFF Other Investment Stimuli Consumption Stimuli Corporate Income Tax Reduction (from 3% to 23% in 212 and to 2% in ); The National Catastrophe Insurance Fund The BOI investment application approval since May-14 was Bt561.6bn (Data as of December 25, 214) Performing-debt suspension; Bt3 daily minimum wage, Bt15, monthly income for civil servants; VAT maintained at 7.%, Energy / cost of living Rice pledging policy (213/14 in-season rice Farmer Aid (October 213 February 214) is the final season) Program Personal Income Tax Restructuring Note: PDMO = Public Debt Management Office, SOE = State of Enterprise, PPP = Public-Private Partnership, IFF = Infrastructure Fund, Sources: MOF, NESDB, KResearch as of March 1, Funding Needed from the Government for Investment Stimuli Billion Baht 1, FY212 FY213 FY214 FY 215F In addition to growth in commercial bank loans, government funding activities may affect liquidity in the system National Legislative Assembly (NLA) passed regular budget for FY215; thus, extra-budget borrowing is not expected The MOF proposed the framework of a Bt2.72trn expenditure and Bt39bn budget deficit for the FY216 Budget Deficit Financing Extra-budget borrowing Economic Policies 214 Budget Act 215 Budget Act Key Points Implementation Process Possible Impacts/ Expected Budget FY214 budget at Bt2.525trn with a deficit of Bt25bn FY215 budget at Bt2.575trn with a deficit of Bt25bn FY214 Effective date: to recommence October 1, 213 after being announced in the Royal Gazette on October 11, 213 FY215 Effective date: October 1, 214 after being announced in the Royal Gazette on September 29, 214 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 Sources: MOF, KResearch (As of January 215) Note: FY212 is actual data. FY213 and FY214 budget deficits are based on budget documentation whereas extra-budget borrowing is projected by KResearch 98

50 The NCPO Bt2.4trn infrastructure plan (Preliminary) The NCPO approved a framework of infrastructure development projects to be carried out between 215 and 222, with a total budget of Bt2.4trn, aimed at facilitating social stability and economic growth Bt2.4trn infrastructure investment projects are planned to be implemented via traditional funding sources, i.e. annual budget or SOE borrowing, or PPP and IFF Thailand Infrastructure and Logistics Master Plans Budget (Bt mn) 1. Intercity train network 67, 2. Bangkok and vicinity Mass-Transit System 3. Public infrastructure for AEC connectivity 1,2, 64, 4. Waterway Transportation System 1, 5. Airport Expansion 89, The NCPO approved Bt18bn out of the fiscal budgets for transport improvements, focusing on priority projects. As the government wants to enhance the disbursement rate, funding sources may come mainly from the annual budget NCPO Priority Projects Deep Seaport Expansion: Laem Chabang and Pak Bara Airport Expansion: Suvarnabhumi, Donmueang, Phuket, Chiangmai, and U-Tapao 4 Bangkok mass-transit routes under MRTA: Green Line expansion Phase 1&2, Orange Line, Pink Line and Yellow Line 3 Mass-transit routes under SRT: Airport Rail Link (both Express and City Line) and Red Line 3 Dual-track rail projects: Jira-Khon Kaen line, Prachuabkirikhan-Chumphon line, and Nakhon Phanom - Hua Hin line Note: SOE = State of Enterprise; PPP = Public-Private Partnership; and IFF = Infrastructure Fund; MRTA = Mass Rapid Transit Authority of Thailand; SRT = State Railway of Thailand Source : Newspaper, KResearch (As of August 8, 214) 99 Key NCPO and Government Economic Events and Highlights (2Q14 - October 214) Late May-June 214 Announced short-term economic policies by the National Council for Peace and Order (NCPO) Cleared around Bt92bn to farmers for overdue rice-subsidy payments Appointed new executives to the Board of Investment of Thailand (BOI) Acknowledged outcome of negotiations on the Foreign Account Tax Compliance Act (FATCA) between Thailand and the US July 214 Appointed new members to the Energy Regulatory Commission Set 215 fiscal budget framework worth Bt2.575trn Assigned the NESDB to develop a plan on special economic zones to enhance Thailand s border trade and prepare for the ASEAN Community in late 215 Approved, in principle, Thailand becoming a founding member of the Asian Infrastructure Investment Bank (AIIB) Postponed awarding telecom licenses for the fourth-generation (4G) mobile phone spectrum Maintain the 7% value-added-tax (VAT) rate until September 215; will increase the VAT rate to 1% in October 215 Promote investment in infrastructure development in lieu of longterm equity funds (LTFs) which will expire in 216 Note: National Economic and Social Development Board (NESDB) Source : Newspaper, KResearch (As of January 21, 215) Events July 214 (Continue) Appointed the National Legislative Assembly (NLA) Approved a draft of an Infrastructure investment plan totaling Bt2.4trn: August-October 214 Approved 139 projects worth Bt458.6bn with 2 pending applications (around Bt7bn) for BOI privileges (June October 214) Approved the 215 fiscal budget bill by the NLA Approved economic stimulus measures worth Bt365bn by the Cabinet November-December 214 Provided financial aid to rubber farmers worth Bt8.5bn, as well as set up Rubber Fund to promote a sustainable rubber industry Approved 36 additional projects worth Bt12.9bn for BOI privileges (including 6 Eco car Phase 2 projects) Approved Seven-Year Investment Strategy by the BOI to promote investments that create value for Thailand and upgrade Thai SMEs Signed MOU between Thailand and China to built standard-gauge tracks on two routes, namely Nong Khai and Map Ta Phut Actions in the pipeline Energy Policy: Reforming petroleum concessions and energy price structures, including an LPG subsidy Tax Reform: Reforming tax collection, generating sufficient revenue for the government, and boosting competitiveness for local businesses, especially for SMEs 1

