Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — Q3 2024 Earnings Presentation
42 slides from Tmbthanachart Bank Public's earnings presentation, Oct 18, 2024
Slide 1: Investor Presentation 3Q24 Financial Performance
Investor Presentation 3Q24 Financial Performance October 18, 2024
Slide 2: ttb Strategy
ttb Strategy SHORT TERM MEDIUM TERM LONG TERM GOAL Customer & Customer Convenience products & Ecosystem-based solution via digital to Lifetime financial well-being experience services via digital smoothen the journey Shareholder Balance sheet preservation, shift in & Financial Sustainable higher div
Slide 3: Executive summary (1)
Executive summary (1) Amidst challenging macro environment, TTB remains prudent to preserve B/S for future growth while patiently waiting for uncertainties to subside. Moving into 2H24 where expectation on rate cut is growing and concerns on household-debt remain, we have emphasized on 4 key areas t
Slide 4: Executive summary (2)
Executive summary (2) ❑ Maintaining revenue stream ➢ Quality NII: We continue to shift loan mix towards better risk-adjusted return products to compensate for a slow volume growth. Together with effective ALM, we could maintain NII stream while consuming less capitals as suggested by lower RWAs, ref
Slide 5: Financial highlight – 9M24 results
Financial highlight – 9M24 results FY2023 2024 9M24 Actual Targets Actual Loan growth (YoY) -3.5% YTD Flat -5.7% YTD In line with Deposit growth (YoY) -0.9% YTD -6.5% YTD INCOME loan growth Net Interest Margin 3.24% 3.1%-3.25% 3.27% Low single -7.2% Non-NII growth (YoY) -3.4% digit growth (Excluded
Slide 6: 3Q24 Performance
3Q24 Performance Asset Quality Net profit and Capital Management 3Q24 Strategy Update 6
Slide 7: Reaffirming prudent loan growth to strike balance between risk and return
Reaffirming prudent loan growth to strike balance between risk and return Total Loan -3.4% QoQ Others 1,328 bn 1,297 bn 1,253 bn -5.7% YTD Retail Credit Card 1% 1% 1% Used Car 3% 14% Retail Personal Loan 3% 3% 3% 3% 3% Cash Your car Retail HP 30% (CYC) 31% 30% 21% New Car 64% Cash Your Book (CYB) Re
Slide 8: Optimizing deposit level to ensure effective cost management
Optimizing deposit level to ensure effective cost management Total Deposit 1,387 bn 1,365 bn -5.1% QoQ Shift in TD mix towards shorter duration 1,296 bn -6.5% YTD Breakdown as % to total TD Time deposit 32% 35% 38% Short to Medium TD Long-term TD Hybrid Dec-23 --> Sep-24 30% 27% 26% 72% 28% 78% 22%
Slide 9: Maintaining the alignment of loan yield and deposit cost
Maintaining the alignment of loan yield and deposit cost Loan Yield Cost of Deposit MPC QoQ + 50 bps - - - MPC QoQ + 50 bps - - - Yield QoQ +20 bps +7 bps +3 bps -4bps Cost QoQ +12 bps +18 bps +7 bps +1 bps -4 bps QoQ +44 bps YoY +26 bps YoY Pre-fund strategy +1 bps QoQ 5.53% 5.60% 5.63% 5.59% 5.62%
Slide 10: Proactive management of liquidity book including investment portfolio
Proactive management of liquidly book including investment portfolio Healthy Investment Portfolio Improving Investment Yield 120% Investment portfolio 10% of total assets HtC&S 100% FVTPL 7% 80% +12 bps QoQ FCY Bond HTC&S THB Govt Bond 9% 59% 2.26% 60% 85% Thai Corp Bond 40% 6% 1.31% 0.79% HTC 20% 3
Slide 11: Optimizing borrowing structure and cost where possible
Optimizing borrowing structure and cost where possible Optimized Borrowing Structure Effective Borrowing Cost* THB billion Total borrowing Subdebt Senior debentures and other borrowings 73.2 -7 bps QoQ 4.5 0% 4.20% 4.26% 4.27% 4.27% 4.20% 59.6 4.0 0% 68% 45.4 40.4 3.5 0% 65% 48% 52% 3.0 0% 32% 2.5 0
Slide 12: NIM in line with target while ensuring quality of NII stream
NIM in line with target while ensuring quality of NII stream Earning asset yield, cost of fund and NIM Net Interest Income (NII) 2.50% 2.50% 2.50% 2.50% 2.50% MPC Rate unchanged unchanged unchanged THB million (+50 bps) unchanged 16,000 -1% QoQ -4% YoY 4.80% 4.84% 4.80% -4 bps QoQ 4.60% 4.77% 14,000
Slide 13: Non loan-related fees performance reducing impact on slow loan-related fees
