INVESTOR PRESENTATION

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1 INVESTOR PRESENTATION CLSA ASEAN CORPORATE ACCESS FORUM th March 2013

2 Agenda Page 1. Review of Result Future Positioning IMPORTANT DISCLAIMER: Information contained in this document has been prepared from several sources and the Bank does not confirm the accuracy and completeness of such data, particularly where the data is sourced from outside the Bank. In addition, any forward looking statements are subject to change as a result of market conditions and the final result may be different to that indicated. The Bank makes norepresentation or warranty of any type whatsoever on the accuracy or completion of the information contained herein. Page 2

3 2012 THIRD YEAR OF RECORD HIGH PROFIT 2011 ACTUAL REVISED 2012 TARGETS 2/ 2012 ACTUAL 2012 RESULT (Highlights) PROFITABILITY LOAN COST AND INCOME ASSET QUALITY CAPITAL (Basel II Bank only) ROE ROA NIMs Total loan growth (yoy) Non-NII growth (yoy) Net fee & insurance premium growth Cost to income NPLs (gross) Capital Adequacy Ratio Tier I 18.4% 1.9% 3.27% 22.1% 20.7% 26.8% 42.9% 2.61% 14.5% 11.2% 18-20% % % 17-19% ND 12-14% 42-43% 2.25% ND ND 19.9% 2.0% 3.18% 19.7% 15.3% 14.2% 41.2% 2.13% 16.5% 10.9% - Third year of record high net profit(baht 40.2 billion or growth of 28.9% yoy) -Robust loan growth of 19.7% yoywith a focus on SME,auto loans and mortgage segments -Strong Non-NII as a result of solid fee and premium income growth of 14.2% yoy -NPL ratio fell to 2.13% of total loans DISTRIBUTION Branches 1,094 1,150+ 1,142 3/ ATMs 8,459 8,500+ 8,700 Excluding Bt5.1bn one-time investment revaluation gain on acquisition of additional shares in SCB Life. If this gain was included, the 2011Net Profit would stand at Bt36.3billion, the ROE at 21.3%, ROA at 2.2%, Non-NII growth at 37.9%, and Cost-to-income at 40.5%. The 2012 Net Profit growth would stand at 10.9% and Non-NII growth at 0.9%. 2/ The 2012 targets were revised upwards in June / Delay in design of new physical format led to less new branches than previously expected. ND = Not disclosed Green font indicates those indicators that meet or exceed the targets. Red font indicates that performance was behind expectations. Page 3

4 PERFORMANCE HIGHLIGHTS Page 1. Net Profit 5 2. NII 6 3. Asset Quality Non-NII Deposit Cost Efficiency Capital 18 Page 4

RECORD NET PROFIT WITH HIGH ROE & ROA Net Profit Net profit increased by 28.9% yoy in 2012 to Baht 40.2 billion, while operating profit increased by 23.4% yoy to a record Baht 60.

5 RECORD NET PROFIT WITH HIGH ROE & ROA Net Profit Net profit increased by 28.9% yoy in 2012 to Baht 40.2 billion, while operating profit increased by 23.4% yoy to a record Baht 60.6 billion Net Profit Solid profitability reflected in high ROE and ROA ROE (Percentage) 17% 29% 29% Operating profit ROA (Percentage) 15% 27% 23% Excluding Bt5.1bn one-time investment revaluation gain on acquisition of additional shares in SCB Life in If this gain was included, the 2011 Net Profit would stand at Bt36.3bn, Operating Profit at Bt54.2bn, while 2011 ROE would stand at 21.3%, and ROA at 2.2%. The 2012 Net Profit growth would stand at 10.9% and Operating Profit growth at 11.9%. Page 5

6 STRONG GROWTH IN NII The growth in NII yoy was primarily a result of the robust loan growth of 19.7% yoy, a larger component of higher yield loans and higher than expected NIMs, together with a larger investment portfolio. Net Interest Income NIM decreased by 9bps in 2012 as a result of higher cost of funds, partly due to the imposition of FIDF fee on certain types of borrowings and the higher contribution rate of 47bps compared to 40bps previously. Yield of Earning Assets, NIM and Cost (Percentage) NII Yield on Earning Assets Net interest margin Cost of funds 6% 27% 23% Green font indicates improvements in yield on loans and decreases in cost of deposits from the previous period. Red font indicates drops in yield on loans and increases in cost of deposits from the previous period. Yield on Loans 4.76% 5.58% 6.14% Cost of Deposits 1.02% 1.69% 2.37% Page 6

