Bank Of Ayudhya Public Co., Ltd. · SET:BAY
Bank Of Ayudhya Public — 15th Annual CLSA Investors' Forum 2008
36 slides from Bank Of Ayudhya Public's conference presentation, September 2008
Slide 1: 15th Annual CLSA Investors' Forum, Hong Kong
15th Annual CLSA Investors’ Forum Hong Kong 22 – 26 September 2008 CONFIDENTIAL Investor Relations : Analyst Briefing January 21, 2008
Slide 2: Important Notice
Important Notice This presentation has been prepared by Bank of Ayudhya Public Company Limited (the “Bank”) solely for informational purposes. It does not constitute an offer or sale or a solicitation of an offer to purchase securities, nor does it constitute a prospectus within the meaning of the S
Slide 3: Agenda
Agenda } Update of Progress in 1H/08 } Financial Performance for 2Q/08 and 1H/08 } Outlook for 2H/08 Investor Relations Department 33
Slide 4: Update of Progress in 1H/08
Update of Progress in 1H/08 Investor Relations Department 44
Slide 5: BAY's Profile
BAY’s Profile Assets, Loans & Deposits (Ranked #5) Network and Employees Consolidated (as of Aug 08) (Baht Billion) Number Domestic Branches 575 751 666 652 ATMs 2,667 563 540 516 500 460 451 Exchange Booth 74 2006 2007 1H/08 Employees 9,568 Assets Loans Deposits Investor Relations Department 55
Slide 6: BAY's Shareholding Structure
BAY’s Shareholding Structure Shareholding Structure (as of Sep 08) GE R Group • After the matured warrants were 32.9% 24.9% exercised on 2 Sep 08, GE and R Group remained as major Others shareholders. 42.2% Investor Relations Department 66
Slide 7: Recent Development
Recent Development 9 Completion of GE Capital Auto Lease (GECAL) acquisition in mid Feb 08. 9 Successfully launched two issuances of debenture totaling 41.9 billion to better match funding for auto hire purchase business. 9 Improvement of asset quality from 6 billion of NPL sold in June 08 and 8.9 b
Slide 8: BAY's Auto HP Business Structure
BAY’s Auto HP Business Structure GECAL’s Funding Structure BAY’s Auto HP Group (Mid Feb 08 – Aug 08) Total Portfolio GE 14 bn BAY BAY (As of Jun 08) 109 bn Local Bank 20 bn 34 bn 36 bn AYCL New cars financing Total Funding GECAL Now focusing on used cars 70 bn and motorcycle financing + AYHP and ref
Slide 9: Debenture Issuance: An Alternative for Better Matched Funding
Debenture Issuance: An Alternative for Better Matched Funding Issuance Terms & Rate Amount (Baht billion) Mar 08 2 year 3.85% 10.5 3 year 4.00% 5.5 4 year 4.25% 4.0 Total 20.0 Jun 08 2 year 4.25% 16.8 3 year 4.50% 5.1 Total 21.9 Grand Total 41.9 • A well-planned fund raising option resulted in a mor
Slide 10: Update on NPL Sale
Update on NPL Sale Consolidated (Baht Billion) NPL Movement 18.5 billion NPL sold within 12 months 4Q 07 16.4% } Retail loans tranche 15.5% Face : Baht 3.6 billion @ 55% 13.6% NPL sale in 1H 08 11.1% Aug 08 : 75.1 Baht 8.9 } Corporate loans tranche 70.6 63.2 billion Face : Baht 6 billion @ 35% 65.0
Slide 11: Distribution Network Expansion in 1H/08
Distribution Network Expansion in 1H/08 • Selective location based on potentiality and profitability of the areas. • Seven new branches opened in 1H/08 (3 new in Phuket which made BAY become Top 2 in Phuket). • Leveraging branch network to support GECAL and Car4Cash products. Investor Relations Depa
Slide 12: New Consumer Banking Products / Services Launches in 1H/08
New Consumer Banking Products / Services Launches in 1H/08 SMS Banking – Mar 08 • Financial information provided through short message service - Financial Alert - Financial inquiring - ATM money transfer alert - Bank information inquiry Krungsri Smile Cash Line – May 08 • Personal loans services - c
Slide 13: Loan Composition Moving Towards the Target
Loan Composition Moving Towards the Target Consolidated 2007 June 2008 By 2010 50% 44% 34% 35% 30% 22% 50% 35% Auto HP 20% Mortgage 11% Personal Loan & Others 4% Corporate Retail SME Investor Relations Department 13 13
Slide 14: Strong Capital Base Maintained
