TMB Bank Public Company Limited and its subsidiaries

Transcription

1 TMB Bank Public Company Limited and its subsidiaries Interim financial statements for the three-month period ended 31 March 2016 and Independent auditor s report on review of interim financial information

2 Independent Auditor s Report on Review of Interim Financial Information To the Board of Directors of TMB Bank Public Company Limited I have reviewed the accompanying consolidated and the statements of financial position of TMB Bank Public Company Limited and its Subsidiaries (the Group ), and of TMB Bank Public Company Limited (the Bank ) respectively, as at 31 March 2016; the consolidated and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the three-month period ended 31 March 2016; and the condensed notes ( interim financial information ). Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34, Interim Financial Reporting. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of Review I conducted my review in accordance with the Thai Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, Interim Financial Reporting. (Chanchai Sakulkoedsin) Certified Public Accountant Registration No KPMG Phoomchai Audit Ltd. Bangkok 13 May 2016

3 TMB Bank Public Company Limited and its subsidiaries Statements of financial position 31 March 31 December 31 March 31 December Assets Note (Unaudited) (Unaudited) (in thousand Baht) Cash 12,455,830 17,290,402 12,455,268 17,289,833 Interbank and money market items, net ,827, ,758, ,963, ,957,730 Claims on securities 12,363,500 11,944,900 12,363,500 11,944,900 Derivative assets 11,628,185 12,250,311 11,628,185 12,250,311 Investments, net 6, ,431,571 98,260,036 99,641,905 95,470,360 Investments in subsidiaries and associate, net ,331,428 3,331,428 Loans to customers and accrued interest receivables, net 8, 15 Loans to customers 586,078, ,867, ,029, ,836,479 Accrued interest receivables 1,086,668 1,068,312 1,086,668 1,068,312 Total loans to customers and accrued interest receivables 587,165, ,936, ,116, ,904,791 Less deferred revenue (87,504) (91,694) (87,504) (91,694) Less allowance for doubtful accounts 8.3, 10, 15 (29,704,290) (28,844,706) (29,673,601) (28,821,032) Less revaluation allowance for debt restructuring 8.6 (225,306) (180,558) (225,306) (180,558) Total loans to customers and accrued interest receivables, net 557,147, ,819, ,129, ,811,507 Customers liabilities under acceptances 11,059 10,913 11,059 10,913 Properties for sale, net 1,180,446 1,207,101 1,180,446 1,207,101 Premises and equipment, net 11 12,310,309 10,291,853 12,285,828 10,266,657 Goodwill and other intangible assets, net 1,273,898 1,238,552 1,209,982 1,173,917 Deferred tax assets ,107,227 2,044,523 1,099,965 2,032,134 Other receivables, net 5, 15 11,509,171 11,325,343 11,249,218 11,066,170 Other assets, net 15 3,763,654 4,495,980 3,702,671 4,420,344 Total assets 838,010, ,937, ,252, ,233,305 The accompanying notes are an integral part of these financial statements. 2

4 TMB Bank Public Company Limited and its subsidiaries Statements of financial position 31 March 31 December 31 March 31 December Liabilities and equity Note (Unaudited) (Unaudited) (in thousand Baht) Liabilities Deposits ,598, ,693, ,627, ,729,505 Interbank and money market items 15 45,670,938 36,216,663 45,670,938 36,216,663 Liabilities payable on demand 3,806,178 3,008,198 3,806,178 3,008,198 Liabilities to deliver security 12,363,500 11,944,900 12,363,500 11,944,900 Financial liabilities designated at fair value through profit or loss 366, , , ,869 Derivative liabilities 11,216,240 12,141,438 11,216,240 12,141,438 Debt issued and borrowings, net 12, 15 30,126,251 30,183,564 30,126,251 30,183,564 Bank s liabilities under acceptances 11,059 10,913 11,059 10,913 Provisions for obligation on transfers of non-performing assets 5, 15 1,657,333 5,998,333 1,657,333 5,998,333 Provisions for employee benefits 1,484,198 1,492,439 1,462,104 1,471,505 Provisions for other liabilities 667, , , ,423 Other payables 5,114,636 6,988,253 5,110,265 6,983,792 Other liabilities 15 7,516,809 8,818,971 7,413,684 8,705,973 Total liabilities 757,599, ,338, ,499, ,236,076 Equity Share capital Authorised share capital 44,108,738,479 ordinary shares of Baht 0.95 each 41,903,302 41,903,302 41,903,302 41,903,302 Issued and paid-up share capital 43,749,499,615 ordinary shares of Baht 0.95 each 41,562,025 41,562,025 41,562,025 41,562,025 Premium on share capital 236, , , ,181 Other reserves 5,655,459 3,959,690 5,606,855 3,927,758 Retained earnings Appropriated Legal reserve 1,710,000 1,710,000 1,710,000 1,710,000 Unappropriated 31,134,826 29,023,338 30,638,406 28,561,265 Equity attributable to equity holders of the Bank 80,298,491 76,491,234 79,753,467 75,997,229 Non-controlling interest 111, , Total equity 80,410,099 76,598,363 79,753,467 75,997,229 Total liabilities and equity 838,010, ,937, ,252, ,233,305 Mr. Boontuck Wungcharoen Mr. Singha Nikornpun Chief Executive Officer Chairman of the Audit Committee The accompanying notes are an integral part of these financial statements. 3

