02
Annual Report 2009 Kiatnakin Bank Public Company Limited
Financial Highlights Continuous growth in assets
Impressive growth in outstanding loans 80,000 100,000
87,117
80,813
50,000
65,255
127,354
114,733
87,227
60,000
40,000
20,000
million baht 2007
2008
2009
million baht 2007
Rigorous growth in shaeholders’equities
2008
2009
Significant improved financial performance
15,000
2,229
5,000
1,867
10,000
2,111
17,946
17,167
16,932
2,000
million baht
million baht 2007
2008
2009
More branches to reach more customer
2007
50
2,000
2008
2009
More personnel to provide better services
40
2,000
2,267
2,179
20
1,896
44
37
27
30 1,000
10 300 0 branches 2007
04
2008
2009
Annual Report 2009 Kiatnakin Bank Public Company Limited
0 Employee 2007
2008
2009
For Kiatnakin, despite all aforementioned economic difficulties, the year 2009 proved to be one of the most thriving periods in the company’s history. Our total consolidated assets enjoyed a remarkable increase of 11% in value, closing at 127,354 Billion Baht. In comparison, the average industry growth was only 2.9%. At the same time, our Hire purchase loans achieved an impressive growth of 5.2%, with the total outstanding to 60,119 Million Baht. Residential project loans also saw an increase of 9.8% from the previous year and the total outstanding balance was at 15,176 Million Baht. Such performance resulted in a 7.8% growth in the Bank’s total loans , with an outstanding balance of 87,117 Million Baht. The average industry figure in this regard saw a shrink of 0.5%. Regarding the investment in financial claims, the Bank continuously succeeded in conducting debt restructuring for our customers, reducing the outstanding balance in this area at year’s end to only 4,523 Million Baht, or a 589.5 Million Baht drop from the previous year. As a result of continuous promotional efforts in 2009, the amount of the Bank’s Foreclosed asset at year end decreased sharply to only 7,214.6 Million Baht. In addition, the Bank raised funds for its operations by means of deposit promotion and issuance of debentures at the right amount in relation with the amount of credit loans offered. At the end of 2009, Kiatnakin, consequentially, had a net liability of 109,408 Million Baht, a 12.1% increase from the year before. The Bank’s noteworthy performance in 2009 was the result of our improved operational efficiency. Kiatnakin achieved a net profit of 2,229 Million Baht, a 362 Million Baht or 19.4% rise over the previous year. This translated to net profit per share of 4.26 Baht. Kiatnakin is also proud to announce that the Bank was given the “Excellent & Recognized as Good Example” evaluation for the quality of the company’s Annual General Meeting of 2009 by the Office of Securities and Exchange Commission, the Thai Investors Association and the Association of Listed Companies. Under this evaluation, the Bank was one of only forty-one companies which achieved a score of over 100. In addition, the Bank was also placed third for the “Bank of the Year 2009 Award” in a survey conducted by government agencies and a prominent financial media company. Such award-winning performance was sound evidence of our commitment to generating the very best investment value for our valued shareholders, who are of utmost importance to the Bank.
result, a number of improvements were made following the findings of the survey, and consequently, our customers reported significantly higher levels of satisfaction both in our products and services. Kiatnakin Bank strongly believes that the outlook of the Thai economy in 2010 will be noticeably more promising than that of the year 2009, due to several prevailing positive factors. Firstly, the export sector has recovered as indicated by significantly increasing demands for Thai products in the world marketplace. Secondly, private sector confidence has been boosted. Thirdly, the current government has invested in a large number of mega projects. All these should lead to a dramatic increase in consumption spending of Thai people in general; a speedy upturn in private sector investment; as well as, robust economic growth for Thailand. keep on developing our expertise, as we believe that we have a competitive edge to succeed in this area over our competitors. We will also remain focused on our core businesses in high-purchase and residential project loans. In addition, we plan to open new branches in major cities to add convenience for our service. The new branches mean we can get closer and provide even more effective services to our customers. At Kiatnakin, we believe in equipping our personnel with the knowledge and expertise needed to perform their duties effectively, and that continuously developed service excellence will translate into long-term customer satisfaction. On behalf of the Board of Directors, I would like to express my sincere gratitude to each and every shareholder who never failed to provide us with their invaluable support, confidence and trust. Last but not least, let me assure you once again that Kiatnakin is committed to live up to its promise, to provide “Side by Side success, always”, over many, many years to come.
Ms. Nawaaporn Ryanskul Chairperson
Equally valued to all of us at Kiatnakin are the customers who have placed their trust in us, and we are determined to giving our very best to achieve their optimum satisfaction. At Kiatnakin, we never cease to develop for the better, and in 2009, the company commissioned a leading research company to conduct a survey to ascertain the levels of customer satisfaction in our products and services. As a
Annual Report 2009 Kiatnakin Bank Public Company Limited
07
Board of Directors 1. Ms. Nawaporn Ryanskul Independent Director Chairperson of the Board of Directors
2. Mr. Chet Pattrakornkul Independent Director, Member of the Audit Committee, Member of the Nomination and Remuneration Committee
3. Mr. Suraphol Kulsiri Director Member of Nomination and Remuneration Committee
4. Mr. Pichai Dachanapirom Independent Director Chairperson of the Audit Committee
5. Mr. Pravit Varutbangkul Director
6. Mr. Pracha Chumnarnkitkosol Director
4 3 2
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Annual Report 2009 Kiatnakin Bank Public Company Limited
5 1
6
Kiatnakin and Kiat Ruam Mit Education Foundation Scholarship Program
The joint program has been granting scholarships to primary and secondary school students and providing funds for buildings and educational materials since 1971, to reach out to Thai children in rural areas and offer equal education opportunities.
Bicycles for the Young Ones with World Vision Foundation of Thailand
Under this program, bicycles have been handed out since 2002 to students whose homes are far from school to assist with their daily commute. This means of transportation has given these students the chance at an uninterrupted pursuit of education.
Words of Gratitude
“We have been running this program for nine years with the help of Kiatnakin Bank. Poor children have been given bicycles to help facilitate their commute to and from the school. Academic performances and attendance rates have improved as a result.” Choosak Wootiwaropas, Director, World Vision Foundation of Thailand
2. Social Ethics and Immunity Intellect and Peace Development Program Kiatnakin Bank and the Young Buddhists Association of Thailand under the Royal Patronage of His Majesty the King have been organizing the Intellect and Peace Development Program since 1994 to give executives, employees, customers and members of the general public the opportunity to practice Vipassana Kammatthana meditation in accordance with the course developed by Siri Garinchai and other similar courses.
Words of Gratitude
“It is important for dharma practices to have a sponsor. This is where Kiatnakin Bank comes in. They help career people develop physically and spiritually for greater happiness at work.” Anirut Wongwanich, President, Young Buddhists Association of Thailand under Royal Patronage
Youth Relations Against Drugs Program Kiatnakin Bank, in collaboration with the Metropolitan Police Bureau and the Youth Relations Center, has been operating a program titled ‘Youth Relations Against Drugs’ to help educate young members of society on the dangers of drugs.
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Annual Report 2009 Kiatnakin Bank Public Company Limited
1. Education * Construction of Baan Huay Gook Nursery Center in Chiang Rai * Bicycle on Loan Program at Baan Pang Sawan School in Nakhon Sawan * Repair of building at Poo Tubberk School in Petchaboon * Repair of facilities at Mooban Pah Mai Prarajprasong School in Surat Thani * Reading Promotion Project in Konkaen * Kiatnakin Bank Library for the Children in Ratchaburi
Employee Volunteer Program Several Kiatnakin community and environmental programs in 2009 were actually initiated and carried out by the employees. Examples of these are as follows
The 1st CSR Day @ Kiatnakin
The activity was conducted in collaboration with the Corporate Social Responsibility Institute, the Stock Exchange of Thailand, the Thaipat Institute and the Foundation for Thailand Rural Reconstruction Movement under Royal Patronage to train Kiatnakin’s CSR agents on correct CSR operations.
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Annual Report 2009 Kiatnakin Bank Public Company Limited
KK Energy Saving Program (4th Year)
The program promotes among executives, employees and their family members the need to conserve energy and resources. It has been expanded to cover recycling of paper into notebooks for students in need.
One Month, One Person, One Tree
Initiated by CSR agents taking part in the 1st CSR Day @ Kiatnakin, the program encourages all employees to plant at least one tree a month to help alleviate the global warming situation. Employees are also encouraged to donate trees to Jarusorn Bamrung School in Pathum Thani to materialize a small garden for the young students there.
KK Mangrove Forest Plantation Program (2nd Year)
Kiatnakin executives and employees are continually given the chance to help preserve the environment. This program, in particular, helped restore a mangrove forest in Chonburi.
Special Activities
Annual Report 2009 Kiatnakin Bank Public Company Limited
17
Annual Report 2009 Kiatnakin Bank Public Company Limited
Risk Management and Risk Factors Risk Management is a systematic approach to forecast business risk. It is seen as a measure that could guarantee success for an organization to a certain level. At the very least, Risk Management could help minimize loss, for its capability to forecast signs of potential damaging issues. It is therefore a clear advantage for an organization to adopt risk management as its safety precaution. In order to properly confront the dynamic nature of banking business, Kiatnakin Bank Public Company Limited has established its own Risk Management Unit, an independent body directly under the authority of the Risk Management Committee. The Unit is tasked with determining and evaluating the company’s risk management policies, as well as, maintaining risk at a manageable level, in order for the Bank to continue its profitable operation. The centralized main risk management policy for the Bank is to manage overall risks of the Bank and its subsidiaries and consolidate all the risks in order to manage them effectively and sufficiently. Executives supervising each business unit of the Bank are tasked with the responsibility to understand relevant risks and to ensure that their unit has done all to minimize such risks within their respective area of responsibility, while complying to risk management policies and framework set forth by the Bank. The executives are also responsible for allocating appropriate budgets needed to suppress such risks. In conformity with the risk management guideline established by the Bank of Thailand, five major risk classifications have been identified and are described as follows. 1. Strategic Risks 2. Credit Risks 3. Market Risks 4. Liquidity Risks 5. Operational Risks
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Risk factors in 2009 and projection for 2010 In 2009, Thailand’s economy was affected by the prolonged economic recession caused by the economic tailspin that began in late 2008. Kiatnakin Bank has therefore conformed to the company’s established Risk Management Policies by increasing liquidity and maintaining adequate capital. As for 2010, there are signs that global economy is now on its way to recovery, and that the risk situation will improve. However, Kiatnakin Bank will continue to maintain rigorous risk management policies, as well as, closely monitor developments of sensitive incidents with the ultimate goal of maintaining the company’s high liquidity, good credit and secure capital management.
Strategic Risks Strategic risk arises from the process of developing strategic plans and improperly implementing them. This could be attributed to inconsistencies between strategies, policies, goals, organizational structure, competition and resources. In the end, these internal and external factors will affect the Bank’s revenue and capital. Kiatnakin Bank’s solution to this is to focus its operations in specialized areas of expertise. The Bank focuses primarily on hire-purchase loans and residential project loans, as well as, investment in financial claims, in order to increase proficiency and competitiveness. Measures used by the Bank in addressing strategic risks can be described as follows. 1. Maintaining a high capital per assets ratio in order to protect the business from the impact of future income fluctuations. The Bank maintains the ratio at a level that is higher than the averaged industry level. As of December 31st, 2009, the Bank maintained a consolidated capital per assets ratio at 16.29%, or approximately 16,883 Million Baht, which was higher than the 8.5% guideline established by the Bank of Thailand.
Management Discussion and Analysis Unit (baht)
2008
Ratio
2009
Ratio
Change
2,029,382,381
32.7
2,111,773,929
29.7
4.1.
187,482,748
3.0
169,990,252
2.4
(9.3)
4,030,494,427 178,891,320 1,365,979,486 7,792,230,362 3,120,198,862 4,672,031,500
64.9 2.9 22.0 125.5 (50.2) 75.2
4,516,891,274 382,864,353 1,194,586,758 8,376,106,566 3,038,958,993 5,337,147,573
63.5 5.4 16.8 117.7 42.7 75.0
12.1 114.0 (12.5) 7.5 19.7 14.2
83,501,242 206,877,334
1.3 3.3
23,051,731 203,567,648
0.3 2.9
(72.4) 1.6
(454,189,771)
(7.3)
(228,066,189)
(3.2)
(49.8)
(16,461,518) 249,277,698
(0.3) 4.0
(8,603,682) 326,592,258
(47.7) 31.0
17,027,284 543,968,645 111,610 756,158,754 151,241,113 1,537,512,391
0.3 8.8 0.0 12.2 2.4 24.8
28,118,841 604,165,108 4,088,743 692,063,447 133,648,329 1,778,626,234
(0.1) 4.6 0.4 8.5 0.1 9.7 1.9 25.0 100.0
6,209,543,891
100.0
7,115,773,807
14.6
988,285,852 1,255,237
682,541,682 1,898,147
(30.9) 51.2
5,220,002,802 3,174,115,782 2,045,887,020 175,212,180 3,681,865 1,866,992,975 3.57 3.46
6,431,333,978 3,333,913,901 3,097,420,077 866,488,867 2,163,651 2,228,767,559 4.26 4.26
23.2 5.0 51.4 394.5 (41.2) 19.4 19.3 23.1
65.1 11.1 3,563.4 (8.5) (11.6) 15.7
Annual Report 2009 Kiatnakin Bank Public Company Limited
31
Management Discussion and Analysis 2.Financial Status Assets As of December 31, 2009, the net assets totaled 127,354 million baht, an increase by 11.0% from the end of Year 2008. The assets comprised loans amounting 86,560 million baht, up by 7.4% and the investment in securities amounting 18,219 million baht, an increase of 556.8%; while the investment in Loan was 4,523 million baht in total, which was down by 11.5% and the non-performing assets for interbank and money market were down by 42.7%, mainly because of the decline in the interest rate. The Bank therefore, invested in bonds instead.
Asset Structure
December 31, 2008 Amount Ratio (Million baht) (%)
Cash 211 Interbank and money market items 19,225 Investment in securities - net 2,774 Investment in loans - net 5,113 Investment in properties - net 107 Loans 80,563 Allowance for doubtful accounts (3,499) (54) Allowance for troubled debt restructuring Properties foreclosed - net 7,724 Other assets 2,569 Total assets 114,733
December 31, 2009 Amount Ratio (Million baht) (%) 229 11,017 18,219 4,523 78 86,560 (3,770) (26) 7,215 3,310 127,354
0.2 6.8 2.4 4.5 0.1 70.2 (3.0) (0.0) 6.7 2.2 100.0
0.2 8.7 14.3 3.6 0.1 68.0 (3.0) (0.0) 5.7 2.6 100.0
Change (%) 8.3 (42.7) 556.8 (11.5) (26.8) 7.4 7.7 (52.3) (6.6) 28.8 11.0
Loans and receivables The total loans and receivables were 87,117 million baht, increased by 6,307 million baht or 7.8 %. The rise was sluggish when compared to the total loans and receivables in 2008, which grew at 22.0%, mainly because the Bank has controlled the asset quality, reduced the NPLs, and carefully expanded
H
Annual Report 2009 Kiatnakin Bank Public Company Limited
33
Management Discussion and Analysis Type of loans Hire Purchase Loans Residential Project loans General loans Financial claims and old loans Other loans Total loans and receivables
December 31, 2008 Amount Ratio (Million baht) (%) 70.7 57,139 17.1 13,826 8.8 7,135 3.1 2,471 0.3 242 100.0 80,813
Asset quality The asset quality has seen improvement to be in line with the Bank’s policy on asset quality management and the reduction of non-performing loan (NPLs). As of December 31, 2009, the percentage of NPL, based on the standards of the Bank of Thailand (BoT), dropped to 5.64% from the 7.15% in 2008, the ratio of NPLs net of provision (net NPLs) to total
NPLs breakdown (bank only)
Hire purchase Residential project loans General loans Financial claims and old loans Total NPLs
December 31, 2009 Amount Ratio (Million baht) (%) 60,119 69.0 15,176 17.4 8,438 9.7 2,834 3.3 550 0.6 87,117 100.0
Change (%) 5.2 9.8 18.3 14.7 127.4 7.8
loans declined from 4.53% in 2008 to 3.49% in 2009. The allowance for bad debt and doubtful accounts amounted to 3,770 million baht, and the allowance for debt restructuring was 26 million baht, or 70.0% of total NPLs of 5,442 million baht at the end of 2009, compared with the 50.3%, or 7,059 million baht of the total NPLs at the end of 2008.
December 31, 2008 December 31, 2009 Amount Ratio Percentage Amount Ratio Percentage of loans of loans (Million baht) (%) (%) (Million baht) (%) (%) 1,412 4,470 173 1,004 7,059
20.0 63.3 2.5 14.2 100.0
2.5 32.3 2.4 40.6 8.7*
986 3,455 256 746 5,442
18.1 62.9 4.7 14.3 100.0
1.6 22.8 3.0 26.3 6.2*
* % of NPL / loans excluding interbank items
collateral in place of cash payment, or the combination of different methods. The Bank’s investment in factoring, which was restructured, will be transferred to loans account, while the restructured loans under the mutual funds will remain in investment in loans account. Moreover, if debtors agreed to surrender collateral, such collateral will be recorded as Non-nperforming Assets.
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Management Discussion and Analysis As of the end of 2008, the investment in loans was 4,523 million baht, declined by 11.5%. During the year 2009, the Bank invested in loans from other companies at the amount of 889 million baht, resulting
the total investment in loans of the Bank to be at 2,586 million baht, in which its 1,376 million baht was managed by the mutual funds. Details are as follows;
Investment in loans (Million baht)
2007
2008
2009
Auctioned from FRA - booked in Funds Auctioned from FRA - booked in the Bank Auctioned from LED - booked in the Bank Total
2,894 671 3,312 6,876
2,476 451 2,186 5,113
1,938 1,210 1,376 4,523
townhouses, condominium, commercial buildings, and lands nationwide.
Investment in properties Investment in properties was by the subsidiaries of the Bank, which was the investment of the properties totaling 78 million baht, down 26.8% because of the success from the debt restructuring and the asset sales.
Liabilities Liabilities were totally 109,408 million baht, increased by 12.1% yoy, where the deposits and borrowing was up by 12.1%, or 102,173 million baht; mostly from the short-term loans from bill of exchange that was up by 62.1%, and the rise in deposits by 7.0%. While the long-term loans declined by 12.6% since the Bank did not raise the money by issuing long-term debentures in 2009, where the market situation was uninviting. The ratio of loans to deposits and borrowing was 84.7%, compared to the 88.4% in 2008.
Liabilities Deposits Interbank and money market items Short term borrowings Long term borrowings Other liabilities Total liabilities
December 31, 2008 Amount Ratio (Million baht) (%) 71,156 72.9 3,762 3.9 11,553 11.8 8,396 8.6 2,699 2.8 97,565 100.0
December 31, 2009 Amount Ratio (Million baht) (%) 76,109 69.6 3,648 3.3 18,729 17.1 7,334 6.7 3,587 3.3 109,408 100.0
Change (%) 7.0 (3.0) 62.1 (12.6) 32.9 12.1
Annual Report 2009 Kiatnakin Bank Public Company Limited
35
Management Discussion and Analysis The book value per share as of December 31, 2009 was 34.30 baht, up from the 32.82 baht per share at the end of 2008. Total paid-up capitals of the Bank on December 31, 2009 was 5,232 million baht, which was stable from the Q1 after there were some applications for the third lot of warrant of ordinary stocks (KK-W#3), where there were 630 units of warrants, or 686 ordinary shares. There was also the remaining of the forth lot of warrant of ordinary stocks (KK-W#4) with 111,329,209 units registered at the Stock Exchange of Thailand (SET), and the ESOP warrant (1st lot) amounting 6,000 units since there were no application for the KK-W#4 and ESOP#1 warrants in 2009.
Capital Adequacy The capital adequacy ratio of the Bank as of December 31, 2009 based on Basel II equaled 16.29 %, up from 15.42 % in 2008 with Tier-1 capital totaling 15.69 %. The Bank has policy to maintain higher capital funds for business expansion and for distressed assets business.
Off-balance Sheet Items The Bank’s off-balance sheet and contingent liabilities totaled 9,840 million baht, up from the 2,982 million baht in 2008, mostly because of the increase from interest rate swap and other contingencies and commitments.
3. Business segment performance The Bank and subsidiaries’ operation still underlined 5 main businesses, which are Hire purchase, residential project lending, general lending, distressed assets management, and securities business. The performances of each business area were as follows:
Hire purchase lending Total Hire purchase lending totaled 60,119 million baht, up by 5.2% from the end of 2008. New Hire-purchase business volume approved in 2009 equaled to 21,575 million baht (Q4 was amounting 7,372 million baht, Q3 was amounting 5,651 million baht, Q2 was amounting 4,829 million baht, and Q1 was amounting 3,772 million baht). The total domestic car sale in 2009 was 548,872 units, down by 10.6% compared with 614,084 units in the same period of last year. The penetration rate of KK new Hire purchase cars to the domestic car sales in 2009 stood at 4.3%. The NPLs of hire purchase loan stood at 1.6%, down from 2.5% in 2008. The proportion of new car and second-hand car was 57: 43
Hire purchase lending Billion baht 70 60 50 40 30 20 10 0
Hire-purchase e-purchase lending Ratio Others 8% Pickup cars 48%
23.6
2005
29.7
2006
208,874 221,368
57.1
60.1
2008
2009
42.8
2007
Bangkok 22% Sedans 44% New cars 57%
By Type
116,656 138,126 172,590
Second-hand cars 43%
By New/Second-hand Cars
Other provinces 78%
By Location
Annual Report 2009 Kiatnakin Bank Public Company Limited
37
Management Discussion and Analysis Credit ratings by TRIS Rating Co., Ltd. Credit rating Company rating KK085A: 1,400 million Baht senior debentures due 2008 KK087A: 3,000 million Baht senior debentures due 2008 KK08NA: 1,580 million Baht senior debentures due 2008 KK095A: 600 million Baht senior debentures due 2009 KK09NA: 920 million Baht senior debentures due 2009 KK09NB: 2,034 million Baht senior debentures due 2009 KK105A: 2,131 million Baht senior debentures due 2010 KK10NA: 966 million Baht senior debentures due 2010 KK115A: 1,289 million Baht senior debentures due 2011 KK119A: 1,450 million Baht senior debentures due 2011 Rating Outlook
January 16, 2009 AAAAAAAAStable
January 15, 2010 AAAAAStable
Source: Credit News, Announcement No. 595 dated January 16, 2009 and Announcement No. 5/2010 on January 15, 2010.
Credit ratings by Fitch Ratings (Thailand) Co., Ltd. Credit Rating (unsolicited rating) Long-term National Rating Short-term National Rating Rating Outlook
November 28 BBB+ (tha) F2 (tha) Stable
2008 May 30 BBB+ (tha) F2 (tha) Stable
Annual Report 2009 Kiatnakin Bank Public Company Limited
41
Corporate Governance independent discretion might be affected, and not be and have not been a substantial shareholder of or is a person having power to control the person that has business relationship with the Bank, or the Bank’s parent company, subsidiary, associated company, or major shareholder, or the person having power to control the Bank unless such an independent director has not been a person referred to above at present and in the past 2 years. Business relationships referred to in the first paragraph above shall mean to include any ordinary course of business or trade for business engagement purpose, any lease taking or lease out of any property, any transaction relating to asset or service, any financial support or acceptance of financial support by way of either borrowing, lending, guaranteeing or collateral providing or any other manner similar thereto that could result in an obligation required to be performed by the applicant or the party thereto in an amount of 3% or more of the net tangible asset value of the applicant or 20 million baht or more, whichever is lesser. In light of this, the method of calculation of the value of connected transaction pursuant to the Capital Market Supervising Committee’s Notification Re: Regulations in respect of Entering into a Connected Transaction shall be applied mutatis mutandis for the purpose of calculation of such amount of debt of the applicant, provided that the amount of debt incurred during the past 1 year prior to the date on which such a business relationship with such person exists; (5) Not be and have not been an auditor of the Bank or the Bank’s parent company, subsidiary, associated company, or major shareholder, or of any of the person having power to control the Bank, and not be and have not been a substantial shareholder of a person having power to control over the Bank, or a partner of any auditing firm or office in which the auditor of the Bank, or the Bank’s parent company, subsidiary, or major shareholder, or the person having power to control the Bank is working, unless such an independent director has not been a person referred to above at present and in the past 2 years; (6) Not be and have not been a professional advisor, including legal or financial advisor who receives a fee of more than 2 million baht a year from the Bank or the Bank’s parent company, a subsidiary, an associated company, or a major shareholder, or from a person having
48
Annual Report 2009 Kiatnakin Bank Public Company Limited
power to control the Bank, and not be and have not been a substantial shareholder of a person having power to control over the Bank, or a partner of any of such professional service provider firm or office, unless such an independent director has not been a person referred to above at present and in the past 2 years; (7) Not be a director appointed as a representative of a director of the Bank, a representative of a major shareholder of the Bank, or a representative of a shareholder of the Bank who is a related person of the major shareholder of the Bank; (8) Not engage in any business the nature of which is the same as that of the Bank or a Bank’s subsidiary and which, in any material respect, is competitive with the business of the Bank or a Bank’s subsidiary, or not be a substantial partner in a partnership, a director participating in any management role, an employee or officer, an advisor receiving a regular salary from a shareholder holding more than 1% of the voting shares of a company engaging in any business the nature of which is the same as that of the Bank or a Bank’s subsidiary and which, in any material respect, is competitive with the business of the Bank or a Bank’s subsidiary; (9) Not have any other characteristics that cause an inability to make an independent comment or opinion on the Bank’s operations. If a person having qualifications stated in (1)-(9) above is appointed as an independent director of the Bank, such appointed independent director may be assigned by the Bank’s Board of Directors to make a decision in respect of business operation of the Bank, or the Bank’s parent company, a subsidiary or an associated company, or a subsidiary of another company of the same level of the Bank, the major shareholder of the Bank, or a person having controlling power over the Bank, provided that such decision-making by such an appointed independent director must always be made on a collective decision basis.
Corporate Governance Attendance of Executive Committees meeting in 2009 Meeting Attendence of Members of the Executive Committee in 2009
14/15
Mr. Surawut Charuchinda Head of Debt Restructuring
15/15
Mr. Patom Amorndechawat Head of of Operations
15/15
Mr. Thitinan Wattanavekin Head of Deposit and Marketing
14/15
Mr. Chavalit Chindavanig Head of Finance and Budgeting
15/15
Mr. Tawatchai Sudtikitpisan (President)
15/15
Mr. Supol Wattanavekin (Chairman) Attendance / No. of meetings held
2
4
6
8
10
12
14
16
Committees and Sub-Committees Meetings Attendance in 2009 Meeting Attendance of Members of the Board of Directors and Sub-Committees in 2009
97
Dept Restructuring
93
Property Appraisal & Pricing
97
Retail Loans
94
Credit Loans
82
Development
89
Assets & Liabilities Management
98
Investment
100
Human Resources Management
97 Credit Loans Management
97 Risk Management
80
85
90
"Remark: Calculated from the percentage of individual committee members attending the meeting
52
Annual Report 2009 Kiatnakin Bank Public Company Limited
95
100
Corporate Governance how they adhered to good corporate governance during the past year. The Internal Audit Department compiles and summarizes the assessment reports. The overall results of the self-assessment of the Board of Directors for 2009 were 3-4 (out of a total score of 4), or 3.42 The details are as follows .
3.80 3.66
3.70 3.61
3.60 3.42
3.40 3.28
3.30 3.26
3.20
Th Se e B lf- oa As rd se of ss D m ir Qu en ec al t 2 tor iďŹ 00 s ca 9 of tio th n e sa Bo n ar d S d tr M uc em tu Ro be re le rs sa of nd th R e es Bo p ar on d sib M il em iti of be es Di rs re S ct el or f-d sa e Re nd ve la tio Ex lop ec me ns ut n hi p ive t w s ith th e M an ag em en t Du tie so ft he Bo Bo ar ar d d of Di re ct or sm ee tin gs
‘
3.00
Annual Report 2009 Kiatnakin Bank Public Company Limited
53
List Of The Bank's Major Shareholders List Of The Bank's Major Shareholders No. 1 2 3 4 5 6 7 8 9 10
Name
Number of Shares
Percentage
Thai NVDR Compant Limited Mrs. Vansamorn Wannamathee Mrs. Panida Thepkanchana Miss Thitinan Wattanavekin Chase Nominees Limited 42 State Street Bank and Trust Company, For London Chase Nominees Limited 30 Mr.Sukkarn Wattanavekin N.C.B.Trust Limited-RBS as Dep For FS J.P.Morgan Ireland (Nominees) Limited 578
65,130,143 41,511,593 41,210,806 25,979,861 25,380,400 19,847,419 19,442,622 19,012,637 17,528,950 15,224,113
12.45 7.93 7.88 4.97 4.85 3.79 3.72 3.63 3.35 2.91
Others The major and relevant shareholders are the ones listed under no. 2, 3, 4 and 8 respectively.
232,883,922 127,714,897
44.52 24.41
Total Shareholders - Thai Shareholders - Foreigner
523,152,466 336,110,456 187,042,010
100 64.25 35.75
As Of 7 August 2009
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Juristic Persons Company
Adress
Shareholder
1. Thai NVDR Company Limited
62, The Stock Exchange of Thailand building, Ratchadapisek Road, Klong Toey, Bangkok 10110
N.A.
2. Chase Nominees Limited 42
Standard Chartered Bank, Custody and Clearing Services Department, 90 Sathornnakorn Tower B, 14th Fl., North Sathorn Road, Bangrak, Bangkok 10500
N.A.
3. State Street Bank and Trust Company, For London
Standard Chartered Bank, Custody and Clearing Services Department, 90 Sathornnakorn Tower B, 14th Fl., North Sathorn Road, Bangrak, Bangkok 10500
N.A.
4. Chase Nominees Limited 30
Standard Chartered Bank, Custody and Clearing Services Department, 90 Sathornnakorn Tower B, 14th Fl., North Sathorn Road, Bangrak, Bangkok 10500
N.A.
5. N.C.B Trust Limited-RBS as Dep For FS
Citibank N.A. Securities services as Dep For FS* 82 North Sathorn Road, Bangrak, Bangkok 10500
N.A.
6. J.P.Morgan Ireland(Nominees) Limited 578
Standard Chartered Bank, Custody and Clearing Services Department, 90 Sathornnakorn Tower B, 14th Fl., North Sathorn Road, Bangrak, Bangkok 10500
N.A.
* There is no one from the Wattanavekin family or from any of the Bank's subsidiaries who is a nominee shareholder in the list of the Bank's investors. The Bank does not have any major shareholder who has signiďŹ cant inuence on management policies, on the Bank operations or on nominating an individual as an Authorized Director of the Bank.
