24 October 26 TMB BANK 3 rd Quarter & 9 Months 26 Results CEO/CFO 1 Unaudited 3Q6 & 9M6 in Summary Unaudited 3Q6 & 9M6 in Summary Unit : THB mm Unit : THB mm Items 9M6 9M5 % 3Q6 2Q6 % Items Sep 6 Jun 6 % Dec 5 % NII 11,31 1,769 4.9% 3,572 3,86 (6.2%) Interbank & Resale 19,978 52,137 (61.7%) 9,611 17.9% Fee 2,852 2,433 17.2% 973 965.7% Loans 556,887 56,146 (.6%) 555,655.2% Non-Interest 3,579 4,224 (15.3%) 1,29 878 46.9% NPL 66,922 66,96.% 67,44 (.7%) Non-Interest Expenses 1,54 8,427 19.3% 3,518 3,412 3.1% Total Assets 735,462 769,529 (4.) 716,296 2.7% PPP 4,752 6,5 (26.9%) 1,322 1,246 6.1% Deposits 553,676 62,964 (8.2%) 517,215 7.% Provision 129 37 (58.%) 27 5 (45.1%) Net Profit (loss) 4,623 6,194 (25.) 1,295 1,197 8.2% LDR 1.6% 92.9% 7.7% 17. (6.9%) LDR (Inc. PN/ST Bonds) 95.5% 92.2% 3.6% 13.2% (7.) + Growth in net interest income and fee income - YTD Drop in PPP :- Lower non-interest income from setting aside allowance for impairment of P/N TAMC THB 489 mm in 2Q6 and lack of investment gains Higher non-interest expenses from :- Increase in business related expenses for FIDF cost, tax & duties - Rise in personnel, fee& service, loss on impairment of NPA 2 Limited loan growth due mainly to delay of private sector investment from political events and large repayment in corporate loan. SME & consumer loan still continue to expand. Manage asset & liability - decrease deposits and interbank & resale in response to the lowerthan-expected loan growth. 3
Net Interest Fee Net Interest Monthly Interest Spread Fee Growing Remarkably Since Merger 15, 12, 9, 6, 3, 6,491 NII NIM 1.68% 1,761 2.5% 14,542 1,769 2.9% 2.9% 11,31 2.8% 23 24 25 9M5 9M6 2.8% 2.3% 1.8% 1.3% 2.46 2.48 1.82 1.68 1.99 Spread 2.3 Dec-5 Mar-6 Jun-6 Jul-6 Aug-6 Sep-6 4, 3, 2, 1, CAGR = 17% 2,348 2,448 3,362 3,83 951* 2,852 Expanding 23 Footprint 24in High 25 Traffic Areas 9M6 Growth is primarily attributed to:- Credit related transaction: -aval & guarantees, L/C, project advisory fee Consumer related transactions: -credit card, ATM fee Slight fall in investment banking related fee as a result of economic slowdown and the political events in 3Q6 * Annualized for comparative purpose Net interest income increased, while NIM contracted as a result of deposit rate peaking from deposit competition among banks Branches Sep 6 444 + YTD +19 Plan 6 +55 NIM enhancement strategy :- BDC 86 +12 +25 Realigned loan mix towards SME ( ) & consumer ( 1%) Boosting savings account ( 4.6% from 2Q6) Issue 27 days ST bonds (THB 25 bn as of Sep 6) Strategically expanding distribution network at Suvarnabhumi Airport ATM EDC 1,674 12,353 +518 +5,444 +6 +7, 4 5 Non-Interest Non-Interest Expenses Non-Interest : Focus & Continue Growth in Fee Non-Interest Expense Breakdown Others Gain on exchange Gain (Loss) on investments Fees and service income 5,5 3,5 1,5 (5) 3,43 Fee / Non-Interest 4,429 5,657 4,224 68 489 693 2,433 3,579 537 529 2,852 (34) 23 24 25 9M5 9M6 419 mm 17.2% Fee Fee 645 mm 15.3% Non- Non- Interest Interest 12, Other & misc 9, Tax & Duties 6, Premises & Equipment FIDF Personnel expenses 3, Cost to Ratio 7,786 8,772 7,786 8,772 12,255 12,255 8,427 1,96 753 1,467 1,437 1,54 2,492 1,21 1,499 1,658 2,863 3,384 23 24 25 9M5 9M6 1,627 mm 19.3% 8% 6% 2% % 79.7% 69.% 55.3% 59. 57.6% 23 24 25 9M5 9M6 YTD drop in non-interest income from Setting aside allowance for impairment of P/N - TAMC THB 489 mm in 2Q6 Lack of gain on investments Improve non-interest income quality by focusing on recurring fee income 8% 6% 2% % Goodwill 78.7% Cost to excl. Goodwill 67.6% 57.7% 6.7% 56.2% 3.6% 3.5% 3.6% 78.7% 57.7% 57.1% 52.6% 64.% 23 24 25 9M5 9M6 Higher non-interest expenses from Business related expenses :- FIDF cost, tax & duties, fee & services and loss on impairment of NPA Controllable expenses :- Personnel expenses and premises & equipment 6 7
