Tmbthanachart Bank Public Company Limited · SET:TTB
Tmbthanachart Bank Public — 2Q24 Earnings Presentation
44 slides from Tmbthanachart Bank Public's earnings presentation, Jul 19, 2024
Slide 1: Investor Presentation 2Q24 Financial Performance
Investor Presentation 2Q24 Financial Performance 19 July 2024
Slide 2: Executive summary
Executive summary Emphasizing shareholder interests, TTB started the year with a clear direction and strategic focuses aiming at safeguarding the Bank’s financial position and profitability amidst an uncertain business environment. Through the first half of the year, progress in core fronts went acc
Slide 3: Financial highlight – 1H24 results
Financial highlight – 1H24 results FY2023 2024 1H24 Actual Targets Actual Loan growth (YoY) -3.5% YTD Flat -2.4% YTD In line with Deposit growth (YoY) -0.9% YTD -1.5% YTD INCOME loan growth Net Interest Margin 3.24% 3.1%-3.25% 3.27% Low single -8.2% Non-NII growth (YoY) -3.4% digit growth (Excluded
Slide 4: 2Q24 Performance, Asset Quality, 2Q24 Strategy Update
2Q24 Performance Asset Quality 2Q24 Strategy Update 4
Slide 5: Focusing on prudent loan growth and efficient liquidity utilization
Focusing on prudent loan growth and efficient liquidity utilization Total Loan -1.4% QoQ Others 1,328 bn 1,315 bn 1,297 bn -2.4% YTD Retail Credit Card 1% 0.4% 1% Used Car 3% 14% Retail Personal Loan 3% 3% 3% 3% 3% Cash Your car Retail HP 31% 30% New Car (CYC) 31% 66% 20% Cash Your Retail Mortgage B
Slide 6: High liquidity position, less pressure on deposit gathering and cost
High liquidity position, less pressure on deposit gathering and cost Total Deposit -0.5% QoQ 1,387 bn 1,373 bn 1,365 bn -1.5% YTD Time deposit 32% 35% 36% Hybrid 30% 27% 26% Saving 32% ~38% 33% ~38% ~38% 33% Current CASA CASA CASA 6% 5% 5% Dec-23 Mar-24 Jun-24 % Retail deposits 70% 73% 73% • On depo
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 as a Major Source of Funds Net Liquid Asset LDR LDR+Borrowing % of Total Funding Mar-24 Jun-24 102% 98% 100 .0% 64% 65% 600 98% 96% 96% 95% 94% 95. 0% 92% 92% 400 92% 90
Slide 8: Ensuring balance sheet healthiness
Ensuring balance sheet healthiness Investment Portfolio Breakdown 120% HtC&S 100% FVTPL 5% 80% Investment portfolio HTC&S 63% FCY Bond 11% of total assets 60% THB Govt 8% Bond 87% Thai Corp Bond 40% 5% 20% HTC 32% 0% Jun-24 • Currently, the Bank’s investment portfolio accounted for approx.11% of tot
Slide 9: Maintaining NIM target
Maintaining NIM target Loan yield, NIM and Cost of Deposit 2.00% 2.50% 2.50% 2.50% 2.50% MPC Rate (+25 bps) (+50 bps) unchanged unchanged unchanged +3bps +3 bps QoQ 5.53% +7 bps 5.60% 5.63% 5.19% +14 bps 5.33% +20 bps +44 bps YoY Loan Yield 3.39% -2 bps QoQ NIM 3.18% 3.34% 3.28% 3.26% +8 bps YoY 1.5
Slide 10: Sustaining NIM thru strategic initiatives
Sustaining NIM thru strategic initiatives Net Interest Margin (NIM) and Net Interest Income 2.00% 2.50% 2.50% 2.50% 2.50% MPC Rate (+25 bps) (+50 bps) unchanged unchanged unchanged 20,000 19,000 3.18% +16 bps 3.34% +5 bps 3.39% -11 bps 3.28% -2 bps 3.26% -2 bps QoQ NIM 18,000 +8 bps YoY 17,000 16,00
Slide 11: QoQ Non-NII declining due to slowdown in retail fees linked to new loan booking
QoQ Non-NII declining due to slowdown in retail fees linked to new loan booking Total Non-NII Breakdown Strategic Non-NII Products THB million Prelim-Numbers THB million Loan-related fee 87 +41% QoQ 5,00 0 LG fee 124 +9% YoY 105 Trade finance & FX 85 137 66 4,50 0 135 461 127 93 +1% QoQ Credit card
Slide 12: Cost discipline remaining core execution under challenging revenue environment
Cost discipline remaining core execution under challenging revenue environment Total Operating Income Total Operating Expense & C/I Ratio THB million THB million Total 44% 43% 44% 43% 42% Operating -2% QoQ C/I Ratio 17,760 18,000 18,332 17,670 Income 17,372 -2% YoY 20,000 3,668 3,335 3,384 3,273 -3%
Slide 13: Cost efficiency supporting operating performance
