Investor Presentation For 2017
Bangkok Bank 1. Operating Environment 2. Our Key Focus and Position 3. Our Financial Result 2017 2
For 2018, global economic expansion is synchronous with rising global investment amid upbeat sentiment 10% or more 6% - 10% 3% - 6% 0% - 3% Less than 0% No data USA 2.7% WORLD 3.9% (3.7% in 2017) EU 2.2% China 6.6% ASEAN* 5.3% Japan 1.2% 3 Note: *ASEAN-5; Indonesia, Malaysia, Philippines, Thailand, Vietnam Source: IMF (2018)
The Thai Economy: Robust growth underpinned by the strong external sector GDP Growth YoY (%) Global economic recovery Large scale fiscal stimulus 4.6% 5.1% 5.0% Global financial crisis 2.5% 7.8% 7.3% Strong Baht appreciation up to taper tantrum 2.8% Collapse in oil price Brexit US election 2.9% 3.2% 3.9% 4.2% 0.1% 0.9% -2.3% Great floods 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018F Source: National Economic and Social Development Board of Thailand and Bank of Thailand 2018F GDP forecast by Bangkok Bank Since 2012 GDP Revised by Chain Volume Measures 4
Exports have benefited from strong global growth and rising global CAPEX Top Ten Exports Automotives Export Value and Volume index Index Jan 2012 = 100, 3mma 120 Electronics Agro-manufacturing products 110 Machinery and equipment 100 Agriculture Electrical Appliances Petro-chemical products Metal & steel (Jan-Nov 2017) (Jan-Nov 2016) 90 80 Export value Export volume Other manufacturing products Petroleum products 0 10 20 30 40 Billion USD 70 Jan Jan Jan Jan Jan Jan Jan Jan 2010 2011 2012 2013 2014 2015 2016 2017 Sep 2017 Source: Bank of Thailand 5
Tourism continues to go from strength to strength - accounting for 11% of GDP Tourist Arrivals (Million) 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 China (9.8m) Others (8.4m) EU (6.5m) ASEAN 5 (5.4m) CLMV (3.8m) North America (1.5m) Source: CEIC, Ministry of Tourism and Sports 6
Private investment growth is on firmer footing amid rising capacity utilisation Private Investment Monthly Index Jan 2013 = 100 SA 110 100 90 Private Investment Index Capacity Utilisation Rate (RHS) 80 Jan Jan Jan Jan Jan 2013 2014 2015 2016 2017 Monthly % SA 80 70 60 50 40 Nov 2017 tobacco furniture textiles basic metals machinery&equip. food & beverage non-metallic mineral fabricated metal pdts rubber and plastic pdts electrical component electrical machinery office machinery paper & paper pdts other transport equip. medical pdts chemicals/chemical petro pdts motor vehicles Overall Capacity Utilisation Rate as of Nov-17, (64%) Nov-17 Nov-16 20 30 40 50 60 70 80 90 100 Capacity utilisation rate by sector, % not seasonally adjusted Source: Bank of Thailand, The Office of Industrial Economics, Bureau of Budget and Fiscal Policy Office 7
Private consumption remains subdued while car sales appeared to have rebounded Private Consumption Monthly Index Jan 2013 = 100 SA 110 Domestic Motor Vehicle Sales No of units (in millions) 1.6 1.4 1.2 1.44 1.33 105 100 1.0 0.8 0.6 0.63 0.62 0.55 0.80 0.79 0.88 0.80 0.77 0.87 0.4 0.2 95 Jan Jan Jan Jan Jan 2013 2014 2015 2016 2017 Nov 2017 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Pickup Truck Passenger Car Sport Utility Vehicle Source: Bank of Thailand, CEIC 8
