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Topics 1 2 3 Economic outlook Bangkok Bank position Strategic priorities and targets 2
GDP growth outlook remains strong 6 Baht trn 4 +2.5% 2.3% +7.8% +4 5% +3.2% +2.6% 2 0 2008 2009 2010 2011f 1Q11(A) 2Q11(A) Note : (A) is annualized number. Source: NESDB and Bangkok Bank Research Department 3
Sharp increase in exports 25 20 6 Month +23.1% YoY USD bn 15 10 5 2007 2008 2009 2010 Jun 11 Source: Bank of Thailand 4
Recovery in confidence 100 60 90 40 Index 80 Index 70 20 60 2007 2008 2009 2010 0 Jun 11 Consumer Confidence Index (LHS) Business Sentiment Index (RHS) Source: Bank of Thailand 5
Furniture Capacity utilization almost full 100% 75% 50% 25% 0% Source: Office of Industrial Economics and Bank of Thailand 6 Communication equipment Medical Motor vehicles Other transport equipment Electrical machinery Total Food Tobacco products Textiles Wearing apparel Leather Wood products Paper products Petroleum products Chemical products Rubber and plastics Non metallic Basic metals Fabricated metal Machinery and equipment Office machinery Avg 2001 2010 Jun 11
Capital expenditure in upward cycle Private Investment 1,500 1,200 YoY +13.8% YoY +10.5% Baht mn 900 600 300 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010p Note : p is preliminary number. (A) is annualized number. Source: NESDB : Table 2 Expenditure Gross Domestic Product at 1988 prices (Gross fixed capital formation + change in inventories) 1H11(A) 7
BBL in good position 1 2 3 Largest bank in Thailand Strong network Customer focused organization 8
BBL in good position to capture opportunities Benefits of being largest bank in Thailand Loans Deposits BBL 3 rd 16% 2 nd 18% 1 st 18% Largest customer base an advantage when client loan demand increases 3 rd 16% 3 rd 16% BBL 2 nd 18% 2 nd 17% 1 st 20% Sufficient low cost funding and deposit customers to crosssell products Total assets Shareholders equity BBL 3 rd 15% 2 nd 17% 1 st 18% Economies of scale for investment and marketing BBL 3 rd 3 rd 13% 13% 2 nd 15% 2 nd 16% 1 st 22% Greatest capacity to extend loans As at 30 June 2011 9
BBL in good position to capture opportunities Strong network-domestic and international Thailand 1,004 branches Overseas 24 branches 1. Japan 2 branches 8. Singapore 1 branch Metro 345 branches Provincial 659 branches 2. Hong Kong 2 branches 3. China 4 branches 4. Taiwan 3 branches 5. Laos 1 branch 6. Vietnam 2 branches 7. Indonesia 1 branch 9. Malaysia 5 branches 10. Philippines 1 branch 11. United States 1 branch 12. United Kingdom 1 branch 13. Myanmar 1 Representative Office As at 30 June 2011 10
BBL in good position to capture opportunities Customer-focused organization 5 Business units 11% 17% 11% 15% 46% Corporate Commercial (Mid size SMEs) Business (Small size SMEs) Consumer International Corporate Largest market share in 22 industry divisions+ Chinese desk + Japanese desk SMEs Over 300 Business Centers in all major cities International Only Thai bank with local license in China Gaining market share in Consumer loans Note: Bank only, including BBC and BBB As at 30 June 2011 11
BBL in good position to capture opportunities Strategy designed to suit each business segment Corporate SMEs Commercial Business International Consumer Leverage customer base Strengthen relationships Increase new customers Utilize expertise Improve sales and marketing Collaboration Training New products Cross selling 12
Strategic priorities and targets 1 2 3 4 Grow loans Increase income while containing costs Improve asset quality Maintain liquidity and strong capital position 13
1. Grow business and consumer loans Strengthen leadership position in loans 1,600 1,400 13.4% 9.9% YTD 8.5% 2.3% 0.5% 7.7% 3.9% QoQ 4.5% 15% 0% Baht bn 1,200 1,000 3.2% 15% 800 2008 2009 2010 1H11 2Q10 3Q10 4Q10 1Q11 2Q11 Loans Loan Growth 30% 14
