Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — Q1 2024 Earnings Presentation
41 slides from Tmbthanachart Bank Public's earnings presentation, Apr 19, 2024
Slide 1: Investor Presentation 1Q24 Financial Performance
Investor Presentation 1Q24 Financial Performance 19 April 2024
Slide 2: 1Q24 Performance, Asset Quality, 2024 Strategy Update
1Q24 Performance Asset Quality 2024 Strategy Update 2
Slide 3: Executive summary
Executive summary 1Q24 performance was on track. Asset quality remained in check with a smooth transition toward post-forbearance period. Net profit rose to THB 5,334 million, +24% YoY and represented the ROE of 9.2%. Key drivers for the positive results were; ❑ Topline momentum ➢ NII grew +7% YoY,
Slide 4: Financial highlight – 1Q24 results
Financial highlight – 1Q24 results FY2023 2024 1Q24 Actual Targets Actual Loan growth (YoY) -3.5% YTD Flat -1.0% YTD In line with Deposit growth (YoY) -0.9% YTD -1.0% YTD INCOME loan growth Net Interest Margin 3.24% 3.1%-3.25% 3.28% Low single -2.8% Non-NII growth (YoY) -3.4% digit growth (Excluded
Slide 5: Focusing on prudent loan growth and improving portfolio mix
Focusing on prudent loan growth and improving portfolio mix Total Loan -1.0% YTD 1,362 bn 1,328 bn Others 1,315 bn Retail Credit Card 0.5% 2% 1% 0.4% Retail Personal Loan 3% 3% Used Car 3% 3% 3% 14% Retail HP 30% 31% 31% New Car 67% Cash Your car (CYC) 19% Retail Mortgage 25% Cash Your Book (CYB) 25
Slide 6: Sufficient liquidity allowing slower pace of deposit growth
Sufficient liquidity allowing slower pace of deposit growth Total Deposit -1.0% YTD 1,387 bn 1,373 bn 1,329 bn Time deposit 26% 32% 35% Hybrid 36% 30% 27% Saving 32% ~38% 32% ~38% 33% ~38% Current CASA CASA CASA 6% 6% 5% Sep-23 Dec-23 Mar-24 % Retail deposits 72% 70% 73% • Before entering 2024, TTB
Slide 7: Optimizing balance sheet with healthy liquidity position
Optimizing balance sheet with healthy liquidity position Unit: THB Bn Continue Optimized B/S and Funding Management Retail Deposit is a Major Source of Funds Net Liquid Asset LDR LDR+Borrowing % of Total Funding Mar-23 Mar-24 102% 97% 98% 98% 96% 100.0% 62% 64% 600 96% 93% 94% 95.0% 92% 92% 90.0% 40
Slide 8: Ensuring balance sheet healthiness
Ensuring balance sheet healthiness Investment Portfolio Breakdown FVTPL 4% HtC&S Investment portfolio FCY Bond 14% THB HTC&S 65% Govt Bond 10% of total assets Thai Corp Bond 80% 6% HTC 33% Mar-24 • Currently, the Bank’s investment portfolio accounted for 10% of total assets which is on the average l
Slide 9: Maintaining NIM target
Maintaining NIM target Loan yield, NIM and Cost of Deposit 1.75% 2.00% 2.50% 2.50% 2.50% MPC Rate (+25 bps) (+25 bps) (+50 bps) unchanged unchanged 5.53% 5.60% +7 bps QoQ 5.33% +20 bps +7 bps 5.05% 5.19% +14 bps +55 bps YoY +14 bps Loan Yield 3.34% 3.39% 3.28% -11 bps QoQ 3.08% 3.18% +20 bps YoY NIM
Slide 10: Despite QoQ hiccup, YoY performance showing improvement
Despite QoQ hiccup, YoY performance showing improvement Net Interest Margin (NIM) and Net Interest Income 3.08% 3.18% 3.34% 3.39% 3.28% -11 bps QoQ NIM +20 bps YoY THB million 14,948 14,396 -4% QoQ 16,000 13,502 14,093 14,665 14,000 +7%YoY 12,000 10,000 8,000 6,000 4,000 2,000 0 1Q23 2Q23 3Q23 4Q23
Slide 11: Non-NII seeing stable performance YoY
Non-NII seeing stable performance YoY Total Non-NII THB million 5,00 0 4,50 0 4,00 0 3,668 Total Non-NII 3,368 3,335 3,384 3,273 -3% QoQ -3% YoY, flat YoY (if excluded BA amortization impact) 3,50 0 1,008 Other Non-NII 3,00 0 809 830 745 +10% QoQ 819 2,50 0 +1% YoY 2,00 0 Net fee and1,50 0 -7% QoQ s
