Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — FY2021 Earnings Presentation
48 slides from Tmbthanachart Bank Public's earnings presentation, Jan 21, 2022
Slide 1: Investor Presentation FY2021 Financial Performance
Investor Presentation FY2021 Financial Performance Analyst Meeting Jan 21st, 2022
Slide 2: Executive summary
Executive summary Nearly two years into the pandemic, business environment remained fragile. TTB therefore has maintained conservative direction to preserve financial stability for future growth. Throughout 2021, The Bank’s key focus was on integration mission as well as providing Covid-19 support t
Slide 3: 2021 highlights & relief program update; 4Q21/FY2021 performance; Strategic roadmap; 2022 guidance
2021 highlights & relief program update 4Q21/FY2021 performance Strategic roadmap 2022 guidance 3
Slide 4: 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 ▪I Maximize the potential of the merged bank’s 10mn custo
Slide 5: Recap our journey in 2021
Recap our journey in 2021 D-SIBS • Rebranding of • Successful entire • Following by D-SIBS • IDR upgrade to BBB • 10% shares purchase on TMBThanachart business transfer listing to become • National long-term TNS and TNI to strengthen in May (EBT) in July 6th large Thai bank rating to AA+(tha) group
Slide 6: Loans under debt relief program remained under control
Loans under debt relief program remained under control Loans under Relief Program to Total Loans • As of Dec-2021, loans under debt relief program represented approximately 12% THB billion of total loan portfolio, relatively stable from 12% as of Sep-21 and 40% during a full lockdown in Jun-20. 1,38
Slide 7: 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 (Included Debt Relief Exit) THB billion • As of Dec-21, approx. 10% of commercial loans remained in debt relief program. Corporate Small Enterprise 601 592 595 • To be more prudent,
Slide 8: Ensuring provision adequacy in response to COVID-19 crisis
Ensuring provision adequacy in response to COVID-19 crisis • To address the deteriorating quality of portfolios, the Bank developed 7 post relief Guiding Principle of Post Relief Risk Schemes schemes to track and trace their quality, so that corresponding PDs could be applied and to separate them fr
Slide 9: 2021 highlights & relief program update; 4Q21/FY2021 performance; Strategic roadmap
2021 highlights & relief program update 4Q21/FY2021 performance Strategic roadmap 2022 guidance 9
Slide 10: 2021 financial outcomes: operating performance
2021 financial outcomes 2021 Targets Actual 2021 • Year 2021, EBT mission and merger priorities were executed as planned, resulting in significant recurring cost saving and balance sheet optimization benefits. Loan ≤Flat -1.5% YTD • Loan growth has been more selective during the pandemic to ensure t
Slide 11: Resuming key retail loan growth with prudent loan quality selection
Resuming key retail loan growth with prudent loan quality selection against resurgence of Covid-19 Total Loan +1% QoQ Others 1,393 bn 1,359 bn 1,372 bn -1.5% YTD Retail Credit Card 1% 2% 1% 1% Retail Personal Loan 2% 2% 2% Used Car 2% 2% 17% New Car Retail HP 29% 69% 29% 29% CYC 14% Retail Mortgage
Slide 12: Deposit mix reflecting funding management and deposit optimization
Deposit mix reflecting funding management and deposit optimization Total Deposit +1.1% QoQ 1,373 bn -2.5% YTD 1,325 bn 1,339 bn TD+NCD 14% 10% 12% Hybrid 51% 49% 47% Saving 34% 34% ~41% 29% ~35% ~41% CASA Current CASA CASA 6% 7% 7% Dec-20 Sep-21 Dec-21 % Retail deposits 76% 73% 74% • TTB reported de
Slide 13: 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 Dec-20 Dec-21 102.6% 102.6% 102.5% 105.0% 101.4% 99.7% 65% 63% 97.1% 97.5% 100.0
Slide 14: Ability to manage deposit cost lessening the impact from declining asset yields
Ability to manage deposit cost lessening the impact from declining in asset yields Cost of Deposit Loan Yield Loan yield (excluded PPA impact) 1.80% 6.00% 4.90% 4.72% 4.64% 4.58% 4.59% 5.05% 4.62% 1.60% 5.50% 1.40% +2 bps QoQ -42 bps -1 bps QoQ -33 bps 4.93% 1.20% 1.07% -30 bps YoY YoY -9 bps YoY Yo
Slide 15: Stabilized NIM from ability to manage deposit cost lower pressure on NII
Stabilized NIM from ability to manage deposit cost lower pressure on NII Net Interest Margin (NIM) Net Interest Income NIM (excluded PPA impact) THB million -5.2% YoY 3.15% 3.08% 3.06% 3.04% 3.07% 3.09% 3.06% 53,805 51,000 +3 bps QoQ -3 bps -8 bps YoY YoY 3.06% 3.00% 2.98% 2.95% 2.98% 3.00% 2.97% +1
Slide 16: Retail fees recovery supporting overall Non-NII
Retail fees recovery supporting overall Non-NII Total Non-NII 18,0 00 THB million 15,541 16,0 00 14,537 -6% YoY 14,0 00 4,193 -22% YoY 3,288 12,0 00 Total Non-NII 10,0 00 Other Non-NII 8,00 0 +15% QoQ, -17% YoY 4,484 6,00 0 4,251 11,348 11,248 -1% YoY 3,309 3,238 3,739 Net fee and -4% QoQ, 4,00 0 1,
Slide 17: Fee gaining positive momentum with higher revenue from auto-bancassurance