51 Summary on Economic Stimulus Measures worth Bt365bn Thai Cabinet approved economic stimulus measures on October 1, 214 Economic Policies Plan to accelerate investment projects via Bt147bn carried over from 214 fiscal budget and Bt13bn from 215 fiscal budget during the last three months of the year (October December 214) Reallocation of unused budgets, worth Bt25bn Refurbishing infrastructure from an unused central budget from and borrowed money without disbursement from Thai Khem Kaeng project worth Bt23bn Helping low-income farmers, worth Bt4bn Key Points Possible / Impacts/ Expected Budget Government determined to speed approval and disbursement of investment projects 3-4% of the amount (Bt 277bn) expected to be disbursed This will help promote positive sentiment for private sector investment as well as economic activity Recall the unused budget in FY and reallocate to appropriate projects Focus on investment in education, public health care, and infrastructure work Promote employment in rural areas Alleviate production costs and enhance rice famers' income Bt1, per rai will be granted to farmer households with less than 15 rai of farmland (1.8mn households) Up to Bt15, will be granted to farmer households with more than 15 rai of farmland (1.6mn households) Expected budget is Bt4bn and the budget will be distributed to farmers starting October 2, 214* Note: *The Bank for Agriculture and Agricultural Cooperatives (BAAC) will pay farmers first; then, the government will pay the money to the BAAC via the annual fiscal budget Source: Newspaper, KResearch (As of October 214) 11 Government Assistance Measures for SMEs Affected by Wage Hike Daily minimum wage rose to Bt3 and will remain at Bt3 until December 215 Measures Tax measures Financial measures Details Reduce income tax If annual income Bt3,, income tax rate = % If annual income between Bt3, and Bt1mn, income tax rate = 15% If annual income over Bt1mn, income tax rate = 2% Cut withholding tax to 2% (from 3%) Allow 1% depreciation in the first year for machinery Exempt income tax from the sale of old machinery Offer tax deductions for 1.5 times incremental wages Effective Period: January 1, December 31, 213 Offer soft loans worth Bt2bn from SME Bank and Bt1bn from Social Security Fund Offer credit line guarantee worth Bt24bn by Thai Credit Guarantee Corporation Effective Period: March December 31, 216 for credit line guarantee; March December 31, 218 for soft loan Productivity-boosting measures Offer soft loans (.1% p.a.) for staff training costs, by the Skill Development Fund Effective Date: January 1, December 31, 213 Other measures Reduce employer contributions to Social Security Fund to 4% (from 5%) Increase budget for state officer trainings and seminars at provincial hotels Source: KResearch, information as of February 213 Reduce business tax by 5% to Bt4 per room (from Bt8) for small scale hotels under the supervision of the Local Administration Organization Effective Period: January 1, December 31,

