Bangkok Bank Public Company Limited · SET:BBL
Bangkok Bank Public — Bangkok Bank — Q4 2007 Earnings Presentation
48 slides from Bangkok Bank Public's earnings presentation, Mar 27, 2008
Slide 1: Financial Information as of December 2007
Financial Information as of December 2007 This presentation is made by Bangkok Bank and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Bangkok Bank. Although all reasonable effort has been made to ensure the facts stated
Slide 2: Thai economy
Thai economy Economic growth in 2007 was boosted by exports while growth in 2008 is expected to be more broad-based 2008_f 2005 2006 2007_p NESDB/1 BOT/2 BBL/3 GDP growth (%) 4.5 5.1 4.8 4.5-5.5 4.5-6.0 4.5-5.5 Consumption (%) 5.3 3.0 2.7 4.7 4.5-5.5 4.5 • Private (%) 4.5 3.2 1.4 3.8 4.5-5.5 3.5-4.0
Slide 3: Bangkok Bank group
Bangkok Bank group Consists of entities that specialize in specific financial activities; other affiliated companies are in insurance and leasing businesses Bangkok Bank Group Bualuang Securities BBL Asset Mgmt Bangkok Bank Sinsubtawee BBL Cayman 56.34%/1 75%/2 100% 100% Retail brokerage Mutual Fund
Slide 4: Customer-centric organization
Customer-centric organization Our focus on customer relationships is the key to our approach Business Units 84% 16% Domestic Banking Investment Banking International Banking 11% Special Asset Management 73% Corporate Commercial Business Consumer Banking Banking Banking Banking (large corporates) (me
Slide 5: 2007 Financial highlights
2007 Financial highlights Overall results for 2007 showed improvement in key areas Loan growth of 8.0%, compared to the GDP growth of 4-5% Gross loan now exceeding Baht 1 trillion NPL declined by Baht 7.5 billion or 8.4%, while the system/1 NPL increased by 3.6% Profit growth of 13.3% Stable net int
Slide 6: Impact of credit market volatility
Impact of credit market volatility Well-positioned and minimal impact Liquidity Highly liquid balance sheet Funding primarily from core customer deposits Credit exposure No direct exposure to US sub-prime credit markets, no conduits Total CDO exposure of USD 50 million (Baht 1.7 billion) whi
Slide 7: Return on equity
Return on equity Adjusted for tax, ROE improved by 2.0% to 12.7% YEAR QUARTER % % 20 20 15 15 12.7 12.2 10.3 10.0 10 10 5 5 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2001 2002 2003 2004 2005 2006 2007 ROE ROE adj with 30% tax 7 Note: If excluding TAMC charge of Baht 2,761 mn and adj with 30% tax, ROE
Slide 8: Return on asset
Return on asset Adjusted ROA also increased due to the strong earnings % YEAR % QUARTER 2.0 2.0 1.5 1.5 1.29 1.25 1.08 1.04 1.0 1.0 0.5 0.5 0.0 0.0 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2001 2002 2003 2004 2005 2006 2007 ROA ROA adj with 30% tax 8 Note: If excluding TAMC charge of Baht 2,761 mn an
Slide 9: Increasing net profit
Increasing net profit Net profit increased from 2006 by 13.3% to Baht 19.1 billion YEAR QUARTER Baht Bn Baht Bn 9.9 40 10 0.3 9.4 8.8 8.8 8.7 33.6 0.5 8.2 31.7 2.6 8 1.2 7.4 30 2.4 2.8 4.9 9.1 7.0 2.2 26.8 5.9 2.2 1.9 1.2 6.0 TAMC 2.8 1.4 6 21.8 4.3 0.5 1.2 9.9 5.3 1.3 1.3 20 1.4 4.2 1.2 1.4 16.1 4
Slide 10: Net interest income
Steady NIM NIM for the quarter was 3.18% and for the year was 3.15% YEAR QUARTER Baht Bn % Baht Bn % 70 3.5 20 4.0 3.14% 3.15% 18 3.5 60 3.0 2.87% 3.18%* 15 3.13%* 3.0 50 2.33% 46.8 2.5 44.4 13 11.9 12.1 2.5 1.94% 40 1.85% 2.0 1.91% NIM NIM 10 2.0 NII NII 1.77% Net interest income 30 1.5 8 1.5 20 1.
