Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — 9M21 Earnings Presentation
28 slides from Tmbthanachart Bank Public's earnings presentation, Oct 21, 2021
Slide 1: Investor Presentation 3Q21/9M21 Financial Performance
Investor Presentation 3Q21/9M21 Financial Performance Analyst Meeting October 21st, 2021
Slide 2: Executive summary
Executive summary Focusing on funding optimization and cost discipline against revenue pressure. Asset quality in line with target. ▪ Business environment remained challenging throughout 3Q21. Our direction was therefore unchanged from 1H21. ▪ The overall 9M21 can be highlighted as follows. ➢ Focuse
Slide 3: Relief Program Update, 3Q21/9M21 Performance & Asset Quality, Post-EBT update
Relief Program Update 3Q21/9M21 Performance & Asset Quality Post-EBT update 3
Slide 4: Loans under debt relief program remained under control
Loans under debt relief program remained under control Loans under Relief Program to Total Loans • In 3Q21, loans under debt relief program represented approximately 12% of total THB billion loan portfolio, slightly lower from 14% in 2Q21 and 40% during a full lockdown in Jun-20. 1,382 1,359 1,359 •
Slide 5: Debt relief profile by customer segments and key products
Debt relief profile by customer segments and key products Commercial Loans Non-Debt Relief Loans under Relief Program • As of Sep-21, 9% of commercial loans remained in debt (Included Debt Relief Exit) relief program, lower QoQ due to customers’ exits from THB billion both corporate and small SME se
Slide 6: Principle-based relief schemes and deterioration of asset quality captured by the ECL model
Principle-based relief schemes and deterioration of asset quality captured by the ECL model Guiding Principle of Post Relief Risk Schemes • The Bank has provided relief measures to affected customers, ranging from scheme 1-7 (SC1-SC7), based on customer’s debt service ability Repayment Schedule Mini
Slide 7: Covid-19 readiness: Call center and non-voice capacity expansion to support incoming relief requests
Covid-19 readiness: Call center and non-voice capacity expansion to support incoming relief requests Incoming requests from impacted customers ~14k call in Sep after partially ease ~80k call a month ~300k call a month during business lockdown, reaching almost during peak period peak period and dropp
Slide 8: Relief Program Update, 3Q21/9M21 Performance & Asset Quality, Post-EBT update
Relief Program Update 3Q21/9M21 Performance & Asset Quality Post-EBT update 8
Slide 9: Summary of 9M21 operating performance
Summary of 9M21 operating performance 2021 Targets Actual 9M21 Loan ≤Flat -2.4% YTD • Under weaker-than-expected economic recovery throughout 9M21, loan growth has been more Growth selective than the original plan. We have continued de-risking weak loans to mitigate downside risks and improve portfo
Slide 10: Maintaining quality loan growth strategy amid prolonged Covid-19
Maintaining quality loan growth strategy amid prolonged Covid-19 Total Loan Flat QoQ Others 1,393 bn 1,359 bn 1,359 bn -2.4% YTD Retail Credit Card 1% 2% 1% 2% 1% Retail Personal Loan 2% 2% 2% 2% Used Car Retail HP 17% 29% 30% 29% New Car 69% CYC 14% Retail Mortgage 22% 22% 22% CYB 0.1% Small Enterp
Slide 11: Deposit strategy and structure improving cost of deposit
Deposit strategy and structure improving cost of deposit Total Deposit Flat QoQ 1,373 bn 1,324 bn 1,325 bn -3.5% YTD TD+NCD 14% 11% 10% Hybrid 51% 53% 49% Saving 29% ~35% 29% ~36% 34% ~41% CASA CASA CASA Current 6% 7% 7% Dec-20 Jun-21 Sep-21 % Retail deposits 76% 75% 73% • Deposit was flat QoQ and -
Slide 12: Optimizing balance sheet with healthy liquidity position
Optimizing balance sheet with healthy liquidity position Continue Optimized B/S through Liquid Asset Management Retail Deposit is a Major Source of Funds THB billion Net Liquid Asset LDR LDR+Borrowing % of Total Funding Jun-21 Sep-21 103% 103% 100.0% 101% 100% 64% 63% 400 95.0% 97% 97% 95% 95% 90.0%
Slide 13: Consistent improvement in cost of deposit with a strong liquidity position
Consistent improvement in cost of deposit with a strong liquidity position Strong Liquidity Position 1,443 1,398 1,404 1,406 1,393 1,384 1,359 1,359 Loans -2.4% YTD 1,392 1,398 1.51% 1,382 1,373 1,380 Deposit -3.5% YTD 1,363 1,325 1,324 1.29% 1.16% 0.96% 0.84% 0.80% 0.76% 0.76% Cost of Deposit ~210
Slide 14: Stabilized NIM from ability to manage deposit cost despite declining asset yields
Stabilized NIM from ability to manage deposit cost despite declining in asset yields Cost of Deposit Loan Yield Net Interest Margin (NIM) Loan yield (excluded PPA impact) NIM (excluded PPA impact) 5.11% 6.00% 4.86% 4.64% 4.64% 5.20% 4.58% 3.06% 3.04% 3.07% 3.06% 2.94% 3.10% 1.80% 5.50% 4.20% 4.0% -3
