TMB Bank Plc. Building the Best Transactional Bank. Make THE Difference. Day with Executive Management

Transcription

1 TMB Bank Plc. Building the Best Transactional Bank Day with Executive Management November 1, 215 Make THE Difference

2 AGENDA 3Q15 Financial Performance 9M15 Financial Performance Looking Forward [2]

3 Executive Summary 3Q15 financial performance Loan grew 3% QoQ, driven from every segments Deposit rose 2% QoQ from No-Fixed & ME NIM hold up well at 2.94%, stable QoQ and YoY while NII grew 1% QoQ and 4% YoY Non-NII relatively stable QoQ but increased 24% YoY to THB 2,592 mn Cost to income ratio maintained at 49% PPOP of THB4,272 mn was flat QoQ Q and +13% YoY NPL ratio lower to 2.95% and coverage ratio remained high at 146% Net profit rose 25% QoQ to THB2,815 mn [3]

4 Deposit growth Deposit continued to grow with quality deposit Total deposit (LHS) Deposit and deposit growth Cost of Deposit (Incl. DPA) QoQ growth (RHS) 7, 14.% 2.8% 568,47 571, ,77 593,188 61, % 6, 1.% 2.4% 5, 2.2% 2.6% 4, 6.% 2.9% 1.88% 2.% 1.86% 1.86% 1.82% 1.8% 2.% 3,.6% -.79% 2.% 1.8% 2, 1.6% -2.% 1.4% 1, 1.2% -6.% 1.% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 3Q14 4Q14 1Q15 2Q15 3Q15 Deposit grew 2.9% QoQ, Q driven mainly by No Fixed & ME (+9.7% QoQ) Q) Cost of deposit dropped 4bps QoQ and 24bps YoY to 1.82% Source: Consolidated financial statements [4]

5 Loan growth Loan growth driven by every segments Loans and loan growth Loans (LHS) QoQ growth (RHS) Loan yield 525,953 53,36 538,971 55, ,329 8.% 6, 8.% 7.% 5, 5.87% 5.85% 5.87% 5.75% 5.66% 6.% 6.% 4, 5.% 3, 3.2% 3.% 4.% 4.% 2.2% 3.% 2, 1.6% 2.% 2.% 1,.8% 1.%.% %.% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 3Q14 4Q14 1Q15 2Q15 3Q15 TMB recorded loan growth of 3.% QoQ Loan growth was driven by medium-size SME, followed by Retail and Corporate lending Due to impact of rate cuts in March (MLR -12.5bps) p) and May y( (MLR -1bps and MOR-1bps), p), loan yield declined by 9bps QoQ Source: Consolidated financial statements [5]

6 NIM and Net interest income NIM was relatively stable Net interest margin 5.% 4.% 3.16% 2.97% 3.13% 3.% 2.% 2.96% 2.94% Net interest income Interest income Interest expenses Net interest income 1, 9,11 9,69 8,935 9,34 9,93 8, 5,537 5,797 5,74 6, 5,718 5,783 4, 1.% 2, 3,573 3,272 3,231 3,316 3,31.% 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 NIM was relatively stable at 2.94%, from 2.96% in 2Q15 and 2.97% in 3Q14 NII increased 1.1% QoQ and 4.4% YoY, thanks to performing loan growth coupled with stable NIM Source: Consolidated financial statements [6]

7 Non-interest income Fees income continued to grow Non-interest income Other non-interest income Net fee and service income Total non-interest income 2,8 2,623 2,592 Fee and service income 3, 2,317 2,4 2,245 2,89 2,5 2, 2, 1,6 2,119 2,185 2,161 1,5 1,2 2,13 2,64 8 1,575 1,677 1,688 1, Fee and service income and expense Fee and service expenses 2,497 2, Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 Non-NII was stable QoQ at THB 2,592 mn and increased 24.1% YoY Net fees and service income continued to grow by 2.5% QoQ and 31.% YoY QoQ growth in fees boosted by fees from Bancassurance (+36% QoQ) and a slight improvement in loan- related fees. Mutual fund fees, however, declined QoQ due to weak sentiment in stock market. YoY growth in fees was from Bancassurance (+49% YoY), credit related fees (+31% YoY) and mutual fund (9.7% YoY) Note: Non-interest income excluded gain on sale of assets Source: Consolidated financial statements [7]