Slide 11: Improving core non-interest income
Improving core non-interest income In 2007, fee and service income was 23% of total income while gain on exchange was 6% Baht Bn YEAR Baht Bn QUARTER 25 23.9 8 2.2 22.0 7.1 20.8 0.6 1.6 6.5 20 18.5 3.4 0.6 5.9 0.4 5.8 Others 17.9 6 5.6 5.5 1.5 4.0 0.5 5.3 1.9 0.6 5.5 1.8 3.6 0.6 5.1 1.7 0.4 15.0 0.5
Slide 12: Diversified fee income
Diversified fee income Total fee income for 2007 was Baht 15,628 mn Other Fees Aval, Guarantee 14% 9% Cheque Related Credit Card 3% 22% Investment Banking 8% Fund Transfers, Electronic Banking Collections 16% 28% For 2007 12 12
Slide 13: Manageable non-interest expenses
Manageable non-interest expenses Non-interest expenses declined by 4.3% in 2007 YEAR QUARTER Baht Bn Baht Bn 40 12.5 36.7 35.1 33.9 6.0 10.5 31.1 5.4 6.0 10.0 1.1 9.6 30 29.3 28.8 2.8 8.9 8.9 Others 6.2 8.7 8.6 26.3 4.7 8.3 1.6 8.2 24.2 7.0 5.7 4.5 4.5 2.8 1.4 1.3 TAMC* 1.7 1.4 5.2 4.5 3.8 7.5 1.8 1
Slide 14: Improving cost ratios
Improving cost ratios Cost-to-income ratio was 51.1%, while cost to total assets declined to 2.3% Baht Bn % % OPERATING EXPENSES COST RATIOS 50 150 4.0 3.5 125 40 36.7 35.1 3.0 4.5 Cost to total assets 100 4.7 31.1 30.1 30.5 2.5 2.8 Cost to income ratio 30 TAMC 28.8 Cost to asset ratio 27.1 2.3 25.3
Slide 15: Widening income spread
Widening income spread Income spread increased from 31.7 bn in 2006 to 33.5 bn in 2007 YEAR QUARTER Baht Bn Baht Bn 80 Operating income 20 Operating income 68.6 17.0 60 .3 % 11 15 6% = 9. = GR GR CA CA Operating expenses Operating expenses 40 35.1 10 9.6 36.2 9.1 5.5 24.2 = 6.4% CAGR 5% 20 R = 8. 5
Slide 16: Moderate loan growth
Moderate loan growth Growth in loan portfolio reflected good export performance of the country and strong regional growth Baht Bn % 1,200 20 9.9% 8.0% 1,100 5.1% 10 2.2% 2.2% YTD 2.3% 0 Loan growth* 1,000 Total loans -2.2% -10 -12.1% 900 -20 800 -30 Loans 700 -40 600 -50 2001 2002 2003 2004 2005 200
Slide 17: Improving asset quality
Improving asset quality NPL ratios declined from 9.2% in 2006 to 7.9% Baht Bn % 49.0% 600 50 40 500 461.4 439.9 30 393.0 400 20 9.2% 16.8% 322.7 7.9% 10 300 NPL/Loan 251.2 0 216.0 210.9 200 180.6 -10 158.7 -20 100.6 89.1 100 81.7 NPL -30 0 -40 1997 1998 06/99 1999 2000 2001 2002 2003 2004 2005 2006
Slide 18: Movement on restructured loans
Movement on restructured loans Restructured loans to total loans continued to decline Baht Bn % 500 35 31.5% 27.6% 30 400 Restructured loans 25 20.8% / Total loans 300 261.9 20 234.1 16.5% 193.8 12.8% 15 200 11.9% TDR 150.3 123.5 123.3 10 100 5 0 0 2002 2003 2004 2005 2006 2007 Restructured Loans %
Slide 19: Foreclosed properties
Foreclosed properties Stock of foreclosed properties declined with improved sales and lower volume of new foreclosures Baht Bn Baht Bn Baht Mn 1,532 50 12 1,600 45.4 43.6 5.8 41.4 40 7.3 36.9 7.6 1,200 33.7 1,220 4.9 2.1 29.9 8 927 30 3.9 800 20 39.6 36.3 31.6 32.1 33.8 4 26.0 355 39.6 36.3 476 400
Slide 20: Consistent provisioning policy
