Ktb 07 by Brother Roger

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Message from the Chairman

and the President

Dear Valued Shareholders, Operating the banking business in 2007 was quite a difficult task as there were simultaneous pressuring factors coming in, both from locally and from abroad. The US subprime crisis with global impact and the slackening domestic economy including strict enforcement of the regulators on provisioning for doubtful accounts under the International Accounting Standard No.39 (IAS 39) have increased the expenses of the Bank considerably. However, Krung Thai Bank made its full efforts and overcome various obstacles by using the advantage of having a large customer base, both in public and private sectors, and competence in efficient cost management to be the main strategy in conducting business, thus resulted in an everexpanding credit in 2007. Moreover, the Bank was successful in opening up a new aggressive marketing front through synergy with our business alliances in presenting wide-ranging financial and consumer products via Bank network. The Processing Bank client base both at retail and institutional levels also expanded enabling us to enjoy increasing fee-based income continuously.

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As to service quality improvement, all the branches nationwide in 2007 were fully prepared for the Service Level Agreement to be made to the public in early 2008. This is to reaffirm the branding of Convenience Bank and to enhance the competence of IT system, work processes and human resources in order to cope with the increasingly severe competition, and to efficiently accommodate the more stringent financial requirements to come. With the strong intention to lead the Bank to further advancement under the principles of good corporate governance coupled with corporate social and environmental responsibility, performance has been witnessed and accepted by the general public, thus during 2007, the Bank was presented with as many as eight awards of honor from respective organizations. To name some they were the Board of the Year for Exemplary Practice Award, the Shareholder Awards for Distinctive Registered Company for Shareholders Care and the Financial Management Excellence Award. These brought about inspiration for the Board of Directors, the executive officers and all the employees to raise the performance further. As for the year 2008, the Bank will focus on services that are consumer-centric through its being the Convenience Bank to create ultimate satisfaction for customers. The Bank will give priority to taking the lead in presenting new products that match the wishes of all targeted customer groups through respective service channels already expanded. We are confident that the strengths of our information technology (IT) system and well-trained staff in the right direction will promote and support our set targets of being able to provide convenient, speedy, warm and impressive services to all clients. We hereby extend our sincere thanks to all the valued shareholders, all the organizations and institutions, and customers of all segments as well as the stakeholders for your trust and support that have enabled us to grow strongly as the nationâ&#x20AC;&#x2122;s leading bank with stability and great competence in creating good business returns. At the same time we had the opportunity to help strengthen the financial system and fully support the economic and social development throughout time.

(Mr. Suparat Kawatkul) Chairman of the Board of Directors

(Mr. Apisak Tantivorawong) President

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Organization Chart Krung Thai Bank Pcl.

Audit Committee

as at February 1, 2008 Internal Audit Group Internal Audit Group • Head Office Audit Dept. • Provincial Network Audit Dept. • Corporate Business & Business Center Audit Dept. • Credit Review & Audit Dept. • Information Technology Audit Dept. • Metropolitan Network Audit Dept.

Network Group

Business Center Group

Corporate Banking Group

• SMEs Strategy Dept.

• Retail Banking & network Strategy Dept.

Metropolitan Network Sector 1

Metropolitan BC Sector

Corporate Banking Sector 1

• Nana Nua Office Regional Office - Branch / Sub-branch

• Metropolitan BC Dept. 1 Business Center • Metropolitan BC Dept. 2 Business Center • Metropolitan BC Dept. 3 Business Center

• Industrial Finance Dept. 1 • Industrial Finance Dept. 2 • Commercial Finance Dept.

Metropolitan Network Sector 2 Regional Office - Branch / Sub-Branch Central Region Network Sector Regional Office - Branch / Sub-Branch Eastern Region Network Sector Regional Office - Branch / Sub-Branch North-Eastern Region Network Sector 1 Regional Office - Branch / Sub-Branch North-Eastern Region Network Sector 2 Regional Office - Branch / Sub-Branch Northern Region Network Sector 1 Regional Office - Branch / Sub-Branch Northern Region Network Sector 2 Regional Office - Branch / Sub-Branch Southern Region Network Sector 1 Regional Office - Branch / Sub-Branch Southern Region Network Sector 2 Regional Office - Branch / Sub-Branch

Northern & North-Eastern Region BC Sector • Northern Region BC Dept. 1 Business Center • Northern Region BC Dept. 2 Business Center • North-Eastern Region BC Dept. 1 Business Center • North-Eastern Region BC Dept. 2 Business Center Central, Eastern & Southern Region BC Sector • Central Region BC Dept. Business Center • Eastern Region BC Dept. Business Center • Southern Region BC Dept. 1 Business Center • Southern Region BC Dept. 2 Business Center

Products & Marketing Management Group

Corporate Banking Sector 2 • Agricultural Finance Dept. • Construction Finance Dept. Corporate Banking Sector 3 • Services Finance Dept. • Project Finance Dept. 1 • Project Finance Dept. 2

Government & State Enterprise Relations Group Government & State Enterprise Relations Sector • Government Relations Dept. 1 • Government Relations Dept. 2 • State Enterprise Relations Dept. • Government Project Management Dept. • Community Bank

Retail Products Management Sector • Personal Loan Products Management Dept. • Housing Loan Products Management Dept. • Alliance Products Management Dept. • Marketing Promotion Dept. Financial & Electronic Banking Products Sector • Financial Products Management Dept. • Card Products Management Dept. • Retail Electronic Banking Products Management Dept. • Customer Relationship Management & Marketing Information Dept.

Financial Management Group • Asset & Liabilities Management Dept. • Treasury Dept. • Accounting Dept. Financial Planning Sector • Planning & Budgeting Dept. • Cashier Dept. • Management Information Dept. • Customer Information Dept. Treasury & Capital Market Sector • Capital Markets Dept. • Investor Relations Dept. • Financial Institutions & Overseas Offices Dept. - Branches & Overseas Offices

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Board of Directors Nominating and Remuneration Committee

Board of Executive Directors

Corporate Governance Committee

President • Office of the President • Marketing & Corporate Communications Dept.

Credit Risk Transaction Management Group

Credit Restructuring Group

• Credit Committee Administration Dept.

Operation Group • Operation Process Development Dept.

Business Center CRTM Sector

Credit Restructuring Sector 1

Cash Management Sector

• Metropolitan BC CRTM Dept. • Northern Region BC CRTM Dept. • North-Eastern Region BC CRTM Dept. • Central & Eastern Region BC CRTM Dept. • Southern Region BC CRTM Dept.

• Credit Restructuring Dept. 1 • Credit Restructuring Dept. 2

• Cash Management Products Dept. • Medium Business & Network Cash Management Dept. • Corporate Cash Management Dept.

Credit Restructuring Sector 2 • Credit Restructuring Dept. 3 • Credit Restructuring Dept. 4

Corporate CRTM Sector • Industrial Business CRTM Dept. • Commercial & Service Business CRTM Dept. • Agricultural Business CRTM Dept. • Construction Business CRTM Dept. • Project & Finance Institution Financing CRTM Dept.

Risk Management & Corporate Governance Group Policy & Corporate Governance Sector • Office of the Board of Directors & shareholders • Policy & Procedures Dept. • Compliance Dept. • Legal Consultant Dept.

Banking Operation Sector

Risk Management Sector

• Branch Support Dept. • Cash Management Dept. • Electronic Channel Support Dept.

• Credit Risk Management Dept. • Market Risk Management Dept. • Enterprise Risk Management Dept. • Business Research Dept.

International Business Operation Sector International Payment & Settlement Operation Office • Foreign Exchange Business Dept. • International Trade Services Dept. Credit Operation Sector

Asset & Legal Management Group Credit Monitoring & Asset Disposition Sector • Credit Monitoring Dept. • Asset Disposition Management Dept. • Asset Disposition Administration Dept. Legal Management Sector • Special Cases Dept. • Legal Monitoring Dept. 1 • Legal Monitoring Dept. 2 • Legal Management & Loan Collection Expedition Dept.

• Credit Operation Dept. • Credit Agreement Operation Dept. • Collateral Function Dept. • Custody & Collateral System Dept. Premises & Facilities Management Sector Procurement Office • General Services & Security Dept. • Premises & Property Management Dept.

Human Resources & Organization Management Group Human Resources & Organization Management Sector • Human Resources Management Dept. • Discipline & Welfare Dept. • Human Resources Development Dept. • Organization Development Dept. • Medical Dept.

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Statement of Direction 1. Be a large commercial bank of firm standing, good operating performance and supporting government operations 2. Develop products and services matching our competitors 3. Retain good corporate governance and carry corporate social responsibility

Vision The Convenience Bank for Retail, Business, Government and Institution

Mission Thailandâ&#x20AC;&#x2122;s leading financial institution providing excellent services, creating sustainable returns, promoting intellectual capital and adhering to good corporate governance

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Board of Directors 1. Mr. Suparut Kawatkul Chairman

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Board of Directors 2. Dr. Chaiyawat Wibulswasdi Vice Chairman and Chairman of the Board of Executive Directors 3. Mr. Apisak Tantivorawong President and Executive Director 4. Mr. Aswin Kongsiri Director and Executive Director 5. Dr. Jamlong Atikul Director and Executive Director

4 2 3 5

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Board of Directors 6. Ms. Tanya Sirivedhin Chairman of the Audit Committee and Independent Director 7. Mr. Pachara Yutidhammadamrong Member of the Audit Committee and Independent Director 8. Mr. Visut Montrivat Member of the Audit Committee and Independent Director

6 7

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Board of Directors 9. Mr. Santi Vilassakdanont Chairman of the Corporate Governance & Social and Environmental Responsibility Committee, Member of the Nominating and Remuneration Committee and Independent Director 10. Mr. Sima Simananta Chairman of the Nominating and Remuneration Committee, Member of the Corporate Governance & Social and Environmental Responsibility Committee and Independent Director 11. Mr. Suri Buakhom Member of the Nominating and Remuneration Committee, Member of the Corporate Governance & Social and Environmental Responsibility Committee and Independent Director 12. Mr. Dusit Nontanakorn Member of the Corporate Governance & Social and Environmental Responsibility Committee and Independent Director

11 9 10 12

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Executive Officers 1. Mr. Apisak Tantivorawong President

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Executive Officers 5. Mr. Wanchai Thanittiraporn Senior Executive Vice President - Managing Director Business Center Group 6. Ms. Kittiya Todhanakasem Senior Executive Vice President – Managing Director Financial Management Group 10. Mr. Boonlers Srichareon Senior Executive Vice President - Managing Director Network Group 12. Mr. Preecha Phukham Senior Executive Vice president – Managing Director Government & State Enterprise Relations Group 14. Ms. Sompis Charoenkiatikul First Executive Vice President – Managing Director Corporate Banking Group

5 14 12 10 6

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Executive Officers 2. Dr. Pongsathorn Siriyodhin First Senior Executive Vice president – Managing Director Operation Group 3. Mr. Sahas Treetipbut Senior Executive Vice President – Managing Director Products & Marketing Management Group 4. Mr. Dusit Tengniyom Senior Executive Vice President - Managing Director Credit Restructuring Group 7. Mr. Sayan Satangmongkol Senior Executive Vice President – Managing Director Asset & Legal Management Group 8. Ms. Nongnutch Thienpaitoon Senior Executive Vice President – Managing Director Credit Risk Transaction Management Group

3 2 8 4 7

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Executive Officers 9. Mr. Somgiat Sangsurane Senior Executive Vice President – Managing Director Risk Management & Corporate Governance Group 11. Ms. Sumana Vonggapan Senior Executive Vice President – Managing Director Human Resources & Organization Management Group 13. Ms. Chujit Niyamosot First Executive Vice President – Managing Director Internal Audit Group

11 13 9

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Brief Biography of Boards of Directors and Executive Officers

B o a r d o f D irectors as at March 1, 2008 1. Mr. Suparut Kawatkul Chairman

Age 56 Education - MSc (Economics), Queen Mary College, University of London, UK - BSc (Economics), London School of Economics and Political Science, University of London, UK Training - Advanced Management Program, Harvard University, USA - Double Taxation Program, University of Southern California, USA - Class 72/2006 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Permanent Secretary, Ministry of Finance - Chairman, Government Pension Fund - Chairman, Student Loan Fund - Director, Office of Insurance Commission - Vice Chairman, Thai Airways International Pcl. - Director, Thai Asset Management Corporation - Director, Office of the Council of State Experience - Director-General, Revenue Department, Ministry of Finance - Director, PTT Pcl. - Chairman, Erawan Hotel Pcl. - Chairman, Government Lottery Office

2. Dr. Chaiyawat Wibulswasdi

Vice Chairman and Chairman of the Board of Executive Directors

Age 61 Education - PhD (Economics), Massachusetts Institute of Technology, USA - BA (Economics), Williams College, USA Training - Class 77/2006 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Vice Chairman, Securities and Exchange Commission, Thailand - Director, National Economic and Social Development Board - Member of the Audit Committee, CPPC Pcl. Experience - Advisor to the Deputy Prime Minister, Minister of Finance and Minister of Commerce

3. Mr. Apisak Tantivorawong President and Executive Director

Age 54 Education - MBA (Industrial Management), University of Tennessee, USA - BEng (Chemical Engineering), Chulalongkorn University Training - Class 18/2002 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Chairman, ASEAN Bankers Association - Chairman, the Thai Bankersâ&#x20AC;&#x2122; Association - Independent Director and Member of Audit Committee, Thai-German Ceramic Industry Pcl. - Independent Director, Indorama Polymers Pcl. - Independent Director, Thai Oil Pcl. - Director, Thai Asset Management Corporation - Director, the Board of Investment of Thailand - Director, Payment Systems Committee Experience - President, Siam City Bank Pcl.

4. Mr. Aswin Kongsiri

Director and Executive Director

Age 62 Education - BA (Philosophy, Politics and Economics) (Hons), Oxford University, UK Training - Banff School of Advanced Management, Alberta, Canada - Class 11/2001 Director Certification Program (DCP), and Chairman 2000 Program, Thai Institute of Directors Association (IOD) - Class 6 National Defence Course for the Joint StatePrivate Sectors, National Defence College Other Positions - Member of the National Legislative Assembly, Thailand - Chairman and Independent Director, Ch. Karnchang Pcl. - Chairman, AK. Place Co., Ltd. - Director and Chairman of Audit Committee, Oriental Hotel (Thailand) Pcl. - Director and Chairman of Risk Management Committee, Bangkok Aviation Fuel Services Pcl. - Independent Director, Member of Audit Committee and Member of Nomination and Remuneration Committee, Padaeng Industry Pcl.

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- Independent Director and Member of Audit Committee, Thai Reinsurance Pcl. - Independent Director and Member of Nomination and Remuneration Committee, Electricity Generating Pcl. - Director, Thai-German Ceramic Industry Pcl. - Director, Kompastra Co., Ltd. - Director, Ton Poh Emerging Thailand Fund - Director, ECR Property Ordinary Partnership - Member of Performance Agreement Sub-committee, Ministry of Finance - Member of Performance Evaluation Sub-committee, Management - Chairman of Performance Evaluation Sub-committee, Management 2: Risk Management Experience - Director and Member of the Audit Committee, Thai Rating and Information Service Co., Ltd. - Director, Chairman of the Nominating and Remuneration Committee, Muang Thai Life Assurance Co., Ltd. - Director and Executive Director, Siam Commercial Bank Pcl.

5. Dr. Jamlong Atikul

Director and Executive Director Age 60 Education - PhD (City & Regional Planning), Cornell University, USA - MCom. (Economics), University of Auckland, New Zealand - B.C.A. (Economics), Victoria University of Wellington, New Zealand Training - Pacific Rim Executive Bankerâ&#x20AC;&#x2122;s Program 1996 - Class 55/2006 Director Accreditation Program (DAP), and Class 77/2006 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Director, RCL Pcl. - Director and Chairman of the Board of Executive Director, Krungthai AXA Life Insurance Co., Ltd. - Honorary Director and Member of the Audit Committee, Council of National Institute of Development Administration - Chairman of External Examination, Assumption University Experience - President, Bank of Ayudhya Pcl. - Executive Director, the Thai Bankersâ&#x20AC;&#x2122; Association - Director, Siam City Cement Pcl.

6. Ms. Tanya Sirivedhin

Chairman of the Audit Committee and Independent Director

Age 62 Education - MA (Economics), University of Wisconsin, USA - BA (Economics), Victoria University of Wellington, New Zealand

Training - Executive Development Program, Harvard Business School, Harvard University, USA - Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University - Class 13/2001 Director Certification Program (DCP), and Class 15/2006 Audit Committee Program (ACP), Thai Institute of Directors Association (IOD) Other Positions - Director, Puay Ungpakorn Institute - President, New Zealand Alumni Association Experience - Advisor to the Governor, Bank of Thailand

7. Mr. Pachara Yutidhammadamrong

Member of the Audit Committee and Independent Director

Age 60 Education - Honorary Degree of Doctor of Laws, Ramkhamhaeng University - Barrister at Law, Thai Bar Association - LL.B., Thammasat University Training - Class 399 National Defence Course for the Joint StatePrivate Sectors, National Defence College - Naval College - Class 53/2006 Director Accreditation Program (DAP), Thai Institute of Directors Association (IOD) Other Positions - Member of the National Legislative Assembly, Thailand - Director, Provincial Electricity Authority - Sub-committee, Sukhumvit Asset Management Co., Ltd. - Director, Office of the Council of State Experience - Director, IRPC Pcl. - Director, Thai Airways International Pcl. - Attorney General, Office of the Attorney General - Deputy Attorney General, Office of the Attorney General

8. Mr. Visut Montrivat

Member of the Audit Committee and Independent Director

Age 62 Education - MBA, Northern Illinois University, USA - BAcc, Chulalongkorn University Training - Top Management Program, Office of the Civil Service Commission - Class 77/2006 Director Certification Program (DCP) and Class 15/2006 Audit Committee Program (ACP), Thai Institute of Directors Association (IOD)

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

- Class 38 National Defence Course for the Joint StatePrivate Sectors, National Defence College Other Positions - Member of the Audit Committee and Independent Director, Bangkok Aviation Fuel Services Pcl. - Director, Paiboon Insurance Co., Ltd. - Director, Compensation Fund - Member of the Audit Sub-commission, Highland Research and Development Institute - Member of Performance Agreement Sub-committee, Ministry of Finance Experience - Deputy Permanent Secretary, Ministry of Finance - Inspector General, Ministry of Finance - Director General, the Comptroller Generalâ&#x20AC;&#x2122;s Department - Director General, the Treasury Department - Director, Siam City Bank Pcl. - Director, TISCO Finance Pcl. - Executive Director, the Court of Justice

9. Mr. Santi Vilassakdanont

Chairman of the Corporate Governance & Social and Environmental Responsibility Committee, Member of the Nominating and Remuneration Committee and Independent Director

Age 57 Education - MM, Sasin Graduate Institute of Business Administration of Chulalongkorn University - MA (Accounting), Chulalongkorn University - BA (Accounting and Management), Chulalongkorn University Training - Class 355 National Defence Course for the Joint StatePrivate Sectors, National Defence College - Class 3/2003 Director Accreditation Program (DAP), Thai Institute of Directors Association (IOD) Other Positions - Member of the National Legislative Assembly, Thailand - President, Saha Pathana Inter-Holding Pcl. - Chairman, the Federation of Thai Industries - Director, Industrial Estate Authority of Thailand - Independent Director, Sahacogen (Chonburi) Pcl. - Director, Chumporn Palm Oil Industry Pcl. - Director, Sompo Japan Insurance (Thailand) Co., Ltd. - Director, Thai Asset Management Corporation - Vice Chairman, Federation of Accounting Professions Experience - Vice Chairman, the Federation of Thai Industries Vice Chairman, the Thai National Shippersâ&#x20AC;&#x2122; Council

10. Mr. Sima Simananta

Chairman of the Nominating and Remuneration Committee, Member of the Corporate Governance & Social and Environmental Responsibility Committee and Independent Director

Age 63 Education - MS (Political Science), Utah State University, USA - BS (Political Science), Chulalongkorn University Training - Certificate of Public Law, Thammasat University - Class 14/2001 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) - Class 38 National Defence Course for the Joint StatePrivate Sectors, National Defence College Other Positions - Director, Dhipaya Insurance Pcl. - Director, Office of the Civil Service Commission - Director, Directorate of Public Administration Law 2, Office of the Council of State - Director, Parliament Official Committee - Director, Royal Thai Police Committee - Chairman, Civil Service Sub-commission on Merit System Protection - Member of Civil Service Sub-commission, Ministry of Education - Member of Royal Thai Police Sub-committee on Ethics Promotion and Merit Development - Member of Public Sector Development Sub-commission on Promotion and Development of Regional and Local Public Service System - Chairman of Parliament Official Sub-committee on Efficient and Effective Assessment of Public Service - Chairman of the Audit and Assessment of Effectiveness of Public Service Committee, Ministry of Tourism and Sports - Advisor on Government Pension Fund - Senior Advisor on Innovative Administration Consultancy Institute - Chairman, Foundation of Effective Development on Public Service - Member, Dhurakij Pundit University Council - Director, Institute for Management Education for Thailand Foundation - Director, Colonel Jinda Na Songkla Foundation - Director, Foundation for a Clean and Transparent Thailand Experience - Secretary General, Office of the Civil Service Commission - Advisor on the Ministry of Foreign Affairs

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11. Mr. Suri Buakhom

- MS (Structural Engineering), Ohio State University, USA - BEng (Civil Engineering), Youngstown State University, USA Member of the Nominating and Remuneration Training Committee, Member of the Corporate Governance - Class 24/2000 Director Certification Program (DCP), Class & Social and Environmental Responsibility Committee 7/2002 Chairman 2000 Program and Class 10/2005 Audit and Independent Director Committee Program (ACP), Thai Institute of Directors Age 63 Association (IOD) Education Other Positions - MBA, Thammasat University - Chairman of the Audit Committee, Crown Seal Pcl. - BA (Economics), Kasetsart University - Chairman, Independent Director and Chairman of the Training Audit Committee, 124 Communications Pcl. - Diploma (Technology), Harvard University, USA - Chairman, the Krungthep Thanakom Co.,Ltd. - Training in Strategic Alliance, the Wharton School, University - Vice Chairman, the Thai Chamber of Commerce of Pennsylvania, USA/ Intelligence Organization, UCLA, - Advisor on the Management, the Siam Cement Pcl. USA/ Computer Technology, Asia Electronic University - Director, Wiik & Hoeglund Pcl. - Certificate of Developing Corporate Governance Policy - Director, Loxley Pcl. 20/09/2005, Class 50/2006 Director Accreditation Program - Director, RCL Pcl. (DAP), Class 70/2006 Director Certification Program (DCP), - Independent Director and Member of the Audit Committee Thai Institute of Directors Association (IOD) S&P Syndicate Pcl. Other Positions of Audit Committee, Siam Future Development Pcl. - Member - Chairman, Krung Thai Computer Services Co., Ltd. - Director, Palang Sophon 2 Co., Ltd. - Vice Chairman, Krungthai Panich Insurance Co., Ltd. - Member of Property Management Board, the Thai Red - Director, Government Information Technology Services Cross Society - Advisor on Online Computer System, Revenue Department - Director, Highland Research and Development Institute and Comptroller Generalâ&#x20AC;&#x2122;s Department, Ministry of Finance - Member of Performance Agreement Committee - Advisor on e-Government, Ministry of Information and - Member of the Audit and Assessment Committee, Communication Technology Ministry of Finance Experience - Member of Internal Audit Sub-committee, Office of Thai - Office Director, Revenue Department Health Promotion Foundation - Deputy Director-General, Revenue Department - Director, State Railway of Thailand - Advisor on Tax Base Development, Revenue Department - Director, University of the Thai Chamber of Commerce - Director, the Industrial Development Foundation 12. Mr. Dusit Nontanakorn - Director, Thai Institute of Directors Association Member of the Corporate Governance & Social and - Director, Thailand Management Association Environmental Responsibility Committee and Experience Independent Director - President, Cementhai Distribution Co., Ltd. Age 60 Education - MBA (Marketing), University of California, USA

E x e c u t i v e Officers as at March 1, 2008 1. Mr. Apisak Tantivorawong President

- Please refer to page 25.

2. Dr. Pongsathorn Siriyodhin

First Senior Executive Vice president â&#x20AC;&#x201C; Managing Director Operation Group

Age 57 Education - PhD (Economics), University of Cincinnati, USA - MA (Economics), California State University, USA - BA (Economics), California State University, USA

Training - Class 78/2006 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Chairman, Krungthai Card Pcl. - Director, Trinity Watthana Pcl. - Director, Nok Airlines Co., Ltd. Experience - First Senior Executive Vice President, Business Support Group; Banking Operations Group & Finance Group, Krung Thai Bank Pcl. - Chairman, Krung Thai Legal Services Co., Ltd.

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- Director, Krungthai AXA Life Insurance Co., Ltd. - Director and Member of the Audit Committee, the Industrial Finance Corporation of Thailand (IFCT)

3. Mr. Sahas Treetipbut

Senior Executive Vice President â&#x20AC;&#x201C; Managing Director Products & Marketing Management Group

Age 60 Education - MS (Computer and Information Sciences), Syracuse University, USA - BBA (Statistics), Chulalongkorn University Training - Class 28/2004 Director Accreditation Program (DAP), Thai Institute of Directors Association (IOD) - Class 12 the National Defence Regular Course for the Joint State-Private Sectors, National Defence College, - Advanced Management Program for Overseas Bankers, the Wharton School, University of Pennsylvania, USA Other Positions - President, Krung Thai General Business Services Co., Ltd. - Chairman, Thai e-Commerce Association - 2nd Deputy Secretary to the Municipal Special Council for the Draft on the Computer-Related Crime Act B.E. 2550 (2007) - Director, Special Qualified Board for the Student Loan - Director, Electronic Transactions Commission Committee - Director, National ITMX Co., Ltd. - Director, TradeSiam Co., Ltd. - Director, Internet Thailand Pcl. - Director, Krungthai AXA Life Insurance Co., Ltd. - Director, Settrade.com Co., Ltd. - Director, MBK Resort Pcl. - Director, MCOT Pcl. - Executive Advisor, Krungthai Card Pcl. Experience - Senior Executive Vice President, Products Management & Special Projects Group; Products & Marketing Group, Krung Thai Bank Pcl.

