Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — TMBThanachart Bank — Non-Deal Roadshow (December 2024)
57 slides from Tmbthanachart Bank Public's roadshow presentation, Dec 5, 2024
Slide 1: TMBThanachart Bank Investor Presentation
TMBThanachart Bank Investor Presentation Tokyo, Japan December 5-6, 2024
Slide 2: Executive summary
Executive summary ➢ Thailand’s Growth Opportunities: ▪ A neutral stance in global stage: Thailand would benefit from its neutral stance amid changing global trade dynamics and investments, especially in the light of ongoing geopolitical tension. This presents a unique opportunity for Thailand to att
Slide 3: Thailand and Growth Opportunities
Thailand and Growth Opportunities 3
Slide 4: Thailand's Growth Opportunities
1 Thailand’s Growth Opportunities A. A neutral stance in global stage B. Geopolitical issues driving reconfiguration of Thailand’s investment C. Government strategies for sustainable growth 2 Thailand’s Economic Outlook 4
Slide 5: The world is currently facing an increasing level of geopolitical risks
The world is currently facing an increasing level of geopolitical risks Overview of current geopolitical risks Geopolitical Risk (GPR) Index Russia-Ukraine Index: 1985- 2019=100 Conflict 350 300 Middle East Instability Security crisis in 250 Conflicts with Northeast Asia Hezbollah in (North Korea) L
Slide 6: Thailand would benefit from 'Strategic Neutrality' stance
A Thailand would benefit from ‘Strategic Neutrality’ stance Thailand’s FTA Network FTA/RTAs already entered into force OECD, BRICS and ASEAN countries ASEAN FTA Thailand-India FTA Thailand’s export value to OECD, Thailand-Australia FTA (TAFTA) BRICS and ASEAN countries BRICS 30% share ASEAN-China FT
Slide 7: Investment in the new frontier industries as a driver of growth
B Investment in the new frontier industries as a driver of growth BCG industries (Agriculture, food, and biotech, medical) Basic and supporting industries Major Foreign Direct Investment (FDI) in targeted industries in Thailand (Metals, materials, chemicals and petrochemicals, public utilities) Indu
Slide 8: Success stories of multinational companies investing in Thailand
B Success stories of multinational companies investing in Thailand Electronics Automotive and EV Agricultural, food, biotech Chemical High Value Service Source: BOI 8
Slide 9: Government strategies designed to foster sustained growth
C Government strategies designed to foster sustained growth Entertainment complex (legislation by May 2025) Thailand embarks on this transformative journey to redefine its entertainment sector, the introduction of the Entertainment Complex Bill promises to reshape the casino landscape and open new b
Slide 10: Thailand's Economic Outlook
1 Thailand’s Growth Opportunities A. A neutral stance in global stage B. Geopolitical forces driving reconfiguration of Thailand’s investment C. Government strategies for sustainable growth 2 Thailand’s Economic Outlook 10
Slide 11: Thai economy expected to grow 2.6% and 2.8% in 2024-2025
Thai economy expected to grow 2.6% and 2.8% in 2024-2025 Economic indicators forecast 2024-2025 GDP growth contribution, 2021-2025F %YoY, % contribution Private consumption Government consumption Private investment %YoY 2022 2023 2024F 2025F Public investment Net export Change in inventory 12% Resid
Slide 12: Thailand's key drivers on recovering path amid headwinds
Thailand’s key drivers on recovering path amid headwinds 1. Private Consumption 2. Foreign Tourist 3. Merchandise Export (59% of GDP)* (12% of GDP)* (58% of GDP)* Index 2019=100 Index 2019=100 Index 2019=100 121.6 94.7 118.1 89.0 110.6 113.5 109.9 108.6 70.4 108.7 106.8 106.0 99.2 99.8 28.1 16.8 94.
