Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — 4Q24 and FY2024 Earnings Presentation
46 slides from Tmbthanachart Bank Public's earnings presentation, Jan 21, 2025
Slide 1: Investor Presentation 4Q24 and 2024 Financial Performance
Investor Presentation 4Q24 and 2024 Financial Performance 21 January 2025
Slide 2: Executive summary
Executive summary FY2024 results: Delivering quality growth, healthy financial positions and enhanced shareholders’ value TTB successfully navigated thru 2024's challenging economic environment with resilience. The Bank showed steady progress and delivered a net profit of THB 21,031 million (+13% Yo
Slide 3: Transformation journey towards the most recommended bank of choice
Transformation journey towards the most recommended bank of choice TBANK Auto lending Leader Ready to take off for TMB better performance and Launch of new ttb shareholder value creation Top performing deposit franchise Touch / Biz One and setup of ttb Spark Integration of 2 banks Financial closing
Slide 4: Improvement pathway of key business drivers: 2018-24
Improvement pathway of key business drivers: 2018-24 Before 2019 2019-2021 2022-2024 Pre-merger Merger & Integration Integration Covid-19 Pandemic Completion 61% 31% Moving towards Before % Retail retail banking After Optimized 8% loan structure % SMEs 29% ▪ Sub-scale medium- ▪ D-SIB bank with sized
Slide 5: 2024 Financial deliverables
2024 Financial deliverables FY2023 2024 2024FY Actual Targets Actual Loan growth (YoY) -3.5% YTD Flat -6.6% YTD Deposit growth (YoY) -0.9% YTD In line with -4.2% YTD loan growth INCOME Net Interest Margin 3.24% 3.1%-3.25% 3.26% -6.0% Non-NII growth (YoY) -3.4% Low single digit growth (Excluded BA am
Slide 6: ttb Strategic intent and aspirations
ttb Strategic intent and aspirations Recap: Recap:governing the Bank’sthoughts strategicon the bank’s direction intent Our long-term aspirations ▪ Optimize for return while maintaining economy of scale gained thru the merger. • Top-quartile ROE of >10% ▪ Increasingly shift loan mix towards retail wh
Slide 7: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 8: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 9: Effective asset-liability management to sustain net interest margin
1 Effective asset-liability management to sustain net interest margin Total loan mix Retail Total deposit mix Current Key initiatives (%) 1 SMEs (%) Saving Loan % Hybrid Deposit Corporate • Selective loan growth focusing on retail Other Time Deposit • Shift to high-yield lending products 34% 30% Dep
Slide 10: Reaffirming prudent loan growth to strike balance between risk and return
1 Reaffirming prudent loan growth to strike balance between risk and return Total Loan 1,328 bn -1.0% QoQ Used Car Others 1% 1,253 bn 1,241 bn -6.6% YTD 3% 14% Retail Credit Card 1% 1% 3% 3% 3% Retail Personal Loan 3% 3% Cash Your car 31% (CYC) Retail HP 30% 29% 21% New Car 64% Cash Your Book Retail
Slide 11: Optimizing deposit level to ensure effective funding cost management
1 Optimizing deposit level to ensure effective funding cost management Total Deposit Term Deposit +2.5% QoQ Shift in TD mix towards shorter duration 1,387 bn -4.2% YTD Breakdown as % to total TD 1,296 bn 1,329 bn Time deposit 32% 38% 34% Short to Medium TD Long-term TD Hybrid 30% Dec-23 Dec-24 25% 2
Slide 12: Maintaining the alignment of loan yield and deposit cost
1 Maintaining the alignment of loan yield and deposit cost Loan Yield Cost of Deposit 1Q24 2Q24 3Q24 4Q24 1Q24 2Q24 3Q24 4Q24 MPC QoQ - - - -25 bps MPC QoQ - - - -25 bps Yield QoQ +7 bps +3 bps -4 bps -6 bps Cost QoQ +18 bps +7 bps +1 bps -6 bps -6 bps QoQ +31 bps YoY -6 bps QoQ +35 bps YoY flat YoY
Slide 13: Proactive management of liquidity book including investment portfolio
1 Proactive management of liquidity book including investment portfolio Healthy Investment Portfolio Improving Investment Yield +34 bps QoQ 120% Investment portfolio +80 bps YoY 10% of total assets HTC&S 100% 2.61% 6% FVTPL 2.26% 80% THB Govt Thai Corp 1.81% 58% Bond Bond 7% HTC&S 60% 84% FCY Bond 4
Slide 14: Optimizing borrowing structure and cost where possible
1 Optimizing borrowing structure and cost where possible Optimized Borrowing Structure Borrowing Cost Vs. Effective Borrowing Cost* THB billion THB million Total borrowing Subdebt +8 bps QoQ Senior debentures 73.2 and other 4.26% 4.27% 4.27% 4.33% 4.24% borrowings 59.6 68% 40.4 65% 29.2 638 639 637
Slide 15: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 16: Digital-first revenue generation engines
2 Digital-first revenue generation engines Customer-Centric Lending Customer Engagement Ecosystem Play ▪ Upfront credit assessment ▪ Personalized messaging to ▪ Seamless customer journey in through “My Credit” widget drive effective cross-selling the entire value chain through ▪ Risk-based pricing t