7 DRIVEN BY THE RECENT ROBUST LOAN GROWTH IN LINE WITH THE RECENT CREDIT UP-CYCLE Loan Growth (%yoy) Consolidation of SCBL and strong growth in large SME segment Global financial crisis; SCB tightened credit underwriting standards Credit Up-Cycle Outcome of market share growth strategies in mortgage, auto and medium/small SME segments SCB Loan Growth 12-15% % (Estimate) 9-12% Banking Sector Loan Growth 19.7% E = Estimate Source: Bank of Thailand s website (for sector loans growth) Page 7

10% Loans breakdown 2009 Loans breakdown 2012 Wholesale 44.8% SME 16.

8 AND A SIGNIFICANT SHIFT TOWARDS SME AND RETAIL LOAN GROWTH Total Loans SME Loans Retail Loans Wholesale Loans 13% 22% 20% 16% 35% 26% 14% 22% 27% 10% 17% 10% Loans breakdown 2009 Loans breakdown 2012 Wholesale 44.8% SME 16.1% Retail 39.1% Wholesale 38.5% SME 19.3% Retail 42.2% Includes loans classified as NPLs Page 8

AS A RESULT, THE LOAN MIX NOW HAS LARGER COMPONENTS OF HIGHER-YIELD LOANS Higher-Yield Loans Contribution from the higher-yield SME and Retail continued to rise in line with the Bank s strategic push.

9 AS A RESULT, THE LOAN MIX NOW HAS LARGER COMPONENTS OF HIGHER-YIELD LOANS Higher-Yield Loans Contribution from the higher-yield SME and Retail continued to rise in line with the Bank s strategic push. At the same time, yield improved in both these segments from a more optimized mix of products. Loan breakdown (Percentage) Others Auto lending Total Loans Yield % 4.76% 5.58% 6.14% Change yoy -39 bps 82 bps 55 bps Mortgage Wholesale Yield % 3.82% 4.80% 5.13% Change yoy -42 bps 98 bps 33 bps SME Wholesale SME Yield % 5.25% 6.53% 7.22% Change yoy 1 bps 128 bps 69 bps Mortgage Yield % 4.48% 5.28% 6.04% Change yoy -36 bps 80 bps 76 bps Auto Loans Yield % 5.57% 5.41% 5.65% Change yoy -57 bps -16 bps 24 bps Others include mainly credit cards and unsecured consumer loans Note: Policy rate adjustments -> +75 bps during 2010, +100 bps during 2011, and -50 bps during 2012 Green font indicates improvements in yield and change yoy from the previous period. Red font indicates drops in yield and change yoy from the previous period. Page 9

10 ASSET QUALITY CONTINUED TO IMPROVE AS REFLECTED BY THE LOWER NPL RATIO NPLs fell to 2.13%, the lowest level since the 1997 crisis, in part due to the Bank s pre-emptive strategies to prevent new NPL formation, improved collection workout practice for existing NPLs, NPL sales to third parties, and to some extent, the steady economic environment throughout Asset Quality Given the continued macro global economic uncertainties and its potential impact on Thailand, the Bank set aside additional prudential provisions of Bt 4.0bn in 2012, in addition to the planned provisions of Bt 6.0bn per annum on a bank only basis. Non-Performing Loans, Gross NPL Ratio, and NPL Coverage Ratio (Baht billion, %) Provisions (Consolidated, Baht billion) NPL Coverage Ratio Gross NPL% Non- Performing Loans %yoygrowth -15% 41% 42% Credit Costs (bps) - Actual Planned 2/ % -6% -1% Includes additional provisions of Baht 3.3 billion in 2011 and Baht 4.0 billion 2012 on a bank basis. 2/ Planned credit costs refers to level of provisions excluding those set aside on prudential bases. Page 10

NPL WELL-MANAGED DESPITE THE IMPACT FROM THE FLOOD IN LATE 2011 NEW NPL The increase in Special Mention loans in 2012 was due to the Bank s prudential stance to reclassify a few commercial customer