52 Ongoing Government Measures to Assist Cost of Living Measures Household Assistance Energy Prices 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: The government intends to restructure diesel fuel prices to reflect global prices NGV and LPG Price: The government has lowered NGV and LPG subsidy, allowing retail selling prices to reflect global market prices. NGV price increased from Bt11.5/kg to Bt12.5/kg, beginning December 3, 214 LPG prices are as follows: Household sector refrained from subsidizing general households. Thus, the current household LPG price is Bt24.16/kg. However, the government is exempting the oil fund levy for low income households. Therefore, the LPG price for low income households is Bt18.13/kg Transport sector adjusted to the market price at Bt24.16/kg Industrial sector adjusted in alignment with relevant production costs, currently at Bt24.16/kg FT Rate: Fuel Adjustment Tariff (FT) Rate for electricity is set to increase by less than the actual cost (from January-April 215, FT rate at Bt.59/unit ) Value-added-tax (VAT) Rate Source: KResearch On July 17, 214, the NCPO announced the following VAT Rates: Maintain the 7% value-added-tax (VAT) rate until September 3, 215 After September 3, 215, the VAT rate will be increased to 1% 13 % Cumulative Budget Disbursement Rate (%) Public Debt to GDP and Fiscal Budget Government budget disbursement rate for 4M FY215 was 37.4%, slightly below than the 37.5% in 4MFY214 The FY215 budget disbursement target is 96%, compared to 95% in FY Oct Nov FY 215 FY 214 FY 213 Dec Jan Feb Mar Apr May Jun Jul Aug Sep The public debt to GDP ratio was 46.46% as of January 215, still under the 6% limit set by the fiscal sustainability framework The Thai government has committed to keep the ratio of public debt to GDP under 5% Bt bn 6, 5,5 5, 4,5 Sep-12 Public Debt Dec-12 Mar-13 % to GDP Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep Dec-14 % to GDP Source: Ministry of Finance 14

53 Thai Economic Figures 15 Currency and Interest Rate Outlook Bt 3.15 USD/THB: End Period Q1 4Q11 4Q12 4Q13 4Q14 4Q15F USD/THB Interest Rate Trend US policy rate would be normalized in 3Q15 due to The MPC unexpectedly lowered policy rate by strengthening US economy, particularly signs from job another 25bps to 1.75% in March meeting. The market, implying a broad dollar bull trend decision was deemed to boost private confidence amidst slow domestic demand recovery and delayed Lower interest rate differentials between Thailand and public spending the US should lead to reallocation of assets back to the US and USD/THB is expected to edge higher towards The decision is viewed to be a one-off cut, and the 34. by year-end 215 policy rate is expected to remain at 1.75% for the rest of 215. The current policy rate is already low and In short-term, there are factors that may lead to some the MPC would probably want to reserve its already deviation in bullish USD/THB call such as higher than limited policy space for when it is really necessary expected Thailand s current account from lower oil price and expectation over ECB s QE-induced foreign capital Key risk factors ahead are further delayed in public inflows spending on investment and headwinds on Thai exports performance % p.a Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15F Fed Funds rate BOT's 1-Day Repurchase rate Note: F is estimated by KBank Capital Markets Research (as of March 11, 215) 16