4. Mr. Dusit Tengniyom

Senior Executive Vice President - Managing Director Credit Restructuring Group

Age 60 Education - MS (Public Administration), California State University at Los Angeles, USA - BS (Business Administration), Woodbury College, California, USA Training - Advanced Management Program : The International Senior Management Program (AMP: ISMP) Graduate School of Business Administration, Harvard University, USA

Other Positions - Advisor to the Chairman of the Board of Directors, Bangkok Expressway Pcl. - Advisor to the Board of the Executive Directors & the Board of Directors, Advance Agro Pcl. - Director & Chairman of the Audit Committee, Krungthai AXA Life Insurance Co., Ltd. Experience - Specialist, Human Resources and Organization Management Group / Senior Executive Vice President, Upper Southern Region & Bangkok Metropolis Group; Bangkok Metropolis & Southern Region Group, Krung Thai Bank Pcl.

5. Mr. Wanchai Thanittiraporn

Senior Executive Vice President - Managing Director Business Center Group

Age 60 Education - MS (Economics Development), National Institute of Development Administration - BCom, Chulalongkorn University - BAcc, Chulalongkorn University Training - Leader Program, Capital Market Academy (CMA#3), the Stock Exchange of Thailand - Advanced Executive Program, J.L. Kellogg Graduate School of Management, Northwestern University, USA - 1995 International Bankers Program, San Francisco, USA Other Positions - Director, Krungthai Panich Insurance Co., Ltd. - Director, Krungthai AXA Life Insurance Co., Ltd. Experience - Senior Executive Vice President, Central Region & Bangkok Metropolis Group ; Bangkok Metropolis, Central & Eastern Region Group, Krung Thai Bank Pcl.

6. Ms. Kittiya Todhanakasem

Senior Executive Vice President â&#x20AC;&#x201C; Managing Director Financial Management Group

Age 49 Education - MBA, University of Illinois, Champaign-Urbana, USA - BBA ( Accounting) (Honors), Thammasat University Training - Class 76/2006 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Director, Krungthai Card Pcl. - Director, Krungthai Panich Insurance Co., Ltd. Experience - Senior Executive Vice President, Risk Management Group, Krung Thai Bank Pcl. - Director, Krungthai AXA Life Insurance Co., Ltd.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

7. Mr. Sayan Satangmongkol

9. Mr. Somgiat Sangsurane

Age 60 Education - MBA, Thammasat University - BS (Agricultural Economics), Kasetsart University Training - Modern Management Strategy Program for KTB’s Executives - Class 43/2004 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) - Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University - DSE-APRACA International Course on Rural Finance, Philippines - Co-operative Management Program, Japan Other Positions - Director, the Bangchak Petroleum Pcl. - Director, Thanathep Printing Co., Ltd. - Director, Krung Thai Legal Services Co., Ltd. Experience - Senior Executive Vice President, Asset Management Group; Risk Management Group; Office of Internal Audit, Krung Thai Bank Pcl.

Age 60 Education - MCom (Securities Markets and Investment), Hitotsubashi University, Japan - BCom, Chulalongkorn University Training - The 14th Annual Meeting of Risk Minds 2007: The Basel Summit, the Risk Minds CRO Forum, Innovations in Risk Modeling, Measurement and Management, Geneva, Switzerland - ABA Regulatory Compliance Conference, American Bankers Association, USA - Making Corporate Board More Effective, Harvard Business School, Harvard University, USA - Risk Management in Financial Institute Program, Granof & Gold (Thailand) Co., Ltd. - Advanced Management Program, University of Washington, USA Other Positions - Deputy Chairman, Krung Thai Legal Services Co., Ltd. - Director and Member of the Audit Committee, TSFC Securities Co., Ltd. Experience - First Executive Vice President, Office of General Counsel, Krung Thai Bank Pcl. - Director, Central Credit Information Services Co., Ltd.

Senior Executive Vice President – Managing Director Asset & Legal Management Group

8. Ms. Nongnutch Thienpaitoon

Senior Executive Vice President – Managing Director Credit Risk Transaction Management Group

Age 57 Education - MBA (Honors), Roosevelt University , Illinois, USA - BA ( Accounting) (Honors), Chulalongkorn University Training - Class 41/2005 Director Accreditation Program (DAP), Thai Institute of Directors Association (IOD) - The Job of the Chief Financial Officer : New York University & Singapore Institute of Management - Senior Executive Program : SASIN - Credit / Risk Management Program : Citibank Singapore Other Positions - Director, TPT Petrochemicals Pcl. & TPT Utilities Co., Ltd - Director, Bangkok Metro Pcl. - Director, Advance Agro Pcl. - Banc-assurance Working Group, Krungthai AXA Life Insurance Co., Ltd. Experience - Senior Executive Vice President, Corporate Banking Group / First Executive Vice President, Corporate Banking Group; Eastern Region & Bangkok Metropolis Group; Corporate Sector, Bangkok Metropolis & Southern Region Group, Krung Thai Bank Pcl.

Senior Executive Vice President – Managing Director Risk Management & Corporate Governance Group

10. Mr. Boonlers Srichareon

Senior Executive Vice President - Managing Director Network Group

Age 60 Education - BA (Commerce), Chulalongkorn University Training - Advanced Management Program - People System in Action Program - Merger & Acquisition Advisors Program - Senior Executive Program - International Bankers Program Other Position - Director, Krungthai Panich Insurance Co., Ltd. Experience - First Executive Vice President, Metropolitan Channel & Distribution Group; Upper Northeastern Region & Bangkok Metropolis Group; Northeastern Region & Upper Bangkok Metropolis Group; Northern & Northeastern Region Group, Krung Thai Bank Pcl.

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11. Ms. Sumana Vonggapan

Senior Executive Vice President – Managing Director Human Resources & Organization Management Group

Age 57 Education - MBA, Southeastern Oklahoma State University, USA - BA (Communication Arts) (Honors), Chulalongkorn University Training - Class 47/2005 Director Accreditation Program (DAP), Thai Institute of Directors Association (IOD) - Strategic Human Resource Management Program, Graduate School of Business Administration, Harvard University, USA - Executive Teamwork Development Program - Management Problem Solving and Decision Making Program - Advanced Management Program Other Positions - Secretary to the Nominating and Remuneration Committee, Krung Thai Bank Pcl. - Chairman, Nominating Committee, Krung Thai General Business Services Co., Ltd. - Director, Krung Thai General Business Services Co., Ltd. - Director, Krung Thai Property Development Co., Ltd. Experience - First Executive Vice President, Human Resources and Organization Management Group; Human Resources and Corporate Support Group / Human Resources Sector, Human Resources and Corporate Support Group, Krung Thai Bank Pcl.

12. Mr.Preecha Phukham

Senior Executive Vice president – Managing Director Government & State Enterprise Relations Group

Age 59 Education - MBA, National Institute of Development Administration - BA (Economics), Thammasat University Training - Advanced Management Program - People System in Action Program - Merger & Acquisition Advisors Program - Dishonesty, Misconduct, Malfeasance Corruption Program - Class 10 Politics and Governance in Democratic Systems for Executives Program - Class 17/2007 Role of the Chairman Program, Thai Institute of Directors Association (IOD) Other Positions - Chairman, KTB Leasing Co., Ltd. - Director, Krung Thai Asset Management Pcl. - Vice Chairman, Community Bank, Krung Thai Bank Pcl.

Experience - First Executive Vice President, Government & State Enterprise Relations Group; Lower Southern Region & Bangkok Metropolis Group / Executive Vice President, Northeastern Region & Northern Bangkok Metropolis Group; Small & Medium Business Sector, Northern & Northeastern Region Group, Krung Thai Bank Pcl.

13. Ms. Chujit Niyamosot

First Executive Vice President – Managing Director Internal Audit Group

Age 59 Education - MBA, Kasetsart University - BA (Accounting), University of the Thai Chamber of Commerce Training - Class 20/2006 Company Secretary Program (CSP), Thai Institute of Directors Association (IOD) - Class 84/2007 Director Certification Program (DCP), Thai Institute of Directors Association (IOD) Other Positions - Director, Krung Thai Computer Services Co. Ltd. - Secretary of the Audit Committee, Krung Thai Bank Pcl. Experience - First Executive Vice President, Credit Operation Sector, Business Support Group; Credit Support Sector; Banking Operations Group, Krung Thai Bank Pcl.

14. Ms. Sompis Charoenkiatikul

First Executive Vice President – Managing Director Corporate Banking Group

Age 54 Education - Master of Professional Accounting Program, Thammasat University - BBA (Accounting) (cumlaude), Thammasat University Training - Financial Executive Development Program (FINEX XIII), the Thai Institute of Banking and Finance Association Other Positions - Director, Krung Thai IBJ Leasing Co., Ltd. - Director, Thai Nam Plastic Pcl. - Director, Thai Identity Sugar Factory Co., Ltd. - Director, Kaset Thai Sugar Co., Ltd. - Director, Si-Chang Flying Service Co., Ltd. Experience - Executive Vice President, Corporate Banking Sector 1, Corporate Banking Group; Industrial Financing Department, Eastern Region & Bangkok Metropolis Group / Senior Vice President, Industrial Financing Department, Eastern Region & Bangkok Metropolis Group; Industrial Financing Department, Bangkok Metropolis & Southern Region Group, Krung Thai Bank Pcl.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Business

Environment

World economy in 2007 2007 Economic Overview and Outlook for 2008 â&#x20AC;˘ The Economy in 2007 slowed down more than World Economy: Slackening more than expected The world economy in 2007 had to encounter numerous anticipated and hence risk factors both in continuation from prior year and newly arising continued to impact the this year. Among them were world trade imbalances, inflationary pressures from higher oil prices, exchange rates and money markets Thai economy. However, volatility and particularly the United States subprime mortgage which have impacted various economies worldwide. As a Thai exports to new potential loans result the world economy grew 4.1 percent, sharply down from 5.4 markets expanded, so the percent in 2006. Most of the economic leaders experienced a slowdown economy as summarized below: overall economy was not - United States of America The economy grew slower than that of the previous year. Although the weaken US dollar had much dampened. benefited US exports greatly hitting new highs continuously

especially in the second and third quarters thus stimulating the manufacturing sector to follow suit, but imports also increased causing trade deficits to worsen further. Moreover another major problem sprung up in 2007. The huge number of defaults in the subprime mortgage market severely impacted the US economy and consequently to other countries globally. This prompted the Federal Reserve (Fed) to cut Fed Funds Rate for the first time in early 2007 and two more times following the ever-increasing during the last three years. As a result, at year-end 2007, Fed Funds Rate stood at 4.25 percent, down from 5.25 percent as at prior year-end albeit pressure from higher inflation was just starting. During the last two months of 2007 headline inflation climbed to 4.3 percent and 4.1 percent respectively â&#x20AC;&#x201C; highest in the past two years.

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- Europe The overall economy slowed down following the German economy where consumption weakened after the government in early 2007 raised VAT rate another 3.0 percent to 19.0 percent. Investment also slackened from subprime problem that became more critical than expected. As a result, liquidity in the financial market tightened but export still grew well, thus urging higher production and employment. In 2007 unemployment rate of the European Union (EU) registered 7.4% percent – the lowest record since 1996. However, the strong euro hitting the highest record since its inception in 1999 and the sky rocketing oil prices caused the European Central Bank (ECB), from third quarter onward, to slow down its interest rate increase. This was done to ease adverse effects on the economy although inflation continuously surged until year-end. - Japan Its economy slowed down as domestic consumption was still subdued and private investment was adversely affected by US subprime problems since middle of the year. This coupled with inflation rate that turned negative once again, prompted the Bank of Japan (BOJ) to call off interest rate increase and further implement relaxing monetary policy. Moreover the severe political conflicts that brought the resignation of Prime Minister Shinzo Abe in July aggravated the investor and consumer confidence. However, the export sector was still the key driver of the Japanese economy since export to China and Europe was accelerated, compensating for the declining export to the United States. - China China was the only economic leader whose economy continued to expand from that of the previous year and was the crucial driving force of the world economy in 2007. Although the Chinese authorities used stringent measures continuously through increases of interest rates on loans and deposits, six times during the year, and boosting statutory reserve under Commercial Banking Act nine times reaching the highest record at 13.5 percent, yet investment continued expanding significantly. This together with expanding exports that continuously hitting new highs resulted in an economic expansion of over 10.0 percent for the fifth consecutive years and international reserves exceeding US$1.0 trillion. Despite this, China was encountering economic stability when inflation rate surged up rapidly during the second half of 2007, hitting the highest record in 11 years. Moreover, China was pressured by US and the EU to adjust its RMB currency to be more flexible as well. Thai Economy: Export was the vital driving force while domestic demand slowed down The Thai economy in 2007 grew 4.8 percent, slowing down from 5.1 percent in the prior year following the slackening of consumption and investment which accounted for over 80 percent of the gross domestic product (GDP). With adverse effects from many factors such as the 30-percent foreign currency reserve requirement, the forthcoming issuance of Foreign Business Act, the soaring retail oil prices since early part of the year, the safety concern following the New Year bomb blasts, the violence in the three deep south provinces that still unresolved, political conflicts among various factions, the strong Baht hitting record in several years, the US subprime market that spilled over to the Thai money markets, the aggregate domestic demand thus slowed down considerably especially in private investment which grew merely 0.5 percent, slackening from 3.7 percent in the previous year. However, Thailand’s export strongly expanded and hit new highs several times on the average 18.1 percent per annum – slightly up from 17.0 percent in prior year. This helped to compensate for the declining domestic demand while encouraging the overall manufacturing to follow suit especially manufacturing production. As for the services sector, despite besieging with problems throughout the year – the heavy smog over tourist destinations in the north at year-beginning, the unresolved violence in the

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three deep south provinces and the failure to bring reconciliation between various political factions, but there still existed positive factors that pushed the services sector onwards. These were the nationwide grand celebration of His Majesty the King’s 80th Birthday and Thailand’s playing host of the Universiade and SEA Games with large number of participants attending. Overall in 2007, foreign tourists visiting Thailand increased from previous year by 4.6 percent or about 14.5 million persons. As for the economic stability, overall remained sound with inflation at a low rate of 2.3 percent, a sharp drop from 4.7 percent in 2006 and unemployment declined to only 1.1 percent, the lowest ever. Public debts were less than 40 percent of GDP and still within the sustainable fiscal framework. Moreover, Thailand’s international stability was regarded as very strong with international reserves increasing, breaking record almost every month. The total reserves exceeded nearly seven times the average import value, resulted from the large current account surplus and the Bank of Thailand’s intervention in maintaining the stability of the Baht so as not to fluctuate it sharply.

• Economic Outlook for 2008

Global Economy: Continue to slow down following current risk factors that threaten to be more adverse

Global economy in 2008 is anticipated to decline further due to the following key risk factors: 1. Subprime Problem The US subprime mortgage crisis will have more impacts on the US economy, causing it to further slacken following the year 2007. Tight liquidity in the financial sector will restrict investment spending and private consumption and prompt chain effects to countries worldwide through international trading and capital transfer which respond rather quickly to economic downturn. 2. Oil Prices Upward soaring oil prices and high volatility are expected. In the first month of 2008, crude oil prices on world markets already touched US$100 a barrel. This is attributable to the continued rising demand of countries with high economic growth such as China, India and Middle-East countries. The tight oil supply resulted from political unrests in oil-producing countries such as Nigeria and Iraq, the sour relationship between Iran and the United States stemming from Iran’s interest in nuclear weapon development, and lastly the higher costs of oil drilling. In addition, the weakening US dollar and oil futures trading by hedge funds also have effects. The rising oil prices thus may cause the 2008 global economy to encounter stagflation.

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3. Interest Rates The direction is uncertain and hard to predict. As inflation gets higher while economies in several countries slacken, particularly the United States, it is quite difficult to formulate the direction of monetary policy. Hence it depends on the policy maker of each country in attaching importance to which problem. It is possible then that the average foreign interest rates in 2008 will decline from that of 2007. 4. World Trade Imbalances US huge trade deficits with Asian countries especially China, Japan and India, resulted in excessive international reserves for these countries totaling to more than US$2.5 trillion as at 2007 year-end. Attempts to reduce the percentage of US dollar in their international reserves in order to maintain their own currency have pressured the US dollar to weaken further. Meanwhile, Chinese RMB that has been pegged in limited range, is really under-value, thus China is under greater pressure from the United States and Europe to seriously resolve its problem of currency. 5. Hard-to-Control Factor More intense global warming has resulted in unbalanced climate condition in each country worldwide giving a high possibility of more frequent and severe natural disasters including outbreaks of epidemics and diseases. Moreover, burning political turmoil in several countries may turn violent and adversely affect international relations that could eventually impact global economy negatively.

Thai Economy: Export could be dampen, new government must expedite measures The export sector that used to be a key driving force of the Thai economy during the past two years is foreseen to slow down in 2008 following the slackening world economy. Moreover, the negative impacts could be worsen, namely the stronger Baht hitting new highs, rising costs of production following higher oil prices and fierce competition from rival countries. The Thai economy in 2008 hence has to rely heavily on domestic demand as the major driving impetus. It is thus subjected to the competency of the new government in restoring investors and consumersâ&#x20AC;&#x2122; confidence. If successful, investment and consumption will be stimulated. In late 2007 the subdued private spending already showed signs of improvement in response to the general election and the initiation of the mega-projects from the interim government. If the new elected government is able to carry on such mega-projects especially the two sky train lines and to pursue the policy in accordance with their election campaigns, the Thai economy will thrive well in continuation from 2007 with anticipation of a growth of about 5.0-5.5 percent for 2008, slightly up from 4.8 percent in 2007.

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Nevertheless, policy implementation to push forward the Thai economy by the new government has to face key challenges as follows: 1. Fuel prices will remain in upward direction following oil prices in global markets especially in the first half of 2008. Besides rising gasoline price, other fuels prices crucial for the manufacturing sector will also surge up to hit record as well. For example, diesel prices are expected to climb beyond 30 Baht a liter and LPG cooking gas could double its price after the government announced the floating of price from December 1, 2007 onward. In addition, the rising demand for alternative energy has pulled up the prices of palm oil greatly, spreading the impact further to consumer goods and passenger fares, the major factors attributing to the high inflation in 2008. 2. Interest rate policy As inflation is expected to rise further and liquidity tightened from impacts of subprime problem which caused financial institutions worldwide including Thailand to be more prudent in investment and credit extension. Coupled with the demand for large capital funds needed for the megaprojects, all these factors will force interest rate to be on the rise. But as the economy has a high tendency to slow down sharply in line with the world economy, interest rate could be lowered to stimulate the economy further and in congruence with global interest rate. 3. Baht value could appreciate further and will exert pressure on Thai exports in addition to the negative impact already borne from the economic slowdown of trading partners and fiercer competition from rival countries. Nevertheles it is expected that import will expand sharply from taking over the implementation of the government mega-projects and private investment recovery will help drain out the US dollar from Thailand to a larger extent. It is thus anticipated that the annual average value of Baht for 2008 will be in the range of 31.0-32.0 a US dollar appreciating from Baht 34.7 a US dollar in 2007 by about 9.2 percent. 4. Natural catastrophe from global warming has begun to take its toll on the world population and natural environment. This can be seen from Thailandâ&#x20AC;&#x2122;s climatic condition that has changed more rapidly and severely â&#x20AC;&#x201C; hotter than usual in summer, hot alternate with cold weather in the cold season, droughts or unseasoned rains and floods in areas of no-flood experiences. These problems cannot be independently solved in relatively short time. Thailand will thus be adversely affected directly by the volume and quality of agricultural produce and indirectly by losses of resources such as money, time and human resources to rectify the problems.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

An Overview of Commercial Banking Business in 2007 and Outlook for 2008 â&#x20AC;˘ Commercial Banking Business in 2007

The commercial banking industry experienced tough times since the 2002 recovery from the 1997 financial crisis. Several negative factors simultaneously occurred in the banking business this year. Internal factors were economic slowdown and enforcement of stricter rules and regulation especially the provisioning requirement for doubtful accounts under the International Accounting Standard No. 39 (IAS 39), and externally the US subprime problem impacting globally including Thailand. All these pressured the overall operation performance of the Thai commercial banking system to decline in 2007 with the following details: Operating Performance Deposits increased merely by 0.25 percent due to high liquidity making mobilization of funds unnecessary. Added to this was the declining interest rates which started at the beginning of the year did not entice depositors. Commercial banks thus issued bills of exchange with high return as an alternative for clients that are interested in equity capital and debt instruments. As a result borrowings surged up 27.88 percent from 2006. Loans expanded by 5.61 percent, down from 6.07 percent in 2006. In the first three quarters loan extension was very slow and then jumped up more than double in the last quarter of the year when political factors were more defined after the general election in December and consequently boosting confidence in investment and consumption. Liquidity was high but overall dropped following accelerating demand for loans in the final quarter. Loans to deposits ratio rose to 93.40 percent from 88.66 percent in 2006. NPL increased 1.84 percent because the slackening economy made debt repayment more difficult. The NPL/Loan ratio declined to 4.27 percent from 4.47 percent in prior year as loans accelerated at a higher rate than NPL. Net profit plummeted as much as 84.16 percent, highest in five years since total earnings increased by only 3.72 percent while total expenses surged up 13.32 percent from provisioning of doubtful accounts as required by IAS 39 which increased by as much as 51.95 percent. Major Changes In 2007, shareholding structures of Thai banks underwent drastic changes. Banks with insufficient capital funds to boost their competitiveness or business expansion speeded up their search for foreign co-investors. Three banks were successful in finding alliances, injecting in more than Baht 70 billion and another two are in the process to be continued into 2008.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Key Factors Affecting Commercial Banking Business - Unfavorable economic condition pressured from internal and external factors slowed down the economy in 2007, affecting demand for loans and decreased borrowersâ&#x20AC;&#x2122; repayment ability. Thus commercial banks became more cautious in extending credit, leading to a decline in the operating performance. - The IAS 39 requiring commercial banks to fully provision all NPL debtors within year-end 2007 and the slackening economy pushing up the volume of NPL, bloated banksâ&#x20AC;&#x2122; expenses in provisioning for doubtful accounts. Net profit of the entire industry hence hit the lowest in five years, impacting capital funds heavily especially banks with BIS ratio lower than 9 percent. Such banks would not be able to pay dividends according to the Preventive Action requirement of the Bank of Thailand and had to speed up their search for foreign co-partners to help increase capital funds. - The US subprime crisis impacted countries worldwide including Thailand drove the Collateralized Debt Obligation (CDO) that Thai commercial banks invested overseas totaling over Baht 24 billion to impair rapidly. Their expenses in provisioning for such impairment which came to 20-85 percent of the total investments depending on quality and risk, aggravated the situation and caused net profit of commercial banks as a whole to decline by more than Baht 10 billion. Commercial Banking Business Outlook for 2008 Operating performance is expected to improve for 2008 under the assumption that the economy will grow at a higher rate and commercial banks already survived through the toughest time from the enforcement of financial measures in prior year. Although the existing risk factors still remain, such as the subprime problem that could impact the global economy severely, oil prices and inflation that may surge up pressuring the relaxed monetary measure in stimulating the economy and reducing effects from the Baht appreciation, as well as enforcement of crucial financial measures especially consolidated supervision requirement to stricter manage risks of financial integrated group, Basel II compliance, Deposit Insurance Agency Act and Financial Institution Business Act effective in 2008, all these issues have already acknowledged by commercial banks for certain period of time. It is thus anticipated that the overall commercial banking business in 2008 will be brighter than previous year as summarized below: - Loan is anticipated to rise from the improved economy which encourages demand for credit especially for SME and housing loans. Since these loans have low risk, use of capital funds as required by Basel II is small but return is high. Corporate loans will be more in the form of syndicated loan made by allied banks to diversify risks. - Spreads of interest rates tend to enlarge since interest income could rise from larger loan bases while cost of deposit remains constant following unchanged interest rate for another period of time until clear signs of economic recovery can be seen which probably be the last quarter of 2008, or may decline if the US economy moves into recession bringing down global interest rates once again. - Fee-based income tends to increase sharply from new products innovation of banks and their business alliances and the increase in selling-points to meet customer needs. Besides, in late 2007 some banks already increased or started to charge fees from services that used to be free thus causing other commercial banks to follow suit.

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Nevertheless, commercial banks in 2008 will have to encounter crucial challenges particularly the volatility of economy and money market, the forthcoming financial liberalization in 2009 upon enforcement of the Second Financial Sector Development Master Plan during 2009-2014. Hence, drastic changes may be witnessed once again among commercial banks namely: - More efficient risk management to be executed as higher risk will adversely affect capital funds and immediately obstruct business expansion. This is different from the past whereby effects are observed only on becoming NPLs and could not be recovered. Therefore, risk management must be most efficient especially in the credit approval process and will force borrowers indirectly to adjust their credibility. Good rating borrowers will enjoy lower loan cost, thus resulting in better overall loan portfolio and lower capital charge for banks. - Capital funds will increase to accommodate operational risk and credit risk stemming from Basel II compliance in late 2008. Commercial banks with BIS ratio close to 8.5 percent will have to expedite huge capital increase since BOT will adopt stricter supervision principle. If BIS ratio is lower than 9 percent, BOT will immediately intervene. Hence, 2008 will see more foreign investors holding equity shares in Thai commercial banks or there may be business mergers again. - Corporate governance will be more stringent to help build up stability, credibility and good image for commercial banks. Such components are crucial parts in determining competitiveness after enforcement of the Deposit Insurance Agency Act which stipulates that in the second year of enforcement, only deposits of Baht 100 million will be insured and will gradually reduce coverage to merely Baht one million from the fifth year onwards. - Business operation will be more in the form of alliance group to create maximum synergy. Hence, 2008 will see more groupings of related parties such as subsidiary group, business alliances, trading partners, customers, shareholders and communities whereby banks will both serve as service providers and financial advisors, giving knowledge, recommendations in marketing, administration, management and investment as well as being co-investors and seeking co-investors for customers. More cooperation among commercial banks will also be seen which will be beneficial to the system as a whole.