2. Increase income while containing costs Increase net interest margin Interest rates rising 4% 3% 3.25% Net interest margin increasing 2% 3.5% 1% 0% 1.25% Jun 10 Jan 11 Jul 11 Note: RP 1 Day updated as at 13 July 2011 Loan yield improving 5.7% 6% 4.7% 4.5% 4.6% 4.7% 4.7% 5.0% 4.5% 3.0% 2.5% 3.00% 2.64% 2.64% 2.69% 2.68% 2.61% 2.55% 2.76% 4% 2% 1.9% 0.9% 0.7% 0.6% 0.7% 0.7% 0.9% 1.0% 2.0% 2008 2009 2010 1H11 2Q10 4Q10 1Q11 2Q11 0% 2008 2009 2010 2Q10 3Q10 4Q10 1Q11 2Q11 Yield on Loans Cost of deposits Note: Preliminary numbers for years 2008 2010 15
2. Increase income while containing costs Cross-sell to both business and consumers Fee income breakdown Net fee income 7% 9% 11% 19% 30% 21.8% 23.6% 22.4% 23.7% 1 2 3 4 5 6 32% 22% Bancassurance & Mutual Funds Loan related fees Credit cards Transaction services Global market services Others 20% 10% 0% 11.4% 10.5% 8.2% 11.4% 2008 2009 2010 1H11 Net fee income growth Net fee income / total income For the half year ended June 30, 2011 Note: Preliminary numbers for years 2008 2010 16
2. Increase income while containing costs Utilize scale and increase productivity Revenue growing faster than costs Steady cost to income ratio Baht bn 100 80 60 40 20 0 2001 2010 CAGR 10.2% 2001 2002 2001 2010 CAGR 6.3% 2003 2004 2005 2006 2007 Revenue 2008 2009 2010 1H11 (A) Expenses YoY 5.7% YoY 4.9% 4Q10(A) 1Q11(A) 2Q11(A) 60% 40% 20% 42.4% 43.0% 2008 2009 2010 1H11 2Q10 4Q101Q11 2Q11 Note: (A) annualized numbers Note: Preliminary numbers for years 2008 2010 17
3. Improve asset quality and maintain prudent credit management Stabilize non-performing loans 100 6% Baht bn 75 50 4.6% 4.4% 3.0% 2.8% 2.9% 4% 25 55 56 46 43 45 2% 0 2008 2009 2010 1Q11 2Q11 0% NPL (L) NPL ratio (R) 18
3. Improve asset quality and maintain prudent credit management Maintain prudent credit management Provisioning expenses to loans declining Coverage ratio stable 12 72 bps 0.8 200% 158.9% 166.5% Baht bn 9 6 49 bps 45 bps 0.60. 0.45 0.4 % of Loans 150% 100% 3 7.6 7.6 6.6 0.2 50% 0 2008 2009 2010 1H11 3.3 Provision exp (L) 2.1 1.9 1.8 1.8 1.8 1.5 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Provision/Loans (R) 0.0 0% 2008 2009 2010 1Q11 2Q11 19
4. Maintain liquidity and strong capital position Well-prepared liquidity position Deposits steadily increasing Loan to deposit ratio below system Baht bn 2,000 1,500 1,000 500 59% 53% 51% 51% 41% YTD +5.5% 52% 47% 49% 49% 48% 110% 100% 90% 80% 12.3 % System 104.9% BBL 92.7% BBL (incl. B/E) 88.6% 0 2008 2009 2010 1Q11 2Q11 70% 2007 2008 2009 2010 Jun 11 Current and Savings deposits Fixed deposits Note: System LDR calculated using BOT s Commercial Banks registered in Thailand s Assets and Liabilities (17 banks) 20
4. Maintain liquidity and strong capital position Maintain CAR and increase dividends Steady increase in dividends Strong capital adequacy ratio 8 39.4% 45 20% 16.1% 16.5% 6 4 2 12.3 % 3.0 4.0 5.0 30 15 15% 10% 5% 672 3.6% 12.5% 3.3% 13.2% 0 2003 2004 2005 2006 2007 2008 2009 2010 Interim (L) Final (L) Dividend payout ratio (R ) 0 0% 2008 2009 2010 Mar 11 adj. Tier 1 Tier 2 Jun 11 adj.* Note: *Include net profit for 1H11 21
Consistently deliver profits over business cycles Steady profit growth Improving ROA and ROE 30 16% 1.5% 1.4% 1.4% 1.4% 1.5% 14% 1.3% 1.2% 1.2% Baht bn 20 10 0 24.6 20.2 20.6 YoY +8.6% 13.9 6.8 +9.1% YoY +14.5% QoQ 5.6 6.5 7.4 2008 2009 2010 1H11 2Q10 4Q10 1Q11 2Q11 12% 10% 8% 12.6% 12.2% 11.9% 11.8% 11.5% 11.4% 10.7% 2007 2008 2009 2010 1H11 1Q11 2Q11 1.0% 0.5% ROE(LHS) ROA(RHS) Note: Net profit (Owners of the bank) 22
Key takeaways 1. Capital expenditure in upward cycle 1 2. 2 Bangkok Bank in an excellent position 3 Strategies already in place to capture opportunities 23
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. 24