54 Monthly Economic Conditions: January - February 215 Units: % over-year, otherwise indicated Q 2Q 3Q 4Q Nov Dec Jan Feb Private Consumption Index (PCI) Sales Volume of Benzene and Gasohol Value-added Tax at 1995 prices Imports of Consumer Goods at 1995 prices Passenger Car Sales Motorcycle Sales Private Investment Index (PII) Domestic Sales Volume of Cement Sales Volume of Commercial Cars Imports of Capital Goods at 1995 prices Value of BOI Applications Manufacturing Production Index Capacity Utilization Agriculture Production Index Agriculture Price Index No. of Tourists Exports (In terms of US Dollars) Unit Value Volume Imports (In terms of US Dollars) Unit Value Volume Trade Balance (USD millions) 6,661 24,582 6,279 5,887 4,78 7,636 1,914 3,64 1,392 Current Account (USD millions) -2,452 14,231 5, ,815 1,664 5,523 2,56 Headline CPI Core CPI Note: NCPO = the National Council for Peace and Order Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), Office of Industrial Economics (OIE), Office of Agricultural Economics (OAE) Key economic figures in January 215 suggested an economic recovery remained slow Private consumption saw a sluggish recovery amid soft farm income as well as the bank became more cautious for lending Exports turned negative on tepid demand from China and ASEAN countries Current accounts showed a continuing surplus due to a sharp decline in imports, especially energy items February 215 headline inflation registered negative territory for 2-consecutive months due to a drop in energy prices from the last year 17 KR Household Economic Condition Index (KR-ECI) KR Household Economic Condition Index (KR-ECI) edged up to 46.2 in December 214, signaling that falling inflation in line with oil prices helped support household spending, though it may take some time until household sentiment returns to normal The 3-month expected KR-ECI rose to a 5-month high of Its components, however, remained below 5, especially household debt and household expenses excluding debt. This will inhibit recovery in domestic consumption. KR-ECI Composite Index Components of KR-ECI KR-ECI Source: KResearch Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Current KR-ECI 3-month Expected KR-ECI 3-month Expected KR-ECI Household savings Household income Household debt Household expenses excluding debt Prices of consumer goods Source: KResearch Dec Nov Notes: 1.The KR Household Economic Condition Index (KR-ECI) has been devised by KResearch to monitor household sentiment towards economic conditions at the current level and over the next three months. Any reading above 5 reflects a positive sentiment and below 5 a negative sentiment. 2. The research sample includes households in Bangkok and Metropolitan Area (BMA). 3. Components of KR-ECI are household savings, household income, household debt, household expenses excluding debt, and prices of consumer goods. 18

55 Economic Condition Highlights: January - February 215 CCI Feb-15 CCI declined further on less encouraging economic prospects Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Consumer Confidence Index (CCI) BSI Business Sentiment Index (BSI) Jan-15 Foreign tourist arrivals increased thanks to seasonality effect and increasing visits from Chinese tourists Jan-15 Private Consumption and investment remained rather bleak due to uncertainties over economic outlook %YoY 2% % -2% -4% -1.5% -.2% -13.3% -6.4% PCI PII Car Sales Construction Materials.7% Imports of Capital Goods 3Q14 4Q14 Dec-14 Jan % Imports of Consumer Goods Jan-15 Exports turned negative due to weak demand from China and ASEAN Million Person % 16.9% 17.2% 18.7% -6.7% 15.9% Jan-15 No of Foreign Tourist Arrival % YoY (RHS) Sources: BOT, MOC, UTCC, OIE 25% 2% 15% 1% 5% % -5% -1% Export Value (USD Million) 25, 25% 2, 2% 15% 15, 1% -3.% 1, 5% % 5, -5% -2.6% -1% Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Exports Exports (excluding gold) % YoY for Exports % YoY for Exports exc Gold % YoY 19 %YoY of MPI Economic Condition Highlights: January - February 215 Jan-15 MPI and CAPU declined YoY due to a fell in exports demand (5) (1) (15) Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 MPI (lhs) %Capacity Utilization (rhs) Feb-15 Headline inflation turned negative due to a sharp decline in energy prices 75 %Capacity Utilization Rate % YoY Activity in the property market showed some improvement in 4Q14 after economic activity returned to normal 35% 3% 25% 2% 15% 1% 5% -5% % -1% 25.% 18.2% 1Q9 2Q9 3Q9 4Q9 1Q1 2Q1 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Construction areas permitted in municipal zone Condominium Registration Nationwide New Housing registered in BKK and Vicinity 4.8% Land and property prices rose at a slower pace in 4Q14 as people were cautious about Thailand economic prospects %MoM % YoY % YoY Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 Headline CPI (MoM-lhs) Core CPI (MoM-lhs) Headline CPI (YoY-rhs) Core CPI (YoY-rhs) %YoY % YoY % 6.4% 4.9% 1Q9 2Q9 3Q9 4Q9 1Q1 2Q1 3Q1 4Q1 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Single House (With Land) Townhouse (With Land) Land Note: NCPO = the National Council for Peace and Order Sources: BOT, MOC, OIE, REIC (Real Estate Information Center) 11