Non loan-related fees performance reducing impact on slow-loan related fees Total Non-NII Non-NII breakdown with loan related THB million THB million Loan related Non-NII Non- loan related Non-NII 5,00 0 4,50 0 Non loa related Non-NII +2% QoQ 4,00 0 Total Non-NII 3,335 3,384 2,570 +8% YoY 3,273 3,18
Slide 14: Non loan-related fees improving, but loan related fee facing challenge
Non loan-related fees improving, but loan related fee facing with challenge due to slowdown in loan volume Bancassurance fee Non-related to loan LG fee Commercial -Loan related fee Related to loan THB million THB million THB million Loan-related fees 1,021 930 +6% QoQ 105 876 -9% YoY 137 +3% QoQ +5%
Slide 15: Focusing on cost discipline during revenue challenges
Focusing on cost discipline during revenue challenges Total Operating Income Total Operating Expense & C/I Ratio 20,000 THB million THB million 18,000 Total Operating 16,000 43% 44% 43% 42% 42% 20,000 18,000 18,332 17,670 -1% QoQ Income 17,372 17,225 -4% YoY C/I Ratio 14,000 3,335 3,384 3,273 Non-NI
Slide 16: Cost efficiency supporting operating performance
Cost efficiency supporting operating performance Pre-Provision Operating Profit (PPOP) THB million 12,000 10,232 10,185 10,060 10,096 9,978 -1% QoQ 10,000 -2% YoY 8,000 6,000 4,000 2,000 0 3Q23 4Q23 1Q24 2Q24 3Q24 • 3Q24 PPOP recorded at THB 9,978 million, -1% QoQ and -2% YoY 16
Slide 17: Asset Quality
3Q24 Performance Asset Quality Net profit and Capital Management 3Q24 Strategy Update 17
Slide 18: 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) >30% increase in LLR 4.8% LLR from pre-Covid 19 3.1% 4.1% Total loans* DPD Staging DPD Staging DPD Staging DPD Profile Conservative
Slide 19: Proactively resolved weak loans to ensure portfolio quality
Proactively resolved weak loans to ensure portfolio quality Loan Classification (%) Stage 3 Ratio (NPL Ratio) 120 .0 16. 0% Stage 1 Stage2 Stage 3 14.3% NPL (THB bn) NPL Ratio Pre-pandemic 14. 0% 1.60 tn 100 .0 1,6 00,000 1.53 tn 1.57 tn 1.48 tn 12. 0% 1,4 00,000 TFRS9 80. 0 10. 0% 1,2 00,000 1,373
Slide 20: Ensuring LLR buffer against future uncertainties
Ensuring LLR buffer against future uncertainties Distribution of Risk Provision 155% 155% 152% 149% 138% 124% LLR/Stage 3 Ratio 63.5 61.8 60.8 60.1 57.4 53.8 15.6 14.7 14.9 13.3 15.0 Stage 1 10.1 Allowance for ECL Stage 2 21.9 24.5 28.2 29.2 28.9 (THB billion) 28.2 Stage 3 21.8 19.6 19.7 17.9 17.0 1
Slide 21: 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 Selectively 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 8,522 8
Slide 22: Prudent risk management on the back of in-control asset quality trend
Prudent risk management on the back of in-control asset quality trend ECL & Credit Cost LLR 275 15,0 00 138 127 125 127 156 163 149 +250 bps 155% 152%149% - 13,0 00 144 Expected credit loss (ECL) (THB million) 131 137 138% 11,0 00 Special provision 129 (5 00) 9,326 124% Annualized credit cost (bps)
Slide 23: Net profit and Capital Management
3Q24 Performance Asset Quality Net profit and Capital Management 3Q24 Strategy Update 23
Slide 24: Enhancing quality of earnings
Enhancing quality of earnings Net Profit % NII to RWA and Risk weighted assets ROE 32,0 00 9.1% 8.2% 9.0 % 1,500 5.01% 5.05% 5.00% 27,0 00 6.5% 6.6% % NII to RWA 4.35% 7.0 % 1,400 4.15% 22,0 00 5.1% 5.1% 4.00% 1,300 18,462 +30% 5.0 % 1,229 YoY +17% Risk-weighted 1,185 17,0 00 15,919 1,200 3.00% 14,1
Slide 25: Reinforcing capital position with priority to shareholder interests
Reinforcing capital position with priority to shareholder interests Solid Capital with ample buffer over requirement Dividend Tier I CAR Interim dividend Final dividend 60% 55% 50% 20.7% Payout ratio 43% 43% 19.7% 18.9% (Full Conso) 35% 16.9 17.3% 14.6% 0.105 0.073 0.055 Dividend (Baht/share) TTB W1
Slide 26: 3Q24 Strategy Update
3Q24 Performance Asset Quality Net profit and Capital Management 3Q24 Strategy Update 26
Slide 27: 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 28: 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 29: 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 30: 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 31: Digital transactions' momentum is well-maintained