Annual Report 2009 Kiatnakin Bank Public Company Limited
61
Management Structure Board of Directors Nomination and Remuneration Committee
Audit Committee
Risk Management Committee
Internal Audit
Risk management Investment Committee
Compliance
Executive Board Credit Committee
Investment Committee
Debt Restructuring Sub-Committee
Assets and Liabilities Management Committee Development Committee
Retail Lending Sub-Committee
President
Property Valuation and pricing Sub-Committee
Human Resource Management Committee OďŹƒce of Directors
Residential Project Lending
Retail Lending
Banking Products
62
Commercial Lending
Operations
Annual Report 2009 Kiatnakin Bank Public Company Limited
Debt Restructuring Management
Information Technology
Finance and Budgeting
Deposit and Marketing
Human Resource Management
Management Structure Our management has been structured systematically to ensure efficiency and achievement of our ultimate service goals. This structure is detailed as follows:
1. Management
It is the determination of Kiatnakin to be a leading financial institution providing integrated nagement Rendering support for these five business groups are departments such as Operations, Finance and Budget, Information Technology, Human Resources Management, Banking Products, Compliance, Internal Audit, Risk Management and the Directors’ Office. Additionally, the bank’s directors are compartmentalized into five committees: the Board of Directors, the Audit Committee, the Nomination and Remuneration Committee, the Risk Management Committee and the Executive Committee. The roles and the responsibilities of each are explained below:
Board of Directors
As representatives of shareholders, the roles, duties and responsibilities of the Board of Directors are to ensure that the business of the bank continues with stability, positive earnings, integrity and that it is free from conflicts of interest. The authority of the Board of Directors is as follows: Set up key policies and strategic goals of the Bank, review and approve the strategic plans proposed by the Executive Board. Supervise and monitor the Executive Board’s management based on approved plans, which are efficient and effective. Set up regulations to ensure the supervision of good corporate governance in matters relating to professional ethics of both Board members and Bank staff. The principles of good corporate governance will shape the organization’s operation and enable the Bank to attain high levels of business ethics and responsibility and will treat each related party equitably to prevent conflicts of interest.
Set up internal audit process to ensure that reports and information have been submitted to the Board of Directors. Supervise the Risk Management Committee to set up policies, procedures and control measures that must include credit risks, investment risks, market risks, liquidity risks and operational risks. Consider the appointment and delineate the authority and duties of the Bank’s top executives. Set up committees to make the Bank’s operations consistent with determined policies. These committees include the Audit Committee, the Nomination and Remuneration Committee, the Risk Management Committee and the Executive Board. Endorse the annual financial reports as certified by the Bank’s auditor and reviewed both by the Executive Board and the Audit Committee in order to seek approval at the shareholders meeting. Acknowledge the auditor’s opinion through the Management Letter as well as the opinion of the Executive Board. Conduct the business in accordance with applicable laws, the Articles of the Association and Memorandum of Association of the Bank, including the resolutions passed in the Shareholders Annual Meeting. In addition, the Board of Directors may seek further professional opinions from external consultants in relation to the Bank’s operations. All expenses regarding such opinions shall be borne by the Bank. o The Board of Directors must have at least one meeting every three months. o The quorum of each meeting must comprise at least half of all votes from all directors present. o The resolutions must be based on the majority of votes from all directors present. o The invitation and agenda must be sent out to the Board of Directors at least seven days prior to the meeting. o Any Board member is entitled to ask for or examine any related documents or information and/or ask management to clarify or provide more information. Annual Report 2009 Kiatnakin Bank Public Company Limited
63
Management Structure The Board of Directors consists of 10 directors, 4 of whom are independent directors, 3 are executives, 3 are non-executive directors and one is a company secretary. Their names are as follows: 1. Ms. Nawaaporn Ryanskul
Chairperson/ Independent Director 2. Mr. Pichai Dachanapirom Independent Director 3. Mr.Manop Bongsadadt Independent Director 4. Mr.Chet Pattrakornkul Independent Director 5. Mr.Tarnin Chirasoonton Non-Executive Director 6. Mr.Pravit Varutbangkul* Non-Executive Director 7. Mr. Suraphol Kulsiri* Non-Executive Director 8. Mr. Supol Wattanavekin Executive Director 9. Mr.Tawatchai Sudtikitpisan* Executive Director 10. Mr.Pracha Chumnarnkitkosol* Executive Director Ms. Porntip Chuprakhun Company Secretary *Authorized director capable of obligating the bank
Audit Committee
The Audit Committee had been assigned the following duties by the Board of Directors: To review the Bank’s financial reporting process to ensure that it is accurate and adequate. To review and evaluate the Bank’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine the internal audit unit’s and compliance unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of the internal audit unit or any other unit in charge of an internal audit and the chief of the compliance unit. To monitor the performance of the compliance unit, review the Bank’s compliance with the law on securities and exchange, the Stock Exchange of Thailand ’s regulations, and the laws relating to the Bank’s business, including review and making comments on the Bank’s annual compliance report. To consider, select and nominate an independent person to be the Bank’s auditor, and to propose 64
Annual Report 2009 Kiatnakin Bank Public Company Limited
such person’s remuneration, as well as to attend a non-management meeting with the auditor at least once a year. To consider the disclosure of the Bank’s information, paying particular attention to connected transactions, or the transactions that may lead to conflicts of interests, to ensure that they are accurate and complete, and in compliance with the laws and the Stock Exchange of Thailand’s regulations, and are reasonable and for the highest benefit to the Bank. To prepare a report on corporate governance activities by the audit committee and disclose it in the Bank’s annual report, signed by the audit committee’s chairman. To report to Bank’s Board of Directors in order that remedial action is taken within the time that the audit committee deems appropriate in case the audit committee finds or suspects any misconduct as follows: (a) a transaction which causes a conflict of interest; (b) any fraud, irregularity, or material defect in an internal control system; or (c) any violation of the laws pertaining to financial institutions, the law on securities and exchange, the Stock of Exchange of Thailand’s regulations, the Bank of Thailand’s regulations or other laws and regulations related to banking business and securities and any other laws. If the Bank’s board of directors or management fails to make rectify within the period specified by the audit committee, the committee shall disclose such transaction or act in the annual report and report to the Bank of Thailand, the office of the Securities and Exchange Commission or the Stock Exchange of Thailand accordingly. The audit committee has the authority to inspect or to question any relevant personnel regarding any related issues of the Bank. The audit committee is authorized to hire or bring in specialists to assist with the auditing process, as deemed appropriate. The audit committee is required to meet at least 4 times per year or more if necessary. The audit committee may invite the management team or any relevant person (s) to join the meeting to give
Management Structure additional information related to the matter being audited. Coordinate with the risk management committee to ensure that management adhere to the Bank’s risk management policy. To perform any other act as assigned by the Bank’s board of directors and accepted the audit committee. The Chairperson and members of the Audit Committee are all independent directors. The Audit Committee consists of 3 members as follows: 1. Mr. Pichai Dachanapirom 2. Mr. Manop Bongsadadt 3. Mr. Chet Pattrakornkul Mr. Kriengsak Sukhanaphorn
Chairperson Member Member Secretary
Nomination and Remuneration Committee
Set the policy, criteria and procedures for recruiting and selecting qualified candidates for the Bank’s directors and senior executives from Executive Vice President and up. The selected candidates are proposed to the Board of Directors for approval. Screen and propose candidates with appropriate qualifications for the following positions o Members o Members in sub-committees of the Bank whose duties, authority and responsibility shall be directly assigned by the Board of Directors o Senior executives from the title of Executive Vice President and up Ensure that the numbers and members of the Bank’s Board of Directors are sufficient and appropriate. Each Board member must have appropriate knowledge, ability and experience in relevant areas. Disclose recruitment policy as well as recruitment procedures in the Annual Report of the Bank. Set up remuneration policy and other benefits offered to the Bank’s Directors and senior executives from the Executive Vice President level upwards.
Set the guidelines on performance evaluation for the Bank’s Directors and senior executives from the Executive Vice President level upwards in order to appropriately revise the annual remuneration package. Performance evaluation shall be subject to duties, responsibilities and related risks and ability to increase long-term value of shareholder equity. Disclose remuneration policy and available options, prepare remuneration reports and disclose comments provided by the Remuneration Committee in the Annual Report of the Bank. Monitor the succession plan and recruitment for Executive Vice President level upwards and propose to the Board of Directors for approval. o The Committee must meet at least twice every year. o Each meeting must comprise not less than half of all members of the Nomination and Remuneration Committee to form a quorum. o Each resolution must be passed by majority votes exercised by members present at the meeting. The Nomination and Remuneration Committee consists of 3 members, of which the Chairperson and one member are independent directors and another is not, as follows: 1. Mr. Manop Bongsadadt,
2. Mr. Chet Pattrakornkul, 3. Mr. Suraphol Kulsiri, Ms. Nujaree Sithasrivong,
Chairperson
Member Member Secretary
The Nomination and Remuneration Committee must meet at least twice a year. Each meeting must have at least half of its members present to form a quorum and the meeting resolutions must be based on the majority votes from the members present at each meeting.
Risk Management Committee
The bank has established the authority of the Risk Management Committee as follows: Set up key risk management policy of the Bank to cover strategic risks, credit risks, market risks, liquidity risks, operational risks, legal risks and reputation risks. Annual Report 2009 Kiatnakin Bank Public Company Limited
65
Management Structure Lay down the strategy consistent with the Bank’s risk management policy as well as the criteria of provisioning for classified loans, which will enable the Bank to assess, monitor and sustain risks at an acceptable level. Review the adequacy, effectiveness and compliance of existing policies and risk control systems. Regularly report operational results of the Risk Management Committee to the Board of Directors for further improvements and performance to be in line with the risk management policy and determined risk management criteria. This report must be submitted to the Audit Committee as well. o The Committee must meet at least once every three months. o Each meeting must be comprised of no less than half of all members of the Risk Management Committee to form a quorum. o Each resolution of the meeting must be passed by majority vote exercised by members present at the meeting. The Risk Management Committee consists of 8 members as follows: 1. Mr. Supol Wattanavekin 2. Mr. Tawatchai Sudtikitpisan 3. Mr. Chavalit Chindavanig 4. Ms. Thitinan Wattanavekin 5. Mr. Patom Amorndechawat 6. Mr. Pracha Chumnarnkitkosol 7. Mr. Sarawut Charuchinda 8. Mr. Kriengsak Sukhanaphorn Mr. Siwaphong Plangthrakul
Chairperson Member Member Member Member Member Member Member Secretary
Executive Committee
The Executive Committee was appointed by the Board of Directors to set strategies, develop business plans and efficiently and effectively supervise the management team accordingly. Thus, the Board of Directors decided to set the following authorities and responsibilities for the Executive Committee: 66
Annual Report 2009 Kiatnakin Bank Public Company Limited
Set up the organizational structure for which the Executive Board has responsibility; appoint and set up the authority and responsibility of the Bank’s management officers from the position of the Executive Vice President and below. Set up the authority for credit line approval, investments, purchasing and expenses to maximize the Bank’s benefits while complying with respective laws. Set up efficient working procedures, rules, operational processes and internal control system. Supervise the Bank’s management so that it is in line with the risk framework set out by the Risk Management Committee, which covers strategic risks, credit risks, market risks, investment risks, liquidity risks, operational risks, reputation risks and legal risks. Comply with and monitor the Bank’s management team and staff members so that they comply with regulations in association with the Business Code of Conduct Code of Professional Ethics. Appoint one or more committees or one or more sub-committees to screen, consider and approve any particular matter on behalf of the Executive Board. Prepare quarterly management and performance reports to be submitted to the Board of Directors. Consider and approve loans and credit lines; approve the selling of assets for sale, the prices of foreclosed assets purchased by auction and exercise the right of objection subject to the set limits. The Executive Board may authorize at least half of its members to consider and approve these matters. Any resolution requires not less than three members of the Executive Board. In addition, the Executive Board may seek further professional opinions from external consultants concerning the Bank’s business operations. The expense of acquiring such opinions will be borne by the Bank. o The Executive Board must have at least one meeting a month. o Each meeting must have at least half of its mem-
Management Structure bers present to form a quorum. o The resolutions must be based on the majority votes of the members present. The Executive Committee consists of 6 members as follows: 1. Mr. Supol Wattanavekin 2. Mr. Tawatchai Sudtikitpisan 3. Mr. Chavalit Chindavanig 4. Ms. Thitinan Wattanavekin 5. Mr. Patom Amorndechawat 6. Mr. Sarawut Charuchinda Ms. Porntip Chuprakhun
Chairperson Member Member Member Member Member Secretary
2. Director and Executive Selection
We pay due attention to the selection of directors and executives who need to be experienced and qualified individuals in order to ensure successful administration. The Nomination and Remuneration Committee is charged with the duty of selecting and screening qualified individuals for these posts while taking into consideration good corporate governance and necessities faced by the bank. The committee is also open to the suggestions of minority shareholders with regard to the nomination of individuals for the posts of the bank’s directors and independent directors. For the selection and the appointment of independent directors, the individuals to be appointed must possess all qualifications as required by the announcements of Office of Securities and Exchange Commission and Stock Exchange of Thailand. The process is as follows: Shareholders, directors and high-level executives nominate individuals with their detailed profile to the Nomination and Remuneration Committee in order that they can be reviewed for qualification, fitness and remuneration. Candidates are nominated to the shareholders assembly in accordance with the regulation of the bank as follows:
(1) Each shareholder’s total number of votes is based on one vote per share. (2) Each shareholder must exercise all votes granted under rule (1) above. He/she can select one or more directors, but cannot determine how the votes are to be divided up. (3) The candidates who receive the most votes, in descending order, are appointed as Directors. Total number of appointments may be based on the existing number of Directors or the number desired at the time. In case of an equal score for the final available appointment, the chairman may cast the deciding vote.
3. Executives’ Remuneration (None)
Financial remuneration. Other remunerations
In setting the director’s remuneration, 3 main considerations are as follows: Monthly compensation while the director is a Chairperson and a director on the Board of Directors. Meeting allowance paid to the Chairperson and directors on attendance basis at each meeting of various boards. Annual bonus based on the Bank’s overall performance and length of service as a director. The average bonus for a director is equivalent to the average bonus of all Bank employees. The Bank set a clear and transparent policy for the director’s remuneration that is in line with the industry. The remuneration is sufficiently high to attract and retain directors with desirable qualities. Shareholder’s approval has been duly sought and granted at the shareholder’s meetings. In 2009, total remuneration for the Bank’s 9 senior executives as well as senior director of the Accounting Department, which included salaries, bonus payments and provident fund contributions, amounted to 54.48 Million Baht. The Bank did not offer stock options or the opportunity to buy or sell Bank assets to any senior executive. Annual Report 2009 Kiatnakin Bank Public Company Limited
67
Management Structure The Nomination and Remuneration Committee conducts an annual assessment of the Bank’s President every year and uses it as a basis in determining the President’s remuneration. The Chairman of the Nomination and Remuneration Committee, who is an independent director and has high seniority in the
Board of Directors, communicates the result of the assessment to the President. The remuneration of other Board members on the Executive Board, the Audit Committee, and the Nomination and Remuneration Committee, will be increased as appropriate. Details are as follows:
Board of Directors Compensation Board of Directors
Nomination and Audit Committee Remuneration Committee 175,000 -
No. Name / Last Name
Positions
1. Ms. Nawaaporn Ryanskul 2. Mr. Pichai Dachanapirom
5. Mr. Tarnin Chirasoonton
Chairperson Independent Director / Chairperson of the Audit Committee Independent Director / Chairperson of the Nomination and Remuneration Committee Independent Director, Member of the Audit Committee / Member of the Nomination and Remuneration Committee Director
360,000
-
6. Mr.Pravit Varutbangkul *
Director
360,000
7. Mr. Suraphol Kulsiri **
3. Mr. Manop Bongsadadt
720,000 360,000
475,000
190,000
665,000
480,000
192,000
672,000
-
144,000
504,000
-
-
360,000
144,000
504,000
-
15,000
375,000
150,000
525,000
8. Mr. Supol Wattanavekin
Director / Member of 360,000 Nomination and Remuneration Committee Director 360,000
-
-
360,000
144,000
504,000
9. Mr.Tawatchai Sudtikitpisan
Director
360,000
-
-
360,000
144,000
504,000
10. Mr. Pracha Chumnarnkitkosol Director
360,000 3,960,000
327,500
4. Mr. Chet Pattrakornkul
360,000
92,500
360,000
105,000
22,500
Baht 2009 Bonuses Total to be paid Total in 2010 720,000 288,000 1,008,000 535,000 214,000 749,000
15,000
52,500
360,000 144,000 504,000 4,385,000 1,754,000 6,139,000
* Extra earnings to receive in 2009 from holding the position of a Director in one of the Bank’s affiliates: 400,000 Baht
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Management Structure Shareholding of Management Team Members as of the end of 2009 Name 1. 2. 3. 4. 5. 6. 7. 8.
Position
Mr. Supol Wattanavekin Chairman of the Executive Board Mr.Tawatchai Sudtikitpisan President Mr. Chavalit Chindavanig Head of Finance & Budgeting Ms.Thitinan Wattanavekin Head of Deposit and Marketing Mr.Pracha Chumnarnkitkosol Head of Risk Management Mr. Patom Amorndechawat Head of Operations Mr.Sarawut Charuchinda Head of Debt Restructuring Ms. Suree Harnpinijsak Senior Vice President of Accounting
No. of Shares at Year’s End 9,481,042 100,000 0 25,979,861 0 0 0 37,500
Differences - 812,234* None None None None None None None
*The decrease was due to the fact that one or more of his children has reached his or her legal age.
4. Auditor’s Remuneration In 2009, the Bank and its subsidiaries engaged Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. to conduct audit services and other related services and incurred the following expenses. Audit Fee. The total audit fee of 7,350,000 Baht was paid to the audit firm and individuals or other organizations related to the auditor and the audit firm. Non-audit fee. The Bank and subsidiaries paid non-audit fees for other services including services for special regulatory reports required by the Bank of Thailand, Collective Impairment Calculation Model, and special training for the audit firms and auditors, amounting to 952,200 Baht, and 585,000 Baht will be paid in the future upon completion of the services agreed upon.
5. Internal Control We require the availability of internal control systems which are consistent with the good corporate governance principle. The objectives of internal control are as follows: 1. To ensure correctness and reliability of financial reports 2. To ensure compliance with established policies, plans and procedures, as well as with relevant laws and regulations
3. To ensure efficient governance, asset management and operation that contribute to achievement of objectives and goals of the Bank The five key internal control components are as below:
(1) Organization and Control Environment The Bank promotes all Bank personnel to be aware of the necessity of internal control systems by determining clear and measurable missions and goals. The organizational structure we have implemented allows the management to function efficiently. Code of conduct was established to declare in writing the prohibited actions on the part of the management and the employees which may lead to conflict of interest, with penalties established for any breach. An internal audit division was established as an integral part of the internal control system. They serve as a management tool with which to facilitate a good control environment. Further, policies and written procedures are in place to guide financial transactions, procurement and general management. They are conclusive and capable of preventing fraud. Personnel-wise, we have established policies for the proper recruitment and employment of staff, orientation, training and development. The performance of all employees is under the review of supervisors with a check and balance system also in place. Annual Report 2009 Kiatnakin Bank Public Company Limited
69
Management Structure (2) Risk Management Our risk management policies require constant evaluation of external and internal risk factors with potentially significant effects on the operation of our bank. We monitor the incidents causing these risk factors and implement measures to mitigate them. All employees are informed of and required to comply with risk management measures while the Internal Audit Division and the Compliance Division will monitor their performance to this end.
(3) Control Activities The Bank clearly specified the scope, power, duties of various committees and the levels of authority and transaction approval process. The authority for approval, bookkeeping and asset management is completely separate in order to realize a check and balance system. In the case where the bank engages in transactions with major shareholders, directors, executives or individuals related to such individuals, such transactions need to be reviewed as per the approved procedures. With regard to investment in subsidiaries and joint ventures, we regularly follow up on their performance and establish procedural directions for individuals appointed by the bank as directors or executives in such companies. A Compliance Division was established to ensure that the operation of the bank complies with all relevant laws. This is to mitigate risks from the conduct of business and to best uphold the reputation of the bank. In a case where a mistake arises, a committee will be appointed to seek the truth. This committee will comprise representatives from a central agency in order to verify the matter, identify a resolution and improve the operation in order to prevent the mistake from recurring in such companies. A Compliance Division was established to ensure that the operation of the bank complies with all relevant laws. This is to mitigate risks from the conduct of business and to best uphold the reputation of the bank. In a case where a
70
Annual Report 2009 Kiatnakin Bank Public Company Limited
mistake arises, a committee will be appointed to seek the truth. This committee will comprise representatives from a central agency in order to verify the matter, identify a resolution and improve the operation in order to prevent the mistake from recurring.
(4) Information and Communication The Bank has established an information technology system to provide up-to-date and relevant information for decision-making which is to be organized and presented in an easy to understand format. The information is communicated internally within the Bank and distributed to all stakeholders. Moreover, the Bank developed systems that disseminated knowledge and business understandings to enhance knowledge of the staff, their business expertise and the acumen so that they can provide the most beneficial advice and opinions to customers and others as per the Bank’s vision and mission.
(5) Monitoring and Evaluation The Bank has procedures and tools to assist executives and supervisors in monitoring and assessing performance by using Balanced Scorecard & Key Performance Indicators (KPIs). Modifications and enhancements are made promptly and as necessary to reflect the changing situations or to correct any insufficiency. Monthly and quarterly reports must be prepared on the operational performance as compared to established plans, prioritizing the details and the impacts of the damage caused and reviewing the efficiency of actions, procedures, risk management tools and internal control in accordance with the process takes into account data from the operational performance report, meeting minutes, damage report, complaints and outcome of random and occasional self-evaluation. It involves the Internal Audit Division, Compliance Division and a third party auditor. The Board of Directors evaluates the sufficiency of the internal control system on an annual basis in order to ensure that it is capable of helping the bank achieve its goals.
Management Structure 6. Personnel Policy From the Bank’s vision of being the bank that has expertise in a specialized area that the customers select as their first choice, the Bank has followed many strategies to achieve the vision. One of the most important strategies was personnel strategy. The Bank concentrated on developing our employees to be efficient and proficient in their work as well as have the knowledge, capability, and determination to support and participate in creating the best service for our customers.
Personnel Recruitment and Selection Human resources are a crucial driving force behind the success of the bank. Therefore, in order to ensure that our employees are of high quality and caliber in this time of economic hardship, we have implemented a stringent personnel recruitment and selection process that is effective at screening, evaluating and selecting of creative candidates with positive working attitude using the competency-based approach. We are also using the latest technology to access pools of quality candidates and to facilitate job applications.
Human Resources Development Realizing that personnel are an organization’s most precious resource, we have implemented processes to develop human resources in different areas from the time of their employment onwards as follows: 1. More than 60 training courses have been conducted for 230 groups of employees of all levels from directors, high-level executives to common staff in order to develop their core competency and functional competency that will allow them to carry out their duties efficiently and contribute to the future growth of the bank. We have also established the Knowledge Management and the Community of Practice projects to facilitate human resources development.
2. With good quality of life and good health contributing to the highest level of performance, we make it a point to help our employees through activities such as 30-Storey Vertical Marathon, Love & First Height, Healthy Contest, yoga and aerobic classes, as well as other activities that can be used to benefit a larger society. We remind our staff how to take care of their financial health as well. Additionally, with family being an element of utmost importance, we have devoted a room for breast milk storage for when the need arises, and, developed programs to help retiring employees manage their finances, health, mood and recreational activities. This is to make sure that they enjoy their post-retirement life, knowing that they have had a rich and successful career over the prior years.
Internal Communication Internal communication is crucial to the fostering of unity inside of an organization. It familiarizes people and helps create a better understanding between executives and employees, as well as among employees, for a more positive working environment and a more efficient achievement of business goals. Therefore, we have developed technologically current channels for regular communication with employees such as the KK World Intranet and bulletin boards so employees can be fully updated about internal and external developments and in a timely manner and even exchange opinions among themselves. Therefore, we have developed technologically current channels for regular communication with employees such as the KK World Intranet and bulletin boards so employees can be fully updated about internal and external developments and in a timely manner and even exchange opinions among themselves.
Annual Report 2009 Kiatnakin Bank Public Company Limited
71
Management Structure 7. Related Transactions Transactions with individuals with possible conflicts in 2009 are detailed in the table below.
72
Name and Relationship and Terms
Description and amount Necessity and Reasonableness
Leasing transaction with Chotthanawat Co., Ltd. which hasshareholders related tothe director or Bank’sexecutive who is also a shareholder or has controlling power or able to significantly influence decisions. The Bank own 99.96% the shares
The Bank lease storage and parking spaces from Chotthanawat Co., Ltd. Total leasing and service fees are Baht 7.7 million per annum.
Deposit transactions by the Bankûs directors, executives and related persons
Conducted by 71 of the Bank’s directors, executives and related persons. Total deposits were Baht 689 million and total interest paid was Baht 13.59 million.
A normal deposit transactions by the Bankûs directors, executives, and related persons.
Provided service with the same interest rates as other customers.
Securities trading transactions by the Bankûs directors/ executives with the securities company (KKS)
which resulted in a total commission of Baht 3.31 million
A normal security brokerage service provided by KKS to directors/executives
Provided service with the same commission fee as other customers
Annual Report 2009 Kiatnakin Bank Public Company Limited
Leasing and service fees for the Bank's parking spaces and auction place for repossessed automobiles that have been ongoing since 2004.
Fairness of Price and Terms Leasing and service fees are comparable with market rates
Dividend Payment Policy The bank’s policy on dividend payments is that no more than 60% of net profit as per the annual consolidated financial statements will be paid as dividend. Any payout of dividends must be approved at a general meeting of shareholders. An interim dividend payment can be made if the bank’s profit is appropriate for that purpose, and it shall be reported to the following general meeting of shareholders for information. In the matter of considering the payment of dividends, the Bank takes into account operating results, long-term returns to shareholders and capital adequacy, which encompass business plans, bankingbusiness risks and pre- and post-effects of dividend payments. Dividends are paid out on the basis of division by the number of shares, in an equal amount per share, in accordance with the law and in accordance with the announcements of the Bank of Thailand.
Annual Report 2009 Kiatnakin Bank Public Company Limited
73
Report of the Board of Directors on Accountability for the Financial Statements The Board of Directors of Kiatnakin Bank Public Company Limited is genuinely concerned about our duties and responsibilities to ensure compliance with the principles of good corporate governance. We are responsible for the consolidated financial statements of the Bank and its subsidiaries, as well as for the financial information that appears in the Annual Report for the accounting year ending December 31, 2009, which have been prepared in accordance with Generally Accepted Accounting Principles (GAAP). An appropriate accounting policy was chosen and consistently maintained, using mostprudent discretion and best judgment. Sufficient information is disclosed in the notes to the financial statements, which have been reviewed and unconditionally approved by an independent licensed auditor. Therefore, these financial statements transparently, truthfully and reliably represent the financial status and the performance of the Bank for the year 2009.
In this regard, we have appointed the Audit Committee, which consists of independent directors responsible for ensuring that the Bank produces accurate and sufficient financial reports. The committee is also responsible for the review of all disclosures of the Bank’s information where related transactions have taken place or where there may be conflicts of interest in order to ensure their accuracy and completeness. The opinion of the Audit Committee related to these matters is included in the Audit Committee’s Report section of this Annual Report. It is our opinion that the overall internal control of the bank is satisfactory in that it sufficiently and appropriately provides credibility to the financial statements of the Bank and subsidiaries for the accounting year ending December 31, 2009.
An effective internal control system was established to ensure that all accounting records are accurate, complete and sufficient to facilitate the Bank in maintaining all of its assets. The system helped the Bank to identify any potential weakness and prevent fraudulent or significant mismanagement of its business operations. Nawaaporn Ryansakul Chairperson of the Board
74
Annual Report 2009 Kiatnakin Bank Public Company Limited
Report of the Independent Certified Public Accountants TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
KIATNAKIN BANK PUBLIC COMPANY LIMITED We have audited the accompanying consolidated balance sheets of Kiatnakin Bank Public Company Limited and subsidiaries and the separate balance sheets of Kiatnakin Bank Public Company Limited as at December 31, 2009 and 2008 and the related consolidated and the separate statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Bank’s management as to their correctness and completeness of the presentation. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the aforementioned consolidated and the separate financial statements present fairly, in all material respects, the financial position of Kiatnakin Bank Public Company Limited and subsidiaries and of Kiatnakin Bank Public Company Limited as at December 31, 2009 and 2008 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Dr. Suphamit Techamontrikul Certified Public Accountant (Thailand) BANGKOK Registration No. 3356 February 24, 2010 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO.,LTD.