11 NPL WELL-MANAGED DESPITE THE IMPACT FROM THE FLOOD IN LATE 2011 NEW NPL The increase in Special Mention loans in 2012 was due to the Bank s prudential stance to reclassify a few commercial customer accounts with financial difficulties, as well as from retail customers who were affected by the floods last year (and the end of the forbearance period). In 2012, new NPL formation rose slightly to 1.00% largely due to the proactive qualitative reclassification of retail mortgage and auto loan customers following the expiration of the 6-month forbearance program for flood-affected accounts. Special Mention -10% -41% 47% Total Loans Wholesale SME Mortgage Auto Loans NPL % 3.25% 2.61% 2.13% New NPL % 1.06% 0.96% 1.00% NPL % 2.88% 2.35% 1.95% New NPL % 0.64% 0.77% 0.34% NPL % 8.47% 5.69% 4.24% New NPL % 1.42% 0.85% 0.84% NPL % 2.78% 1.95% 1.78% New NPL % 1.06% 0.90% 1.30% NPL % 2.14% 2.46% 2.05% New NPL % 0.66% 0.93% 1.02% Green font indicates improvements in NPL and new NPL formation from the previous period. Red font indicates deteriorations in NPL and new NPL formation from the previous period. Page 11

NON-NII REMAINS SOLID Non-NII Non-NII grew strongly yoy, due to robust growth in net insurance premium income and gain on trading and FX. Non-Interest Income 29.4 35.4 40.

12 NON-NII REMAINS SOLID Non-NII Non-NII grew strongly yoy, due to robust growth in net insurance premium income and gain on trading and FX. Non-Interest Income Gain (Loss) on Investment Other income 2/ Gain on trading and FX Net fee and Net insurance premium 23% 21% 15% Non-NII %yoygrowth 42% 41% 40% 30% 30% 29% Excluding Bt5.1bn one-time investment revaluation gain on acquisition of additional shares in SCB Life in If this gain was included, the Non- NII for 2011 would stand at Bt40.5bn, the Non-NII growth for 2011 and 2012 at 38% and 1%, respectively. The 2011 Non-NII to total operating income would stand at 44% and the 2011 Net fee and net insurance premium % to total income at 29%. 2/ Other income includes income from equity interest in affiliated companies, dividend income, and other operating income. Green font indicates increases in Non-NII % to total operating income and Net fee and net insurance premium % to total income from the previous period. Red font indicates decreases in Non-NII % to total operating income and Net fee and net insurance premium % to total income from the previous period. Non-NII % to total operating income Net fee and net insurance premium % to total income Page 12

FIRMLY ANCHORED UPON STEADY FEE INCOME GROWTH Fee and Insurance Premium Income Net fee and insurance premium income grew substantially by 14% yoy, stemming from the strong increases in net premium

and Insurance Premium by BU 29.8 Net Fee and Insurance Premium Breakdown (Percentage) 72% 7% 21% 20.6 69% 9% 22% 26.

13 FIRMLY ANCHORED UPON STEADY FEE INCOME GROWTH Fee and Insurance Premium Income Net fee and insurance premium income grew substantially by 14% yoy, stemming from the strong increases in net premium income, loan related fee, fee from card business, and asset management business, despite being partly offset by the lower fee from non-recurring large corporate finance related transactions Net Fee and Insurance Premium by BU 29.8 Net Fee and Insurance Premium Breakdown (Percentage) 72% 7% 21% % 9% 22% % 12% 16% Wholesale SME Retail Others 2/ Loan related fee Asset Management Bancassurance and net insurance premium GMTS 3/ Bank cards 20% 27% 14% % Share The yoy decrease in wholesale fee income was largely caused by a decline in corporate finance fees due to the absence of large deals in / Others include brokerage fee, fund transfer, remittance, etc. 3/ GMTS stands for Global Markets and Transaction Services, which includes cash management, trade finance, corporate finance and corporate trust Page 13

STRONG DEPOSIT FRANCHISE SUPPORTIVE OF LOAN GROWTH Deposit/BE Growth Bills of Exchange (BE), were used through to 2011 to attract a growing volume of both corporate and High Net Worth customers short

14 STRONG DEPOSIT FRANCHISE SUPPORTIVE OF LOAN GROWTH Deposit/BE Growth Bills of Exchange (BE), were used through to 2011 to attract a growing volume of both corporate and High Net Worth customers short term deposits. Following the new regulatory requirement effective from January 2012 banks were required to pay FIDF fee on BE and, essentially, this new levy negated the value proposition of BE. As a result, the Bank sharply curtailed the growth and/or renewal of BE, resulting in an 88% yoy decline in BE in Many of these BEs have been channeled to the Bank s deposit products on maturity. Total Deposits + BE Deposits 1,614 1,092 1,184 Current Savings Fixed 16% 24% 17% Bills of Exchange % 417% -88% 14% 8% 36% CASA Current & Savings Accounts (%) 61% 56% 52% Bill of Exchange is a borrowing instrument and is akin to an uninsured deposit in the Thai market. Page 14