Cost efficiency supporting operating performance Pre-Provision Operating Profit (PPOP) THB million 12,000 10,232 10,185 10,096 Flat QoQ 9,940 10,060 +2% YoY 10,000 8,000 6,000 4,000 2,000 0 2Q23 3Q23 4Q23 1Q24 2Q24 • 2Q24 PPOP recorded at THB10,096 million, flat QoQ and +2% YoY 13
Slide 14: Reduction in normal provision QoQ & YoY on the back of in-control asset quality
Reduction in normal provision QoQ & YoY on the back of in-control asset quality trend ECL & Credit Cost LLR 275 15,0 00 138 127 125 127 156 163 - +280 bps 155% 152% 13,0 00 Expected credit loss (ECL) (THB million) 137 131 138% Special provision 11,0 00 129 (5 00) Annualized credit cost (bps) 9,326 1
Slide 15: Maintaining net profit momentum with +17% YoY and improving ROE
Maintaining net profit momentum with +17% YoY and improving ROE towards our aspiration Net Profit 12,0 00 11. 0% 9.2% 9.2% 8.2% 8.4% 8.5% ROE 10,0 00 9.0 % 8,00 0 7.0 % flat QoQ 6,00 0 5,334 5,355 5.0 % +17% YoY 4,566 4,735 4,866 Net profit THB million 4,00 0 3.0 % 2,00 0 1.0 % - -1.0% 2Q23 3Q23 4Q2
Slide 16: Maintaining healthy and stronger capital position since merger
Maintaining healthy and stronger capital position since merger Tier I Ratio Capital Adequacy Ratio (CAR) 20.8% 19.5% 18.9% 20.0% 17.0% 17.1% 16.3% 14.6% BoT's min. requirement BoT's min. requirement 4Q19 4Q22 1Q242Q24 4Q19 4Q22 1Q242Q24 • Since merger, TTB has continued to optimize capital usage and
Slide 17: 2Q24 Performance, Asset Quality, 2Q24 Strategy Update
2Q24 Performance Asset Quality 2Q24 Strategy Update 17
Slide 18: Post-forbearance, loan portfolio remained in check
Post-forbearance, loan portfolio remained in check Modified loan portfolio Loan portfolio remained stable THB trillion Non-modified loans • After the BoT’s forbearance including the orange-blue scheme expired at the end of Modified loans 2023, TTB’s modified loan portfolio remained stable at approx.
Slide 19: 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 20: 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 21: 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-pandemic 14.30% 1.60 tn 1.57 tn 1,6 00,000 1.53 tn 1.52 tn 1,4 00,000 1,2 00,000 1,373 bn 1,407 bn 1,361 bn Covid-19 1,427 bn peak level 1,0 00,000 89.0% Sta
Slide 22: Ensuring LLR buffer against future uncertainties
Ensuring LLR buffer against future uncertainties Distribution of Risk Provision 155% 155% 152% 124% 138% LLR/Stage 3 Ratio 63.5 61.8 60.8 57.4 53.8 15.6 14.7 14.9 10.1 13.3 Stage 1 Allowance for ECL Stage 2 21.9 24.5 28.2 29.2 28.9 (THB billion) Stage 3 21.8 19.6 19.7 17.9 17.0 1Q21 4Q22 4Q23 1Q24 2
Slide 23: 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 No risk on stage 3 accrued interest 9,209 8,579 8,674 8,702 8,522 A
Slide 24: 2Q24 Performance, Asset Quality, 2024 Strategy Update
2Q24 Performance Asset Quality 2024 Strategy Update 24
Slide 25: 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 26: 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 27: 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 28: 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 29: Digital transactions continue to grow both financial and non-financial
1 Digital transactions continue to grow both financial and non-financial Financial transactions Non-financial transactions Channel mix of all Digital financial transactions Deposit % Digital (mn) % Others financial transactions 305 316 3% 2% 1% 251 +26% 2% 2% 1% Branch • Request statement 8% 8% 97%
Slide 30: Momentum in digital sales via ttb Touch persists for all key products
1 Momentum in digital sales via ttb Touch persists for all key products Credit card booking So Goood transactions Mutual funds transaction (No. of card) (% transaction) (% transaction) 32% 37% 55% %digital +25% +2x 96% 97% 97% 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Flash card booking Personal
Slide 31: Hyper-personalization: Customizable message for individual needs
1 Hyper-personalization : Customizable message for individual needs Launched in Apr’24 Launched in Jul’24 31
Slide 32: My Credit: Streamline loan application process with simplified credit check