Slide 12: Challenging environment for fee recovery
Challenging environment for fee recovery Breakdown Strategic Non-NII Products ▪ Despite external factors such as an unfavorable capital market and a slowdown in THB million Prelim-Numbers auto market, TTB has continued to improve product offerings to better answer Loan-related fee customers’ needs a
Slide 13: Improving core operating profit and achieving C/I as target
Improving core operating profit and achieving C/I as target Total Operating Income Total Operating Expense & C/I Ratio THB million THB million Total 20,000 -4% QoQ 44% 44% Operating 20,000 17,760 18,000 18,332 17,670 +5% YoY 18,000 43% 43% 43% Income 16,870 C/I Ratio 16,000 3,668 3,335 3,384 3,273 -
Slide 14: 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 -1% QoQ 9,940 10,232 10,185 10,060 +5% YoY 10,000 9,561 8,000 6,000 4,000 2,000 0 1Q23 2Q23 3Q23 4Q23 1Q24 • YoY growth of 1Q24 PPOP was still driven by better topline from
Slide 15: LLR level at 155%, on the back of in-control asset quality trend
LLR level at 155%, on the back of in-control asset quality trend ECL & Credit Cost LLR 275 15,0 00 138 127 125 127 156 155% 155% 13,0 00 - +310 bps Expected credit loss (ECL) (THB million) 131 137 138% (5 00) Special provision 11,0 00 Annualized credit cost (bps) 9,326 124% 9,00 0 Total provision An
Slide 16: Maintaining net profit momentum with +24% YoY and improving ROE
Maintaining net profit momentum with +24% YoY and improving ROE towards our aspiration Net Profit 10,0 00 15. 0% 9,00 0 9.2% 8,00 0 7.9% 8.2% 8.4% 8.5% 10. 0% ROE 7,00 0 6,00 0 5,334 +10% QoQ 5.0 % 4,866 +24% YoY 5,00 0 4,566 4,735 Net profit 4,295 THB million 4,00 0 0.0 % 3,00 0 2,00 0 -5.0% 1,00 0
Slide 17: Maintaining healthy and stronger capital position since merger
Maintaining healthy and stronger capital position since merger Tier I Ratio Capital Adequacy Ratio (CAR) 20.0% 20.7% 20.8% 18.9% 16.3% 17.0% 17.0% 14.6% BoT's min. requirement 4Q19 4Q22 4Q231Q24 4Q19 4Q22 4Q231Q24 • Since merger, TTB has continued to optimize capital usage and enhance shareholders’
Slide 18: 1Q24 Performance, Asset Quality, 2024 Strategy Update
1Q24 Performance Asset Quality 2024 Strategy Update 18
Slide 19: Post forbearance, loan portfolio remained in check
Post forbearance, loan portfolio remained in check Modified loan portfolio Loan portfolio remained stable and in check Blue Orange Non-modified • After the end of the BoT’s forbearance in 2023, TTB’s portfolio remained stable. THB trillion • Modified loans accounted for approx.11% of total loans, sh
Slide 20: Ensuring provision adequacy in response to Covid-19 crisis
Ensuring provision adequacy in response to Covid-19 crisis Guiding Principle of Modified Loan Schemes • To have effective management of the portfolio quality, our 7-modified loan Repayment Schedule Staging Criteria schemes have been used for both Covid-19 debt reliefs and legacy portfolio – Minimum
Slide 21: Conservative loan staging with strong LLR buffer
Conservative loan staging with strong LLR buffer DPD Profile VS Loan Staging Internal data for managerial view - Breakdown as % of Loan principals (excluded interbank) +36% increase in LLR 4.8% 4.7% from pre-Covid 19 LLR 4.1% Total loans* 3.1% DPD Staging DPD Staging DPD Staging DPD Staging DPD Prof