Infrastructure investment is set to accelerate before the general election 2015-2022 Infrastructure Projects 3.38 Trillion Baht 2016-2018 Transport Action Plans 60 Projects, 2.5 Trillion Baht 1 2 3 4 5 Inter-city rail network 2,227.42 Billion Baht Mass Transit 746.98 Billion Baht Road 300.82 Billion Baht Water transportation 6.76 Billion Baht Air transport 98.02 Billion Baht Inter-city rail network Under construction: Chira-Khonkhaen (48% completed) Auctions completed: 5 projects Transportation in Bangkok & vicinity Under construction : Red/Orange lines To be constructed in 2018Q1: Pink/Yellow lines Proposals developed: 5 lines Highway network Under construction: Bang Pa In-Korat (14% completed) Bang Yai-Kanchanaburi Pattaya-Maptaphut (46% completed) Under procurement : Rama 3-Dao Khanong Outer Ring Road (West Bangkok) Air transport Under construction: Suvarnabhumi Phase II 9 Source: Office of Transport and Traffic Policy and Planning, Ministry of Transport Other projects High-speed trains: Bangkok-Korat, Bangkok-Rayong Eastern Economic Corridor
Infrastructure projects planned for the Eastern Economic Corridor (EEC) 10 Note: *As of December 2017 Source: EEC Office
Inflation is trending up as a result of rising energy prices - albeit well below the target %YoY 3 2 Headline Inflation Contribution 1 0-1 -2-3 Source: Ministry of Commerce 11 CORE RAW FOOD ENERGY CPI
Currency Movement: Rapid appreciation is beginning to unnerve the business sector 14% 12.8% 12% 11.1% 10% 8% 10.0% 8.6% 8.2% 7.0% 6.8% 6% 4% 2% 0% 0.3% 4.8% 3.9% 2.3% 2.0% 3.0% 0.6% 4.3% 3.4% 2.1% -2% -4% -0.4% -0.6% -1.7% KRW MYR THB SGD TWD CNY INR JPY PHP IDR 2017 YTD 2018* Note: *YTD as of 25 Jan 2018 Source: Bloomberg 12
Currency Movement: The NEER level has been steadily rising lowering export competitiveness Monthly Index Jan 2012 = 100 125 120 Nominal Effective Exchange Rate (NEER) Taper Tantrum BOT s Capital Account Liberalisation 115 110 105 100 95 Dec-17 Source: Bank of Thailand 13
Bangkok Bank 1. Operating Environment 2. Our Key Focus and Position 3. Our Financial Result 2017 14
Our Key Focus Inspiring Success Support customers to tap into new opportunities in infrastructure investment in Thailand and AEC, businesses in EEC and S-curve industries. Expand customer base and revenue streams Innovation Leadership Offer innovative products and services using Big Data, machine learning and Artificial Intelligence (AI) Inter-Connection Connect businesses in ASEAN/AEC by leveraging our industry expertise and enhanced transaction services through our domestic and international networks 15
Goals are supported by: 1. Sustainable Liquidity and Capital Well-Positioned LDR System /1 96.1% Healthy Level of Liquid Assets BBL 34.2% BBL 86.7% System /1 28.3% Regulatory 2009 2011 2013 2015 2017 Strong Capital Position 17.0% 17.0% 18.5% 2009 2011 2013 2015 2017 Economic Momentum CE Tier1 Tier1 CAR /2 /2 /2 Capital Requirements /3 as of the year 2020 16 Note: /1 System refers to all commercial banks in Thailand /2 As of December 2017, the ratios include net profit for the second half of 2017 and the deduction of dividends to be paid in May 2018 /3 The minimum capital requirements by the Bank of Thailand (BOT) under the Basel III, including the additional requirements for Higher Loss Absorbency (HLA) as Domestic Systemically Important Banks (D-SIBs) Source: Bank of Thailand, Bangkok Bank Analysis
Goals are supported by: 2. Scale and Franchise Leadership Market Leader in Corporate & SME Multi-Tiered Distribution Platform Large Retail Customer Base 17 Full Range of Product & Service Bangkok Bank Long- Established International Branch Strong Domestic Network
Goals are supported by: 3. Solutions for a Digital Era Building a Culture of Innovation Promoting a culture of innovation with a range of initiatives Rebuilding Technology Infrastructure Enhance our back-end and front-end systems & improve straight-through-processing Security Culture Cultivate corporate security culture as a business enabler and support the sustainable cybersecurity Research and Development Working on areas such as AI and Big Data 18