5 TMB Bank Public Company Limited and its subsidiaries Statements of profit or loss and other comprehensive income (Unaudited) Note Interest income 15 9,087,149 8,934,680 9,080,921 8,925,669 Interest expenses 15 3,158,564 3,231,098 3,158,564 3,231,081 Net interest income 5,928,585 5,703,582 5,922,357 5,694,588 Fees and service income 15 2,325,571 2,160,725 2,143,937 2,018,322 Fees and service expenses , , , ,812 Net fees and service income 1,842,377 1,687,695 1,684,020 1,572,510 Gains on trading and foreign exchange transactions, net 473, , , ,177 Losses on financial liabilities designated at fair value through profit or loss, net (18,069) (6,823) (18,069) (6,823) Gains on investments, net 69,896 70,636 69,747 70,636 Other operating income ,057 98, ,262 94,672 Total operating income 8,407,694 7,964,014 8,237,165 7,835,760 Other operating expenses Three-month periods ended 31 March (in thousand Baht) Three-month periods ended 31 March Employee expenses 1,984,497 1,828,672 1,926,869 1,775,292 Directors' remuneration 6,507 6,956 6,417 6,866 Premises and equipment expenses 693, , , ,055 Taxes and duties 313, , , ,895 Others , , , ,421 Total other operating expenses 3,910,647 3,558,391 3,791,324 3,459,529 Impairment loss on loans and debt securities 15 1,876,832 2,387,087 1,874,192 2,401,877 Profit from operations before income tax expense 2,620,215 2,018,536 2,571,649 1,974,354 Income tax expense , , , ,328 Profit for the period 2,096,641 1,642,261 2,057,815 1,607,026 Other comprehensive income Items that will be reclassified subsequently to profit or loss Gains (losses) on remeasuring available-for-sale investments 14,272 33,110 (6,569) 20,869 Losses arising from translating the financial statements of foreign operations (10,141) (10,179) (10,141) (10,179) Income tax relating to items that will be reclassified subsequently to profit or loss 18 (827) (4,586) 3,342 (2,138) 3,304 18,345 (13,368) 8,552 Items that will not be reclassified subsequently to profit or loss Change in revaluation surplus on assets 2,108,389 (3,149) 2,108,389 (3,149) Income tax relating to items that will not be reclassified subsequently to profit or loss 18 (421,678) 630 (421,678) 630 1,686,711 (2,519) 1,686,711 (2,519) Total other comprehensive income for the period, net of income tax 1,690,015 15,826 1,673,343 6,033 Total comprehensive income for the period 3,786,656 1,658,087 3,731,158 1,613,059 The accompanying notes are an integral part of these financial statements. 4

6 TMB Bank Public Company Limited and its subsidiaries Statements of profit or loss and other comprehensive income (Unaudited) Three-month periods ended 31 March Note (in thousand Baht) Three-month periods ended 31 March Profit attributable to: Equity holders of the Bank 2,092,162 1,637,657 2,057,815 1,607,026 Non-controlling interest 4,479 4, Profit for the period 2,096,641 1,642,261 2,057,815 1,607,026 Total comprehensive income attributable to: Equity holders of the Bank 3,782,177 1,653,483 3,731,158 1,613,059 Non-controlling interest 4,479 4, Total comprehensive income for the period 3,786,656 1,658,087 3,731,158 1,613,059 Earnings per share 19 Basic earnings per share (in Baht) Diluted earnings per share (in Baht) Mr. Boontuck Wungcharoen Mr. Singha Nikornpun Chief Executive Officer Chairman of the Audit Committee The accompanying notes are an integral part of these financial statements. 5

7 TMB Bank Public Company Limited and its subsidiaries Statements of changes in equity (Unaudited) Other reserves Retained earnings Translation adjustment arising from translating Revaluation the financial Equity Issued and Other reserve - Revaluation surplus on statements attributable to paid-up Premium on share-based surplus on available-for-sale of foreign Total other equity holders Non-controlling Note share capital share capital payments assets, net investments, net operations, net reserves Legal reserve Unappropriated of the Bank interest Total equity (in thousand Baht) Three-month period ended 31 March 2015 Balance at 1 January ,494, , ,836 3,748, ,773 43,563 4,164,566 1,250,000 22,586,165 69,653,247 88,864 69,742,111 Comprehensive income for the period Profit for the period ,637,657 1,637,657 4,604 1,642,261 Other comprehensive income (2,519) 26,488 (8,143) 15, ,826-15,826 Total comprehensive income for the period (2,519) 26,488 (8,143) 15,826-1,637,657 1,653,483 4,604 1,658,087 Contributions by and distribution to owners of the bank Expenses in relation to share-based payments , , ,529-24,529 Total contributions by and distribution to owners of the bank , , ,529-24,529 Transfer to retained earnings (13,624) - - (13,624) - 13, Balance at 31 March ,494, , ,365 3,732, ,261 35,420 4,191,297 1,250,000 24,237,446 71,331,259 93,468 71,424,727 Three-month period ended 31 March 2016 Balance at 1 January ,562, , ,651 3,596,433 82,615 67,991 3,959,690 1,710,000 29,023,338 76,491, ,129 76,598,363 Comprehensive income for the period Profit for the period ,092,162 2,092,162 4,479 2,096,641 Other comprehensive income ,686,711 11,417 (8,113) 1,690, ,690,015-1,690,015 Total comprehensive income for the period ,686,711 11,417 (8,113) 1,690,015-2,092,162 3,782,177 4,479 3,786,656 Contributions by and distribution to owners of the bank Expenses in relation to share-based payments , , ,080-25,080 Total contributions by and distribution to owners of the bank , , ,080-25,080 Transfer to retained earnings (19,326) - - (19,326) - 19, Balance at 31 March ,562, , ,731 5,263,818 94,032 59,878 5,655,459 1,710,000 31,134,826 80,298, ,608 80,410,099 The accompanying notes are an integral part of these financial statements. 6