Slide 22: Proactively resolved weak loans to ensure portfolio quality
Proactively resolved weak loans to ensure portfolio quality Loan Classification (%) Stage 3 Ratio (NPL Ratio) Stage 1 Stage2 Stage 3 TFRS9 Pre-Covid-19 14.30% 1.60 tn 1,6 00,000 1.53 tn 1.57 tn 1.55 tn 1,4 00,000 1,373 bn 1,407 bn 1,395 bn Covid-19 1,427 bn 1,2 00,000 peak level 1,0 00,000 89.0% Sta
Slide 23: Building up LLR, strengthening resilience for future uncertainties
Building up LLR, strengthening resilience for future uncertainties Distribution of Risk Provision 155% 155% 138% LLR/Stage 3 124% Ratio 63.5 61.8 57.4 53.8 15.6 14.7 13.3 Stage 1 10.1 Allowance for ECL Stage 2 21.9 24.5 28.2 29.2 (THB billion) Stage 3 21.8 19.6 19.7 17.9 Coverage by stage 1Q21 4Q22
Slide 24: Accrued interest trend reflecting our conservative approach
Accrued interest trend reflecting our conservative approach Conservative Accrued Interest Treatment 1st phase of debt relief 3rd Phase of debt relief Resume loan growth (Full lockdown) (partial lockdown) and M-rate hikes 9,209 No risk on stage 3 accrued interest 8,579 8,674 8,702 Accrued Int. Stage
Slide 25: 1Q24 Performance, Asset Quality, 2024 Strategy Update
1Q24 Performance Asset Quality 2024 Strategy Update 25
Slide 26: Transformation journey towards the most recommended bank of choice
Transformation journey towards the most recommended bank of choice TBANK Auto lending Leader Ready to take off for TMB better performance and Launch of new ttb shareholder value creation Top performing deposit franchise Touch / Biz One and setup of ttb Spark Integration of 2 banks Financial closing
Slide 27: Improvement pathway of key business drivers: 2018-23
Improvement pathway of key business drivers: 2018-23 Before 2019 2019-2021 2022-2023 Pre-merger Merger & Integration Integration Covid-19 Pandemic Completion 63% 31% Moving towards Before % Retail retail banking After Optimized 29% loan structure % SMEs 8% ▪ Sub-scale medium- ▪ D-SIB bank with sized
Slide 28: 2024 outlook and recap of the Bank's strategic intent
2024 outlook and recap of the Bank’s strategic intent 2024external 2024 external outlook outlook ▪ Slow-growth environment Recap: Recap:governing the bank’sthoughts strategicon the bank’s direction intent ▪ High household debt ▪ Tightening regulatory landscape ▪ Optimize for return while maintaining
Slide 29: 3Y transformation roadmap and key deliverables
3Y transformation roadmap and key deliverables Transformation roadmap: 2 Revenue model transformation to rethink existing and 5 1 new revenue engines 4 Organizational Branch and process Digital transformation transformation transformation to build new capability to align organization to drive produc
Slide 30: Digital transactions continue growing in 1Q24
1 Digital transactions continue growing in 1Q24 with 30% growth in financial transaction volume Financial transactions Non-financial transactions Channel mix of all Deposit % Digital Digital financial transactions % Others financial transactions (mn) 298 305 3% 3% 2% 2% 2% 2% Branch 235 +30% • Reque
Slide 31: Digital sales of key products via ttb Touch continues positive momentum
1 Digital sales of key products via ttb Touch continues positive momentum Credit card booking Cash chill chill drawdown Mutual funds transaction (‘000 cards) (THB Bn) (Mn transaction) +23% +110% +88% 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 Flash card booking Personal loan booking Deposit accoun