Annual Report 2009 Kiatnakin Bank Public Company Limited
75
BALANCE SHEETS KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
AS AT DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS 2009
2008
2009
2008
228,648,692
211,132,097
227,398,692
209,877,097
Notes ASSETS CASH INTERBANK AND MONEY MARKET ITEMS - DOMESTIC ITEMS Interest bearing Non-interest bearing Total interbank and money market items INVESTMENTS IN SECURITIES Short-term investments, net Long-term investments, net Investments in subsidiaries, net Total investments in securities, net INVESTMENTS IN LOANS, NET INVESTMENTS IN PROPERTIES NET ACCOUNTS RECEIVABLE FROM CLEARING HOUSE LOANS AND ACCRUED INTEREST RECEIVABLE Loans Securities and derivative business receivables Total loans and receivables Accrued interest receivable Total loans and accrued interest receivable Less Allowance for doubtful accounts Allowance for troubled debt restructurings Net loans and accrued interest receivable PROPERTIES FORECLOSED - NET LAND, PREMISES AND EQUIPMENT - NET INTANGIBLE ASSETS - NET OTHER ASSETS TOTAL ASSETS
5 10,166,651,892 18,422,725,200 9,851,758,589 18,250,925,016 667,781,702 701,650,460 802,305,607 850,254,943 11,016,906,835 19,225,030,807 10,553,409,049 18,918,706,718 6
7
6,170,066,200 12,048,452,061 18,218,518,261 4,523,461,184 78,040,002
Annual Report 2009 Kiatnakin Bank Public Company Limited
933,990,816 5,080,458,409 1,840,013,538 12,040,167,481 6,859,484,350 2,774,004,354 23,980,110,240 5,112,999,450 2,585,572,179 106,643,684
234,558,450
35,418,179
86,560,031,073 556,925,082 87,116,956,155 521,028,482 87,637,984,637 (3,770,051,263) (25,710,718) 83,842,222,656
80,562,842,359 249,750,839 80,812,593,198 547,454,067 81,360,047,265 (3,499,231,622) (53,866,276) 77,806,949,367
467,247,848 1,832,410,314 7,342,123,732 9,641,781,894 2,637,444,196 -
-
-
86,560,031,073 7,504,938 86,567,536,011 519,888,134 87,087,424,145 (3,763,489,619) (25,710,718) 83,298,223,808
80,562,842,359 7,504,938 80,570,347,297 546,042,093 81,116,389,390 (3,469,580,473) (53,866,276) 77,592,942,641
8
9 11
12 13 14 15
7,214,636,952 7,723,816,407 6,393,016,769 6,786,829,316 683,351,788 698,710,205 716,449,456 727,806,441 164,635,777 146,437,592 134,336,165 175,059,625 873,893,896 1,119,114,167 793,600,649 1,094,193,827 127,354,052,925 114,732,775,289 129,020,190,886 117,398,870,464
The notes to the financial statements form an integral part of these statements
76
SEPARATE FINANCIAL STATEMENTS
BALANCE SHEETS (CONTINUED) KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
AS AT DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS Notes LIABILITIES AND SHAREHOLDERS’ EQUITY DEPOSITS Deposits in Baht Total deposits INTERBANK AND MONEY MARKET ITEMS - DOMESTIC ITEMS Interest bearing Non-interest bearing Total interbank and money market items LIABILITIES PAYABLE ON DEMAND ACCOUNTS PAYABLE TO CLEARING HOUSE SECURITIES AND DERIVATIVE BUSINESS PAYABLES BORROWINGS Short-term borrowings Long-term borrowings Total borrowings ACCRUED INTEREST EXPENSES OTHER ACCOUNTS PAYABLE INCOME TAX AND SPECIFIC BUSINESS TAX PAYABLE OTHER LIABILITIES TOTAL LIABILITIES
2009
2008
SEPARATE FINANCIAL STATEMENTS 2008
2009
16 76,109,216,305 71,155,762,434 76,109,227,559 71,155,762,434 76,109,216,305 71,155,762,434 76,109,227,559 71,155,762,434 17 3,644,727,985 3,412,793 3,648,140,778 195,492,397 35,081,034 431,400,288
3,760,512,084 1,756,478 3,762,268,562 277,210,000 200,335,122
3,722,507,639 5,815,487 3,728,323,126 195,492,397 -
4,047,899,997 3,848,597 4,051,748,594 277,210,000 -
18 18,729,310,439 11,552,912,885 21,399,310,439 14,432,912,885 7,334,459,686 8,395,666,937 7,334,459,686 8,395,666,937 26,063,770,125 19,948,579,822 28,733,770,125 22,828,579,822 484,231,846 656,482,622
19
794,448,207 473,725,671
488,347,436 628,378,230
802,534,778 451,974,830
39,392,140 634,866,083 39,453,812 638,235,813 801,363,422 913,492,884 1,081,959,212 1,145,968,060 109,408,019,268 97,565,276,514 111,600,364,168 100,408,566,020
Annual Report 2009 Kiatnakin Bank Public Company Limited
77
BALANCE SHEETS (CONTINUED) KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
AS AT DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS 2009
2008
2009
2008
7,228,455,710
7,228,455,710
7,228,455,710
7,228,455,710
5,231,524,660 2,655,779,138
5,231,517,800 8,483,233 2,647,294,293
5,231,524,660 2,655,779,138
5,231,517,800 8,483,233 2,647,294,293
1,218,803,372
1,617,507,040
131,602,422
316,112,818
(236,265,579)
30,915,301
(227,208,845)
50,381,764
Notes LIABILITIES AND SHAREHOLDERS’ EQUITY (CONTINUED) SHAREHOLDERS’ EQUITY SHARE CAPITAL Authorized share capital 722,845,571 ordinary shares of Baht 10 each Issued and fully paid-up share capital 523,152,466 ordinary shares of Baht 10 each (December 31, 2008 : 523,151,780 shares of Baht 10 each) WARRANTS SHARE PREMIUM FAIR VALUE RESERVES ON INVESTMENT IN LOANS GAIN (LOSS) FAIR VALUE RESERVES ON AVAILABLE-FOR-SALE SECURITIES RETAINED EARNINGS Appropriated Legal reserve Other reserve Unappropriated TOTAL SHAREHOLDERS' EQUITY OF THE BANK MINORITY INTERESTS TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY OFF-BALANCE SHEET ITEMS - CONTINGENCIES AVALS ON BILLS AND GUARANTEES ON LOANS OTHER CONTINGENCIES AND COMMITMENTS
20
21
22
722,845,571 722,845,571 722,845,571 722,845,571 380,000 380,000 380,000 380,000 8,319,290,406 6,875,215,396 8,904,903,772 8,013,288,965 17,912,357,568 17,134,158,634 17,419,826,718 16,990,304,444 33,340,141 33,676,089 17,946,033,657 17,167,498,775 17,419,826,718 16,990,304,444 127,354,052,925 114,732,775,289 129,020,190,886 117,398,870,464
24 482,933,337 9,357,419,998
Mr.Tawatchai Sudtikitpisan Director
The notes to the financial statements form an integral part of these statements
78
Annual Report 2009 Kiatnakin Bank Public Company Limited
SEPARATE FINANCIAL STATEMENTS
116,799,711 2,865,341,434
482,933,337 9,357,419,998
116,799,711 2,865,341,434
Mr.Pracha Chumnarnkitkosol Director
STATEMENTS OF INCOME KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS Notes INTEREST AND DIVIDEND INCOME Interest on loans Interest on interbank and money market items Hire-purchase and financial lease income Interest and dividend on securities Interest on investment in loans Total interest and dividend income INTEREST EXPENSES Interest on deposits Interest on interbank and money market items Interest on short-term borrowings Interest on long-term borrowings Fees and charges on borrowings Total interest expenses Net interest and dividend income BAD DEBTS AND DOUBTFUL ACCOUNTS LOSS ON DEBT RESTRUCTURING NET INTEREST AND DIVIDEND INCOME AFTER BAD DEBTS AND DOUBTFUL ACCOUNTS AND LOSS ON DEBT RESTRUCTURING NON-INTEREST INCOME Gain on disposal of investment in securities Gain on revaluation of investment Impairment loss on investment in loans Impairment loss on investment in properties Brokerage fees Fees and services income Acceptance, avals and guarantees Others Gain on exchanges Gain from sale of foreclosed assets Other income Total non-interest income
7
27
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
2008
2,111,773,929 169,990,252 4,516,891,274 382,864,353 1,194,586,758 8,376,106,566
2,029,382,381 187,482,748 4,030,494,427 178,891,320 1,365,979,486 7,792,230,362
2,106,033,417 162,573,894 4,516,891,274 998,164,936 670,058,175 8,453,721,696
2,013,868,262 177,410,477 4,030,494,427 2,548,452,449 981,152,917 9,751,378,532
2,233,628,195 99,897,748 436,556,840 268,617,595 258,615 3,038,958,993 5,337,147,573 682,541,682 1,898,147
1,950,620,091 133,374,209 663,174,478 357,992,420 15,037,664 3,120,198,862 4,672,031,500 988,285,852 1,255,237
2,229,121,226 108,206,943 489,881,634 268,617,595 258,615 3,096,086,013 5,357,635,683 685,734,582 1,898,147
1,981,174,267 142,576,811 788,423,861 357,992,420 15,037,664 3,285,205,023 6,466,173,509 986,291,687 1,255,237
4,652,707,744
3,682,490,411
4,670,002,954
5,478,626,585
23,051,731 203,567,648 (228,066,189) (8,603,682) 326,592,258
83,501,242 206,877,334 (454,189,771) (16,461,518) 249,277,698
45,863,127 174,884,112 (266,275,022) -
172,058,426 254,194,472 (499,060,851) -
28,118,841 604,165,108 4,088,743 692,063,447 133,648,329 1,778,626,234
17,027,284 543,968,645 111,610 756,158,754 151,241,113 1,537,512,391
28,118,841 605,483,931 4,086,703 119,058,809 114,779,065 825,999,566
17,027,284 549,961,665 110,327 110,306,951 604,598,274
Annual Report 2009 Kiatnakin Bank Public Company Limited
79
STATEMENTS OF INCOME (CONTINUED) KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS 2009
2008
2009
2008
1,466,816,830 559,567,310 130,999,153 234,074,710 7,408,700
1,209,988,131 463,915,626 153,099,081 334,311,618 8,185,001
1,263,158,179 475,822,397 130,434,679 192,836,689 5,906,200
1,059,203,291 371,066,402 152,496,509 197,107,829 6,625,001
270,415,793 15,936,507 648,694,898 3,333,913,901
169,480,392 216,395,376 618,740,557 3,174,115,782
270,415,793 24,047,722 593,792,410 2,956,414,069
169,480,392 116,567,129 279,675,625 538,837,984 2,891,060,162
3,097,420,077 866,488,867 2,230,931,210
2,045,887,020 175,212,180 1,870,674,840
2,539,588,451 863,281,095 1,676,307,356
3,192,164,697 175,212,180 3,016,952,517
2,228,767,559 2,163,651 2,230,931,210
1,866,992,975 3,681,865 1,870,674,840
1,676,307,356 1,676,307,356
3,016,952,517 3,016,952,517
Notes NON-INTEREST EXPENSES Personnel expenses Premises and equipment expenses Taxes and duties Fee and service expenses Directors’ remuneration Contributions to the Financial Institutions Development Fund and Deposit Protection Agency Loss from sale of foreclosed assets Loss from revaluation of foreclosed assets Other expenses Total non-interest expenses INCOME BEFORE INCOME TAX LESS INCOME TAX NET INCOME
28
29
NET INCOME ATTRIBUTABLE TO: EQUITY HOLDERS OF THE BANK MINORITY INTEREST
SEPARATE FINANCIAL STATEMENTS
BASIC EARNINGS PER SHARE
BAHT
25
4.26
3.57
3.20
5.77
DILUTED EARNINGS PER SHARE
BAHT
25
4.26
3.46
3.20
5.59
The notes to the financial statements form an integral part of these statements
Mr.Tawatchai Sudtikitpisan Director
80
Annual Report 2009 Kiatnakin Bank Public Company Limited
Mr.Pracha Chumnarnkitkosol Director
Annual Report 2009 Kiatnakin Bank Public Company Limited
81
Balance as at January 1, 2008 - as previously reported Adjustment : Cumulative effect of accounting change Balance after adjustment - as restated Fair value reserve decrease Net loss recognized in the shareholders' equity Net income Total net gain (loss) recognized Legal reserve Dividend paid Ordinary shares Warrants Repayments of capital reduction for minority interest Dividend paid for minority interest Closing balances as at December 31, 2008 22 23 20 21
Notes
KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
137,017,633 -12,314,779 124,702,854 -93,787,553 -93,787,553 -93,787,553 30,915,301
464,293,655
10,867,643 2,641,305,128 1,503,495,367 10,867,643 2,641,305,128 1,967,789,022 -350,281,982 -350,281,982 -350,281,982 5,989,165 -2,384,410 2,647,294,293 1,617,507,040 8,483,233
5,216,870,040 14,647,760 5,231,517,800
Warrants
Share premium
5,216,870,040
Issued and paid-up share capital
Fair value Fair value reserves on reserves (deficit) on available-forinvestment in sale securities loans
Appropriated Legal General reserve reserve
715,460,030 380,000 7,385,541 722,845,571 380,000
-1,675,913,824 16,931,712,239 -444,177,585 -444,177,585 1,870,674,840 1,426,497,255 -1,201,346,702 20,636,925 -2,384,410 -1,506,607 -6,109,925 17,167,498,775
-3,173,781 37,382,858 -108,050 -108,050 3,681,865 3,573,815 -1,506,607 -6,109,925 33,340,141 -3,163,920,631 6,216,954,664 1,866,992,975 1,866,992,975 -7,385,541 -1,201,346,702 6,875,215,396
Total 40,556,639 18,607,626,063
Minority interest 9,380,875,295
Unappropriated retained earnings
BAHT
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
715,460,030 380,000
CONSOLIDATED FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
82
Annual Report 2009 Kiatnakin Bank Public Company Limited
23 20 21
5,231,517,800 6,860 5,231,524,660
Issued and paid-up share capital
The notes to the financial statements form an integral part of these statements
Balance as at January 1, 2009 Fair value reserve decrease Net loss recognized in the shareholders' equity Net income Total net gain (loss) recognized Dividend paid Ordinary shares Warrants Repayments of capital reduction for minority interest Dividend paid for minority interest Closing balances as at December 31, 2009
Notes
KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
8,483,233 -8,483,233 -
Warrants 2,647,294,293 3,061 8,481,784 2,655,779,138
Share premium
380,000 380,000 722,845,571 722,845,571
30,915,301 -267,180,880 -267,180,880 -267,180,880 -236,265,579 1,617,507,040 -398,703,668 -398,703,668 -398,703,668 1,218,803,372
Appropriated General Legal reserve reserve
Minority interest 6,875,215,396 33,340,141 -542,493 -542,493 2,228,767,559 2,163,651 2,228,767,559 1,621,158 -784,692,549 -265,003 -1,020,207 8,319,290,406 33,676,089
Unappropriated retained earnings
17,167,498,775 -666,427,041 -666,427,041 2,230,931,210 1,564,504,169 -784,692,549 9,921 -1,449 -265,003 -1,020,207 17,946,033,657
Total
BAHT
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
Fair value Fair value reserves on reserves (deficit) on available-forinvestment in sale securities loans
CONSOLIDATED FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED)
Annual Report 2009 Kiatnakin Bank Public Company Limited
83
23 20 21
22 23 24 21
Warrants 10,867,643 -2,384,410 8,483,233 8,483,233 -8,483,233 -
Issued and paid-up share capital 5,216,870,040 14,647,760 5,231,517,800 5,231,517,800 6,860 5,231,524,660
The notes to the financial statements form an integral part of these statements
Opening balance as at January 1, 2009 Fair value reserve decrease Net loss recognized in the shareholders' equity Net income Total net gain (loss) recognized Dividend paid Ordinary shares Warrants Closing balances as at December 31, 2009
Opening balance as at January 1, 2008 Fair value reserve decrease Net loss recognized in the shareholders' equity Net income Total net gain (loss) recognized Legal reserve Dividend paid Ordinary shares Warrants Closing balances as at December 31, 2008
Notes
KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2,647,294,293 3,061 8,481,784 2,655,779,138
2,641,305,128 5,989,165 2,647,294,293
Share premium
316,112,818 -184,510,396 -184,510,396 -184,510,396 131,602,422
464,293,655 -148,180,837 -148,180,837 -148,180,837 316,112,818 50,381,764 -277,590,609 -277,590,609 -277,590,609 -227,208,845
137,526,281 -87,144,517 -87,144,517 -87,144,517 50,381,764
722,845,571 722,845,571
715,460,030 7,385,541 722,845,571
380,000 380,000
380,000 380,000
8,013,288,965 1,676,307,356 1,676,307,356 -784,692,549 8,904,903,772
6,205,068,691 3,016,952,517 3,016,952,517 -7,385,541 -1,201,346,702 8,013,288,965
-
-
Minority interest
16,990,304,444 -462,101,005 -462,101,005 1,676,307,356 1,214,206,351 -784,692,549 9,921 -1,449 17,419,826,718
15,391,771,468 -235,325,354 -235,325,354 3,016,952,517 2,781,627,163 -1,201,346,702 20,636,925 -2,384,410 16,990,304,444
Total
BAHT
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
SEPERATE FINANCIAL STATEMENTS Fair value Fair value Appropriated Unappropriated reserves on reserves (deficit) on Legal retained investment in available-forGeneral reserve earnings loans sale securities reserve
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED)
STATEMENTS OF CASH FLOWS KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS
CASH FLOWS FROM OPERATING ACTIVITIES Net income before tax Adjustments to reconcile net income to cash provided by (paid in) operating activities: Depreciation and amortization Bad debt and doubtful accounts Loss on troubled debt restructuring transactions Unrealized gain on foreign exchange Provision for diminution in value of securities (reversal) Provision for diminution in value of properties foreclosed Loss on revaluation of investment in loans and properties Gain from transfering investment in loans to loans Gain on disposal of securities Gain on disposal of equipment Loss on written off of equipment Amortization of deferred income on disposal of leasehold right Provision for retirement benefits Decrease in specific business tax payable Increase (decrease) in accrued expenses Dividend received from subsidiaries Net income from interest and dividends Proceeds from interest and dividends Interest paid Cash paid for corporate income tax Profit from operations before changes in operating assets and liabilities
84
Annual Report 2009 Kiatnakin Bank Public Company Limited
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
2008
3,097,420,077
2,045,887,020
2,539,588,451
3,192,164,697
357,319,573 902,715,543 1,898,147 (1,253,354) (22,738,528) 15,936,507 290,672,724 (171,116,203) (224,999) (8,806,029) 3,092,787
228,399,112 1,176,216,840 1,255,237 42,005,852 216,395,376 506,705,437 (213,838,199) (176,537,070) (14,283,469) 13,081,942
330,292,077 906,472,945 1,898,147 (1,253,354) 925,805 24,047,722 320,277,875 (171,116,203) (45,320,614) (5,166,633) 1,848,467
191,151,958 1,174,626,384 1,255,237 279,675,625 535,115,000 (213,838,199) (274,701,204) (11,849,721) 7,720,844
(11,150,293) (11,150,293) 20,118,322 82,417,086 19,745,764 82,700,274 (583,165) (5,082,041) (815,982) (4,981,755) (898,882) 145,556,694 (27,001,699) 102,668,700 (517,936,083) (2,524,679,415) 4,645,303,464 3,806,065,868 3,607,450,341 2,364,127,188 (5,337,147,573) (4,672,031,500) (5,357,635,683) (6,466,173,509) 8,246,595,666 7,812,514,704 8,224,316,085 9,770,548,958 (3,349,175,354) (3,087,149,106) (3,410,273,355) (3,255,661,739) (245,329,490) (400,236,049) (243,809,715) (399,760,648) 3,960,246,713
3,459,163,917
2,820,047,673
2,013,080,250
STATEMENTS OF CASH FLOWS (CONTINUED) KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS 2009
2008
SEPARATE FINANCIAL STATEMENTS 2008
2009
CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) (Increase) decrease in operating assets Interbank and money market items 8,170,282,704 (17,428,020,747) 980,000,000 Securities purchased under resale agreement Investment in trading and available-for-sale securities (4,466,715,821) 2,394,908,936 555,051,135 Investment in loans (353,046,972) 48,421,250 Investment in properties 20,000,000 118,561,805 (199,140,271) Accounts receivable from Clearing House (10,362,629,706) (19,122,196,816) Loans and receivables 4,349,339,652 4,187,680,700 Properties foreclosed (212,309,606) 13,055,344 Other assets
8,327,456,401 (17,402,335,283) 980,000,000 (3,884,893,457) 2,679,371,839 294,440,433 (714,171,934) (9,895,508,697) (19,407,503,183) 4,085,811,369 3,688,584,707 7,403,338 (260,197,873)
Increase (decrease) in operating liabilities Deposits Interbank and money market items Liabilities payable on demand Accounts payable to Clearing House Securities and derivative business payables Short-term borrowings Other payables Other liabilities Net cash provided by operating activities
4,953,465,125 (323,425,468) (81,717,603) 8,009,190,303 176,403,399 44,589,356 13,524,649,805
CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchase of long-term investment in securities Proceeds from sales of long-term investment in securities Proceeds from capital reduction of investment in subsidiaries Dividend received from subsidiaries Purchase of premises and equipment Proceeds from sales of equipment Purchase of intangible assets Proceeds from sales of intangible assets Net cash provided by (used in) investing activities
4,953,453,871 (114,127,784) (81,717,603) 35,081,034 231,065,166 9,669,190,303 182,756,951 39,867,375 16,046,960,956
(11,407,765,388) 225,000 (227,961,159) 9,217,602 (64,166,534) 975,405 (11,689,475,074)
29,802,104,599 696,289,763 29,813,931 (149,549,601) 1,451,784,391 (449,540,849) 177,031,245 6,539,194,053
29,802,104,599 925,477,481 29,813,931 211,784,391 (270,581,682) 114,614,138 3,398,653,748
(2,557,612,159) (11,401,129,290) (2,557,612,159) 225,000
1,718,371,820
528,734,297 517,936,083 (208,682,955) (295,996,373) 5,457,002 15,748,131 (60,984,270) (48,303,949) (1,167,745,049) (10,618,444,133)
595,328,268 2,524,679,415 (284,176,608) 13,093,458 (44,465,470) 1,965,218,724
1,718,419,301
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STATEMENTS OF CASH FLOWS (CONTINUED) KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
BAHT CONSOLIDATED FINANCIAL STATEMENTS 2009 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from increase in share capital Proceeds from share premium Proceeds from sale of debenture Cash paid for debenture redemption Dividend payment Repayments of share capital to minority interest Dividend paid for minority interest Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at January 1, Cash and cash equivalents at December 31,
5,411 3,061 63,000,000 (3,617,000,000) (784,692,549) (1,020,207) (265,003) (4,339,969,287)
2008
SEPARATE FINANCIAL STATEMENTS 2009
2008
12,263,350 5,411 12,263,350 5,989,165 3,061 5,989,165 10,486,000,000 1,513,000,000 10,486,000,000 (14,596,000,000) (3,617,000,000) (14,596,000,000) (1,201,346,702) (784,692,549) (1,201,346,702) (6,109,925) (1,506,607) (5,300,710,719) (2,888,684,077) (5,293,094,187)
17,516,595 211,132,097 228,648,692
70,738,285 140,393,812 211,132,097
17,521,595 209,877,097 227,398,692
70,778,285 139,098,812 209,877,097
3,856,096,705 258,326,694
4,445,043,038 362,783,452
3,716,046,544 258,326,694
4,374,708,061 362,783,452
(398,703,668)
(350,281,982)
(184,510,396)
(148,180,837)
(267,180,880)
(93,787,553)
(277,590,609)
(87,144,517)
Additional cash flows information Non-cash transactions Transfer of assets for loan settlement Transfer of investments in loans to be loans Decrease in fair value reserves on investment in loans Decrease in fair value reserves on available-for-sale securities
The notes to the financial statements form an integral part of these statements
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NOTES TO THE FINANCIAL STATEMENTS KIATNAKIN BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2009
1. GENERAL Kiatnakin Bank Public Company Limited “the Bank” was incorporated in Thailand. Its head office is located at 500, Amarin Tower, Ploenchit Road, Pathumwan, Bangkok. The Bank provides banking business through its branch network in Thailand.
2. BASIS FOR PREPARATION OF THE FINANCIAL STATEMENTS 2.1 Basis for Preparation of the Financial Statements The consolidated and separate financial statements for the years ended December 31, 2009 and 2008, are presented as prescribed by the Bank of Thailand’s Notification dated August 3, 2008, related to the Preparation and Announcement of Financial Statements of Commercial banks and Holding companies of Financial Industry, issued under the Financial Institution Business Act B.E. 2551 and the Bank changes the format of presentation of the financial statements to comply with the Thai Accounting Standard (TAS) No.1 (Revised 2007) “Presentation of Financial Statement” (previously No. 35) which are effective for financial periods beginning on or after January 1, 2008 onward. The Bank maintains its accounting records in Thai Baht and prepares its statutory financial statements in the Thai language in conformity with financial accounting standards used by the banking industry in Thailand. The financial statements are prepared in accordance with accounting principles and practices generally accepted in Thailand and the Bank of Thailand’s guidelines. The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The Federation of Accounting Professions has issued Notification of Federation of Accounting Professions No. 86/2551 dated November 12, 2008 regarding the accounting standards that have been announced in the Royal Gazette, for financial statements covering periods beginning on or January 1, 2009. TAS 36 (Revised 2007) Impairment of Assets TAS 54 (Revised 2007) Non-current Assets Held for Sale and Discontinued Operations The Federation of Accounting Professions has issued the Notification of Federation of Accounting Professions No. 12/2552 dated May 15, 2009 regarding the renumbering of Thai Accounting Standards and Thai Financial Reporting Standards to be equivalent to the International Accounting Standards and the International Financial Reporting Standards. The Federation of Accounting Professions has issued the Notification of Federation of Accounting Professions No. 16/2552 dated May 21, 2009 regarding the new and revised accounting standards that have been announced in the Royal Gazette, but not yet in effective in 2009 as follows: - Two revised accounting standards that will supersede previously issued accounting standards when they become effective on January 1, 2011 are “Accounting Framework” (Revised 2007) and Accounting Standard No. 24 (Revised 2007) “Related Party Disclosures” (previously No. 47). - The new accounting standard that will be effective on January 1, 2011 is Accounting Standard No. 40 “Investment Property”. - The new accounting standard that will be effective on January 1, 2012 is Accounting Standard No. 20 “Accounting for Government Grants and Disclosure of Government Assistance”. These accounting standards will supersede previously issued accounting standards when they become effective. The Bank will adopt those accounting standards on each effective date as guidance. The management has assessed the impact of these accounting standards that those accounting standards will have no material effect, when they become effective, on the consolidated and separate financial statements.
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2.2
Basis for Preparation of the Consolidated Financial Statements
The consolidated financial statements include the accounts of the Bank and the subsidiaries where more than 50 % of the shares are owned by the Bank. Significant intercompany transactions and balances have been eliminated. The subsidiaries which were incorporated in Thailand are as follows:
Ownership Interest (%)
Kiatnakin Securities Co., Ltd. Erawan Law Office Co., Ltd. Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property Fund 1 Asia Recovery Property Fund 3 CMIC Development Company Limited
Type of Business
As at December 31, 2009
As at December 31, 2008
Securities Law Office Unit trust Unit trust Unit trust Unit trust Unit trust Unit trust Real estate
99.99 99.93 99.95 99.59 99.97 98.91 99.50 98.77 80.58
99.99 99.95 99.59 99.97 98.91 99.50 98.77 80.58
The consolidated financial statements for the year ended December 31, 2009 and 2008 do not consolidate financial statements of CMIC Development Company Limited which the Bank holds 80.58% of common shares since the shares were received from conversion of debts to equity according to the bt restructuring agreement. This practice is in accordance with the Notification of Federation of Accounting Professions No. 27/2550: Exemption of TAS 27 (previously No. 44) and TAS 28 (previously No. 45) for financial institutions. According to the Notification of the Bank of Thailand No. SorNorSor 70/2551 regarding preparation and disclosure of the consolidated financial statement of banks and holding company, which is a parent company of financial group, dated August 3, 2008, to comply with the Thai Accounting Standard No. 27 “Consolidated financial statements and separate financial statements” (previously No. 44), for the preparation of the consolidated financial statements, the Bank changed the accounting policy of the subsidiaries, which are mutual funds owned more than 50% by the Bank, for properties foreclosed, investment in properties, investment in loan and investment in securities to use the same accounting policy as the Bank as follows: 1. Properties foreclosed and investment in properties are stated at the lower of the outstanding loan principal or fair value, changed from fair value. 2. Unrealized gain or losses resulting from changes in fair value of investment in loans and investment in securities will be recognized as a separate component of shareholders’ equity, not in the statement of income. According to the change of subsidiary’s accounting policy for the preparation of the consolidated financial statements, the Bank restated the consolidated financial statements for 2007.
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3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Cash and cash equivalents Cash and cash equivalents includes cash on hand and cash on collection.
3.2
Investment in securities 3.2.1 Basis of investment classification Investments other than investments in subsidiaries and interest in joint ventures are classified into the following four categories: trading, held-to-maturity, available-for-sale and general investments. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Investments that are acquired principally for the purpose of generating a profit from short-term fluctuations in price are classified as trading investments and included in short-term investments. Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity and are included in long-term investments, except for maturities within 12 months from the balance sheet date, which are classified as short-term investments. Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale; and are included in long-term investments unless management has expressed the intention of holding the investment for less than 12 months from the balance sheet date or unless they will need to be sold to raise operating capital, in which case they are included in short-term investments. Investments in non-marketable equity securities are classified as general investments. 3.2.2 Trading and available-for-sale investments Trading and available-for-sale investments are stated at fair value. The fair value of debt securities traded in the established market is based on the quoted prices or yields of the debt securities at the balance sheet date, or the latest trading date prior to the balance sheet date if there was no trading on that date. If the debt securities are not traded in the established market, the fair value is calculated by reference to the risk-free yield curve adjusted by an appropriate risk premium. The fair value of equity securities is based on the last bid price quoted by the Stock Exchange of Thailand at the balance sheet date. The fair value of unit trusts is determined from the net assets value (NAV) published by mutual fund management companies as the fund managers. Unrealized gain or loss resulting from changes in fair value of trading investments are recognized in the statements of income. Unrealized gain or loss resulting from changes in fair value of available-for-sale investments are recognized as a net amount in a separate component of shareholders’ equity, except where the securities are sold out, the realized gain or loss will be recognized in the statements of income. 3.2.3 Held-to-maturity investments Held-to-maturity investments are carried at amortized cost using the effective yield method. 3.2.4 General investments General investments are stated at cost less allowance for impairment in value. 3.2.5 Investments in subsidiaries Investments in subsidiaries are stated at cost method in the separate financial statements. Subsidiaries are entities in which Kiatnakin Bank Public Company Limited has an interest of more than one half of the voting rights or otherwise has power to exercise control over the financial and operating policies are consolidated. Subsidiaries are consolidated from the date on which control is transferred to the group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. All intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated; unrealized losses are also eliminated unless cost cannot be recovered. Where necessary, significant accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Bank. Separate disclosure is made for minority interests in the consolidated balance sheet and consolidated statement of income.
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A list of the subsidiaries is set out in Note 2.2. A test of impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying amount of the investment is higher than its recoverable amount, impairment loss is charged to the statements of income. 3.2.6 Income recognition relative to investment On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of income. When partly disposing of a particular investment in debt or equity securities, the carrying amount of disposed part is determined by the weight average carrying amount of the total holding of the investment.
3.3
Valuation of investment in loans
The investment in loans ishe investment in commercial and hire-purchase loans with and without collateral. These commercial and hire-purchase loans have no readily ascertainable market values available and, therefore, are reported at estimated fair value. Unrealized gain or losses resulting from changes in fair value of investment in loans of the bank are reported as a net amount in a separate component of shareholders' equity, except where the investments are sold out, the realized gain or losses will be recognized in the statements of income. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the statement of income. For the Bank, where there is a change in terms or contracts, the investment in loans will be transferred to loans account to comply with the Bank of Thailand’s Notification Sor Nor Sor. 67/2551 Re: Accounting procedures for financial institution. The fair value was adopted for transfer. The difference between net book value and fair value is recognized as gain on revaluation in the statement of income.
3.4
Valuation of investment in property
The investment in property is the investment in real estate business of the subsidiaries, which are mutual funds. These investments generally have no readily ascertainable market values available and, therefore, are reported at the lower of cost or estimated fair value.
3.5
Allowance for doubtful account
The Bank classifies its loan portfolios into categories and sets allowance for doubtful accounts for loans in accordance with the Bank of Thailand’s Notification dated August 3, 2008 and with the management estimation over the allowance for doubtful accounts from the ending balance of loans. The period of time that a loan is past due and the ability to repay the debt are the principal criteria utilized in classifying a loan. Allowance for doubtful accounts for securities business receivables has been determined on the basis in accordance with the requirements of the Securities and Exchange Commission’s Notification dated February 15, 2001. The increase or decrease in allowance for doubtful accounts is recorded as expenses or decrease in expenses during the accounting period. Bad debts are written off during the year in which they are identified. Bad debts recovery is recorded by credit to bad debts and doubtful accounts expenses in the statements of income.