8 Operating income and cost Cost to income was well in line with target Operating income and expenses 1, 8,114 7,626 7,949 8, 6, Operating income Operating expenses 8,341 8,375 Cost to income ratio 7.% 6.% 5.% 54.3% 5.4% 4.% % 45.8% 48.6% 49.% 4, 2, 3,84 4,434 3,663 4,79 4,151 3.% 2.% 1.% 3Q14 4Q14 1Q15 2Q15 3Q15.% 3Q14 4Q14 1Q15 2Q15 3Q15 Total operating income was THB8,375 mn, flat QoQ but improved 9.8% YoY Total operating costs of THB4,151 mn was also stable QoQ but increased 8.1% YoY As a result, cost to income ratio was stable at 49.% QoQ and YoY Note: Operating income excludes gain on sale of assets Operating costs exclude loss on impairment of properties foreclosed, provisions of obligation on transfers of NPA and provisions for other liabilities Source: Consolidated financial statements [8]

9 Pre-provision operating profit PPOP was stable QoQ but rose YoY Pre-Provision Operating Profit (PPOP) 5, 4, 3, 3,79 3,723 4,318 4,286 4,272 2, 1, - 3Q14 4Q14 1Q15 2Q15 3Q15 Pre-provision operating profit (PPOP) in 3Q15 recorded at THB4,272 mn, stable QoQ but rose 12.7% YoY Source: Consolidated financial statements [9]

10 Asset quality NPL ratio dropped to 2.95% Non-performing loan & NPL ratio 25, NPLs (LHS) NPL ratio (RHS) 7.% 21, 21,27 18,93 19,19 2,55 19,794 17, 13, 3.43% 2.85% 3.1% 3.9% 2.95% 9, 6.% 5.% NPL Breakdown 4.% Total NPL: 19.8 bn 3.% 2.% 1.% 5,.% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 TCG full covered 6.5 bn Sep-15 SME: 15.1 bn NPLs dropped to THB19,794 mn due to: NPLs as of Sep-15 amounted to THB 19.8 bn, 1) NPLs sales of THB855 mn of which THB15.1 bn was SME 2) NPLs increased at a slower pace NPL ratio, as a result, decreased to 2.95% from 3.1% From THB15.1 bn of SME NPLs, THB 6.5 bn was covered by TCG Source: Consolidated financial statements [1]

11 Net profit Net profit increased 25% QoQ Provision expense Net profit to equity holders of the Bank 3, 2,5 3, 2,5 2,975 2,815 2, 2,387 2, 2,387 2,26 1,5 1,5 1,638 1, ,142 1, , 5 3Q14 4Q14 1Q15 2Q15 3Q15 3Q14 4Q14 1Q15 2Q15 3Q15 Annualized credit cost 63bps 86bps 177bps 98bps 58bps Credit cost 9M15 = 17 bps TMB set THB82 mn of provision for 3Q15, a 39.2% drop QoQ The lower provision was due mainly to: A decrease in NPL amount & reduction of NPL formation Provision write back of THB285 mn from NPL sales After the provision, net profit was recorded at THB2,815 mn, +24.6% QoQ and 17.9% YoY Source: Consolidated and Bank-only financial statements [11]

12 Coverage ratio Downside risk has been limited with high coverage ratio Provision for NPL/NPL 8% 7% 6% 5% 6% 6% 6% 6% 6% 4% 3% 2% 1% % Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Provision for PL/PL 4.% 3.% 3.3% 3.4% 3.3% 3.2% 3.1% 2.% 1.%.% % Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Coverage ratio 16% 12% 139% 157% Coverage ratio *Coverage ratio (Bank Only) 15% 146% 146% Coverage ratio maintained at high level at 146% reflecting strong position among top tier peers 8% Ratio of provision for NPL/NPL remained high at 6o% 4% % 145%* 157%* 15%* 146%* 146%* 3Q14 4Q14 1Q15 2Q15 3Q15 Provision for performing loan/performing loan was relatively stable at 3.1% Source: Preliminary financial statement [12]