Consistent provisioning policy After the one-time adjustment in 2006, provisions in 2007 has reverted to the level of 40-50 bps of loans Baht Bn YTD bps 10 125 103.23 100 67.2 Avg. per year 8 75 50.9 55.8 51.6 44.7 47.2 52 bps/2 50 25 Avg. per year 6 0 4.7 Bn/2 -25 4 -50 -75 Avg. per quarter 2 -100
Slide 21: Conservative loan loss reserve
Conservative loan loss reserve Strong coverage ratio at 82.0 percent of NPL versus revised minimum provision by BOT of 63.4 percent Baht Bn % 500 100 82.0% 80.2% LLR/NPL 400 80 63.6%* 63.4% BOT min/NPL 300 60 197.0 47.8% 200 35.1% 40 166.8 162.6 150.8 23.2% 135.4 102.1 109.4 100 79.6 71.5 20 67.0 15
Slide 22: Deposit: quarter-end detail
Deposit: quarter-end detail Deposit as at Feb 08 was Baht 1,288 Bn with 1.6% growth YTD Baht Bn % 1,500 85.0% 82.3% 80.0 1,400 1,288 75.0 1,300 1,267 1,222 70.0 1,200 1,186 1,157 65.0 1,115 1,100 1,072 1,063 60.0 1,000 55.0 900 50.0 2001 2002 2003 2004 2005 2006 2007 02/08 Deposit (L) LDR (R) 22 22
Slide 23: Stable deposit composition
Stable deposit composition Composition of deposit base has remained stable with time deposits at about 55% and low-cost deposit base at about 45% 3.0 2.0 2.0 3.0 3.0 3.0 101.0 100.0 100.0 101.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100% 4.0 5.0 5.0 4.2 4.2 21.0 20.0 24.0 29.0 31.0 80 36.0 42.0 3
Slide 24: Investment portfolio
Investment portfolio Investments are primarily in government and state enterprise bonds Baht Bn % 600 Yield on investment 5 4.5% 4.1% 4.1% 4 3.6% 3.3% 400 Corporate 355.8 3.0% 3 318.2 305.8 310.1 316.3 Equity 296.4 Foreign 2 200 Gov&State-ent 1 0 0 2002 2003 2004 2005 2006 2007 24 24
Slide 25: Regulatory capital position
Regulatory capital position Capital continued to strengthen from net profit % 20 15.9 15 14.5 14.6 14.0 13.4 3.9 13.5 2.8 2.6 11.7 11.6 11.3 11.5 3.3 3.5 3.7 10 3.0 4.0 3.9 8.7 4.3 1.4 4.8 3.5 4.1 11.7 12.0 5 9.7 4.3 10.6 8.7 4.4 8.8 8.0 4.1 Tier 2 3.6 2.9 CAPS 2.1 Tier 1 1.1 0 1997 1998 1999 2000 2
Slide 26: Solid shareholders' equity
Solid shareholders’ equity Equity to total assets remained strong at about 10% with growth from core equity Baht Bn % 300 12 10.5% Equity/Total assets 250 10 8.1% 8 200 164.4 6 148.3 Non-core 150 139.2 equity 154.1 115.0 142.1 4 106.5 101.1 102.2 128.6 100 106.8 2.7% 2 142.1 Core 90.6 equity 55.5 50
Slide 27: Network expansion and personnel productivity
Network expansion and personnel productivity Continuous investment in branch network and technology infrastructure Number of branches and employees Number of ATM and CDM machines 1,000 2008 YTD 39,000 5,000 2008 YTD 800 Branch +17 ATM +317 4,707 736 Employee -45 CDM +34 840 35,000 800 4,000 600 31,0
Slide 28: Improving dividend payment
Improving dividend payment Dividend paid shows increasing trend despite higher income tax expenses 3.00 2.75 2.00 2.00 1.75 1.75 1.25 1.00 1.00 1.00 0.75 0.75 0.00 0.00 2003* 2004* 2005 2006 2007 Interim Annual 2004 2005 2006 2007 Div/NP - 19.0% 18.8% 29.4% 30.0% Div/PBT - 19.0% 17.0% 23.1% 20.3% Di
Slide 29: Looking forward