Bangkok Bank 1. Operating Environment 2. Our Key Focus and Position 3. Our Financial Result 2017 19
10.00% 5.0 0% 0.0 0% -5.00% -10.00 % Overall Financial Position Loan Billion Baht NPL Amount, NPL Ratio 350 Billion Baht, Percentage 300 1,782 1,869 1,941 +3.2% YTD +3.4% QoQ 2,004 250 200 150 100 50 2.1% 2.8% 3.2% 3.9% 87.4 45.0 56.2 68.8 2014 2015 2016 2017 0 2014 2015 2016 2017 NPL Amount NPL Ratio Deposit Billion Baht, Percentage of Composition 86.6% 89.4% 89.1% 86.7% CE Tier1, Capital Ratio* Percentage 2,059 2,091 2,178 +6.1% YTD +0.4% QoQ 2,311 17.9% 18.3% 18.7% 18.5% 58% 42% 55% 45% 52% 48% 49% 51% 15.6% 16.2% 16.8% 17.0% 20 2014 2015 2016 2017 Current & Saving Fixed LDR Ratio 2014 2015 2016 2017 CE Tier 1/Tier1 Tier2 Note: * The ratios include net profit and deducted dividend
Reserve for Asset Quality Coverage Ratio Percentage Loan Loss Reserve Billion Baht 180.00 300 250 200 150 100 50 204 141 185 174 160 130 136 138 BBL System /1 150.00 120.00 90.00 60.00 30.00 91.9 58.8 33.1 119.5 104.2 61.2 55.4 48.8 58.3 140.0 70.0 70.0 0 2014 2015 2016 2017-2014 2015 2016 2017 Note: /1 System refers to all commercial banks in Thailand Source: Bank of Thailand, Bangkok Bank Analysis BBL's Excess Reserve over BOT Requirement BBL's Required Reserve by BOT 21
Total Income and Operating Expense Income Breakdown NIM Billion Baht, Percentage of Composition Percentage +6.2% YoY 102.7 105.9 112.5 96.9 +5.0% YoY 39% 44% 40% 41% +0.9% QoQ -2 bps YoY 2.37% 2.34% 28.5 2.32% 27.4 28.7 2.16% 40% 41% 41% 61% 56% 60% 59% 60% 59% 59% -5 bps YoY +1 bps QoQ 2.36% 2.30% 2.31% 2014 2015 2016 2017 4Q16 3Q17 4Q17 2014 2015 2016 2017 4Q16 3Q17 4Q17 Net Interest Income Net Fee Income Other Income 40 30 20 10 Net Fee Income Billion Baht 21.7 24.1 24.5 +12.4% YoY 25 27.5 20 15 10 5 +25.3% YoY +18.7% QoQ 6.3 6.6 7.8 Cost-to-Income Ratio Percentage 44.5% 43.8% 47.7% 43.5% 47.4% 41.9% 45.5% 0 2014 2015 2016 2017 0 4Q16 3Q17 4Q17 2014 2015 2016 2017 4Q16 3Q17 4Q17 22
Overall Profitability Profitability Driver Billion Baht 102.7 105.9 96.9 43.1 45.0 50.5 8.7 14.7 15.7 112.5 48.9 22.4 27.4 28.5 28.7 13.0 11.9 13.1 36.3 34.2 31.8 33.0 2014 2015 2016 2017 3.6 6.3 4.6 8.3 8.2 8.5 4Q16 3Q17 4Q17 Operating Expense Provisioning Expense Tax Net Profit /1 Note: /1 Attributable to owners of the Bank 23
24 Appendix
Disbursement Schedule of Infrastructure Projects Billion Baht 500 450 400 350 300 250 200 150 100 50-2017 2018 2019 2020 2021 2022 2023 2024 Action Plan 2016 Action Plan 2017 Action Plan 2018 Source: Ministry of Transport, Office of Transport and Traffic Policy and Planning 25
Opportunities from Regionalization & Urbanization Higher Connectivity in the AEC 10 Target Industries Next-Generation Automotive Robotics Smart Electronics Aviation & Logistics Affluent, Medical & Wellness Tourism Biofuels & Biochemicals Agriculture & Biotechnology Digital Food for the Future Medical Hub 26
Loan Growth and Composition Loan Billion Baht 1,782 1,869 1,941 +3.2% YTD +3.4% QoQ 2,004 2014 2015 2016 2017 Loan by Business Unit Percentage of Composition International 16% Corporate 40% 14% Consumer 10% Business Dec-16 20% Commercial International 15% Corporate 41% 14% Consumer 9% Business Dec-17 21% Commercial Loan by Industry Percentage of Composition Real Estate &Construction 9% 11% Housing 15% Others 16% Commercial Agriculture & Mining 2% 26% Manufacturing Dec-16 21% Utility & Service Real Estate &Construction 10% 11% Housing 15% Others 15% Commercial Agriculture & Mining 2% 26% Manufacturing Dec-17 21% Utility & Service 27