8 TMB Bank Public Company Limited and its subsidiaries Statements of changes in equity (Unaudited) Other reserves Retained earnings Translation adjustment arising from translating Revaluation the financial Issued and Other reserve - Revaluation surplus on statements paid-up Premium on share-based surplus on available-for-sale of foreign Total other Note share capital share capital payments assets, net investments, net operations, net reserves Legal reserve Unappropriated Total equity (in thousand Baht) Three-month period ended 31 March 2015 Balance at 1 January ,494, , ,836 3,748,394 58,848 43,563 4,116,641 1,250,000 22,273,279 69,292,436 Comprehensive income for the period Profit for the period ,607,026 1,607,026 Other comprehensive income (2,519) 16,695 (8,143) 6, ,033 Total comprehensive income for the period (2,519) 16,695 (8,143) 6,033-1,607,026 1,613,059 Contributions by and distribution to owners of the bank Expenses in relation to share-based payments , , ,529 Total contributions by and distribution to owners of the bank , , ,529 Transfer to retained earnings (13,624) - - (13,624) - 13,624 - Balance at 31 March ,494, , ,365 3,732,251 75,543 35,420 4,133,579 1,250,000 23,893,929 70,930,024 Three-month period ended 31 March 2016 Balance at 1 January ,562, , ,651 3,596,433 50,683 67,991 3,927,758 1,710,000 28,561,265 75,997,229 Comprehensive income for the period Profit for the period ,057,815 2,057,815 Other comprehensive income ,686,711 (5,255) (8,113) 1,673, ,673,343 Total comprehensive income for the period ,686,711 (5,255) (8,113) 1,673,343-2,057,815 3,731,158 Contributions by and distribution to owners of the bank Expenses in relation to share-based payments , , ,080 Total contributions by and distribution to owners of the bank , , ,080 Transfer to retained earnings (19,326) - - (19,326) - 19,326 - Balance at 31 March ,562, , ,731 5,263,818 45,428 59,878 5,606,855 1,710,000 30,638,406 79,753,467 The accompanying notes are an integral part of these financial statements. 7

9 TMB Bank Public Company Limited and its subsidiaries Statements of cash flows (Unaudited) Three-month periods ended Three-month periods ended 31 March 31 March Note (in thousand Baht) Cash flows from operating activities Profit from operations before income tax expense 2,620,215 2,018,536 2,571,649 1,974,354 Adjustments to reconcile profit from operations before income tax expense to net cash provided by (used in) operating activities Depreciation and amortisation 296, , , ,171 Impairment loss on loans and debt securities 1,876,832 2,387,087 1,874,192 2,401,877 Impairment loss on premises and equipment (reversal of) (68,177) 2,739 (68,177) 2,739 Impairment loss on properties for sale and other assets (reversal of) 7,419 (3,494) 7,398 (3,515) Provisions for employee benefits and other liabilities (reversal of) 186,421 (22,372) 185,263 (23,423) Gains on revaluation of trading investments (1,695) (10,371) (1,695) (10,371) Gains on disposal of premises and equipment (4,798) (4,787) (4,778) (4,787) Gains on disposal of investments (69,896) (70,636) (69,747) (70,636) Unrealised losses on remeasurement of financial liabilities designated at fair value through profit or loss 18,069 6,823 18,069 6,823 Unrealised losses (gains) on exchange on borrowings and derivatives (403,529) 245,154 (403,529) 245,154 Expenses in relation to share-based payments 25,080 24,529 25,080 24,529 Net interest income (5,928,585) (5,703,582) (5,922,357) (5,694,588) Dividend income (5,505) (7,890) (5,505) (7,890) Interest received 8,729,222 8,173,933 8,725,057 8,166,780 Interest paid (2,503,381) (2,641,953) (2,503,381) (2,641,970) Income tax paid (64,623) (68,031) (56,012) (65,803) Profit from operations before changes in operating assets and liabilities 4,709,390 4,620,167 4,664,066 4,590,444 Decrease (increase) operating assets Interbank and money market items 4,867,908 1,746,104 4,929,109 1,822,487 Trading investments (17,867,921) 988,840 (17,867,921) 988,840 Loans to customers (6,171,810) (10,429,368) (6,158,513) (10,446,280) Properties for sale 46,125 43,462 46,125 43,462 Other receivables 134, , ,198 53,094 Other accrued income 112, ,950 97,341 43,817 Other assets 772,671 1,006, , ,658 Increase (decrease) in operating liabilities Deposits (7,137,611) 10,141,207 (7,144,385) 10,118,757 Interbank and money market items 9,454,275 (13,219,246) 9,454,275 (13,219,246) Liabilities payable on demand 797, , , ,758 Financial liabilities designated at fair value through profit or loss 50,000 50,000 50,000 50,000 Short-term debt issued and borrowings (5,432) (3,872) (5,432) (3,872) Provisions for employee benefits (67,960) (48,484) (67,960) (46,163) Provisions for other liabilities (5,236) (5,171) (5,236) (5,171) Account payables (174,178) (450,141) (174,088) (445,414) Other accrued expenses (1,104,010) (1,011,787) (1,120,373) (1,019,448) Other liabilities (456,532) (1,196,450) (430,125) (1,178,003) Net cash used in operating activities (12,045,405) (6,743,432) (12,027,183) (7,338,280) The accompanying notes are an integral part of these financial statements. 8