Looking forward In response to new opportunities and growing competition, Bangkok Bank will continue to Capitalize on Enhance • Superior franchise • Customer relationships • Extensive network • Product development • Stable deposit base • Operations management To maximize revenue generation 29 29
Slide 30: Appendix
Appendix
Slide 31: Thai banking sector
Thai banking sector Highly concentrated with top 4 banks capturing over 62% market share 18 commercial banks incorporated in Thailand Financial institutions in Thailand/1 • 12 Private banks 100% 2.6 2.7tn 10.4 10.2tn 7.87.5tn – 6 majority Thai-owned Thai-managed 90 Others Others banks/1 80 70 – 3 ba
Slide 32: Comparative position
Comparative position Strong position as the largest bank in Thailand Second THB Bn System largest bank Assets 7,817 1,573 1,211 Loans 5,571 1,035 958 Deposits 5,965 1,267 1,002 Shareholders’ equity 742 164 109 Total assets Loans Deposits Shareholders’ equity 20% 19% 21% 22% As at December 2007 Sourc
Slide 33: Bangkok Bank's ranking in Southeast Asia
Bangkok Bank’s ranking in Southeast Asia We continue to be one of the leading banks in the region, and the largest bank in Thailand Asian Banker AB300 Rank* 2007 2006 Assets : USD Mn DBS Group Holdings DBS Group (Singapore) 22 22 (Singapore) 128,715 29 UOB (Singapore) 29 105,199 UOB (Singapore) OCBC
Slide 34: Bangkok Bank profile
Bangkok Bank profile • Established in 1944 • Thailand’s largest bank with more than 15.5 million deposit accounts, the largest deposit base of any bank in Thailand • No single shareholding of over 5%, with foreign shareholding of about 46.4% • 5th largest company/1 on Stock Exchange of Thailand with
Slide 35: Bangkok Bank listing details
Bangkok Bank listing details Symbol BBL, BBL-F Industry/Sector Financials/Banking Listed date 25/04/1975 Paid-up capital common: 19,088 mn baht preferred: - mn baht No. of listed shares 1,908.8 shares Par 10.00 baht Fiscal year end 31/12 % Free float 95.34% Book value per share 85.1 baht (December 2
Slide 36: Recent awards
Recent awards Best Bank in Thailand 2007 by Euromoney magazine “The award was in recognition of the bank’s overall performance, including business volumes, innovative technologies, Bangkok Bank’s leading position in Thailand, credit rating and the quality of its assets and revenue” Best of the Year
Slide 37: Organization Chart
Organization Chart Boardof Board ofDirectors Directors Nominationand andRemuneration RemunerationCommittee Committee Nomination AuditCommittee Committee Audit Risk Management Committee Risk Management Committee Boardof ofExecutive ExecutiveDirectors Directors Board TopManagement Management Auditand
Slide 38: Board of Directors
Board of Directors Board of Directors Committee Executive Non Independent Board Audit Nomination Risk Mgmt Executive Directors and Directors of Remuneration Directors Executive Directors 7 5 7 10 4 3 4 1 Mr. Chatri Sophonpanich C 2 Mr. Staporn Kavitanon VC X 3 Mr. Kosit Panpiemras X C 4 Mr. Piti Sit
Slide 39: Customer-focused operating platform
Customer-focused operating platform Core Business Corporate Commercial Business Consumer Units Head Office Business Centers Branches Delivery Express Banking i.e. ATM, CDM Channels Electronic Banking i.e. iBanking, BIZ iBanking, Bualuang Phone, i-Trade Relationship Sales/ Management/ Relationship Of