Fee Income Fee Income Breakdown Percentage of Composition 12% 13% 12% 12% 13% 15% 15% 17% 9% 8% 8% 8% 24% 22% 23% 22% 26% 26% 26% 24% 14% 12% 14% 15% 18% 18% 8% 8% 7% 22% 23% 20% 26% 24% 22% Net Fee Income Billion Baht 21.7 24.1 24.5 +12.4% YoY 27.5 6.3 6.6 +25.3% YoY +18.7% QoQ 7.8 16% 16% 16% 17% 15% 15% 19% 2014 2015 2016 2017 4Q16 3Q17 4Q17 2014 2015 2016 2017 4Q16 3Q17 4Q17 Other Fees and Commissions Bancassurance and Mutual Fund Global Market Service Transaction Service Credit Card Business Loan Related Fee 28
Capital Position Total Capital (Billion Baht) Common Equity Tier 1 Ratio Tier 1 Ratio Total Capital Adequacy Ratio 403 42 420 36 16.8% 17.0% 16.8% 17.0% 18.7% 18.5% 12.0% 361 384 8.0% 7.0% 5.75% 8.5% 7.25% 9.5% 11.0% 9.75% Dec-16 Dec-17 Tier 2 capital CE Tier1/ Tier 1 capital Dec-16 Dec-17 Dec-16 Dec-17 Dec-16 Dec-17 Basel III Capital requirements /2 as of the year 2020 Capital requirements /1 as of the year 2019 Capital requirements /1 as of the year 2017 BBL s ratio as of December 31, 2016 and ratio as of December 31, 2017 /3 29 Note: /1 The Bank of Thailand requires commercial banks to maintain an additional capital conservation buffer. The buffer will gradually increase by more than 0.625% each year from January 1, 2016 until it reaches more than 2.5% in January 1, 2019. Note: /2 The Bank of Thailand announced the guidelines for identifying and regulating Domestic Systemically Important Banks (D-SIBs) in September 2017. The BOT requires D-SIBs to hold additional capital for Higher Loss Absorbency (HLA) by gradually increasing its additional capital ratio by an increment of 0.5 percent from January 1, 2019 until completion of the increment to 1.0 percent in January 1, 2020 onwards. Note: /3 The ratios include net profit and deducted dividend
Financial Position Million Baht Dec-14 Dec-15 Dec-16 Dec-17 Growth %QoQ %YTD Loan /1 1,782,233 1,868,903 1,941,093 2,003,989 3.4% 3.2% Deposit 2,058,779 2,090,965 2,178,141 2,310,743 0.4% 6.1% LDR 86.6% 89.4% 89.1% 86.7% 2.5% -2.4% NPL 45,046 56,226 68,841 87,419-0.9% 27.0% NPL Ratio 2.1% 2.8% 3.2% 3.9% 0.1% 0.7% LLR to NPL 204% 185% 174% 160% 6.2% -13.4% LLR to Loan 5.2% 5.6% 6.2% 7.0% 0.0% 0.8% Liquid Assets /2 920,034 906,648 956,847 1,051,982-5.2% 9.9% Liquid Assets to Total Assets 33.3% 32.0% 32.5% 34.2% -1.9% 1.7% CET1/Tier 1 Ratio /3 15.6% 16.2% 16.8% 17.0% -0.3% 0.2% CAR /3 17.9% 18.3% 18.7% 18.5% -0.6% -0.2% 30 Note: /1 Loan = Loan to Customer Less Deferred Revenue /2 Liquid Assets consist of cash, interbank and money market assets, claims on securities and trading & available-for-sale securities /3 The ratios include net profit and deducted dividend
31 Financial Performance 4Q17 Note: /1 Attributable to owners of the Bank Million Baht 4Q16 3Q17 4Q17 Growth (%) Net Interest Income 16,303 16,825 16,955 0.8% 4.0% Net Fee Income 6,255 6,599 7,836 18.7% 25.3% Non-Interest Income 11,063 11,651 11,789 1.2% 6.6% Total Income 27,366 28,476 28,744 9.4% 5.0% Operating Expense 12,968 11,939 13,089 9.6% 0.9% Provisioning Expense 3,596 6,259 4,617-26.2% 28.4% Net Profit /1 8,267 8,161 8,496 4.1% 2.8% EPS /1 (Baht per Share) 4.33 4.28 4.45 4.1% 2.8% NIM 2.36% 2.30% 2.31% 0.01% -0.05% Net Fee Income Ratio 22.9% 23.2% 25.5% 2.3% 2.6% Cost to Income Ratio 47.4% 41.9% 45.5% 3.6% -1.9% ROA /1 1.13% 1.06% 1.10% 0.04% -0.03% ROE /1 8.77% 8.33% 8.48% 0.15% -0.29% QoQ YoY
