Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — Q1 2023 Earnings Presentation
33 slides from Tmbthanachart Bank Public's earnings presentation, 2023
Slide 1: Investor Presentation 1Q23 Financial Performance
Investor Presentation 1Q23 Financial Performance
Slide 2: Performance 1Q23, Asset Quality, Strategy Update 1Q23
Performance 1Q23 Asset Quality Strategy Update 1Q23 2
Slide 3: Executive summary
Executive summary 1Q23 financial performance was relatively in line with target. Net profit growth of +34% YoY was boosted by; ❑ Better topline: Key driver was NII which rose +9% YoY. Positive NII and NIM trend reflected a result of our strategic intention to recycle liquidity and capital to grow ne
Slide 4: Financial highlights – 1Q23 results
Financial highlights – 1Q23 results FY2022 2023 1Q23 Actual Targets Actual Loan growth (YoY) +0.4% Approx. 3% -1.3% YTD In line with Deposit growth (YoY) +4.5% +0.2% YTD loan growth INCOME Net Interest Margin 2.95% 3.0% - 3.1% 3.08% Low single Non-NII growth - +0.1% digit growth EFFICIENCY C/I Ratio
Slide 5: Key focus: recycling liquidity for quality loan growth to enhance loan yield
Key focus: recycling liquidity for quality loan growth to enhance loan yield Total Loan -1.3% YTD Others 1,394 bn 1,376 bn 1,358 bn Retail Credit Card 1% 1% 1% 2% 2% Used Car Retail Personal Loan 2% 2% 3% 3% 15% Retail HP Cash Your car (CYC) 29% 30% 30% New Car 15% 70% Cash Your Book (CYB) 0.1% Reta
Slide 6: Deposit pre-positioning strategy allowing the Bank to optimize deposit mix
Deposit pre-positioning strategy allowing the Bank to optimize deposit mix during rising rate environment Total Deposit +0.2% YTD 1,374 bn 1,399 bn 1,402 bn Time deposit 15% 17% 19% 45% 43% 40% Hybrid Saving 34% ~40% 34% ~40% 35% ~41% CASA CASA CASA Current 6% 6% 6% Sep-22 Dec-22 Mar-23 % Retail dep
Slide 7: Well-managed B/S composition to ensure B/S healthiness
Well-managed B/S composition to ensure B/S healthiness Optimized B/S Structure Investment Portfolio Breakdown TTB’s LCR 000,000 2,000,000 Asset Liab. & Equity 800,000 1,800,000 BoT's Minimum Requirement LCR Cash & other assets Investment port at 600,000 277 mn 1,600,000 10% of total asset 400,000 1,
Slide 8: Improvement in loan yield absorbing the impact from FIDF resumption
Improvement in loan yield absorbing the impact from FIDF resumption Yield, NIM and Cost of Deposit FIDF fee reduction to 0.23% p.a. (Jan20-Dec22) +36 bps QoQ 5.05% +58 bps YoY 4.69% Loan Yield 4.47% 4.42% 4.46% -2 bps QoQ 3.10% 3.08% 2.91% 2.83% 2.92% +17 bps YoY NIM +36 bps QoQ 1.18% 0.78% 0.81% 0.