3.6
Troubled debt restructuring
The Bank accounts for troubled debt restructuring in accordance with guidelines approved by the Bank of Thailand. The Bank records the assets or equity securities transferred to the Bank for debt settlements at the lower of fair values of the assets or equity securities, less estimated selling expenses, or the amount of investment in receivables (including non-accrued interest income at the restructuring date). In case that the debt restructuring involves modifications of terms of receivables, the fair value of investment in receivables after restructuring is based on the net present value of the expected future cash flows, using the Minimum Lending Rates (MLR) prevailing at the restructuring date. Losses arising from restructuring by waiver of principal or recorded accrued interest receivable, less recorded allowance, are recognized in the statement of income when incurred. Legal fees and other direct costs incurred to affect the debt restructuring are expensed when incurred.
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3.7
Properties foreclosed
Properties foreclosed represent land and/or construction, leasehold, condominium and repossessed vehicles. The repossessed land and/or construction, leasehold and condominium are stated at the lower of the outstanding loan principal including accrued interest or fair value. The repossessed vehicles are stated at the lower of the outstanding loan principal including accrued interest and accrued value added tax or fair value. Fair value of the repossessed vehicles is based on the external appraised value less estimated discount according to risk that might incur of each repossessed vehicle.
3.8
Premises and equipment and depreciation
Land is stated at historical cost. Buildings and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated on the straight-line basis to write off the cost of each asset, except for land, to its residual value over its estimated useful life as follows: Buildings Equipment Furniture and fixtures Vehicles
10 - 20 years 3 - 5 years 5 years 5 years
Gains and losses on disposal of fixed assets determined by comparing proceeds with the carrying amount and are included in operating profit. Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the group. Major renovations are depreciated over the remaining useful life of the related asset.
3.9
Intangible assets 3.9.1
Computer software Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of 10 years. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognized as a capital improvement and added to the original cost of the software. Computer software development costs are recognized as assets and are amortized using the straight-line method over their estimated useful lives, not exceeding a period of 10 years. 3.9.2 TFEX membership license The securities business recognized TFEX membership license as intangible asset without amortization.
3.10
Foreign currency transactions
Foreign currencies transactions are accounted for at the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities at the balance sheet date denominated in foreign currencies are translated into Baht using the reference rates of exchange of the Bank of Thailand ruling as of that date. Gains and losses on exchange resulting from the settlements and the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the statement of income.
3.11
Accounting for lease
Leases of premises or equipment which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other
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long-term payables. The interest element of the finance cost is charged to the statement of income over the lease period so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period. The premises or equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset or the lease term. Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of income on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognized as an expense in the period in which termination takes place.
3.12
Interest on loans and deposits
Interest on loans and deposits is recognized as income on the accrual basis, except in the case of interest on loans which is over three months past due from the due date where interest is recognized on collection basis. The Bank reverses accrued interest income on loan when its principal or interest payment has become over three months past due to comply with the Bank of Thailand's Notification dated August 3, 2008. The Bank continues its income recognition on the accrual basis when the entire amount of the principal and overdue interest has been paid.
3.13
Hire-purchase and financial lease income
Income from hire-purchase contracts is recognized on the effective interest method. Income from hire-purchase contracts which are originated on or after January 1, 2008 is recognized based on the effective interest method. Income from hire-purchase contracts which are originated before January 1, 2008 is recognized based on the effective interest method, using the brought forward balances of hire-purchase receivables as of January 1, 2008 as the beginning balances. The method of revenue recognition under the effective interest method will also be used for the remaining period of the hire-purchase contract. Interest on hire-purchase which is over three months past due from the due date is recognized on collection basis. The Bank reverses accrued interest income on hire-purchase when its principal or interest payment has become over three months past due to comply with the Bank of Thailand's Notification dated August 3, 2008. The Bank continues its income recognition on the accrual basis when the entire amount of the principal and overdue interest has been paid. Lease contracts are recorded by financial lease method. Income from financial lease contracts is recognized on the effective interest method over the year of contracts.
3.14
Interest and dividend income
Interest on investment is recognized as income on accrual basis except in the case of interest on debt securities which is over three months past due from the due date where interest is recognized on collection basis. Dividend income is recognized when dividend is declared.
3.15
Income from investment in loans
Interest on investment in loans is recognized as income on the collection basis based on the outstanding loans multiplied by the effective yield according to contract or new agreement.
3.16
Fees and services income Fees and services are recognized as income when services are rendered.
3.17
Expenses and dividend recognition
Expenses are recognized on an accrual basis. Dividends are recorded in the consolidated and separate financial statements in the period in which they are approved by the shareholders.
3.18
Income taxes
The group does not recognize income taxes payable or receivable in future periods in respect of temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts in the financial statements.
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3.19
Basic earnings per share
Basic earnings per share amount are computed by dividing the net income for period by the weighted-average number of paid-up ordinary shares in issue during the year. The diluted earnings per share are therefore computed by dividing the net income for year adjusted by expense (after tax effect) saved from the conversion of dilutive potential ordinary shares, by the weighted-average number of ordinary shares (included potentially dilutive shares).
3.20
Provident fund
The group operates a provident fund that is a defined contribution plan, the assets of which are held in a separate trust fund. The provident fund is funded by payments from employees and by the relevant group companies. Contributions to the provident fund are charged to the statement of income in the period to which they relate.
3.21
Post employment benefit
The group provides for post employment benefits, payable to employees under Thai Labour Law. The amounts payable in the future depend on the salary and the maximum years of service of the respective employees. The liability arising as a result of such regulation is recorded by the present value of estimated future cash outflows using interest rates of government bond which have terms to maturities approximating the terms of the related liabilities.
3.22
Derivatives
The Bank has entered into off-balance sheet transactions involving derivative financial instruments in order to support its customers’ needs and hedge against exchange rate risk and interest rate risk. Financial derivative contracts are recorded as off-balance sheet items. Forward foreign exchange contracts are marked to fair value using the market price as at the balance sheet date. Gains and losses from the translation are included in determining income. For interest rate swap contracts, the Bank recognized the net amount of interest to be received from or paid to the counterparty under the interest rate swap contracts as income or expenses on an accrual basis. Obligations under derivatives business which a subsidiary enter into for trading purpose are regarded as off-balance sheet items. Amounts pledged as security for derivatives trading are recorded as receivable at Thailand Clearing House (TCH) and gain or loss from changes in the value of derivatives are included in the income statements. The fair value of derivatives is based on the daily settlement price quoted by Thailand Futures Exchange Public Company Limited.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in certain circumstances, affecting reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from these estimates. The significant areas requiring management to make judgments and estimates that affect reported amounts and disclosures are as follows:
4.1
Allowance for doubtful accounts 4.1.1
Loans The Bank classifies its loan portfolios into categories and sets allowance for doubtful accounts for loans in accordance with the Bank of Thailand’s Notification dated August 3, 2008 and with the management estimation over the allowance for doubtful accounts from the ending balance of loans. The period of time that a loan is past due and the ability to repay the debt are the principal criteria utilized in classifying a loan. The collateral value (appraised by an independent valuer or internal valuer every 3 years) used in calculating the required allowance for doubtful accounts is based on the type of collateral according to the Bank of Thailand guideline. The Bank sets loans reserve at the rate 100% for the discrepancies between debts and net present value of estimated future cash flows from selling of collateral or from collection except for the normal and specially mentioned debts where reserve is set at the rates of 1% and 2% per annum, respectively. 4.1.2 Hire - purchase receivables The Bank provided allowance for doubtful accounts on hire-purchase loans by using Collective Approach method which considers historical loss experience of loan which are calculated by the probability of default and the percentage of loss given default. In addition, the Bank adjusted historical loss experience with the significant factor related to the ability to
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repay loan in the future such as the increasing of loss on sales of foreclosed assets. In addition, the Bank considered the additional allowance for doubtful accounts for hire-purchase receivables regard to Bank of Thailand’s regulation in order to comply with the Bank of Thailand’s Notification dated August 3, 2008 by considering the valuation of collateral regarding the Bank of Thailand’s guideline. The Bank provided the allowance for doubtful accounts for hire-purchase receivables at the rate of 100% for the discrepancies between debts and net present value of estimated future cash flow from selling of collaterals and discounted for the holding period regarding the Bank of Thailand’s guideline. For the normal and specially mentioned debts, the Bank provided the allowance for doubtful accounts at the rate of 1% and 2%, respectively. 4.1.3 Securities business receivables Allowance for doubtful accounts for securities business receivables has been determined on the basis in accordance with the requirements of the Securities and Exchange Commission’s Notification dated February 15, 2001.
4.2
Valuation of investment in loans
Fair value of investment in loans is determined by the net present value of estimated future cash flows from selling of collateral, appraised by an external independent valuer or internal valuer according to the Bank of Thailand’s guideline, discounted by interest rate at 7% per annum with the expected selling period of 4-5 years but not exceeding the balance in the original contract. The values assigned to the investment portfolio are based upon available information and assumptions which do not necessarily represent amounts which might ultimately be realized because of the uncertainty of economic’s circumstance which is the significant factor to determine the fair value. The subsidiaries, which are mutual funds, which invest in the investment in loans measured the fair values of the investment in restructured commercial loans based upon net present value of estimated future cash flows (interest rate as identified in restructuring agreements). Fair value of the investment in non-restructured commercial loans is based upon the net present value of estimated future cash flows from selling of collateral, appraised by an external independent valuer or internal valuer according to the Bank of Thailand’s guideline, discounted by interest rate at 7% per annum with the expected selling period of 4-5 years but not exceeding the balance in the original contract.
4.3
Valuation of investment in property
Fair value is calculated from the appraisal value, appraised by an external independent valuer or internal valuer according to the Bank of Thailand’s guideline and discounted by the risk premium according to the holding period. The values assigned to the investment portfolio are based upon available information and assumptions which do not necessarily represent amounts which might ultimately be realized because of the uncertainty of economic’s circumstance which is the significant factor to determine the fair value.
4.4
Valuation of properties foreclosed
The repossessed vehicles are stated at the lower of the outstanding loan principal including accrued interest and accrued value added tax or fair value. Fair value of the repossessed vehicles is based on the external appraised value less estimated discount according to risk that might incur of each repossessed vehicle.
4.5
Provision for post - employment benefit
The Bank provides the provision for post employment benefits, payable to employees by estimation from the amount to pay to employees in the future depending on the salary and the maximum years of service of the respective employees and discounts the value of future cash outflows by using interest rates of government bond.
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5. INTERBANK AND MONEY MARKET ITEMS - DOMESTIC ITEMS (ASSETS) Interbank and money market items (assets) as at December 31, 2009 and 2008 comprised of:
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS On demand The Bank of Thailand and FIDF Commercial Banks Total Add : Accrued interest receivable Less : Allowance for doubtful accounts Total
379,301,863
2009 Term
Total
On demand 449,078,816
856,026,780 1,235,328,643 -
1,800,000,000 2,179,301,863 8,000,000,000 8,856,026,780 9,800,000,000 11,035,328,643 2,198,192 2,198,192
(620,000) 1,234,708,643
(20,000,000) (20,620,000) 9,782,198,192 11,016,906,835
-
536,530,733 985,609,549 -
985,609,549
2008 Term
Total
16,820,000,000 17,269,078,816 1,400,001,798 1,936,532,531 18,220,001,798 19,205,611,347 19,419,460
19,419,460
-
-
18,239,421,258 19,225,030,807
Unit : Baht SEPARATE FINANCIAL STATEMENTS On demand The Bank of Thailand and FIDF Commercial Banks Finance, Securities and Credit froncier companies Total Add : Accrued interest receivable Less : Allowance for doubtful accounts Total
2009 Term
Total
On demand
2008 Term
Total
379,301,863
1,800,000,000
2,179,301,863
449,078,816
330,528,994
8,000,000,000
8,330,528,994
230,206,644
16,820,000,000 17,269,078,816 1,400,001,798 1,630,208,442
62,000,000
-
62,000,000
679,285,460 -
18,220,001,798 18,899,287,258 19,419,460 19,419,460
679,285,460
18,239,421,258 18,918,706,718
771,830,857 (620,000) 771,210,857
9,800,000,000 10,571,830,857 2,198,192 2,198,192 (20,000,000)
(20,620,000)
9,782,198,192 10,553,409,049
Annual Report 2009 Kiatnakin Bank Public Company Limited
95
6. INVESTMENTS IN SECURITIES 6.1 Classification of investments in securities As at December 31, 2009 and 2008, the Bank and subsidiaries classify their investments in securities as follows:
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Cost/ Amortized cost Short-term investment Trading securities Equity securities Listed securities Unit trusts Total Add (Less) Provision for changes in value of investment Net equity securities Net trading securities
2008 Fair value
Cost/ Amortized cost
85,511,745 105,805,388
85,825,348 120,849,827
71,484,941 35,114,022
191,317,133 15,358,042
206,675,175 206,675,175 206,675,175
106,598,963 (15,260,334) 91,338,629 91,338,629
4,485,985,399 4,494,221,192 36,000 833,700,580 834,220,000 5,319,721,979 5,328,441,192
667,463,818 36,000
206,675,175 206,675,175
Fair value
66,412,600 24,926,029 91,338,629 91,338,629 91,338,629
Available-for-sale securities Debt instruments Government and state enterprise securities Corporate debt instruments Foreign debt securities Total Add Provision for changes in value of investment Net debt instruments
96
Annual Report 2009 Kiatnakin Bank Public Company Limited
5,328,441,192 5,328,441,192 8,719,213
667,499,818 1,519,574
669,019,392 669,019,392 -
669,019,392
669,019,392
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Cost/ Amortized cost Equity securities Listed securities Unit trusts Total Add (Less) Provision for changes in value of investment Net equity securities Net available-for-sale securities Net short-term investment
2008 Fair value
Cost/
Fair value
Amortized cost
444,664,013
525,222,614
100,170,896
109,727,219
544,834,909 90,114,924
634,949,833
205,938,666 50,170,897 256,109,563
135,979,814 37,652,981 173,632,795
634,949,833 634,949,833 5,963,391,025 5,963,391,025 6,170,066,200 6,170,066,200
(82,476,768) 173,632,795 842,652,187 933,990,816
173,632,795 842,652,187 933,990,816
Long-term investment Available-for-sale securities Debt instruments Government and state enterprise securities Corporate debt instruments Foreign debt securities Total Add (Less) Provision for changes in value of investment Net debt instruments Net available-for-sale securities General investment Equity securities Unit trust Total Less Allowance for impairment of investment Total general investment Net long-term investment Net investment in securities
9,939,675,814 9,451,222,104 6,239,803 2,447,087,950 2,577,879,055 12,393,003,567 12,029,101,159 (363,902,408) 12,029,101,159 12,029,101,159 12,029,101,159 12,029,101,159
1,736,516,651 1,820,918,187 6,404,404 1,742,921,055 1,820,918,187 77,997,132 1,820,918,187 1,820,918,187 1,820,918,187 1,820,918,187
54,192,442 18,442
19,075,351 20,000
58,474,969 17,967
54,210,884
19,095,351
-
-
54,210,884 12,048,452,061 12,083,312,043 18,218,518,261 18,253,378,243
19,095,351 1,840,013,538 2,774,004,354
58,492,936 58,492,936 1,879,411,123 2,813,401,939
20,256,707 20,000 20,276,707 (925,805) 19,350,902
Annual Report 2009 Kiatnakin Bank Public Company Limited
97
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Cost/
2008 Fair value
Amortized cost
Cost/ Amortized cost
Fair value
Short-term investment Available-for-sale securities Debt instruments Government and state enterprise securities Corporate debt instruments Foreign debt securities Total Add Provision for change in value of investments Total debt instruments-net Equity securities Listed securities Unit trusts Total Add (Less) Provision for changes in value of investments Net equity securities Net available-for-sale securities Net short-term investment
98
Annual Report 2009 Kiatnakin Bank Public Company Limited
3,642,336,461 834,220,000 4,476,556,461 4,476,556,461
312,792,035 36,000 -
314,355,106 -
312,828,035 1,527,071 314,355,106
314,355,106 314,355,106
494,267,338
165,804,805
115,295,566
109,634,610
50,100,000 215,904,805 (63,012,063)
37,597,176 152,892,742 -
152,892,742
152,892,742
5,080,458,409
603,901,948 5,080,458,409
467,247,848
467,247,848
5,080,458,409
5,080,458,409
467,247,848
467,247,848
3,634,102,514 36,000 833,700,580 4,467,839,094 8,717,367 4,476,556,461
404,637,060 100,100,000 504,737,060 99,164,888 603,901,948
603,901,948 -
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Cost/ Amortized cost Long-term investment Available-for-sale securities Debt instruments Government and state enterprise securities Foreign debt securities Total Add (Less) Provision for changes in value of investments Net debt instruments Net available-for-sale securities
2008
Fair value
Cost/ Amortized cost
9,939,675,814 2,447,087,950
Fair value
9,451,222,104 1,736,516,651 2,577,879,055 12,386,763,764 12,029,101,159 1,736,516,651 (357,662,605) 84,401,536 12,029,101,159 12,029,101,159 1,820,918,187
1,820,918,187 -
12,029,101,159 12,029,101,159 1,820,918,187
1,820,918,187
1,820,918,187 1,820,918,187
General investment Equity securities Unit trusts Total Less Allowance for impairment of investment Total general investment Net long-term investment
11,982,127 10,000
11,482,127 10,000
41,826,658 8,983
11,492,127 11,492,127
41,835,641 41,835,641
12,040,167,481 12,075,028,242 1,832,410,314
1,862,753,828
11,992,127 (925,805) 11,066,322
45,917,862 9,221 45,927,083 45,927,083
Investment in subsidiaries Equity securities Unit trusts Total investments in subsidiaries Net investments in securities
650,999,230 6,208,485,120 6,859,484,350
678,768,950 649,999,930 7,983,239,367 6,692,123,802 8,662,008,317 7,342,123,732 23,980,110,240 25,817,494,968 9,641,781,894
599,841,499 8,408,360,605 9,008,202,104 11,338,203,780
Annual Report 2009 Kiatnakin Bank Public Company Limited
99
6.2
Time to maturity of debt securities
Time to maturity of the Bank and subsidiaries’ investment in debt securities classified as available-for-sale securities and held-to-maturity securities as at December 31, 2009 and 2008 are presented as follows:
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Mature Mature within within 1 year 2-5 years
Mature within 6-10 years
6,239,803
4,485,985,399 1,775,789,112 36,000 833,700,580 1,998,672,468 5,319,721,979 3,774,461,580
8,163,886,701 14,425,661,212 6,275,803 448,415,483 3,280,788,531 8,612,302,184 17,712,725,546
(6,239,803) -
8,719,213 41,768,072 5,328,441,192 3,816,229,652
(399,430,677)
On demand Available-for-sale debt instruments Government and state enterprise securities Corporate debt instruments Foreign debt securities Total Add (Less) Provision for changes in value of investment Net debt securities
6,239,803 -
Total
(355,183,195) 8,212,871,507 17,357,542,351
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 On demand
Mature Mature within within 1 year 2-5 years
Mature within 6-10 years
Total
Available-for-sale debt instruments Government and state enterprise securities Corporate debt instruments Total
6,404,404 6,404,404
667,463,818 1,387,181,682
(6,404,404)
1,519,574 54,878,745 669,019,392 1,442,060,427
36,000 667,499,818 1,387,181,682
349,334,969 2,403,980,469 6,440,404 349,334,969 2,410,420,873
Add (Less) Provision for changes in value of investment Net debt securities
100
Annual Report 2009 Kiatnakin Bank Public Company Limited
-
79,516,706 29,522,791 378,857,760 2,489,937,579
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Mature within
Mature within 2-5 years
Mature within
3,634,102,514 36,000 833,700,580 4,467,839,094
1,775,789,112 -
8,163,886,701 -
13,573,778,327 36,000
1,998,672,468 3,774,461,580
448,415,483 8,612,302,184
3,280,788,531 16,854,602,858
8,717,367 4,476,556,461
41,768,072 3,816,229,652
(399,430,677) 8,212,871,507
(348,945,238) 16,505,657,620
1 year Available-for-sale debt instruments Government and state enterprise securities Corporate debt instruments Foreign debt securities Total Add (Less) Provision for changes in value of investment Net debt securities
Total
6-10 years
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2008
Available-for-sale debt instruments Government and state enterprise securities Corporate debt instruments Total Add Provision for changes in value of investment Net debt securities
Mature within
Mature within
Mature within
1 year
2-5 years
6-10 years
312,792,035 36,000 312,828,035
1,387,181,682 -
2,049,308,686
1,387,181,682
349,334,969 349,334,969
1,527,071 314,355,106
54,878,745 1,442,060,427
29,522,791 378,857,760
85,928,607 2,135,273,293
Total
36,000 2,049,344,686
Annual Report 2009 Kiatnakin Bank Public Company Limited
101
6.3
Investments in companies with holdings of 10% and upwards
As at December 31, 2009 and 2008, investments in companies other than subsidiaries, of which the Bank and subsidiaries hold 10% and upwards of the paid-up capital in each company, classified by industry, are as follows:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2009 Principal activities
Investment amount At cost (Baht)
Holding (%)
Leasing Hire-purchase Real estate
3,085,200 1
100 10.00 80.58
Investing in debt and equity securities
50,000,000
46.00
Other companies BTMU Leasing Co., Ltd. Attakorn Co., Ltd. CMIC Development Co., Ltd.* Fund (which is not a legal juristic entity) Ayudthya Tuntawee Fund 5**
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2008 Principal activities
Investment amount At cost (Baht)
Holding (%)
Leasing Hire-purchase Real estate Packaging
3,085,200 1 21,954,436
10.00 10.00 80.58 11.01
Investing in debt and equity securities
50,000,000
33.78
Other companies BTMU Leasing Co., Ltd. Attakorn Co., Ltd. CMIC Development Co., Ltd.* Nippon Pack (Thailand) PCL. Fund (which is not a legal juristic entity) Ayudthya Tuntawee Fund 5**
* The consolidated financial statements for the years ended December 31, 2009 and 2008, do not consolidate financial statements of CMIC Development Company Limited which the Bank holds 80.58% of common shares since the shares were received from conversion of debts to equity according to the debt restructuring agreement. This practice is in accordance with the Notification of Federation of Accounting Professions No. 27/2550: Exemption of TAS 27 (previously No. 44) and TAS 28 (previously No. 45) for financial institutions. In the unaudited financial statements as at December 31, 2009 of CMIC Development Company Limited, total assets amounted to Baht 1,383.20 million (December 31, 2008: Baht 1,379.62 million) and shareholders’ equity amounted to Baht 115.84 million. (December 31, 2008: negative shareholders’ equity amounted to Baht 111.55 million). ** The Bank has no control over the Ayudthaya Tuntawee Fund 5’s operations therefore the Bank did not consolidate the financial statements of this fund.
102
Annual Report 2009 Kiatnakin Bank Public Company Limited
Annual Report 2009 Kiatnakin Bank Public Company Limited
103
6.4
Investment in subsidiaries
Law office Unit trust* Unit trust* Unit trust* Unit trust* Unit trust** Unit trust***
Erawan Law Office Co., Ltd.
Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property Fund 1 Asia Recovery Property Fund 3
1,000,000 512,928,223 1,812,061,257 1,908,328,946 786,984,835 43,817,463 933,405,003
650,000,000
Paid-up capital/ outstanding Capital Cost
999,300 529,570,263 1,898,724,023 2,014,395,044 778,863,948 45,931,842 941,000,000 6,859,484,350
-
-
Cost method Impairment
999,300 529,570,263 1,898,724,023 2,014,395,044 778,863,948 45,931,842 941,000,000 6,859,484,350
649,999,930
Net cost
SEPARATE FINANCIAL STATEMENTS 2009
649,999,930
Investment in commercial loans auction from Financial Restructuring Authority (FRA). Investment in loans, which have properties as collateral or properties Investment in loans or properties
Ordinary shareholder Ordinary shareholder Unit holder Unit holder Unit holder Unit holder Unit holder Unit holder
Securities
Kiatnakin Securities Co., Ltd.
* ** ***
Relationship
Principal activities
As at December 31, 2009 and 2008, the Bank has investments in subsidiaries as follows:
99.93 99.95 99.59 99.97 98.91 99.50 98.77
99.99
Holding (%)
88,278,784 225,570,059 303,338,067 617,186,910
-
Dividend paid by subsidiaries
Unit : Baht
104
Annual Report 2009 Kiatnakin Bank Public Company Limited
Ordinary shareholder Unit holder Unit holder Unit holder Unit holder Unit holder Unit holder
Relationship
650,000,000 980,875,375 1,812,061,257 1,908,328,946 786,984,835 43,817,463 933,405,003
Paid-up capital/ outstanding Capital
649,999,930 1,013,208,945 1,898,724,023 2,014,395,044 778,863,948 45,931,842 941,000,000 7,342,123,732
Cost
Investment in commercial loans auction from Financial Restructuring Authority (FRA). Investment in loans, which have properties as collateral or properties Investment in loans or properties
Unit trust* Unit trust* Unit trust* Unit trust* Unit trust** Unit trust***
Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property Fund 1 Asia Recovery Property Fund 3
* ** ***
Securities
Kiatnakin Securities Co., Ltd.
Principal activities
-
Impairment
Cost method
649,999,930 1,013,208,945 1,898,724,023 2,014,395,044 778,863,948 45,931,842 941,000,000 7,342,123,732
Net cost
SEPARATE FINANCIAL STATEMENTS 2008
99.99 99.95 99.59 99.97 98.91 99.50 98.77
Holding (%)
41,599,996 257,936,628 1,371,465,958 614,307,280 88,554,980 2,373,864,842
Dividend paid by subsidiaries
Unit : Baht
7. INVESTMENT IN LOANS - NET As at December 31, 2009 and 2008, the details of bidding receivables from the Financial Restructuring Authority (FRA), the Legal Execution Department (LED) and purchasing receivables are as follows:
Unit : Baht 2009 Purchase date
Kiatnakin Bank Public Company Limited Receivables auctioned from FRA September 30, 1999 December 15, 1999
Number of customers
Outstanding balance
Cost
Fair value
per original and renewed agreements
359 201
2,484,046,258
407,813,915
295,503,625
598,954,754
18,287,169
18,694,552
Receivables purchased January - December 2009 Investment in hire-purchase loans transferred from RT-KK Nakornluang Surat Leasing Co., Ltd. Receivables auctioned from LED Total
10
2,014,824,487
893,717,329
888,810,588
688 257 1,546 3,061
99,309,095
7,677,224
14,732,798 13,567,345,843 18,779,213,235
14,786,286 1,628,295,726 2,970,577,649
6,753,869 1,375,809,545 2,585,572,179
Subsidiaries (unit trust)
1,833
7,570,906,546
954,666,786
1,937,889,005
4,894
26,350,119,781
3,925,244,435
4,523,461,184
Annual Report 2009 Kiatnakin Bank Public Company Limited
105
Unit : Baht 2008 Purchase date
Kiatnakin Bank Public Company Limited Receivables auctioned from FRA September 30, 1999 December 15, 1999
Number of
Outstanding balance
customers
per original and renewed agreements
380 226
691 521
Cost
Fair value
2,597,661,690 772,697,069
454,860,070 61,036,960
363,980,796 61,982,451
100,290,368 40,630,224 14,501,920,510 18,013,199,861
7,728,708
-
40,929,452 2,254,349,312 2,818,904,502
25,095,260 2,186,385,689 2,637,444,196
1,316,963,661 4,135,868,163
2,475,555,254 5,112,999,450
Receivables purchased Investment in hire-purchase loans transferred from RT-KK Nakornluang Surat Leasing Co., Ltd. Receivables auctioned from LED
1,631
Total
3,449
Subsidiaries (unit trust)
2,127 5,576
8,823,291,496 26,836,491,357
In consolidated and separate financial statements for the year ended December 31, 2009, investment in loans had impairment charge amounting to Baht 228.07 million and Baht 266.28 million, respectively, which was a result of the uncertainty in the abilities to repay. (for the year ended December 31, 2008: Baht 454.19 million and Baht 499.06 million, respectively).
106
Annual Report 2009 Kiatnakin Bank Public Company Limited
8. LOANS AND ACCRUED INTEREST RECEIVABLE 8.1 Classified by product as at December 31, 2009 and 2008 Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Banking business loans Loans Hire-purchase receivables* Leasing receivables* Total banking business loans Add Accrued interest receivable Less Allowance for doubtful accounts Allowance for troubled debt restructuring Net banking business loans and accrued interest receivable
2008
SEPARATE FINANCIAL STATEMENTS 2009
2008
26,184,560,086 60,118,642,873 256,828,114
23,185,496,034 57,138,766,079 238,580,246
26,184,560,086 60,118,642,873 256,828,114
23,185,496,034 57,138,766,079 238,580,246
86,560,031,073 519,888,134
80,562,842,359 546,042,093
86,560,031,073 519,888,134
80,562,842,359 546,042,093
(3,756,354,441)
(3,462,433,719)
(3,756,354,441)
(3,462,433,719)
(25,710,718)
(53,866,276)
(25,710,718)
(53,866,276)
83,297,854,048
77,592,584,457
83,297,854,048
77,592,584,457
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
293,181,839 263,743,243
197,500,780 52,250,059
7,504,938 -
7,504,938 -
556,925,082 1,140,348
249,750,839 1,411,974
7,504,938 -
7,504,938 -
(13,696,822)
(36,797,903)
(7,135,178)
(7,146,754)
Net securities business receivables and accrued interest receivable
544,368,608
214,364,910
369,760
358,184
Net loans and accrued interest receivable
83,842,222,656
77,806,949,367
83,298,223,808
77,592,942,641
Securities business receivables Cash accounts Margin accounts Total securities business receivables Add Accrued interest receivable Less Allowance for doubtful accounts
2008
Annual Report 2009 Kiatnakin Bank Public Company Limited
107
* Hire-purchase and leasing receivables are shown net of unearned income in the consolidated and the separate financial statements of Baht 10,261,584,951 and Baht 33,215,450, respectively (December 31, 2008: Baht 10,609,745,731 and Baht 36,424,745, respectively). Unearned interest income of hire-purchase and finance lease contracts is stated net of commissions and direct expenses incurred at the initiation of hire-purchase.
