Economic outlook. Bangkok Bank position. Strategic priorities and targets

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2 Topics Economic outlook Bangkok Bank position Strategic priorities and targets 2

3 GDP growth outlook remains strong 6 Baht trn % 2.3% +7.8% +4 5% +3.0% f 1Q11(A) Note : (A) is annualized number. Source: NESDB and Bangkok Bank Research Department 3

4 Sharp increase in exports Q % YoY USD bn Mar 11 Source: Bank of Thailand 4

5 Recovery in confidence Index 80 Index Mar 11 Consumer Confidence Index (LHS) Business Sentiment Index (RHS) Source: Bank of Thailand 5

6 Capacity utilization almost full 100% 75% 50% 25% 0% Total food motor vehicles Avg textiles petroleum chemicals rubber/plastics non metallic Mar 11* paper machinery electrical Note: *Preliminary number Source: Office of Industrial Economics and Bank of Thailand Safety glass for automobile Air conditioner Cosmetic Tyre Passenger car Car under 1,800 cc Soft drinks, Mineral waters Glass Products Ethylene Basic chemicals Motor cycles and Component Rubber glove Motor Vehicles Hard Disk Drive Floor & Wall tile Benzene Machinery and equipment Refrigerator Concrete & Construction Products Plastics in primary forms TOTAL 0% Note: Preliminary number as at 31 March % 40% 60% 80% 100% 120% 140% 160% 180% 6

7 Capital expenditure in upward cycle Private Investment 1,500 Baht mn 1, p Note : p is preliminary number. (A) is annualized number. Source: NESDB : Table 2 Expenditure Gross Domestic Product at 1988 price (Gross fixed capital formation + change in inventories) YoY +13.8% YoY +12.6% 1Q 11(A) 7

8 BBL in good position Largest bank in Thailand Strong network Customer focused organization 8

9 BBL in good position to capture opportunities Benefits of being largest bank in Thailand Loans Deposits BBL 3 rd 16% 2 nd 18% 1 st 18% Largest customer base will benefit when clients have loan demands 3 rd 16% 3 rd 17% BBL 2 nd 18% 2 nd 18% 1 st 20% Sufficient low cost funding and deposit customers to crosssell products Total assets Shareholders equity 3 rd 15% BBL 2 nd 18% 1 st 18% Economies of scale for investment and marketing BBL 3 rd 3 rd 13% 13% 2 nd 15% 2 nd 15% 1 st 22% Greatest capacity to extend loans As at 31 March

10 BBL in good position to capture opportunities Strong network-domestic and international Thailand 1,001 branches Overseas 24 branches 1. Japan 2 branches 8. Singapore 1 branch Metro 343 branches Provincial 658 branches 2. Hong Kong 2 branches 3. China 4 branches 4. Taiwan 3 branches 5. Laos 1 branch 6. Vietnam 2 branches 7. Indonesia 1 branch 9. Malaysia 5 branches 10. Philippines 1 branch 11. United States 1 branch 12. United Kingdom 1 branch 13. Myanmar 1 Representative Office As at 31 March

11 BBL in good position to capture opportunities Customer-focused organization 5 Business units 11% 17% 11% 16% Corporate Business International 45% Note: Bank only including BBC and BBB As at 31 March 2011 Commercial Consumer Corporate Largest market share in 22 industry divisions+ Chinese desk + Japanese desk SMEs Over 300 Business Centers in all major cities International Only Thai bank with local license in China Gaining market share in Consumer loans 11

12 BBL in good position to capture opportunities Strategy designed to suit each business segment Corporate SMEs Commercial Business International Consumer Leverage customer base Strengthen relationship Increase new customers Utilize expertises Improve sales and marketing Collaboration Training New products Cross selling 12

13 Strategic priorities and targets Grow loans Increase income while containing costs Improve asset quality Maintain liquidity and strong capital position 13

14 1. Grow business and consumer loans Strengthen leadership position in loans 1,400 1, % YTD 9.9% 0.2% 2.3% 0.5% 7.7% QoQ 3.9% 15% 0% Baht bn 1, % % Q10 2Q10 3Q10 4Q10 1Q11 Loans Loan Growth 30% 14

