Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — Q2 2023 Earnings Presentation
34 slides from Tmbthanachart Bank Public's earnings presentation, July 2023
Slide 1: Investor Presentation 2Q23 Financial Performance
Investor Presentation 2Q23 Financial Performance
Slide 2: 1H23 Executive summary
1H23 Executive summary Overall, 1H23 performance progressed according to plan. Net profit growth of 34% YoY was a combined result of better topline, effective cost control and controllable asset quality. Key performance highlight are as follows. ❑ Improving core operating performance: Topline contin
Slide 3: Financial highlights – 1H23 results
Financial highlights – 1H23 results FY2022 2023 1H23 Actual Targets Actual Loan growth (YoY) +0.4% Approx. 3% -0.9% YTD In line with Deposit growth (YoY) +4.5% -0.3% YTD loan growth INCOME Net Interest Margin 2.95% 3.0% - 3.1% 3.13% Low single Non-NII growth - +2.9% digit growth EFFICIENCY C/I Ratio
Slide 4: Performance 2Q23
Performance 2Q23 Asset Quality Strategy Update 2Q23 4
Slide 5: Pursuing recycling liquidity strategy to better risk-adjusted return loans
Pursuing recycling liquidity strategy to better risk-adjusted return loans Total Loan +0.4% QoQ Others 1,376 bn 1,358 bn 1,364 bn -0.9% YTD Used Car Retail Credit Card 1% 15% 1% 1% Retail Personal Loan 2% 2% 2% 3% 3% 3% Cash Your car (CYC) 16% Retail HP 30% 30% 30% Cash Your Book New Car (CYB) 69% 0
Slide 6: Strong deposit franchise supporting deposit cost management
Strong deposit franchise supporting deposit cost management Total Deposit -0.5% QoQ -0.3% YTD 1,399 bn 1,402 bn 1,395 bn Time deposit 17% 19% 22% Hybrid 43% 40% 38% Saving 34% ~40% 35% ~41% 34% ~40% CASA CASA CASA Current 6% 6% 6% Dec-22 Mar-23 Jun-23 % Retail deposits 72% 71% 71% • The remaining ex
Slide 7: Prudently managing B/S composition to ensure B/S healthiness
Prudently managing B/S composition to ensure B/S healthiness Optimized B/S Structure Investment Portfolio Breakdown TTB’s LCR Asset Liab. & Equity BOT Minimum Requirement LCR Cash & other assets Investment port at 10% 264 bn of total assets FVTPL 1% HtC&S 300 % Loan Deposit 1,364 bn 1,395 bn 200% 19
Slide 8: NIM expansion, driven by higher loan yield and well-managed deposit cost
NIM expansion, driven by higher loan yield and well-managed deposit cost Yield, NIM and Cost of Deposit FIDF fee reduction to 0.23% p.a. (Jan20-Dec22) 5.19% +14 bps QoQ 5.05% +77 bps YoY 4.69% 4.42% 4.46% Loan Yield 3.10% 3.08% 3.18% +10 bps QoQ 2.83% 2.92% +35 bps YoY NIM 1.24% +6 bps QoQ 1.18% 0.8
Slide 9: NII showing expansionary trend, driven by strategic B/S initiatives
NII showing expansionary trend, driven by strategic B/S initiatives Net Interest Income & NIM QoQ Change in Interest Income and Expense . THB million MPC 0.50% 0.50% 0.50% 0.50% 1.00% 1.25% 1.75% 2.00% +10 bps QoQ Timeline +35 bps YoY #1 Aug'22 #3 Nov'22 FIDF+23bps #6 May'23 3.10% 3.08% 3.18% NIM 2.
Slide 10: Non-NII boosted by BA and IB fees. Still challenging for fee recovery.