13 AGENDA 9M15 Financial Performance 3Q15 Financial Performance Looking Forward [13]

14 Executive Summary 9M15 financial performance Loan grew 7% YTD, from every segments Deposit expanded 7% YTD from flagship products : No-Fixed & ME Despite rate cuts, NIM rose 13bps to 3.1% and NII increased 9% 26% growth in Non-NII was driven by fees from mutual fund, BA and credit-related Cost to income improved to 48% PPOP rose 23% Provision was significantly higher to limit downside risk (credit cost = 17 bps) After provision, net profit recorded at THB6,712 mn, +2% YoY [14]

15 Deposit and Loan growth Deposit & loan growth in line with target Deposit and deposit growth 7, Total loans and loan growth 6, 6, 5, 4, 3, 571,625 61,653 5, 4, 3, 53,36 567,329 2, 2, 1, 1, Dec-14 Sep-15 Dec-14 Sep-15 Deposit rose 6.8 % YTD boosted by retail products - No Fixed & ME Loan grew 7.% YTD, from every segments Source: Consolidated financial statements [15]

16 NIM and Net interest income NIM expanded by 13 bps to 3.1% NII & NIM NII (LHS) NIM (RHS) 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, 2.88% 15,798 9M14 3.1% 17,25 9M15 3.2% 2.8% 2.4% 2.% 1.6% 1.2%.8%.4%.% NIM increased 13 bps from 2.88% to 3.1%, thanks to well-managed funding costs Loan yields declined 13 bps from rate cuts Deposit cost dropped 31 bps With higher NIM & growth in performing loan, NII increased 8.9% Source: Consolidated financial statements [16]

17 Non-interest income Growth in Non-NII backed by 42% increase in net fees & service income Other non-interest income Non-interest income Net fees and service income Non-interest income 8, 7,46 7,5 7, 6, 5,857 6, 5, 4,5 5,69 4, 3, 2, 1, 4,57 9M14 5,764 Fee & service income and expense Non-NII up 27.4% to THB7,44 mn, thanks to net fees & service income 9M15 3, 1,5-9M14 7,176 Fee & service income Fee & service expenses +26% -14% 1,633 1,412 9M15 Net fees and service income grew 42.1%, supported by both fee revenue & fee expense; Fees & Service income rose 26.1% YoY. Key products & growth rates = Fees expenses fell 13.5% Mutual fund +7% Bancassurance +51% Credit-relate +37% Note: Non interest income excluded gain on sale of asset Source: Consolidated financial statements [17]

18 Operating income and cost Cost to income ratio improved to 48% from 52% Operating income and expenses 25, 2, 21,655 Total operting income Total operating expenses +14% 24,664 Cost to income ratio 6.% 52.% 4.% 47.8% 15, +7% 1, 5, 1,51 11,28 2.% 9M14 9M15.% % 9M14 9M15 Total operating income was THB21,777 mn, +13.7% Operating expenses was THB11,28 mn, +7.3%, mainly from; Employees expense (+3.3% YoY) - higher staff compensation and headcounts Premise expense (+3.2% YoY) - higher branch rental due to branch relocation Other expenses (+1.5% YoY) - computer software rental As a result, cost to income ratio improved to 47.8% from 52.% Note: Operating income excludes gain on sale of assets Operating costs exclude loss on impairment of properties foreclosed, provisions of obligation on transfers of NPA and provisions for other liabilities Source: Consolidated financial statements [18]

19 Pre-provision operating profit PPOP grew 23% Pre-provision ii operating profit 14, 12, 1, 1,341 8, 6, 4, 2, 9M14 12,876 9M15 Despite unfavorable economic circumstances, PPOP recorded at THB12,876 million, +23% from 9M14 Source: Consolidated financial statements [19]