10 TMB Bank Public Company Limited and its subsidiaries Statements of cash flows (Unaudited) Cash flows from investing activities Three-month periods ended Three-month periods ended 31 March 31 March Note (in thousand Baht) Interest received 207, , , ,083 Dividend received 5,505 7,890 5,505 7,890 Purchase of available-for-sale investments (16,065,622) (15,355,248) (16,065,622) (14,755,248) Proceeds from sales of available-for-sale investments 23,328,599 11,146,033 23,307,599 11,146,033 Purchase of held to maturity debt securities (8,058,246) - (8,058,246) - Proceeds from redemption of matured held to maturity debt securities 8,270,871 3,014,639 8,270,871 3,014,639 Proceeds from sales of general investments 29,500 43,719 29,500 43,719 Purchase of premises and equipment (75,027) (119,712) (72,735) (116,767) Purchase of leasehold rights (321) (977) (321) (977) Purchase of intangible assets (120,700) (70,496) (120,644) (70,440) Proceeds from disposals of premises and equipment 9,682 23,676 9,662 23,676 Net cash provided by (used in) investing activities 7,531,773 (645,234) 7,513,558 (50,392) Cash flows from financing activities Proceeds from (repayments of) long-term debts issued and borrowings (75,862) 2,655,294 (75,862) 2,655,294 Interest paid on long-term debts issued and borrowing (234,937) (303,799) (234,937) (303,783) Net cash provided by (used in) financing activities (310,799) 2,351,495 (310,799) 2,351,511 Change in translation adjustments of foreign operations (10,141) (10,179) (10,141) (10,179) Net decrease in cash (4,834,572) (5,047,350) (4,834,565) (5,047,340) Cash at 1 January 17,290,402 16,427,953 17,289,833 16,427,874 Cash at 31 March 12,455,830 11,380,603 12,455,268 11,380,534 Supplementary disclosures of cash flow information Non-cash transactions: Change in remeasuring available-for-sale investments 14,272 33,110 (6,569) 20,869 Change in revaluation surplus on assets and transferred revaluation surplus on assets directly to retained earnings 2,084,232 (20,179) 2,084,232 (20,179) Change in translation adjustments of foreign operations (10,141) (10,179) (10,141) (10,179) Transfer of premises and equipment to properties for sale 25,527 38,277 25,527 38,277 Reversal of provisions for obligtion on transfers of non-performing assets net off written off the promissory note 5 4,341,000-4,341,000 - The accompanying notes are an integral part of these financial statements. 9

11 Note Contents 1 General information 2 Basis of preparation of the interim financial statements 3 Fair value of assets and liabilities 4 Maintenance of capital fund 5 Sale of non-performing assets to Thai Asset Management Corporation ( TAMC ) 6 Investments, net 7 Investments in subsidiaries and associate, net 8 Loans to customers and accrued interest receivables, net 9 Classified assets 10 Allowance for doubtful accounts 11 Premises and equipment, net 12 Debts issued and borrowings, net 13 Assets pledged as collateral and under restriction 14 Commitments and contingent liabilities 15 Related parties 16 Segment information 17 The financial position and results of operations classified by domestic and foreign business 18 Deferred tax and income tax expense 19 Earnings per share 20 Events after the reporting period 10

12 These notes form an integral part of the interim financial statements. The interim financial statements issued for Thai regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Audit Committee on 13 May General information TMB Bank Public Company Limited,( the Bank ), is incorporated in Thailand and has its registered office at 3000, Phaholyothin Road, Chomphon, Chatuchak, Bangkok. The Bank was listed on the Stock Exchange of Thailand on 23 December The principal business of the Bank is operating commercial banking businesses. All subsidiaries are incorporated as limited companies under Thai laws and have been operating in Thailand, with their core businesses being provisions of asset management and fund management services. Details of the Bank s subsidiaries and associate as at 31 March 2016 and 31 December 2015 are given in note 7. 2 Basis of preparation of the interim financial statements (a) Statement of compliance The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standards (TAS) No. 34 (revised 2015) Interim Financial Reporting, guidelines promulgated by the Federation of Accounting Professions ( FAP ); and applicable rules and regulations of the Thai Securities and Exchange Commission; and presented as prescribed by the Bank of Thailand (BoT) Notification No. Sor Nor Sor 21/2558, directive dated 4 December 2015, regarding The preparation and announcement of the financial statements of commercial banks and holding companies which are the parent company of a group of companies offering financial services. The interim financial statements are prepared to provide an update on the financial statements for the year ended 31 December They do not include all of the financial information required for full annual financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements of the Bank and its subsidiaries for the year ended 31 December The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended 31 December 2015 except that the Bank and its subsidiaries have adopted all the new and revised TFRS that are effective for annual periods beginning on or after 1 January The adoption of these new and revised TFRS did not have any material effect on the accounting policies, methods of computation, financial performance or position of the Bank and its subsidiaries. 11