Slide 13: Thailand's tourism marking steady recovery
Thailand’s tourism marking steady recovery; the slow return of Chinese tourists weighing on Asia's tourism recovery Tourist arrivals by country destination Chinese tourist arrivals by country destination Million persons Million Persons 4.5 Thailand Japan 1.2 Thailand Japan Singapore S.Korea 4.0 Sing
Slide 14: Tourism revenue had been well-distributed to the local
Tourism revenue had been well-distributed to the local Distribution in terms of quantity Distribution in terms of revenue Thailand’s foreign tourist arrivals Chiangrai Total tourism revenue* recovery index Million persons Thousand persons by province, 9M24 vs 9M19 3.5 Others China (RHS) 1,200 99% of
Slide 15: Measures emphasizing the promotion of consumption and investment
Measures emphasizing the promotion of consumption and investment Short-term measures Medium to Long-term measures ▪ 10K-cash handout (phase2) expected to deliver to Thai senior citizens (approx. 4 mln, not ▪ (Proposed) Planning to increase the daily minimum wage to in the phase 1 lists) by end of Ja
Slide 16: BOI investment application hits over THB 723 billion
BOI investment application hits over THB 723 billion Value of BOI investment promotion by status BOI investment promotion (certificate issuance) by major sector Billion THB Billion THB 1,000 2021 2022 2023 9M/23 9M/24 300 2021 2022 2023 9M/24 257 250 800 746 723 672 200 600 174 533 509 150 400 335 1
Slide 17: Future reduction in policy rate will be positive for Thai's equity market
Future reduction in policy rate will be positive for Thai’s equity market Headline and core inflation Policy rate projection, 2024-2025 %YoY % Core inflation 10 3.0 Raw food Projection Energy 16 Oct 8 Headline inflation 2.5 6 2.0 Recent Monetary Policy 4 Committee (MPC)’s decision to cut policy 1.5
Slide 18: Overall resilient macro-financial stability remained robust
Overall resilient macro-financial stability remained robust Public Debt External Debt Current Account Foreign Reserve ** Real interest rate*** (%GDP) (%GDP) (%GDP) (Months of Import) (%) 38.9 28.7 17.8 16.6 -1.9 Indonesia Philippines Singapore Japan Japan -3.4 39.0 27.5 19.8 17.5 0.2 46.1 29.8 8.2 1
Slide 19: Resilient Thai Banking Industry
Resilient Thai Banking Industry 19
Slide 20: With capital robustness, Thai banks standing resilient against crises
With capital robustness, Thai banks standing resilient against crises Thai bank - Strong financial position and profit growth Banking stock - Remain undervalued Sector net profit (THB Bn) Recovering from Sector CAR (THB Bn) Covid-19 Global Financial Crisis Thailand’s political unrest COVID-19 crisis
Slide 21: Thai commercial banks have continued de-risking portfolio from SMEs
Thai commercial banks have continued de-risking portfolio from SMEs Loan outstanding Corporate & Others SMEs Retail (THB) 2020 8,289 bn 3,452 bn 5,077 bn 49.3% 20.5% 30.2% 2021 9,389 bn 3,437 bn 5,266 bn 51.9% 19.0% 29.1% 2022 9,486 bn 3,449 bn 5,680 bn 51.0% 18.5% 30.5% Thai Banking sector 9,885 bn
Slide 22: New measures to ease household debt issue
New measures to ease household debt issue As part of the country’s initiatives to sustainably address household debt problem, Thai Bankers’ Association (TBA) with supports from the MoF and the BoT, prepare to launch the 3-year interest suspension scheme for vulnerable customers focusing primarily on
Slide 23: Digital banking has become a norm for Thais' financial transaction
Digital banking has become a norm for Thais’ financial transaction No. of deposit account and digital adoption Unit: mn accounts No. of transaction via mobile banking xx %txn. share Unit: bn txn 160 90% 30.3% 45.8% 68.0% 74.8% 78.5% 80.6% 81.1% 83% 83% 150 79% 140 74% 80% ~10X 130 132 70% 120 64% 12
Slide 24: Trust on D-SIBs influences market share payment transaction and CASA
Trust on D-SIBs influences market share payment transaction and CASA No. of payment transaction by channel CASA market share % mix change x% from 2017 CASA share of D-SIBs bank to total Thai banks (%) Inter-bank fund transfer1/ In-house transfer -20% 91% -20% 87% e-Money Others 2/ -2% Fee waiver 83%
Slide 25: At ttb, we commit to delivering quality growth and creating shareholder value
At ttb, we commit to delivering quality growth and creating shareholder value. 25
Slide 26: Our Strengths
1 Our Strengths A. Improving financial performance B. Clean B/S with sufficient risk cushion C. Strong market position to drive future growth 2 Reinventing Business Model to create and capture future growth opportunities 3 Shareholder Value Creation with quality growth and sustainable profitability
Slide 27: 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 28: Improvement pathway of key business drivers: 2018-23
A Improvement pathway of key business drivers: 2018-23 Before 2019 2019-2021 2022-2023 Pre-merger Merger & Integration Integration Covid-19 Pandemic Completion 63% 31% Moving towards Before % Retail retail banking After Optimized 29% loan structure % SMEs 8% ▪ Sub-scale medium- ▪ D-SIB bank with siz