Slide 9: Interest income from loan showing positive momentum, driven by strategic B/S initiatives
Interest income from loan showing positive momentum, driven by strategic B/S initiatives Change in Interest Income and Expenses Net Interest Income MPC 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 1.25% 1.75% THB million Timeline #1 Aug'22 #3 Nov'22 FIDF+23bps #2 Sep'22 #4 Jan'23 2.91% 2.83% 2.92% 3.10
Slide 10: While other strategic Non-NII showing recovery sign, mutual fund fees still impacted
While other strategic Non-NII showing recovery sign, mutual fund fees still impacted by unfavorable market sentiment Total Non-NII Breakdown Strategic Non-NII Products THB million Gain from AT1 partial buy-back 95 86 +10% QoQ 89 148 151 +45% YoY Loan-related 66 136 95 -7% QoQ 5,00 0 138 440 404 140
Slide 11: Benefiting from cost synergy, especially a reduction in recurring expenses
Benefiting from cost synergy, especially a reduction in recurring expenses Total Operating Income Total Operating Expense & C/I Ratio THB million THB million -5% QoQ, 45% 45% 46% Total +7% YoY C/I 20,000 44% 43% 17,840 20,000 Operating 16,870 Ratio 18,000 Income 15,774 15,889 16,349 16,000 -16% QoQ,
Slide 12: PPOP growth boosted by both better topline and cost efficiency
PPOP growth boosted by both better topline and cost efficiency Pre-Provision Operating Profit (PPOP) THB million 12,000 -1% QoQ 9,636 9,561 +8% YoY 8,963 10,000 8,818 8,752 8,000 6,000 4,000 2,000 0 1Q22 2Q22 3Q22 4Q22 1Q23 • YoY growth of PPOP was driven by better topline from positive trend of NII
Slide 13: Net Profit +34% YoY with lower provision and controllable asset quality
With core operating improvement and lower provision underpinning by controllable asset quality, Net Profit +34% YoY ECL & Credit Cost Net Profit Expected credit loss (ECL) (THB million) Net profit to equity holders of the Bank (THB million) Annualized credit cost (bps) Annualized ROE 15,000 200 6.9%
Slide 14: Sound and strong capital position since merger
Sound and strong capital position since merger Tier I Ratio Capital Adequacy Ratio (CAR) 19.4% 19.9% 18.9% 16.2% 14.6% 15.4% BoT's min. BoT's min. requirement requirement 4Q19 1Q22 1Q23 4Q19 1Q22 1Q23 • Since merger, TTB has a direction to optimize capital usage and enhance shareholders’ return. • W
Slide 15: Asset Quality
Performance 1Q23 Asset Quality Strategy Update 1Q23 15
Slide 16: Limited portion of deep restructuring in our modified portfolio
Limited portion of deep restructuring in our modified portfolio Total modified portfolio (Pre-COVID and during COVID) • Customers’ financial support has been migrated to a comprehensive debt restructuring as the BoT’s debt relief program and Covid-19 measures have THB trillion Blue Orange Non-modifi
Slide 17: Ensuring provision adequacy in response to Covid-19 crisis
Ensuring provision adequacy in response to Covid-19 crisis Guiding Principle of Post Relief Risk Schemes • To have effective management of the portfolio quality, our 7-post relief schemes Repayment Schedule Staging Criteria have been used for both Covid-19 debt reliefs and legacy portfolio – collect
Slide 18: Prudent loan staging with higher LLR buffer
Prudent loan staging with higher LLR buffer DPD Profile VS Loan Staging Internal data for managerial view - Breakdown as % of Loan principals (excluded interbank) >25% increase in LLR 4.1% 4.3% from pre-Covid LLR 4.0% Total loans* 3.1% DPD Staging DPD Staging DPD Staging DPD Staging DPD Profile No D
Slide 19: Strengthening portfolio quality
Strengthening portfolio quality Loan Classification (%) NPL Ratio/ Stage 3 Stage 1 Stage2 Stage 3 Pre-Covid-19 14.30% TFRS9 1.60 tn 1.56 tn 1,6 00,000 1.50 tn 1.53 tn 1,4 00,000 1,427 bn 1,2 00,000 1,373 bn 1,407 bn 1,347 bn 1,0 00,000 89.0% Stage 1 89.8% Stage 1 89.8% Stage 1 90.0% Stage 1 800 ,000
Slide 20: Building up reserve for future uncertainties
Building up reserve for future uncertainties Distribution of Risk Provision 129% 132% 133% 135% 138% 140% LLR Ratio (%) 124% 125% 121% 56.6 57.4 58.7 53.8 54.4 53.9 54.5 55.5 55.0 Allowance for ECL 13.2 Stage 1 10.1 12.6 12.4 12.6 12.8 12.5 13.3 12.4 (THB billion) Stage 2 21.9 25.2 Stage 3 21.0 21.7