13 (b) Functional and presentation currency The interim financial statements are presented in Thai Baht, which is the Bank and its subsidiaries functional currency. All financial information is presented in Thai Baht and has been rounded to the nearest thousand and in the notes to financial statements to the nearest million unless otherwise stated. (c) Use of judgements and estimates The preparation of interim financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Bank and its subsidiaries accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December (d) Basis of consolidation The consolidated financial statements include the account of the Head Office, all domestic and overseas branches and the Bank s subsidiaries and have been prepared on the same basis as that apply for the consolidated financial statements for the year ended 31 December 2015, with no structural changes in the subsidiaries occuring during the period. All inter-company transactions and balances within this Group have been eliminated. 3 Fair value of assets and liabilities 3.1 Financial assets and liabilities The significant different of fair values in comparison with carrying values of each line item of financial assets and financial liabilities as shown in the statements of financial position at 31 March 2016 and 31 December 2015 were as follows: 31 March December 2015 Carrying value Fair value Carrying value Fair value Financial assets Derivatives assets 11,628 12,095 12,250 12,474 Investments, net 102, ,830 98,260 99,415 Total financial assets 114, , , ,889 Financial liabilities Deposits 637, , , ,666 Derivatives liabilities 11,216 11,137 12,141 12,050 Debts issued and borrowings 30,126 32,246 30,183 32,028 Total financial liabilities 678, , , , March December 2015 Carrying value Fair value Carrying value Fair value Financial assets Derivatives assets 11,628 12,095 12,250 12,474 Investments, net 99, ,040 95,470 96,625 Total financial assets 111, , , ,099 12

14 31 March December 2015 Carrying value Fair value Carrying value Fair value Financial liabilities Deposits 637, , , ,701 Derivatives liabilities 11,216 11,137 12,141 12,050 Debts issued and borrowings 30,126 32,246 30,183 32,028 Total financial liabilities 678, , , ,779 The following methods and assumptions were used by the Bank and its subsidiaries in estimating fair value of financial instruments as disclosed herein. - Investments, net: The fair value of investments in government-sector debt securities is determined, using yield rates or prices quoted on the Thai Bond Market Association ( ThaiBMA ). The fair value of investments in other debt securities issued locally is determined based on market value appraised by the reliable institutions, their respective yields, or the ThaiBMA s yield rates adjusted by appropriate risk factors. The fair value of marketable equity securities held for trading and as available-for-sale is determined at the last bid price quoted on the last working day of the Stock Exchange of Thailand of the reporting period. The fair value of an investment unit is determined using the net asset value announced on the reporting period-end date. The fair value of non-marketable equity securities is determined mainly based on the net asset value of the investee company. - Derivatives: In cases where there is an active market, the Bank uses the market value as the fair value of derivatives. For simple over-the-counter derivative are based on inputs which are observable from independent and reliable market data sources, mainly based on exchange-traded prices, broker/dealer quotations, or counterparties quotations. Those inputs are tested for reasonableness by discounting expected future cash flows using market interest rate for a similar instrument at the measurement date. Fair values of over-the-counter derivative reflect the credit risk of the instrument and include adjustments to take account of the counter party and own entity credit risk when appropriate. Fair value hierarchy When measuring the fair value of an asset or a liability, the Bank and its subsidiaries use market observable data as far as possible. Fair value measurements for assets and liabilities are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows. Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Bank and its subsidiaries can access at the measurement date. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on unobservable market data. If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. 13

15 The Bank and its subsidiaries recognise transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There were no transfers between Level 1 to Level 2 of the fair value hierarchy during the period ended 31 March 2016 and the year ended 31 December Financial assets and liabilities measured at fair value The Bank and its subsidiaries have an established control framework with respect to the measurement of fair values. This is to ensure that prudent revaluation principles and proper internal control procedures are in place. The following table analyses financial assets and liabilities measured at fair value at the reporting date, by the level in the fair value hierarchy into which the fair value measurement is categorised. Fair value Level 1 Level 2 Level 3 Total 31 March 2016 Financial assets Derivatives (trading book) - Foreign currency related - 6,018-6,018 - Interest rate related - 5,354-5,354 Investments - Trading investments - 28,774-28,774 - Available-for-sale investments - 34,680-34,680 Financial liabilities Financial liabilities designated at fair value through profit or loss Derivatives (trading book) - Foreign currency related - 5,661-5,661 - Interest rate related - 5,408-5, December 2015 Financial assets Derivatives (trading book) - Foreign currency related - 7,781-7,781 - Interest rate related - 4,428-4,428 Investments - Trading investments - 15,422-15,422 - Available-for-sale investments - 43,604-43,604 Financial liabilities Financial liabilities designated at fair value through profit or loss Derivatives (trading book) - Foreign currency related - 7,242-7,242 - Interest rate related - 4,575-4,575 14

16 Fair value Level 1 Level 2 Level 3 Total 31 March 2016 Financial assets Derivatives (trading book) - Foreign currency related - 6,018-6,018 - Interest rate related - 5,354-5,354 Investments - Trading investments - 28,774-28,774 - Available-for-sale investments - 31,890-31,890 Financial liabilities Financial liabilities designated at fair value through profit or loss Derivatives (trading book) - Foreign currency related - 5,661-5,661 - Interest rate related - 5,408-5, December 2015 Financial assets Derivatives (trading book) - Foreign currency related - 7,781-7,781 - Interest rate related - 4,428-4,428 Investments - Trading investments - 15,422-15,422 - Available-for-sale investments - 40,814-40,814 Financial liabilities Financial liabilities designated at fair value through profit or loss Derivatives (trading book) - Foreign currency related - 7,242-7,242 - Interest rate related - 4,575-4,575 15

