Kasikornbank Public Co. Ltd. · SET:KBANK
Kasikornbank Public — Investor Presentation (May 2003)
20 slides from Kasikornbank Public's investor presentation, May 8, 2003
Slide 1: Update on Progress 1Q 2003
suihnisnansing KASIKORNBANK # 4 2% & f8 77 Update on Progress 1Q 2003
Slide 2: Table of Contents
Table of Contents Q Overview of Events Q SLIPS Redemption Q Financial Position and Performance Q Progress on Corporate Reform " Cost reduction " Risk management development " Revenue enhancement 2
Slide 3: Overview of Events
Overview of Events 1998 Recapitalization Done 1999 Balance Sheet Repair Done 2000 Strategic Programs: 1. Cost reduction Doing 2001 2. Risk management development Doing 2002 3. Revenue enhancement Doing 2003E Significant reduction in funding cost via SLIPS Redemption Definite 2004E 3
Slide 4: SLIPS Redemption
SLIPS Redemption Q How to Redeem SLIPS Q Estimated Impacts " Using retained earnings; no new share issuance " Tier-1 ratio declines to 5.5% " Timing is 1Q04 " Interest expense to assets drops from 2.25% to 1.76% in Case #1 and 1.87% in Case #2 " RoE increases from 22% to 36% in Case #1 and 33% in Ca
Slide 5: Financial Position and Performance
Financial Position and Performance Q Financial Performance Q Key 2002 RoA Improvement " Improving RoA " Higher net interest income " Increasing provisioning coverage " Better cost-efficiency " Strengthening capital position " Increased non-interest income " Lowered provisioning expenses Key Improvem
Slide 6: Progress on Corporate Reform: Cost Reduction
Progress on Corporate Reform 1. Cost Reduction More than 50% headcount reduction and replacement from 1997 Relatively low deposit cost, and following SLIPS redemption funding cost will significantly drop further IT outsourcing and centralized back office will enhance efficiency and support creativit
Slide 7: Progress on Corporate Reform: Risk Management Development
Progress on Corporate Reform 2. Risk Management Development Q Overall Risk " Establish risk management policy approved by the board of directors as a guideline for business decisions " Develop capital allocation and risk-adjusted performance measurement Q Credit Risk " Implement comprehensive credit
Slide 8: Progress on Corporate Reform: Revenue Enhancement
Progress on Corporate Reform 3. Revenue Enhancement Efforts continue to be made to achieve sustainable risk-adjusted return to shareholders Renewed teamwork, KBANK has been making advanced steps to further improve RoA Corporate Banking Group Retail Banking Group Q 12% net corporate good loan growth
Slide 9: FAQs on KBANK
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Slide 10: FAQs on KBANK
FAQs on KBANK Q Yield and Revenue Pressure " Increasing competition " Asset quality " New NPLs and relapses " Loan growth targets Q Other Specific Issues on KBANK " Improving cost/income ratio " Progress on strategic programs " Key financial ratios Q Operating Environment " Regulatory framework " Ec
Slide 11: Increasing Competition
Increasing Competition Key Issues Responses Q Disintermediation Improve capability of capital market products department Q Loan refinancing Strengthen business segment focus with less exposure to large corporate lending Q Price competition Improve service quality, use relationship pricing, increase
Slide 12: Asset Quality and Restructuring Progress
Asset Quality Q Term extension remains the most frequently used Frequency of Resolutions on Restructured Debt Q AMCs are making reasonable progress Term extension 59% Collateral disposal 39% Q More than 50% of hardcore NPLs are in the final stage Interest rate reduction 25% Haircut on principal / ac
Slide 13: New NPLs and Relapses
New NPLs and Relapses Q NPLs and relapse rate continue to decline Annualized NPL Flows, % of Total Loans 30.0% 3.0% Q Double-counting of relapses accounts for 13% NPL Decrease, New NPL, Relapse 20.0% 2.0% Q Land represents only 25% of collateral assets 10.0% 1.0% Net NPL Flow 0.0% 0.0% -10.0% -1.0%
Slide 14: Loan Growth Targets
Loan Growth Targets Loan Growth Targets for 2003 (Bt bn) 2002 Outstanding 2003 Net Target Outstanding % Growth Corporate banking group 129.5 137.4 6% Total retail 178.7 199.2 11% Small business lending 146.4 161.9 11% Mortgage loans 25.9 28.3 9% Credit cards 5.5 7.4 34% Other personal loans 0.9 1.5
Slide 15: Improving Cost/Income Ratio
Improving Cost/Income Ratio Q About 60-80% of extra expenses during 2001 and 2002 were actually impairment loss provisions and the cost of headcount reduction Q When compared to the banking sector, these expenses were not significantly higher, just more explicit Q In sum, KBANK’s cost/income and cos
Slide 16: Progress on Strategic Programs
Progress on Strategic Programs CRM Q Completing segmentation and new sales and service platforms for corporate and retail customers, increased retail lending by 10% CRM Q Completed 9 Business Banking Centers for corporate customers, increased customer satisfaction index from 6.72 to 9.06 (Max. = 10)
Slide 17: 2002 Key Financial Ratios
2002 Key Financial Ratios RoE Ranking Asset Yield Breakdown 7.0% 6.2% 25.00% 21.51% 6.0% 5.3% 20.00% 5.0% 5.1% 5.0% 12.71% 12.45% 13.22% 4.7% 15.00% 5.0% 4.4% 4.2% 10.00% 4.0% 5.00% 3.0% 0.00% -5.00% 2.0% -10.00% 1.0% -15.00% 0.0% -20.00% BBL KTB KBANK SCB BAY TMB BOA DTDB -25.00% -21.91% BBL KTB KB
Slide 18: What May Change?
What May Change? Q Possible legal changes " Banking Act/Master Plan to develop the universal-banking concept in Thailand " Deposit insurance to eliminate distortion of the country’s capital allocation and expedite consolidation " New taxes on unused land could force landlords to return idle resource
Slide 19: Economy and Banking Sector
Economy and Banking Sector Q Improving macroeconomic outlook Increasing 2003 GDP Growth Consensus " Benign interest rate environment 4.6 4.4 4.4 " Increasing economic growth momentum 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.1 4 4 4 4 4 " Recovery of banks’ profitability 4.0 3.9 3.8 3.6 3.6 3.6 3.4 3.2 3.0 Sep-
Slide 20: suihnisnansing
suihnisnansing KASIKORNBANK # 4 2% & f8 77
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