Slide 40: Delivery channels
Delivery channels Head Office Business Centers Branches Corporate Commercial Business Consumer iCash, iTrade BIZ iBanking, iTrade, iBanking, Express Banking Express Banking, Phone Banking All use branch for transactions 40 40
Slide 41: Product offerings
Product offerings Comprehensive and segment tailored Personal Business Business Corporate SMEs Transaction a/c Payment services Fund transfer Trade services Treasury services Cash management iBanking Fund transfer Fund management ATM card Bancassurance Mutual fund Fund management Corporate Lending L
Slide 42: Extensive distribution network
Extensive distribution network • Over 800 branches in Thailand • 19 international branches in 12 countries • 86 Business Centers and 142 Business Desks Domestic branches Business Centers International branches Metro Metro 19 branches in the UK, USA and 258 branches 34 Business Centers (BC) Asia 181
Slide 43: Bangkok Bank interest rates vs benchmark rate
Bangkok Bank interest rates vs benchmark rate /1 /2 % 8.0 MLR=6.875% 6.0 RP14D 4.0 RP1D=3.25% F12M=2.375% 2.0 F3M=2.25% Savings=0.75% 0.0 01/01 01/02 01/03 01/04 01/05 01/06 01/07 01/08 Savings Fixed 3 months (Low) Minimum Lending Rate Repurchase Rate 14 days Repurchase Rate 1 day Fixed 12 months (H
Slide 44: Benchmark rates
/1 Benchmark rates % 7 .0 6 .0 BOE=5.25% 5 .0 ECB=5.00% 4 .0 RP1D=3.25% 3 .0 FED=2.25% 2 .0 RP14D 1 .0 BOJ=0.5% 0 .0 01/01 05/01 09/01 01/02 05/02 09/02 01/03 05/03 09/03 01/04 05/04 09/04 01/05 05/05 09/05 01/06 05/06 09/06 01/07 05/07 09/07 01/08 F e de ra l F unds R a te B O J inte re s t ra te E
Slide 45: Bangkok Bank interest rates
Bangkok Bank interest rates 2006 2007 2008 Dec-31 Jan-10 Jan-17 Feb-14 Feb-28 Mar-06 Apr-02 Apr-11 Apr-20 May-23 May-28 Jul-18 Jul-19 Feb-4 Mar-25 Savings 0.75 => => => => => => => => => => => => 0.75 0.75 14D 3.75-4.00 3.50-3.75 => => 3.00-3.50 3.00-3.25 2.75-3.00 => 2.50 => 2.00 => 1.50 1.50 1.50
Slide 46: Government bond yield curve
Government bond yield curve 2007 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Y Jan-03 4.92 5.01 5.03 5.07 5.10 5.13 5.20 5.28 5.35 5.45 5.56 5.63 5.69 5.74 5.81 5.86 5.91 5.96 6.01 May-18 3.13 3.11 3.18 3.24 3.30 3.35 3.39 3.45 3.49 3.54 3.62 3.75 3.85 3.96 3.99 4.03 4.10 4.15 4.20 2008 1 2 3
Slide 47: Foreign exchange rate
Foreign exchange rate THB/USD 60 Jan ‘98 55 Dec 2006, BOT 50 imposed the new capital control policy 45 40 35 July 1997, Thailand Feb ‘08 changed the currency 32.74 30 system from “basket” to “managed float” 25 20 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note Source : Bank of
Slide 48: 2007 Foreign exchange rate
2007 Foreign exchange rate THB/USD 36.5 36.23 36.0 35.5 35.0 29/02/2008 Bank of Thailand announced the 34.5 lifting of the 30% capital reserve requirement 34.0 12/07/2007 The baht strengthened to a high in 10 years at 33.39 THB/USD due to capital inflow 33.5 33.39 33.0 31.49 (24/03/2008) 32.5 01/07