17 3.1.2 Financial assets and liabilities not measured at fair value The following table shows financial assets and liabilities not measured at fair value at the reporting date. Carrying Carrying amount Fair value amount Fair value 31 March 2016 Financial assets Derivatives (banking book) Investments - Held-to-maturity investments 38,442 39,594 38,442 39,594 - General investments Financial liabilities Deposits 637, , , ,650 Derivatives (banking book) Debt issued and borrowings 30,126 32,246 30,126 32, December 2015 Financial assets Derivatives (banking book) Investments - Held-to-maturity investments 38,669 39,557 38,669 39,557 - General investments Financial liabilities Deposits 644, , , ,701 Derivatives (banking book) Debt issued and borrowings 30,183 32,028 30,183 32,028 16

18 4 Maintenance of capital fund The Bank maintains its capital fund in accordance with the Financial Institution Business Act B.E by maintaining its capital fund as a proportion of risk weighted assets in accordance with the criteria, methodologies, and conditions prescribed by the Bank of Thailand. As announced by the BoT in its circulars dated 8 November 2012 and 8 May 2015, the Bank is required to calculate its capital fund in accordance with Basel III. As at 31 March 2016 and 31 December 2015, the consolidated supervision and the s total capital funds can be categorised as follows: supervision 31 March 31 December Tier 1 capital Common Equity Tier 1 capital (CET1) Paid-up share capital 41,562 41,562 Share premium Legal reserve 1,710 1,710 Net profits after appropriation 22,421 22,421 Other comprehensive income 3,560 3,549 Capital adjustment items on CET1 (93) (87) Capital deduction items on CET1 (3,250) (3,512) Total Common Equity Tier 1 capital 66,146 65,879 Additional Tier 1 capital Transactions under subsidiary and associated companies only for non-controlling interest and outside the scope that countable as Tier 1of financial instruments of consolidated financial institutions Total Tier 1 Capital 66,180 65,917 Tier 2 capital Allowance for classified assets of pass category 5,411 5,702 Subordinated debentures 25,350 25,350 Transactions under subsidiary and associated companies only for non-controlling interest and outside the scope that is countable as Tier 2 of consolidated financial institutions 8 9 Total Tier 2 Capital 30,769 31,061 Total Capital funds 96,949 96,978 Total Risk-Weighted Assets 573, ,336 17

19 The BoT s regulation minimum requirement * 31 March 2016 (%) 31 December 2015 Capital Adequacy Ratio/Total Risk-Weighted Asset Tier 1 Capital Ratio/Total Risk-Weighted Asset Common Equity Tier 1 Capital Ratio/Total Risk- Weighted Asset March 31 December Tier 1 capital Common Equity Tier 1 capital (CET1) Paid-up share capital 41,562 41,562 Share premium Legal reserve 1,710 1,710 Net profits after appropriation 22,108 22,108 Other comprehensive income 3,512 3,517 Capital adjustment items on CET1 (93) (87) Capital deduction items on CET1 (3,168) (3,430) Total Common Equity Tier 1 Capital 65,867 65,616 Tier 2 capital Allowance for classified assets of pass category 5,411 5,702 Subordinated debentures 25,350 25,350 Total Tier 2 Capital 30,761 31,052 Total Capital funds 96,628 96,668 Total Risk-Weighted Assets 572, ,513 The BoT s regulation minimum requirement * 31 March December 2015 (%) Capital Adequacy Ratio/Total Risk-Weighted Asset Tier 1 Capital Ratio/Total Risk-Weighted Asset Common Equity Tier 1 Capital Ratio/Total Risk- Weighted Asset * Includes capital conservation buffer as required by the BOT commencing 1 January

20 According to Bank of Thailand notification number For Nor Sor (23) Wor 263/2556 dated 22 February 2013, the Bank is required to disclose CET1 after deducting capital add-on arising from Single Lending Limit, effective at the end of January As at 31 March 2016 and 31 December 2015, the Bank has no add-on arising from Single Lending Limit. The Bank disclosed capital adequacy and capital risk exposure information for the Bank and the full consolidation as at 31 December 2015 through the Bank s website at in April Capital management The Bank s capital management approach is driven by its desire to maintain a strong capital base to support the development of its business, to meet regulatory capital requirements and to maintain appropriate credit ratings. 5 Sale of non-performing assets to Thai Asset Management Corporation ( TAMC ) Promissory notes disputed over transfer price adjustment requests On 25 February 2016, the Supreme Court confirmed the Appeal Court s verdict to dismiss the case. Therefore, TAMC is eligible to adjust the transfer price of non-performing loans down by Baht 4,341 million. Accordingly, the Bank has written off the promissory note, presented as a part of Other receivables and reversed the related provision, both amounting to Baht 4,341 million, as the case was finalised. As at 31 March 2016, the Bank had outstanding other receivables and accrued interest receivables amounting to Baht 340 million, of which provisions were fully provided (31 December 2015: Baht 4,681 million). Such amounts are included under the caption of Provisions for obligation on transfers of nonperforming assets in the statement of financial position. 6 Investments, net 6.1 Classified by type of investments 31 March December March December 2015 Trading securities - Fair value Government and state enterprise securities 28,774 15,422 28,774 15,422 Total 28,774 15,422 28,774 15,422 Available-for-sale securities - Fair value Government and state enterprise securities 31,886 40,810 31,886 40,810 Domestic marketable equity securities 2,794 2, Total 34,680 43,604 31,890 40,814 19