Slide 17: My Credit widget is a vehicle to transform how ttb lends
2 “My Credit” widget is a vehicle to transform how ttb lends as a bank and already showing positive sales momentum Confirm personal Receive Digital Booking % Digital Select Info + grant pre-approve objective e-NCB consent credit offer CYC (Unit) Personal loan (Unit) 5% 17% 20% 44% 58% 61% 29% 122% 4
Slide 18: Data-driven hyper-personalization engine allows more customer centric engagement
2 Data-driven hyper-personalization engine allows us to be more customer centric and achieve richer engagement with customers Impressions millions 240 3x 2023 2024 Views millions 37 4x 2023 2024 Clicks millions 8 2x 2023 2024 18
Slide 19: Gamification and status tiers to engage customers along their life cycles
2 Gamification and status tiers as additional tools to better engage customers along their life cycles to ultimately win main bank relationship Gamification (launched Q4 2024) Customer status tiers (to be launched in Q2 2025) 19
Slide 20: Car owner ecosystem
2 Car owner ecosystem – Strengthening car owner relationships through digital platforms My Car Roddonjai 1.7mn > 2.9mn Visits to My Car (4Q24) Unique monthly visitors (Dec’24) > 950k > 77k Cars onboarded Cars listed > 71k > 50% Easy pass registered of sold cars are financed with ttb Motor insurance
Slide 21: Homeowner ecosystem
2 Homeowner ecosystem – Capturing homeowners’ relationship through lifetime journeys with My Home solution and partnership My Home Refinance & Retention Credit Card Spending of ttb home-loan customer ~ 50% holds ttb credit card +12% YoY retention rate growth ▪ Bill management with home members Globa
Slide 22: Salaryman ecosystem
2 Salaryman ecosystem – Continue to provide comprehensive digital solutions for both employers and employees Payroll Engagement & Well-being My Work by ttb Total company acquired > 8.4k > 770 Total payroll companies Companies onboarded 17x ~ 1mn > 120 Soft launched Total employees Companies in Nov’2
Slide 23: Wealth ecosystem
2 Wealth ecosystem – Extensive product suits and solutions aimed at maximizing and growing wealth Wealth Customer Savings – Retail FCD Wellness Investment ▪ Easy account > 75% > 1,200 management Private banking Of Private banking customer via ttb touch customers hold investment acquisition in 2024 ▪
Slide 24: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 25: Cost discipline through digitalization and branch optimization
3 Cost discipline through digitalization and branch optimization Branch rationalization focused Digital migration through new on targeted in-person sales and Operational efficiency gains to capabilities and foundation staff productivity uplift be progressively realized Digital share of financial Num
Slide 26: Strong digital transactions' momentum well-maintained
3 Strong digital transactions’ momentum well-maintained in financial, non-financial and sales Financial transaction Non-financial transaction Digital sales Channel mix of all financial Deposit % Digital Deposit account opening (‘000 accounts) transactions % Others 20% 42% 38% Branch ATM/CDM Digital
Slide 27: Continuing reduction in customer contacts across physical touchpoints
3 With on-going expansion of digital migration, continuing reduction in customer contacts across all physical touchpoints Branch Contact Center Traffic at branch (’000 customers) Contact center volume (Mn calls) -50% (YoY) -13% Reduction in card activation -12% transactions 3.8 3.4 -24% (YoY) 1Q24 2
Slide 28: Common staff-assisted platform with omni-channel capabilities
3 Common staff-assisted platform with seamless omni-channel capabilities with ttb Touch to be rolled out in 2025 ttb Enterprise RM/ Sales ttb touch Shared backend architecture with ttb Touch for high-volume transactions Customers Branch staff Staff/ Operations Drop requests with centralized manual b
Slide 29: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 30: Proactive and prudent approach to risk management
4 Proactive and prudent approach to risk management Conservative loan staging Prudent ECL set-up Proactive collections Normal ECL (THB billion) DPD 160 ,000 Extra ECL Voice Bot system 140 ,000 1-30 120 ,000 22.2 19.9 100 ,000 Classified 9.3% 20.0 0 4.9 2.5 as stage 2 31-60 80,0 00 15.0 0 60,0 00 9.3
Slide 31: Conservative loan staging
4 Conservative loan staging DPD Profile VS Loan Staging Internal data for managerial view - Breakdown as % of Loan principals (excluded interbank) Conservative Staging Policy +30% in LLR 4.7% from pre-Covid19 160 ,000 LLR 3.1% 4.1% Total loans* 140 ,000 DPD Staging DPD Staging DPD Staging DPD 120 ,0
Slide 32: Prudent provisioning and LLR levels against future uncertainties