8.2
Classified by maturity as at December 31, 2009 and 2008 Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 2008
On demand or become due Less than one year Over one year Total loans and accrued interest receivable
8.3
1,687,027,700 4,839,745,233 81,111,211,704 87,637,984,637
1,181,566,388 4,049,926,760 76,128,554,117 81,360,047,265
SEPARATE FINANCIAL STATEMENTS 2009
2008
1,687,027,700 4,295,746,384 81,104,650,061 87,087,424,145
1,180,154,414 3,833,766,018 76,102,468,958 81,116,389,390
Classified by currency and residence of customer as at December 31, 2009 and 2008 Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
2008
Domestic
Total
Domestic
Total
Baht
87,637,984,637
87,637,984,637
81,360,047,265
81,360,047,265
Total loans and accrued interest receivable
87,637,984,637
87,637,984,637
81,360,047,265
81,360,047,265
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
108
2008
Domestic
Total
Domestic
Total
Baht
87,087,424,145
87,087,424,145
81,116,389,390
81,116,389,39
Total loans and accrued interest receivable
87,087,424,145
87,087,424,145
81,116,389,390
81,116,389,390
Annual Report 2009 Kiatnakin Bank Public Company Limited
8.4
Classified by business type and loan classification as at December 31, 2009 and 2008 Unit : Baht
Normal Agriculture and mining Manufacturing and commerce Property development and construction Public utility and services Housing loans Hire-purchase loans Leasing loans Others Total loans Accrued interest receivable Total
803,432
CONSOLIDATED FINANCIAL STATEMENTS 2009 Doubtful Doubtful Special Substandard loss mentioned -
803,432
Total
1,724,415,295
29,045,420
29,389,766
27,713,069
303,383,800
2,113,947,350
14,753,635,338 634,021,566 1,092,282,628
634,928,105
406,567,260 20,799,234 67,757,174 489,455,148
400,428,868 30,239,428 19,380,987 371,971,932
2,964,157,802 20,161,987 14,884,061
19,159,717,373 714,926,861
61,807,627 1,075,776,209 1,075,776,209
38,424,247 888,158,531 888,158,531
52,079,201,099 238,730,048 3,231,318,580 73,754,407,986 402,547,679 74,156,955,665
9,704,646 79,268,824 7,053,414,491 8,192,928 99,458,634 7,914,013,048 118,382,954 8,032,396,002
124,600,203 9,905,138 47,507,390 3,484,600,381 97,849 3,484,698,230
1,273,573,674 60,118,642,873 256,828,114 3,478,516,478 87,116,956,155 521,028,482 87,637,984,637
Unit : Baht
Normal Agriculture and mining Manufacturing and commerce Property development and construction Public utility and services Housing loans Hire-purchase loans Leasing loans Others Total loans Accrued interest receivable Total
2,054,106
CONSOLIDATED FINANCIAL STATEMENTS 2008 Special Substandard Doubtful Doubtful mentioned loss 473,096
Total 2,527,202
1,678,068,251
55,539,888
29,152,908
36,893,968
335,893,464
2,135,548,479
12,137,313,366
1,371,491,407 72,679,677
428,419,036 24,632,160
3,012,071,026
707,736,297
393,518,890 14,086,208 79,124,312 6,635,519,995 9,857,046 146,032,684
13,740,399 399,537,260 9,905,138 44,989,596
10,491,130
49,090,949,214 218,818,062 1,922,725,741
53,668,543 923,761,226 58,251,665
88,998,384 108,383,196
17,342,813,725 809,213,904 864,760,681 57,138,766,079 238,580,246
66,391,130,789 426,758,923 66,817,889,712
7,333,679,023 119,745,804 7,453,424,827
2,509,005,426 2,509,005,426
958,117,557 958,117,557
3,620,660,403 949,340 3,621,609,743
633,465,752
64,350,107
2,280,382,882 80,812,593,198 547,454,067 81,360,047,265
Annual Report 2009 Kiatnakin Bank Public Company Limited
109
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Normal
Agriculture and mining Manufacturing and commerce Property development and construction Public utility and services Housing loans Hire-purchase loans Leasing loans Others Total loans Accrued interest receivable Total
Doubtful
Substandard
Special mentioned
Doubtful
Total 803,432
803,432
-
-
-
loss -
1,724,415,295
29,045,420
29,389,766
27,713,069
303,383,800
2,113,947,350
14,753,635,338
634,928,105
406,567,260 20,799,234 67,757,174 489,455,148
400,428,868
2,964,157,802
19,159,717,3
30,239,428
20,161,987
19,380,987 371,971,932
14,884,061
714,926,861 1,273,573,674
124,600,203
38,424,247
9,905,138 41,043,596
60,118,642,873 256,828,114 2,929,096,334
888,158,531 888,158,531
3,478,136,587 3,478,136,587
86,567,536,011 519,888,134 87,087,424,145
634,021,566 1,092,282,628 52,079,201,099 238,730,048 2,688,362,230 73,211,451,636 401,505,180 73,612,956,816
9,704,646 79,268,824 7,053,414,491 8,192,928 61,807,627 99,458,634 7,914,013,048 1,075,776,209 118,382,954 8,032,396,002 1,075,776,209
Unit : Baht SEPARATE FINANCIAL STATEMENTS Normal
Agriculture and mining Manufacturing and commerce Property development and construction Public utility and services Housing loans Hire-purchase loans Leasing loans Others Total loans Accrued interest receivable Total
110
2008 Substandard
Special mentioned
Doubtful
Doubtful loss
Total
2,054,106
-
-
-
473,096
2,527,202
1,678,068,251
55,539,888
29,152,908
36,893,968
335,893,464
2,135,548,479
428,419,036 3,012,071,026 24,632,160 64,350,107 13,740,399 10,491,130 399,537,260 88,998,384 9,905,138 44,989,596 79,681,387
17,342,813,725 809,213,904 864,760,681 57,138,766,079
958,117,557 3,591,958,594 958,117,557 3,591,958,594
80,570,347,297 546,042,093 81,116,389,390
12,137,313,366 633,465,752 707,736,297 49,090,949,214 218,818,062 1,709,181,649 66,177,586,697 426,296,289 66,603,882,986
393,518,890 1,371,491,407 14,086,208 72,679,677 79,124,312 53,668,543 6,635,519,995 923,761,226 9,857,046 146,032,684 58,251,665 7,333,679,023 2,509,005,426 119,745,804 7,453,424,827 2,509,005,426
Annual Report 2009 Kiatnakin Bank Public Company Limited
238,580,246 2,038,36,981
8.5 Loan classification and allowance as at December 31, 2009 and 2008 by considering from the valuation of future cash flow from the selling of collaterals Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
Loan classification
Normal Loans Hire-purchase receivables - New car - Used car Special mentioned Loans Hire-purchase receivables - New car - Used car Substandard Loans Hire-purchase receivables - New car - Used car Doubtful Loans Hire-purchase receivables - New car - Used car Doubtful loss Total loans and accrued interest receivable Additional allowance for some doubtful accounts General reserve Allowance for troubled debt restructuring Total
Loan outstanding and interest receivable
Loan net of collateral/ Present value Allowance of cash flow %
Allowance Allowance per BOT’s for doubtful guideline % account
Increase (Decrease) allowance per BOT *
Total allowance per BOT’s guideline
21,814,449,090
3,865,838,275
37,393,062
1.00
-
37,393,062
30,845,259,831 21,497,246,741
30,735,400,637 21,360,722,323
1.00 307,354,006 1.09 232,831,873
1.00 1.00
869,394,045
142,686,104
2,741,337
2.00
3,144,128,151 4,018,873,807
3,117,906,819 3,965,579,624
4.77 148,724,155 5.37 212,951,626
586,321,061
147,438,721
100.00 147,438,721
100.00
- 147,438,721
195,943,091 293,512,058
196,682,330 294,786,518
18.74 15.88
36,858,269 46,812,099
100.00 100.00
159,824,061 196,682,330 247,974,419 294,786,518
516,186,600
72,419,604
100.00
72,419,604
100.00
137,706,631 234,265,300 3,484,698,231
138,260,713 235,310,352 1,075,397,973
18.74 25,910,058 15.88 37,367,284 100.00 1,075,397,973
100.00 100.00 100.00
87,637,984,637
65,348,429,993
2,384,200,067
478,861,500 2,863,061,567
124,221,228 784,000,000
(1,231,532) 122,989,696 - 784,000,000
25,710,718 3,318,132,013
- 25,710,718 477,629,968 3,795,761,981
1.00
2.00
- 307,354,006 (19,224,650) 213,607,223 -
2,741,337
2.00 (86,366,019) 2.00 (133,640,034)
62,358,136 79,311,592
-
72,419,604
112,350,655 138,260,713 197,943,068 235,310,352 - 1,075,397,973
* In addition, the Bank considered the additional allowance for doubtful accounts for hire-purchase receivables in order to comply with the Bank of Thailand’s Notification dated August 3, 2008 by considering the valuation of collateral regarding the Bank of Thailand’s guideline. The Bank provided the allowance for doubtful accounts for hire-purchase receivables at the rate of 100% for the discrepancies between debts and net present value of estimated future cash flow from selling of collaterals and discounted for the holding period regarding the Bank of Thailand’s guideline. For the normal and specially mentioned debts, the Bank provided the allowance for doubtful accounts at the rate of 1% and 2%, respectively
Annual Report 2009 Kiatnakin Bank Public Company Limited
111
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2008
Loan classification
Normal Loans Hire-purchase receivables - New car - Used car Special mentioned Loans Hire-purchase receivables - New car - Used car Substandard Loans Hire-purchase receivables - New car - Used car Doubtful Loans Hire-purchase receivables - New car - Used car Doubtful loss Total loans and accrued interest receivable Additional allowance for some doubtful accounts Allowance for troubled debt restructuring Total
112
Loan outstanding and interest receivable
Loan net of collateral/ Present value Allowance % of cash flow
Allowance Allowance per BOT’s for doubtful guideline account %
3,294,984,298
1.00
30,387,077
29,066,437,080 28,954,132,653 20,292,185,143 20,155,055,964
1.00 1.64
289,541,327 330,542,918
17,459,267,490
1.00
Increase (Decrease) allowance per BOT *
Total allowance per BOT’s guideline
-
30,387,077
1.00 - 289,541,327 1.00 (128,992,358) 201,550,560 -
3,076,221
2.00 (128,588,108) 2.00 (225,877,917)
52,165,561 81,105,177
704,825,783
161,861,368
2.00
3,076,221
2,631,709,412 4,116,889,631
2,608,278,054 4,055,258,840
6.93 7.57
180,753,669 306,983,094
1,585,244,201
262,218,527
100.00
262,291,093
100.00
- 262,291,093
310,560,144 613,201,082
311,917,065 616,047,414
23.46 21.47
73,175,743 132,265,380
100.00 100.00
238,741,322 311,917,065 483,782,034 616,047,414
558,580,296
165,006,285
100.00
165,006,285
100.00
- 165,006,285
151,016,326 248,520,934 3,621,609,743
151,838,374 250,106,657 985,801,821
23.46 21.47 100.00
35,621,283 53,697,899 971,523,604
100.00 100.00 100.00
116,217,091 151,838,374 196,408,758 250,106,657 - 971,523,604
81,360,047,265 61,972,507,320
Annual Report 2009 Kiatnakin Bank Public Company Limited
2.00
2,834,865,593
551,690,822 3,386,556,415
126,788,843
(14,113,636) 112,675,207
53,866,276 3,015,520,712
- 53,866,276 537,577,186 3,553,097,898
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
Loan classification
Normal Loans Hire-purchase receivables - New car - Used car Special mentioned Loans Hire-purchase receivables - New car - Used car Substandard Loans Hire-purchase receivables - New car - Used car Doubtful Loans Hire-purchase receivables - New car - Used car Doubtful loss Total loans and accrued interest receivable Additional allowance for some doubtful accounts General reserve Allowance for troubled debt restructuring Total
Loan outstanding and interest receivable
Loan net of collateral/ Present value Allowance % of cash flow
Allowance Allowance per BOT’s for doubtful guideline account %
Increase (Decrease) allowance per BOT *
Total allowance per BOT’s guideline
21,270,450,242
3,865,838,275
1.00
37,393,062
1.00
-
37,393,062
30,845,259,831 21,497,246,741
30,735,400,637 21,360,722,323
1.00 1.09
307,354,006 232,831,873
1.00 1.00
(19,224,650)
307,354,006 213,607,223
869,394,045
142,686,104
2.00
2,741,337
2.00
-
2,741,337
3,144,128,151 4,018,873,807
3,117,906,819 3,965,579,624
4.77 5.37
148,724,155 212,951,626
2.00 (86,366,019) 2.00 (133,640,034)
62,358,136 79,311,592
586,321,061
147,438,721
100.00
147,438,721
100.00
-
147,438,721
195,943,091 293,512,058
196,682,330 294,786,518
18.74 15.88
36,858,269 46,812,099
100.00 100.00
159,824,061 247,974,419
196,682,330 294,786,518
516,186,600
72,419,604
100.00
72,419,604
100.00
-
72,419,604
137,706,631 234,265,300 3,478,136,587
138,260,713 235,310,352 1,068,836,329
18.74 25,910,058 15.88 37,367,284 100.00 1,068,836,329
100.00 100.00 100.00
87,087,424,145
65,341,868,349
2,377,638,423 124,221,228 784,000,000 25,710,718 3,311,570,369
112,350,655 138,260,713 197,943,068 235,310,352 - 1,068,836,329 478,861,500 2,856,499,923 (1,231,532) -
122,989,696 784,000,000
- 25,710,718 477,629,968 3,789,200,337
* In addition, the Bank considered the additional allowance for doubtful accounts for hire-purchase receivables in order to comply with the Bank of Thailand’s Notification dated August 3, 2008 by considering the valuation of collateral regarding the Bank of Thailand’s guideline. The Bank provided the allowance for doubtful accounts for hire-purchase receivables at the rate of 100% for the discrepancies between debts and net present value of estimated future cash flow from selling of collaterals and discounted for the holding period regarding the Bank of Thailand’s guideline. For the normal and specially mentioned debts, the Bank provided the allowance for doubtful accounts at the rate of 1% and 2%, respectively.
Annual Report 2009 Kiatnakin Bank Public Company Limited
113
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2008 Loan outstanding and interest receivable Normal Loans Hire-purchase receivables - New car - Used car Special mentioned Loans Hire-purchase receivables - New car - Used car Substandard Loans Hire-purchase receivables - New car - Used car Doubtful Loans Hire-purchase receivables - New car - Used car Doubtful loss Total loans and accrued interest receivable Additional allowance for some doubtful accounts Allowance for troubled debt restructuring Total
114
Loan net of collateral/ Present value Allowance % of cash flow
Allowance Allowance per BOT’s for doubtful guideline account %
3,294,984,298
1.00
30,387,077
29,066,437,080 28,954,132,653 20,292,185,143 20,155,055,964
1.00 1.64
289,541,327 330,542,918
17,245,260,764
1.00
Increase (Decrease) allowance per BOT *
Total allowance per BOT’s guideline
-
30,387,077
1.00 - 289,541,327 1.00 (128,992,358) 201,550,560 -
3,076,221
2.00 (128,588,108) 2.00 (225,877,917)
52,165,561 81,105,177
704,825,783
161,861,368
2.00
3,076,221
2,631,709,412 4,116,889,631
2,608,278,054 4,055,258,840
6.93 7.57
180,753,669 306,983,094
1,585,244,201
262,218,527
100.00
262,291,093
100.00
- 262,291,093
310,560,144 613,201,082
311,917,065 616,047,414
23.46 21.47
73,175,743 132,265,380
100.00 100.00
238,741,322 311,917,065 483,782,034 616,047,414
558,580,296
165,006,285
100.00
165,006,285
100.00
- 165,006,285
151,016,326 248,520,934 3,591,958,594
151,838,374 250,106,657 956,150,673
23.46 21.47 100.00
35,621,283 53,697,899 941,872,455
100.00 100.00 100.00
116,217,091 151,838,374 196,408,758 250,106,657 - 941,872,455
81,116,389,390 61,942,856,172
Annual Report 2009 Kiatnakin Bank Public Company Limited
2.00
2,805,214,444
551,690,822 3,356,905,266
126,788,843
(14,113,636) 112,675,207
53,866,276 2,985,869,563
- 53,866,276 537,577,186 3,523,446,749
8.6
Non-performing loans
As at December 31, 2009 and 2008, the Bank had non-performing loans, defined according to the Bank of Thailand’s Notification as loans classified as substandard, doubtful, and doubtful loss, including interbank and money market items, but excluding accrued interest receivable, as follows: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Non-performing loans (excluded accrued interest) % of Non-performing loans to total loans (included loans to financial institutions) Non-performing loans net of allowance for doubtful accounts (excluding accrued interest receivable) % of Non-performing loans net of allowance for doubtful accounts to total loans net of allowance for doubtful accounts (included loans to financial institutions) % of Non-performing loans to the total of each type of loans - Loans - Hire-purchase - Securities and derivative business receivables
SEPARATE FINANCIAL STATEMENTS
2008
5,448,535,121 7,085,166,734 5.62
7.16
3,287,355,580 4,350,919,831
2008
2009
5,442,071,327 7,059,081,576 7.15
5.64
3,287,443,640 4,350,919,831
3.51
4.53
3.49
4.53
16.82 1.64 2.44
24.07 2.47 14.50
16.82 1.64 100.00
24.07 2.47 100.00
Loans and accrued interest receivable from which recognition of income has been discontinued based on accrual basis are as follows: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
Loans and bills receivables Securities business receivables Hire-purchase receivables Total loans from which recognition of income has been discontinued
2008
Principal
Interest receivable
Principal
Interest receivable
4,448,539,106 13,968,732 986,027,283
97,849 -
5,639,279,770 33,590,096 1,412,296,868
949,340 -
5,448,535,121
97,849
7,085,166,734
949,340
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
Loans and bills receivables Securities business receivables Hire-purchase receivables Total loans from which recognition of income has been discontinued
2008
Principal
Interest receivable
Principal
Interest Receivable
4,448,539,106 7,504,938 986,027,283
-
5,639,279,770 7,504,938 1,412,296,868
-
5,442,071,327
-
7,059,081,576
-
Annual Report 2009 Kiatnakin Bank Public Company Limited
115
9.
ALLOWANCE FOR DOUBTFUL ACCOUNTS Allowance for doubtful accounts as at December 31, 2009 and 2008 consists of the following: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Normal
At beginning of year Add Allowance for doubtful accounts (reversal) Less Bad debt written-off Allowance for doubtful accounts at end of year
Special mentioned
Substandard
9,931,255 -
Doubtful Doubtful loss
Total
979,752,102
- 3,499,231,622
(551,348,003) (121,814,551) 726,253,784 - (629,714,794) -
784,000,000 900,534,435 - (629,714,794)
445,990,669 1,076,291,092
784,000,000 3,770,051,263
620,739,016 140,679,712 1,190,255,572 53,511,950 -
General reserve
674,250,966 150,610,967
638,907,569
567,805,220
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2008
At beginning of year Add Allowance for doubtful accounts (reversal) Less Bad debt written-off Allowance for doubtful accounts at end of year
Normal
Special mentioned
Substandard
462,610,494
119,512,640
665,287,912
158,128,522 -
21,167,072 -
620,739,016
Doubtful Doubtful loss 933,398,373
Total
808,453,844 2,989,263,263
524,967,660 (365,593,153) 866,346,490 1,205,016,591 - (695,048,232) (695,048,232) -
140,679,712 1,190,255,572
567,805,220
979,752,102 3,499,231,622
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Normal At beginning of year Add Allowance for doubtful accounts (reversal) Less Bad debt written-off Allowance for doubtful accounts at end of year
116
Special mentioned
Substandard
9,931,255 -
General reserve
Total
950,100,953
- 3,469,580,473
(551,348,003) (121,814,551) 729,446,683 - (609,818,188) -
784,000,000 903,727,334 - (609,818,188)
445,990,669 1,069,729,448
784,000,000 3,763,489,619
620,739,016 140,679,712 1,190,255,572 53,511,950 -
Doubtful Doubtful loss
674,250,966 150,610,967
Annual Report 2009 Kiatnakin Bank Public Company Limited
638,907,569
567,805,220
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2008 Special mentioned
Substandard
462,610,494 119,512,640
665,287,912
Normal
At beginning of year Add Allowance for doubtful accounts (reversal) Less Bad debt written-off Allowance for doubtful accounts at end of year
10.
158,128,522 -
21,167,072 -
Doubtful Doubtful loss
Total
780,777,271
2,961,586,690
524,967,660 (365,593,153) 864,371,914 - (695,048,232) -
1,203,042,015 (695,048,232)
950,100,953
3,469,580,473
620,739,016 140,679,712 1,190,255,572
933,398,373
567,805,220
TROUBLED DEBT RESTRUCTURINGS As at December 31, 2009 and 2008, the Bank has troubled debt restructurings classified by default period as follows: Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
0 - 1 month More than 1 month - 3 months More than 3 months - 6 months More than 6 months - 12 months More than 12 months Total
Number of customer
Principal balance
162 38 39 23 72 334
3,709.91 641.04 494.73 455.28 1,656.43 6,957.39
2009 Loan net of Allowance for collateral doubtful account 384.46 43.26 102.54 30.03 658.90 1,219.19
42.99 7.41 102.54 30.03 658.90 841.87
Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
0 - 1 month More than 1 month - 3 months More than 3 months - 6 months More than 6 months - 12 months More than 12 months Total
Number of customer
Principal balance
111 27 37 24 109 308
3,685.89 370.53 1,084.65 399.21 1,579.84 7,120.12
2008 Loan net of Allowance for collateral doubtful account 300.48 20.58 161.37 115.90 557.32 1,155.65
61.57 5.15 161.45 115.90 550.87 894.94
Annual Report 2009 Kiatnakin Bank Public Company Limited
117
As at December 31, 2009, the Bank has 4 troubled debt restructurings (December 31, 2008: 6 debts) where the outstanding balance before restructuring amounted to Baht 25.92 million (December 31, 2008: Baht 2.69 million). The Bank recognized loss on restructuring amounting to Baht 1.90 million (for the year end December 31, 2008: Baht 1.26 million) in the statement of income under loss on troubled debt restructuring.
Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2009 Restructuring conditions
Number of loans
Outstanding balance before TDR(1)
Outstanding balance after TDR(1)
Type of assets transferred
Fair value of assets
1 3 4
20.68 5.24 25.92
2.80 2.80
Land -
20.68 -
Transfer of properties Modifications of payment terms Total
Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2008 Restructuring conditions
Number of loans
Outstanding balance before TDR(1)
Outstanding balance after TDR(1)
Type of assets transferred
Fair value of assets
6 6
2.69 2.69
-
-
-
Modifications of payment terms Total
(1)
118
Net book value (principal including accrued interest).
Annual Report 2009 Kiatnakin Bank Public Company Limited
11.
ALLOWANCE FOR TROUBLED DEBT RESTRUCTURINGS Allowance for troubled debt restructuring as at December 31, 2009 and 2008, consist of the following: Unit : Baht CONSOLIATED AND SEPARATE FINANCIAL STATEMENTS
At beginning of year decrease during year At end of year
12.
2009
2008
53,866,276 (28,155,558) 25,710,718
74,281,908 (20,415,632) 53,866,276
PROPERTIES FORECLOSED - NET Properties foreclosed as at December 31, 2009 and 2008, consist of the following: Unit : Baht SEPARATE FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
Properties foreclosed Less Provision for diminution in value of properties foreclosed Net properties foreclosed
2009
2008
2009
2008
8,752,132,722
9,245,375,670
7,872,081,951
8,241,846,777
(1,537,495,770) 7,214,636,952
(1,521,559,263) 7,723,816,407
(1,479,065,182) 6,393,016,769
(1,455,017,461) 6,786,829,316
Properties foreclosed are acquired by assets transferred, by auction and by the repossession for the debt settlement.
Annual Report 2009 Kiatnakin Bank Public Company Limited
119
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
At beginning of year Additions Disposals At end of year Less Provision for diminution in value of properties foreclosed Net properties foreclosed
Immovable assets
Movable assets
Total
8,968,587,510 1,433,662,409 (1,751,987,815) 8,650,262,104 (1,497,062,519) 7,153,199,585
276,788,160 2,422,434,295 (2,597,351,837) 101,870,618 (40,433,251) 61,437,367
9,245,375,670 3,856,096,704 (4,349,339,652) 8,752,132,722 (1,537,495,770) 7,214,636,952
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2008
At beginning of year Additions Disposals At end of year Less Provision for diminution in value of properties foreclosed Net properties foreclosed
Immovable assets
Movable assets
Total
8,814,557,690 2,005,191,252 (1,851,161,432) 8,968,587,510 (1,416,333,888) 7,552,253,622
173,455,642 2,439,851,786 (2,336,519,268) 276,788,160 (105,225,375) 171,562,785
8,988,013,332 4,445,043,038 (4,187,680,700) 9,245,375,670 (1,521,559,263) 7,723,816,407
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
At beginning of year Additions Disposals At end of year Less Provision for diminution in value of properties foreclosed Net properties foreclosed
120
Annual Report 2009 Kiatnakin Bank Public Company Limited
Immovable assets
Movable assets
Total
7,965,058,617 1,293,612,248 (1,488,459,532) 7,770,211,333 (1,438,631,931) 6,331,579,402
276,788,160 2,422,434,295 (2,597,351,837) 101,870,618 (40,433,251) 61,437,367
8,241,846,777 3,716,046,543 (4,085,811,369) 7,872,081,951 (1,479,065,182) 6,393,016,769
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2008 Movable assets Immovable assets At beginning of year Additions Disposals At end of year Less Provision for diminution in value of properties foreclosed Net properties foreclosed
Total
7,382,267,781 1,934,856,275 (1,352,065,439) 7,965,058,617
173,455,642 2,439,851,786 (2,336,519,268) 276,788,160
7,555,723,423 4,374,708,061 (3,688,584,707) 8,241,846,777
(1,349,792,086) 6,615,266,531
(105,225,375) 171,562,785
(1,455,017,461) 6,786,829,316
The details of assets at fair value where the Bank granted an option to debtors for repurchasing classified by outstanding term of contract are as follows: 2009 22,430,621 260,043,051 127,235,086 7,437,503 45,105,989 462,252,250
Less than 2 months 2 - 12 months Over 12 months but less than 24 months Over 24 months but less than 36 months Over 36 months but less than 60 months Total
13.
Unit : Baht 2008 62,125,319 357,537,563 200,898,837 11,267,936 3,687,343 635,516,998
PREMISES AND EQUIPMENT - NET Premises and equipment as at December 31, 2009 and 2008 consist of the following: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Cost
Accumulated depreciation
Ending Beginning Beginning Ending Disposals Other balance balance Additions Depreciation Disposals Other balance balance 99,548,277 - 99,548,277 73,034,325 3,350,324 - 36,455,547 - 73,034,325 33,105,223 701,143,099 101,635,100 (60,131,317) -483,077,239 - 742,646,882 433,681,715 109,112,443 (59,716,919)
Land Premises Equipment Furniture and fixtures 424,814,054 93,383,979 (13,971,177) Vehicles 165,184,492 40,195,500 (19,359,990) Total 1,463,724,247 235,214,579 (93,462,484)
- 504,226,856 199,338,901 - 186,020,002 81,148,952 - 1,605,476,342 747,274,791
77,813,800 (11,003,677) 30,076,668 (19,237,529) 220,353,235 (89,958,125)
-266,149,024 - 91,988,091 -877,669,901
Allowance for impairment of assets -
Net - Premises and equipment 99,548,277 36,578,778 259,569,643
-
238,077,832 94,031,911 727,806,441
Annual Report 2009 Kiatnakin Bank Public Company Limited
121
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2008 Cost Beginning balance Additions Disposals 99,548,277 73,034,325 582,276,482 143,530,623 (24,664,006)
Accumulated depreciation
Other
Ending Beginning Ending balance balance Depreciation Disposals Other balance - 99,548,277 - 73,034,325 29,745,720 3,359,503 - 33,105,223 - 701,143,099 370,116,564 87,612,751 (24,047,600) - 433,681,715
Land Premises Equipment Furniture and fixtures 431,034,338 97,379,296 (103,599,580) - 424,814,054 219,566,995 70,679,788 (90,907,882) - 199,338,901 Vehicles 149,870,782 57,559,841 (41,573,720) (672,411) 165,184,492 94,936,657 26,547,515 (40,309,075) (26,145) 81,148,952 Total 1,335,764,204 298,469,760 (169,837,306) (672,411) 1,463,724,247 714,365,936 188,199,557 (155,264,557) (26,145) 747,274,791
Depreciation for the years ended
- December 31, 2009 : Baht - December 31, 2008 : Baht
Allowance Net for Premises impairment and of assets equipment - 99,548,277 - 39,929,102 - 267,461,384 - 225,475,153 - 84,035,540 - 716,449,456
220,353,235 188,199,557
As at December 31, 2009 and December 31, 2008, the Bank and subsidiaries had premises and equipment, fully depreciated but still in use, at the original cost amounting to Baht 372.22 million and Baht 319.96 million, respectively.
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
Ending Beginning balance balance Depreciation Disposals 99,548,277 67,052,388 27,123,287 3,350,324 545,520,179 235,505,092 97,149,533 (30,152,583)
En Other balance - 30,473,611 - 302,502,042
Allowance for impairment of assets -
- 423,625,750 124,738,881 71,751,163 (4,364,399) - 158,254,502 54,755,602 26,981,929 (11,547,938) - 1,294,001,096 442,122,862 199,232,949 (46,064,920)
- 192,125,645 - 70,189,593 - 595,290,891
-
Cost Beginning balance 99,548,277 67,052,388 484,870,246
Additions
Disposals 91,083,151 (30,433,218)
Land Premises Equipment Furniture and fixtures 340,396,346 89,329,551 (6,100,147) Vehicles 133,607,393 36,317,500 (11,670,391) Total 1,125,474,650 216,730,202 (48,203,756)
122
Accumulated depreciation
Other -
Annual Report 2009 Kiatnakin Bank Public Company Limited
Net Premises and equipment 99,548,277 36,578,777 243,018,137 231,500,105 88,064,909 698,710,205
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2008
Ending Disposals Other balance - 27,123,287 (7,281,312) - 235,505,092
Allowance Net for Premises impairment and of assets equipment - 99,548,277 - 39,929,101 - 249,365,154
303,070,279 94,127,305 (56,801,238) - 340,396, 46 116,453,191 57,712,710 (49,427,020) - 124,738,881 115,661,383 54,474,341 (35,855,920) (672,411) 133,607,393 67,728,737 21,644,290 (34,591,280) (26,145) 54,755,602 941,377,376 285,060,023 (100,290,338) (672,411) 1,125,474,650 378,615,160 154,833,459 (91,299,612) (26,145) 442,122,862
- 215,657,465 - 78,851,791 - 683,351,788
Cost
Land Premises Equipment Furniture and fixtures Vehicles Total
Beginning balance Additions 99,548,277 67,052,388 356,045,049 136,458,377
Disposals (7,633,180)
Accumulated depreciation
Other
Depreciation for the years ended
Ending Beginning balance balance Depreciation - 99,548,277 - 67,052,388 23,763,784 3,359,503 - 484,870,246 170,669,448 72,116,956
- December 31, 2009 : Baht 199,232,949 - December 31, 2008 : Baht 154,833,459
As at December 31, 2009 and December 31, 2008, the Bank had equipment, fully depreciated but still in use, at the original cost amounting to Baht 124.57 million and Baht 119.56 million, respectively.
14.