21 31 March December March December 2015 Held-to-maturity debt securities - Cost/Amortised cost Government and state enterprise securities 38,442 38,669 38,442 38,669 Total 38,442 38,669 38,442 38,669 General investments - Cost Domestic non-marketable equity securities 1,314 1,344 1,314 1,344 Foreign non-marketable equity securities Total 1,351 1,380 1,351 1,380 Less allowance for impairment (815) (815) (815) (815) Net Total investments, net 102,432 98,260 99,642 95, Investments in entities in which the Bank and its subsidiaries hold 10% or more As at 31 March 2016 and 31 December 2015, the Bank had investments in entities in which the Bank holds 10% or more of the paid-up share capital of the investee companies but such companies are not treated as its subsidiaries and associate. Those investments were summarised below. and 31 March December 2015 Property development and construction Public utilities and services Mutual funds and financial services Others Total Less allowance for impairment (41) (41) Investment, net Interest in unconsolidated structured entity arising in the normal business The Bank and its subsidiaries may enter into transactions with structured entities in the forms of investment in unit trusts, lending and derivative transactions and providing fund management services. Investment in unit trusts is recognised as equity securities. Lending and derivative transactions are provided under normal business terms and are managed the same way as other loan and receivables, and derivative counterparties. Fund management is provided to mutual funds and private funds for which the Group earns is management fees. As at 31 March 2016 and 31 December 2015, the Bank and its subsidiaries did not have significant risks and transactions relating to structured entities to disclose in the financial statements. 20

22 6.3 Investments in companies with problems in their financial position and operating results As at 31 March 2016 and 31 December 2015, the Bank had the following investments in listed companies which meet the Stock Exchange of Thailand ( SET ) s criteria for delisting, and are in default on debt securities, or companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are similar to the listed companies which meet criteria for delisting from the SET: No. of and 31 March December 2015 Cost value/ book value Fair value Allowance for impair- ment No. of Companies Companies Cost value/ book value Fair value Allowance for impair- - Listed companies under delisting conditions/ defaulted debt securities (62) (62) - Companies whose ability to continues as a going concern is uncertain, or unlisted companies whose financial position and operating results are similar to the listed companies which meet criteria for delisting from the SET (733) (733) Total (795) (795) ment 21

23 7 Investments in subsidiaries and associate, net Type of Companies Business Ownership interest Paid-up capital Cost Allowance for impairment At cost, net 31 March 31 December 31 March 31 December 31 March 31 December 31 March 31 December 31 March 31 December (%) Subsidiaries Phayathai Asset Asset management Management Co., Ltd. business ,070 1,070 3,870 3,870 (843) (843) 3,027 3,027 Designee for ETA Contract Ltd. Financial support business TMB Asset Management Co., Ltd. Fund management business Total investment in subsidiaries, net 4,174 4,174 (843) (843) 3,331 3,331 Associate Metro Designee Co., Ltd. Financial support business Total investment in associate Total 4,174 4,174 (843) (843) 3,331 3,331 22

24 8 Loans to customers and accrued interest receivables, net 8.1 Classified by loan type 31 March December March December 2015 Overdrafts 139, , , ,957 Loans 312, , , ,685 Bills 134, , , ,080 Others Less deferred revenue (88) (92) (88) (92) Loans to customers net of deferred revenue 585, , , ,745 Add accrued interest receivables 1,087 1,068 1,087 1,068 Total loans to customers net of deferred revenue add accrued interest receivables 587, , , ,813 Less allowance for doubtful accounts - Provision at BoT s minimum rates required (17,003) (16,078) (16,972) (16,054) - Provision in excess of BoT s minimum rates required (12,702) (12,767) (12,702) (12,767) Less revaluation allowance for debt restructuring (225) (180) (225) (180) Loans to customers and accrued interest receivables, net 557, , , , Classified by business type and quality of loan classification 31 March 2016 Special Sub- Doubtful Pass mention standard Doubtful of loss Total Agriculture and mining 11, ,975 Manufacturing and commerce 315,456 13, , ,089 Property development and construction 23, ,746 Infrastructure and services 64, ,022 66,926 Housing loans 71,030 1, ,219 Others 60,584 1, ,036 Total* 546,317 18,222 1, , , December 2015 Special Sub- Doubtful Pass mention standard Doubtful of loss Total Agriculture and mining 11, ,518 Manufacturing and commerce 317,238 11,354 1, , ,132 Property development and construction 23, ,746 Infrastructure and services 66, ,721 Housing loans 62,922 2, ,288 Others 61,836 1, ,371 Total* 543,738 16,565 2, , ,776 23