15 LIQUIDITY REMAINS AT A COMFORTABLE LEVEL Liquidity The Bank s loan to deposit + BE ratio rose in 2012 due to the sharp decline in the BE volume, while the loan to deposit ratio improved significantly as the BankshiftedawayfromBEasasourceoffunds. The Bank monitors its liquidity daily and has set its minimum liquidity ratio (liquid assets divided by total deposits and BE) at 20%. This is well in excess of the regulatory threshold. Loan to Deposit Ratio Liquidity Ratio Loan to Deposit 94%-96% Loan to Deposit + Bills of Exchange (BE) 20% The Bank expects deposits (including BE) to grow in tandem with loan growth in order to keep LDR within a 94%-96% range. Liquid assets primarily comprise cash, deposits and bilateral repo with the Bank of Thailand as well as investment in government securities BE or Bills of Exchange are included in deposits as they are essentially akin to uninsured deposits Page 15

IMPROVING COST TO INCOME RATIO Cost Efficiency Although operating expenses increased in line with income, the cost to income ratio remains within the 42-43% target.

required in the rapidly changing competitive landscape.

16 IMPROVING COST TO INCOME RATIO Cost Efficiency Although operating expenses increased in line with income, the cost to income ratio remains within the 42-43% target. The Bank s capital expenditure remains effectively managed and geared towards the ongoing investment in network expansion and the strategic systems enhancement initiatives required in the rapidly changing competitive landscape. The outlay on these investments is unlikely to have significant impact to the cost-to-income ratio level in the near future. Operating Expenses Cost-to-Income Ratio (Percentage) 9% 21% 15% Excluding the one-time investment gain in 1Q11. If this gain is included, the cost to income ratio would stand at 40.5%. Page 16

STRONG CAPITAL BASE TO SUPPORT GROWTH AND EMERGING REGULATORY REQUIREMENTS Capital The Bank believes this strong capital position, together with its sound loan loss coverage, are sufficient to

17 STRONG CAPITAL BASE TO SUPPORT GROWTH AND EMERGING REGULATORY REQUIREMENTS Capital The Bank believes this strong capital position, together with its sound loan loss coverage, are sufficient to withstand the impact of any unexpected shocks. The Bank expects to maintain its aggregate capital adequacy ratio well in excess of the regulatory minimum throughout Capital Adequacy Ratio(Consolidated) 15.1% 13.7% 3.6% 2.8% 15.6% 5.0% 16.2% 4.5% Tier II Tier I Common Equity Tier I 11.5% 10.9% 10.6% 11.7% Bank-Only CAR Tier I Basel II 15.5% 14.5% 16.5% 11.6% 11.2% 10.9% Basel III Previous quarterly presentations reported data on bank-only basis but from Jan 1, 2013, the Bank will adopt Basel III consolidated basis as the norm. Page 17

SCB RETAINS A STRONG COMPETITIVE POSITION AMONGST THE BIG THAI BANKS Highest Net Profit

Competitive Positioning 38% 21% 46% 29% Source: Commercial banks 2012 financial results

as at Dec 28, 2012 Source: Commercial banks 2012 financial results High Tier I

18 SCB RETAINS A STRONG COMPETITIVE POSITION AMONGST THE BIG THAI BANKS Highest Net Profit (Consolidated, Baht billion) 2012 Net profit Highest ROA (Percentage) 2012 ROA Competitive Positioning 38% 21% 46% 29% Source: Commercial banks 2012 financial results Highest Market Cap Market Cap. as at Dec 28, 2012 Source: Commercial banks 2012 financial results High Tier I (Percentage) 2012 Tier I (Basel II Bank only basis) 64% 27% 59% 57% Source: Stock Exchange of Thailand s website Source: Commercial banks 2012 financial results Page 18

SCB RETAINS A STRONG COMPETITIVE POSITION AMONGST THE BIG THAI BANKS (cont d)

2011) (Percentage) Highest Proportion of Non-NII(2012) (Percentage)

Commercial banks 2012 financial results Lowest Cost to Income Ratio(2012)

ATM Network (as at Dec 31, 2012) # of Branches # of ATMs Source: Commercial

19 SCB RETAINS A STRONG COMPETITIVE POSITION AMONGST THE BIG THAI BANKS (cont d) Highest Loan Growth(2012 vs. 2011) (Percentage) Highest Proportion of Non-NII(2012) (Percentage) Competitive Positioning Non Interest Income to Total Income Source: Commercial banks 2012 financial results Lowest Cost to Income Ratio(2012) (Percentage) Source: Commercial banks 2012 financial results Largest Branch & ATM Network (as at Dec 31, 2012) # of Branches # of ATMs Source: Commercial banks 2012 financial results Source: Bank of Thailand s website, National ITMX Company Including net insurance premiums less net insurance claims Page 19