Slide 29: Decent financial deliverables in 2024
A Decent financial deliverables in 2024 Net profit (THB bn) Income (THB bn) 9M24 Key Performance Drivers 80 +8% YoY 70 60 -0.7% YoY Loan -5.7% YTD 50 40 71.0 Target Flat 65.5 65.9 52.3 30 20 +30% 20 10 Deposit -6.5% YTD 0 18 +17% YoY Target In line with loan growth 16 OPEX (THB bn) & C/I Ratio +36%
Slide 30: Clean balance sheet with sufficient risk cushion
B Clean balance sheet with sufficient risk cushion Prudent risk management is always one of our priorities with aims to keep balance sheet clean and preserve the Bank’s fundamentals for future growth. During Covid-19 pandemic, we lifted provision level to absorb the Covid-19 impact by utilizing the
Slide 31: Optimized loan portfolio, strengthening position towards retail lending
C Optimized loan portfolio, strengthening position towards retail lending After the merger, ttb possesses more completed product suites and strengthens our position towards retail lending spaces. ✓ House-keeping early in our journey to stay focus and to handle legacy issue in SME portfolio: SMEs por
Slide 32: Strong presence in car, home and payroll market
C Strong presence in car, home and payroll market, setting stage for opportunities to optimize growth and risk-adjusted returns With lower portion of high-yield loans comparing to peers, there remains room for ttb to optimize loan growth and enhance yield by selectively growing quality high-yield lo
Slide 33: Leading deposit franchise with unique value proposition
C Leading deposit franchise with unique value proposition As the first Thai bank to waive transactional fees and to introduce innovative products such as hybrid deposits, ttb has established a unique value proposition, becoming one of the leading deposit franchises in Thailand and narrowing the gap
Slide 34: Reinventing Business Model
1 Our Strengths A. Improving financial performance B. Clean B/S with sufficient risk cushion C. Strong market position to drive future growth 2 Reinventing Business Model to create and capture future growth opportunities 3 Shareholder Value Creation with quality growth and sustainable profitability
Slide 35: 2024 outlook and recap of the Bank's strategic intent
2024 outlook and recap of the Bank’s strategic intent 2024external 2024 external outlook outlook ▪ Slow-growth environment Recap: Recap:governing the Bank’sthoughts strategicon the bank’s direction intent ▪ High household debt ▪ Tightening regulatory landscape ▪ Optimize for return while maintaining
Slide 36: 3Y transformation roadmap and key deliverables
3Y transformation roadmap and key deliverables Transformation roadmap: 2 Revenue model transformation to rethink existing and 5 1 new revenue engines 4 Organizational Branch and process Digital transformation transformation transformation to build new capability to align organization to drive produc
Slide 37: Digital transactions' momentum is well-maintained
1 Digital transactions’ momentum is well-maintained in both financial and non-financial transactions Financial transactions Non-financial transactions Channel mix of all Digital financial transactions Deposit % Digital financial transactions (mn) % Others 316 345 283 2% 1% 1% +22% 2% 1% 1% Branch •
Slide 38: Digital sales via ttb Touch continue to yield overall positive results
1 Digital sales via ttb Touch continue to yield overall positive results xx% %digital Credit card booking So Goood transactions Mutual funds transaction (No. of card) (Transaction) (Transaction) 24% 55% 65% 98% >99% >99% 96% 97% 98% +18% +36% +147% 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Flash
Slide 39: ttb touch: humanized digital banking fostering ecosystems
2 3 ttb touch: humanized digital banking fostering 4 ecosystems ~2.5mn ~1mn Car Owner Salaryman ~1mn ~40K Home Owner Wealth Corporate Banking Partners Enabling holistic ecosystem experience 39
Slide 40: Car owner ecosystem
2 3 Car owner ecosystem Motor insurance booking (unit) Car management and > 817K +195% My Car operation in ‘My Car’ widget Cars onboarded widget 3Q23 2Q24 3Q24 • Loan repayment • Insurance renewal • Car tax renewal Better experience in CYC • Easy pass top up Financing application • Gas price • Credi
Slide 41: Home owner ecosystem
2 3 Home owner ecosystem >580K >3K Home onboard Leads to refinance My Home Home related widget Launched 1Q24 >400K ~ 44K management Users Utility bills set up • Consolidated bill management • Utility dashboard Home loan • Bill payment reminder Refinance retention 48% +8% 40% Financing YoY growth on
Slide 42: Salaryman ecosystem
2 3 Salaryman ecosystem Mindful spending Payroll company and maximizing value Healthy borrowing acquisition ~ 8.5K ttb all free: free FX rate • Welfare loan Payroll Payroll companies +85% • Debt consolidation acquisition ~ 1mn charge, free cash withdrawal at partner ATMs, and other Payroll employees
Slide 43: Wealth ecosystem