Strong Capital Base Maintained BAY+AAMC 19.80% 17.25% 4.68% 4.31% 11.59% CAR required Tier 2 * 4.24% by BOT at 7.47% 15.12% 12.94% 8.5% Tier 1 2006 2007 Jun 08 THB bn. 2006 2007 Jun 08 Tier 1 35.98 67.78 65.16 Tier 2 * 20.44 21.01 21.66 Total Capital 55.85 88.79 86.82 • Basel II will be implemented
Slide 15: Update on CDO Investment
Update on CDO Investment • Total investment - US$ 85 million in 4 tranches (equivalent to 0.4% of the Bank’s total assets) - Investment yields LIBOR+1.56% - There are 100 – 230 corporate names underlying each tranch. • Industries of underlying Financial, Insurance, Telecom, Petrochemicals, corporate
Slide 16: Financial Performance for 2Q/08 and 1H/08
Financial Performance for 2Q/08 and 1H/08 Investor Relations Department 16 16
Slide 17: Balance Sheet
Balance Sheet Consolidated (Baht Billion) Assets Liabilities & Equity +99 751.2 751.2 +99 666.3 652.4 81.2 666.3 652.4 47.1 +3 210.7 55.7 78.1 154.1 +9 206.0 202.0 74.7 +79 +90 563.5 540.5 499.6 +16 515.9 460.3 450.4 2006 2007 Jun-08 2006 2007 Jun-08 Loans Other assets Deposits Other Liabilities Equ
Slide 18: Loans & Deposits
Loans & Deposits Consolidated Loans Deposits + (Baht Billion) 571.8 +88 538.5 +2 540.5 Deposits 552.5 +19 + 513.6 +39 71.0 65.0 Debenture 450.4 -6 55.9 14.0 34.0 70.6 +0.4 Deposits 499.6 518.5 515.9 -3 +19 +88 +8 475.5 64% 64% 64% 467.5 379.8 33% 33% 33% 3% 3% 3% 2007 Mar-08 Jun-08 2007 Mar-08 Jun-0
Slide 19: Interest Accounts
Interest Accounts Consolidated (Baht Billion) Interest Income 19.47 Interest Expense 18.35 +6% +19% YoY +19% QoQ 10.58 8.92 8.88 -11% YoY 8.90 +16% QoQ 6.85 4.15 -23% 3.17 3.68 2Q/07 1Q/08 2Q/08 1H/07 1H/08 2Q/07 1Q/08 2Q/08 1H/07 1H/08 Net Interest Income • Net Interest Income in 2Q/08 and 1H/08 in
Slide 20: Net Interest Margin
Net Interest Margin Consolidated 6.16% 6.00% 5.95% 5.77% 5.54% 4.02% 3.56% 3.86% 3.09% 3.09% 2.89% 3.05% 2.32% 2.28% 2.15% 2Q/07 1Q/08 2Q/08 1H/07 1H/08 Yield on Earning Assets Cost of Funds NIM • A rising trend of NIM is expected to continue with expansion in retail lending and improvement in asset
Slide 21: Non Interest Accounts
Non Interest Accounts Consolidated (Baht Billion) Non-Interest Income Non-Interest Expense 10.24 9.13 +48% YoY Normalized for CDO MTM +12% +8% YoY +18% QoQ 4.84 +8% QoQ 3.98 3.63 2.35 4.94 4.95 5.34 +10% 2.53 2.18 1.84 1.47 3.67 1.96 2.49 3.30 3.85 1.27 1.71 1.75 1.96 1.89 2Q/07 1Q/08 2Q/08 1H/07 1H
Slide 22: Revenue Structure
Revenue Structure Consolidated Non interest income / Total income* Fee income / Total income* 31% 25% 28% Normalized for CDO MTM 24% 24% 24% 24% 20% 23% 22% 20% 22% 28% 76% 76% 76% 76% 80% 77% 78% 80% 78% 72% 2Q/07 1Q/08 2Q/08 1H/07 1H/08 2Q/07 1Q/08 2Q/08 1H/07 1H/08 Net Interest Income Non Interes
Slide 23: Cost-to-Income Ratio
Cost-to-Income Ratio Consolidated 79.1% 65.5% 69.9% 58.6% 61.7% 60.0% 57.5% 58.7% Normalized for CDOs MTM 2Q/07 1Q/08 2Q/08 1H/07 1H/08 • Quarterly cost to income improved YoY and QoQ as revenue grew at a faster rate than operating expenses. • 1H/08 cost to income improved even with CDO mark to mark
Slide 24: NPLs and Coverage Ratio
NPLs and Coverage Ratio 57 55 58 53 Coverage Ratio (%) 55 50 50 46 16.4% 15.5% NPLs 13.6% 11.1% (Baht Billion) 12.6% 12.0% 11.0% 8.8% 9.4% 10.0% 9.0% 7.0% 75.1 70.6 8.6% 65.0 63.2 7.1% 57.2 5.3% 53.7 5.7% 47.2 47.0 43.6 42.6 39.7 39.0 37.3 30.1 27.3 25.5 BAY Consol BAY Consol BAY Consol BAY Consol 2
Slide 25: Profit before Provision and Tax and Net Income
Profit before Provision and Tax and Net Income Consolidated (Baht Billion) Profit before Net Income Provision and Tax 7.21 Normalized for CDO MTM 6.35 +186% YoY 3.03 +44% QoQ 2.00 1.03 3.91 3.74 3.94 3.30 +61% 2.61 1.31 -7.83 -8.96 2Q/07 1Q/08 2Q/08 1H/07 1H/08 2Q/07 1Q/08 2Q/08 1H/07 1H/08 • Operat
Slide 26: Key Performance & 2008 Targets
Key Performance & 2008 Targets 2008 Consolidated 2007 1Q/08 2Q/08 1H/08 Targets -17.3 bn +87.7 bn +8.0 bn +95.7 bn +124 bn Loan Growth (Good Bank) (-4.4% ) (+23.1% ) (+1.7% ) (+25.2% ) (+32.4% ) 70.6 bn 71.0 bn 65.0 bn 65.0 bn Bad Bank (NPL) 58 bn +7.4 bn +0.4 bn -6.0 bn -5.6 bn -9.9 bn +88.1 bn +2.