Slide 32: Ongoing ecosystem plays and revenue model transformation
2 3 Ongoing ecosystem plays and revenue model transformation towards digital-first principle ▪ >700K cars onboarded to My Car ~2.5mn ~1mn ▪ +52% YoY and +7% QoQ welfare loan bookings ▪ 22% CYC drop lead conversion via Car Owner Customers Payroll Customers My Car vs. 2% from other channels ▪ 48% of n
Slide 33: Car owner ecosystem – Deepening engagement with car owners
2 3 Car owner ecosystem – Deepening engagement with car owners via digital platform My Car Roddonjai > 700K > 1.6mn Cars onboarded Unique visitors (1Q24) > 63K Easy pass registered > 40K Car onboarded ~70% Car tax renewal vs other channels > 4.6bn 22% Financed amount CYC drop-lead conversion (vs. 2%
Slide 34: Salaryman ecosystem – Better engaged with employers and employees
2 3 Salaryman ecosystem – Better engaged with employers and employees through financial well-being solution Payroll acquisition & welfare loan My Work by ttb Soft launched in Nov’23 > 1.2K Welfare MOU signed > 350 Companies onboarded > 386K Eligible employees > 10% 48% Conversion from free trial to
Slide 35: Homeowner ecosystem – Engagement drive through ecosystem
2 3 Homeowner ecosystem – Engagement drive through ecosystem partner and solutions for home owners Global House Partnership My Home Refinance & Retention Launched in Jul’23 Launched in Feb’24 > 47% Retention rate Co-branded credit card (40% in 2023) ▪ Bill management with home members ▪ Instant 3% d
Slide 36: Wealth ecosystem – Earn fast, burn smart
2 3 Wealth ecosystem – Earn fast, burn smart, maximizing infinite wealth through wellness products Reserve Credit Card Savings – FCD Account Wellness Investment > 191 bn ▪ Easy account Investment AUM management via ttb balance touch ▪ ~600 wealth customer acquisition in 1Q24 ▪ Up to 4% p.a. FCD USD
Slide 37: Digital-first branch has rolled out nationwide
4 Digital-first branch has rolled out nationwide to capitalize on ttb Touch’s straight-thru capability, boosting productivity and digital migration Digital 1st branch implementation >65% >25% -58% High counter Low counter Document error migration to migration to Reduction Digital auto lobby Touch (a
Slide 38: Strong adoption via digital channel declining load in other touchpoints
4 Strong adoption and engagement via digital channel also resulted in declining load in other higher-cost touchpoints Contact center volume (mn transactions) Physical document sent out (mn documents/mails) 4.0 -14.4% 40.9% 3.8 33.4 Credit card’s e-doc accounts YoY reduction in payment 32.3 amount/du
Slide 39: Key highlights of upcoming ttb touch releases
Key highlights of upcoming ttb touch releases My Credit Financial Certificate Loyalty / gamification Yindee chat x Generative AI Self-assess credit health check Official financial certificate with Mission-based tool with redeemable In-app chat service enhancement with seamless lending bank stamp and
Slide 40: 'My Credit' widget to enhance lending experience
‘My Credit’ widget (soft launched in Apr’24) to enhance lending experience Credit check with only Instantly insured with Approve & Disburse ID card required digital insurance purchase in 10 mins Real-time approval and Customizable amount (from 5-7 days) disbursement on and payment plan Back qualifie
Slide 41: 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 Limited (ttb) — Q1 2024 Earnings Presentation on 6ix