â&#x20AC;˘ Competition and Adjustment in Banking Industry

Competition among banks was not very intense in 2007 due to the slackening economy which did not favor credit expansion. All financial institutions also had to meet the provisioning requirement for doubtful accounts in complying with IAS 39 which is more stringent now. While NPL is on the rise since early 2007 all banks had to focus on solving NPL problem and be cautious in extending new loans so as not to burden with more provisioning in the future. An overall strategy for this year then is to increase fee-based income to compensate the declining interest income. As for loan competition, only housing loan, SME loan and credit card should be favorable. On deposit side, competition was rather active although high liquidity still prevailed. It is anticipated that interest rate would rise in 2008 so most banks quickly issued long term deposit and various types of B/E to peg their future costs and retain market shares and also to prepare for the high demand of funds when the government mega-projects will be initiated. Private sector will then start using their credit line for investment. Overall marketing competition of commercial banks in 2007 can be summarized as below:

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

- Products Banks focused on developing a complete line of financial products in addition to the basic deposits and loans so as to accommodate the needs of all groups of customer segmentation, such as life and non-life insurance, financial management, investment and electronic cards. Moreover, sale strategies have been improved to link with respective products and selling them in packages such as housing loans with insurance and credit card. Each bank tries to create uniqueness to their products such as tax-free deposit, deposit with extra bonus, high-limit loan or full collateral limit loan. They also introduced new services not widely done yet such as wealth management and other supplementary services such as organizing seminar and training on business and general knowledge so as to strengthen the institution and to create good impression to the customers. - Pricing Price competition is mostly seen in deposit mobilization through offering of high interest rate deposits for savings and time deposits so that customers could enjoy flexibility in using money but still get high interest rates. Loans on the other hands were pressured by slackening economy so special rate or incentive is given to customers with good history. On credit card business, competition strategy was to give more rebates when conditions are exercised. - Distribution Channels To respond to customersâ&#x20AC;&#x2122; lifestyle needing convenience, comfort and hightech modern services, banks competed against each other to add more distribution channels in addition to the normal branches. Services via the internet have been well developed to provide almost all types of financial services, as if having a bank at home. Users are also confident with the security system. Internet thus is an efficient and low-cost distribution channel that could be well accessed by the new generation. As for other distribution channels such as mini-branches, ATM, ADM and passbook update machine, a total of over 5,200 were installed in 2007, a record history. Moreover, banks have developed security systems with surveillance and publicize criminal conduct or crimes to the clients to be on the alert. Some banks even provide banking delivery service. - Sale Promotion Banks have given importance to marketing products through event organization through out the year. However, advertising through various media was rather dull due to expense cut, in line with economic condition and increasing burden of loan loss provisioning. Advertising expenses of commercial banks and credit card business in 2007 plunged as much as 11.7 percent from prior year. Nevertheless, banks were still interested in supporting social and environmental activities. As for year 2008, competition is anticipated to be more active since commercial banks are getting stronger and ready to penetrate the market, especially banks already restructured their management which have been reflected by their higher target than the prior year, including loan, deposit, new branches, ATM installation and recruitment of new employees. Competition is anticipated in the following areas: - Deposits Taking Apart from severe competition among banks themselves, they have to compete with capital market business too as this business will be expanding their market share of deposits taking after the Deposit Insurance Agency Act comes into effect in 2008. By that time deposits with banks bear the same risk as savings in various mutual funds, especially funds that guarantee the principle. Thus banks are pressured to create distinctive deposit products that can induce depositors in all dimensions â&#x20AC;&#x201C; be the rate of return as interest or non-interest, withdrawal flexibility, tie-up with deposit of various types or full-range financial services and offering of various privileges. Additionally, there will be issuance of

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versatile bills of exchange with rate of return higher than that of deposit so as to retain customers from relocating to capital markets. And more importantly, it will be acceleration of building strength for banks to give them an image of stability and credibility which are the key factors that determine banksâ&#x20AC;&#x2122; competitiveness under this new Act. - Loans Servicing There will be more snatching of customers especially for loans with less burden of capital funds such as SME and housing loans bearing risk weighted of only 75 percent and 35 percent. Besides, personal loan and consumer loan also tend to have increasing competition from banks having foreign management experienced in retail banking. As for corporate loans, trends are that there will be more synergy and collaboration rather than competing especially for multi-million infrastructure projects. All this is to diversity risk and loan portfolios and as a result will be getting better quality loans. - Other Servicing It is also anticipated that there will be fiercer competition in the services of credit card, debit card, bancassurance, leasing and hire purchase, foreign exchange, financial consultancy, financial management, international funds transfer and payment for costs of goods and services. This was because such services are sources of fee-based income regarded as crucial by all banks, each of whom are eager to up this income since it is income with no risk. It is anticipated that by year-end 2008, this part of earnings of the entire commercial banking industry will increase over 15 percent of total earnings compared to the current 13 percent. Competition strategy that most banks will be using in 2008 are presentation of full ranging financial products and services from banks and subsidiaries in response to the lifestyle of niche markets, expansion of distribution channels to provide convenience and access to mass customers, advertising and sale promotion for inducement and remembrance. Also commercial banks need to speed up competitiveness through efficient risk management, cost management and business expansion to cover both financial and non-financial services. Increasingly clear trend from 2008 onwards is the creation of closer ties with customers through development of various support systems, such as call center and customer relationship management (CRM) as well as providing clients with business and financial knowledge, personal consulting service to help strengthen the clientsâ&#x20AC;&#x2122; business and assessing customer satisfaction with instant readiness to respond to their demand. All these strategies aim for creating deep and close sentiment and ties of customers with the banks. And things to follow will be everlasting mutual assistance and support that all the banks have wished for.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Business

Operation

An Overview of Krung Thai Bank Performance Operating the banking â&#x20AC;˘ The Bankâ&#x20AC;&#x2122;s Operation business in 2007 was lackluster economic condition and enforcement of pressured by the slackening stringentThesupervision requirement by the Bank of Thailand (BOT) economy and the strict especially provisioning for bad and doubtful accounts under the International Accounting Standard No. 39 (IAS 39) caused the enforcement of the Bankâ&#x20AC;&#x2122;s business operation in 2007 to experience difficulties due to regulators, but with the slackening demand for loans and downtrend of loan quality existing advantages and following economic slowdown while costs of provisioning for bad being the Convenience and doubtful account would rise in opposite direction with loan Bank in the heart of clients, quality. Nevertheless, the Bank could manage well to get through obstacles by utilizing its strengths of having established good the Bank was able to move allrelationship with the government agencies and state enterprises forward with considerable and its possession of numerous retail customer bases including distinctiveness in efficient cost management as its operating strength. strategy. Implementation of such strategy was done by focusing on creating interest income from low-risk government customer base through offering versatile products and special conditions both to governmental organizations and retail government officials. As a result, the 2007 total government loans registered beyond the set target. At the same time, the Bank focused on costs management, which was its strength, to be even more efficient to make up with the declining income and increasing allowance for bad and doubtful accounts thus enabling the Bank in 2007 to enjoy the growth rates of interest and non-interest expenses and cost to income ratio that were lower than the average rates of large bank group.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

In addition, the Bank in 2007 was extremely successful in crossing over the frame of being a mere banker toward professional marketing expert by opening up anew aggressive marketing frontier under its project entitled “Go shop, Go Bank” through cooperation with KTB Leasing Co.,Ltd. a subsidiary selling over 300 items of quality consumer goods at special prices via KTB branches and Bank staffers who were well trained in sales. Moreover, the Bank joined in alliance with Loveis Music Group well know among all age groups in conducting music marketing to launch services of KTB Leasing, KTB Online and KTB Visa Debit. Regarding service quality development, the Bank attached great importance to creating maximum satisfaction to customers on continuous basis by using the results of customer satisfaction survey in supporting its work plan enhancement and formulation to enable the Bank’s Convenience Brand to always be in the customers’ mind. Moreover in 2007, the Bank internally announced the branch’s service quality assurance to prepare its readiness before formal announcement to the general public in early 2008. Also in 2007, the Bank further developed respective products and services to add convenience and comfort to customers especially the Cash Management service covering the entire financial management services that customers were able to boost their efficiency through entrusting the Bank to conduct various transactions on their behalf such as employees salary payment, making payment and accepting payment for costs of goods and services, cheques and relevant documents printing, cash and cheques receiving and delivery and other services - all these would help relieve the customers’ burden and costs to a large extent. As for distribution channels, the Bank in 2007 continuously expanded its service channels thus enabling it to have, at year-end 2007, as many as 762 branches and ATMs totaling 4,900 the highest in banking industry. In connection with internal management, the Bank still keep restructuring the organization by improving business units in the Network Group to boost efficiency in selling products and services and providing customers with convenience and ease while enhancing the Risk Management and Corporate Governance Group for higher efficiency in risk management, and simultaneously developing the Enterprise Risk Management (ERM). Furthermore, to strengthen its corporate social and environmental responsibility to which the bank has attached great importance all along, the Bank in 2007 added a new business unit directly responsible for this function. It was the Bank’s anticipation that it would be able to create the culture of corporate governance and corporate social and environmental responsibility to prevail across-theboard so that the staff members would have their share in driving various projects in this field to succeed and fully benefit the country as a whole.

• Overall Performance in 2007

In 2007 the Bank earned net profit of Baht 6,407 million, a decrease from that in 2006 by as much as Baht 7,671 million or accounting for 54.49 percent decline. This was because earning from loans or main income that accounted for as high as 70 percent of total earnings dropped from slackening total loans and decreased interest rates while total expense soared highly despite the main deposit costs decline following interest rate direction. However, the Bank had to bear the burden of allowance for bad and doubtful accounts under the IAS 39 higher from that in 2006 by as much as 18.62 percent. Additionally, the Bank still had its corporate income tax expense higher by Baht 1,030 million from that in 2006 in which the Bank was exempted from tax payment due to closure of international banking facility. Regarding asset quality, the Bank’s total NPLs stood at Baht 67,492 million, up 14.31 percent from 2006 resulting in an increase of NPLs/Loan ratio to 6.89 percent from 6.26 percent in 2006. Crucial financial ratios such as ROA, ROE, net profit to employees, loans to deposits and net interest margin all dropped while cost to income surged up.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Albeit the Bank’s decreased NIM and increased cost to income from 2006, this phenomenon followed the overview of the industry and the Bank was still regarded as at a better level compared to its competitors as a result of its competence in efficiently managing costs. Apart from this, the Bank enjoy higher financial stability from 2006 with capital-to-risk-asset ratio up from 14.03 percent to 15.16 percent while shareholder equity to assets rose from 7.70 percent to 7.89 percent and liability to shareholder equity ratio dropped from 11.99 percent to 11.68 percent Though 2007 was the year in which the Bank’s financial performance declined a great deal from external pressure, the Bank regarded this as an opportunity for speeding up self-improvement and selfdevelopment in all aspects with strong determination to be the country’s lead bank focusing on providing services of excellence, being able to create good and sustainable returns, promoting creation of intellectual capital and adhering to principles of good corporate governance in accordance with its mission. All these would not only result in the Bank’s readiness, strengths and greater stability to accommodate increasing competition and more financial and regulatory changes but also enable the Bank to gain social recognition until it was granted awards of honor in so many aspects to the highest in several decades as detailed in the topic of Awards of Pride on page 64-65.

• Core Business Groups and Income Structure

To reiterate being Convenience Bank aiming at creating optimum satisfaction to customers of all groups, the Bank has appropriately restructured its organization to suit the tasks of income-generating business group, risk management business group and business operation group with details below: Business Group Generating Income consists of the following five business groups. - Network Group is the major group that drives the Bank to achieve business operation target. Its work is to provide financial services of all types to clients under the policies and strategies of the Bank. This includes taking of deposits, lending, payment of goods and services, as well as introducing and selling products and services of the Bank and subsidiaries through network of 762 branches nationwide as at year–end 2007 with supports from respective regional offices, business sectors and departments in this group to generate interest and non-interest income for the Bank.

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Since branches are the forefronts in dealing with customers, the Bank thus gives greatest importance to service quality assurance for the customers’ ultimate satisfaction each time they use the Bank’s services. This was carried out through the Quality Assurance Project that has been continuously going on since 2000. And in 2007, all the branches are ready internally for the Service Level Agreement (SLA) and to step forward to being the first bank ever in Thailand that announces service quality assurance to the general public in early 2008. It is assured that over-the-counter service takes 3 minutes per transaction, new account opening with ATM card 10 minutes, approval of Circle Loan 5 days and approval of housing loan within 7 days. Besides, the Network Group initiated three projects for creating impressive services for customers namely “Sawasdee Greeting Service” servicing from the heart of each employee; “No Customer Complaint” retaining good communication with customer to avoid any misunderstanding that might cause the Bank to lose client or incur damages and the “Young Customer Service Relations” (YoungCSR) employing new graduates to assist customers in using services and automatic machines. Training programs were also organized to give knowledge to customers on continuous basis. As a result, the Network Group achievements in 2007 were beyond expectations as reflected by deposits and loans achieved above the targets while NPL volume dropped lower than the target. Objectives for 2008, the Network Group is determined to expand loans to fixed-income customers with low risk especially private retail clients so that the Bank’s customer profile covers all occupation groups. Products recommended include single service, group service and cross-selling. Moreover, the Group intends to use CRM information to stimulate more uses of the Bank and subsidiaries’ services so as to increase fee-based income and retain the client loyalty to the Bank. It will continuously enhance service quality to create customer satisfaction and to be the only bank in customer’s mind. Young CSR Project will be continued for customers’ good impression and a chance for Thai youths to get training. - Business Center Group provides SME customers with credit lines of Baht 20 - 500 million. This group is a key target group as they constitute a major economic base with low risk weighted. Hence, Business Center Group is expediting the business center (BC) network so they can closely serve clients in this segment while enhancing respective products to efficiently meet their needs. At the same time develop and train staffs in this group diligently to being the leader in SME servicing. Apart from the major services provided to the SMEs, the Bank in 2007 launched “SME Reviving Machines” and “P/N Small BOT” to enable the enterprises to economize energy or use alternative energy sources. The “SME Baht Effect” loan to assist entrepreneurs who are adversely affected by the Baht appreciation in addition to relief loans for natural disasters, floods, bird flu and insurgency in southern border areas so that they would be able to recover quickly. At the same time, the Group offered products and services of its business alliances and subsidiaries that are beneficial to the SMEs. Additionally, the Business Center Group regularly organized activities to enhance entrepreneurs knowledge through “KTB Lecture Series on SMEs” and “Krung Thai Roving SMEs” to SME clients nationwide to have relevant information to prepare them for any economic and financial changes that tended to be more volatile in the future thus being beneficial to the clients and to the credit quality of the Bank.

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As for the work plan of 2008, the Business Center Group intends to strengthen the SMEs through the project “SME Customers Value Added Plan” whereby it serves as a center for distributing assistance from the public and private sectors to the SMEs nationwide in three aspects. They are “Efficiency Plus” to boost business efficiency, cut costs and save energy, “Equity Plus” to support capital funds for SME and “Financial Plus” to provide business consultancy together with providing financial facility. In addition to provide knowledge in all areas to entrepreneurs so they can enhance their potential and build a strong base for the country and for the Bank. - Government & State Enterprise Relations Group is responsible for servicing government agencies and state enterprises, a large client base with low risk. Services provided include deposits, loans, intermediary of payment for goods and services. In 2007, the Bank’s policy was to expand its loans portfolio to government and state enterprises to reduce risk from the slackening economy. Thus it offers loans as welfare assistance to government officials and public employees having salary accounts with Krung Thai Bank such as housing loans and multi-purpose loans for refinancing and consumption. These loans were so well responded that the volume exceeded the target by more than double. Moreover, the Government and State Enterprise Relations Group improved the Local Administration Organization Loan regarding the procedures used for credit extension and enhanced the electronic systems for the government agencies such as tax payment system, course registration for educational institutions and “KTB Co-op” for various cooperatives to enable their members to deposit/ withdrawal or make loan repayment through Krung Thai ATMs nationwide. At present the Bank joined alliance with two agricultural co-ops to initiate the “Convenience Counter” Project whereby such co-ops serve as agents for Bank in rendering services of deposit/withdrawal, goods and services payment and recharge credit for mobile phone. This has helped the Bank to broaden government client base which is already a strong point and to boost fees income on a continuous basis. Regarding work plan for 2008, the Group is still determined to continuously enhance the electronic systems to accommodate financial transactions that tend to be increasingly crucial. Many projects are on hand such as “KTB i-pay” to provide funds transfer for organizations with large number of transactions starting with the Revenue Department. Another planned project is “On-the-Spot Custom Duty Payment” whereby the Bank will take care of the whole financial process of the Customs Department installing service points at custom posts and Suvannabhumi Airport. Other projects are the e-Student loan system to expedite student loans with their institutions, the Database Enhancement Project to improve the quality of debtors, HR Enhancement and Financial Management System Project for state local administrators and the local administration tax payment which the Bank has implemented since 2007 to cover every work units in Bangkok. The Bank also took active part in social and environmental development through establishment of loan for this purpose and as working capital for developing public services in respective areas. - Corporate Banking Group is responsible for servicing private corporate clients with credit lines of over Baht 500 million, both as individual and as syndicated loans. In 2007, the Corporate Banking Group was able to expand new loans beyond targets, most of which were businesses crucial for national

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development such as lignite power plant, hydro-electric generating dam, construction, traffic problem solving and sugarcane and sugar manufacturing for ethanol production. In 2008 Corporate Banking Group will focus on expansion of loans in energy field, transportation, communications, public utility and petrochemicals including upstream and downstream businesses of government mega-projects especially the mass rapid transit around Bangkok and periphery. The Group aims at extending loans to existing clients with prospects while taking aggressive steps for retaining credit quality and not incurring loss to the Bank. It will also closely monitor various business movements to find new potential clients.

- Products & Marketing Management Group centralizes management of the Bank and its business alliances’ products ranging from doing research work to formulating strategy to retain existing clients and attract new ones and to marketing the Bank’s products. Besides, the Group oversees the customer relations task and creation of brand loyalty of the Bank to ensure customers’ close and lasting ties with the Bank. In 2007, the Products & Marketing Management Group implemented full-ranging financial products to reaffirm its being of the Convenience Bank. It initiated the new form of financial product, the KTB B/E, bill of exchange for borrowing funds from the general public. It was received with good response from the public as it meets the clients’ sentiment to have savings alternative that gave higher return than deposits. At the same time, the Bank obtained another secure source of funds. On the loan side, the Group targeted for retail customers with fixed income, both in the public and private sectors. This is another large customer base with low risk and products intended for them are Krung Thai special credit card circle loan, multipurpose loan for private company employees and Bank subsidiaries’ employees. In addition, it launched welfare loan for government retirees, issued package products to give clients a full-range benefits, promoted Krung Thai VISA Debit Card through organizing activities and roadshows nationwide, and added more

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values for VDB/ATM-IPAC cards for institutions to be able to use as ID card, time card, and library access card. The Bank expedited installation of electronic service points to accommodate the increase of cardholders by installing over 1,000 ATMs and ADMs giving the Bank the largest number of automatic machines. This helped to eliminate the Bankâ&#x20AC;&#x2122;s weakness of not having sufficient machines for customers, at the same time can boost fee-based income. For 2008, the Products & Marketing Management Group still focuses on launching new products that will increase the client benefits such as multi-purpose insurance covered loan, Krung Thai VISA Debit circle loan with insurance coverage, and life insurance products that suit modern lifestyle. The Group will enhance the efficiency of the approval system such as personal loan approval within five days and applying Housing Loan online. On the part of electronic cards, the Group will issue Prepaid Card and Smart Card to respond to each customer segmentâ&#x20AC;&#x2122;s lifestyle. Additional 1,000 ATMs/ADMs will be installed to serve cardholders adequately. Business Groups Overseeing Risk Management comprised 4 groups as follows: - Credit Risk Transaction Management Group operates independently serving as a check and balance from credit extending business units. Its main tasks include credit scrutiny, credit assessment and giving consulting service relating to credit consideration, so credit quality is strictly in compliance with the credit policy and procedures. In 2007, the Credit Risk Transaction Management (CRTM) Group restructured its organization through centralization for faster and more prudent credit scrutiny process. The Group also developed the credit extension competency to be of the same standard across-the-board. The Group collaborated with Human Resources & Organization Management Group in organizing training programs for its staff members and uplifts the performance quality so as to give customer highest satisfaction. Timing has been fixed for certain credit scrutiny process so as to speed up the overall credit extension operation. For 2008, the CRTM Group will focus on scrutinizing process to obtain high quality loans. Close monitoring of industries and keeping abreast of the changing environment will give better credit quality. Moreover, the Group will work aggressively together with respective business groups to prevent performing loans to become problem loans and new problem loans to become NPL. - Internal Audit Group is changing its view of auditing, finding irregularities, to one of prevention. In 2007, it stressed the importance of business operation supervision fully in accordance with the audit requirements prescribed by the Bank of Thailand (BOT) and the State Enterprise Policy Office. Software programs have been developed to check any irregularities which might incur losses and investigate

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

fraudulent incidents in the manner that was up to standards. At the same time, audit results were used as supplementary information for formulating strategic plan and audit plan of the Bank. Apart from this, the Internal Audit Group expedited the development of the competence of audit staff, to keep pace with the changes of regulations, environmental factors and technology by sending audit members to be trained in various courses that would help to boost operational efficiency, such as Curriculum of Auditor School of BOT and the Certified Internal Auditor course (CIA) while promoting exchange of knowledge and experience between internal auditor teams and business units. The Internal Audit Group in 2008 plans to audit business units using risk-based supervision via the audit system already initiated since 2007. This will enable the business units to have the control and prevention system for fraud that may take place in a timely manner. Moreover, the Group has developed an audit monitoring application system to boost efficiency of internal audit function and expedite the actions as recommended within specified timeframe. Besides, the Group has checked the application system in preventive manner as parallel running to ensure the accuracy, reliability and maximum efficiency of the audit application system. - Risk Management & Corporate Governance Group is responsible for the analysis, assessment, monitoring, control and formulation of risk management policies and strategies. The Group has prepared standards and operating procedures to enable all the business units to perform their tasks in compliance with the prescribed rules and regulations, and also in accordance with the applicable laws governing the Bank. In 2007, the Group continued to enhance loan approval system, consumer loans and commercial loans for higher efficiency as well as getting ready for Basel II as scheduled by BOT through acquiring IT Solution that covers credit risk, market risk and operational risk. The Group also introduced enterprise risk management (ERM) so that the Bankâ&#x20AC;&#x2122;s risk management would be up to global standards and be a part of organization culture in creating value added for sustainable growth. Additionally, the Risk Management & Corporate Governance Group is responsible for promoting corporate governance. This is a 3-phase work plan comprising Phase 1: Learning with focus on corporate communications at all level for acknowledgement of corporate governance principles, Phase 2: Adopt corporate governance principles for practice across-the-board, and Phase 3: Being No. 1 with focus on staff having awareness and adherence to the corporate governance principles across-the-board. Since the year 2007 was in Phase 2 of this work plan, the Group organized respective activities continuously throughout the year with full cooperation from all employees and business units all over the country thus enabling the Bankâ&#x20AC;&#x2122;s corporate governance promotion progressed satisfactorily. This was witnessed by the Board of the

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Year for Exemplary Practices Award, 2006/2007 that the Bank received from the National Corporate Governance Committee as confirmation of the Bank’s generally recognized performance and practices. As for 2008, the Risk Management & Corporate Governance Group will expedite the operating system enhancement, software system and capital funds calculation system as well as improvement of risk management tools and development of models so as to be well prepared for advanced risk calculation. Apart from this, the Group will expand corporate governance structure to apply to Bank’s subsidiaries. This includes promotion and strengthening of corporate governance network through joining forces with the state-owned banks in organizing campaigns for management under the principles of corporate governance. - Asset & Legal Management Group is responsible for managing assets quality to prevent them from becoming non-performing loans (NPLs), managing properties foreclosed as well as overseeing adequacy of provisioning for bad and doubtful accounts in accordance with the requirements prescribed by the Bank of Thailand. The Asset and Legal Management Group, in 2007, enhanced the internal processes to boost operational efficiency in respective software systems particularly the NPL reduction expedition system, provisioning calculation system, properties foreclosed management system and legal system through the Bank website. In early 2008, the Group was restructured by segregating the Credit Restructuring Department to the newly established Credit Restructuring Group, and renamed the Asset Management Group to “Asset & Legal Management Group” to enable the asset management task especially debtors problem solving to be more efficient and timely. Moreover, such organization restructuring helped to shorten the work steps while having more prudent work process and clearer operational standards. As for 2008, the Asset & Legal Management Group (formerly Asset Management Group) plans to accelerate the website enhancement for NPL reduction expedition project so that the credit business units can use it as major tool for NPL management and efficiently monitor bad debt recovery. Such business units will also gain knowledge and be encouraged to see the importance of bad debt recovery monitoring which will result in increased profit of the Bank. Besides, the Group will introduce legal processes for expediting debt collection instantly when default occurs to prevent NPL that may arise. This will help the Bank to get repaid from loans just starting to have defaults and from legal proceedings as well as loan collateral auction sale and debts written off. As for sale of properties foreclosed, the Group will expedite the operations through various channels such as direct sale through Bank employees and sales agents.