Fee gaining positive momentum with higher revenue contribution from auto-bancassurance, following economic recovery in 4Q21 Breakdown Strategic Non-NII Products Bancassurance fee THB million FY2021 net fee slightly dropped by -1% YoY. The drop was due mainly to non-recurring fee income while key Non
Slide 18: Reduction in recurring expenses, helping self-funded integration cost
Reduction in recurring expenses, helping self-funded integration cost Total Operating Income Total Operating Expense THB million 69,346 70,000 65,537 -5% YoY THB million 60,000 15,541 14,537 35,000 32,177 31,219 -3% YoY -6% YoY 50,000 30,000 25,000 40,000 20,000 Total 30,000 Operating +4% QoQ, 53,80
Slide 19: 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) 45.6% 45.0% 44.9% 47.2% 44.5% 46.1% 43.4% 48.8% 47.6% 46.9% 46.4% 46.2% 45.8% 44.8% 4Q20 1Q21 2Q21 3Q21 4Q21 2020 2021 • With the pressure on income affected from Covid-19
Slide 20: Pre-provision profit reflecting our prudent business direction
Pre-provision profit reflecting our prudent business direction Pre-Provision Operating Profit (PPOP) THB million 40,000 37,266 -8% YoY 35,000 34,300 30,000 25,000 20,000 flat QoQ, 15,000 -14% YoY 9,805 8,898 8,502 8,438 8,461 10,000 5,000 0 4Q20 1Q21 2Q21 3Q21 4Q21 2020 2021 • As a result of our pru
Slide 21: Manageable asset-quality risks with prudent risk management result in lower provisioning
Manageable asset-quality risks with prudent risk management result in lower in provisioning ECL & Credit Cost Net Profit Expected credit loss (ECL) (THB million) THB million Annualized credit cost (bps) 238 +4% YoY 160 161 161 179 146 157 10,112 10,474 30,000 24,831 -13% YoY 21,514 25,000 20,000 +19
Slide 22: Improving LLR Coverage by stage
Improving LLR Coverage by stage Distribution of Risk Provision LLR Ratio (%) 131% 124% 125% 129% 140% 130% 121% 120% 110% 100% 90% 80% 70% 60% 51.97 53.80 54.42 53.92 54.47 50% 10.12 12.59 12.45 12.41 Stage 1 11.13 Allowance for ECL Stage 2 (THB billion) 21.92 21.00 21.71 22.05 Stage 3 21.62 19.22 2
Slide 23: 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 7,232 7,369 7,145 7,130 -20% from peak in 3Q20 6,442 7,720 6,440 5,143 6,444 6,497 6,793 6,998 -9% from peak in 3Q20 2,759 Accrued Int.
Slide 24: 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 1.60 tn 14.3% 1.49 tn 1.50 tn 1,427 bn 1,347 bn 1,328 bn 89.0% Stage 1 89.1% Stage 1 89.8% Stage 1 8.3% Stage 2 7.9% Stage 2 7.4% Stage 2 2.76% Stage 3 2.98% Stage
Slide 25: Reinforce capital position with wider buffer over requirements
Reinforce capital position with wider buffer over requirements Solid Capital with ample buffer over requirement 19.3% +4% • We remain strongly capitalized, enabling the Bank to withstand the uncertainty ahead. + 1% 15.3% 14.4% 14.4% • Due to Economic headwind impacted from Covid-19 Tier 2 AT1 pandem
Slide 26: 2021 highlights & relief program update; 4Q21/FY2021 performance; Strategic roadmap
2021 highlights & relief program update 4Q21/FY2021 performance Strategic roadmap 2022 guidance 26
Slide 27: 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 ▪I Maximize the potential of the merged bank’s 10mn custo
Slide 28: Balance sheet and cost synergies already ahead of plan
I Balance sheet and cost synergies already ahead of plan while revenue synergies expected to pick up in momentum in 2022 5-year synergy value Progress-to-date (shared to investors on 24 Jan 2020) (accumulated) • Balance sheet optimization strategy achieved Balance sheet synergies and continue as sho
Slide 29: Digitalization journey to operate under digital first operating model
II Digitalization journey to operate under digital first operating model and to capture new revenue stream Top 3 digital Digital banking to create new business and ecosystem banking platform in Thailand Digital banking to generate sustainable growth in traditional revenue stream Digital banking to d
Slide 30: BusinessOne and related opportunities from B2B or B2B2C play
II• BusinessOne and related opportunities from B2B or B2B2C play as showcase of our digital transformation effort in 2020-21 ttb business one Mitr Phol Farmer Solution Punboon.org • Internet banking platform for • Supply chain financing solution • Donation platform to connect donor corporate clients
Slide 31: New ttb touch to be launched to leapfrog our digital capabilities
II• New ttb touch to be launched in Q1’21 to leapfrog our digital capabilities for better experience and customer engagement 31
Slide 32: Ecosystem play to engage customers beyond banking needs
• Ecosystem play to engage customers beyond banking needs II Example: Auto ecosystem Tax Toll / • Toll fee topup In app widget OEM govn’t • Annual tax pay offices • Traffic ticket pay ▪ To address financial and non-financial needs related to car ownership e.g., toll-free topup, traffic ticket pay, c