20 1. Agenda Review of Result 2012 Page Future Positioning Page 20

21 MACRO TRENDS FORECAST FOR 2013 (SCB-EIC PERSPECTIVE) Macro Estimates (%) 2012 Key drivers 2013E Comment and outlook 6.4 GDP growth 4.9 Moderate growth of GDP driven mainly by domestic spending. Private consumption and investment spending remain strong. Government investment should pick up in the second half. 3.0 Headline inflation 3.0 Stable global energy prices. Global energy price outlook is stable as major economies are still in slow down mode. As a result, inflation outlook is also stable Policy rate (end period) 2.75 Policy rate stays put as long as the economy demonstrates strength. Despite concerns on capital inflows, the policy rate will likely stay put as long as domestic spending stays strong THB/USD (end period) 29.5 Capital inflows drive THB appreciation. Both FDI and portfolio investment inflows are supportive of further THB appreciation Loan growth (sector-wide) 12.1 Slight moderation in loan growth. Loans for personal consumption should carry strong momentum from Loans for corporates cool down as the need to rebuild capacity tapers off. 9.8 Deposit+B/E (sector-wide) 11.5 High competition for deposits. Deposit+BE growth lagged behind loan growth in For this reason and a healthy loan growth, high competition for deposits is expected in %YOY except for policy rate (% per annum) and exchange rate (THB/USD) Source: SCB EIC analysis as of February 2013 based on data from the Ministry of Commerce, Bank of Thailand, and Office of thenational Economic and Social Development Board Page 21

22 2013 BROAD THRUSTS 2013 Thrusts 1. Strong drive within Retail towards launch of segment based innovative products (e.g. Affluent, 50+) and the corresponding shift towards growth from more customer-centric strategies 2. Capture market share in the Baht 20-50m SMEloan segment which holds considerable potential 3. Build banking foundation in selected regional markets to support both inbound/outbound investment flows to/from Thailand 4. Start to completely overhaul the operations backbone of the Bank and drive towards a lean factory-like environment with scalability and end-to-end quality 5. Launch skill-buildingprograms, bank-wide, through a structured framework that leads to enhanced competitive capabilities 6. Substantial upgrade of core ITsystems ATM, Trade, Payments, Mobile banking to take functionality, availability and scalability to the next level and provide a platform that is more supportive of the increasing mobility of end users. Page 22

23 2013 TARGETS Targets 2011 ACTUAL 2012 ACTUAL 2013 TARGETS 2/ PROFITABILITY ROE 18.4% 19.9% 19-22% ROA 1.9% 2.0% % NIMs 3.26% 3.18% % LOAN Total loan growth (yoy) 22.1% 19.7% 12-15% COST AND INCOME Non-NII 20.7% 15.3% 12-14% Cost to income 42.9% 41.2% 40-42% ASSET QUALITY NPLs (gross) 2.61% 2.13% 2% Excluding Bt 5.1bn one-time investment revaluation gain on acquisition of additional shares in SCB Life. If this gain was included, the 2011 ROE would stand at 21.3%, ROA at 2.2%, Non-NII growth at 37.9%, and Cost-to-income at 40.5%. 2/ Subject to change without prior notice, dependent on overall economic conditions. Page 23

END IMPORTANT DISCLAIMER: Information contained in this document has been prepared from several sources and the Bank does not confirm the accuracy and completeness of such data, particularly where

24 END IMPORTANT DISCLAIMER: Information contained in this document has been prepared from several sources and the Bank does not confirm the accuracy and completeness of such data, particularly where the data is sourced from outside the Bank. In addition, any forward looking statements are subject to change as a result of market conditions and the final result may be different to that indicated. The Bank makes norepresentation or warranty of any type whatsoever on the accuracy or completion of the information contained herein. The 2012 data disclosed herein is preliminary and subject to change following completion of the audit. Page 24

Siam Commercial Bank PCL DB Access Asia Conference 2012

Siam Commercial Bank PCL DB Access Asia Conference 2012 May, 2012 Agenda Page 1. Review of Result 1Q12 3-17 2. Future Positioning 19-23 3. 2012 Targets 25 IMPORTANT DISCLAIMER: Information contained in