INTANGIBLE ASSETS - NET Intangible assets as at December 31, 2009 and 2008 consist of the following: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009 Cost Beginning balance 232,710,812
Software TFEX Membership 5,318,500 Total 238,029,312
Ending Other balance - 102,263,752
Allowance for impairment of assets -
Net Premises and equipment 169,603,526
- 1,462,151 - 103,725,903
-
5,456,099 175,059,625
Accumulated depreciation
Additions Disposals 62,566,784 (23,410,318)
Other -
1,599,750 64,166,534 (23,410,318)
-
Endin g balance 271,867,278 6,918,250 278,785,528
Beginning balance Depreciation Disposals 90,129,569 34,569,094 (22,434,911) 1,462,151 91,591,720
34,569,094 (22,434,911)
Annual Report 2009 Kiatnakin Bank Public Company Limited
123
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2008 Cost Beginning balance Additions 184,406,863 48,303,949
Software TFEX Membership 5,318,500 Total 189,725,363 48,303,949
Accumulated depreciation
Disposals -
Other
-
Amortization for the years ended
Ending balance - 232,710,812
Beginning balance Depreciation 69,991,463 20,138,106
5,318,500 - 238,029,312
1,462,151 71,453,614
Ending balance Disposals Other - 90,129,569 -
20,138,106
-
-
1,462,151 91,591,720
Allowance Net for Premises impairment and of assets equipment - 142,581,243 3,856,349 - 146,437,592
- December 31, 2009 : Baht 34,569,094 - December 31, 2008 : Baht 20,138,106
As at December 31, 2009 and December 31, 2008, the Bank and subsidiaries had software, fully amortized but still in use, at the original cost amounting to Baht 25.94 million and Baht 41.45 million, respectively. Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Cost
Software Total
Beginning balance Additions Disposals 201,622,116 60,984,270 (21,918,114) 201,622,116 60,984,270 (21,918,114)
Accumulated depreciation
Other
Ending balance - 240,688,272 - 240,688,272
Beginning balance Depreciation Disposals 67,285,951 30,684,657 (21,918,113) 67,285,951 30,684,657 (21,918,113)
Other
-
Ending balance 76,052,495 76,052,495
Allowance Net for Premises impairment and of assets equipment - 164,635,777 - 164,635,777
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2008 Cost
Software Total
Beginning balance Additions 157,156,646 44,465,470 157,156,646 44,465,470
Disposals -
Accumulated depreciation Ending Other balance - 201,622,116 - 201,622,116
Amortization for the years ended
Beginning balance Depreciation 50,836,901 16,449,050 50,836,901 16,449,050
Disposals
-
Ending Other balance - 67,285,951 - 67,285,951
Allowance Net for Premises impairment and of assets equipment - 134,336,165 - 134,336,165
- December 31, 2009 : Baht 30,684,657 - December 31, 2008 : Baht 16,449,050
As at December 31, 2009 and December 31, 2008, the Bank had software, fully amortized but still in use, at the original cost amounting to Baht 6.25 million and Baht 28.17 million, respectively.
124
Annual Report 2009 Kiatnakin Bank Public Company Limited
15.
OTHER ASSETS Other assets as at December 31, 2009 and 2008, consist of the following: Unit : Baht
Interest and dividend receivables Other income receivables Prepaid expenses and deferred fee expenses Prepaid output tax for hire-purchase receivables Other receivables, net Refundable deposit Withholding tax Receivables from trading securities Receivables - subsidiary Receivables - Revenue Department Pre payment for leasehold right Derivative revaluation Others Total other assets
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
2008
207,706,729 15,607,380 31,566,429 51,251,379 212,672,321 80,176,395 25,354,246 11,084,717 153,709,912 101,306,104 97,461,852 106,296,363 1,094,193,827
31,619,989 2,483,353 31,537,347 54,024,270 313,589,306 72,673,882 17,495,529 987 172,601,815 88,920,068 56,394 88,890,956 873,893,896
306,885,938 15,280,876 24,738,035 51,251,379 209,840,351 74,261,852 23,359,071 11,084,717 617,459 153,709,912 87,837,516 97,461,852 62,785,209 1,119,114,167
31,176,112 1,843,522 18,581,558 54,024,270 312,072,291 64,408,423 16,438,935 987 627,678 172,601,815 87,408,221 56,394 34,360,443 793,600,649
Interest, other income receivables and other receivables as at December 31, 2009 are shown net of allowance for doubtful accounts of Baht 18,910,078 and Baht 10,165,756 in the consolidated and separate financial statements, respectively (December 31, 2008: Baht 9,193,411 and Baht 449,089, respectively).
16.
DEPOSITS 16.1 Classified by type as at December 31, 2009 and 2008 Unit : Baht
Current accounts Saving deposits Term deposits - Less than 6 months - 6 months to one year - Over one year Promissory notes Certificates of deposit Total deposits
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
2008
452,414,344 5,322,831,589
247,571,955 516,395,988
452,414,344 5,322,842,843
247,571,955 516,395,988
7,399,733,864 12,322,896,077 50,610,987,300 353,131 76,109,216,305
8,335,303,039 16,677,546,680 45,367,251,178 353,131 11,340,463 71,155,762,434
7,399,733,864 12,322,896,077 50,610,987,300 353,131 76,109,227,559
8,335,303,039 16,677,546,680 45,367,251,178 353,131 11,340,463 71,155,762,434
Annual Report 2009 Kiatnakin Bank Public Company Limited
125
16.2
Classified by maturity as at December 31, 2009 and 2008 Unit : Baht
Less than 6 months More than 6 months but less than one year Over one year Total depositss
16.3
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2009
39,614,597,883 6,492,597,961 30,002,020,461 76,109,216,305
2008 39,806,107,542 19,015,369,923 12,334,284,969 71,155,762,434
39,614,609,137 6,492,597,961 30,002,020,461 76,109,227,559
2008 39,806,107,542 19,015,369,923 12,334,284,969 71,155,762,434
Classified by currency and territory as at December 31, 2009 and 2008 Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
Thai Baht Total deposits
Domestic 76,021,584,106 76,021,584,106
2008
Foreign 87,632,199 87,632,199
Total 76,109,216,305 76,109,216,305
Domestic 71,066,275,379 71,066,275,379
Foreign 89,487,055 89,487,055
Total 71,155,762,434 71,155,762,434
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Thai Baht Total deposits
17.
Domestic 76,021,595,360 76,021,595,360
2008
Foreign 87,632,199 87,632,199
Total 76,109,227,559 76,109,227,559
Domestic 71,066,275,379 71,066,275,379
Foreign 89,487,055 89,487,055
Total 71,155,762,434 71,155,762,434
INTERBANK AND MONEY MARKET ITEMS - DOMESTIC ITEMS (LIABILITIES) Interbank and money market items (liabilities) as at December 31, 2009 and 2008, are as follows: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
Commercial Banks Finance, Securities and Credit froncier Other financial institutions Total
126
2008
On demand 5,042
Term -
Total 5,042
On demand 833
Term 140,000,000
Total 140,000,833
3,767,821 3,772,863
907,215,304 2,737,152,611 3,644,367,915
907,215,304 2,740,920,432 3,648,140,778
2,735,475 2,736,308
449,311,254 3,170,221,000 3,759,532,254
449,311,254 3,172,956,475 3,762,268,562
Annual Report 2009 Kiatnakin Bank Public Company Limited
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009 Commercial Banks Finance, Securities and Credit froncier Other financial institutions Total
18.
2008
On demand -
Term -
Total -
On demand -
Term 140,000,000
Total 140,000,000
2,402,694 3,767,821 6,170,515
985,000,000 2,737,152,611 3,722,152,611
987,402,694 2,740,920,432 3,728,323,126
284,092,119 2,735,475 286,827,594
454,700,000 3,170,221,000 3,764,921,000
738,792,119 3,172,956,475 4,051,748,594
BORROWINGS Borrowings as at December 31, 2009 and 2008, are as follows: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
2008
Short - term borrowings Bills of exchange Debentures Total short - term borrowings
15,632,310,439 3,097,000,000 18,729,310,439
7,998,912,885 3,554,000,000 11,552,912,885
16,852,310,439 4,547,000,000 21,399,310,439
10,878,912,885 3,554,000,000 14,432,912,885
Long - term borrowings Bills of exchange Debentures Total long - term borrowings Total borrowings
4,595,459,686 2,739,000,000 7,334,459,686 26,063,770,125
2,559,666,937 5,836,000,000 8,395,666,937 19,948,579,822
4,595,459,686 2,739,000,000 7,334,459,686 28,733,770,125
2,559,666,937 5,836,000,000 8,395,666,937 22,828,579,822
The details of unsecured and senior debentures are as follows: Unit : Baht
At beginning of year Less Redemption during year Add Issuing during year At end of year
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2008
2009
2008
9,390,000,000 (3,617,000,000) 63,000,000 5,836,000,000
13,500,000,000 (14,596,000,000) 10,486,000,000 9,390,000,000
9,390,000,000 (3,617,000,000) 1,513,000,000 7,286,000,000
13,500,000,000 (14,596,000,000) 10,486,000,000 9,390,000,000
Annual Report 2009 Kiatnakin Bank Public Company Limited
127
128
Annual Report 2009 Kiatnakin Bank Public Company Limited
KK095A KK09NA KK10NA KK09NB KK105A KK115A KK119A KK09625A KK09716A KK10315A
KK095A KK09NA KK10NA KK09NB KK105A KK115A KK119A KK09625A KK09716A
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Par value (Baht)
Interest rate (percentage)
6.25 per annum 5.84 per annum 4.70 per annum 4.47 per annum 4.25 per annum 4.54 per annum 5.00 per annum 1.50 per annum 1.00 per annum 1.25 per annum
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
6.25 per annum 5.84 per annum 4.70 per annum 4.47 per annum 4.25 per annum 4.54 per annum 5.00 per annum 1.50 per annum 1.00 per annum
Interest rate (percentage)
Par value (Baht)
48,000 15,000 1,450,000 1,513,000
(3,617,000) 9,390,000
Issuing during year
(600,000) (920,000) (2,034,000) (48,000) (15,000) -
Redemption during year
600,000 920,000 966,000 2,034,000 2,131,000 1,289,000 1,450,000 -
December 31, 2008
7,286,000
966,000 2,131,000 1,289,000 1,450,000 1,450,000
Unit : share December 31, 2009
5,836,000
63,000
(3,617,000)
9,390,000
SEPARATE FINANCIAL STATEMENTS
966,000 2,131,000 1,289,000 1,450,000 -
48,000 15,000
Issuing during year
(600,000) (920,000) (2,034,000) (48,000) (15,000)
Redemption during year
Unit : share December 31, 2009
600,000 920,000 966,000 2,034,000 2,131,000 1,289,000 1,450,000 -
December 31, 2008
CONSOLIDATED FINANCIAL STATEMENTS
Due for redemption May 29, 2009 November 2, 2009 November 15, 2010 November 15, 2009 May 8, 2010 May 8, 2011 September 11, 2011 June 25, 2009 July 16, 2009 March 15, 2010
29th of May and November 2nd of May and November 15th of May and November 15th of May and November 8th of May and November 8th of May and November 11th of March and September Maturity date Maturity date Maturity date
May 29, 2009 November 2, 2009 November 15, 2010 November 15, 2009 May 8, 2010 May 8, 2011 September 11, 2011 June 25, 2009 July 16, 2009
29th of May and November 2nd of May and November 15th of May and November 15th of May and November 8th of May and November 8th of May and November 11th of March and September Maturity date Maturity date
Term of interest payment
Due for redemption
Term of interest payment
19.
OTHER LIABILITIES Other liabilities as at December 31, 2009 and 2008, consist of the following: Unit : Baht
Accrued bonus Accrued fee and other expenses Value added tax payable Up-front fee Income received in advance Deposits Provisions Suspense cash received from customer Others Total other liabilities
20.
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2009
295,345,130 161,910,571 1,586,529 167,553,202 88,341,031 134,376,705 164,479,497 56,998,104 75,377,291 1,145,968,060
2008
2008
178,442,242 168,891,340
277,479,920 135,460,841
162,686,177 96,650,643
1,414,540 149,063,671 53,130,599 72,040,061 81,779,223 149,070,842
167,553,202 88,341,031 156,944,049
149,063,671 53,130,599 70,828,401 74,526,963
56,986,604
149,070,842
59,660,366 913,492,884
66,189,710 1,081,959,212
45,406,126 801,363,422
133,003,855
SHARE CAPITAL
The annual Shareholders’ Meeting dated April 18, 2008, passed a resolution to reduce the Bank’s registered capital from the original amount of Baht 7,154,600,300 to Baht 6,978,455,710 by retiring 17,614,459 unissued ordinary shares and increase the registered capital from Baht 6,978,455,710 to Baht 7,228,455,710 by registering additional 25,000,000 ordinary shares with a par value of Baht 10 per share, in order to facilitate the exercise of ESOP warrants. The Bank registered the reduction and increase in share capital with the Ministry of Commerce on July 7, 2008 and July 8, 2008, respectively. The amount of 630 unit of warrants have been converted into 686 ordinary shares. The Bank registered the conversation of warrants with the Ministry of Commerce on April 16, 2009.
Annual Report 2009 Kiatnakin Bank Public Company Limited
129
130
Annual Report 2009 Kiatnakin Bank Public Company Limited
8,483,233
1.00000
1.13362 1.00000
2.30 -
-
422,951 4,725,062 111,329,209
169,500 116,646,722
Unit
10,867,643
10,867,643 -
Amount
314,923
314,923 -
Cancel (Unit)
150,000 1,294,728
108,028 1,036,700 -
Exercise (Unit)
2,384,410
2,384,410 -
Amount
1.00000
1.29217 1.13362 1.00000
Exercise rate to purchase ordinary share per 1 unit of warrant
630
13,500 3,701,232
8,483,233 -
Price per unit
8,483,233
630 -
3,687,732 -
Decrease during the year
-
19,500 115,037,071
8,483,233 -
Amount
Exercise (Unit)
Cancel (Unit)
Exercise rate to purchase ordinary share per 1 unit of warrant Amount
Decrease during the year
As at December 31, 2007
2.30 -
3,688,362 111,329,209
Unit
Price per unit
As at December 31, 2008
Warrants as at December 31, 2009 and 2008, consist of the following :
WARRANTS
150,000 1,464,776
139,561 1,175,215 -
Share capital issued during year (Share)
686
686 -
15.62
10.00 12.35 19.53
Exercise price
15.62
12.35 19.53
Share capital issued during year (Share) Exercise price Unit
-
-
Unit Unit Amount 1,395,610 3,688,362 3,688,362 8,483,233 14,513,905 111,329,209 111,329,209 19,500 19,500 2,343,000 115,037,071 115,037,071 8,483,233 18,252,515
Amount
-
2.30 -
Amount
Unit : Baht As at December 31, 2008
6,000 111,335,209 8,472
8,472 111,329,209 -
Amount
Price per unit
As at December 31, 2009
Unit : Baht
Warrant KK#2 can be exercised on the 30th of every quarters ended starting from December 30, 1998 to September 30, 2008. Warrant KK#3 can be exercised on the 30th of every quarters ended starting from December 31, 1999 to March 30, 2009. Warrant KK#4 can be exercised on the 30th of every quarters ended starting from March 30, 2001 to December 30, 2010. ESOP warrant which are offered to the management and directors of the Bank and of its subsidiaries can be exercised on the 30th of every quarter ended starting from December 31, 2002 to March 30, 2011.
KK#2 KK#3 KK#4 ESOP Warrant
KK#3 KK#4 ESOP Warrant
21.
22.
LEGAL RESERVE
Under the Public Companies Act, the Bank which is public company is required to set aside as legal reserve at least 5% of its net income, net of accumulated deficit brought forward (if any), until the reserve is not less than 10% of the registered capital. Such reserve fund is not available for distribution as dividend. According to the Civil and Commercial Code, subsidiaries which are private companies must appropriate to a reserve fund at each distribution of dividend at least 5% of the profit arising from the business of the company until the reserve fund reaches 10% of the capital of the company. Such reserve fund is not available for distribution as dividend.
23.
DIVIDEND
On April 18, 2008, the meeting of the ordinary shareholders approved the resolutions regarding the payment of dividend for the year 2007 at the rate of Baht 2.30 per ordinary share a part of which had been paid as interim dividend at the rate of Baht 1.00 per share on September 7, 2007, and the remaining amount was paid on May 2, 2008 at the rate of Baht 1.30 per share, totaling Baht 517,777,883 and Baht 678,291,990, respectively. On July 24, 2008, the meeting of the Board of Directors of the Bank No. 5/2008 approved the resolutions regarding the payment of interim dividend at the rate of Baht 1.00 per ordinary share, totaling Baht 523,054,712. The dividend was paid on August 22, 2008. On April 21, 2009, the meeting of the ordinary shareholders approved the resolutions regarding the payment of dividend for the year 2008 at the rate of Baht 1.75 per ordinary share a part of which had been paid as interim dividend at the rate of Baht 1.00 per share on August 22, 2008, and the remaining amount was paid on May 15, 2009 at the rate of Baht 0.75 per share, totaling Baht 392,350,025. On July 23, 2009, the meeting of the Board of Directors of the Bank No. 6/2009 approved the resolutions regarding the payment of interim dividend at the rate of Baht 0.75 per ordinary share, totaling Baht 392,342,524. The dividend was paid on August 21, 2009.
24.
CONTINGENCIES As at December 31, 2009 and 2008, contingencies of the Bank and subsidiaries are as follows: Unit : Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Aval - bills of exchange Guarantee - others Interest rate swap contract Cross currency swap contracts Unused overdraft credit facilities Total
2009
2008
482,933,337 1,161,242,982 4,651,000,000 3,445,176,100
116,799,711 898,008,708 1,912,000,000
100,000,916 9,840,353,335
55,332,726 2,982,141,145
-
Annual Report 2009 Kiatnakin Bank Public Company Limited
131
25.
EARNINGS PER SHARE
Earnings per share in the consolidated and separate financial statements for the years ended December 31, 2009 and 2008 are calculated as follows:
CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2009
Basic earnings per share Net profit available to ordinary shareholders Effect of assumed conversion Warrants Diluted earnings per share Net profit available to ordinary shareholders plus assumed conversions
Net income Baht
Ordinary shares
Earnings per share Baht
2,228,767,559
523,152,269
4.26
-
-
2,228,767,559
523,152,269
4.26
CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2008
Basic earnings per share Net profit available to ordinary shareholders Effect of assumed conversion Warrants Diluted earnings per share Net profit available to ordinary shareholders plus assumed conversions
132
Annual Report 2009 Kiatnakin Bank Public Company Limited
Net income Baht
Ordinary shares
Earnings per share Baht
1,866,992,975
522,439,364
3.57
-
16,850,749
1,866,992,975
539,290,113
3.46
SEPARATE FINANCIAL STATEMENTS For the year ended December 31, 2009
Basic earnings per share Net profit available to ordinary shareholders Effect of assumed conversion Warrants Diluted earnings per share Net profit available to ordinary shareholders plus assumed conversions
Net income Baht
Ordinary shares
Earnings per share Baht
1,676,307,356
523,152,269
3.20
-
-
1,676,307,356
523,152,269
3.20
SEPARATE FINANCIAL STATEMENTS For the year ended December 31, 2008
Basic earnings per share Net profit available to ordinary shareholders Effect of assumed conversion Warrants Diluted earnings per share Net profit available to ordinary shareholders plus assumed conversions
Net income Baht
Ordinary shares
Earnings per share Baht
3,016,952,517
522,439,364
5.77
-
16,850,749
3,016,952,517
539,290,113
5.59
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133
26.
CAPITAL MANAGEMENT According to the Financial Institutions Business Act B.E. 2551 and the related Bank of Thailand’s Notification, the Bank has to maintain capital funds in proportion to asset and contingent liabilities at not less than 8.5% on the condition that the Tier 1 capital funds shall not be less than 4.25% of such assets and contingent liabilities and the maximum amount of the Tier 2 capital funds must not exceed the Tier 1 capital funds. Capital fund as at December 31, 2009 and 2008 are as follows :
Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
2008
5,231,524,660 2,655,779,138 722,845,571 380,000 7,647,234,383
5,231,517,800 8,483,233 2,647,294,293 722,845,571 380,000 5,426,162,798
16,257,763,752
14,036,683,695
Tier 2 capital Allowance for normal classification loans Unrealized gain (net) on revaluation of available-for-sale equity securities
580,239,612 44,624,199
524,041,729 -
Total tier 2 capital
624,863,811
524,041,729
-
(63,012,063)
16,882,627,563
14,497,713,361
Tier 1 capital Issued and paid-up capital Warrants Share premium Legal reserve General reserve Retained earnings after appropriation Total tier 1 capital
Less Unrealized loss (net) on revaluation of available-for-sales equity securities Total capital fund
Disclosure of capital maintenance information under the Notification of the Bank of Thailand Re: Public Disclosure of Capital Maintenance for Commercial Banks Location of disclosure : www.kiatnakin.co.th Date if disclosure : within April 2010 Information as of : December 31, 2009
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As at December 31, 2009 and 2008, capital adequacy ratios maintained by the Bank in accordance with the notification of the BOT are as follows: Unit : Baht SEPARATE FINANCIAL STATEMENTS 2009
Tier 1 capital to risk weighted assets Capital funds to risk weighted assets
2008
Bank ratio
Minimum required by BOT
Bank ratio
Minimum required by BOT
15.69% 16.29%
4.25% 8.50%
14.93% 15.42%
4.25% 8.50%
As at December 31, 2009 and 2008, the Bank calculated the proportion of capital to risk weighted assets by using Basel 2 method to comply with the notification of the Bank of Thailand No. Sor Nor Sor 87/2551 regarding Supervisory Guidelines on Capital Funds, dated November 27, 2008
27.
OTHER INCOME Other income for the years ended December 31, 2009 and 2008, are as follows:
Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2009 Penalty income Profit from sales of fixed assets Amortization of deferred income on disposal of leasehold right Other income Total other income
SEPARATE FINANCIAL STATEMENTS For the years ended December 31,
2008
2009
2008
103,614,879 8,806,029
77,415,073 14,283,469
103,395,273 5,166,633
77,135,355 11,849,721
21,227,421 133,648,329
11,150,293 48,392,278 151,241,113
6,217,159 114,779,065
11,150,293 10,171,582 110,306,951
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135
28.
OTHER EXPENSES Other expenses for the years ended December 31, 2009 and 2008, are as follows: Unit : Baht CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2009
Repossessed cars expenses Properties foreclosed expenses Transportation expenses Advertising and promotion expenses Core banking expenses Provision expenses Other expenses Total other expenses
29.
102,278,955 54,693,504 69,963,910 174,035,117 36,250,116 53,159,131 158,314,165 648,694,898
SEPARATE FINANCIAL STATEMENTS For the years ended December 31,
2008
2009
2008
92,539,629 69,994,101 64,245,341 172,707,865 36,250,116 183,003,505 618,740,557
102,278,955 54,693,504 63,449,474 171,466,782 36,250,116 53,159,131 112,494,448 593,792,410
92,539,629 69,994,101 61,963,341 168,782,955 36,250,116 109,307,842 538,837,984
INCOME TAX Income tax for the years ended December 31, 2009 and 2008 are as follows: Unit : Baht SEPARATE FINANCIAL STATEMENTS For the years ended December 31, 2009
2008
Income before income tax Income not subject to tax or additional deductible expense Expenses not deductible for tax purposes
2,539,588,451 (760,909,738) 957,067,153
3,192,164,697 (2,774,463,886) 202,601,076
Taxable income
2,735,745,866
620,301,887
Corporate income tax Add Adjustment income tax of last year Total income tax
805,723,760 57,557,335 (1) 863,281,095
171,090,566 4,121,614(2) 175,212,180
The income tax in consolidated financial statements for the year ended December 31, 2009 included the income tax of subsidiaries of Baht 3.21 million (December 31, 2008 : nil). 1) The adjustment in income tax of last year was due to adjustment of taxable advance income for credit fee and other which have been calculated for corporate income tax purposes. 2) The adjustment in income tax of last year was due to changes in estimate.
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Annual Report 2009 Kiatnakin Bank Public Company Limited
According to the Royal Decree No. 475 B.E. 2551 issued under the Revenue Code regarding the corporate income tax rate deduction effective on August 7, 2008, the corporate income tax for listed companies in the Stock Exchange of Thailand has been reduced from 30% to 25% of net profit which does not exceed Baht 300 million. This will remain in effect for three consecutive accounting periods beginning on or after January 1, 2008.
30.
PERATING LEASE COMMITMENTS As at December 31, 2009 and 2008, the Bank has operating lease commitments in respect of vehicles, office space, computer software expense, payable from the balance sheet dates as follows: Unit : Baht
Car rental expense Within one year Within two years Over three years Total
-
CONSOLIDATED FINANCIAL STATEMENTS 2009 Office space Computer software expense expense 81,368,728 55,583,462 136,483,401 273,435,591
3,020,843 3,020,843
Total 84,389,571 55,583,462 136,483,401 276,456,434 Unit : Baht
Car rental expense Within one year Within two years Over three years Total
241,116 241,116
CONSOLIDATED FINANCIAL STATEMENTS 2008 Office space Computer software expense expense 83,741,177 73,504,686 162,602,658 319,848,521
36,250,116 3,020,843 39,270,959
Total 120,232,409 76,525,529 162,602,658 359,360,596 Unit : Baht
Car rental expense Within one year Within two years Over three years Total
-
SEPARATE FINANCIAL STATEMENTS 2009 Office space Computer software expense expense 66,004,092 46,137,359 120,605,819 232,747,270
3,020,843 3,020,843
Total 69,024,935 46,137,359 120,605,819 235,768,113 Unit : Baht
Car rental expense Within one year Within two years Over three years Total
241,116 241,116
SEPARATE FINANCIAL STATEMENTS 2008 Office space Computer software expense expense 68,357,850 60,805,251 145,275,280 274,438,381
36,250,116 3,020,843 39,270,959
Total 104,849,082 63,826,094 145,275,280 313,950,456
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137
31.
SEGMENT INFORMATION
31.1 are as follows:
The results of operations classified into banking and securities businesses for the years ended December 31, 2009 and 2008
Unit : Million Baht CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2009 Banking business
Securities business
Total
Net interest and dividend income after bad debts and doubtful accounts Non-interest income Total income Non-interest expenses Income tax Total expenses and income tax Income before minority interests Less Share in net income to minority interests in subsidiaries
4,638.74 1,392.22 6,030.96 3,013.93 863.59 3,877.52 2,153.44 2.16
13.96 386.41 400.37 319.98 2.90 322.88 77.49 -
4,652.70 1,778.63 6,431.33 3,333.91 866.49 4,200.40 2,230.93 2.16
Net income for year
2,151.28
77.49
2,228.77
Unit : Million Baht CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2008 Banking business
Securities business
Total
Net interest and dividend income after bad debts and doubtful accounts Non-interest income Total income Non-interest expenses Income tax Total expenses and income tax Income (loss) before minority interests Less Share in net income to minority interests in subsidiaries
3,660.82 1,317.82 4,978.64 2,862.84 175.21 3,038.05 1,940.59 3.68
21.67 219.69 241.36 311.28 311.28 (69.92) -
3,682.49 1,537.51 5,220.00 3,174.12 175.21 3,349.33 1,870.67 3.68
Net income (loss) for year
1,936.91
(69.92)
1,866.99
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Annual Report 2009 Kiatnakin Bank Public Company Limited
31.2
As at December 31, 2009 and 2008, the financial position classified by banking and securities businesses are as follows:
Unit : Million Baht CONSOLIDATED FINANCIAL STATEMENTS 2009
Net investment in securities Net loans and accrued interest receivable Net investment in loans Net investment in properties Other assets Total assets Deposits Interbank and money market items Borrowings Other liabilities Total liabilities
Banking business
Securities business
Total
17,993.89 83,298.22 4,523.46 78.04 20,207.39 126,101.00
224.63 544.00 484.42 1,253.05
18,218.52 83,842.22 4,523.46 78.04 20,691.81 127,354.05
76,109.22 3,586.13 26,063.77 3,073.52 108,832.64
62.01 513.37 575.38
76,109.22 3,648.14 26,063.77 3,586.89 109,408.02
Unit : Million Baht CONSOLIDATED FINANCIAL STATEMENTS 2008
Net investment in securities Net loans and accrued interest receivable Net investment in loans Net investment in properties Other assets Total assets Deposits Interbank and money market items Borrowings Other liabilities Total liabilities
Banking business
Securities business
Total
2,665.29 77,592.94 5,113.00 106.64 28,409.67 113,887.54
108.71 214.01 522.51 845.23
2,774.00 77,806.95 5,113.00 106.64 28,932.18 114,732.77
71,155.76 3,762.27 19,948.58 2,453.56 97,320.17
245.10 245.10
71,155.76 3,762.27 19,948.58 2,698.66 97,565.27
The Bank operates only in Thailand and no segment information by geographical area is presented accordingly.
Annual Report 2009 Kiatnakin Bank Public Company Limited
139
32.
FINANCIAL INSTRUMENTS
Significant financial assets carried on the balance sheet include cash, interbank and money market items, investment in securities, investment in loans and loans. Significant financial liabilities carried on the balance sheet include deposits, interbank and money market items, and borrowings. The group’s activities expose it to a variety of financial risks. The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the group. Risk management is carried out by a treasury department and risk management department under policies approved by the Board of Directors. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, use of derivative financial instruments and investing excess liquidity. Risks relating to significant financial instruments held by the Bank are summarized below.
32.1
Credit risk
The group has policies in place to ensure that loans are made to customers with an appropriate credit history. Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The group has policies that limit the amount of credit exposure to any clients or financial institutions. Concentration of credit risk relative to the Bank’s loans summarized by type of industry are as follows: Unit : Baht’000
Agriculture and mining Manufacturing and commerce Real estate and constructions Utilities and services Housing loans Hire-purchase - automobile Leasing Others Total loans and receivables
32.2
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2009
803 2,113,947 19,159,718 714,927 1,273,574 60,118,643 256,828 3,478,516 87,116,956
2008 2,527 2,135,548 17,342,814 809,214 864,761 57,138,766 238,580 2,280,383 80,812,593
803 2,113,947 19,159,718 714,927 1,273,574 60,118,643 256,828 2,929,096 86,567,536
2008 2,527 2,135,548 17,342,814 809,214 864,761 57,138,766 238,580 2,038,137 80,570,347
Interest rate risk and liquidity risk
The matching of the long-term source of funds and investment or long-term loans is the fundamental policy of the Bank’s liquidity risk management policy. In addition, the management over liabilities with the proper maturity and low funding cost is also the Bank’s fundamental policy. It is unusual for the Bank to completely match since business transacted is often of uncertain term and of different types. The Bank has the committee to oversee interest rate risk and liquidity risk by having weekly meeting to balance the two risks to be at an acceptable cost.