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Business Support Group comprises the following three: - Financial Management Group oversees that the Bankâ&#x20AC;&#x2122;s financial standing is at appropriate levels and manages the excess liquidity to maximize profits. Besides, the Group acts as the Bankâ&#x20AC;&#x2122;s information center providing information to the general public as well as to investors and rating agencies. In 2007, the Financial Management Group was able to earn for the Bank beyond the specified target despite volatile capital markets and negative factors almost throughout the year. The Group was entrusted with the task of introducing the Economic Value Management (EVM) to be used in the organization. The Group in 2007 implemented the work plan Phase 2 by linking the value added management system with the business management process and already trained the staff at supervisory level. This made the Bank confident that after Phase 3 implementation in 2008, it would be ready for the new state enterprise assessment to be enforced by the State Enterprise Policy Office in 2009. The Financial Management will speed up the operation under the EVM system and prepare the accounting system for IAS 39 requirement. The Group is also preparing the software system to accommodate wealth management service provided to clients by the Bank experts. This will not only reaffirm the branding of the Convenience Bank but also create opportunities to boost fee-based income to the Bank. - Operation Group acts as a center overseeing branch operation, international business operation and cash management service for institution clients. In 2007, the Group accelerated improvement of the internal process of respective business units to be in line with the changing rules and regulations and environment. This included collateral appraisal procedure enhancement to prevent value impairment, fraud and reduce burden of provisioning for doubtful accounts, and credit information viewing system efficiency

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enhancement to reduce risk while facilitating the branch’s credit approval for higher flexibility and speed. It also enhanced the Bank’s Call Center 1551 for greater efficiency. Moreover, the Operation Group in 2007 joined hands with business units in organizing training in Paperless Customs & Customs e-Payment course to give financial management knowledge to clients and exporters/importers thus contributing to an increase of over 20 percent in fee-based income from financial management service in 2007, and enabling the Bank to enjoy the No. 1 rank of foreign currency deposits among Thai commercial banks. On overseeing the Bank building premises, apart from focus on tidiness, cleanliness, appearance and safety for customers convenience and appropriate working environment for employees, the Operation Group attached great importance to the aspects of energy saving and environmental friendliness of the buildings as well. Therefore, in 2007, the Head Office Building of the Bank (Sukhumvit Building) received an outstanding national award energy conservation from Thailand Energy Award 2007 contest and received the second prize from the ASEAN Energy Award 2007 competition in Singapore in continuation from the outstanding prize for retro-fitted building from the Thailand Energy Award 2006 and 1st runner up prize in the category of retro-fitted building from the ASEAN Energy Award 2006 being presented to the Bank’s Head Office Building (Nana Nua Building). The Operation Group’s key work plan for 2008 includes continuous software system enhancement especially property appraisal system for greater competency in serving the clients and enhancement of Core Banking System (CBS), the main system of the Bank, for higher efficiency, as well as customer collateral system enhancement in collaboration with the Department of Insurance for accurate and complete information on clients insurance policies and collateral. Moreover, the Group will expedite expansion of institution customer base for more use of financial management service particularly Cash Management that the Bank has systematically developed with respect to products, technology and human resources. Hence, the Group is ready to serve the clients by providing full convenience of financial management in anticipation that the Bank’s fee-based income will grow by leaps and bounds from the preceding year. - Human Resources & Organization Management Group is crucial for the management, planning and development of human resources and organization in support of the Bank’s business operation to be carried out efficiently according to the specified directions and targets. In 2007 the Group restructured the Bank organization to be in harmony with the current business environment through addition of one more business grouping entitled “Credit Restructuring Group” to be responsible for troubled debt restructuring task formerly under the responsibility of the Asset Management Group. Meanwhile, the Group entrusted the former Asset Management Group, which was renamed as the Asset & Legal Management Group to take the responsibility for debt quality management and legal management and loan collection expedition. This enabled the Bank’s overall task in this matter to be more efficient and flexible especially in the situation where the Bank had to expedite resolving the problem debts to recover income and reduce expense burden in provisioning for doubtful accounts.

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On the human resources side, the Human Resources & Organization Management Group has materialized the Bank policy to move towards being a Learning Organization by organizing a large number of training courses throughout the year to enhance the employees’ knowledge and competence so they would perform quality work and become service-minded professionals. In 2007, the Group focused on training courses relating to income building for the Bank such as marketing, products and services sale, credit/loans and international business as well as other supplementary courses to boost employees’ competency and develop quality of life. Throughout the year 2007, Bank employees attended a total of 237 training courses locally and overseas. Apart from respective training courses, the Group gave great importance to transfer of knowledge between supervisors and subordinates. Hence, the Group has fully supported the coaching, on-the-job training and mentoring in each and every business unit of the Bank. Besides, the Group has carried on the Self-learning program for the 4th year to enable the employees to learn by themselves through the Bank’s intranet system and used the test results in supplement to promotion. As for salary and wage management which was another task of the Human Resources and Organization Management Group, it developed in 2007 the system of variable pays upon work accomplishment and competency so as to urge employees to have more enthusiasm in developing themselves. In 2008 the Group will further carry on the task of KTB-Learning Organization through preparation of Training Roadmap so that the employees of each post will attend respective training / seminar programs to enhance knowledge and competence by appropriately applying the knowledge gained to their job performance. Moreover, the Group will implement the Corporate Management Development Plan by making preparation for strategic manpower plan so as to enable the Bank to plan its manpower efficiently. The Scorecard system for measuring the efficiency of the Bank’s human resources management will be used while giving the clients and employees opportunities to express their opinions and recommendations as useful information for further improvement of human resources management task. Apart from this, the Human Resources and Organization Management Group which has been designated to oversee the Corporate Social and Environmental Responsibility (CSER) of the Bank will keep focusing on intellectual development to create the intellectual capital more intensively. In this regard, the Group will oversee the main seven CSER projects of the Bank so that they will be fully efficient and beneficial to the target group as specified in the project objectives. Furthermore, the Group will expand the results of such projects to cover the people, community, society and environment in a broader circle, and importantly to urge the Bank employees to take part in the project activities so as to create their acknowledgement and positive social awareness. All this is to respond to the Bank policy regarding operation for the society and the environment as a part of its crucial responsibility.

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Income Structure (Consolidated) Income Type

Interest and Dividend Income Loans Interbank and Money Market Items Investments Total Interest and Dividend Income Non-interest Income Gain (Loss) from Investments Share of Gain (Loss) from Investments on Equity Method Fees and Service Income Acceptances, Avals and Guarantees Others Gain (Loss) on Exchanges Reversal of Loss from Impairment of Properties Foreclosed Reversal of Loss from Impairment of Land Other Income Total Non-interest Income Total Income

December 31, 2007 December 31, 2006 December 31, 2005 Income (%) Income Income (%) (%) (Mn. Baht) (Mn. Baht) (Mn. Baht)

54,052 6,197 5,928 66,177

70.01 55,210 8.02 6,464 7.68 5,618 85.71 67,292

70.79 42,902 8.29 3,003 7.20 4,156 86.28 50,061

74.35 5.21 7.20 86.76

1,180

1.53

1,308

1.68

0.13

453

0.59

355

0.46

524

0.91

1,129 5,959 672

1.46 7.72 0.87

976 5,519 869

1.25 7.08 1.11

738 4,153 778

1.28 7.20 1.35

247 0.32 - - 95 0.16 18 0.02 159 0.20 - - 1,375 1.78 1,513 1.94 1,278 2.21 11,033 14.29 10,699 13.72 7,641 13.24 77,210 100.00 77,991 100.00 57,702 100.00

Consolidated Operation Policy

• Overview of Current Business Operation of Subsidiaries To support its core business operation and boost the opportunities for creating returns from investment, the Bank has invested in the following subsidiaries and associated companies: - Subsidiaries Group refers to group of companies that support the Bank’s business and are vital as a certain business unit of the Bank through focusing on providing services to the Bank or acting as the Bank’s channels in conducting full-ranging financial business. The Bank, in its capacity as shareholder and parent company has closely overseen the subsidiaries to enable their operation to be efficient and in line with the Bank policies. The Bank’s subsidiaries comprise: 1. Krung Thai Asset Management Pcl. conducts securities business concerning management of funds and businesses with license from the Office of Securities and Exchange Commission Thailand (SEC). This company is a profitable investment to the Bank.

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2. KTB Leasing Co. Ltd. conducts the business of hire-purchase and hire-purchase leasing for movable property of all types, and factoring business. 3. Krung Thai Computer Services Co., Ltd. provides information technology (IT) services and advice on computer system development and enhancement mainly to business units within the Bank and subsidiaries. 4. Krung Thai Legal Services Co., Ltd. was established to boost the efficiency of providing legal services and developing employees in legal affairs. It provides legal services to the Bank and subsidiaries. 5. Krung Thai General Business Services Co., Ltd. was set up to reduce the Bankâ&#x20AC;&#x2122;s operational expenses and number of employees. It renders various services to the Bank and subsidiaries such as building management, transportation of property, financial instruments and related documents, security service, document printing for delivery in envelopes and delivery of cash and document to other financial institutions as permitted by the Bank of Thailand. 6. Krung Thai Property Development Co., Ltd. conducts real estate development. Currently the company is not in operation and in the process of liquidation for business closedown. 7. NC Associates Co., Ltd. was set up by financial institution creditors group to oversee the sale and supply production raw material to a certain debtor of the Bank under troubled debt restructuring. The Bank has already transferred such debtor to Sukhumvit Asset Management Co., Ltd. (SAM). Currently NC Associates Co., Ltd. is in the process of liquidation for business closedown. - Associated Companies refer to group of companies in which the Bank co-invested with the business alliances for strategic business benefits to the Bank and business synergy especially in financial products development. They are: 1. Krungthai Card Pcl. conducts the business of credit card and other electronic cards and renders personal loan and retail business loan services. 2. Krungthai AXA Life Insurance Co., Ltd. is a life insurance business through co-investment with the AXA Group (Finance), one of the worldâ&#x20AC;&#x2122;s leading insurance companies. 3. Krungthai Panich Insurance Co., Ltd. conducts the business of non-life insurance of all types. 4. Krung Thai IBJ Leasing Co., Ltd. is a joint venture between the Bank and the IBJ Group (Japan) conducting hire-purchase leasing of movable property, tools, equipment and factoring business. 5. KTB Securities Co., Ltd. conducts securities business such as securities brokerage, underwriting, financial consultancy and other businesses permitted by the office of Securities and Exchange Commission Thailand. 6. Krungthai Charoensri Co., Ltd. conducts the business of cars and motorcycles hire-purchase in the Upper-Northeastern area, currently under liquidation for business closedown.

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Income Structure of the Bank and Subsidiaries December 31, 2007 December 31, 2006 December 31, 2005 Mn. baht % Mn. baht % Mn. baht %

Interest and Dividend Income Krung Thai Bank Pcl. 66,000 Krung Thai Computer Services Co., Ltd. -127 Krung Thai Legal Services Co., Ltd. 0 Krung Thai General Business Services Co., Ltd. 0 0 Krung Thai Property Development Co., Ltd. NC Associates Co., Ltd. 0 KTB Leasing Co., Ltd. 299 Krung Thai Asset Management Pcl. 5

85.48 67,247 -0.16 0 0.00 0 0.00 0 0.00 0 0.00 0 0.39 40 0.00 5

86.22 50,053 86.74 0.00 0 0.00 0.00 0 0.00 0.00 0 0.00 0.00 1 0.00 0.00 0 0.00 0.05 3 0.01 0.01 3 0.01

Total Interest and Dividend Income

66,177

85.71 67,292

86.28 50,061

86.76

Non-Interest Income 10,543 Krung Thai Bank Pcl. Krung Thai Computer Services Co., Ltd. 56 Krung Thai Legal Services Co., Ltd. 21 Krung Thai General Business Services Co., Ltd. 27 Krung Thai Property Development Co., Ltd. 28 NC Associates Co., Ltd. 0 KTB Leasing Co., Ltd. 63 Krung Thai Asset Management Pcl. 295

13.65 10,046 0.07 128 0.03 49 0.04 47 0.04 169 0.00 0 0.08 6 0.38 254

12.88 0.16 0.06 0.06 0.22 0.00 0.01 0.33

7,145 48 98 44 69 0 0 237

12.38 0.08 0.17 0.08 0.12 0.00 0.00 0.41

Total Non-Interest Income

11,033

14.29 10,699

13.72

7,641

13.24

Total Income Krung Thai Bank Pcl. 76,543 Krung Thai Computer Services Co., Ltd. -71 Krung Thai Legal Services Co., Ltd. 21 Krung Thai General Business Services Co., Ltd. 27 Krung Thai Property Development Co., Ltd. 28 NC Associates Co., Ltd. 0 KTB Leasing Co., Ltd. 362 Krung Thai Asset Management Pcl. 300

99.13 77,293 -0.09 128 0.03 49 0.03 47 0.04 169 0.00 0 0.47 46 0.39 259

99.10 57,199 0.16 48 0.06 98 0.06 44 0.22 70 0.00 0 0.06 4 0.33 240

99.13 0.08 0.17 0.08 0.12 0.00 0.01 0.41

Total Income

77,210 100.00 77,991 100.00 57,702 100.00

Note: 1) Income of Krung Thai Bank Pcl. excludes related-party transactions of subsidiaries. 2) NC Associates Co., Ltd. and Krung Thai Property Development Co., Ltd. currently in process of liquidation for business closedown.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

• Overview of Business Operation under BOT Consolidated Supervision Requirement The Bank has restructured the business operation along the consolidated supervision requirement to accommodate the enforcement of the Financial Institutions Business Act in 2008 through an establishment of financial business group with Krung Thai Bank as parent company under the investment and management policies as follows: Investment Policy The Bank has the policy to invest in businesses that support its core business and promote the policy of being the Convenience Bank. Business that invested includes: 1. Financial business refers to investment to promote the Bank in providing full-ranging services. The Bank has invested in seven companies namely Krungthai Card Pcl., Krungthai AXA Life Insurance Co., Ltd., Krungthai Panich Insurance Co., Ltd., Krung Thai IBJ Leasing Co., Ltd., KTB Securities Co., Ltd., Krung Thai Asset Management Pcl., KTB Leasing Co., Ltd. 2. Support business is investment to facilitate service, providing convenience and boosting efficiency in various operations such as legal task, information system and general services (KTB Training Center management, vehicles and logistic service, assets transportation, security service, document printing, automatic document enveloping and delivery). The Bank has invested in three companies in this group namely Krung Thai Computer Services Co., Ltd., Krung Thai Legal Services Co., Ltd. and Krung Thai General Business Services Co., Ltd. Management Policy The Bank has supervised the financial business group in accordance with the Consolidated Supervision requirement prescribed by the Bank of Thailand. The main objective is to strengthen the financial business group for greater stability and capability of conducting business appropriately and effectively with adequate and comprehensive risk prevention thus enhancing the Bank’s image and standing. Management policy is implemented by assigning the Bank Executives to serve as directors on the boards of the companies to closely supervise the business. The Bank also requires the companies in this group to formulate their business plan and annual budget as well as risk management plan so that the operation of the company group will proceed in accordance with the Bank policy. Additionally, the group is required to prepare the relevant information and report the operating performance for submission to the regulators.

• Competitiveness of the Bank

The Bank’s competitiveness has been high all along. Whether it is the second largest bank in the industry with a market share of over 15 percent, enabling it to enjoy economy of scale or having BIS ratio of 15.16 highest among the large banks or that government holds more than 55 percent of the registered shares. All these have contributed to the Bank’s high stability, low cost and a large government customer

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

base of lenghty relationship. In addition there is a nationwide branch network well-equipped with state-ofthe-art technology for customersâ&#x20AC;&#x2122; convenience. The Bank is also able to present its products to respective customer feasibly. Nevertheless, the Bank still determines to continue enhancing its capability and competence to cope with the increasingly severe competition especially in 2007 when consumption and investment were so dull that business expansion was hard to focus on. The Bank thus converted this crisis into opportunity through full stream development of competitiveness in various aspects as follows: Network and Business Alliance Expansion To boost fee-based income, the Bank expedited branch network expansion and installation of more automatic machines such as ATM, ADM and passbook update machine while building alliance network ready for expansion. In 2007 the Bank opened 67 new branches, or 9.64 percent, higher than the banking industry average that increased 8.16 percent. Number of sub-branches in particular, increased as high as 45 or 36.89 percent higher than industry average that went up by only 15.70 percent, and additional 1,102 ATMs were installed or 29.02 percent, higher than the industry average that increased only 21.86 percent. Moreover, the Bank joined hands with other commercial banks to broaden the scope of services and conveniences to the clients in using online funds transfer, ATM connect service and foreign exchange service. On expanding business alliances, apart from collaboration with its subsidiaries in providing various financial services such as underwriting investment units, investment consultancy, life and non-life insurance, the Bank opened up an aggressive frontier off the traditional financial products. Through synergy with KTB Leasing Co., Ltd. and 30 other private company alliances the Bank sells a wide range of consumer goods like cars, motorcycles, computers, electric appliances and many more by installment payment through branches and service outlets of the Bank. Financial Product Enhancement and Innovation The Bank in 2007 launched many new products and services and also enhanced several existing services to add convenience and fulfill customer needs, such as cash management service to be a complete line of financial management covering collection - direct debit, payment of goods and services, cash and check delivery, and payment service direct credit, funds transfer, check preparation. On liquidity management service - inter-account funds transfer, online inter-account funds transfer and conditional inter-account funds transfer and on financial information service included was corporate banking. Additionally, there is KTB e-Account Opening service where retail customers could open new accounts 24/7 everywhere through the internet and update passbook at any KTB convenient branch. Other new services are KTBS Cyber Branch for securities trading on the internet and Krung Thai VISA debit card, opening up a new vision of using debit card in Thailand. With this debit card, customer is entitled to a number of privileges such as maximum cash advance locally and abroad as high as Baht 150,000 per day, payment for goods and services at more than 10 million shops worldwide at maximum limit of Baht 150,000 per day, discounts of 5-50 percent from over 1,500 member shops, and receiving personal accident insurance coverage of Baht 100,000.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Employee Competency Development towards Service of Excellence In 2007 the Bank has adjusted human resources management strategy to become the No. 1 bank in customer’s heart. Apart from continuing the on-going projects on Human Resources Competency Development since 2006 namely – the Outstanding Employee in Servicing Customers Project, and the Outstanding Branch Top Sales Project another 4 projects were added to develop staffs’ potential. They are Building Star on Sales Project, Star of Credit Project, Creative Thinker Project and Work Improvement Project. With all these going as well as many more training courses and on-the-job training, the Bank is confident in the employees’ competence that they will be ready to render the best services that will give maximum customer satisfaction. Service Quality Assurance The Bank in August 2007 began to assure internally four types of services nationwide. SLA for such services are over-the-counter service completion within 3 minutes, new account opening with ATM card done in 10 minutes, Krung Thai Circle Loan approval in 5 working days and housing loan approval in 7 working days. Announcement to the general public is scheduled to be made in early 2008. Sales Promotion Activities The Bank organized sales promotions through out the year to reiterate the convenience brand. Among them was music marketing in collaboration with LOVEis Music Group to sell Bank’s products and services including those of subsidiaries which was very successful. The launch of selling consumer goods through the Bank network by KTB Leasing Co., Ltd. enabled the Bank to become the first bank to provide customers with a complete line of products. Besides, the Bank organized events to launch KTB Online service and KTB VISA Debit service as well as collaboration with the Metropolitan Electricity Authority (MEA) to award a Toyota Yaris as a grand prize for customers that register to direct debit their electricity bills with the Bank. Moreover, the Bank continuously took part in functions and fairs at national level throughout the year to gain accesses to the target clients such as Money Expo 2007, Home and Condo Expo and NPA Grand Sale which were considered to be highly successful. Expansion of Retail Customer Base and Fee-Based Income The Bank focused on expanding the retail customer base to strengthen fee-based income. Fee-based income which is unencumbered and no risk involved depend largely on the number of transactions used by customers. Currently it was found that retail customers do only a few transactions through the Bank although versatile services have been offered such as credit card, ATM card, public utility payment, funds transfer, security and mutual fund trading, life and non-life insurance, hire-purchase, leasing, cash management and foreign exchange service. All these services are good sources of the Bank’s fee-based income. Therefore, the Bank has accelerated an expansion of private-sector customer base to supplement the strong public–sector customer base, in order to boost the average number of transactions per person and also increase the opportunity for more cross selling. In addition, the Bank has developed an efficient customer relationship management (CRM) system to retain good relationship with customers.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Internal Process and System Development The Bank regards good corporate governance as a crucial tool that will enable the Bank to obtain a stable and sustainable growth. Since 2006, the Bank has set up the Corporate Governance Plan which is divided into three phases. Phase 1 in 2006 was proclaimed as a “Year of Learning” in which the Bank organized respective activities throughout the year to promote awareness of corporate governance to staff members at all levels. In Phase 2 the year 2007 was proclaimed as a “Year of Doing”. All the staffs were instilled with principles of “Integrity, Transparency and Ethics”. As such the Bank is confident in its standards of services and gain higher confidence when it was awarded “Board of the Year for Exemplary Practices” for the year 2006/2007 from the National Corporate Governance Commission and the “Shareholder Award” from Thailand Securities Depository Co., Ltd. in conjunction with the Stock Exchange of Thailand, Thai Investors Association, Thai Listed Companies Association and Thai Investor Relations Club. Such awards help boost up the moral for moving forward to Phase 3 -“Year of Victory”. Additionally, the Bank in 2007 expedited risk management along the Basel II requirement, enterprise risk management and preparation of the Business Continuity Plan (BCP) as prescribed by the Bank of Thailand that will be enforced in late 2008. Apart from monitoring the work plan, the Bank also speeds up the inclusion of risk management in the corporate culture through follow-up, audit and knowledge enhancement to staffs at all levels so they have the immunity and awareness of risk management in every process of their work. On internal processing, the Bank in 2007 strengthened its competence with several modern and efficient applications such as the Economic Value Management (EVM) to formulate strategic plan, analyze investment, appraise performance and remunerations; KTB Credit Management System (KTB-CMS) for credit management; Account Payable & Budget Management System for effective budget management and disbursement; electronic filing system for documenting and filing by electronic means. Also included were development of the Invoice Printing System (IPS) for respective organizations with large volume of payment transactions and video installation for sale of products in distant area.

• Key Changes in 2007

Organization Restructuring

In 2007 the Bank conducted a minor organization restructuring for greater flexibility and to suit the competitive environment and the changing applicable laws, rules and regulations. Details are: - Reduced 14 business groups to 12 groups through merger of the Risk Management Group and the Office of General Counsel to form the Risk Management and Corporate Governance Group; and the Metropolitan Network Group and the Regional Network Group were merged into the Network Group. - Added one more Corporate Banking Sector to the Corporate Banking Group totaling three Sectors. Also one Project Finance Department and one Industrial Finance Department were added for Corporate Banking Sectors 1 and 3. - Added Retail Banking and Network Strategy Department to the Products and Marketing Management Group.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

- Added the SMEs Strategy Department to the Business Center Group. - In the Credit Risk Transaction Management (CRTM) Group, the Commercial Business CRTM Department and the Service Business CRTM Department were merged as the Commercial and Service Business CRTM Department. Meanwhile the Business CRTM office was dissolved to centralize the task of Business Center CRTM to be included in the Business CRTM Departments of each region. All this would enable the credit scrutiny process to be faster and more prudent. - The Risk Management and Corporate Governance Group broadened the scope of the responsibility of the Operational Risk Management Department and renamed it as the Enterprise Risk Management Department to perform the duty of giving advice, overseeing, coordinating and monitoring the risk management of all the business groups in the Bank. This would assist the business groups in meeting their targets, principles and guidelines set by the Bank and drive the enterprise risk management to progress further on continuous basis. - Set up the CSER Subcommittee and added the CSER Promotion Division in the Marketing and Corporate Communications Department to be responsible for social and environmental promotion task jointly with the Corporate Governance Subcommittee. Such two Subcommittees were under the supervision of the Corporate Governance Committee.

New Products and Services

Most of the new products and services launched in 2007 were deposit services since the low interest rates were not attractive to depositors, hence, the Bank presented new products with interesting returns while loans were slowing down along the economic condition thus new products were limited. Details were: Deposit Products The Bank issued deposit products and new forms of bill of exchange with flexibility and high returns to give customers another alternative and to expand sources of funds to accommodate loan expansion in 2008 such as: Tax free KTB 15 Bonus deposit accepting equal deposit amount once a month in continuation for 24 months as contractual savings, offering 12-month time deposit interest rate plus bonus of 15 percent of interest rate. Service offering a 5-month and 10-month time deposit with interest payable every month. Krung Thai Safer Deposit offering privileges together with insurance premium discount and special service to depositing clients. KTB e-Opened Account for online and savings account opening without passbook (for agencies/ institutions). Foreign Currency Deposits for current, savings and time deposits for nine foreign currencies: AUD, NZD, USD, EURO, GBP, JPY, SGD, CHF and HKD. Non-transferable Bill of Exchange as borrowing from public. This B/E can be redeemed before maturity of one, three and six months and also be used as KTB loan collateral.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Loan Products focused on low-risk loans to suit the slowing down economy. They were: Small BOT and SME Baht Effect to SME Clients, projects of which the BOT determined the credit lines using promissory notes (P/N) from SME operation as collateral. SME Machine Fund, loan to give SMEs the opportunity to use efficient and modern machines in the operation. Krung Thai Permsuk Loan for personal consumption purposes with housing as collateral so as to boost customersâ&#x20AC;&#x2122; liquidity in buying consumer goods and life insurance premium payment. Other Products In 2007 the Bank focused on offering its own financial products and those of subsidiaries in the form of consolidated service-providing for the convenience of customers and in line with branding of the Convenience Bank as well as boosting fee-based incomes. Special services were rendered to time depositors of not more than six months to apply for KTB Online service with no entry fee and annual fee. Savings depositors of over Baht 500 could apply for KTB Classic Visa Debit card with no entry and annual fees or Gold Debit card with no entry fee and first-year fee was reduced from Baht 200 to only Baht 100. Moreover, protection coverage was provided for personal accident insurance in the amount of Baht 100,000. Special services offered for Krung Thai Subtavee Housing Loan, clients who bought houses in projects supported by the Bank get exemption from appraisal fee. When using ATM card, VISA Debit Card or KTC credit card, buying 3-year fire insurance coverage and utility payment through the Bank, a burglary insurance or personal accident insurance value of as high as Baht one million will be given. Special services from Dhipaya Insurance Pcl., clients received three privileges: 5 percent discount on premium of all types of insurance, 24-hour roadside assistance value of Baht 1,290 for one year for buyer of first-class car insurance, and emergency assistance through hotline service 24/7 such as medical help, emergency car breakdown assistance and personal secretarial service for buyers of house fire insurance with premium of Baht 1,000 and over.