Asset Highlights Loan Outstanding Breakdown Loans Net Loan Growth : 9M6 By Sector By Industry 6 5 4 3 2 1 516 556 557 31 23 24 25 9M6 6,535 Personal Consumption 4,844 4,411 (11,124) Service Others Banking & Finance (3,22) Manufacturing Total = THB 557 bn Service 11% Personal Consumption 1 Agriculture 2% Mining 1% Manufacturing 31% Investments Total Assets Loan Growth by Sector 12 1 8 6 4 2 48 95 18 113 23 24 25 9M6 8 7 6 5 4 3 2 1 379 673 716 735 23 24 25 9M6 Corporate SME Consumer 556 56 557 73 78 8 236 244 245 247 238 231.2 % 1 bn 9.6 % 7 bn 3.8 % 9 bn 6.5 % 16 bn.6% 3 bn 2.6 % 2 bn.4 % 1 bn 2.9 % 7 bn Dec 5 Jun 6 Sep 6 Dec 5 Jun 6 Public Utilities 1% Real Estate Banking & Finance 7% Export 3% Import 1% Total = THB 557 bn Construction Wholesales & Retail 13% 8 9 NPL / Total Loans 2% 15% 1% 5% % 1% 9.9% Asset Quality 12.% 12.1% 12.% 67,44 29,831 61,697 66,922 23 24 25 9M6 LLR / Total Loans (LLR / NPL 46%) 8% 6% 2% % 8.9% 8.5% 6.2% 5.5% 23 24 25 9M6 Legal Workout Progress of NPL Sep 6 Rehabilitation Bankruptcy 2% Seizure of asset 11% Court verdict 18% Payment request 17% Notice issue 9% File lawsuit 13% Total THB 67 bn Legal Workout Progress of NPL Dec 5 Bankruptcy 18% Rehabilitation 15% Assets investigation 3% Seizure of asset Payment request 23% Court verdict Notice issue 3% File lawsuit 1 Total THB 67 bn Funding Breakdown 7 6 5 4 3 2 1 Interbank Borrowings Deposits 344 14 7 322 Improving Liquidity Position 611 63 92 456 631 41 73 654 28 72 517 554 9 75% 82% 85% 23 24 25 9M6 Deposit Structure LDR 1 1% 8% 6% 2% % LDR LDR (included P/N, ST Bonds) 93% 93% 113% 15% Deposits Structure Dec 5 Jun 6 Sep 6 17% 13% 11% 96% 23 24 25 9M6 Growth (Jun 6) Currents 14.3 2.8% 15.5 2.6% 15.3 2.8% (.2) (1.5%) Savings 149.7 28.9% 128.7 21.3% 134.6 24.3% 5.9 4.6% Time 12 mths 244.4 47.3% 366.5 6.8% 325.1 58.7% (41.4) (11.3%) Time > 12 mths 93.1 18.% 69.8 11.6% 63.5 11.5% (6.3) (9.%) NCD&FCD 15.7 3.% 22.4 3.7% 15.5 2.8% (6.9) (3.7%) Total 517.2 1.% 63. 1.% 554.1 1.% (48.9) (8.1%) 1 11
Strengthening CAR Mission accomplished Organic growth of profitability Capital Management (Raising Tier 1 ~ THB 18 bn) Hybrid Tier 1 issuance - USD 2 mm Rights offering of THB 9.7 bn 1 1% 8% 6% 1.6% 7.7% Tier I 8.8% 9.% 6.% 6.2% 12.7% 1.% 2% % 23 24 25 9M6 12 13 & Challenges Ahead Challenges Ahead Establish TMB Franchise Continuous growth in fee income from strengthening consumer banking franchise Rebranding and network expansion Launched landmark deals TMB Macquarie acted as lead arranger of convertible bond for Bangkok Dusit Medical Services TMB acted as selling agent for Rayong Refinery PLC TMB acted as lead arranger for Dhanarak Asset Management Strengthen Capital Base & Liquidity Successfully completed rights offering of THB 9.7 bn, bringing CAR to 12.7% in line with peers Issued Thailand s inaugural Hybrid Tier-1 Securities for USD 2 mm Ratings upgraded Moody s upgraded BFSR to D- from E+ TRIS upgraded TMB rating to A from A- with stable outlook Expedite NPL/NPA sales Manage funding cost effectively Impose operating cost control measure 1H6 3Q6 4Q6 and 1H7 14 15
1% 8% 6% 2% % -2% - -6% -8% -1% - Politics and TMB Operating Environment GDP Economic Forecast in 26-27 27 Nominal GDP Growth 1998 1999 2 21 Commercial Banks Loan 22 23 24 25 9.% 5.-5.5% 2 6f 2 7f 7.9% 6.% Real GDP Growth (%) Private Consumption Expenditure (%) Gross Fixed Investment (%) Exports (USD bn) % change (y-o-y) Imports (USD bn) % change (y-o-y) Trade Balance (USD bn) Current Account Balance (USD bn) : % of GDP Inflation Rate (%) Baht/USD (Average) Challenging Ahead 26f 4.5 3.6 5.2 126.7 16. 127.8 8.5-1.1 2.7 1.3 4.5 38.21 27 f 4.5-4.8 4.2 7.9 139.4 1. 