1 My Credit : Streamline loan application process with simplified credit check Soft launched in Apr’24 32
Slide 33: Cash Your Car: Obtain credit with disbursement in under 10 minutes
1 Cash Your Car : Obtain credit with disbursement in under 10 minutes Soft launched in Jul’24 Note : for customer with income information and 33 consideration of ability to pay
Slide 34: Loyalty / gamification: Capture customer loyalty through gamification
1 Loyalty / gamification: Capture customer loyalty through gamification Launched in Apr’24 34
Slide 35: In-app customer feedback: Real-time feedback on user's experience
1 In-app customer feedback : Real-time feedback on user’s experience Soft launched in Jul’24 Success screens Soft launched in Jul’24 > 5,000 Feedbacks received since launched (Jul’24) > 90% High satisfactory score (score 4-5) 35
Slide 36: Ongoing ecosystem plays and revenue model transformation towards digital-first principle
2 3 Ongoing ecosystem plays and revenue model transformation towards digital-first principle ▪ >730K cars onboarded to My Car ~2.5mn Car Owner Customers ~1mn ▪ +53% YoY welfare loan bookings, 43% via digital ▪ 31% of ttb’s used car business Payroll Customers generated via Roddonjai ▪ > 430 companies
Slide 37: Car owner ecosystem – Strengthening car owner relationships through digital platforms
2 3 Car owner ecosystem – Strengthening car owner relationships through digital platforms My Car Roddonjai > 730K > 1.8mn Cars onboarded Unique visitors (2Q24) ~75% > 1.5mn Car tax renewal vs other Financial calculation channels > 50% > 66K of published car are sold Easy pass registered Motor insura
Slide 38: Salaryman ecosystem – Better engaged with employers and employees
2 3 Salaryman ecosystem – Better engaged with employers and employees through financial well-being solution Payroll engagement & well-being My Work by ttb > 1.3K > 430 Companies Upcoming features Welfare MOU signed onboarded • Support company-specific rules for leave, expense, > 425K approval proces
Slide 39: Homeowner ecosystem – Lifelong engagement with home owners
2 3 Homeowner ecosystem – Lifelong engagement with home owners through MyHome solution and partnership My Home Refinance & Retention Credit card spending Launched in Feb’24 50% of homeloan 18 % customer holds credit card Improvement on ▪ Bill management with home members retention rate ▪ Refinance c
Slide 40: Wealth ecosystem – Earn fast, burn smart, maximizing infinite wealth
2 3 Wealth ecosystem – Earn fast, burn smart, maximizing infinite wealth through wellness products Wealth customer Savings – FCD Account Wellness Investment ▪ Easy account > 1k management via ttb > 53bn touch New Investment volume YTD Wealth customers acquisition in 2Q24 ▪ Up to 4% p.a. FCD USD Savi
Slide 41: Digital-first branch continues to boost digital migration
4 Digital-first branch continues to boost digital migration while simultaneously improving overall service quality Transaction migration to digital Service quality High counter migration to Auto lobby Low counter migration to touch Average wait time Customer complaint (% migrated transaction) (% mig
Slide 42: Continuing reduction in load and operational costs across all physical touchpoints
4 Continuing reduction in load and operational costs across all physical touchpoints from increasing digital channel adoption Contact center volume (mn transactions) Physical document sent out (mn documents/mails) +41.6% (YoY) -40.6% (YoY) 18.4 17.8 -4% Increase in credit card’s e-doc 1.9 Reduction
Slide 43: Key highlights of upcoming ttb touch releases
Key highlights of upcoming ttb touch releases AL E-Receipt Structure note Yindee x Chat GPT Tablet From physical document to Structure note In-app chat service Enhance digital capability for E-receipt, with potential available for view and enhancement powered by branch/sales staff to enable them to
Slide 44: 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 — 2Q24 Earnings Presentation on 6ix