15 2. Increase income while containing costs Stabilize net interest margin Interest rates rising 3% 2% 3.00% 3.5% Net Interest Margin narrowing 1% 1.25% 0% Jun 10 Dec 10 Jun % 3.00% Note: RP 1 Day updated as at 1 June 2011 Pricing pressures continuing 2.64% 2.64% 2.62% 2.68% 2.55% 6% 5.7% 4.7% 4.5% 4.5% 4.6% 4.7% 4.8% 4.9% 2.5% 4% 2% 1.9% 0.9% 0.7% 0.6% 0.6% 0.7% 0.7% 0.9% 2.0% Q10 4Q10 1Q11 0% Q10 2Q10 3Q10 4Q10 1Q11 Yield on Loans Cost of deposits Note: Preliminary numbers for year

16 2. Increase income while containing costs Cross-sell to both business and consumers Fee income breakdown 7%10% 11% 18% Bancassurance Mutual funds Over 18 million deposit accounts 32% 22% Bancassurance & Mutual Fund Loan related fees Credit cards Transaction services Global market services Others Cash management Supply chain management Trade finance Payroll Over 100,000 business customers As at 31 March

17 2. Increase income while containing costs Utilize scale and increase productivity Revenue growing faster than costs Cost to income ratio improving Baht bn Revenue Note: (A) is annualized number CAGR 10.2% CAGR 6.3% Expenses Q11(A) 60% 40% 20% 42.6% 41.6% Q10 4Q10 1Q11 Note: Preliminary numbers for year

18 3. Improve asset quality and maintain prudent credit management Reduce non-performing loans NPL declined both amount and ratio 100 6% Baht bn % 4.4% 3.0% 2.8% 4% % Q11 0% NPL (L) NPL ratio (R) 18

19 3. Improve asset quality and maintain prudent credit management Maintain prudent credit management Provisioning expenses to loans declining Coverage ratio rising bps % 159% 170% Baht bn bps 0.6% % 0.4 % of Loans 150% 100% % Provision exp (L) 2.1 1Q10 2Q10 3Q Q10 1Q Provision/Loans (R) 0% Q11 19

20 4. Maintain liquidity and strong capital position Well-prepared liquidity position Deposits steadily increase Loan to deposit ratio below system 2,000 1,500 QoQ +3.7% 110% 100% System 101.6%* Baht bn 1, % 53% 51% 51% 90% 12.3 % BBL 90.3% % 47% 49% 49% 80% BBL (incl. B/E) 86.4% Q11 70% Mar 11 Current and Savings deposits Fixed deposits Note: *System LDR calculated using BOT s Commercial Banks registered in Thailand s Assets and Liabilities (17 banks) 20

21 4. Maintain liquidity and strong capital position Continue strong capital Strong capital adequacy ratio Steady increase in dividend 20% % 16.7% 39.4% 45 15% 10% 5% % 3.5% 12.5% 13.2% Baht % % Mar 11 adj.* Tier 1 Tier Interim (L) Final (L) Dividend payout ratio (R ) 0 Note: *Include net profit for 2H10 and 1Q11 and adjusted with dividend payment 21

22 Consistently deliver profits over business cycles Steady profit growth Stable ROA and ROE % YTD 16% 14% 1.3% 1.2% 1.2% 1.4% 1.4% 2% Baht bn % YoY +15.3% QoQ 12% 10% 12.2% 11.8% 10.7% 11.5% 11.4% 1% % 1% Q10 4Q10 1Q Q11 Net profit (Non controlling interest) Net profit (Owners of the Bank) ROE(LHS) ROA(RHS) 22

23 Key takeaway 1. Capital expenditure in upward cycle Bangkok Bank in an excellent position 3 Strategies already in place to capture opportunities 23

24 For further information Contact: Investor Relations Team Tel (66) Fax (66) IR@bbl.co.th Bangkok Bank Website This presentation is made by Bangkok Bank and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Bangkok Bank. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Bangkok Bank. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Bangkok bank as being accurate. Neither Bangkok Bank nor any of its directors, officers, employees, and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein are as up to date as is reasonably possible and may be subject to revision in the future. Neither Bangkok Bank nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation. Neither Bangkok Bank nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. This presentation may contain projections or other forward-looking statements related to Bangkok Bank that involve risks and uncertainties. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. All forward-looking statements are based on information available to Bangkok Bank on the date of its posting and Bangkok Bank assumes no obligation to update such statements unless otherwise required by applicable law. This presentation does not constitute an offer or invitation to subscribe for, or purchase, any shares of Bangkok Bank. 24