32 Financial Performance Year Note: /1 Attributable to owners of the Bank Million Baht 2014 2015 2016 2017 Growth (%) Net Interest Income 58,997 57,510 63,998 66,625 4.1% Net Fee Income 21,726 24,071 24,492 27,526 12.4% Non-Interest Income 37,860 45,219 41,860 45,843 9.5% Total Income 96,857 102,728 105,858 112,468 6.2% Operating Expense 43,087 45,045 50,505 48,948-3.1% Provisioning Expense 8,687 14,654 15,728 22,370 42.2% Net Profit /1 36,332 34,181 31,815 33,009 3.8% EPS /1 (Baht per Share) 19.03 17.91 16.67 17.29 3.8% NIM 2.37% 2.16% 2.34% 2.32% -0.02% Net Fee Income Ratio 22.4% 23.4% 23.1% 24.1% 1.0% Cost to Income Ratio 44.5% 43.8% 47.7% 43.5% 4.2% ROA /1 1.39% 1.21% 1.09% 1.09% 0.00% ROE /1 11.66% 9.91% 8.59% 8.49% -0.10% YoY
Dividend and Payout Ratio Baht 12 10 39.3% Percent 50 40 8 6 4 2 0 4.00 5.00 6.00 6.50 6.50 6.50 6.50 6.50 6.50 4.00 4.50 4.50 4.50 4.50 4.50 4.50 2.75 3.00 3.00 3.50 1.75 2.00 3.00 1.75 2.00 2.00 1.00 1.25 0.75 0.75 1.00 1.00 1.00 1.00 1.50 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 30 20 10 0 Interim (L) Final (L) Dividend Payout Ratio (R) 33
Network Branch /1 2014 2015 2016 2017 1,115 +23 1,138 +19 1,157 +9 1,166 ATM 8,877 +453 9,330-25 9,305 +177 9,482 CDM 1,237 +34 1,271 +11 1,282 +18 1,300 Employee 26,132 +1,010 27,142-271 26,871-859 26,012 Note: Consolidated /1 Domestic branches 34
Long-Standing International Presence UK Branch: 1 Number of Year: 60 32 International Locations in 15 Economies Vietnam Branch: 2 Number of Year: 25 35 Cayman Islands Branch: 1 Number of Year: 2 USA Branch: 1 Number of Year: 52 Laos Branch: 2 Number of Year: 24 Myanmar Branch: 1 Number of Year: 22 Malaysia /1 Branch: 5 Number of Year: 58 Singapore Branch: 1 Number of Year: 60 Note: As at December 2017 /1 Wholly-Owned Subsidiary Source: Bangkok Bank Filing China /1 Branch: 6 Number of Year: 31 Japan Branch: 2 Number of Year: 62 Philippines Branch: 1 Number of Year: 22 Taiwan Branch: 3 Number of Year: 52 Hong Kong Branch: 2 Number of Year: 63 Cambodia Branch: 1 Number of Year: 3 Indonesia Branch: 3 Number of Year: 45
2018 Financial Target Consolidated 2018 Financial Target Loan Growth 5-6% NPL Ratio (Gross) Maintain Net Interest Margin (NIM) Maintain Net Fee Income Growth Mid to High Single Digit Cost to Income Ratio Mid-40s Note: The above financial targets are based on the Bank s preliminary estimates that may change due to the operating environments and other unforeseen circumstances. 36
For Further Information Contact: Investor Relations Team Tel (66) 2 626 4981 Fax (66) 2 231 4890 Email: IR@bbl.co.th Bangkok Bank Website www.bangkokbank.com This presentation is made by Bangkok Bank and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Bangkok Bank. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Bangkok Bank. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Bangkok bank as being accurate. Neither Bangkok Bank nor any of its directors, officers, employees, and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein are as up to date as is reasonably possible and may be subject to revision in the future. Neither Bangkok Bank nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation. Neither Bangkok Bank nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. This presentation may contain projections or other forward-looking statements related to Bangkok Bank that involve risks and uncertainties. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. All forward-looking statements are based on information available to Bangkok Bank on the date of its posting and Bangkok Bank assumes no obligation to update such statements unless otherwise required by applicable law. This presentation does not constitute an offer or invitation to subscribe for, or purchase, any shares of Bangkok Bank.