2 3 Wealth ecosystem New FCD Account FCD account balance FCD Earn fast account +9x +5x Maximizing • Earn Fast - Burn infinite wealth 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Smart via ttb reserve credit • Wellness investment FCD : Foreign Currency Deposit card • Foreign investment & FCD Account Term funds infl
Slide 44: Latest interest in pursuing inorganic growth opportunities (1/2)
Latest interest in pursuing inorganic growth opportunities (1/2) Balance • Lower cost of fund on debt sheet financing for high yield loan Motorcycle Financing synergies leveraging ttb’s facilities Business rationale • Cross-selling opportunities with Revenue extended products to a wider • A more com
Slide 45: Latest interest in pursuing inorganic growth opportunities (2/2)
Latest interest in pursuing inorganic growth opportunities (2/2) Balance • Lower cost of fund on liquidity sheet provided for margin loan supported Securities business synergies by ttb’s facilities Business rationale • Revenue upside through holistic • Completed suite of investment products through
Slide 46: B+ESG in action, integrating sustainability into our business
B+ ESG in action, integrating sustainability into our business Anchored by the B+ESG principle, we strive to integrate sustainability into our business, ensuring that our strategic objectives not only meet short-term goals but also contribute to long-term sustainable growth. Corporate Governance Bus
Slide 47: Our framework on transition finance
Our framework on transition finance Assess Analyze Prevent Provide Assess impacts of emerging Analyze clients’ risks to Prevent future impacts through Provide financial solutions for climate regulation to clients categorize them for an transition solutions transition journey engagement approach • EU
Slide 48: Sustainable financing solutions
Sustainable financing solutions Green Transformation Solar Rooftop Program EV Fleet/HP Program Green/Blue Loan Program Program Transition loan to support clients Credit loan, specially for solar Auto loan, specifically for EV Credit loan to support clients in in transitioning from brown to transitio
Slide 49: Sustainability-linked loan: green cane with Mitr Phol
Sustainability-linked loan: green cane with Mitr Phol • Mitr Phol is Asia’s largest sugar producer who is committed to sustainability. Sugar cane burning has been a major problem of the sugar cane price drop in Thailand because the product gained after burning did not meet the quality required by ma
Slide 50: Shareholder Value Creation
1 Our Strengths A. Improving financial performance B. Clean B/S with sufficient risk cushion C. Strong market position to drive future growth 2 Reinventing Business Model to create and capture future growth opportunities 3 Shareholder Value Creation with quality growth and sustainable profitability
Slide 51: Steady recovery from Covid-19, a result of prudent strategy and execution
Steady recovery from Covid-19, a result of prudent strategy and execution Since 4Q21 after the country reopening, the Bank’s performance has been on positive momentum. This reflects ttb’s ability to recovery from Covid-19 crisis, driven by a right business direction and a successful execution of pos
Slide 52: Improving the quality of net profit
Improving the quality of net profit Apart from initiatives to maintain profitability against economic turbulences, we emphasize on improving the quality of net profit to build a healthy capital position. Our strategies have yielded positive results, as reflected by % NII to Risk-Weighted Assets (RWA
Slide 53: Commitment to increase shareholder value
Commitment to increase shareholder value Post-merger initiatives such as ttb-W1 issuance and the increase in dividend payout to approx. 60% in 1H24 reflect ttb’s strong commitment to shareholders. With steady net profit generation and the robust capital levels, there remains opportunities to improve
Slide 54: Thai banks' valuation and ttb's position as the 2nd highest DPS among D-SIBs
Thai banks’ valuation and ttb’s position as the 2nd highest DPS among D-SIBs Given the strong fundamentals and capital robustness of Thai banks, we believe the current trading multiples does not fully reflect true fair value or future potentials. Among D-SIBs, ttb is currently the 2nd highest DPR st
Slide 55: The alignment of long-term interests between bank and shareholders
The alignment of long-term interests between bank and shareholders Retention programs 2024 Employee Joint Investment Program (EJIP) Budget 2.5 times higher than the previous year (eligible for 11,755 employees) ➢ The program will grant share contribution from employees and ttb the right to ~11,755 h
Slide 56: Commitment to all stakeholders
Commitment to all stakeholders Customers Financial well-being enabler • Improvement in main bank customers’ financial well-being • Employee retention Employees Employer of choice ➢ Long term employee incentive program (e.g. EJIP) • Critical positions filled by internal candidates1 • ROE at top peer
Slide 57: 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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