32.2.1 Interest rate risk Most of the Bank’s assets are subject to fluctuations in interest rates in the market. Interests on loans and receivables are mainly based on fixed rate. Certain loans and receivables are based on floating rates, linked to, for examples, Minimum Lending Rate (MLR) plus or Minimum Overdraft Rate (MOR) plus. Loans and receivables summarized under fixed and floating interest rate classifications are as follows:
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Unit : Baht’000
Loans and receivables with fixed interest rate Loans and receivables with floating interest rate Total loans and receivables
CONSOLIDATED FINANCIAL STATEMENTS
SEPARATE FINANCIAL STATEMENTS
2009
2009
2008
2008
69,225,000
66,527,857
69,225,000
66,527,857
17,891,956 87,116,956
14,284,736 80,812,593
17,342,536 86,567,536
14,042,490 80,570,347
The Bank and its subsidiaries have summarized financial assets and liabilities classified on maturity of interest repricing period as at December 31, 2009 and 2008, as follows: Unit : Baht’000 CONSOLIDATED FINANCIAL STATEMENTS 2009 0-3 Months 3-12 Months 1 - 5 Years Greater than Non-Performing Non-Interest 5 Years Loans Bearing Financial assets Interbank and money market items Investments in securities, net Investments in loans, net Accounts receivable from clearing house Loans Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Accounts payable to clearing house Securities and derivative business payables Borrowings
10,166,652 3,282,556 89,282
2,045,885 40,254
Total
3,816,230 4,292,705
8,212,871 101,220
-
850,255 11,016,907 860,976 18,218,518 - 4,523,461
22,151,316
13,896,000 42,981,882
2,017,778
6,069,980
234,558 234,558 - 87,116,956
29,898,775 2,313,748 -
15,757,007 30,001,020 1,234,480 96,500 -
-
-
452,414 76,109,216 3,413 3,648,141 195,492 195,492 35,081 35,081
-
-
431,400 431,400 - 26,063,770
9,575,999
8,986,530
7,501,241
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141
Unit : Baht’000 CONSOLIDATED FINANCIAL STATEMENTS 2008 0-3 Months 3-12 Months 1 - 5 Years Greater than Non-Performing Non-Interest 5 Years Loans Bearing Financial assets Interbank and money market items Investments in securities, net Investments in loans, net Accounts receivable from clearing house Loans Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Accounts payable to clearing house Securities and derivative business payables Borrowings
18,422,725 354,664 41,333
314,355 129,525
Total
1,442,060 4,778,761
378,858 163,380
-
802,306 19,225,031 284,067 2,774,004 - 5,112,999
17,480,567
12,450,075 40,359,093
2,763,836
7,759,022
35,418 35,418 - 80,812,593
21,489,761
37,084,144 12,334,285
-
-
247,572 71,155,762
1,497,012 -
1,268,000 -
995,500 -
-
-
1,757 277,210
6,174,019
5,378,894
8,395,667
-
-
200,335 200,335 - 19,948,580
3,762,269 277,210
Unit : Baht’000 SEPARATE FINANCIAL STATEMENTS 2009 0-3 Months 3-12 Months 1 - 5 Years Greater than Non-Performing Non-Interest 5 Years Loans Bearing
Total
Financial assets Interbank and money market items Investments in securities, net Investments in loans, net Loans
9,851,759 2,430,671 330 21,608,360
2,045,885 3,816,230 3,073 2,582,169 13,896,000 42,981,882
8,212,871 2,017,778
6,063,516
701,650 10,553,409 7,474,453 23,980,110 - 2,585,572 - 86,567,536
Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Borrowings
29,898,786 2,391,528 12,245,999
15,757,007 30,001,021 1,234,480 96,500 8,986,530 7,501,241
-
-
452,414 76,109,228 5,815 3,728,323 195,492 195,492 - 28,733,770
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Unit : Baht’000 SEPARATE FINANCIAL STATEMENTS 2008 0-3 Months 3-12 Months 1 - 5 Years Greater than Non-Performing Non-Interest 5 Years Loans Bearing
Total
Financial assets Interbank and money market items Investments in securities, net Investments in loans, net Loans
18,250,925 629 17,267,023
314,355 1,442,060 3,777 2,633,038 12,450,075 40,359,093
378,858 2,763,836
7,730,320
667,782 18,918,707 7,506,509 9,641,782 - 2,637,444 - 80,570,347
Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Borrowings
21,489,761 1,784,400 9,054,019
37,084,144 12,334,285 1,268,000 995,500 5,378,894 8,395,667
-
-
247,572 71,155,762 3,849 4,051,749 277,210 277,210 - 22,828,580
The average balances of significant performing financial assets and financial liabilities, including the average interest and dividend income, are summarized as follows: Unit : Baht’000 CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2009
Significant performing financial assets Interbank and money market items Investment in securities, net Investment in loans, net Loans Significant financial liabilities Deposits and Interbank and money market items Borrowings
Average outstanding balances
Interest and dividend income
Average Rate %
13,851,197 14,702,115 3,739,445 83,623,177 115,915,934
169,990 382,864 1,194,587 6,628,666 8,376,107
1.23 2.60 31.95 7.93 7.23
80,797,499 20,266,890 101,064,389
2,333,526 705,174 3,038,700
2.89 3.48 3.01
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143
Unit : Baht’000 CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2008
Significant performing financial assets Interbank and money market items Investment in securities, net Investment in loans, net Loans Securities purchased under resale agreements Significant financial liabilities Deposits and Interbank and money market items Borrowings
Average outstanding balances
Interest and dividend income
Average Rate %
9,318,063 4,623,728 4,904,242 77,512,028 420,833 96,778,894
179,984 178,891 1,365,979 6,059,877 7,499 7,792,230
1.93 3.87 27.85 7.82 1.78 8.05
58,552,418 25,934,863 84,487,281
2,083,994 1,021,167 3,105,161
3.56 3.94 3.68
Unit : Baht’000 SEPARATE FINANCIAL STATEMENTS For the year ended December 31, 2009
Significant performing financial assets Interbank and money market items Investment in securities, net Investment in loans, net Loans Significant financial liabilities Deposits and Interbank and money market items Borrowings
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Average outstanding balances
Interest and dividend income
Average Rate %
11,909,889 18,455,904 2,998,829 82,633,438 115,998,060
162,574 998,165 670,058 6,622,925 8,453,722
1.37 5.41 22.34 8.01 7.29
79,035,879 22,382,958 101,418,837
2,337,328 758,499 3,095,827
2.96 3.39 3.05
Unit : Baht’000 SEPARATE FINANCIAL STATEMENTS For the year ended December 31, 2008
Significant performing financial assets Interbank and money market items Investment in securities, net Investment in loans, net Loans Securities purchased under resale agreements Significant financial liabilities Deposits and Interbank and money market items Borrowings
Average outstanding balances
Interest and dividend income
Average Rate %
6,434,772 12,091,671 3,659,767 75,982,650 420,833 98,589,693
169,912 2,548,452 981,153 6,044,363 7,499 9,751,379
2.64 21.08 26.81 7.95 1.78 9.89
53,406,292 29,117,568 82,523,860
2,123,751 1,146,416 3,270,167
3.98 3.94 3.96
32.2.2 Liquidity risk Significant assets and liabilities of the Bank analyzed by relevant maturity groupings are as follows:
Unit : Baht’000 CONSOLIDATED FINANCIAL STATEMENTS 2009 1 - 5 years Over 5 years On demand Within 1 year
Total
111,670 35,088,271 3,107 19,492,976 54,696,024
228,649 11,016,907 18,218,518 4,523,461 78,040 234,558 60,118,643 256,828 26,741,485 121,417,089
Financial assets Cash Interbank and money market items Net investment in securities Net investment in loans Net investment in properties Accounts receivable from clearing house Hire-purchase receivables Leasing receivables Loans and bills receivable Total financial assets
228,649 1,234,709 32,686 1,496,044
9,782,198 6,170,066 107,756 234,558 39,284 1,505,096 17,838,958
12,048,452 4,304,035 78,040 24,991,088 253,721 5,710,727 47,386,063
Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Accounts payable to clearing house Securities and derivative business payables Borrowings Total financial liabilities
5,775,599 3,773 195,492 5,974,864
29,773,673 2,593,388 35,081 431,400 11,273,336 44,106,878
40,559,944 1,050,980 14,790,434 56,401,358
- 76,109,216 - 3,648,141 195,492 35,081 431,400 - 26,063,770 - 106,483,100
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145
Unit : Baht’000
On demand Significant assets Cash Interbank and money market items Investment in securities, net Investment in loans, net Investment in properties, net Accounts receivable from clearing house Hire-purchase receivables Leasing receivables Loans Total financial assets Significant liabilities Deposits Interbank and money market items Liabilities payables on demand Securities and derivative business payables Borrowings Total financial liabilities
CONSOLIDATED FINANCIAL STATEMENTS 2008 Over 5 years 1 - 5 years Within 1 year
Total
211,132 985,610 -
18,239,421 933,991 192,287 -
1,840,013 3,402,957 106,644
1,517,755 -
211,132 19,225,031 2,774,004 5,112,999 106,644
13,690 1,210,432
35,418 20,124 712,588 20,133,829
24,742,175 234,700 5,126,211 35,452,700
32,376,467 3,880 17,582,758 51,480,860
35,418 57,138,766 238,580 23,435,247 108,277,821
764,321 286,828 277,210
41,663,332 1,165,241 -
28,728,109 2,310,200 -
-
71,155,762 3,762,269 277,210
1,328,359
200,335 7,483,008 50,511,916
12,465,572 43,503,881
-
200,335 19,948,580 95,344,156
Unit : Baht’000
On demand
SEPARATE FINANCIAL STATEMENTS 2009 Within 1 year Over 5 years 1 - 5 years
Total
Financial assets Cash Interbank and money market items Net investment in securities Net investment in loans Hire-purchase receivables Leasing receivables Loans and bills receivable Total financial assets
227,399 771,211 32,686 1,031,296
9,782,198 5,080,458 39,284 962,140 15,864,080
18,899,652 2,585,572 24,991,088 253,721 5,704,263 52,434,296
35,088,271 3,107 19,492,976 54,584,354
227,399 10,553,409 23,980,110 2,585,572 60,118,643 256,828 26,192,065 123,914,026
Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Borrowings Total financial liabilities
5,775,610 6,170 195,492 5,977,272
29,773,674 2,671,173 13,943,336 46,388,183
40,559,944 1,050,980 14,790,434 56,401,358
-
76,109,228 3,728,323 195,492 28,733,770 108,766,813
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Annual Report 2009 Kiatnakin Bank Public Company Limited
Unit : Baht’000 SEPARATED FINANCIAL STATEMENTS 2008 1 - 5 years Over 5 years On demand Within 1 year
Total
32,376,467 3,880 17,582,758 49,963,105
209,877 18,918,707 9,641,782 2,637,444 57,138,766 238,580 23,193,001 111,978,157
Financial assets Cash Interbank and money market items Net investment in securities Net investment in loans Hire-purchase receivables Leasing receivables Loans and bills receivable Total financial assets
209,877 679,286 11,073 900,236
Financial liabilities Deposits Interbank and money market items Liabilities payables on demand Borrowings Total financial liabilities
764,321 286,828 277,210 1,328,359
32.3
18,239,421 467,248 20,124 499,044 19,225,837
9,174,534 2,637,444 24,742,175 234,700 5,100,126 41,888,979
41,663,332 1,454,721 10,363,008 53,481,061
28,728,109 2,310,200 12,465,572 43,503,881
- 71,155,762 - 4,051,749 277,210 22,828,580 - 98,313,301
Fair values
The fair value of financial instruments has been estimated by the Bank using available market information and appropriate valuation methodologies for each type of financial instruments. A summary of carrying amounts and fair value of financial instruments as at December 31, 2009 and 2008, are as follows: Unit : Baht’000 CONSOLIDATED FINANCIAL STATEMENTS 2009 2008 Fair Value Carrying Amount Carrying Amount Financial assets Cash Interbank and money market items Investments in securities, net Investments in loans, net Investments in properties, net Accounts receivable from clearing house Loans and accrued interest receivable, net Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Accounts payable to clearing house Securities and derivative business payables Borrowings Accrued interest payable
Fair Value
228,649 11,016,907 18,218,518 4,523,461 78,040 234,558 83,842,223
228,649 11,016,907 18,218,518 4,523,461 78,040 234,558 83,842,223
211,132 19,225,031 2,774,004 5,112,999 106,644 35,418 77,806,949
211,132 19,225,031 2,813,402 5,112,999 106,644 35,418 77,806,949
76,109,216 3,648,141 195,492 35,081 431,400 26,063,770 484,232
76,109,216 3,648,141 195,492 35,081 431,400 26,244,031 484,232
71,155,762 3,762,269 277,210 200,335 19,948,580 794,448
71,155,762 3,762,269 277,210 200,335 20,019,559 794,448
Annual Report 2009 Kiatnakin Bank Public Company Limited
147
Unit : Baht’000 SEPARATE FINANCIAL STATEMENTS 2009 2008 Carrying Amount
Fair Value
Carrying Amount
Fair Value
Financial assets Cash Interbank and money market items Investments in securities, net Investments in loans, net Loans and accrued interest receivable, net
227,399 10,553,409 23,980,110 2,585,572 83,298,224
227,399 10,553,409 23,980,110 2,585,572 83,298,224
209,877 18,918,707 9,641,782 2,637,444 77,592,943
209,877 18,918,707 11,338,204 2,637,444 77,592,943
Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Borrowings Accrued interest payable
76,109,228 3,728,323 195,492 28,733,770 488,347
76,109,228 3,728,323 195,492 28,914,328 488,347
71,155,762 4,051,749 277,210 22,828,580 802,535
71,155,762 4,051,749 277,210 22,899,559 802,535
32.4
Interest rate swaps
The Bank has set up objectives and policies to manage the foreign exchange risk and interest rate risk from the volatility of foreign exchange rates and interest rates by using the derivatives for serving the client’s need and the Bank’s assets and liability management purpose. The Bank controls the counterparty risks by setting-up the credit limit based on the normal lending procedures. The notional amount and the fair value of derivatives as at December 31, 2009 and 2008 are as follows: Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2009 Notional amount
Net Fair Value of Derivatives
Less than 1 year Within 1- 5 years More than 5 years Interest rate swap contracts Cross currency swap contracts
148
Annual Report 2009 Kiatnakin Bank Public Company Limited
-
4,651.00 2,895.23
Total
- 4,651.00 549.95 3,445.18
9.06 133.47
Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2008 Notional amount Less than 1 year
Within 1- 5 years
More than 5 years
Total
-
1,912.00
-
1,912.00
Interest rate swap contracts
33.
Net Fair Value of Derivatives
(31.31)
INFORMATION ON QUALITY OF ASSETS
The quality of assets classified in accordance with the guidelines of the Securities Exchange Commission as at December 31, 2009 and 2008 are as follows:
33.1
Investment in securities
The Bank has investment in debt instruments in companies which were ordered to discontinue their operations and defaulted their debts as at December 31, 2009 and 2008 as follows: Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Non-listed companies which have defaulted on interest payment
Type of investment
Numbers
Cost
Market Value
Provision
Senior debenture
1
-
-
-
The Bank has recognized impairment loss on such debt instruments to the statement of income in the period when incurred.
Annual Report 2009 Kiatnakin Bank Public Company Limited
149
33.2
Loans and accrued interest receivable
The Bank has given loans, receivables and accrued interest receivables to companies which face the financial difficulties and provided related allowance for doubtful accounts in the consolidated and separate financial statements as follows Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2009 Allowance for Numbers Collateral doubtful accounts Total debts
Listed company which is under restructuring plan Company which is under default problem
1 77 78
142 3,579 3,721
35 6,141 6,176
120 750 870
Unit : Million Baht CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2008 Allowance for Collateral doubtful accounts Total debts Numbers Listed company which is under restructuring plan Company which is under default problem
34.
1 99 100
147 3,644 3,791
39 5,308 5,347
122 830 952
RELATED PARTIES TRANSACTIONS Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Bank, including holding companies, subsidiaries and fellow subsidiaries are related parties of the bank. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Bank that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Bank and close members of the family of these individuals and entities associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. The following material transactions were carried out with related parties for the years ended December 31, 2009 and 2008. According to the Bank of Thailand’s Notification No. So Nor Sor. 66/2551 regarding the Guideline on Consolidated Supervision dated August 3, 2008, the Bank is required to disclose the Inter Group Transactions in the Financial Business Group Policy and the Risk Managemen for Inter Group - Transactions in the Financial Business Group Policy as follows:
150
Annual Report 2009 Kiatnakin Bank Public Company Limited
1.
The Inter Group Transactions in the Financial Business Group Policy The inter group transactions shall be the same conditions or criteria, including interest rate of service fee charged, as applied when the Bank conducts the transactions with general customers with the same risk level and the Bank does not allow the companies in the financial business group borrow from or lend to each other. 2. The Risk Management for Inter Group Transactions in the Financial Business Group Policy The Bank manages risk for all inter group transactions based on the Credit Risk Management for the Financial Business Policy which covers the key credit risk management process, namely credit risk control, credit risk measurement, and credit risk monitoring, in accordance with the Bank’s policy and the Bank of Thailand’s requirements.
34.1
Income Unit : Million Baht SEPARATE FINANCIAL STATEMENTS
Interest and dividend income Kiatnakin Securities Co., Ltd. Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Asia Recovery Property Fund 1 Gain on repurchasing of unit trust Asia Recovery 1 Fund Asia Recovery Property Fund 1 Fee and services income Kiatnakin Securities Co., Ltd. Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Other income Kiatnakin Securities Co., Ltd.
2009
2008
0.08 88.28 225.57 303.34 617.27
41.64 257.94 1,371.76 614.31 88.60 2,374.25
45.10 45.10
4.72 93.44 98.16
3.84 0.36 0.36 0.36 0.36 5.28
3.76 1.20 1.20 1.20 2.40 9.76
3.30 3.30
3.38 3.38
The consolidated financial statements for the year ended December 31, 2009 included the brokerage income received from Kiatnakin Bank Public Company Limited and the directors and management at the position of department head and above amounting to Baht 0.44 million and Baht 3.31 million, respectively (2008: Baht 0.02 million and Baht 1.23 million, respectively).
Annual Report 2009 Kiatnakin Bank Public Company Limited
151
34.2
Expenses Unit : Million Baht SEPARATE FINANCIAL STATEMENTS
Interest and discounts on borrowings Kiatnakin Securities Co., Ltd. Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property Fund 1 Asia Recovery Property Fund 3 Directors and management at the position of department head including their related person who have control or significant influences Rental and services expenses CMIC Development Co., Ltd. (1) Chotitanawan Co., Ltd. (2) Ruam Wattana Co., Ltd. (2) Other service Erawan Law Office Co., Ltd. Amarin Law Office Co., Ltd. (3) Other services fee paid by subsidiaries to Erawan Law Office Co., Ltd. and Amarin Law Office Co., Ltd. amounting to Baht 4.50 Million and Baht 9.30 Million, respectively (2008 : Amarin Law Office Co., Ltd. amounting to Baht 7.68 Million). Relationship details: (1)
Shares received from troubled debt restructuring
(2)
Major shareholder is an authorized director (3) Major incomes come from Kiatnakin Bank Group
152
Annual Report 2009 Kiatnakin Bank Public Company Limited
2009
2008
8.31
7.29 22.54
9.20 17.80 23.86 28.82 38.66
19.94
12.35 38.67
13.59
5.19
75.23
174.55
23.16
16.88 9.00 -
2.53 1.03
7.73 0.22 31.11
25.88
37.00
-
7.40 44.40
42.20 42.20
34.3
Outstanding balances as at December 31, 2009 and 2008 are as follows: Unit : Million Baht SEPARATE FINANCIAL STATEMENTS
Loans to financial institutions / Loan Kiatnakin Securities Co., Ltd. CMIC Development Co., Ltd. Directors and management at the position of department head including their related person who have control or significant influences Accounts receivable/Other assets Kiatnakin Securities Co., Ltd. Asia Recovery 2 Fund CMIC Development Co., Ltd. Amarin Law Office Co., Ltd. Borrowing from financial institutions Kiatnakin Securities Co., Ltd. Other liabilities/Accrued interest expenses Kiatnakin Securities Co., Ltd. Asia Recovery 1 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property fund 3
2009
2008
62.00 539.33
563.33
1.25 602.58
0.77 564.10
0.62 99.25 6.38 106.25
0.63 5.76 1.23 7.62
-
282.00 282.00
2.56
3.34
-
0.17
0.84 0.71 4.11
0.61 2.05 1.91 8.08
Annual Report 2009 Kiatnakin Bank Public Company Limited
153
Unit : Million Baht SEPARATE FINANCIAL STATEMENTS Weighted Average Balance
Deposits Kiatnakin Securities Co., Ltd. Erawan Law Office Co., Ltd. Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property Fund 1 Asia Recovery Property Fund 3 Director and management at the position of department head including their related person have control or significant influences
2009
2008
2009
2008
393.53 0.45 -
218.65 159.12 160.09 217.70 254.58 108.32 269.70
80.19 0.01 -
7.48 -
520.57 914.55
319.92 1,708.08
689.83 770.03
511.87 519.35
Unit : Million Baht SEPARATE FINANCIAL STATEMENTS Weighted Average Balance
Short term Borrowing Asia Recovery 1 Fund Asia Recovery 2 Fund Asia Recovery 3 Fund Thai Restructuring Fund Asia Recovery Property Fund 1 Asia Recovery Property Fund 3 Director and management at the position of department head including their related person have control or significant influences
154
Annual Report 2009 Kiatnakin Bank Public Company Limited
2009
2008
2009
2008
153.86 80.47 414.16 1,311.97 1,194.60
353.10 575.36 684.77 890.11 267.86 881.41
1,450.00 1,220.00
100.00 350.00 1,260.00 1,170.00
134.39 3,289.45
76.41 3,729.02
140.06 2,810.06
91.12 2,971.12
34.4
Pricing policies
Transactions between the Bank and related parties have been priced as follows: • Fee and services income, which the funds paid to the Bank is calculated at the rate specified in service agreement. • Income under commitment agreement under securities business receivables is calculated based on outstanding balance which the Bank could not claim from securities business receivables. • Other income is based on actual cost incurred. • Interest income is based on market price. • Dividend income is received at the rate declared by the fund. • Gain on repurchasing of unit trust is calculated from net asset value of unit trust at the repurchased date deducted by the carrying value. • Brokerage commission is charged at the same rate given to third parties. • Interest and discounts on borrowing are based on market price. • Rental and service income are based rate identified in rental and services contracts
35.
BENEFITS PAID TO DIRECTORS AND EXECUTIVES
The Bank has no special benefits given to the directors and executives beyond the general benefits made as usual such as directors remuneration, executives salary and bonus (if any) included ESOP warrants as disclosed in Note 21.
36.
SUBSEQUENT EVENT
The Board of Directors’ Meeting No. 7/2009 on September 4, 2009 has passed the resolution to purchase the investment units of Gamma Capital Fund and Bangkok Capital Fund and to authorize the Bank’s Executive Board to perform all necessary matters until completion of the transaction. Subsequently, the Bank’s Executive Board Meeting No. 4/2010 on February 23, 2010 has passed the resolution to the Bank to enter into the sale and purchase agreement for purchasing of investment units of Gamma Capital Fund and Bangkok Capital Fund as follows: 1. Entered into the sale and purchase agreement in respect of acquiring investment units of Gamma Capital Fund totaling 35,910,539.3601 units or 94.57% of total investment units with Gamma Capital L.L.C. as the seller and GE Capital Thai Holdings Ltd. and GS Financial Services L.P. (DEL) as the parent entities. 2. Entered into the sale and purchase agreement in respect of acquiring investment units of Bangkok Capital Fund totaling 44,584,236.6208 units or 96.11% of total investment units with Thai Capital L.L.C. as the seller and GE Capital Thai Holdings Ltd. and GS Financial Services L.P. (DEL) as the parent entities. The total investment value under the Units Sale and Purchase Agreements is amounting to Baht 4,210.88 million in which the actual investment value is adjustable to the net asset value of Gamma Capital Fund and/or Bangkok Capital Fund within 90 days from the closing date.
37.
APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved for issuing by the Bank’s authorized director on February 24, 2010.
Annual Report 2009 Kiatnakin Bank Public Company Limited
155
Master of Arts (Econ), University of California at Los Angeles (UCLA), U.S.A. Bachelor of Arts (Economics) Goucher College Maryland, U.S.A. Directors Certificate Program (DCP 1/2000), Thai Institute of Directors (IOD) Audit Committee Program (ACP 11/2005) Thai Institute of Directors (IOD) The Role of the Chairman Program (2007), Thai Institute of Directors (IOD)/ 2009-Present, Senior Member of the Investment Sub-Committee, Government Pension Fund 2009-Present, Chiang Mai University Council Member, Chiang Mai University 2008-Present, Mahidol University Council Member, Mahidol University 2007-Present, Independent Director and Chairperson of the Board of Directors, Kiatnakin Bank Public Company Limited 2007-Present, Member of the Audit Committee, National Health Security Office 2005-Present, Chulalongkorn University Council Member, Chulalongkorn University 2001-Present, Member of Council of Trustees and Board of Directors, Thailand Development Research Institute (TDRI) 1989-Present, Director, P.A. Lynn Industrial Company Limited 1987-Present, Director, Thai Property Appraisal Co., Ltd. Number of Shareholding 0% Family Relationship with the Executive (None)
Bachelor of Accountancy, Thammasat University Authorized Auditor License No. 2421 Directors Certification Program (DCP 32/2003), Thai Institute of Directors (IOD) Monitoring the System of Internal control and Risk Management Certificate (MIR 1/2007), Thai Institute of Directors (IOD) Monitoring the Internal Audit Function Certificate (MIA 4/2008), Thai Institute of Directors (IOD) Monitoring Fraud Risk Management Certificate (MFM1/2009), Thai Institute of Directors (IOD) 2007-Present, Independent Director and Chairperson of the Audit Committee, Kiatnakin Bank Public Company Limited 2001-Present, Director, Dharmaniti Press Company Limited 1998-Present, Director, Dharmaniti Office of Management Company Limited 1998-Present, Director, Dharmaniti Seminar and Training Company Limited 1989-Present, Director, Dharmaniti Public company Limited Number of Shareholding 50,000 (0.01%) Family Relationship with the Executive (None)
Annual Report 2009 Kiatnakin Bank Public Company Limited
Board of Directors Mr. Manop Bongsadadt, Age 68 Position: Independent Director / Chairperson of the Nomination and Remuneration Committee / Member of Audit Committee Education: Master of Regional Planning, Institute of Social Studies, The Netherlands Master of Architecture, Kansas State University, U.S.A. Bachelor of Architecture, Chulalongkorn University Directors Accreditation Program Certificate (DAP 8/2004), Thai Institute of Directors (IOD) Audit Committee Program Certificate (ACP 10/2005), Thai Institute of Directors (IOD) Role of the Chairman Program Certificate (RCP 17/2007), Thai Institute of Directors (IOD) Role of the Compensation Committee Certificate (RCC 8/2009), Thai Institute of Directors (IOD)
Work Experience: 2006-Present, 2006-Present, 2005-Present, 2004-Present,
Chairperson of the Nomination and Remuneration Committee, Kiatnakin Bank Public Company Limited Director, Krungthep Thanakom Co., Ltd. Member of Audit Committee, Kiatnakin Bank Public Company Limited Independent Director, Kiatnakin Bank Public Company Limited 2004-Present, Member of the Audit Committee, The Erawan Group Public Company Limited 2003-Present, Chairperson of the Board of Directors, Rasa Property Development Public Company Limited 2002-Present, Associate Present Professor, Architecture Faculty, Chulalongkorn University 1995-Present, Director, Tubkaew-Holy Kindergarten School and Nursery Number of Shareholding 0% Family Relationship with the Executive (None)
Mr. Chet Pattrakornkul, Age 61 Position: Independent Director / Member of the Audit Committee / Member of the Nomination and Remuneration Committee Education: Master of Marketing (Certificate Program), Thammasat University Bachelor of Political Science, Ramkamhaeng University Directors Certification Program (DCP 9/2001), Thai Institute of Directors (IOD) DCP Refresher Course (3/2006), Thai Institute of Directors (IOD) Role of The Compensation Committee (RCC 1/2006), Thai Institute of Directors (IOD) Audit Committee Program (ACP 17/2007), Thai Institute of Directors (IOD) Monitoring the Internal Audit Function (MIA 1/2007) , Thai Institute of Directors (IOD) Board and Director Performance Evaluation (R-WS workshop 2/2008), Thai Institute of Directors (IOD)
Annual Report 2009 Kiatnakin Bank Public Company Limited
157
Board of Directors Monitoring Fraud Risk Management (MFM1/2009), Thai Institute of Directors (IOD) Monitoring of the Quality of Financial Reporting (MFR7/2009), Thai Institute of Directors (IOD) Monitoring the System of Internal Control and Risk Management (MIR 5/2009), Thai Institute of Directors (IOD)
Work Experience: 2007-Present, Member of Audit Committee, Kiatnakin Bank Public Company Limited 2006-Present, Member of Nomination and Numeration, Kiatnakin Bank Public Company Limited 2005-Present, Independent Director, Kiatnakin Bank Public Company Limited 2004-2005, Head of Consumer Lending, Kiatnakin Finance Public Company Limited Number of Shareholding: 10,000 (0.002%) Family Relationship with the Executive: (None)
Mr. Tanin Chirasoonton Age 57 years Position: Director Education: Bachelor of Law, Ramkamhaeng University Directors CertiďŹ cation Program (DCP 10/2001), Thai Institute of Directors (IOD), DCP Refresher Course (5/2007), Thai Institute of Directors (IOD), Public Administration 1997, Political Science Faculty, Thammasat University Accounting & Finance System Tools for Executive ABM EXEC (III) The Continuing Education Center Chulalongkorn University
Work Experience: 2009-Present, 2009-Present, 2006-2009, 2004-2006,
Independent Committee, Kiatnakin Bank Public Company Limited Managing Director, Erawan Law OďŹƒce Limited Independent Director, Kiatnakin Bank Public Company Limited Independent Director/ Member of the Nomination and Remuneration Committee, Kiatnakin Bank Public Company Limited 2003-2004, Independent Director/ Chairperson of the Nomination and Remuneration Committee, Kiatnakin Finance Public Company Limited Number of Shareholding: 0% Family Relationship with the Executive: (None)
158
Annual Report 2009 Kiatnakin Bank Public Company Limited
Board of Directors Mr. Pravit Varutbangkul Age 62 years (1) Position: Director Education: Master of Business Administration (Operation Research & General), University of Santa Clara, California, U.S.A Bachelor of Science (Operations Research & Finance), Brigham Young University, Provo, Utah, U.S.A Directors Certification Program (DCP 5/2001), Thai Institute of Directors (IOD) DCP Refresher Course (3/2006), Thai Institute of Directors (IOD) Audit Committee Program (ACP 16/2007), Thai Institute of Directors (IOD) Improving The Quality of Financial Reporting (QFR 5/2007), Thai Institute of Directors (IOD) Improving The Quality of Financial Reporting (QFR 5/2007), Thai Institute of Directors (IOD) Monitoring Strategy Implementation and Execution (2008) ), Thai Institute of Directors (IOD) Effective Business Performance Leadership (5/2008), Thai Institute of Directors (IOD)
Work Experience: 2007-Present, Director, Kiatnakin Securities Company Limited 1996-Present, Authorized Director, Kiatnakin Bank Public Company Limited 2005-2006, Authorized Director and Vice Chairman, Kiatnakin Bank Public Company Limited 2004-2005, Authorized Director and Head of Chairman of Central Support, Kiatnakin Finance Public Company Limited Number of Shareholding: 300,000 (0.06%) Family Relationship with the Executive: (None)
Mr. Suraphol Kulsiri, Age 57 years(2) Position: Authorized Director / Member of Nomination and Remuneration Committee Education: Bachelor of Marketing, Bangkok University Directors Certification Program (DCP 13/2001) Thai Institute of Directors (IOD) Role of the Compensation Committee: Motivating Excellence in Performance 2007 Thai Institute of Directors (IOD) Work Experience: 2004-Present, Authorized Director and Member of the Nomination and Remuneration Committee, Kiatnakin Bank Public Company Limited Mar 2003-Present, Chief Executive Officer, Kiatnakin Securities Company Limited 2005-2007, Director, the Stock Exchange of Thailand 2005-2007, Director, Settrade Company Limited 2005 -2006, Chairman of the Information Technology, the Stock Exchange of Thailand 2005-2006 Chairman of the Information Technology Association, Association of Securities Companies Number of shareholding: 0% Family Relationship with the Executive: (None) Annual Report 2009 Kiatnakin Bank Public Company Limited
159
Board of Directors Mr. Supol Wattanavekin, Age 55 years(1) Position: Chairperson of the Risk Management Committee / Chairman of the Executive Board Education: Master of Business Administration (Executive) Sasin Graduate Institute of Business Administration of Chulalongkorn University Bachelor of Law, Ramkhamhaeng University Orchestrating Winning Performance 2005, IMD International, Switzerland Board & CEO Assessment, Thai Institute of Directors (IOD) The Role of the Chairman Program, Thai Institute of Directors (IOD) Director Accreditation Program (DAP 56/2006) - Thai Institute of Directors (IOD) Director Certification Program (DCP 76/2006) Thai Institute of Directors (IOD) the 5th SEACEN / ABAC/ABA/PECC Public Private Dialogue for the Asia Pacific Region, in Malaysia Organizing and Managing Strategic Alliances for Success and Profit, Sasin Graduate Institute of Business Adminstration of Chulalongkorn University Leadership, Strategic, Growth and Change, Sasin Graduate Institute of Business Adminstration of Chulalongkorn University Corporate Governance Report of Thai Listed Companies, Listed Companies Association
Work Experience: 2005-Present, Chairman of the Executive Board, Kiatnakin Bank Public Company Limited 2005-Apr 2007, Chairman of the Board of Directors, Kiatnakin Bank Public Company Limited 2004-Present, Director, The Erawan Group Public Company Limited 1999-Present, Director, Kiatnakin Securities Company Limited 1999-2005, Chairman, Kiatnakin Bank Finance Company Limited 1999-2005, Chairman of the Executive Board, Kiatnakin Bank Finance Company Limited 1990-Present, President, BTMU Leasing (Thailand) Limited 1986-1999, President, Kiatnakin Securities Co., Ltd. Number of shareholding (including his spouse’s): 9,481,042 (1.81%) Family Relationship with the Executive: Brother of the Head of Deposit and Marketing
160
Annual Report 2009 Kiatnakin Bank Public Company Limited
Board of Directors Mr.Tawatchai Sudtikitpisan, Age 50 years (1) Position: President Education: Master of Business Administration, University of Texas at Austin, U.S.A. Master of Science in Electrical Engineering, University of Texas at Austin, U.S.A. Bachelor of Science in Electrical Engineering, University of Texas at Austin, U.S.A. Directors Certification Program (DCP 31/2003) Thai Institute of Directors (IOD) Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University The Job of The Chief Executive, Singapore Institute of Management (SIM)
Work Experience: 2006-Present, 2005-Present, 2005-Present,
Authorized Director, Kiatnakin Securities Company Limited President, Kiatnakin Bank Public Company Limited Head of Residential Project Lending, Commercial Lending and Retail Lending, Kiatnakin Bank Public Company Limited 2005, Head of Commercial Lending, Kiatnakin Finance Public Company Limited 2002-2005, Authorized Director, Kiatnakin Bank Public Company Limited 2002-2005, Head of Residential Project Lending, Kiatnakin Finance Public Company Limited Number of shareholding: 100,000 (0.02%) Family Relationship with the Executive: (None)
Mr.Pracha Chumnarnkitkosol, Age 48 years Position: Director Education: Master of Business Administration (Finance), University of Texas Arlington, U.S.A.