Non-NII boosted by BA and IB fees. Still challenging for fee recovery. Total Non-NII Breakdown Strategic Non-NII Products THB million Gain from the 86 -10% QoQ AT1 partial buy-back Loan-related 95 151 -4% YoY 89 148 95 LG 136 85 -3% QoQ 5,00 0 404 140 135 -1% YoY TF & FX 400 440 4,50 0 4,014 436 378
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 C/I 45% 45% 46% 43% 44% +5% QoQ Ratio Total 17,840 17,760 +12% YoY 20,000 16,349 16,870 Operating 15,889 12,000 Income 4,014 3,668 +9% QoQ 15,
Slide 12: PPOP growth boosted by core operating performance and cost efficiency
PPOP growth boosted by core operating performance and cost efficiency Pre-Provision Operating Profit (PPOP) THB million 12,000 +4% QoQ 9,636 9,561 9,940 +14% YoY 8,963 10,000 8,752 8,000 6,000 4,000 2,000 0 2Q22 3Q22 4Q22 1Q23 2Q23 • The QoQ and YoY growth of PPOP was driven by better topline from p
Slide 13: Net Profit +33% YoY with core operating improvement and lower provision
With core operating improvement and lower provision underpinning by controllable asset quality, Net Profit +33% YoY ECL & Credit Cost Net Profit Expected credit loss (ECL) (THB million) Net profit to equity holders of the Bank (THB million) 20,000 Annualized credit cost (bps) 250 Annualized ROE 18,0
Slide 14: Sound and strong capital position since merger
Sound and strong capital position since merger Tier I Ratio Capital Adequacy Ratio (CAR) 18.9% 19.9% 19.8% 15.8% 16.1% 14.6% BoT's min. BoT's min. requirement requirement 4Q19 2Q22 2Q23 4Q19 2Q22 2Q23 • Since merger, TTB has a direction to optimize capital usage and enhance shareholders’ return. • W
Slide 15: Asset Quality
Performance 2Q23 Asset Quality Strategy Update 2Q23 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) 4.1% 4.3% >25% increase in LLR LLR 4.0% from pre-Covid 19 Total loans* 3.1% DPD Staging DPD Staging DPD Staging DPD Staging DPD Profile N
Slide 19: Strengthening portfolio quality
Strengthening portfolio quality Loan Classification (%) Stage 3 Ratio (NPL Ratio) Stage 1 Stage2 Stage 3 Pre-Covid-19 14.30% TFRS9 1,6 00,000 1.60 tn 1.53 tn 1.55 tn 1.50 tn 1,4 00,000 1,2 00,000 1,427 bn 1,373 bn 1,387 bn 1,347 bn 1,0 00,000 89.0% Stage 1 89.8% Stage 1 89.8% Stage 1 89.8% Stage 1 8
Slide 20: Strengthening reserve for future uncertainties
Strengthening reserve for future uncertainties Distribution of Risk Provision 144% 138% 140% 132% 133% 135% 129% LLR Ratio (%) 124% 125% 121% 56.6 57.4 58.7 58.6 53.8 54.4 53.9 54.5 55.5 55.0 12.5 13.3 13.2 13.2 Stage 1 10.1 12.6 12.4 12.4 12.6 12.8 Allowance for ECL Stage 2 (THB billion) 21.9 21.0
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 8,213 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
Slide 22: Strategy Update 2Q23
Performance 2Q23 Asset Quality Strategy Update 2Q23 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 2Q23) • Balance sheet optimization strategy achieved and continue as Balance sheet synergies shown in dec
Slide 25: Momentum on cross-selling of CYC, CYH, Personal Loan and credit card
I Momentum on cross-selling of CYC, CYH, Personal Loan and credit card CYC new booking (THB) CYH new booking (THB) Personal Loan booking (THB) Credit card issuing (cards) +66% +64% +29% +26% 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 1H23 ▪ Potential to cross-sell CYC to ~900k ▪ Potentia
Slide 26: Positive momentum in adoption and utilization of new ttb Touch
II Positive momentum in adoption and utilization of new ttb Touch 4.3 4.5 2.8 +65% Number of new ttb Touch user (mn users) 2Q22 1Q23 2Q23 2.6 3.0 1.4 +120% Avg daily log in (mn) 2Q22 4Q22 1Q23 178 189 146 Number of financial 1Q22 Touch +39% old version transactions on digital (mn) (137mn) 2Q22 1Q23
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 0.8mn (+30
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) 36 % amount via Touch 24 +61% 23 42% 41% 42% 61 2Q22 1Q23 2Q23 2Q2
Slide 29: ttb's digital and ecosystem play pipeline
II III ttb’s digital and ecosystem play pipeline July 2022 2023 Q1 Q2 Q3 Q4 New ttb Touch Release 2 Release 3-4 29
Slide 30: My Car: growing car owner ecosystem engagement
III My Car: growing car owner ecosystem engagement Auto insurance CYC drop lead Car tax renewal My Car: over 520k cars onboarded. With addition of add-your-own Lunched in April 2023 Launched in June 2023 900K users (+224% growth from 2Q22). insurance and automatic display >2.5x higher conversion of
Slide 31: Roddonjai: Open new world of used cars
III Roddonjai: Open new world of used cars SOFT LAUNCHED MAR 2023 Traction as of June 2023 >1,000 dealers onboarded >10,000 cars inventory >1,700 cars sold >1,200 cars financed 31
Slide 32: My Tax: One-stop tax management assistance
III My Tax: One-stop tax management assistance SOFT LAUNCHED APR 2023 Linkages to in-app purchase Tax planning dashboard Tax simulation tool journey for tax deductible 32
Slide 33: ttb Touch: One-stop security checkup for customers
II ttb Touch: One-stop security checkup for customers Security Hub with Security Level Status Account Setting Card Management Set Daily Limit 33
Slide 34: 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 — Q2 2023 Earnings Presentation on 6ix