Slide 21: Accrued interest reflecting our conservative approach
Accrued interest reflecting our conservative approach Accrued interest 1st phase of debt relief 3rd phase of debt relief Resume loan growth (Full lockdown) (partial lockdown) and M-rate hikes 9,209 8,169 Approx. -11% from peak in 3Q20 7,522 7,499 7,777 7,145 7,130 7,232 7,369 7,148 7,351 6,442 7,720
Slide 22: Strategy Update 1Q23
Performance 1Q23 Asset Quality Strategy Update 1Q23 22
Slide 23: 3Y strategic priorities
3Y strategic priorities Strategic focus: I II III IV V Revenue Digital-first business Efficiency Organizational synergy realization and operating model Ecosystem play improvement transformation Continue to capture the Enhance digital platform to Extend from existing areas Streamline offline/back- Al
Slide 24: Balance sheet and cost synergies already ahead of plan
I Balance sheet and cost synergies already ahead of plan with increasing momentum on revenue synergy 5-year synergy value Progress-to-date (shared to investors on 24 Jan 2020) (accumulated as of 1Q23) • Balance sheet optimization strategy achieved and continue as Balance sheet synergies shown in dec
Slide 25: ttb's direction towards digital-first and digital-only operating model
II ttb’s direction towards digital-first and digital-only operating model Digital Digital Physical First Only Reprioritize in-branch processes to Digital Service1/ Digital Only Products shift away from paper forms to Continue migration of service to digital with 11% Special-rate digital and 65% grow
Slide 26: Positive momentum in adoption and utilization of new ttb Touch
II Positive momentum in adoption and utilization of new ttb Touch 4.0 4.3 3.5 2.8 +53% Number of new ttb Touch user (mn users) 2Q22 3Q22 4Q22 1Q23 2.6 2.9 2.3 1.4 +115% Avg daily log in (mn) 2Q22 3Q22 4Q22 1Q23 154 168 178 146 Number of financial 1Q22 Touch +30% old version transactions on digital (
Slide 27: Ongoing migration of low-value transaction to digital channels
II Ongoing migration of low-value transaction to digital channels for better customer experience while achieving lower cost-to-serve Digital’s share of financial transactions ~85% Cost-to-serve comparison Digital’s share of ~10x non-financial transactions <20% Passbook / fund book request 0.9mn (+37
Slide 28: Strong momentum of digital sales carried to new ttb Touch
II Strong momentum of digital sales carried to new ttb Touch Digital Lending Digital Deposit Digital Investment New credit card and flash card Deposit account opening Mutual fund purchase via Touch bookings (‘000 card) (’000 account) % amount via Touch 28 23 45 34% 50% 41% 18 +27% +55% 29 23 1Q22 4Q
Slide 29: ttb's digital and ecosystem play pipeline
II III ttb’s digital and ecosystem play pipeline April 2022 2023 Q1 Q2 Q3 Q4 New ttb Touch Release 2 29
Slide 30: ttb touch 2nd release key highlights
II III ttb touch 2nd release key highlights Account opening for 3rd Party Smart Kiosk Apply loan with Credit card usage Face Authentication Tax Document existing customers authentication dStatement customization • ttb Touch onboarding • 1st account opening for New-to-bank customer Bank statement req
Slide 31: Continued tractions for car owner engagement in the ecosystem
III Continued tractions for car owner engagement in the ecosystem Increasing adoption of My Car to drive active customers Strengthen customer engagement via # of users onboard to “My Car” Widget (‘000) Soft Launch: data as of April 20th, 2023 (MVP LAUNCHED IN MARCH 2023) >700 +187% 805 dealers onboa
Slide 32: My Tax one-stop tax management assistance
III Driving payroll acquisition and engagement via financial well-being Growing acquisition with enhanced/aggregated benefits Continuing engagement with My Tax (MVP LAUNCH IN APRIL 2023) Payroll company acquisition Welfare loan booking “My Tax” One-stop tax management assistance +27% +16% Pre-fill d
Slide 33: 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
TMBThanachart Bank Public Company — Q1 2023 Earnings Presentation on 6ix