Bachelor of Engineering, Chulalongkorn University Risk Management of Banking & Finance, Thai Institute of Directors (IOD) Directors Certification Program (DCP 75/2006) Thai Institute of Directors (IOD) EVA : Managing for Value Creation, Sasin Graduate Institute of Business Administration of Chulalongkorn University Blue Ocean Strategy, (STRATEGIC) Business Development Center Senior Executive Program (SEP-22), Sasin Graduate Institute of Business Administration of Chulalongkorn University
Work Experience: 2006-Present, Director, Kiatnakin Bank Public Company Limited 2005-Present, Head of Risk Management, Kiatnakin Bank Public Company Limited 2004-2005 Chairman of the Credit Committee, Kiatnakin Bank Finance Company Limited 1999-2004, Managing Director, Asia Recovery Management Company Limited Number of shareholding: 0% Family Relationship with the Executive: (None) (1) Do not have authority in Subsidiary, Kiatnakin Securities Company Limited, as Directors (2) Have authority in Subsidiary, Kiatnakin Securities Company Limited, as the Chief Executive Officer
Annual Report 2009 Kiatnakin Bank Public Company Limited
161
Management Team (1) Mr. Supol Wattanavekin, Age 55 years Position Chairman of the Executive Board Education: Master of Business Administration (Executive) Sasin Graduate Institute of Business Administration of Chulalongkorn University Bachelor of Law, Ramkhamhaeng University Orchestrating Winning Performance 2005, IMD International, Switzerland Board & CEO Assessment, Thai Institute of Directors (IOD) The Role of the Chairman Program, Thai Institute of Directors (IOD) Director Accreditation Program (DAP 56/2006), Thai Institute of Directors (IOD) Director Certification Program (DCP 76/2006), Thai Institute of Directors (IOD) The 5th SEACEN / ABAC/ABA/PECC Public Private Dialogue for the Asia Pacific Region, in Malaysia Organizing and Managing Strategic Alliances for Success and Profit, Sasin Graduate Institute of Business Adminstration of Chulalongkorn University Leadership, Strategic, Growth and Change, Sasin Graduate Institute of Business Adminstration of Chulalongkorn University Corporate Governance Report of Thai Listed Companies, Listed Companies Association
Work Experience: 2005-Present, Chairman of the Executive Board, Kiatnakin Bank Public Company Limited 2005-Apr. 2007, Chairman of the Board of Directors, Kiatnakin Bank Public Company Limited 2004-Present, Director, The Erawan Group Public Company Limited 1999-Present, Director, Kiatnakin Securities Company Limited 1999-2005, Chairman, Kiatnakin Bank Finance Company Limited 1999-2005, Chairman of the Executive Board, Kiatnakin Bank Finance Company Limited 1990-Present, President, BTMU Leasing (Thailand) Limited 1986-1999, President, Kiatnakin Securities Co., Ltd. Number of shareholding: (including his spouse’s): 9,481,042 (1.81%) • Family Relationship with the Executive Brother of the Head of Deposit and Marketing
(1) Mr.Tawatchai Sudtikitpisan, Age 50 years Position President Education: Master of Business Administration, University of Texas at Austin, U.S.A. Master of Science in Electrical Engineering, University of Texas at Austin, U.S.A. Bachelor of Science in Electrical Engineering, University of Texas at Austin, U.S.A. Directors Certification Program (DCP 31/2003) Thai Institute of Directors (IOD) Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University 162
Annual Report 2009 Kiatnakin Bank Public Company Limited
Management Team The Job of The Chief Executive, Singapore Institute of Management (SIM)
Work Experience: 2006-Present, 2005-Present, 2005-Present,
Authorized Director, Kiatnakin Securities Company Limited President, Kiatnakin Bank Public Company Limited Head of Residential Project Lending, Commercial Lending and Retail Lending, Kiatnakin Bank Public Company Limited 2005, Head of Commercial Lending, Kiatnakin Finance Public Company Limited 2002-2005, Authorized Director, Kiatnakin Bank Public Company Limited 2002-2005, Head of Residential Project Lending, Kiatnakin Finance Public Company Limited Number of shareholding: 100,000 0.02% Family Relationship with the Executive: None
Mr. Sarawut Charuchinda, Age 52 years Position Head of Debt Restructuring Education: Master of Business, University of Mississippi, U.S.A. Bachelor of Accountancy (2nd Class Honors), Chulalongkorn University Director Certification Program (DCP31/2003), Thai Institute of Directors (IOD)
Work Experience: 2005-Present, Head of Debt Restructuring, Management, Kiatnakin Finance Public Company Limited 2002-2005, Head of Asset Management, Kiatnakin Finance Public Company Limited Number of shareholding: 0% Family Relationship with the Executive: None
Miss Thitinan Wattanavekin, Age 53 years(1) Position Head of Deposit and Marketing Education: Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University Bachelor of Public Affairs, University of Southern California, U.S.A. Directors Certification Program (DCP 1/2000), Thai Institute of Directors (IOD) Board Performance Evaluation, Thai Institute of Directors (IOD) Corporate Social Responsibility (CSR 1/2007), Thai Institute of Directors (IOD) Politics and Governance (KPI 8), The King Prajadhipok’s Institute Capital Market for Executives (CMA 2), Capital Market Academy The Joint State-Private Course (NDC 19/2006), Thailand National Defence College
Annual Report 2009 Kiatnakin Bank Public Company Limited
163
Management Team Work Experience: 2005-Present, Head of Deposit and Marketing, Kiatnakin Bank Public Company Limited 2002-2005, Head of Treasury and Funding, Kiatnakin Finance Public Company Limited 1999-Present, Director, Kiatnakin Securities Company Limited Number of shareholding: 25,979,861 (4.97%) Family Relationship with the Executive: Sister of the Chairman of the Executive Board
Mr. Patom Amorndechawat, Age 53 years(2) Position Head of Operations Education: Master of Accountancy, Thammasat University Bachelor of Law, Thammasat University Bachelor of Accounting, Chulalongkorn University Directors CertiďŹ cation Program (DCP 121/2009)
Work Experience: 2009-Present, Authorized Director, Kiatnakin Securities Company Limited 2007-Present, Head of Operations, Kiatnakin Bank Public Company Limited 2000-2007, Executive Vice President of Operation and Retail, Bank Thai PCL. Number of shareholding: % Family Relationship with the Executive: (None)
Mr.Pracha Chumnarnkitkosol, Age 48 years Position Head of Risk Management Education: Master of Business Administration (Finance) University of Texas Arlington, U.S.A. Bachelor of Engineering, Chulalongkorn University Risk Management of Banking & Finance, Thai Institute of Directors (IOD) Directors CertiďŹ cation Program (DCP 75/2006) Thai Institute of Directors (IOD) EVA : Managing for Value Creation, Sasin Graduate Institute of Business Administration of Chulalongkorn University Blue Ocean Strategy, (STRATEGIC) Business Development Center Senior Executive Program (SEP-22), Sasin Graduate Institute of Business Administration of Chulalongkorn University
Work Experience: 2006-Present, Director, Kiatnakin Bank Public Company Limited 2005-Present, Head of Risk Management, Kiatnakin Bank Public Company Limited 2004-2005 Chairman of the Credit Committee, Kiatnakin Bank Finance Company Limited 1999-2004, Managing Director, Asia Recovery Management Company Limited Number of shareholding: 0% Family Relationship with the Executive: None 164
Annual Report 2009 Kiatnakin Bank Public Company Limited
(2) MBA, Eastern Michigan University, U.S.A. Bachelor of Engineering, Chulalongkorn University - Director Accreditation Program (DAP 21/2004) Thai Institute of Directors (IOD) Director Certification Program (DCP 76/2006) Thai Institute of Directors (IOD) - TLCA Executive Development Program (EDP 2/2008), Listed Companies Assocation July 2009-Present, Authorized Director, Kiatnakin Securities Company Limited April 2009-Present, Director, Erawan Law Office Limited - July 2007-Present, Head of Finance & Budgeting, Kiatnakin Bank Public Company Limited 1998-2006, Acting Managing Director, Tisco Securities Company Limited Number of shareholding: 0% Family Relationship with the Executive: (None)
Master of Accounting, Chulalongkorn University Bachelor of Accounting, The University of the Thai Chamber of Commerce Certified Public Accountant - Young Bankers’ Executive Development Program IX, The Thai Institute of Banking and Finance Association Chief Financial Officer Certificate Program (CFO), Federation of Accounting Professions Under The Royal Patronage of His Majesty The King Certificate COSO for CFO, Federation of Accounting Professions Under The Royal Patronage of His Majesty The King The 3rd Auditor Development Program (1/2007), the Revenue Department Impact of the New Accounting Standards on Financial Reports of Listed Companies, Securities Analysts Association 2005-Present, Senior Vice President, Kiatnakin Bank Public Company Limited 2002-2005, Senior Vice President, Kiatnakin Finance Public Company Limited Number of shareholding: 37,500 (0.01%) Family Relationship with the Executive: (None)
Annual Report 2009 Kiatnakin Bank Public Company Limited
General Information Name of Company
Kiatnakin Bank Public Company Limited
Type of Business
Commercial Bank
Company Registration No.
Bor. Mor. Jor. 172
Location
500, Amarin Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand. Tel: +(66) 2680-3333 Fax:+(66) 2256-9933 www.kiatnakin.co.th
Number of ordinary shares sold
523,152,466 shares (as at December 31, 2009)
Contact Personnel Securities Registrar
Thailand Securities Depository Co., Ltd. 62, Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110, Thailand Tel: 0-2229 2800 Fax: 0-2359 1259
Authorized Auditor
Mr Supamitr Techamontrikul Deloitte Touche Tomatsu Jaiyos Auditing Co., Ltd. 25th Floor, Rajanakarn Building 183 South Sathorn Rd, Yannawa, Sathorn, Bangkok 10120 Tel: 0-2676-5700 / Fax: 0-26765757
Legal Adviser
Not appointed
Adviser / Manager under management contract 166
Not appointed
Annual Report 2009 Kiatnakin Bank Public Company Limited
Capital Structure Our Capital Structure can be classified as follows: (1) As of December 31st, 2009, we have a registered capital of 7,228 Million Baht, of which 5,231 Million Baht is paid-up. This translates into 523,152,466 ordinary shares with a value of 10 Baht each. (2) Debentures As of December 31st, 2009, we have four batches of outstanding debentures, the details of which appear on Page 128 of the notes to the financial statements. (3) warrants The third issue of warrants of 150,849,990 units offered to existing ordinary shareholders at the price of 2.30 Baht per unit at the ratio of 5 existing shares to 3 warrants. One 3rd batch warrant can be exercised to purchase 1.13362 new ordinary shares at 12.35 Baht each. The right can be exercised on the last 30th of a quarter. The first exercise was scheduled for June 30th, 1999 with the last scheduled for March 30th, 2009. As of December 31st, 2009, there is no outstanding warrant. The fourth issue of warrants of 138,613,188 units were offered to existing ordinary shareholders at the price of 0 Baht per unit at the ratio of 5 existing
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shares to 1 subscription right and 3 warrants. One 4th batch warrant can be exercised to purchase 1 new The fourth issue of warrants of 138,613,188 units were offered to existing ordinary shareholders at the price of 0 Baht per unit at the ratio of 5 existing shares to 1 subscription right and 3 warrants. One 4th batch warrant can be exercised to purchase 1 new ordinary share at 19.53 Baht each. The right can be exercised on the last 30th of a quarter. The first exercise was scheduled for March 30th, 2001 with the last scheduled for December 30th, 2010. As of December 31st, 2009, there are 111,329,209 outstanding 4th batch warrants or no change from the earlier year. The general shareholders meeting has approved the issuance of ESOP warrants to executives and/or employees of the bank and subsidiaries for the purchase of a maximum of 10 million ordinary shares at the proposed price of 0 Baht per unit in 2000. Holders can exercise the right to purchase new ordinary shares at the ratio of 1:1 at the price of 15.62 Baht per share. The first exercise is scheduled for December 31st, 2002 with the last scheduled for March 30th, 2011. As of the end of 2009, there are 6,000 outstanding ESOP warrants or a cancellation of 13,500 warrants.
Kiatnakin Bank holds over 10% of shares in the following juristic persons (as of December 31st, 2009) Juristic Person Name / Address
Type of Busines
1. BTMU Leasing (Thailand ) Co., Ltd. 4th Floor, Harinthorn Tower, 54, Sathorn Nua Road, Silom, Bangrak, Bangkok 10500 Tel 0-2266-3060 Fax 0-2266-3 2. Attakorn Company Limited 456 Petch kasem Rd, Hadyai Distric Tel 0-7436-6034-40 Fax 0-7423-5819 3. Kiatnakin Securities Co., Ltd., 7th Floor, Amarin Tower, 500, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Tel 0-2680-2222 Fax 0-2680-2233 4. Asia Recovery Mutual Fund 1, KASIKORN ASSET MANAGEMENT Co., 400/22, KASIKORNBANK Building, 6th Floor, Phahon Yothin Avenue, Samsen Nai, Phaya Thai, Bangkok 10400 Tel 0-2673-3999 Fax 0-2673-3900 5. Asia Recovery Mutual Fund 2, KASIKORN ASSET MANAGEMENT Co., 400/22, KASIKORNBANK Building, 6th Floor, Phahon Yothin Avenue, Samsen Nai, Phaya Thai, Bangkok 10400 Tel 0-2673-3999 Fax 0-2673-3900 6. Asia Recovery Mutual Fund 3, KASIKORN ASSET MANAGEMENT Co., 400/22, KASIKORNBANK Building, 6th Floor, Phahon Yothin Avenue, Samsen Nai, Phaya Thai, Bangkok 10400 Tel 0-2673-3999 Fax 0-2673-3900
Hire-purchase/ Leasing
10
600,000
Automotive Hire-purchase
10
800,000
Securities
99.99
65,000,000
Investment Fund Ltd.
99.95
125,947,412
Investment Fund Ltd.
99.59
187,239,308
Investment Fund Ltd.
99.97
190,832,895
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Shareholding Percentage
Number of common shares sold
Juristic Person Name / Address
Type of Busines
7. Thai Restructuring Fund, Unit Trust One Asset Management Limited 24th Floor, Siam Tower (Siam Discovery), 989 Rama 1 Road, Patumwan, Bangkok 10330 Tel 0-2659-8888, Fax 0-2659-8860-1 8. Asia Recovery Property Fund 1 Investment Fund One Asset Management Limited 24th Floor, Siam Tower (Siam Discovery), 989, Rama 1 Road, Patumwan, Bangkok 10330 Tel 0-2659-8888 Fax 0-2659-8860-1 9. Asia Recovery Property Fund 3 Investment Fund One Asset Management Limited 24th Floor, Siam Tower (Siam Discovery), 989, Rama 1 Road, Patumwan, Bangkok 10330 Tel 0-2659-8888 Fax 0-2659-8860-1 10. Ayudhya Tuntavee Fund 5 Investment Fund Ayudhya Fund Management Co., Ltd. 12th Floor, Ploenchit Tower, 898, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Tel 0-2657-5757 Fax 0-2263-0199 11. CMIC Development Co., Ltd. Space Rental 10th Floor, K Tower, 209, Sukhumwit 21 Road, Klong Toei Nua, Wattana, Bangkok 10110 Tel 0-2664-1396-7 Fax 0-2664-2163 12. Erawan Legal OďŹƒce Co., Ltd. Legal Service 12th Floor, K Tower, 209, Sukhumwit 21 Road, Klong Toei Nua, Wattana, Bangkok 10110 Tel 0-2664-1396-7 Fax 0-2664-2163
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Shareholding Percentage
Number of common shares sold
98.91
78,698,484
99.50
24,418,404
98.77
93,340,500
83.57
5,983,265
80.58
230,000,000
99.93
10,000
Branches Kiatnakin Bank and Kiatnakin Securities Branches Over decades of operations, Kiatnakin has been trusted and supported by valued customers in various segments and industries. Today, we operate with an eďŹƒcient network that spans across the country, covering all regions Address
Telephone
Fax
0-2680-3333
0-2256-9933
0-2625-5000
0-2664-1454
0-2941-4859
0-2562-0017
0-2525-3055
0-2525-3056
0-2533-0333
0-2533-0343
0-2454-8656
0-2454-8657
0-2540-4992
0-2540-4552
0-2703-2649
0-2703-2650
0-2237-7887
0-2237-7884
0-2320-0622
0-2320-0623
Bangkok and Perimeters
Head OďŹƒce
11th Floor, Amarin Tower, 500 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330 Asoke 209/1 K Tower (A Building), Sukhumvit 21 (Asoke), Khlong Toey Nua, Wattana, Bangkok 10110 Kaset-Vibhavadi 47/11 Ngamwongwan Road, Khwaeng Lad Yao, Jatujak, Bangkok 10900 Nonthaburi 68/30-32 Moo 8, Tambon Bang Krasor, Amphoe Muang, Nonthaburi 11000 Pathum Thani 433, 435, 437 Rangsit-Nakhon Nayok Road, Tambon Prachathipat, Amphoe Thanyaburi, Pathum Thani 12130 Petkasem-Kanjanapisek Branch 119/42-43 Bang Kae, Bang Kae, Bangkok 10160 Ramintra 43, 45, 47, 49 Ramintra Road , Minburi, Minburi, Bangkok 10510 Samut Prakarn 89/8-10 Moo 5, Tambon Bang Muang, Amphoe Muang Samut Prakarn 10270 Siphaya 78 Trok Captain Bush (Charoen Krung 30), Bangrak, Bangrak, Bangkok 10500 Srinakarin 903, 905 Srinakarin Road, Suan Luang, Suan Luang, Bangkok 10250
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Branches Address
Telephone
Fax
Bangkok and Perimeters
Samut Sakhon
1400/98-101 Ekkachai Road, Tambon Mahachai, Amphoe Muang, Samut Sakhon 74000
0-3483-7211
0-3483-7212
Suksawat
178, 180, 182 Bangpakok, Ratburana,Bangkok 10140
0-2428-8799
0-2428-8798
Yaowarat
289 Yaowarat Road, Samphanthawong, Samphanthawong, Bangkok 10100
0-2223-1371
0-2223-1372
Ayutthaya
100 Moo 1, Tambon Pailing, Amphoe Phranakorn Sri Ayutthaya, Ayutthaya 10300
0-3523-5641
0-3523-5642
Chachengsao
08, 510 Chachengsao-Bang Pakong Road, Tambon Na Muang, Amphoe Muang, Chachengsao 24000 60/27-28 Moo Ban Bor Fai, Tambon Hua Hin, Amphoe Hua Hin, Prachuab Kirikhun 77110 275/1-2 Saeng Chootoh Road, Tambon Baan Nua, Amphoe Muang, Kanchanaburi 71000 992/2 Petkasem Road, Tambon Huay Jorakae, Amphoe Muang, Nakhon Pathom 73000 286/25-28 Srisuriyawong Road, Tambon Na Muang, Amphoe Muang, Ratchaburi 70000
0-3851-6611
0-3851-6106
0-3254-7558
0-3254-7660
0-3462-0645
0-3462-0646
0-3427-1583
0-3427-1584
0-3231-0382
0-3231-0391
568/7-9 Paholyothin Road, Tambon Pak Priao, Amphoe Muang, Saraburi 18000 290/3-6 Moo 4, Tambon Sanamchai, Amphoe Muang, Suphan Buri 72000
0-3631-8445
0-3631-8446
0-3554-6270
0-3554-6277
Central
Hua Hin
Kanchanaburi
Nakhon Pathom
Ratchaburi
Sara buri Suphan Buri
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Branches Address
Telephone
Fax
East
29/1-2, 29/3, 29/4 Moo 7, Tambon Chantanimit,Amphoe Muang, Chantaburi 22000 7/41 Moo 4, Sukhumvit Road, Tambon Huaykapi, Amphoe Muang, Chonburi 20130 120/17-18 Moo 6, Tambon Na Kluea, Amphoe Bang Lamung, Chonburi 20150 41/18-20 Prachintakarm Road, Tambon Na Muang, Amphoe Muang, Prachin Buri 25000
0-3934-3616
0-3934-3615
0-3838-4946-9
0-3838-4950
0-3848-9161
0-3848-9162
0-3721-7581
0-3721-7582
375/4-5 Sukhumvit Road, Tambon Noenphra, Amphoe Muang, Rayong 21000
0-3880-8090-4
0-3880-8095
Chaiyaphum
31/12-14 Haruthai Road, Tambon Nai Muang, Amphoe Muang, Chaiyaphum 36000
0-4483-5678
0-4483-5677
Khon Kaen
9/2 Prachasamosorn Road, Tambon Nai Muang, Amphoe Muang, Khon Kaen 40000 192/1-4 Jomsurangyart Road, Tambon Nai Muang, Amphoe Muang, Nakhon Ratchasima 30000 49, 49/1-3 Tawapiban Road, Tambon Nai Muang, Amphoe Muang, Roi Et 45000
0-4333-7725-32 0-4333-7734
Chantaburi Chonburi Pattaya Prachin Buri
Rayong Northeast
Nakhon Ratchasima
0-4426-0401-8
0-4426-0409
0-4351-8162
0-4351-8163
Sakhon Nakhon
1773/63 Ratpattana Road, 0-4273-3004 Tambon Thatchoengchum, Amphoe Muang, Sakhon Nakhon 47000
0-4273-3005
Surin
6/7 Lak Muang Road, Tambon Nai Muang, Amphoe Muang, Surin 32000
0-4453-5031
Roi Et
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Annual Report 2009 Kiatnakin Bank Public Company Limited
0-4453-5030
Branches Address 466 Suriyat Road, Tambon Nai Muang, Amphoe Muang, Ubon Rachathani 34000
Telephone 0-4520-9260
Fax 0-4520-9258
215/25, 215/27 Udon Dusadee Road, Tambon Mark Keng, Amphoe Muang, Udon Thani 41000
0-4222-2555
0-4222-3242
Chiang Mai
33 Chiang Mai-Lampang Road, Tambon Chang Phueak, Amphoe Muang, Chiang Mai 50300
0-5321-8711-3,
0-5340-9620-4
Chiang Rai
102/1-3 Moo 13, Paholyothin Road, Tambon Rob Wieng, Amphoe Muang, Chiang Rai 57000
0-5340-9625 0-5371-9433
0-5371-9434
Lampang
142-144 Highway-Lampang-Nguo Road, Tambon Phra Bat, Amphoe Muang, Lampang 52000
0-5431-7799
0-5431-7699
Nakhon Sawan
1311/18 - 21 Moo 10, Tambon Nakornsawan Tok, Amphoe Muang, Nakhon Sawan 60000
0-5631-3659
0-5631-3655
Phetchabun
3/48 Samakkeechai Road, Tambon Nai 0-5671-2272 Muang, Amphoe Muang, Phetchabun 67000
0-5671-2273
Phitsanulok
286/10 Pichaisongkram Road, Tambon Nai Muang, Amphoe Muang, Phitsanulok 65000
Phrae
162 Yantrakitkosol Road, Tambon Naiwiang, 0-5521-1687 0-5452-2179 Amphoe Muang, Phrae 54000
Ubon Rachathani
Udon Thani North
0-5521-1683-6, 0-5521-1773-4
0-5452-2178
South
Chumphon
67/4 - 5 Krom Luang Chumphon Road, Tambon Tha Taphao, Amphoe Muang, Chumphon 86000
0-7757-0508
0-7757-0509
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Branches Address
Telephone
Fax
Hat Yai
24, 24/1 Suvarnawong Road, Tambon Hat Yai, Amphoe Hat Yai, Songkhla 90110
0-7434-6262
0-7434-6260
Krabi
254, 254/1-2 Moo 11 Tambon Krabi Noi, Amphoe Muang, Krabi 81000
0-7566-3922
0-7566-3923
Nakhon Si Thammarat
6/144-5 Patanakarn Khu Khwang Road, Tambon Nai Muang, Amphoe Muang, Nakhon Si Thammarat 80000 63/714-716 Moo 4, Tambon Vichit, Amphoe Muang, Phuket 83000 59/12 – 14 Huay Yod Road, Tambon Thap Thieng, Amphoe Muang, Trang 92000 22/144-145-146, 22/163 Raj-Uthit Road,
0-7577-46517
0-7577-4658
0-7652-2309
0-7652-2310
0-7522-3292
0-7522-3293
0-7721-7405-7, 0-7721-7408
0-7720-5454-5
Phuket Trang Surathani
Kiatnakin Securities Branch Head Office
500 Amarin Tower 7th Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330
0-2680-2222
0-2680-2233 e-Trade Hotline: 0-2680-2244
Asoke
209/1 K Tower, (A Building), Sukhumvit 21 (Asoke), Khlong Toei Nue, Wattana, Bangkok 10110
0-2680-2900
0-2680-2995
Bangna
1093/56 Central City Tower, 11st Floor, Bangna-Trad Road, Bangna, Prakanong, Bangkok 10260 30/39-50 Office Building,11st Floor, The Mall Ngam Wong Wan, Ngam Wong Wan Road, Bangkhen, Amphoe Muang, Nontaburi 11000
0-2745-6458-66 , 0-2745-6307-9 0-2745-6467
Bangkok and Perimeter
Ngamwongwan
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0-2550-0356 , 0-2550-0380
0-2550-0366
Branches Samut Sakhon
Address 1400/98-101, Ekkachai Road, Tambon Mahachai, Amphoe Muang, Samut Sakhon 74000
Telephone 0-3483-7246-64 0-3442-3565
Fax 0-3442-7123-5
9/2 Prachasamosorn Road, Tambon Nai Muang, Amphoe Muang, Khon Kaen 40000
0-4333-7700-10
0-4333-7721
7/18 Moo 4, Sukhumvit Road, Tambon Huaykapi, Amphoe Muang, Chonburi 20130
0-3838-4931-43
0-3838-4794
Upcountry Branches Northeast
Khon Kaen Central
Chonburi North
Chiang Mai
Pitsanulok
0-5322-0751-62 0-5322-0764 33 Kiatnakin Building, Khuangsingh 0-5322-0763 0-5322-0765 Junction,Chiang Mai-Lampang Road, Tambon Chang Phueak, Amphoe Muang, Chiang Mai 50300 0-5523-3060-2 0-5525-9455 169/2-3-4 Baromtrailokanart Road, Tambon Nai Muang, Amphoe Muang, Pitsanulok, 65000
East
Rayong
125/1 Janta-udom Road, 0-3861-7477-85 (Rayong-Baan Khai),Tambon Choeng Noen, Amphur Muang, Rayong 21000
0-3861-7490
South
Hat Yai
200, 4th Floor, Room No. 414-424, Juladis Plaza Hatyai Building, Niphat- Uthit 3 Road, Tambon Hat Yai, Amphoe Hat Yai, Songkhla, 90110
0-3483-7266
0-7423-9515
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500 Amarin Tower, 11th Floor, Ploenchit Road, Lumphini, Pathumwan, Bangkok 10330 209 K Tower (A Building), Sukhumvit 21 (Asoke), Klongtoey-nua, Wattana, Bangkok 10110 Tel. +(66) 2680-3333 Fax. +(66) 2256-9933 www.kiatnakin.co.th