56 Exports and Imports: 214 Exports by Country Imports by Country Middle East 5.2% Hong Kong 5.5% Japan 9.6% Others 21.8% USA 1.5% ASEAN 26.1% EU 1.3% China 11.% Top 1 Exports by Product (BOP Basis) 214 Total Exports (BOP Basis) USD Millions Weight %YoY Exports, f.o.b. (BOP basis) 224,792 1.% -.3% Electronics 33, % 1.8% Automotive 31, %.1% Agro-manufacturing Products 27, % -2.5% Machinery & Equipment 19, % 8.5% Petro-chemical Products 13, % 7.6% Electrical Appliances 12, % 4.5% Petroleum products 11, % -11.9% Metal & Steel 9, % -11.2% Other Manufacturing products 8,49 3.8% 5.6% Chemicals 8, % -6.% Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis USA 6.4% EU 8.5% Middle East 12.8% Others 21.8% China 16.9% Japan 15.7% ASEAN 18.% 214 Total Imports (BOP Basis) USD Millions Weight %YoY Imports, f.o.b. (BOP basis) 2,21 1.% -8.5% Fuel 47, % -8.7% Machinery, equipment, and supplies 44,3 22.1% -2.5% Electronics parts and electrical appliances 26, %.1% Materials of base metal 19, % -5.8% Chemicals 13,19 6.5% -2.1% Non-durables Consumer goods 12, % -2.7% Automotive 9, % -27.5% Agricultural and agro-manufacturing products 8, %.3% Plastics Top 1 Imports by Product (BOP Basis) 7, %.7% Non-monetary gold 6, % -56.1% 111 Export and Import Data: USD Million 25, 2, 15, 1, 5, 23.% 6.2% 5.7% 1.9% 1.3% 1.6% 11.9% 21.3% Exports by Country 22.7% 4.9% 6.7% 1.3% 1.5% 11.% 11.2% 22.7% 22.5% 23.1% 5.4% 4.7% 5.1% 5.7% 9.8% 9.9% 1.7% 1..2% 11.8% 11.7% 1.9% 9.5% 24.3% 24.6% 29 Others 21 Middle East Hong Kong USA 213 Japan China EU ASEAN Top 1 Exports by Product (BOP Basis) Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis 21.6% 5.1% 5.8% 1.% 9.7% 11.9% 9.8% 26.% 213 Total Exports (BOP Basis) USD Millions Weight %YoY Exports, f.o.b. (BOP basis) 225,49 1.% -.2% Electronics 32, % -.8% Automotive 31, % 7.6% Agro-manufacturing Products 27, % -2.6% Machinery & Equipment 17, % 4.% Petroleum products 12, % -1.3% Petro-chemical Products 12, % 5.3% Electrical Appliances 11,81 5.2% 2.3% Metal & Steel 1, % -5.5% Chemicals 9,19 4.% 7.6% Rubber 8, % -5.9% USD Million 25, 2, 15, 1, 5, 22.4% 12.4% 18.7% 6.3% 12.8% 9.% 18.5% Imports by Country 25.% 23.2% 22.8% 12.9% 14.1% 24.4% 13.3% 5.9% 5.% 5.8% 11.6% 19.8% 2.7% 5.8% 18.4% 16.4% 14.8% 13.3% 15.% 13.2% 8.1% 7.6% 7.8% 9.1% 16.6% 16.2% 16.1% 16.6% Others Middle East USA Japan China EU ASEAN Top 1 Imports by Product (BOP Basis) 213 Total Imports (BOP Basis) USD Millions Weight %YoY Imports, f.o.b. (BOP basis) 218,748 1.% -.5% Fuel 52, % 9.8% Machinery, equipment, and supplies 45, % -1.1% Electronics parts and electrical appliances 26, % -2.9% Materials of base metal 2, % -5.% Non-monetary gold 15,57 6.9% 21.6% Chemicals 13, % -2.1% Automotive 13, % -6.2% Non-durables Consumer goods 13,116 6.% 5.6% Agricultural and agro-manufacturing products 8, % -4.6% Plastics 7, % -4.5% 112