Slide 15: Well-managed funding cost lower pressure on NII
Well-managed funding cost lower pressure on NII Net Interest Income THB million 45,000 -5.1% YoY 40,000 40,286 38,231 35,000 -1.6% QoQ 30,000 25,000 -4.9% YoY 20,000 15,000 13,227 12,782 12,577 10,000 5,000 0 3Q20 2Q21 3Q21 9M20 9M21 • Apart from B/S quality, TTB has also emphasized on P&L quality u
Slide 16: Retail fee income improving despite intensified Covid-19 outbreak
Despite intensified Covid-19 outbreak and the lockdown measure in many areas, retail fee income improving Total Non-Interest Income (Non-NII) Breakdown Strategic Non-NII Products THB billion Bancassurance fee THB million 1,514 1,388 1,224 1,238 3,686 3,850 1,083 12,0 00 10,689 10,175 -5% YoY Mutual
Slide 17: With cost discipline, cost synergy realization going better than original plan
With cost discipline, cost synergy realization going better than original plan Total Operating Income Total Operating Expense THB million THB million NII 55,000 50,975 50,000 Non-NII 48,406 -5% YoY 10,689 -4% YoY 45,000 Total Operating Income 10,175 23,536 40,000 -5% YoY 25,000 22,597 35,000 20,000
Slide 18: C/I ratio in line with target, with long-term aspiration to achieve low-40s
C/I ratio in line with target, with long-term aspiration to achieve low-40s Cost-to-Income Ratio C/I ratio (excluded PPA impact) 60% 45% 45% 45% 45% 45% 49% 55% 44% Flat QoQ 39% 50% 46% 46% 46% 46% Flat34% YoY 46% and YoY 45% 29% 40% 24% 35% 19% 14% 30% 9% 25% 4% 20% -1% 3Q20 2Q21 3Q21 9M20 9M21 • W
Slide 19: Pre-provision profit reflecting our prudent business direction
Pre-provision profit reflecting our prudent business direction Pre-Provision Operating Profit (PPOP) THB million 27,462 30,000 25,839 -6% YoY 25,000 20,000 15,000 -1% QoQ -4% YoY 10,000 8,809 8,502 8,438 5,000 0 3Q20 2Q21 3Q21 9M20 9M21 • As a result of our prudent business direction during fragile
Slide 20: Prudent risk management and prudent level of allowances set aside
Prudent risk management and prudent level of allowances set aside ECL & Credit Cost Net Profit Expected credit loss (ECL) (THB million) Annualized credit cost (bps) 238 -14% YoY 30,000 245 8,877 199 25,000 195 7,675 160 161 161 160 161 20,000 16,595 16,497 -1% YoY 145 15,000 95 -7% QoQ 8,237 +1% QoQ
Slide 21: Coverage by stage
Coverage by stage Distribution of Risk Provision *Remark LLR Ratio (%) 132% 131% 124% 125% 140% 130% 114% 121% 120% 110% 100% 90% 80% 70% 60% 50% 51.97 53.80 54.42 53.92 48.37 Allowance for ECL 44.37 10.12 11.13 12.59 12.45 Stage 1 (THB billion) 9.85 11.31 Stage 2 21.92 21.00 21.71 21.62 17.14 19.63
Slide 22: Accrued interest reflecting conservative approach
Accrued interest reflecting conservative approach Accrued interest 1st phase of debt relief 3rd phase of debt relief (Full lockdown) (partial lockdown) 9,209 7,522 7,145 7,130 7,232 6,442 7,720 6,440 2,759 5,143 6,444 6,497 6,793 Accrued Int. Stage 1 & 2 Accrued Int. Stage 3 2,036 1,300 1,489 1,082
Slide 23: Prudent actions to strengthen portfolio quality
Prudent actions to strengthen portfolio quality Loan Classification (%) NPL Ratio/ Stage 3 Stage 1 Stage2 Stage 3 Pre-Covid-19 19 TFRS9 14.3% 1.60 tn 1.50 tn 1.49 tn 1,427 bn 1,346 bn 1,328 bn 89.0% Stage 1 89.5% Stage 1 89.1% Stage 1 8.3% Stage 2 7.6% Stage 2 7.9% Stage 2 2.76% Stage 3 2.89% Stage
Slide 24: Reinforce capital position with wider buffer over requirements
Reinforce capital position with wider buffer over requirements Solid Capital with ample buffer over requirement 19.7% +4.1% • We remain strongly capitalized, enabling the Bank to withstand the uncertainty ahead. + 1% 15.6% 14.4% 14.6% • Due to Economic headwind impacted from Covid-19 Tier 2 AT1 pand
Slide 25: Relief Program Update, 3Q21/9M21 Performance & Asset Quality, Post-EBT update
Relief Program Update 3Q21/9M21 Performance & Asset Quality Post-EBT update 25
Slide 26: Our transformative journey towards the recommended bank of choice by our customers
Our transformative journey towards the recommended bank of choice by our customers Covid-19 / debt relief Integration Jul 2021: becoming one Business transformation The recommended legal entity thru EBT 2022-23 bank of choice by our customers ▪ Maximize the potential of the merged bank’s 10mn custom
Slide 27: What's next?
What’s next? 2Q21 3Q21-4Q21 2022 onwards ✓ ✓ • Rebranding launch • Established one brand with philosophy “Make REAL Change” • Launch new digital platform and proposition for retail, Bank’s financial well-being = customer’s financial well-being enabling digital-first operating model • Complete EBT •
Slide 28: 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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