Slide 33: Digital transformation from within will create greater impacts
II Digital transformation from within will create greater impacts than building new digital capabilities at subsidiaries Key principles Medium-sized bank mentality with conviction that we can still transform within Subsidiary Subsidiary End-to-end agile way-of-work with cross functional squads Subsi
Slide 34: ttb spark as new internet unit to ramp up digital resources
II ttb spark as new internet unit to ramp up digital resources and ensure focus and discipline on new business development Organizational setup and nature of work ▪ Digital as capabilities embedded in business functions Traditional ▪ Related units have high control over respective areas of banking t
Slide 35: Core business enhancement from group restructuring
III• Core business enhancement from group restructuring Traditional banking business ▪ Large-scale customer acquisition thru low risk, low yield product and lower cost-to-serve model Infrastructure and digital capability Preserve ▪ Shared services on digital and asset value operation to achieve grou
Slide 36: ttb Consumer to be set up in Q1 2022 with potentially more subsidiaries
• ttb Consumer to be set up in Q1 2022 with potentially more subsidiaries III in pipeline to enhance core business and unlock new value Associate/ Strategic partnership Current subsidiaries New subsidiaries1/ 10% share TNS//TNI TNI ttb Broker Phahonyothin asset ttb Consumer TNS New subsidiaries mana
Slide 37: ttb Consumer: Acquisition engine for consumer loans
III• ttb Consumer: Acquisition engine for consumer loans with cutting-edge solutions thru digital and data analytics Rationale Aspiration / targets • Headroom for growth in unsecured loan business ▪ Top 4 consumer loan players further vs. well-performed secured loan business (over fair share) ▪ >50%
Slide 38: 2021 Sustainability Highlights
Update on ongoing sustainability initiatives Corporate Governance Environmental Business Sustainability and Business Ethics Sustainability Social Sustainability > 23.7 mb #1 > 9.8 billion baht 228 mb of accident protection in Fair Finance Thailand for green loan outstanding positive social impact an
Slide 39: 2021 highlights & relief program update; 4Q21/FY2021 performance; Strategic roadmap
2021 highlights & relief program update 4Q21/FY2021 performance Strategic roadmap 2022 guidance 39
Slide 40: 2022 performance guidance
2022 performance guidance Loan Growth Approx. +2% • Remain conservative in resuming loan growth. By leveraging digital capability, the Bank targets to maintain a leading position in retail space with key focus on auto loan and mortgage lending. We will also enhance yields in selected areas of high r
Slide 41: Appendix: ttb's Sustainability
Appendix: ttb’s Sustainability 41
Slide 42: TTB's Sustainability
TTB’s Sustainability We strive to integrate sustainability into our business and to ensure that our strategic objectives do not only fulfil short-term goals, but also contribute to long-term sustainable growth. Sustainability Sustainability Framework Sustainability KPIs Governance Board of Directors
Slide 43: Business Sustainability
Business Sustainability As we go forward on the path of sustainable banking and become the recommended bank of choice, it is imperative for us to always strive to deliver the best-deal personalized solutions relevant to customers’ life stage or event to uplift the customers’ financial well-being and
Slide 44: Corporate Governance & Business Ethics
Corporate Governance & Business Ethics Our governance is based on policies and practices that ensure accountability, fairness and transparency. With good corporate governance, risk management and internal control, the Bank is more resilient and prepared for new challenges. It allows the Bank to oper
Slide 45: Environmental Sustainability
Environmental Sustainability We promote responsible and sustainable financing by assessing clients’ long-term environmental, social and governance impacts. At the same time, we manage our direct environmental footprints to improve operational and resource efficiency. Responsible Lending Sustainable
Slide 46: Social Sustainability
Social Sustainability We embrace the diversity of workforce and build the skills and capability of our workforce. Also, we contribute to the sustainable development of youth and community and promote financial inclusion and literacy for those financially vulnerable to have a life-long financial well
Slide 47: Sustainability Ratings & Recognition
Sustainability Ratings & Recognition Sustainability Ratings 1st place in Fair Finance Thailand ranking Excellent level in IOD’s Corporate for three consecutive years Governance Report of Thai Listed Companies (CGR) Inclusion in Thailand Sustainability Certified as a member of Collective Investment (
Slide 48: 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 — FY2021 Earnings Presentation on 6ix