57 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 Investment Value (Bt bn) 1,2 1, , M14 Rubber & Plastic Products Investment value of BOI-approved applications (by Industry)* Chemical & Chemical Products Paper and Paper Products Garments Tobacco Investment Value Food and Beverage M Avg M14 Source: BOT, MOC, OIE (Data as of August 214) Source: BOI Note: *Figures above indicate investments of approved projects requesting investment promotion benefits from BOI 113 Property Market: Economic headwinds may lead to repercussions in the property market Supply Side: New Housing Completions and New Projects Launched in BMR* 1, Units New Housing Completions New Projects Launched % (YoY) Demand Side: Transferred Properties in BMR* 1, Units M13 9M14 Price Growth of Properties 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 (29-213): Land 4.9%; Single House 1.7%; Townhouse 3.2% Land Single House Townhouse Sources : National Economic and Social Development Board (NESDB), BOT, Real Estate Information Center (REIC), Agency for Real Estate Affairs (AREA), the BOT, and KResearch Note: * Including Condominium, Single House and Townhouse; BMR = Bangkok and Metropolitan Area Outstanding Mortgage Loans to Individuals and Property Developers loans to GDP % Q13 2Q13 3Q13 4Q13 3Q14 % Outstanding loans to Property Developers to GDP % Outstanding mortgage loans to GDP 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 6.5% as of 3Q14, still lower than the precrisis level Supply Side: In 214, new housing completions and new housing projects declined due to economic slowdown Demand Side: the number of transferred properties still declined due to lack confidence amid the economic slowdown Prices: Property prices increased slightly due to an increase in business costs Mortgage loan NPLs among Thai commercial banks remained low at 2.5% in 3Q14, but experienced a slight increase from 2.3% in

58 Household Borrowing Old Definition Household Borrowing to GDP New Definition 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 1% 8% 6% 4% 2% 9.% 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.% %.% 19.9% 24.6% 28.8% 7.9% 11.3% 15.% 8.1% 26.2% 28.8% 32.1% 35.% 36.% 8.1% 12.1% 13.3% 13.8% Cross-Country Comparison of Household Debt* 95.1% 9.4% 87.1% 81.% 76.8% 84.7% 63.% 5.1% 9.4% 7.6% 5.9% 1.7% 77.3% 82.3% 84.7% 8.8% 9.1% 7.3% 12.3% 12.9% 11.5% 2.2% 23.% 24.2% 24.3% 24.7% Q14 Commercial Banks SFIs Saving Cooperatives Non-Bank Fis Others Total Debt Service Ratio of Thai households** 4% 3% 2% 1% % 28.6% 29.6% 28.9% % NPL for Consumption Loans of Thai Commercial Banks 3.% 2.% 1.%.% 19.% 19.4% 13.5% 9.7% 6.2% 5.% Household borrowing 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 Thailand s household debt to GDP is comparable to other countries; the debt service ratio of Thai households is still well below 4%**, indicating that the household debt situation is unlikely to trigger any problems in the foreseeable future NPL ratio for consumption loans of Thai commercial banks increased slightly; however, it is still below the 5-year average, reflecting a good quality of loans Source: BOT, Bank for International Settlements (BIS), National Statistical Office (NSO), and KResearch 4.1% M14 3.4% 3.1% 2.3% 2.% 1.9% 2.2% 2.3% * Thailand and Malaysia Household Debt as of 3Q14, Other Countries as of YE 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 postpone from January 212, due to the severe floods in 211 Source: The Bank of Thailand 116