Slide 27: Outlook for 2H/08
Outlook for 2H/08 Investor Relations Department 27 27
Slide 28: Thailand Economic Outlook
Thailand Economic Outlook Key forecasts and assumptions Situation & Outlook % change 2006 2007 2008 • Business and consumer confidence stays below Actual Forecast normal due mainly to political factor and high inflation. GDP 5.1 4.8 5.7 (H1) 4.5-5.2 • Domestic demand remains sluggish on weaker confi
Slide 29: Investor Relations Department contact
Investor Relations Department. Telephone : (662) 296 2977 Fax : (662) 683 1341. E-mail : irgroup@krungsri.com Investor Relations Department 29 29
Slide 30: Appendix
Appendix Investor Relations Department 30 30
Slide 31: Background: Bank of Ayudhya PCL (BAY)
Background : Bank of Ayudhya PCL (BAY) } Celebrating 63rd anniversary in April 2008 } Providing a full banking services with a service-led strategy - Corporate - SME - Consumer - Treasury and Investment } Leveraging strong branding & distribution network } Started up a credit card JV with GE in 2001
Slide 32: Business Profile: Franchise – Market Share in Key Areas
Business Profile: Franchise – Market Share in Key Areas As of June 2008 Baht Billion CONSOLIDATED F/S Ranking Assets % Deposits % Loans % L/D% Assets Deposits Loans BBL 1,639 19.8% 1,279 21.2% 1,173 19.6% 1 1 1 91.7% KTB 1,310 15.8% 1,043 17.3% 1,035 17.3% 2 2 2 99.2% SCB 1,206 14.6% 874 14.5% 882 1
Slide 33: BAY Group Offers a Full Range of Financial Services
BAY Group Offers a Full Range of Financial Services Group Companies BAY’s Shareholding As of Jun 08 Credit Card Krungsriayudhya Card Co., Ltd 49.9 % Non-life Insurance The Ayudhya Insurance Plc. 10.9% Life Insurance Ayudhya Allianz C.P. Life Plc. 8.5% Fund Management Ayudhya Fund Management Co., Ltd
Slide 34: GE Partnership and Business Objectives
GE Partnership and Business Objectives Goals in 2010 ROE : 20% Retail loan portion of 50% Organic + Inorganic Growth Governance & Compliance Profitability 2007 Strengthening the Foundation Completed Built strong capital base and strengthened human capital Strengthened retail banking technology p
Slide 35: GECAL Acquisition Completed in February 2008
GECAL Acquisition Completed in February 2008 GECAL acquisition made BAY a market leader of auto HP Yield & NIM 12.1% GE 10.7% 11.8% 7.4% 6.5% 6.9% 33% 100% 100% 5.9% 5.7% 4.4% Price = 16.2 bn BAY GECAL TSS 3.0% 3.2% 3.2% 100% acquisition Assets size = 77.8 bn 2005 2006 2007 Loan port = 77.6 bn Auto
Slide 36: Advantage from GECAL's Leading Position
Advantage from GECAL’s Leading Position Used Car and Refinancing Motorcycle Market Share Market Share GECAL TK Others 6% 5% HW 20% 4% TNB AIG GECAL 3% 6% 27% GL 2% TISCO Aeon 6% 2% NBank Other Dealers KK 22% 78% 13% SCBL 11% Note: As of 2007, Source: GECAL estimate GECAL is #1 in the Auto HP market
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