1 Digital transactions’ momentum is well-maintained in both financial and non-financial transactions Financial transactions Non-financial transactions Channel mix of all Digital financial transactions Deposit % Digital financial transactions (mn) % Others 316 345 283 2% 1% 1% +22% 2% 1% 1% Branch •
Slide 32: Digital sales via ttb Touch continue to yield overall positive results
1 Digital sales via ttb Touch continue to yield overall positive results xx% %digital Credit card booking So Goood transactions Mutual funds transaction (No. of card) (Transaction) (Transaction) 24% 55% 65% 98% >99% >99% 96% 97% 98% +18% +36% +147% 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 3Q23 2Q24 3Q24 Flash
Slide 33: Recent ttb Touch enhancement: "My Credit" widget
1 Recent ttb Touch enhancement: “My Credit” widget as a vehicle to transform how ttb lends as a bank Receive Confirm personal info pre-approve 3-month stats during Introduction Select objective + grant e-NCB consent credit offer soft launch (w/o marketing) Customer visits to My Credit widget 152k Cu
Slide 34: Recent ttb Touch enhancement: data-driven hyper-personalization engine
1 Recent ttb Touch enhancement: data-driven hyper-personalization engine to embed personalized messages in various part of ttb Touch Key stats Impressions millions 147 4X 9M23 9M24 Views millions 21 5X 9M23 9M24 Clicks millions 5 4X 9M23 9M24 34
Slide 35: Ongoing ecosystem plays and revenue model transformation towards digital-first
2 3 Ongoing ecosystem plays and revenue model transformation towards digital-first principle ▪ > 800K cars onboarded to My Car ~2.5mn Car Owner Customers ~1mn ▪ > 50% of new welfare loan bookings via digital channel ▪ 32% of ttb’s used car business Payroll Customers generated via Roddonjai ▪ > 680 c
Slide 36: Car owner ecosystem – Strengthening car owner relationships
2 3 Car owner ecosystem – Strengthening car owner relationships through digital platforms My Car Roddonjai > 800k > 1.9mn Cars onboarded Unique monthly visitors (Sep’24) 79% > 2.7mn Car tax renewal vs Financial calculations other channels conducted > 69k > 50% of sold cars are booked Easy pass regis
Slide 37: Salaryman ecosystem – Better assist employers and employees
2 3 Salaryman ecosystem – Better assist employers and employees through financial well-being and digital tailored solutions Payroll engagement & well-being My Work by ttb > 1.5k > 680 Total company acquired Welfare MOU signed Companies onboarded +3x > 444k > 100 Eligible employees Companies converte
Slide 38: Homeowner ecosystem – Deepen engagement throughout home owner's lifetime journey
2 3 Homeowner ecosystem – Deepen engagement throughout home owner’s lifetime journey with My Home solution and partnership My Home Refinance & Retention Credit card spending Launched in Feb’24 ~ 50% holds ttb credit card of ttb home-loan customer +8% YoY retention ▪ Bill management with home members
Slide 39: Wealth ecosystem – Extensive product suites and solutions
2 3 Wealth ecosystem – Extensive product suits and solutions aimed at maximizing and growing wealth Wealth customer Savings – Retail FCD Account Wellness Investment > 1,000 ▪ Easy account management > 75% Private banking Of wealth customers hold via ttb touch customer acquisition investment product
Slide 40: Continuing reduction in customer contacts across physical touchpoints
4 Continuing reduction in customer contacts across all physical touchpoints, alongside on-going expansion of digital migration Branch Contact center Traffic at branch -42% (YoY) (’000 customers) Contact center volume (Mn calls) -9% Reduction in card activation transactions 2.9 -11% 2.6 -27% (YoY) 1Q
Slide 41: Key highlights of upcoming ttb touch releases
Key highlights of upcoming ttb touch releases Widget for Yindee Chat x Cash installment Bank-wide Staff-assisted tablet QR scanning Generative AI for motor insurance loyalty program for sales and service personnel Nov 2024 1H 2025 41
Slide 42: THANK YOU
THANK YOU fiuGsusr10 TMBThanachart ooaave Make REAL Change
TMBThanachart Bank Public Company — Q3 2024 Earnings Presentation on 6ix