4 Prudent provisioning and LLR levels against future uncertainties ECL & Credit Cost LLR/NPLs Expected credit loss (ECL) (THB million) 275 164 154 Special provision 20,0 00 156 163 149 150 35,0 00 Annualized credit cost (bps) - Annualized credit cost (bps) 18,0 00 - 30,0 00 excl. extra ECL +270 bps
Slide 33: Ensuring a resilient LLR distribution
4 Ensuring a resilient LLR distribution Distribution of Risk Provision 155% 155% 152% 149% 151% 138% 124% LLR/Stage 3 Ratio 63.5 61.8 60.8 60.1 57.4 59.0 53.8 15.6 14.7 14.9 13.3 15.0 15.3 10.1 Stage 1 Allowance for ECL 28.2 21.9 21.0 21.7 22.1 23.1 25.2 24.5 25.2 25.9 25.9 29.2 28.9 28.2 (THB billi
Slide 34: Proactively resolved weak loans to ensure portfolio quality
4 Proactively resolved weak loans to ensure portfolio quality Loan Classification (%) Stage 3 Ratio (NPL Ratio) Stage 1 Stage2 Stage 3 NPL (THB bn) 120 .0 16. 0% NPL Ratio Pre-pandemic 14.30% 14. 0% 100 .0 1.60 tn 1.57 tn 1,6 00,000 1.53 tn 1.50 tn Successfully cleaning TFRS9 12. 0% 1,4 00,000 80. 0
Slide 35: Proactively engaging with customers to facilitate loan restructuring
4 Proactively engaging with customers to facilitate loan restructuring and mitigate potential defaults Before due date Recent past due date Overdue Due date reminders Voice Bot system Restructuring offers E-contract / E-sign (April 2025) Collection Voice Bot Customers system system 1 Submit 2 Call 3
Slide 36: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 37: Efficient use of capital supported by liquidity recycling
5 Efficient use of capital supported by liquidity recycling Net Profit % NII to RWA and Risk Weighted Assets 32,0 00 9.0% 5.10% 2,001 5.01% 8.2% 9.0 % 5.00% 27,0 00 1,801 4.35% ROE 6.5% 6.6% % NII to RWA 4.15% +13% YoY 7.0 % 1,601 4.00% 22,0 00 5.1% 5.1% 21,031 1,401 18,622 5.0 % Risk-weighted 1,229
Slide 38: ttb strategy framework
ttb strategy framework Short term (1 year) Medium term (2-3 years) Long term (3-5 years) 1 Effective asset-liability management 2 Digital-first revenue generation engines a) Customer-centric lending transformation Revenue b) Customer engagement to win main-bank relationship c) Beyond banking ecosyst
Slide 39: Optimize shareholder value through immediate returns and long-term reinvestments
6 Optimize shareholder value through a balance between immediate returns and long-term reinvestments Immediate returns Long-term reinvestments Dividend payout ratio Digital & IT investments (THB bn) Capital allocations 60% 55% 5.9 50% 5.5 43% 43% 4.8 4.4 35% 4.4 • Dividend payout 3.5 TTB • Share W1
Slide 40: Reinforcing capital position with priority to shareholder interests
6 Reinforcing capital position with priority to shareholder interests Solid Capital with Ample Buffer over Requirement Dividend CET1 & CAR Interim dividend Final dividend 60% TIER1 55% 50% 20.7% Payout ratio 43% 43% 19.3% (Full Conso) 35% 18.9% 17.0% 16.9% 0.105 14.6% 0.073 +30% CAR & CET1 0.055 +23
Slide 41: 2025 Financial Guidance
2025 Financial Guidance FY2024 2025 Actual Targets Loan growth (YoY) -6.6% YTD Approximate 0% - 2% Deposit growth (YoY) -4.2% YTD In line with loan growth INCOME Net Interest Margin 3.26% 3.1% - 3.25% -6.0% Non-NII growth (YoY) (Excluded BA Single digit growth amortization) -3% EFFICIENCY C/I Ratio
Slide 42: Appendix
Appendix 43
Slide 43: New measures "You Fight, We Help" to ease household debt issue
New measures “You Fight, We Help” to ease household debt issue Debt Restructuring Program Impact to ttb & accounting practice ▪ Principal reduction (50%, 70% and 90% of original repayment or installment) and interest rate ~6% of total loans suspension for 3 years or approx. THB 70 bn Adoption rate ~
Slide 44: Non loan-related fees improving, but loan related fee facing challenge
Non loan-related fees improving, but loan related fee facing with challenge due to slowdown in loan volume Bancassurance fee Non-related to loan LG fee Commercial -Loan related fee Related to loan THB million THB million THB million -4% YoY Loan-related fees +16% QoQ 1,147 -9% YoY 1,076 -6% YoY 535
Slide 45: Accrued interest trend reflecting our conservative approach
Accrued interest trend reflecting our conservative approach TTB has taken conservative approach in revenue recognition for accrued interest treatment during the pandemic, starting in Jan 2021. Accrued interest of loans under modifications in Stage 2 and Stage 3 has been fully provisioning, preemptiv
Slide 46: Disclaimer
Disclaimer: The information in this material is in summary form and does not purport to be complete. No representation or warranty, express or implied, is or should be made concerning, and no reliance should be place on, the accuracy, fairness, or completeness of this information and liability there
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