Progress of Key Projects

Economic Value Management (EVM) The Bank introduced EVM which is an organization management system that uses key factors relating to business operation as a tool in improving efficiency of the organization, in accordance with the policy formulated by the State Enterprise Policy Office. The Bank implemented EVM Phase 1 in 2006 and Phase 2 in 2007 through linkage of EVM with the business management process such as strategic planning, risk management, funds allocation, investment analysis, operational efficiency measurement, incentive creation and returns yielding. All such activities focused on creating sustainable value added and communication of relevant knowledge to all employees was done on continuous basis so that EVM is understood across-the-board. This is meant to prepare for stepping forward into Phase 3 in 2008 when comparison with that of 2007 will be done and the progress of using EP to determine the remuneration for senior executives. Basel II Readiness Project The Bank developed work processes and collection of data in preparation for a complete database under the Basel II requirement. Calculation of capital charges for credit risk, market risk and operational risk is enhanced. Risk management tools have been improved and models

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

development is prepared for future advanced approaches. Enterprise Risk Management (ERM) in managing 5 risks areas namely strategic, credit, liquidity, market and operational risk is implemented. Communication of such information and awareness of risk management were relayed to employees at all levels so they have correct understanding on the objectives. It must be understood that risk management is the responsibility of all employees. (Details shown in “Risk Management” on page 98)

• Research and Development Policy

Adhering to the Bank’s vision and mission on being the Convenience Bank and providing services excellence, thus the importance of giving ultimate satisfaction to customers and team work are still the primary concerns. Every business unit must have a target of satisfaction for customer and interrelated work unit within the Bank. Moreover, the Bank designated year 2007 as the year with activities serving corporate social and environmental responsibility (CSER). Thus research projects were initiated to benefit business operation and development assessment through internal implementation and outsourcing. Among them were Survey of Customer Satisfaction and Corporate Identity, Inter-Unit Cooperation Assessment and research work of various business units. Research projects undertaken included Shareholders Satisfaction Survey, Government and State Enterprise Customer Satisfaction Survey, Survey of usage of KTB-CMS, Assessment of KTB Business Ethics Initiative (White Seedlings Project), Corporate Governance Compliance Assessment Project and Assessment of KTB & Subsidiaries Satisfaction. Apart from these, the Bank conducted survey on the confidence of entrepreneurs nationwide to produce the Krung Thai Business Index (KTBI) in support of credit task. In 2007, the Bank’s research and development expenses totaled about Baht 3 million.

• Social and Environmental Projects

The Bank attaches continuous importance on social and environmental activities especially the creation of intellectual capital, one of its main mission. In 2007 the Bank expanded the scope of responsibility of the Corporate Governance Committee to cover social and environmental responsibility and also set up a new business unit to be responsible for this task. This was to support the progress of each project as intended by the Bank and possibly to expand the effects and activity network both in the variety of activities and the participant groups.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

The CSER projects implemented in 2007 consisted of main projects and auxiliary projects as well as supportive activities of government and private organizations. Details were: Main CSER Projects and Expanded Projects Currently the Bank had a total of seven on-going projects, some of which had been expanded to new projects for greater in depth benefits as follows: 1. Krung Thai Dream Schools near Home expanded to KTB Young Reporters project. 2. Krung Thai Young Enterprise expanded to Basic Business Administration project. 3. Krung Thai White Seedlings project 4. Krung Thai Luncheon Support 5. KTB Lecture Series 6. Krung Thai Art and Culture expanded to three additional projects namely Krung Thai Art Lovers Club, Krung Thai Sculpture Park and Krung Thai Art Gallery. 7. KTB-CSER Prototype in collaboration with the Thai Environment Institute expanded to another three projects namely Krung Thai Volunteers Club, KTB Young Footballers and Krung Thai Caring for Environment. KTB-Supported Projects for Government Agencies and State Enterprises consisted of many diverse activities such as activities in Honor of His Majesty the King on several auspicious occasions, Youth Knowledge Exchange of Bangkok Treasure by The Thai Environment Institute, Business Experience Exchange with alliance and Thailand Business Council for Sustainable Development (TBCSD), Activities in support of Medical Equipment Purchase of Artificial Eyeballs for the Poor, Universiad (University Olympics) games and activities creating reconciliation in the Deep South Areas. Apart from the above projects directly for social and environmental benefits, the Bank made its best effort to instill in the people the awareness of social responsibility particularly the Bank’s stakeholders. Throughout 2007, the Bank organized activities to communicate and reaffirm to employees, customers and all stakeholders the importance and necessity that all society members have to jointly take responsibility for the society and the environment. Additionally, the Bank publicize news concerning its CSER activities continuously so as to urge the public to take part in driving the Bank’s CSER activities forward for the benefits in a broader circle. With strong and increasing determination in its mission of corporate social and environmental responsibility, the Bank in 2007 was presented with several awards of honor from official agencies concerned and was also honored by the Thai Environment Institute to be the CSER Prototype Organization. As a result, the Bank enjoyed the opportunities to participate in various activities and to exchange knowledge and experience with a large number of organization network covering educational institutions, public sector as well as business organizations. (Additional details of CSER Operation can be viewed from the Report on Corporate Social and Environmental Responsibility, Krung Thai Bank Pcl., 2007 or on website: http://www.ktb.co.th. select “social responsibility/publication”.)

• Awards of Pride in 2007

The year 2007 saw as many as eight awards of honor presented to the Bank. This indicated that the public recognized that the Bank’s operation has adhered to the principles of good corporate governance, a determined mission throughout time. Meanwhile, the Bank also pays great attention to social and environmental responsibility to enable the business to have a sustainable growth along with the Thai society. Details of the awards were as follows:

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

1. Board of the Year for Exemplary Practice for 2006/07 from the National Corporate Governance Commission under the merit announcement program entitled ”Board of the Year, 2006/07” organized by the Thai Institute of Directors Association in conjunction with the Stock Exchange of Thailand, the Board of Trade of Thailand, the Federation of Thai Industries, the Thai Bankers’ Association, the Thai Listed Companies Association and the Federation of Thai Capital Market Organizations. 2. Shareholder Awards in the category of “Distinctive Listed Company for Shareholders Care”. The Bank had been selected as 1 out of 10 companies receiving Shareholder Awards from the Thailand Securities Depository Co., Ltd. in conjunction with the Stock Exchange of Thailand, Thai Investors Association, Thai Listed Companies Association and Thai Investor Relations Club. 3. One of the Top Five Nominees in the Category of Financial Management Excellence from Thailand Corporate Excellence Awards Fair organized by the Business Management Association of Thailand and Sasin Graduate Institute of Business Administration of Chulalongkorn University. 4. Banker of the Year 2007 Awards Mr. Apisak Tantivorawong, President of Krung Thai Bank was selected by Thailand’s “The Interest Magazine” to be the Banker of the Year 2007 due to his distinctiveness in banking management and capability of handling obstructions encountered, bringing the Bank forward with distinctiveness both in business and social and environmental responsibility. 5. Thailand Energy Awards 2007 in the category of New Building presented by the Department of Alternative Energy Development and Efficiency, Ministry of Energy. This was the third year running and Head Office Building (Sukhumvit Building) was granted such award and honored to be representative of Thailand to take part in the contest at ASEAN level. 6. ASEAN Energy Awards 2007 second runner up in the category of New and Existing Building organized in Indonesia. The Head Office Building (Sukhumvit Building) received an honor to be the representative of Thailand joining the contest and was presented this award in succession from the Head Office Building 1 (Nana Nua Building) that received the same award in 2006 as Thailand’s representative as well. 7. Honorable Mention Awards from the competition program in the category of large corporate adopting sufficiency economy philosophy, in royal celebration of His Majesty the King’s 80th Birthday under the project entitled “Happiness for All Thais” organized by the Royal Development Projects Board. 8. Outstanding Social and Environmental Responsibility Awards Honorable Mention, 2007, organized for the first time by the State Enterprise Policy Office, Ministry of Finance. In addition to the above awards, the Bank was very proud that its strong determination in working as a professional had been recognized by respective financial institutions both at national and international levels, reflecting the following assessments and honor title received. Quality assessment of the Bank’s 2007 Annual Ordinary General Meeting was “Excellent”, gaining the highest mark of 107.50 out of 110.00 from the Securities and Exchange Commission Thailand (SEC) in conjunction with the Thai Investors Association and the Listed Companies Association. Mr. Apisak Tantivorawong, President of Krung Thai Bank, in his capacity as Chairman of the Thai Bankers’ Association was appointed Chairman of the ASEAN Bankers Association (ABA) for a two-year term from 2007 to 2009 by nine members of the ASEAN Bankers Association at the 37th Conference of the ASEAN Bankers Association Council in 2007 in Vietnam.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

• Targets and Strategies for 2008

With the vision of being “Convenience Bank for retail, business, corporate, government and institution customers”, the Bank set the targets for 2008 as below: Convenience Bank Focus on being Convenience Bank through impressive and excellent services to all customers so that “Convenience Brand” and “Brand Loyalty” are fortified. Processing Bank Focus on providing complete and full-ranging services of funds transfer, payment and cash management covering domestic and international funds transfer and foreign exchange service.

Sustainable Growth and Profitability

HR Strategy

Focus on quality credit expansion, broadening deposit customer bases, upgrading asset quality to standard level, boosting fee-based income, managing costs for greater competitiveness, efficiently managing capital funds, increasing earnings from investment and treasury as well as promoting management with efficiency, transparency and social responsibility in line with corporate governance. For the business operation to reach the Bank’s target, the following strategies were set up, namely: Focus on developing staffs to have conscience and upright living and competent in four aspects, namely to work efficiently, to manage people effectively, to think innovatively and to live well, so that they are happy at work and with their life. More importantly, the Bank instills in the staffs the love of selflearning and self-development as they will be the key forces in driving the organization forward and providing excellent services to customers.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

IT Strategy Focus on enhancement and modernization the computer system and its database in order to make services, management, planning and decision-making fast and accurate, such as Cash Management system, CRM, Basel II and computerized audit system. Products and Servicing Accelerate development of financial products and innovations both of the Bank and its subsidiaries, to meet the requirements of each target group which has different lifestyle. Targets, strategies and action plan are clearly defined to accommodate aggressive market penetration. Emphasize customercentric in developing services and as at January 22, 2008 Service Level Agreement (SLA) has been assured to the general public. All branches nationwide will complete over-the-center service in 3 minutes, new account opening with ATM card 10 minutes, Krung Thai Circle Loan in 5 working days and Housing Loan in 7 working days. Network The Bank is developing its network and business alliances to increase convenience and speed of services to customers, together assuring them of quality and variety. The Bank is setting to cover the remaining channels and improve the service points with sufficient equipment optimizing the usage of those service outlets. Core Management Process affecting Customers and Earnings The Bank focuses on developing enterprise risk management (ERM), good corporate governance (CG) and corporate social and environmental responsibility (CSER) by attaching importance to internal communication to enable the staffs to understand and put into daily practice as to eliminate problems and obstacles that could bar the Bank from meeting the targets.

â&#x20AC;˘ Key Projects in 2008 comprised of

- - - - -

Income Boosting from Processing Bank Project to increase fee-based income. Customer Relationship Management (CRM) Project to direct marketing for each group of customers. Building Convenience Brand Project in customersâ&#x20AC;&#x2122; heart. Network and Distribution Channels Expansion and Enhancement Project. Corporate Social & Environmental Responsibility (CSER) project to show responsibility to society and environment.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Shareholding

and Mana g e m e n t S t r u c t u r e s

1. Shareholding Structure

Shareholders as at April 9, 2007 (share register closing date)

Shareholders

Number of Shares Ordinary

1. The Financial Institutions Development Fund 2. Littledown Nominees Limited 3. Thai NVDR Co., Ltd. 4. Vayupaksa Mutual Fund 1 managed by MFC 5. Vayupaksa Mutual Fund 1 managed by KTAM 6. Chase Nominees Limited 1 7. Mellon Bank, N.A. 8. HSBC (Singapore) Nominees Pte., Ltd. 9. State Street Bank and Trust Co. 10. Clearstream Nominees Ltd. 11. Others

Total

6,207,264,567 656,106,400 493,650,943 271,742,858 271,742,857 177,335,200 156,597,100 120,571,742 118,556,356 94,281,515 2,611,899,462 11,179,749,000

Preferred - - 60 2,726,095 2,726,095 - - - - - 47,750

Total

6,207,264,567 656,106,400 493,651,003 274,468,953 274,468,952 177,335,200 156,597,100 120,571,742 118,556,356 94,281,515 2,611,947,212

55.50 5.87 4.41 2.45 2.45 1.59 1.40 1.08 1.06 0.84 23.35

5,500,000 11,185,249,000

100.00

Notes: Investors can look up the latest shareholding structure at www.ktb.co.th before the 2008 Annual Ordinary General Meeting

2. Management Structure

The Bank has complied with the guidelines of the Structure of the Board of Directors in promoting corporate governance of commercial banks which comprised five committees as follows: The Board of Directors The Board of Executive Directors

The Audit Committee

The Nominating and Remuneration Committee

The Corporate Governance & Social and Environmental Responsibility Committee

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.1 Scope of Authority and Responsibility and Members of Each Committee

2.1.1 The Board of Directors

Responsibilities

The Board of Directors assumes full authority in the management, overseeing that the business complies with the objectives of the Bank’s Articles of Association and the resolutions of the shareholders’ meeting, all which be under relevant laws and regulations. The authority and responsibilities include: 1) Oversee and manage the Bank in accordance with the objectives, the Bank’s Articles of Association and the resolutions of the shareholders’ meeting, as well as supervise the Bank’s various operations. 2) Meet at least once a month and there must be at least half of the total directors attending. The majority vote shall be taken as the resolution of the meeting. 3) Call an annual ordinary general meeting within four months from the closing of accounting period at year-end. Other general meetings may be called anytime when the Board deems appropriate or within one month from the date of shareholder’s written request. 4) Despite Board vacancy, the subsisting directors can still perform the duty. However, if the number of directors does not constitute a quorum, the remaining directors can only hold a general meeting to elect new candidates to fill all the vacancies. 5) Comply with the Code of Best Practice of Directors of Listed Companies. Authority 1) Each director can cast one vote and the majority vote shall be taken as the resolution of the Board meeting. In case of equal votes, the Chairman of the Board shall have the second vote for a decision. 2) Any director who has special interest in the matter discussed in the Board meeting is prohibited from casting vote on such issue. In this case, the Chairman may request that person to temporarily leave the meeting. 3) All business activities of the Bank shall be under the authority of the Board of Directors. Either the Chairman or the President, or at least two other directors as delegated by the Board have the authority to sign and affix the Bank’s official seal on behalf of the Bank. 4) The Board of Directors has the authority to appoint General Manager, staff members as well as agent of the Bank with the power and duty as the Board deems appropriate. Remuneration, expenses, and benefits as well as termination for such persons are also within the authority. 5) The Board of Directors can empower the General Manager to appoint and revoke the appointment of the staff members of the Bank. If the General Manager is also a director of the Board of Directors, he is named “President”. 6) The Board of Directors has the authority to invite any person as it deems appropriate, to be an advisor assisting the Board on banking business as well as determining wages and remuneration for the advisor.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Scope of Authority As set forth in the Bank’s Articles of Association and the Public Limited Company Act, B.E. 2535 (1992), the Board of Directors can process the following matters only upon receiving approvals from the Bank’s general meeting: 1) Approval of the balance sheet and the profit and loss statements. 2) Approval of the profit appropriation. 3) Election of new directors replacing those completed their terms of service or election of additional directors when there is an increase in the total number of directors. 4) Appointment of the Bank’s auditor and fixing their remuneration. 5) Increase of capital, reduction of capital and transfer of allowance for compensation of accumulated loss, dividend payment, public offering or allocation of capitalized shares and issuance of debentures. 6) Sell or transfer the Bank’s entire business or some important part, purchase or acceptance of transfer of other business, preparation or amendment or termination of agreement relating to renting out part or the entire Bank’s business. Members of the Board of Directors as at January 24, 2008 1) Mr. Suparut Kawatkul Chairman 2) Dr. Chaiyawat Wibulswasdi Vice Chairman 3) Mr. Aswin Kongsiri Director 4) Mr. Santi Vilassakdanont Director and Independent Director 5) Mr. Suri Buakhom Director and Independent Director 6) Ms. Tanya Sirivedhin Director and Independent Director 7) Mr. Pachara Yutidhammadamrong Director and Independent Director 8) Mr. Sima Simananta Director and Independent Director 9) Dr. Jamlong Atikul Director 10) Mr. Visut Montrivat Director and Independent Director 11) Mr. Dusit Nontanakorn Director and Independent Director 12) Mr. Apisak Tantivorawong President 13) Mr. Somgiat Sangsurane Secretary 14) Mr. Suchart Dejittirut Assistant Secretary Details of Changes of Directorship 1) Dr. Uttama Savanayana Resigned as of March 7, 2007 2) Mr. Dusit Nontanakorn Took position on July 5, 2007 to replace Dr. Uttama Savanayana

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Director from Major Shareholders Mr. Aswin Kongsiri is the representative from the major shareholders group (FIDF). He is not eligible to sign on behalf of the Bank.

Independent Directors Committee Definition

Independent Director shall not engage in business or work relating to commercial bank that may impact his/her independent decision-making and must possess the following additional qualifications: 1) No shareholding of more than 0.5 percent of paid-up capital of commercial bank or those of any subsidiaries, affiliated or associated companies including shares held by related kin. 2) Having no involvement in the management of commercial bank, subsidiaries, affiliated and associated companies or major shareholder of commercial bank nor being employee or staff member receiving regular salary from commercial bank, subsidiaries, affiliated or associated companies or major shareholder of commercial bank. In addition, he/she must not be an advisor receiving regular salary from commercial bank, subsidiaries, affiliated or associated companies or major shareholder of commercial bank. 3) Having no interest or benefit, whether directly or indirectly, both in the financial and managerial aspects in commercial bank, subsidiaries, affiliated or associated companies or major shareholder of commercial bank. 4) Must not be related or be a close relative of the top executive or major shareholder of commercial bank. 5) Must pass through the nomination process of the Board of Directors or the Nominating and Remuneration Committee. Authority and Responsibility 1) Initiate important agenda or issues to the Board of Directors should the issues be considered and not included in the meeting agenda. 2) Present opinions to the Chairman of the Board on roles and performance of the Board of Directors. 3) Support the Board of Directors for improved efficiency in accordance with guidelines of good supervision. Independent Directors as at January 24, 2008 1) Mr. Santi Vilassakdanont Chairman 2) Mr. Suri Buakhom Independent Director 3) Ms. Tanya Sirivedhin Independent Director 4) Mr. Pachara Yutidhammadamrong Independent Director 5) Mr. Sima Simananta Independent Director 6) Mr. Visut Montrivat Independent Director 7) Mr. Dusit Nontanakorn Independent Director 8) Mr. Somgiat Sangsurane Secretary

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

President Authority and Responsibility The President is empowered to conduct business in accordance with the established policies and targets set by the Board of Directors and strictly manage operation according to plan or budget approved by the Board. The President must perform his duties honestly and cautiously while safeguarding the interest of the Bank and the shareholders. Authorized Directors Mr. Suparut Kawatkul, Chairman of the Board of Directors or Mr. Apisak Tantivorawong, President are authorized to sign on behalf of the Bank solely or Mr. Chaiyawat Wibulswasdi jointly with Mr. Jamlong Atikul and affixed with the Bankâ&#x20AC;&#x2122;s official seal. 2.1.2 The Board of Executive Directors Authority and Responsibility The Board of Directors has empowered the Board of Executive Directors with the following duties: 1) Credit approval, debt improvement and debt write-off 2) Approval of securities investment including sales of invested securities 3) Approval of executive appointment (Executive Vice President and First Executive Vice President who are non-managing director) 4) Approval of procurement in accordance with rules and regulations 5) Credit scrutiny, troubled debt restructuring and bad debt write-off 6) Business Plan scrutiny 7) Scrutiny of procurement process 8) Scrutiny hiring of consultants 9) Monitoring key issues as assigned by the Board of Directors 10) Other tasks assigned by the Board of Directors The Board of Executive Directors as at January 24, 2008 1. Dr. Chaiyawat Wibulswasdi Chairman 2. Mr. Aswin Kongsiri Director 3. Dr. Jamlong Atikul Director 4. Mr. Apisak Tantivorawong Director 5. Mr. Somgiat Sangsurane Secretary 6. Mr. Suchart Dejittirut Assistant Secretary Detail of Change of Directorship Dr. Uttama Savanayana Resigned as of March 7, 2007

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.1.3 The Audit Committee Authority and Responsibility

1) Financial Reporting and Public Disclosure (1) Review the Bank’s financial reports to ensure that they are adequate, accurate and reliable in accordance with the generally accepted accounting principles. (2) Review with the Bank’s auditor key issues that may adversely affect the reliability of the financial reports such as: - Significant difficulties or conflicts encountered during the course of the audit. - Issue of different facts and opinions between the auditor and the management. - Level of effectiveness of internal control. - Errors or losses found in the current accounting period and the possibility to recur in the following periods. - The draft of the annual financial statements and notes to the financial statements. - Auditor’s report (3) Review any related transactions or transactions that may cause conflict of interest when disclosing such information and accounting procedures to ensure accuracy, completeness and transparency. (4) Review the evidences in case of doubt about the operation that may significantly affect the Bank’s business or conflict of interest that may have impact on the Bank’s operation. (5) Review the information for submission to the regulatory unit to be in line with those in the financial reports. 2) Internal Control Review the internal control system to ensure its effectiveness in accordance with the standards of the Committee of Sponsoring Organizations of the Treadway Commission. Internal auditor must assess the entire internal control system at least once a year in addition to the assessment of financial reporting with the Bank’s auditor. 3) The Auditor (1) Ensure independence of the auditor. (2) Review the scope of work of the auditor and internal auditors to avoid duplication of work in financial auditing with due consideration of efficiency in the use of resources in the audit process. (3) Consider the appointment and remuneration of the auditor for submission to the general meeting. (4) Review the annual audit report of the Office of the Auditor General of Thailand and may review or audit any transaction deemed necessary and material together with presentation of crucial recommendations to the Board of Directors.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

4) The Internal Auditor (1) Ensure independence of the internal auditor. (2) Directly supervise the Internal Audit Group. However, the management of the Internal Audit Group shall report directly to the President. (3) Oversee the Internal Audit Group to adhere to moral ethics and corporate governance with generally accepted audit standards as well as examination and review the code of Business Conduct of audit officers prior to submission to the Board of Directors for approval. (4) Regularly examine and review the charter of the Internal Audit Group. (5) Consider and approve the strategic plan for internal audit, the annual audit plan as well as budget used in the internal audit process with the aim of efficiency and effectiveness and their prioritization with respect to risk levels. (6) Review the internal audit report and call closed-door meetings with the management of the Internal Audit Group in order to examine any interference from the executives and the management that may have impact on the independence and freewill of the internal auditor. (7) Review with the management of the Internal Control Group the utilization of the Bank’s resources which must be in line with the policy or operating manual. (8) Review with the management on material deficiencies found from auditing and their responses. (9) Consider the approval of the appointment, penalizing and dismissal of the group head of Internal Audit as submitted by the President prior to submission to the Board of Directors for approval. (10) Appraise the performance of the group head of Internal Audit. (11) Arrange for the Independent Quality Assessment Review by external auditor at least every five years. 5) Regulatory Compliance Review all compliances with relevant laws, rules and regulations stipulated by the official authorities and the regulators so as to avoid losses as penalty charges, warning or reputation of the Bank and its executives. 6) Risk Management (1) Review major risk levels and the risk assessment of the internal auditor and that of the Bank’s auditor whether they are adequate and up to standards. (2) Review the Bank’s directors and top executives on their awareness of key risks and those related to operational risk. 7) Performance Assessment Arrange for self-assessment and the Board of Directors will assess the Audit Committee’s annual performance.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