59 Fed Policy Normalization and Thailand Economic Impacts Pace of Fed s asset purchases under Quantitative Easing Program Source: KResearch and *FOMC (Oct 214) Fed QE Program was concluede in Oct-14 $ Billion Fed began its QE tapering in January 214; the program concluded in October 214 In instances where QE tantrum results in drastic fund outflows, Thailand s external stability will likely be maintained, as our FX reserves should be more than enough to meet all obligations Thai banking system liquidity increased due to slow loan growth amid a rise in deposits, while CAR and NPL ratio remained good (17.1% and 2.34% as of 3Q14, respectively), with strong profitgenerating capacity (Bt213.6bn and Bt175.2bn in 213 and 9M14, respectively) Thailand has enough FX reserves to meet all internal and external obligations FX Reserves Net Fwd Position $179.6 Billion Source: BOT, ThaiBMA, KResearch Data as of January 9, 215 Million Baht 2,7, 2,6, 2,5, 2,4, 2,3, 2,2, 2,1, 2,, $ Billion Liquid Thai commercial assets in Thai banks commercial have high banks liquidity increased Assets 2,377,947 Nov-13 2,575,192 Dec-13 2,391,171 Jan-14 2,315,446 Feb-14 2,335,37 Mar-14 2,365,278 Apr-14 Excess Liquidity LTD+BE Note: Liquidity includes cash, as well as net positions in short-term money market and net investments 5 2,266,117 May ,22,942 Jun-14 Current Account Deficit Reserves backing banknotes NR Bond Holdings ST External Debt 2,262,846 Jul-14 2,268,936 Aug-14 2,278,965 Sep-14 $13.8 Billion 2,384,273 Oct-14 2,565,987 Nov Percent 117 Thailand s external balances remain relatively strong compared to peers High international reserve / Imports (Import Coverage) Low foreign holding ratio in Thai government bonds Number of Month % 47.6% 14. 4% 37.7% % % 15.8% 1. 3% % 4. 1% 2. %. Indonesia South Korea Malaysia U.S. Thailand India Indonesia Phillippines South Korea Malaysia Singapore Thailand Source: Bloomberg, KResearch (data as of December 214) Note: Retrieved from Asia Bond Monitor (Volume November 214),based on September 214 data High international reserve ratio / External debts Source: Asian Development Bank 25% 2% 15% 1% 5% % 7.1% 38.3% 138.2% 84.7% 26.9% 13.9% India Indonesia Phillippines South Korea Malaysia Thailand Source: Bloomberg, KResearch (data as of December 214) Notes: 1) Thailand s international reserve as of December 214 was USD157bn 2) Foreign investor holdings as of December 214: - Thai Government bonds: Bt626bn or 18.1% of the total Bt3.5trn in Thai Government bonds - Thai bonds: Bt683bn or 7.4% of the total Bt9.3trn in Thai bond market size Source: Various central banks, Asian Development Bank, Bloomberg, and World Bank; Complied by KResearch Thailand s economy and financial market 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 118

60 Net impacts of decreasing oil price for Thai Economy The 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 Positive Impact Industries Average 214: 96.7 USD/bbl Dubai 215: possibly dropping to 5-6 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 Low 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 managed production cost: particularly industries with high energy costs Increase consumer purchasing power (except farmers): given widespread product price drops 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 119 Other Figures Million Baht Thai Bond Market Size (Gov't and Private bonds) 1,, 8,, 6,, 4,, 2,, 75% 76% 77% 68% 69% 7% 57% 56% 4,888, ,85, ,118, ,962, ,327, ,579, ,991, Thai Bond Outstanding (LHS) Bond Market Size to GDP (RHS) 9,287,288 4Q 14 Foreign Holdings of Thai Bonds 9% 8% 7% 6% 5% 4% 3% 2% 1% % Percent to GDP Bond Yields % M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 1Y 15Y * Dec-12 Dec-13 Dec-14 Jan-15 * Data as of Jan 2, 215 Current Account and FX Reserve Million Baht 9, 7, 5, 3, 1, -1, 49,15 76,455 65,892 1.% 1.5% 1.1% ,459 4.% % 418, % 8.4% 7.4% 71, , Foreign Holding Outstanding (LHS) % of Thai Bond Market (RHS) 683,214 4Q14 9% 8% 7% 6% 5% 4% 3% 2% 1% % %of Total Bond Market USD Million 25, 2, 15, 1, 5, -5, -1, -15, -2, 2, USD157.bn (Dec14) 18, 16, 14, 12, 1, 8, 6, 4, (+)USD11.6bn (Nov14) 2, Current Account (LHS) FX Reserves (RHS) USD Million 12