141.9 11. - 2.5 1.7.8 3.2 37.65 Regulatory Challenges Forthcoming Regulatory Changes Tightening provisioning requirements by BoT to clean up NPLs Deposit Insurance Act Introduction of Basel II standards by 28 New Commercial Banking Act Shareholding: Mr.Thaksin sold off 1. shareholding over a year ago Loans: TMB has provided credit facilities to Shin group on commercial basis and with excellent performance all along Deposits: In line with risk management policies under oversight of Board Risk Management Committee, TMB has set limits on deposit concentration etc. Supporting factors for economic expansion: - continuing robust exports, improving consumer confidence and business sentiment Expect expansionary fiscal policy or loose monetary policy It is not likely that interim government will decide or execute major economic initiatives due to time limitation Since the upcoming year involves constitution drafting, there may be political events that affect financial markets from time to time 16 17 Phased Approach to Implementation of Basel II Basel II implementation progress ORM framework has been developed and in the process of rolling out Refine Corporate credit process to improve process efficiency, proper data collection, effective control and monitoring and reporting. Credit Risk Operational Risk Action 26 27 28 29 21 & beyond Data source/systems enhancements Frameworks/Processes Enhancements ORM frameworks development Mapping gross income Into business lines Credit MIS Datamart Capital calculation parallel run/finalize Control review and roll-out ORM policies and risk tools Parallel run/finalize Loss data collection / ORM datamart Portfolio rated using Basel II compliant risk ratings ORM Datamart 18 19
Profit and Loss Balance Sheets 9M6 9M5 % 3Q6 3Q5 % Assets Sep 6 Jun 6 % (Jun) Dec 5 % (Dec) Interest income 26,266 18,844 39. 9,449 6,593 43.3% Interest expenses 14,965 8,75 85.3% 5,877 2,894 13.% Cash 1,191 11,635 (12.) 11,57 (7.8%) Interbank & money market items 11,478 23,137 (5.) 9,611 19. Net interest income 11,31 1,769 4.9% 3,572 3,699 (3.) Securities purchased under resale 8,5 29, (7.7%) - n.a. Provision & loss from TDR 129 37 (58.%) 27 24 (88.7%) Net income after provision & loss from TDR 11,172 1,463 6.8% 3,545 3,459 2.5% Non-interest income 3,579 4,224 (15.3%) 1,29 1,434 (1.1%) Non-interest expenses 1,54 8,427 19.3% 3,518 2,819 24.8% Investments in securities - net 112,922 11,699 2.% 17,59 5.% Loans 556,887 56,146 (.6%) 555,655.2% LLR (3,78) (32,535) (5.) (34,536) (1.9%) Loans - net 526,18 527,611 (.3%) 521,119 1.% Net income before tax 4,698 6,26 (25.%) 1,317 2,74 (36.5%) tax 74 66 12.9% 22 18 19.3% Net profit 4,623 6,194 (25.) 1,295 2,55 (37.%) Basic EPS (Baht).34.47 (27.%).1.15 (38.) Fully diluted EPS (Baht).25.4 (38.3%).7.13 (48.%) Properties foreclosed - net 27,248 27,234.1% 28,37 (4.%) Premises and equipment - net 12,39 12,66 2.% 11,724 5.% Goodwill 12,772 12,95 (1.) 13,37 (4.%) Other assets - net 13,934 15,196 (8.3%) 13,6 2.5% Total assets 735,462 769,529 (4.) 716,296 5.3% 2 21 Balance Sheets Now Open at Suvarnabhumi Airport Liabilities & Equity Sep 6 Jun 6 % (Jun) Dec 5 % (Dec) Deposits 553,676 62,964 (8.2%) 517,215 7.% Interbank and money market items 27,913 26,295 6.2% 41,18 (32.2%) Borrowings 72,435 69,816 3.8% 72,69 (.) Other liabilities 16,722 17,189 (2.7%) 34,362 (51.3%) Total liabilities 67,746 716,264 (6.) 665,446.8% No. of shares outstanding 18,529 15,36 21.1% 15,36.% Total shareholders equity 64,716 53,265 21.5% 5,85 27.3% Total liabilities & equity 735,462 769,529 (4.) 716,296 2.7% Book value (Baht) 3.49 3.48. 3.32 5.1% IR contacts Nisa Laohasomboon Tel. 66-2299 2299-29262926 E-mail nisa.lao@tmbbank.com Ajaya Intaraprasong Tel. 66-2299 2299-1178 E-mail ajaya.int@tmbbank.com 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. 22 23