8) Charter Review Review and revise the Charter of the Audit Committee on regular basis for submission to the Board of Directors for approval. 9) Other Responsibilities (1) Authorize to audit or investigate concerned persons under the scope of authority and responsibility of the Audit Committee and to hire or bring in specialist to assist in auditing or investigation. (2) Perform other jobs as assigned by the Board of Directors. The Audit Committee as at January 24, 2008 1) Ms. Tanya Sirivedhin Chairman and Independent Director 2) Mr. Pachara Yutidhammadamrong Member and Independent Director 3) Mr. Visut Montrivat Member and Independent Director 4) Ms. Chujit Niyamosot Secretary 2.1.4 The Nominating and Remuneration Committee Authority and Responsibility 1) Set policy, condition and procedure in nominating and fixing remuneration including other benefits for the directors and top executives. 2) Recommend overall policy concerning the fixing of remuneration and other benefits of the Bank. 3) Recruit and select applicants with qualifications according to rules and concerned laws. Present the applicants to the Board of Directors for consideration as directors or top executives. 4) Oversee that the size of the board of directors is justifiable and appropriate for the organization, including adjustment with the changing environment. 5) Activate the Board of Directors to select new director to replace the one that has been terminated according to the regulation. 6) Oversee that the directors and top executivesâ&#x20AC;&#x2122; remunerations are justifiable with their duties and responsibilities. 7) Establish guidelines for assessing the performance of the top executives. 8) Others duties as assigned by the Board of Directors. The Nominating and Remuneration Committee as at January 24, 2008 1) Mr. Sima Simananta Chairman and Independent Director 2) Mr. Santi Vilassakdanont Member and Independent Director 3) Mr. Suri Buakhom Member and Independent Director 4) Ms. Sumana Vonggapan Secretary

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.1.5 The Corporate Governance & Social and Environmental Responsibility Committee Authority and Responsibility 1) Present policy on corporate governance and social environmental responsibility of the Bank and its subsidiaries to the Board of Directors. 2) Oversee that the Bankâ&#x20AC;&#x2122;s operations complied with the principles of corporate governance stipulated by the regulatory agencies such as the Bank of Thailand, the Stock Exchange of Thailand and the Office of Securities and Exchange Commission Thailand together with bearing social and environmental responsibility. 3) Regularly review the Bankâ&#x20AC;&#x2122;s corporate governance & social and environmental policy to be in line with international practices and recommendations of concerned institutions. 4) Recommend Code of Best Practices of the Board of Directors or Board of Directors Charter as well as charters of all other committees set up, to the Board of Directors. 5) Recommend Code of Business Conduct and Code of Practices for executives and staffs of the Bank. 6) Encourage good corporate culture and participate in social and environmental activities for sustainable development which has to be understood and carried out at all levels. 7) Nominate sub-committee to do corporate governance and social environmental responsibility work. 8) Perform other tasks as assigned by the Board of Directors. The Corporate Governance & Social and Environmental Responsibility Committee as at January 24, 2008 1) Mr. Santi Vilassakdanont Chairman and Independent Director 2) Mr. Sima Simananta Director and Independent Director 3) Mr. Suri Buakhom Director and Independent Director 4) Mr. Dusit Nontanakorn Director and Independent Director 5) Mr. Suchart Dejittirut Secretary Detail of Change of Directorship Mr. Dusit Nontanakorn Took position on August 2, 2007

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

In addition, the Bank has appointed executives with knowledge and expertise to serve in various sub-committees. Their specific duty is to scrutinize key issues the Bank needed to give closer and sound supervision namely: • Executive Committee (Exec. Comm) Compose the overall policy of the Bank covering credit, liquidity management, investment in financial and capital markets, interest rates, foreign exchange rates, products and other activities. This committee meets on a weekly basis. • Risk Management Committee (RMC) Formulate policy and strategy in managing all types of risks. Meeting is held at least once a month and reports will be briefed to the Audit Committee every month and to the Board of Directors every quarter for acknowledging or approval. • Assets and Liabilities Management Committee (ALCO) Concern with formulating strategy of Balance Sheet Management by recommending strategy and tools to be used for investment, interest rate and returns on loans and deposits, FX rates and liquidity, in addition to using analytical tools to control liquidity and interest rates. ALCO meets at least once a month and reports are presented to the Board of Executive Directors for acknowledgement and or for approval. • Investment Committee (IC) Manage investment of equity and debt instruments in the trading book. Approval of investment has to be within the limits set by the Board of Directors. Management and risk control of such investment must be in accordance with policy and the target of the Bank. • Credit Scrutiny Committee Scratinize Credit, manage credit approval and debt restructuring, sales of non-performing assets and underwriting or investment of debt instruments except for debt instruments issued by government, Bank of Thailand or other state enterprise guaranteed by Ministry of Finance.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.2 Nominating Directors and Executives

2.2.1 Selection of Directors The Bank has appointed the Nominating and Remuneration Committee to select and scrutinize applicant nominated for director. Such person must be qualified and not forbidden by law to be director of commercial bank or securities company as prescribed by the Bank of Thailand, the Office of the Securities and Exchange Commission and other authorities concerned. The candidate must also have the required qualifications, skills, knowledge, competency and experience as required by the Bank for the Board of Directors to submit to the shareholders’ general meeting. After approval of the appointment, the responsible business unit will proceed with the registration of director change and/or report to the units concerned within the specified time. Directors who completed their term of office may be re-elected. In addition, the Bank organizes orientation for directors to inform them of their role, duty and responsibility as well as various rules and policies needed for the understanding of the Bank’s operation. 2.2.2 Appointment of Director There are two cases: Case 1: Appointment of new director to replace those who completed his or her term of office will be done in the shareholders’ general meeting. Director who completes his/her term may be re-elected. Case 2: Appointment of director to replace those who left the office before completion of term shall be made by the Board of Directors with voting of no less than three-fourths of the subsisting directors. Qualified person without any forbidden traits will be selected as director and will stay in office only for the remaining tenure of the Director who left. 2.2.3 Rights of Minority Shareholders in Appointment of Director The general meeting of shareholders shall elect director on the following criteria: 1) One share equals one vote except preferred shares with provision of condition to have less voting right than ordinary shareholder. 2) Each shareholder may exercise all the votes to elect one person or several persons but is not entitled to divide the votes for any particular person. 3) Persons receiving the highest votes in descending order shall be elected. The number to be elected depends on the vacancy at that time. In the event of a tied vote for the last opening, the Chairman of the general meeting shall cast the deciding vote. In addition the Bank allows shareholders to add agenda including naming of qualified applicant as director through the Bank’s website from October 1 to December 31 of each year prior to the general meeting. The named applicant will be scrutinized by the Nominating and Remuneration Committee and the Board of Directors. Result will be notified through the website and that of the Securities Exchange of Thailand in March of every year and will also be notified again on the date of shareholders’ general meeting.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.2.4 Selection of the President The Bank has complied with the Standard Qualifications for Directors and Employees of State Enterprise Act B.E. 2518 (1975) and any following amendments in holding a transparent process of selection. A public announcement will be made for the post of the President giving an opportunity for those who have knowledge, competency and experience in the management of large organization to present themselves. Then the Nominating and Remuneration Committee will select the appropriate person. 2.2.5 Selection of Group Executives The Nominating and Remuneration Committee will nominate in-bank persons with knowledge and competency relating to the work under consideration. If the Committee is unable to find appropriate person within the Bank, it will nominate outsiders with vision, knowledge and competency in managing banking business amid the currently changing environment and high competition.

2.3 Directors Orientation

The Bank organizes Directors Orientation for newly appointed Directors to inform them about business plan, products and services, capital and shareholding structure, organization structure and key legal issues necessary for performing the duty of Director of a registered company. For 2007 orientation was given to Mr. Dusit Nontanakorn, the only new director. The presented topics covered 1) Fire escape plan of Nana Nua Building 2) Composition of the Board of Directors as well as the Board meeting schedules 3) Calendar and agenda for the Board of Directors meeting 4) Standard agenda 5) Relevant laws 6) Capital and shareholding structure, certification letter, Memorandum of Association, Articles of Association and minutes of the shareholdersâ&#x20AC;&#x2122; meeting 7) Assessment of enterprise board of directors by the Thai Institute of Directors Association 8) Credit rating 9) D & O insurance coverage for directors and executives 10) Audit results by the Bank of Thailand 11) Operational progress according to audit reports of the Bank of Thailand 12) Financial institution supervision under Basel II framework. 13) Business Plan of the Bank 14) KTB Corporate War Room 15) Directorship in subsidiaries, affiliated and associated companies 16) Organization structure and executives list There are additional activities for the new director in accordance with Best Practice Code, namely site visits to - Departments in Head Office, Nana Nua building on July 19, 2007 and Sukhumvit building on August 2, 2007. - Company visit to Krungthai Card Pcl. on October 4, 2007.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.4 Assessment of the Board of Directors, President and Group Executives

2.4.1 Self-Assessment of the Board of Directors The Bank requires the Board of Directors to do self-assessment twice a year so as to reflect operation efficiency according to the principles of good oversight. The self-assessment is divided into three types: self-assessment of the entire Board of Directors, self-assessment of individual Director and inter-assessment of individual Director. 1) Self-assessment of the entire Board of Directors consists of four assessments namely Board Policy, Board Composition, Board Practices and Board Meeting. In 2007 social and environmental responsibility was another assessment added. In 2007, the overall assessment for the four areas were excellent at 92.6 and 90.5 percent for first and second time respectively. Most of the Directors were of the opinion that the number of Directors was appropriate for the business size and the number of Independent Directors was more than half the total number of Directors making it large enough to oversee the material issues prudently. 2) Self-assessment of individual Director covers six areas namely Accountability, Responsibility, Equitable Treatment, Transparency, Vision to Create Long Term Value and Ethics. In 2007, the overall assessments for the six areas were excellent at 98.4 and 97.6 percent for the first and second assessment respecively. The majority of Directors expressed their opinion that every Director had to have their accountability for the accuracy and completeness of the financial reports and the general information disclosed to the stakeholders on an equitable treatment basis. 3) Inter-assessment of individual director comprises questions that support the principles of good oversight whereby Directors are able to express their opinions that are useful to the stakeholders, such as opinions and recommendations that do not contradict the best practices yet are beneficial to the Bank, independent and creative expression of opinions, useful information for the Boardâ&#x20AC;&#x2122;s decisionmaking, and responsibility for the stakeholders that will lead to accurate and equitable treatment. In 2007, the overall assessments were excellent at 99.4 and 98.7 percent for the first and second assessment respectively. The majority of the Directors felt that the recommendations of each Director helped to support good practices and useful to the Bank. Besides, the Directorsâ&#x20AC;&#x2122; opinions were independent and creative in various perspectives that will lead to right treatment. The Bank concluded the assessment results to all the Directors for acknowledgement as a move toward creation of good corporate governance within the Bank, a stable and continued growth with efficient, transparent and fair management that will bring confidence to all concerned.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.4.2 Assessment of the President The Bank continued to adopt the same guidelines and criteria for assessment of the President as in 2006, with two assessment annually during January-June and July-December of each year. Procedures as follows: 1) The Nominating and Remuneration Committee will assess the performance by comparing it with the Key Performance Indicator (KPI) as specified in the strategy and targets each year. 2) The Nominating and Remuneration Committee submits the assessment to the Board of Director for approval. 3) The Nominating and Remuneration Committee informs the President of the assessment. 2.4.3 Assessment of Group Executives The Bank requires assessment of Group Executives twice a year during January-June and JulyDecember of each year in the same manner as the assessment of the President. 1) The Group Executive Performance Assessment Committee will assess the performance of Group Executives as follows: (1) Compare the performance under consideration with the Key Performance Indicator (KPI) that is in line with the strategy and target of each year as agreed upon with the President (70 percent weighted). (2) Management competency scores assessed by supervisor and colleagues (30 percent weighted). 2) The Group Executive Performance Assessment Committee submits the assessment to the Nominating and Remuneration Committee for approval. 3) The Nominating and Remuneration Committee submits the assessment further to the Board of Directors for approval. 4) The Nominating and Remuneration Committee informs the Group Executives of their assessments.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.5 Shareholding of the Board of Directors and Executives as at December 31, 2007

Name

Position

No. of Shares

Family Relationship with Other Executives

Chairman Vice Chairman and Chairman of the Board of Executive Directors Director and Executive Director Chairman of the Corporate Governance & Social Environmental Responsibility Committee, Member of the Nominating and Remuneration Committee and Independent Director

0 0

0.000000 0.000000

- -

0 0

0.000000 0.000000

- -

Mr. Suri Buakhom Member of the Nominating and Remuneration Committee, Member of the Corporate Governance & Social and Environmental Responsibility Committee and Independent Director Ms. Tanya Sirivedhin Chairman of the Audit Committee and Independent Director Mr. Pachara Yutidhammadamrong Member of the Audit Committee and Independent Director Mr. Sima Simananta Chairman of the Nominating and Remuneration Committee, Member of the Corporate Governance & Social and Environmental Responsibility Committee and Independent Director Dr. Jamlong Atikul Executive Director Mr. Visut Montrivat Member of the Audit Committee and Independent Director

0.000000

0 80,276

0.000000 0.000718

- -

Mr. Suparut Dr. Chaiyawat Mr. Aswin Mr. Santi

Kawatkul Wibulswasdi Kongsiri Vilassakdanont

KTB Shares Held

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.5 Shareholding of the Board of Directors and Executives as at December 31, 2007 (continued)

Position

No. of Shares

Family Relationship with Other Executives

Member of the Corporate Governance Social and Environmental Responsibility Committee and Independent Director

0.000000

Mr. Apisak Tantivorawong Dr. Pongsathorn Siriyodhin

President and Executive Director First Senior Executive Vice President-Managing Director

0.000000

Mr. Sahas

Senior Executive Vice President-Managing Director

0.000000

Mr. Wanchai Thanittiraporn

Senior Executive Vice President-Managing Director

0.000000

Ms. Kittiya

Todhanakasem

Senior Executive Vice President-Managing Director

0.000000

Mr. Sayan

Satangmongkol

Senior Executive Vice President-Managing Director

0.000000

Ms. Nongnutch Thienpaitoon

Senior Executive Vice President-Managing Director

0.000000

Mr. Somgiat Sangsurane

Senior Executive Vice President-Managing Director

0.000000

Mr. Boonlers Srichareon

Senior Executive Vice President-Managing Director

770

0.000007

Ms. Sumana Vonggapan

Senior Executive Vice President-Managing Director

0.000000

Mr. Preecha Phukham

Senior Executive Vice President-Managing Director

0.000000

Ms. Chujit

First Executive Vice President – Managing Director

12,054

0.000108

First Executive Vice President – Managing Director

0.000000

Mr. Dusit

Name

Nontanakorn

Treetipbut

Niyamosot

Ms. Sompis Charoenkiatikul

KTB Shares Held

Note: Mr. Visut Montrivat’s shares are all held by his wife Ms. Nantiya Montrivat. Ms.Chujit Niyamosot holds 8,300 shares and her spouse, Mr.Vinai Niyamosot 3,754 shares.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Analysis of Operating Performance

and Financial Standing

The Bank has changed the accounting policy for recording investments in subsidiaries and associated companies in the Bank’s financial statements from equity method to cost method in the fourth quarter ending December 31, 2007 to be in compliance with the new requirement of the Accounting Standard No. 44. In this regard, the Bank also made retroactive revision of financial statements which showed comparison between the two. Investments in subsidiaries and associated companies shown in the Bank’s financial statements used the historical cost as the starting cost. Such policy change caused the net income in the Bank’s financial statements not equal to the net income in the consolidated financial statements. For the year ended December 31, 2007, the consolidated financial statements showed net income of Baht 6,407 million while the Bank’s financial statements registered net income of Baht 6,113 million, with the following explanations: 1. Such recording change resulted in the Bank’s financial statements for the years ended December 31, 2007 and 2006 a decrease in net income by Baht 294 million and Baht 280 million respectively (decreased by Baht 0.026 per share and Baht 0.025 per share respectively) since the Bank’s financial statements excluded profit from investment using equity method for recording. 2. Impact on other items in the Bank’s financial statements for the year ended December 31, 2007 was a decrease in investments in subsidiaries and associated companies and shareholders’ equity of Baht 1,491 million. Cumulative results of this accounting principle change were shown in “Adjusted Items from Changes of Investments Policy” in the Bank’s statement of changes in shareholders’ equity. However, such accounting policy change affected only the accounting items relating to investments in subsidiaries in the Bank’s financial statements with no impact on preparation of consolidated financial statements and the basic factors in doing business.

Analysis of Operating Performance (Consolidated Financial Statements) Overview

The Bank and its subsidiaries in 2007 made a profit before income tax of Baht 7,476 million, down from prior year by Baht 6,641 million or 47.0 percent. After deduction of income tax of Baht 1,069 million, the Bank and subsidiaries had a net income of Baht 6,407 million, down from previous year by Baht 7,671 million or 54.5 percent. Profit before income tax and net income decreased sharply from those of prior year because the spread between interest received on loans and interest paid on deposits was reduced while provisioning for doubtful accounts was as high as Baht 19,575 million, up by 18.6 percent from prior year so as to meet the requirement of the International Accounting Standard No. 39 (IAS 39) including provisioning for losses from investment in collateralized debt obligation (CDO) in accordance with the prudent banking practice.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Operating Performance (Million Baht)

2007

Income before income tax Less Income tax Net Income

2006

7,476 1,069 6,407

14,117 39 14,078

Change Amount

(6,641) 1,030 (7,671)

(47.0) 2,641.0 (54.5)

â&#x20AC;˘ Net Interest and Dividend Income

In 2007 net interest and dividend income of the Bank and subsidiaries stood at Baht 44,038 million, down from previous year by Baht 1,849 million or 4.0 percent due to the decline of subsidiariesâ&#x20AC;&#x2122; interest income and dividend from loans amounting to Baht 54,052 million, down from prior year by Baht 1,158 million or 2.1 percent. This was because when interest rate was on a downward trend, interest rate on loans dropped faster than those on deposits. At the same time, the interest income and dividend from interbank and money market items registered Baht 6,197 million, down from previous year by Baht 267 million or 4.1 percent while interest expense amounted to Baht 22,139 million, up from prior year by Baht 734 million or 3.4 percent due to the increase in average deposits and bills of exchange. As a result, the Bank and subsidiaries in 2007 had net interest margin of 3.8 percent, down from 4.0 percent in the prior year and average net interest margin dropped to 3.6 percent from 3.9 percent in the previous year.

Net Interest and Dividend Income (Million Baht)

Interest and dividend income - Loans - Interbank and money market items - Investments Less Total interest expense Net interest and dividend income Net interest margin (performing assets) (%) Net interest margin (assets) (%)

2007

2006

66,177 54,052 6,197 5,928 22,139 44,038 3.8 3.6

67,292 (1,115) 55,210 (1,158) 6,464 (267) 5,618 310 21,405 734 45,887 (1,849) 4.0 3.9

Change Amount

(1.7) (2.1) (4.1) 5.5 3.4 (4.0) (0.2) (0.3)

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Percentage Share of Non-Interest Income %

2006

2007

• Non-Interest Income

In 2007, non-interest income amounted to Baht 11,033 million, up from the previous year by Baht 335 million or 3.1 percent. This was accounted by the increase of fees and service income by Baht 592 million or 9.1 percent thus resulting in increase of percentage share of fees and service income to non-interest income to 64.2 percent from 60.7 percent in the prior year. Net gain from investments Share of gain from investments on equity method Fees and service income Gain on exchange Reversal of loss from impairment of properties foreclosed and land Other income

• Non-Interest Expenses

Percentage Share of Non-Interest Expenses %

2006

2007

In 2007 non-interest expenses registered Baht 28,020 million, up from the prior year by Baht 2,054 million or 7.9 percent. This was mainly attributed to the increase in personnel expenses and premises and equipment expenses to cater for business expansion. As a result, the cost to income ratio in 2007 rose to 51.5 percent from 45.2 percent in 2006 following the overall industry.

Personnel expenses Premises and equipment expenses Taxes and duties Fees and service expenses Directors’ remuneration Contribution to the Financial Institutions Development Fund Other expenses

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

• Bad Debt and Doubtful Accounts Expenses

In 2007 the Bank and subsidiaries set aside provision for bad and doubtful accounts of Baht 19,575 million, up from the prior year by Baht 3,073 million or 18.6 percent. On the Bank side a provision of Baht 300 million per month had been set for bad and doubtful accounts and during the year an additional provision of Baht 15,900 million was set so allowance for doubtful accounts would be adequate as prescribed in the IAS 39 requirement. Such provision for doubtful accounts included provisioning for loss from CDO investment too.

• Investment Expenses

In 2007 the capital asset expenses in the Bank’s financial statements (including land, premises and equipment but excluding revaluation) amounted to Baht 1,217 million. As for 2008, the Bank and subsidiaries has a budget for capital asset expenses of Baht 6,379 million, most of which is for network expansion and installation of new electronic service points. Moreover, several IT projects are in the pipeline to service the clients such as Customer Relationship Management (CRM), Processing Bank and Mobile Banking projects.

Analysis of Financial Standing • Total Assets

As at December 31, 2007 the total assets registered Baht 1,212,722 million, up from the prior year-end by Baht 7,894 million or 0.7 percent with net interbank and money market items amounting to Baht 76,008 million, down from the previous year-end by Baht 10,121 million or 11.8 percent. Securities purchased under resale agreement amounting to Baht 600 million, down from the prior year-end by Baht 20,600 million or 97.2 percent. Meanwhile, net loans and accrued interest receivable amounted to Baht 922,760 million, up from the prior year-end by Baht 34,119 million or 3.8 percent. Details as follows:

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Investments in Securities as at year-end 2007 posted Baht 110,124 million, declining from the prior year-end by Baht 3,454 million or 3.0 percent, as a result of decrease in net current investments. The Bank had no concentration of investments in any companies for more than 10 percent of investments value at cost (excluding investments in mutual funds, government and state enterprise bonds) while it diversified risks through appropriate investments in respective securities in accordance with the Bank policy focusing on investments in securities bearing acceptable and manageable risk. Moreover, the Bank already set aside adequate allowance for revaluation and impairment of securities in accordance with the accounting standards for investments.

Investments in Securities

December 31, 2007 December 31, 2006

Net current investments Net long-term investments Net investments in subsidiaries and associated companies Total net investments

Amount

21,251 83,532

19.3 75.9

5,341 110,124

Amount

(Million Baht)

Change Amount

29,049 79,864

25.6 70.3

(7,798) 3,668

(26.8) 4.6

4.8 4,665 100.0 113,578

4.1 100.0

676 (3,454)

14.5 (3.0)

Net Investments Classified by Investment Type

Equity securities (including mutual funds) Investments in subsidiaries and associated companies Foreign debt securities Private enterprise debt securities Government and state enterprise securities

December 2006

December 2007

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Loans as at December 31, 2007 totaled Baht 954,571 million, up from the prior year-end by Baht 31,892 million or 3.5 percent. Most of the loans were manufacturing and commercial loans.

Percentage Shares of Loans Classified by Size and Type (Bankâ&#x20AC;&#x2122;s Financial Statements) December 31, 2007

Size of loans Less than Baht 5 million Baht 5 â&#x20AC;&#x201C; 300 million More than Baht 300 million Type of loans Loans Bill of exchange Overdraft

(Million Baht)

December 31, 2006

21.4 25.5 53.1

19.8 26.2 54.0

57.2 31.8 11.0

55.7 33.5 10.8

Loans Classified by Business Type

Agriculture & mining Manufacturing & commerce Real estate & construction Public utilities & services Housing loans Others

December 2006

December 2007

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Assets Quality

Loans Classification The slackening economy in 2007 further from the prior year caused assets quality of certain classes to decline. They were special mention and doubtful of loss loans while substandard and doubtful loans enjoyed better quality compared to that of the prior year.

Loans Classification

December 2006

December 2007

Pass Special mention Substandard Doubtful Doubtful of loss

Non-Performing Loans (NPLs) As at December 31, 2007 the Bank and subsidiaries carried NPL of Baht 96,164 million, rising from the prior year-end by Baht 6,472 million or 7.2 percent. As a result, NPL to total loans increased to 9.6 percent from 9.3 percent as at prior year-end with net NPL as at December 31, 2007 amounting to Baht 67,533 million, an increase from the prior year-end of Baht 8,492 million or 14.4 percent. This caused net NPL to total loans to rise to 6.9 percent from 6.3 percent as at prior year-end. The Bankâ&#x20AC;&#x2122;s NPL as at December 31, 2007 registered Baht 96,084 million, up from prior year-end by Baht 6,392 million or 7.1 percent, thus causing NPL to total loans to rise to 9.5 percent from 9.2 percent as at previous year-end. While net NPL stood at Baht 67,492 million, up by Baht 8,451 million or 14.3 percent, increasing net NPL to total loans to 6.9 percent from 6.3 percent at prior year-end.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Non-Performing Loans Million Baht

Net Non-Performing Loans %

Million Baht

December 2006 December 2007

Volume of NPL

Ratio of NPL to total loans

Allowance for Doubtful Accounts As at December 31, 2007 the Bank and subsidiariesâ&#x20AC;&#x2122; allowance for doubtful accounts (including allowance for troubled debt restructuring) posted at Baht 36,968 million, down from the prior year-end of Baht 2,555 million or 6.5 percent due to write-off of bad debts as much as 24.7 percent more from that of last year. Troubled Debt Restructuring (TDR) As at year-end 2007, TDR agreements were made for a total of 5,661 cases with book value of debt before TDR of Baht 18,338 million, a decrease by 4,372 cases and Baht 25,382 million from prior year-end respectively. Interest and principal totaling Baht 7,171 million was repaid, down from prior year-end by merely Baht 1,621 million or 18.4 percent, and additional loans were made in the amount of Baht 2,115 million, up by Baht 307 million or 17.0 percent while bad debts from TDR stood at only Baht 216 million, down from prior year-end by Baht 7 million or 3.1 percent.