20 Net profit Net profit rose 2% Provision expense Net Profit 5, 7,5 4, 4,556 6, 6,564 6,712 3, 4,5 2, 2,295 3, 1, 1,5 Annualized credit cost 9M14 58 bps 9M15 17 bps 9M14 9M15 Provision rose 98.5% from THB2,295 mn to THB4,556 mn Increase in provision was to limit downside risks from weak economic condition in 215 and to accommodate rise in NPLs Net profit was at THB6,712 million, still 2.3% increase YoY Source: Consolidated financial statements [2]

21 Solid capital base under Basel III Capital was well above minimum requirement under Basel III Capital adequacy ratio (CAR) Capital adequacy ratio (CAR) Tier I Capital Tier I Capital Minimum BOT requirement 25% Minimum BOT requirement 14% 2% 18.6% 18.3% 17.8% 16.9% 17.% 12% 11.2% 11.% 1.9% 11.3% 11.3% 15% 1% 8% 1% 8.5% 8.5% 8.5% 8.5% 8.5% 6% 6.% 6.% 6.% 6.% 6.% 5% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 4% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 TMB maintained capital base at high level under Basel III requirements CAR at 17.% with Tier 1 & CET 1 at 11.3% Source: Bank-only financial statements [21]

22 AGENDA 3Q15 Financial Performance 9M15 Financial Performance Looking Forward [22]

23 215 Key financial target Key ratios FY215 Target 9M15 Actual Performing loan growth 6-8% 6.9% Deposit growth 6-8% 6.8% Net interest margin 3.% 3.1% Net fees income growth 3% 42.1% Cost to income ratio < 5% 47.8% ROE 13-14% 12.5% NPL ratio 3.% 2.95% Coverage ratio 14-15% 146% Note: Based on 215 GDP growth forecast of 3% [23]

24 Six strategic intents Focusing on Deposit-Led Strategy to deliver Transactional Banking Excellence Grow Quality Deposits Optimise Capital & Liquidity Utilisation Recurring noninterest income Develop Strong Customer Understanding Ensure Cost Efficiency Build Transactional Banking Excellence [24]

25 215 Strategic direction To expand quality deposit & recurring fees income wholesales SMEs Retails Introduce innovative way of doing business to assist customers Uplift customer experience in every channel & help increase business efficiency Transform from Traditional Banking to Digital Banking Gain more quality deposit Recurring fees income [25]

26 Gain more quality deposit Commercials Retails 215 Target: Develop tools & platforms to support customer s cash flow management across supply chains Refine transactional offering to enhance cash management capabilities Upgraded version of Business click Progress: Launched consolidated upgraded version of Business click in Quarter Target Refine flagship transactional ti account Upgraded d version of No Fee offering comprehensive solution with simpler condition Continue to transform traditional banking to digital banking Progress: Launched All free in Quarter 2. Outstanding balance as of September was THB9.2 bn [26]

27 Recurring fee income Commercials Retails 215 Target 215 Target Become banking partner in fund raising and business expansion in cross-boarder and domestically Offer trade finance products that fit SME business nature Launch e-guarantee service Progress: Expand Open architecture to digital channel and increase no. of products on shelf Develop Consolidated statement to lift customer experience More focus on segmentation in delivering bancassurance to capture unanswered needs Progress: Successfully launched e-guarantee service in Quarter 2 Offer training and business seminar for customers to enhance customers understanding in BKK and upcountry Add unit fund from Manulife in Quarter 3 Successfully provide consolidated statement in Quarter 2 Launched new bancassurance product designed to match middle-income segment in Quarter 4 [27]

28 TMB Bank Public Company Limited 3 Phahonyothin Road Chatuchak, Bangkok 19 Website: investor.rel@tmbbank.com Disclaimer This presentation contains some information from other sources, that TMB Bank Public Company Limited does not make any representations regarding the use, validity, accuracy, or reliability of, or the results of the use of information, data but not limited to, all text, and images ( the Content ) on this presentation. Some content may contain forward looking statements, that based on management s view upon the information currently available to us. These statement are subject to certain risks and uncertainties that could cause the actual results materially differed from what had been previously stated. The materials in this presentation shall not, and are not intended to, constitute or contain an offer to sell or the solicitation of an offer to buy, any securities of TMB Bank Public Company Limited.