25 31 March 2016 Special Sub- Doubtful Pass mention standard Doubtful of loss Total Agriculture and mining 11, ,966 Manufacturing and commerce 315,456 13, , ,088 Property development and construction 23, ,724 Infrastructure and services 64, ,005 66,909 Housing loans 71,030 1, ,219 Others 60,584 1, ,036 Total* 546,317 18,222 1, , , December 2015 Special Sub- Doubtful Pass mention standard Doubtful of loss Total Agriculture and mining 11, ,509 Manufacturing and commerce 317,238 11,354 1, , ,132 Property development and construction 23, ,724 Infrastructure and services 66, ,721 Housing loans 62,922 2, ,288 Others 61,836 1, ,371 Total* 543,738 16,565 2, , ,745 *Loans to customers net of deferred revenue. 8.3 Classified by loan classification The Bank and its subsidiaries have classified loans to customers and accrued interest receivables (excluding interbank and money market items) in accordance with the BoT s notification, regarding the Classification and Provisions made by Financial Institutions, as follows: 31 March 2016 Net amount Loans to used to set customers and the allowance Minimum Allowance accrued interest for doubtful rates for doubtful receivables accounts (1) required accounts (2) (%) Minimum allowance as per BoT s Regulations Pass 547, , ,088 Special mention 18,282 9, Sub-standard 1, ,289 Doubtful Doubtful of loss (4) 18,578 5, ,691 Total * 587, ,351 17,003 Provision in excess of BoT s minimum rates required 12,702 (3) Total 29,705 24

26 31 December 2015 Net amount Loans to used to set customers and the allowance Minimum Allowance accrued interest for doubtful rates for doubtful receivables accounts (1) required accounts (2) (%) Minimum allowance as per BoT s Regulations Pass 544, , ,027 Special mention 16,625 9, Sub-standard 2,253 1, ,412 Doubtful Doubtful of loss (4) 17,379 5, ,769 Total * 581, ,209 16,078 Provision in excess of BoT s minimum rates required 12,767 (3) Total 28, March 2016 Net amount Loans to used to set customers and the allowance Minimum Allowance accrued interest for doubtful rates for doubtful receivables accounts (1) required accounts (2) (%) Minimum allowance as per BoT s Regulations Pass 547, , ,088 Special mention 18,282 9, Sub-standard 1, ,289 Doubtful Doubtful of loss 18,529 5, ,660 Total * 587, ,320 16,972 Provision in excess of BoT s minimum rates required 12,702 (3) Total 29,674 25

27 31 December 2015 Net amount Loans to used to set customers and the allowance Minimum Allowance accrued interest for doubtful rates for doubtful receivables accounts (1) required accounts (2) (%) Minimum allowance as per BoT s Regulations Pass 544, , ,027 Special mention 16,625 9, Sub-standard 2,253 1, ,412 Doubtful Doubtful of loss 17,348 5, ,745 Total * 581, ,185 16,054 Provision in excess of BoT s minimum rates required 12,767 (3) Total 28,821 *Loans to customers net of deferred revenue add accrued interest receivables (1) Balance net of collateral: In the case of loans that are classified as pass and special mention means the principal balance net of the value of collateral, excluding land, buildings and constructions thereon, leasehold rights and machinery. In the case of loans that are classified as substandard, doubtful and doubtful of loss, it means the debt balance after deduction of the present value of future cash flows expected to be received from debt collection, or from the disposal of collateral, excluding machinery. (2) Allowance for doubtful accounts on loans guaranteed by Small Business Credit Guarantee Corporation according to the Portfolio Guarantee Scheme was made in accordance with the Bank of Thailand s notification on supervisory guidelines on loans guaranteed in the Portfolio Guarantee Scheme by Small Business Credit Guarantee Corporation. (3) As at 31 March 2016, this included provision of Baht 1,276 million (31 December 2015: Baht 1,545 million), provided for non-performing loans for s financial statements. (4) Loans classified as doubtful of loss in the consolidated financial statements included the balances of the Bank and Phayathai Asset Management Co., Ltd. 8.4 Non-performing loans NPLs per BoT s regulations refer to all sub-standard, doubtful, doubtful of loss and loss loans. As at 31 March 2016 and 31 December 2015, the Bank and its subsidiaries NPLs (including interbank and money market items) were summarised as follows: 31 March 2016 TMB Bank Public Company Limited Phayathai Asset Management Co., Ltd. Elimination Net NPLs (principal net of allowance for doubtful accounts) NPLs after allowance for doubtful accounts on NPLs 8, ,579 Total loans after allowance for doubtful accounts on NPLs 677, ,122 Percentage of net NPLs (%)

28 TMB Bank Public Company Limited Phayathai Asset Management Co., Ltd. 31 March 2016 Elimination NPLs (principal) NPLs 21, ,452 Total loans 689, ,995 Percentage of NPLs (%) TMB Bank Public Company Limited 31 December 2015 Phayathai Asset Management Co., Ltd. Elimination Net NPLs (principal net of allowance for doubtful accounts) NPLs after allowance for doubtful accounts on NPLs 8, ,183 Total loans after allowance for doubtful accounts on NPLs 672, ,435 Percentage of net NPLs (%) NPLs (principal) NPLs 20, ,473 Total loans 684, ,725 Percentage of NPLs (%) As at 31 March 2016, the Bank had loans to customers, amounting to Baht 42,758 million (31 December 2015: Baht 39,876 million), on which it ceased recognition of interest income on an accrual basis. 8.5 Troubled debt restructuring During the three-month periods ended 31 March 2016 and 2015, the Bank and its subsidiary entered into contracts for troubled debt restructuring, (only the account where debtor has present value loss/losses on debt structuring is presented) *, which can be summarised as followed: and Three-month period ended 31 March 2016 Number of debtors Before After restructuring restructuring Type of restructuring Modification of terms of payments 1, Total 1, Term of debt restructuring agreements Not over 5 years years 1, Over 10 years Total 1,