Troubled Debt Restructuring (Bankâ&#x20AC;&#x2122;s Financial Statements)

December 31, 2007 December 31, 2006

(Million Baht)

Change (%)

No. of Book Value No. of Book Value No. of Book Value Cases of Debt Cases of Debt Cases of Debt before TDR before TDR before TDR

Asset transferred Debt-equity swap Loan terms modification Combination of restructuring Total

15 - 1,108 4,538 5,661

135 18 - - 4,788 1,571 13,415 8,444 18,338 10,033

803 - 7,985 34,932 43,720

(16.7) - (29.5) (46.3) (43.6)

(83.2) - (40.0) (61.6) (58.1)

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

As at December 31, 2007 the Bank had outstanding balance of Baht 74,970 million for a total of 26,420 cases of restructured debtors. Among the outstanding debt, 539 cases for Baht 4,984 million were in the process of monitoring under new terms and conditions. Properties Foreclosed As at year-end 2007 the Bankâ&#x20AC;&#x2122;s non-performing assets stood at Baht 34,712 million, up from prior year-end by Baht 604 million or 1.8 percent, most of which resulted from auctioned purchase of loan collateral and acceptance of asset transfer for debt repayment to solve NPL problem. Such operation would assist the Bank to earn income from NPA sale as well. In 2007, the Bank made a profit of Baht 796 million from NPA sale, increase of Baht 128 million or 19.2 percent from prior year-end.

â&#x20AC;˘ Total Liabilities

As at December 31, 2007 total liabilities in consolidated financial statements posted Baht 1,117,062 million, up from prior year-end by Baht 4,962 million or 0.4 percent with deposits of Baht 1,000,671 million, up by Baht 34,234 million or 3.5 percent, mainly from saving deposits. While total borrowings stood at Baht 50,382 million, down by Baht 26,962 million or 34.9 percent since all short-term debentures reached maturities.

Deposits Classified by Type

December 31, 2007 December 31, 2006 Deposit Type

Demand deposits Savings deposits Time deposits - Less than 6 months - 6 months to less than 1 year - 1 year and over Total deposits

Amount

75,130 489,338 436,203 196,386 63,938 175,879 1,000,671

(Million Baht)

Change

Amount

7.5 48.9 43.6 19.6 6.4 17.6 100.0

77,801 448,674 439,962 197,894 81,265 160,803 966,437

8.1 46.4 45.5 20.5 8.4 16.6 100.0

(2,671) (3.4) 40,664 9.1 (3,759) (0.9) (1,508) (0.8) (17,327) (21.3) 15,076 9.4 34,234 3.5

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

• Shareholders’ Equity

As at December 31, 2007 the shareholders’ equity in consolidated financial statements amounted to Baht 95,660 million, increasing from prior year-end by Baht 2,932 million or 3.2 percent due to the following key changes: Revaluation surplus (deficit) on investments posted Baht 384 million, up from the prior year by Baht 2,234 million or 120.8 percent. Share book value as at December 31, 2007 was Baht 8.55 per share, up from Baht 8.29 per share in 2006 by 3.1 percent.

• Off-Balance Sheet Items: Contingencies

As at December 31, 2007 the Bank and subsidiaries’ total contingencies in the consolidated financial statements registered Baht 342,959 million, an increase from the prior year-end by Baht 47,860 million or 16.2 percent. Such change was in accordance with the normal operation.

Off-Balance Sheet Items: Contingencies

December 31, 2007

Avals to bills and guarantees of loans Liabilities under unmatured import bills Letters of credit Other contingencies Total contingencies

6,128 127 16,105 320,599 342,959

• Liquidity Policy, Sources and Uses of Funds

(Million Baht)

December 31, 2006

Amount

7,164 46 21,632 266,257 295,099

(1,036) 81 (5,527) 54,342 47,860

(14.5) 176.1 (25.6) 20.4 16.2

Change

Liquidity The Bank’s policy on liquidity management policy was to have sources of funds ready for business expansion. The Assets and Liabilities Management Committee managed the liquidity of the Bank in line with the requirements prescribed by Bank of Thailand. As at December 31, 2007 total loans to deposits in the consolidated financial statements was 95.4 percent, slightly down from 95.5 percent as at the prior year-end. However, if included bills of exchange, a type of savings, with deposits, total loans to deposits ratio as at December 31, 2007 would be 94.0 percent. Sources and Uses of Funds Major sources of funds for 2007 consisted of 82.5 percent of deposits and others such as shareholders’ equity, borrowings through debt securities, and interbank borrowing. The Bank used capital funds of as much as 76.1 percent in lending (net) while using the remaining 23.9 percent in investment, interbank and money market items, NPA and others.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Sources of Funds

Uses of Funds

December 2006

December 2007

Deposits Interbank & money market items Loans Others Shareholdersâ&#x20AC;&#x2122; equity

Loans NPA (Properties foreclosed) Others Interbank & money market items Investments

Key Sources and Uses of Funds

December 31, 2007 December 31, 2006

Loans - Not over one year - Over one year Less Unearned discounts Total loans* Deposits - Not over one year - Over one year Total deposits

Amount

(Million Baht)

Change

Amount

404,409 551,540 (1,378) 954,571

42.4 389,924 57.8 533,053 (0.2) (298) 100.0 922,679

42.2 57.8 (0.0) 100.0

14,485 3.7 18,487 3.5 (1,080) (362.4) 31,892 3.5

940,040 60,631 1,000,671

93.9 901,622 6.1 64,815 100.0 966,437

93.3 6.7 100.0

38,418 (4,184) 34,234

Note: * exclude accrued interest receivable and interbank and money market loans

Amount

4.3 (6.5) 3.5

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

• Capital Fund to Assets Ratio

The Bank’s statutory capital fund as at December 31, 2007 amounted to Baht 128,500 million, up from the prior year by Baht 7,947 million or 6.6 percent. The risk weighted BIS ratio equaled 15.16 percent, with tier 1 capital of Baht 96,718 million or 11.41 percent of the risk weighted BIS ratio which was higher than the requirement of BOT of 8.5 and 4.25 respectively. Details as follows:

Capital Fund to Risk Assets (Bank’s Financial Statements)

December 31, 2007 December 31, 2006 Amount

Tier-1 Capital Fund 96,718 Tier-2 Capital Fund 31,782 Total capital fund before less items 128,500 Less Revaluation deficit (net) on investments - in available-for-sale equity securities Total capital fund 128,500 Risk weighted assets 847,490

Amount

11.41 93,497 3.75 29,284 - 122,781 - 2,228 15.16 120,553 - 859,023

(Million Baht)

Change Amount

10.88 3,221 3.15 2,498 - 5,719 - (2,228) 14.03 7,947 - (11,533)

3.4 8.5 4.7 100.0 6.6 (1.3)

Note: Tier-2 capital to total assets was obtained from total capital fund ratio less Tier-1 capital fund

Analysis of Cash Flow Statement For the year ended December 31, 2007 the cash and cash equivalent items in the consolidated financial statements stood at Baht 21,456 million, up by Baht 2,822 million or 15.1 percent from year-end 2006 mainly due to the following reasons: 1. Net cash provided by operating activities of Baht 11,429 million, deriving from operation income before changes in operating assets and liabilities of Baht 27,686 million and the Bank had changed major assets and liabilities namely deposits increase of Baht 34,234 million, securities purchased under resale agreements decrease of Baht 20,600 million and interbank and money market items (assets) decrease of Baht 10,163 million while net loans rose by Baht 53,953 million and short-term borrowings dropped by Baht 26,991 million. 2. Net cash used in investment activities amounting to Baht 3,443 million mainly caused by net purchase of available for sale securities of Baht 8,095 million and purchase of premises and equipment of Baht 2,213 million while net cash received from disposal of held to maturity debt securities amounted to Baht 7,272 million. 3. Net cash used in financing activities amounting to Baht 5,164 million mainly from cash paid on ordinary share and preferred share dividends amounting to Baht 5,705 million.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

The Bank’s Performance from 2003-2007 Consolidated Items

Amount (million baht) Change (%) จำนวน 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003

Operating Performance Interest and Dividend Income 66,177 67,292 50,061 45,929 40,778 (1.66) Interest Expense 22,139 21,405 11,445 13,361 17,218 3.43 Net Interest and Dividend Income 44,038 45,887 38,616 32,568 23,560 (4.03) Bad Debts and Doubtful Accounts 19,575 16,502 6,438 8,349 3,542 18.62 Net Interest and Dividend Income after Bad Debts and Doubtful Accounts 24,463 29,385 32,178 24,219 20,018 (16.75) Non-Interest Income 11,033 10,699 7,641 9,249 7,897 3.12 Non-Interest Expenses 28,020 25,966 22,517 22,347 19,131 7.91 Income (Loss) before Income Tax 7,476 14,117 17,303 11,121 8,785 (47.04) Income Tax Expense 1,069 39 4,279 27 80 2,641.03 Minority Interests in Net (Income) Loss 0.00 0.00 0.04 0.08 (0.24) - Net Income (Loss) 6,407 14,078 13,024 11,094 8,705 (54.49) Financial Standing Interbank and Money Market Items 76,008 86,129 69,132 50,221 36,430 (11.75) Securities Purchased under Resale Agreements 600 21,200 48,210 56,200 13,000 (97.17) Net Investments 110,124 113,578 103,425 69,695 82,746 (3.04) Loans 954,571 922,679 892,066 935,204 978,372 3.46 Allowance for Doubtful Accounts and Revaluation Allowance for Debt Restructuring 36,968 39,523 41,125 63,359 59,454 (6.46) Net Loans and Accrued Interest Receivable 922,760 888,641 855,953 880,378 930,149 3.84 Net Properties Foreclosed 34,718 34,110 33,786 31,634 21,472 1.78 Total Assets 1,212,722 1,204,828 1,162,748 1,148,903 1,134,501 0.66 Total Deposits 1,000,671 966,437 982,971 1,003,122 1,005,355 3.54 Interbank and Money Market Items 39,601 48,534 52,454 42,281 34,947 (18.41) Borrowings 50,382 77,344 20,451 10,001 1 (34.86) Total Liabilities 1,117,062 1,112,100 1,080,116 1,073,046 1,059,566 0.45 Minority Interests 0.00 0.00 0.67 0.70 0.78 - Total Shareholders’ Equity 95,660 92,729 82,631 75,857 74,936 3.16

34.42 9.00 12.63 2.45 87.02 (14.34) (22.40) (14.19) 18.83 18.57 38.23 19.38 156.32 (22.89) 135.71 75.87 (8.68) 32.86 20.99 12.96 40.02 (17.39) 17.12 (4.79) 15.32 0.76 16.81 6.34 (18.41) 55.59 26.59 9.46 (99.09) 15,748.15 (66.25) 370.59 (100.00) (50.00) 133.33 (2,300.00) 8.09 17.40 27.44 8.69 24.59 37.66 37.86 (74.20) (56.03) (14.22) 332.31 617.44 9.82 48.40 (15.77) 38.14 3.43 (4.61) (4.41) 15.13 (3.90) (35.09) 6.57 (6.99) 3.82 (2.77) (5.35) 16.40 0.96 6.80 47.33 39.72 3.62 1.21 1.27 7.19 (1.68) (2.01) (0.22) 4.88 (7.47) 24.06 20.99 69.13 278.19 104.49 1,000,000 (98.59) 2.96 0.66 1.27 6.67 (100.00) (4.29) (10.26) 65.96 12.22 8.93 1.23 15.05

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

The Bank’s Performance from 2003-2007 (Continued) Consolidated Items Financial Ratios Profitability Ratios Net Interest Margin (%) Return on Average Assets (%) Return on Average Equity (%) Cost to Income Ratio (%) Net Income (Loss) / No. of Employees (million baht)* Financial Policy Ratios Loan / Deposit (%)

Amount (million baht) Change (%) จำนวน 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003

3.64 0.53 6.80 51.49

3.88 1.19 16.06 45.22

3.34 1.13 16.44 48.93

2.85 0.97 14.71 55.06

0.38

0.89

0.87

0.75

95.39 11.68 7.89

95.47 11.99 7.70

90.75 13.07 7.11

93.23 14.15 6.60

97.32 14.14 6.61

10.88 14.03

8.50 12.10

8.24 10.92

8.20 9.20

94.51 9.22

95.17 10.32

96.30 12.35

97.11 7.96

4.27 44.06

4.60 42.12

6.76 52.93

6.07 74.84

Liabilities / Shareholders’ Equity (times) Shareholders’ Equity / Assets (%) Capital Adequacy Ratios BIS Tier 1 Capital Ratio (%) 11.41 BIS Total Capital Ratio (%) 15.16 Asset Quality Ratios* Earning Assets / Total Assets (%) 94.14 NPL / Loans (%) 9.53 Allowance for Doubtful Accounts / Total Loans (%) 3.85 Allowance for Doubtful Accounts / NPLs (%) 38.43 Other Items NPLs (million baht) 96,164 Book Value per Share (baht) 8.55 P/E Ratio (times) 17.64 Price per Book Value (times) 1.18 No. of Employees (persons)* 16,110 No. of Branches (branches)* 762 Note: * KTB data only

2.15 0.79 12.43 62.90 0.59 (57.30)

89,692 97,635 119,693 79,443 8.29 7.39 6.78 6.70 9.22 9.63 7.58 20.94 1.46 1.50 1.32 1.95 15,445 14,952 14,811 14,873 695 643 619 616

7.22 3.14

4.31 9.64

2.30

16.00

(8.14) (18.43) 12.18 9.00

3.30 8.09

0.95 3.88

27.12

11.32

50.67 (26.34) 1.19 15.12

(0.42) 0.49

(0.76) (0.16)

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Risk Factors

and Risk Management

The Bank is well aware that, in conducting banking business amidst fast changing environment in this globalization era, not only good corporate governance is needed but an efficient risk management is also necessary. Hence, the Bank has fully devoted its effort to develop an integrated risk management process covering all risk types within the Bank. Enterprise Risk Management (ERM) under COSO Framework (COSO II) is adopted for managing risk in all the business units. The key principle is to link risk management process with the strategic plan and business opportunities of the Bank. In addition risk management policy was written up together with risk management manual that includes risk map, key risk indicators, risk appetite and risk tolerance for all the key risk areas namely credit risk, market risk, strategic risk and operational risk. Moreover, training was organized for the senior management to gain an overview of risk management that would enhance their efficiency of overseeing the Bankâ&#x20AC;&#x2122;s aggregate risk. For the staffs practical knowledge of enterprise risk management was given so that they are all aware of the importance of risk management and have the same understanding of terminology, objectives and follow procedures of the same standard across the Bank.

Risk Management Structure

Risk management structure of the Bank is comprised of committees including the Board of Directors, the Board of Executive Directors, the Audit Committee and the Executive Committee, and several other subcommittees consisting of senior management responsible for formulation of policies and strategies on risk management as follows: Risk Management Committee (RMC) is responsible for formulating policies and strategies on risk management. Assets and Liabilities Management Committee (ALCO) is responsible for formulating short-term and long-term strategies with respect to investment, pricing, liquidity risk and interest rate risk, as well as approving credit, monitoring and assessing the Bankâ&#x20AC;&#x2122;s operation in order to set up risk controls which eventually lead to more profit for the Bank.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Investment Committee (IC) is responsible for formulating investment framework and setting criteria, investment limit and approving investment of equity securities and debt securities in order to keep risks within the investment policy and target of the Bank. Credit Scrutiny Committee is responsible for scrutinizing credit application, debt restructuring, disposing of non-performing assets, underwriting and investment in debt securities, as well as approving credit lines, debt restructuring and other credit transactions as prescribed by the Bank. Moreover, the Bank in 2007 enlarged the work scope of Operational Risk Management Department in the Risk Management and Corporate Governance Group to include responsibilities covering coordinating, monitoring and overseeing that risk management of all business groups is in line with the risk framework of the Bank. Also included is the responsibility of reporting risks to all risk-concerned committees. This department also serves as a consultant on enterprise risk management as well as enforces risk awareness to staffs of all levels that they will all have a part in risk management so the Bank can meet its set target and the stated mission. With these added responsibilities, Operational Risk management Department is renamed to Enterprise Risk Management Department.

Risk Management Principles

To attain an efficient risk management, the Bank has set up principles for various risks as follows:

1. Credit Risk

Currently, the Bank’s main income still derives from interest income of credit extension. Hence, credit transactions are of great importance to the Bank’s profitability. At the same time, these transactions carry high-risk from probability that borrowers might default the loan agreement or the Bank may not be fully repaid thus affecting income and capital fund. In addition, the Bank still bears the risk of borrowers not complying with the liabilities in the contract such as contingency of aval to bill, loan guarantee, import bills not reaching maturity, letter of credit and other contingencies. Measures and Risk Management Tools 1) Establish policy and manual on credit risk management to enable the Bank’s credit risk management to proceed in the same direction conforming to the supervision policy of the Bank of Thailand (BOT) as well as Basel II requirement. 2) Review and enhance the credit policy, credit approval authority and troubled debt restructuring as well as relevant operating procedures to support the Bank’s business operation under acceptable risk. 3) Monitor and report on credit approvals not conforming to the credit policy in order to control credit risk. 4) Enhance and develop credit risk management tools to be in line with the Bank’s guidelines for risk management and Basel II framework.

100

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5) Improve assessment of borrowers using credit scoring for Krung Thai Circle Loan and credit rating for individuals and real estate developer customers, to increase analysis efficiency that will reflect risk better. 6) Develop RAROC for approving corporate and medium sized loans on web base. 7) Conduct control self-assessment as prescribed by the Bank of Thailand and report to the Board of Directors with measures to remedy risks and to monitor performance in accordance with the action plan. 8) Boost efficiency of trouble debt restructuring work through classifying debtors into groups for better management and negotiate with all debtors enabling them to see the benefits of debt restructuring before taking legal action. 9) Develop skills and knowledge of credit for executives and credit officers rendering credit services using Omega Performance. 10) Train employees to have the right understanding about risks and risk management of Basel II framework so they are aware of its importance and jointly help to prevent risks. 11) Proceed with the Readiness Plan to comply with Basel II requirement that have begun since 2005 in continuation to 2007, namely cleansing customer information, collateral information, capital charge calculation and development of risk models. Despite unfavorable business environment and several risk factors in 2007, overall credit risk management was at an acceptable level. This was due to the dedicated continued credit risk management and enhanced measures adapted to the changing environment. Details as below: â&#x20AC;˘ Credit Concentration Risk As at year-end 2007, there was no significant credit concentration in any particular industry as most loans were diversified among consumption (housing loans and personal loans), manufacturing and public utilities sectors accounting for 20.71, 19.43 and 10.27 percent of the total loans respectively. This was attributable to the set up of industry concentration limit to prevent any significant credit concentration. â&#x20AC;˘ Asset Quality Risk The economic slowdown in 2007 adversely affected the asset quality to some extent. Non-Performing Loans (NPLs) increased from 9.22 percent of total loans in 2006 to 9.53 percent, most of which were old loans approved a few years ago, while new loans are not much affected. The Bank has taken up preventive measures such as instructing credit extension units not to allow new loan becoming NPL, to reduce NPLs within their responsibility every year and to closely monitor debtors before becoming NPL. In addition the Bank enhances authority for credit approval and troubled debt restructuring and speeds up the sale of Non-Performing Asset (NPA) by setting up NPA corner for interested people to see and also organizing NPA Grand Sale throughout the year.

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However, increasing NPLs increased the Bank’s provisioning for doubtful accounts. Meanwhile the Bank had to increase reserve too to meet the International Accounting Standard No. 39 (IAS 39) on recognition and measurement of financial instruments prescribed by BOT since late 2006. • Collateral Value Impairment Risk The Bank reviews collateral constantly to keep their values up-to-date in accordance with the requirement of the BOT. As most of the loans have property as collateral, their values are possible to impair following economic slowdown. Such measure would thus reduce collateral value impairment risk in a timely manner. Furthermore, the Bank could envisage the direction and trend of collateral value which will help in scrutinizing collateral of new loan appropriately and efficiently. Those collaterals seized by the Bank as nonperforming assets, allowance for collateral impairment under the IAS 39 had been provisioned as per details in the notes to the financial statements No. 3.7. • Guarantee and Aval Risk As at December 31, 2007 the Bank’s total contingencies from guarantee, borrowings, other guarantees, L/C issuance and aval to bill amounted to Baht 342,959 million, increase from Baht 295,099 million in 2006. The controls used included reviewing by the Legal Consultant Department prior to issuing letter of guarantee and strictly assessing customer’s payment ability in accordance with credit policy and the credit risk tools. Customer is also required to sign indemnification letter to the Bank specifying that such client would be responsible for losses incurred to the Bank from issuing such L/G. All these measures are enforced for the purposes of reducing risk from the client and reducing losses from insufficient collateral.

2. Market Risk

Market risk arises from volatility of interest rates, foreign exchange rates and securities prices in the capital market as a result of market changes which impact negatively on trading book and banking book and further on to income and capital fund. Hence, the Bank has attached great importance to market risk management with business unit independently from front office set up to closely monitor, manage and control market risk at all times.

Measures and Market Risk Management Tools

1) Management of risk affecting trading book position 1.1) Review market risk management policy and the threshold to be in line with the Bank’s strategy and market changes. 1.2) Use Value at Risk (VaR) to analyze market risk and control risk at an acceptable level when experiencing market changes. Besides, the Bank also assessed mark-to-market transactions in the trading book every day-end in order to see the impact from foreign exchange rate fluctuations that might negatively affect the Bank’s income and capital fund.

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1.3) Conduct Stress Testing along the criteria set by BOT in the Financial Sector Assessment Program (FSAP), and under the Bank’s own criteria as deemed appropriate with the structure and type of transaction, in order to determine losses when encountering crisis and to give warning in preparation of emergency plan to reduce or cater for damages in the future. 1.4) Communicate to the directors, management and staff members the understanding and awareness of market risk and realize the importance of its prevention as per guidance prescribed in the market risk policy. 1.5) Train human resources in market risk management and other related topics, so that they become competent in risk management and be able to manage risk efficiently. 2) Management of risk affecting banking book position 2.1) Prepare policy and manual on managing interest rate risk in the banking book and curb interest rate risk at a level acceptable to the Bank and in line with the volume of the Bank’s transactions per financial institution guideline on supervision of interest rate risk in banking book. 2.2) Setup earnings at risk limit to control the Bank’s risk related to anticipated income and interest rate at a specified period. Also included is net interest income sensitivity to keep losses at a level acceptable to the Bank. 2.3) Setup criteria for reporting interest rate risk in banking book both in normal situation and when over the limit to be able to request remedy guidelines or to curb the risk position to be within the set limit. With such measures and tools, the Bank was able to manage market risk to be within the appropriate levels as follows: • Risks Affecting Trading Book Risk affecting the Bank’s trading book was low considering from the VaR at 99 percent confidence level. VaR is the highest value of losses that the Bank could suffer when there is a change in the risk factors and this value is quite low as compared to the Bank’s capital fund. The VaR for each risk factor affecting trading portfolio was as follows: Interest Rate Risk VaR from the interest rate was still within the acceptable limit of the Bank. As interest rates in 2007 was on the downward trend, the Bank hence focused on investment in government debt securities. Thus risk was low and yields were rather definite. Foreign Exchange Risk Although the Baht in 2007 appreciated 8.4 percent against the US dollar, its fluctuation was lesser than that of 2006. Baht fluctuated between 33.3896 to 36.2335 per US dollar and averaging at Baht 34.6854 per US dollar. This enabled the Bank to control the daily foreign exchange trading efficiently both in spot and forward trading. VaR from exchange rate was still within the approved limit of the Bank.

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Price Risk Price risk for the equity securities that Bank invested was still within the acceptable limit, despite the Stock Exchange of Thailand was more volatile in 2007 than in 2006 especially impacts from subprime crisis in the United States that had spread globally including the Thai stock market as well. • Risks Affecting Banking Book Risks in the banking book often arise from mismatch of period between interest rate repricing and interest receiving. Such difference might reduce the Bank’s net interest income. Nevertheless, the overall market risk in banking book in 2007 was still low compared to the Bank’s capital fund.

3. Liquidity Risk

Liquidity risk is the risk resulted from the Bank’s inability to repay its liabilities and contingencies upon maturity since the assets cannot be liquidated or converted into cash, or sufficient fund cannot be acquired or could be acquired but at a cost not accepted. All these may have negative impact on the Bank’s earning and capital fund both at present and in the future. Liquidity risk also includes risk of not being able to unwind or offset the existing risk from the assets held, thus forcing the Bank to sell them at prices lower than cost as the assets on hand had low liquidity. Measures and Liquidity Risk Management Tools 1) Identify risk by looking at the short term liquidity risk from the daily position of the Treasury Department and overall liquidity risk from the liquidity monitoring report or the liquidity gap of the Assets and Liabilities Management Department and report such issue to the Board of Executive Directors regularly every week. 2) Measure liquidity risk in conducting business and financial transactions on regular basis through the use of statistical tools and models. Financial ratios analyses both in static and dynamic movements were done to see if any transactions might have adverse impact on liquidity, as prescribed by the Bank of Thailand. In measuring short-term liquidity risk the ratio net liquidity assets to net liquidity gap is considered and for aggregate risk, earnings at risk limit is applied. 3) The Market Risk Management Department will monitor and control the overall liquidity risk to ensure that it is within the approved risk limit. Reports are regularly generated to inform directors, senior management and concerned business units the position and the level of risk so as to find sources of funds to meet the requirement or to reduce risk during the period of negative liquidity gap or short of liquidity. Report is submitted to the Risk Management Committee regularly every month. 4) Regularly conduct stress test to ensure that in time of emergency, the Bank will be able to timely access sources of funds at acceptable costs. Moreover, the Bank also have the Contingency Funding Plan, approved by the Board of Directors, consisting of Action Plan and the responsible business units ready to be used immediately upon encountering liquidity problem from any crisis.

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5) Review risk limit and liquidity policy once a year or as deemed appropriate to suit the changing environment. With such efficient measures, the Bank in 2007 had excess liquidity higher than liquidity cushion level throughout the year and its liquidity risk was still within the specified risk limit. Additionally the Bank invested such excess liquidity in the money markets both domestically and abroad, another channel to help boost the Bankâ&#x20AC;&#x2122;s earnings.