61 Other Figures Million Baht 3,, 2,5, 2,, 1,5, 1,, 5, Source: BOT, NESDB - Housing Loans/GDP 22.4% 18.9%18.7% 19.3%19.9%21.1% 16.9%17.2% 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, ,51, ,72,23 3Q14 Housing Loans for Personal Consumption (LHS) Housing Loans to GDP (RHS) 25% 2% 15% 1% 5% % Percent to GDP Million Baht 35, 3, 25, 2, 15, 1, 5, 2.1% 2.1% 179, Credit Card Loans/GDP 189, % 2.1% 2.2% 2.3% 2.4% 2.4% 196, , Credit Card Loans Outstanding (LHS) 228, 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 3Q214 Million Baht 35, 3, 25, 2, 15, 1, 5, 211,89 Personal Loans/GDP 229, , , ,236 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 3Q , , ,684 Nov-14 3.% 2.5% 2.% 1.5% 1.%.5%.% Percent to GDP Credit Card Loans to GDP (RHS) 2.5% 2.5% 2.4% 1.9% 2.% 2.3% 2.5% 2.6% , , ,611 Nov-14 3.% 2.5% 2.% 1.5% 1.%.5%.% Percent to GDP 121 Other Figures Thailand Korea Singapore USA China Malaysia Japan Loans to GDP as of % 85.8% 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 96.6% 13.3% 119.% 116.6% 125.7%.% 2.% 4.% 6.% 8.% 1.% 12.% 14.% %YoY 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% -2.% Thai Banks Net Loans and NPLs 5.7% 5.3% 4.1% 3.% 2.5% 2.3% 2.6% 12.87% -.51% 12.54% 15.8% 14.4% 1.49% 4.4% Dec-8 Dec-9 Dec-1 Dec-11 Dec-12 Dec-13 Nov-14 %YoY Net Loan Note : %YoY Net loans represent growth of net loans in 14 Thai commercial banks from CB1.1 (% Gross NPLs as of Jun-14) GDP Per Capita %Gross NPLs 6.% 4.% 2.%.% % Gross NPLs to Total loans %YoY 25.% 2.% 15.% 1.% 5.%.% 19.6% 14.% 13.5% 15.7% 13.1% 11.1% 6.3% 8.8% 4.8% 5.6% 3.9% 1.1% 5.8% 14.3% 11.% 9.4% M14 Credit Card Loan Growth Spending Growth Bath 8.3% 9.8% 11.1% 2, 7.9% 7.3% 15, 5.8% 3.9% 4.7% 1, -1.1% 5, GDP Per Capita % YoY 12.% 1.% 8.% 6.% 4.% 2.%.% -2.% Note: The credit card statistics number includes foreign bank and non-bank credit cards Source: BOT, NSO, CEIC, and KResearch 122

62 Other Figures Population and Labour force Million Population Labour force 39.8 % of Unemployment Unemployment Rate Source: NESDB, National Statistical Office (NSO), and KResearch Nov-14 Net Foreign Direct Investment Foreign Direct Investment Position by Countries % YoY % 45, 3.% % 21.2% 4, 25.% 24.5% 24.4% 23.5% 23.7% 25.6% 8 35, 2.% 9.7% 9.5% 9.2% 9.3% 9.6% 8.3% 8.2% 3, 15.% % 18.8% 16.5% 17.% 16.3% 15.6% 25, 17.5% 1.% 2, 194.2% % 17.1% 17.% 5.% 19.8% 18.2% 17.1% 16.7% 15, 74.1% 1,.% % 35.8% 33.5% 31.7% 3.% 31.7% 34.5% 34.% 14.5% 5, -5.% -28.2% -4.9% -61.% -1.% Q M14 Note: FDI %YoY Japan Asean EU USA Others - 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 281, , , , , , , The ASEAN Economic Community (AEC) By December 215, ASEAN will be transformed into the ASEAN Economic Community, with free movement of goods, services, investment, and skilled labour, and a freer flow of capital AEC by 215 Single Market and Production Base Competitive Economic Region Equitable Economic Development Integration With the Global Economy Size of ASEAN Economy (USD Trillion) Average Projected GDP Growth around 5 % Source: IMF (October 214) and KResearch Source: The Association of Southeast Asian Nations and KResearch 124

63 AEC as a Growth Driver 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 125 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 126

64 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