4. Operational Risk

Operational risk refers to losses incurred from people inside and outside of the Bank, operational processes, various IT software systems used and unforeseen external events. Included also is legal risk but excluding strategic and reputation risks. In the current environment when Bank is facing several problems such as economic slowdown, higher cost of living and technological advancement that is faster than capability of employees, all of which make operational risk inevitably to be on the uptrend. Nevertheless, the Bank in 2007 fully developed and enhanced its operational risk management process to be able to cater for the changing environment and its complexity. As a result, the Bankâ&#x20AC;&#x2122;s aggregate operational risk was at an acceptable and manageable level as well as complying with the BOT policy that requires capital charges for operational risk along the Basel II guidelines. Measures and Operational Risk Management Tools 1) Enhance the operating procedures through stricter reports reviewing that have been made more convenient in line with work processes that heavily depended on IT system. Increase disciplinary action and penalty to reduce losses from intentional errors in the staffâ&#x20AC;&#x2122;s performance. Simultaneously, the Bank develops software applications to be more user-friendly and gives training to staffs to enable them to understand the contents of their jobs so as to reduce risk of unintentional errors. 2) The Bank called joint meetings between the system administrators and ATM vendors regularly every month to explore solutions to solve problems encountered by the Bank. This would help reduce interruption of work especially ATMs so customers would enjoy the highest convenience in using the Bank services. 3) Risk Control Self-Assessment (RCSA) is carried out once a year to enable staffs to assess the risk level of their job and identify point of risk in their business unit. Assessment is also made to see whether the available internal controls are adequate and appropriate for controlling such risks. In 2007, the Bank organized 5 training classes for Operational Risk Officers (OROs) of respective business units to enable them to understand the core principles and the steps necessary for conducting RCSA. The RCSA software

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program is also improved for easier usage and knowledge was posted on website of the Risk Management and Corporate Governance Group so that staff members would be able to learn on their own. As at September 2007 full 100 percent or all the 1,181 business units have completed RCSA compared to 91 percent in 2006, the first year RCSA was introduced. 4) Key Risk Indicator (KRI) was implemented for risk monitoring and reporting. This tool shows the risk profile of the past and the current and can be used as a warning tool when a risk could be foreseen to arise in the future. The Bank in 2007 used assessments from RCSA and causes of loss from loss data report to determine preliminary KRI. These KRIs will be piloted first with the branches. However, since KRI is still a new tool it must take more time to assess which KRI is appropriate and significant. 5) Business Continuity Plan (BCP) is established for contingent disasters and unexpected events that may take place in both Head Office Buildings and causing disruption of key business transactions. The BCP starts from conducting Business Impact Analysis (BIA) to determine the priorities of jobs or services according to severity of impact to the business. Details of operating steps of such jobs are specified. In 2007 key processes that are already cushioned by BCP were funds transfer, treasury, financial assets trading, payment and settlement, trade finance, electronic banking and operations of the Corporate Banking Group and Nana Nua Office. Additionally, the Bank has put information concerning BCP on the website of the Risk Management and Corporate Governance Group for everyone to study. 6) Overall losses incurred from operational risk are quickly reported to the Risk Management Committee and the Executive Committee regularly on quarterly basis to control the loss volume to be within acceptable and manageable level. For losses of significant amounts they are reported immediately. If any particular loss frequently occurs, the Enterprise Risk Management Department will hold joint discussions with concerned business units and the Internal Audit Group to find corrective measures and periodically monitor the cases. During 2007, the Bank required that all business units have to report losses arising from operational risk via Web-based Operational Loss Data Reporting on monthly basis thus enabling the Enterprise Risk Management Department to obtain relevant data faster with more accuracy and completeness resulting in issuing efficient preventive measures. 7) Instill awareness of operational risk management to every employee until it is an integral part of organization culture. Knowledge about operational risk management is disseminated through various channels so all staffs are able to learn by themselves. Manuals are updated to be in line with the Bankâ&#x20AC;&#x2122;s aggregate risk management policy and made compulsory in all business units of the Bank. Moreover, the Bank has set a framework for new product approval so the product development units could be confident that risks would not increase or increase minimally.

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5. Strategic Risk Strategic risk stems from inappropriate usage of strategic plan and implementation that do not respond well to internal factors and external environment thus having negative impact or earnings, capital funds and stability as well as solvency of the Bank. During 2007, internal and external factors changed dramatically, mostly hampering operation such as continuing petrol price surges, US subprime lending crisis, high Baht appreciation, political uncertainty and increasingly severe competition among financial institutions and non-bank. All these could deter the Bank from reaching the target. Nevertheless, the Bankâ&#x20AC;&#x2122;s operating performance was still at a satisfactory level, especially income before provisioning for doubtful accounts was still at the level close to that in prior year. This was because the Bank had prepared plans to reduce strategic risk that might arise from respective factors through adjustment of strategic and supportive action plans that are appropriate and adequately comprehensive covering all arising risks. Measures and Strategic Risk Management Tools 1) The strategic planning process has clear and complete steps based on Balanced Scorecard principle. SWOT Analysis is conducted using both qualitative and quantitative information. Recommendations gathered from the customer satisfaction survey will be used in strategic planning simultaneously with enterprise risk management so as to reduce risk that may prevent the Bank from attaining the targets. 2) The Bank requires the Board of Directors, the Board of Executive Directors and Executive Committee to take part in establishing the Bankâ&#x20AC;&#x2122;s strategic plan and put it into practice via responsibility of each business group. 3) The Bank regularly monitors its operating performance comparing to the strategic plan, pushing whatever that can reach the target and revise those that used to be adjusted to be in line with the changing environment. 4) The Bank is in the process of introducing the Economic Value Management (EVM) through the principle of Economic Profit (EP) in establishing strategic plan under the strategic risk management and RAROC guidelines.

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6. Capital Adequacy Risk Capital adequacy risk refers to the risk of having insufficient capital funds for business expansion, unexpected damages or losses and the changing regulations and uncontrollable environment. Hence, the Bank attaches great importance to preparedness for capital adequacy at all times. As at year-end 2007, the Bank’s BIS ratio registered Baht 128,500 million accounting for 15.16 percent of risk assets higher than BOT’s requirement of 8.50 percent and sufficient for further growth. Measures and Capital Adequacy Risk Management Tools Apart from assessment of capital adequacy as required by BOT, verification of loan classification and accuracy of debt restructuring and collateral data, the Bank has other preparedness measures for maintaining the capital funds in accordance with the new requirement such as consolidated supervision whereby the Bank is required to maintain capital funds for its subsidiaries and the IAS 39 measure demanding more provisioning for doubtful accounts. All these may impact the Bank’s profit and capital funds in particular the Basel II requirement, which requires the Bank to set up capital funds to accommodate credit risk, market risk and operational risk by 2008. However, the Bank has prepared since 2004 and was able to maintain capital funds for market risk using standardized approach since June 2005. Presently, market risk management is in the process of moving to the Internal Model Approach (IMA). Moreover, the Bank in 2007, has purchased software application to accommodate capital funds calculation including risk management tools that comply with Basel II requirement for credit risk and operational risk. The Basel II project implementation is in the form of a consortium in conjunction with Yipintsoi the prime contractor, SAS Software (Thailand) as software provider and Deloitte as the consultant. This project started in June 2007 and the project scope is divided into three phases: Phase 1: Readiness Assessment Phase consisting of data gap analysis and business gap analysis. Phase 2: Implementation of Standardized Approach that would accommodate capital charge calculation as at year-end 2008. Phase 3: Preparation for Advanced Approach – Internal Ratings Based Approach for credit risk and Advanced Measurement Approach for operational risk.

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Report of the Corporate Governance &

Social and Environmental Responsibility Committee

As financial institution is an organization that must have credibility, confidence and trust in its business, the Bank hence stresses the importance of operation based on integrity, transparency and ethics. The Corporate Governance & Social and Environmental Responsibility Committee is thus setup to supervise and monitor the initiation of such practices that will raise the quality of the Bank’s supervision which later could induce a corporate governance culture. This plan has been setup in three phases – Learning, Doing and Winning, from 2006 – 2008. The implementation of the above work plan has been communicated to all staffs nationwide and participation is done via key performance indicators (KPIs) whereby all business units need to follow such principles of good corporate governance. Assessments were done through performed activities and customer satisfaction surveys. The Bank also stresses the importance of responsibilities towards social community, environment and the nation. Staffs at all levels took part in carrying out activities in education, art, culture, religions, sports, energy saving and environment conservation. Particularly “Creation of Intellectual Capital”, this is an inexhaustible capital for creation of value and development of intelligence and wisdom in various dimensions in the social community which will be the driving forces for the country’s sustainable growth. Such work has resulted in the receiving of respective awards of good corporate governance as follows: 1. Board of the Year for Exemplary Practices for 2006/07 awarded by the National Corporate Governance Committee in conjunction with the Thai Institute of Directors Association, the Stock Exchange of Thailand, the Board of Trade of Thailand, the Federation of Thai Industries, the Thai Bankers’ Association, the Thai Listed Companies Association and the Federation of Thai Capital Market Organizations. 2. Shareholder Awards as distinctive listed company for shareholders care. The Bank was selected as one out of 10 companies receiving such title from the Thailand Securities Depository in conjunction with the Stock Exchange of Thailand, the Thai Investors Association, the Thai Listed Companies Association and the Thai Investor Relations Club. 3. From Quality assessment of the Annual Ordinary General Meeting 2007, the Bank was assessed as “excellent company” among the 19 companies receiving scores of higher than or equal to 100 from the Office of Securities and Exchange Commission Thailand (SEC) in conjunction with the Thai Investors Association and the Thai Listed Companies Association. 4. Honorable Mention Award under the Sufficiency Economy Philosophy from the Office of the Royal Development Projects Board. 5. Honorable Mention Award under Corporate Social and Environmental Responsibility 2007 from the State Enterprise Policy Office, Ministry of Finance. The above assessments by government agencies and independent institutions have truly reflected the Bank’s excellent corporate governance. The Corporate Governance & Social and Environmental Responsibility Committee is thus determined to drive the Bank forward as a model institution of good management and corporate governance through conducting business with continuous corporate social and environmental responsibility. (Mr. Santi Vilassakdanont) Chairman of the Corporate Governance & Social and Environmental Responsibility Committee January 24, 2008

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Report of the Nominating

and Remuneration Committee

The Bank has appointed the Nominating and Remuneration Committee consisting of three members who all are Independent Directors to be responsible for nominating and fixing remuneration of Group Managing Director, President and Director on the Board of Directors. The Nominating and Remuneration Committee has nominated qualified persons to be appointed as Group Managing Director or Director on the Board of Directors by carefully considering their qualifications, knowledge, competence, skills, experience and expertise as well as leadership, vision and good attitude towards the organization â&#x20AC;&#x201C; all for the benefit of the Bank. The Committee also considers the appropriate size, structure and composition of the Board of Directors to promote good corporate governance thus enabling the business management to be carried out efficiently and in compliance with the regulatory requirements and the changing environment. As for remuneration, the Committee has considered and fixed remuneration that suited the assigned duty and responsibility, job performance and overall operating performance of the Bank, as well as remuneration fixing that is competitive in the market. During 2007, the Nominating and Remuneration Committee met 11 times. The proposed nominating and remuneration fixing was already considered and approved by the Board of Directors. (Mr. Sima Simananta) Chairman of the Nominating and Remuneration Committee December 31, 2007

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Business

Supervision

As the largest state-owned commercial bank, apart from providing excellent financial services to clients and good returns to the shareholders, the Bank deems it is a duty to support the Thai economy towards a continued growth along a sustainable social and environmental development. Such task can be accomplished only from a good policy, work plan and business supervision process. Hence, the Bank has given great importance to building corporate governance through the establishment of the Corporate Governance Committee in 2002 which had been adjusted to be of the same standard across-the-board. Later the Bank proclaimed 2006 as “the Year of Corporate Governance” and setup a three-year work plan for creation of corporate governance culture namely, 2006 as “the Year of Learning”, 2007 as “Year of Adopting” and 2008 “to be Number 1”. Throughout these three years, activities had been organized to instill staffs and executives of all levels the significance of good corporate governance. Among these activities were Corporate Governance Exhibition, CG Slogan Contest with the award-winning slogan “Honest, Transparent, Ethical”, CG Awards to distinctive business units complying best with the Corporate Governance Policy. In 2007, which was the Year of Adopting, the Bank focused on compliance with the principles of Good Corporate Governance. New adoptions took place, such as revision of the Charter of the Corporate Governance Committee, inclusion of corporate governance course in the staff’s self-learning test a requirement for promotion and other activities of enhancing CG knowledge to enable corporate governance culture to be deeply instilled in the organization. Moreover, the Bank publicized all its CG activities and progress to allow clients, shareholders and general public to join in and be a part in acknowledging the Bank’s CG operation. With full collaboration from the Board of Directors, Executives and all the staff members in spurring every business unit to adhere to good management, ethical business dealings and transparent disclosure of information to the public together with continued social responsibility, the Bank in 2007 was presented with awards from various organizations. Some of the recognitions included Board of the Year for Exemplary Practices Award, Shareholder Awards for Shareholder Care, Honorable Mention Outstanding Social and Environmental Responsibility Award, and “Excellent” score from quality assessment of Annual Ordinary General Meeting 2007.

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Corporate Governance Policy The Board of Directors is fully aware of the importance of good corporate governance, control and internal audit as well as risk management. It thus established relevant committees to assist in supervising the Bank operation in various respects. They are the Board of Executive Directors, the Audit Committee, the Nominating and Remuneration Committee and the Corporate Governance Committee (renamed as the Corporate Governance & Social and Environmental Responsibility Committee on January 24, 2008). All these committees possess the qualifications and carry the responsibilities as prescribed by the Bank of Thailand and the Stock Exchange of Thailand. Details are shown in “Shareholding and Management Structure” 2.1, page 69-77. The Bank has written up the 7 principles of corporate governance and enforced across-the-board since 2002. They are: 1. Creation of Long Term Value Added: create sustainable value added without hampering the organization in the short term. 2. Accountability: responsible for one’s action and decision. 3. Responsibility: obligate to carry out the assigned duties with full capability. 4. Promotion of Best Practices: conduct business and provide services with good corporate governance and ethical conduct. 5. Equitable Treatment: give equitable and fair treatment to all stakeholders. 6. Transparency: show transparency in business operation which can be explained and audited. 7. Social and Environmental Awareness: aware of social and environmental responsibility to help reduce negative impact from the Bank operation. The Bank has taken part in community development and promotion of local wisdom continuously.

Principles of Corporate Governance set by the Stock Exchange of Thailand

The Bank has fully complied with the principles of good corporate governance as prescribed by the Stock Exchange of Thailand in five areas as follows:

1. Shareholders’ Rights

1.1 Policy and Shareholders’ Rights Protection The Bank gives great importance to protection of shareholders’ rights and promotion of exercising such rights. The basic legal rights consist of the right to buy, sell or transfer securities held, the right to receive dividend, the right to take part in decision-making of the Bank’s material issues such as approval of key activities affecting business direction, amendment of the Memorandum of Association and the Articles of Association, the right to vote for the appointment of auditor and fixing of auditor fee, the right to propose agenda in the shareholders meeting, the right to vote for the election of director (details are shown on page 78) and the right to attend the shareholders meeting.

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Apart from these basic rights, the Bank has established more practices to supplement convenience to the shareholders. Among them is shareholders’ right to receive news on operating performance, analysis of operating performance, credit ratings from respective institutions, research work and social activities from the Bank’s website. In addition, the Bank took shareholders to visit Krung Thai Bank Training Center at Khao Yai, Nakhon Ratchasima Province which is an energy saving building receiving national and ASEAN awards.

1.2 Shareholders Meeting

The Bank attaches great importance to the Ordinary General Meeting held once a year within the period of not more than four months from the end of the Bank’s accounting period. In so doing, the Bank has followed all the principles of good corporate governance and strict compliance with the legal provision allowing the shareholders to propose the agenda prior to the meeting date of the Annual Ordinary General Meeting. The Bank will gather relevant information and disclose to the public on the Bank website: www.ktb.co.th and select Investor Relations /Shareholders/invitation to the Annual Ordinary General Meeting about 30 days before the meeting date. In addition, the Bank has designated Thailand Securities Depository Co., Ltd. in its capacity as Register, to send out notices of meeting together with agenda details and attachments to shareholders at least 14 days before the meeting date. Shareholders will then have enough time to study the relevant information before casting their votes on various agenda items. In case of doubt, shareholders can still submit queries to the Directors prior to the meeting date on the Bank website or by mail directly to the Board of Directors, or raise questions on the meeting day. The Chairman of the Meeting would first inform rules of the meeting and procedural steps of voting and give the shareholders the opportunities to present their opinions concerning the agenda or the Bank. Chairman of the Board of Directors, President and all relevant chairmen of the respective committees would attend each Ordinary General Meeting to answer any questions asked concerning operating performance and management policy. The Bank called the Annual Ordinary General Meeting on April 27, 2007 attended by all the Directors and 12 Group Executives including the Chief Financial Officer. In addition, representatives from other related organizations and institutions attended the General Meeting as observers such as the Office of the Auditor General Thailand and the Office of the Securities and Exchange Commission of Thailand. The Chairman of the Meeting gave equal opportunities and time to all shareholders in checking the Bank’s operation, making inquiries, expressing opinions and presenting recommendations. Voting and vote counting were conducted in an open, transparent and instant manner. One share was counted as one vote and majority votes made the decision, except for special resolution voting at least three-fourths of the total votes were needed. In vote casting, voting ballots shall be used only when shareholders intend to vote against and abstain, and these voting ballots would be stored for later checking. The Bank recorded the minutes of the meeting separating the votes into in favor, against and abstentions on each agenda item. Complete recording of queries, explanations, opinions and recommendations of the meeting would be disclosed to the shareholders on the Bank website: www.ktb.co.th and select Investor Relations/ Shareholders/ Minutes of the Meeting within 30 days from the meeting date.

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2. Equitable Treatment to Shareholders

2.1 Treatment of Minority Shareholders The Bank has the policy on giving equitable and fair treatment to all groups of shareholders whether they are institutional investors, foreign investors or minority shareholders. Additionally, the Bank gives the shareholders the rights to nominate appropriate person to be director in advance. In 2007, four Directors completed their term of office. The Bank thus requested the minority shareholders and shareholders in other groups to nominate appropriate persons for consideration during October 1 December 31, 2007. However, none of the shareholders have nominated appropriate persons. Therefore, the Nominating and Remuneration Committee nominated such four Directors to the Annual Ordinary General Meeting for consideration and all four were reelected for another term (details are shown on www.ktb.co.th and select Investor Relations/Shareholders/ Minutes of the Meeting). 2.2 Attendance of General Meeting by Shareholder’s Proxy In case where shareholder is unable to attend the general meeting, the Bank allows the shareholder to assign a proxy to attend the meeting and vote on his/her behalf. Proxy form with instructions and the list of three Independent Directors were attached. At the 2007 Annual Ordinary General Meeting, 733 shareholders and 419 proxies attended totaling 1,152 shareholders, accounting for 73.25 percent from a total of 8,193,194,893 shares, constituting a quorum in accordance with the Bank’s Articles of Association. 2.3 Measures for Preventing Usage of Inside Information by Directors and Executives To eliminate conflict of interest and overseeing that inside information is not used for personal interest; the Bank has setup clear policies as summarized below: Practices for Related–Party Transactions Approval 1) Each Director is required to disclose transactions that might bear conflict of interest, relatedparty transactions or related transactions as prescribed in the requirements of the Office of Securities and Exchange Commission of Thailand. 2) Director having conflict of interest is prohibited from approving such transaction that bears conflict of interest. In handling the related–party transaction, the Audit Committee shall participate to give opinions under the principles of good corporate governance and requirement of the Stock Exchange of Thailand. 3) Lending or investing in business in which Director has interest must be unanimously approved by the Board of Directors without attendance of such Director. To prevent conflict of interest, pricing and terms and conditions must be determined in accordance with the Bank’s normal trading and with the same treatment given to general clients. Information on related-party transactions is shown in the Notes to the Financial Statements No. 3.19 Related-Party Transactions.

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Measures for Overseeing the Usage of Inside Information 1) Employees are prohibited from buying, selling, transferring or accepting transfer of securities by taking advantages of outsiders in using inside information that could impact securities price changes but not yet disclosed to the general public or the Stock Exchange. Such employee may obtain the information in his capacity or as an employee whether such actions are for his own benefit or others, or disclose inside information to enable other person to do so for his benefit. 2) Directors, Executive Vice President and higher, and First Vice President or equivalent in the Accounting or Finance Group are required to report their holdings of securities issued by the Bank including those of their spouse and children under 20 years of age to the Office of the Securities and Exchange Commission of Thailand. They also have to report their holdings to the Board of Directors on monthly basis. 3) To supervise securities trading and prevent insider trading, the Bank has stipulated the timeframe limiting trading of securities issued by the Bank. Applicable rules and regulations governing the prevention of insider trading are regularly communicated to the Directors, employees and persons concerned through various channels of the Bank.

3. Consideration of Stakeholders

3.1 Treatment of Stakeholders The Bank attaches importance to the caring of all groups of stakeholders, internally or externally. All of whom are vital to the Bankâ&#x20AC;&#x2122;s sustainable business operation. As for internal staff, the Bank has written up the operating policy and procedure which is constantly revised for appropriateness and fairness. For external persons and institutions, the Bank has also stipulated in writing in the Manual of the Business Ethics of the Boards and the executives and Code of Conduct for employees. All such information is communicated through various channels, intranet and internet, and also published as manuals for every business unit. The practice guidelines for treatment of various stakeholders are summarized below: Shareholders The Bank is determined to conduct business with prudence and transparency, make profits grow continuously and steadily as well as boost the competitiveness to enhance value added for the shareholders in the long run. Customers It is the Bankâ&#x20AC;&#x2122;s determination to serve all customers willingly and eagerly to the best of its ability with equality and fairness. The Bank is ready to render advice and assistance to customers while taking their problems into consideration and seeking appropriate solutions to solve those problems without revealing their private information except when it is stipulated by law or with customerâ&#x20AC;&#x2122;s written consent. Creditors The Bank complies with the terms and conditions as agreed upon with respective creditors such as depositors, debenture holders and other creditors in order to retain its reputation and credibility.

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Trading Partners The Bank has stipulated that employees involving in trading of properties, goods and services must adhere to the Bank’s optimum interest regardless of self-interest or interest of related kin. Employees must provide accurate, complete and true information that will not impede the buyers’ or sellers’ decisions and understanding. Importantly, employees should avoid accepting gifts or rewards from buyers or sellers as well as attending parties privately hosted so as to keep away from any accusations that may arise and prevent tendency in giving special assistance in return on later occasion. Business Alliances The Bank is firmly determined to comply with the agreements made with its business alliances and to render assistance for mutual business benefits. Competitors The Bank has no policy to compete by means of falsifying or distorting competitors’ facts. At the same time, the Bank avoids making deals or discussion with employees of other agencies or financial institutions on the issues relating to geographic location, marketing, customer segmentation, interest rates, fees and commissions including products, services or business plans that may have negative impact on the Bank’s business competition. Society and Environment The Bank conducts itself as a good citizen taking up the responsibility for the public and the nation. It renders support to public social activities and participates in social community and environmental development as well as natural resources conservation. Besides, the Bank is ready and willing to cooperate and to support government policies for national benefits. To materialize the social and environmental operation for its true benefit, the Board of Directors and the Management team had included social and environmental responsibility in its mission. During 2007, the Bank enhanced its social and environmental projects for higher efficiency by integrating various projects activities and continuously implementing them under the concept of building intellectual capital. And importantly, the Bank extended invitation to the community and stakeholders to participate in such activities so as to create social awareness and care for the under-privileged as well as solving the increasingly severe environmental problems. Details of social and environmental operation can be viewed in the Corporate Social & Environmental Responsibility Report, Krung Thai Bank Pcl. or on website: www.ktb.co.th and select Social Responsibility/Publication. Board of Directors and Executives The Bank’s Directors and executives are well informed of their rights and are ready to set good examples in exercising their rights and fulfilling their duties within the framework set by the Bank. At the same time, they are well aware of caring for the rights of all stakeholders on equal and fair basis.

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Employees The Bank realizes the value of its employees, the important driving force of the organization, thus it made all effort to recruit persons with competency and experience matching the jobs needed at salaries and remunerations comparable to those of other leading companies. At the same time, the Bank gives great importance to employee competency development through continued in-house training in preparation for tougher competition in financial business and to support its brand of being the Convenience Bank. Training courses include management skill, marketing and sale, service providing, loans, risk management and IT as well as specific job courses such as “KTB Product & Sale Champion”, “Excellent Service” and Omega Performance for credit officers. Besides, the Bank also develops employees with high competency in preparation for future executives and preparation of Young Blood group through granting of postgraduate scholarships for studying locally and abroad. There was also development of the intranet system for information and knowledge interchange as well as Self-Learning system for standardization of the employees’ basic knowledge. Additionally, the Bank provides welfare assistance for employees and their family members to raise the quality of their life. Assistance includes monthly child support allowance, child education support allowance, housing allowance for employee relocation to provincial area, medical allowance, employee’s holiday resort, meditation program, welfare loans and disabled employees support funds. Concerning employees’ occupational safety, the Bank has policy focusing on safety of life and asset as well as working environment. Key activities organized in 2007 included: - The General Services & Security Department in conjunction with the Health and Safety Working Environment Committee enhanced and repaired deficiencies of workplaces such as lighting, noises and pollutions to suit the employees’ work. - Gave advice to branches nationwide on preparation of emergency plan. - Gave knowledge of disaster prevention and warning of dangers that may arise to respective business units and branches for their awareness and prevention. - Delivered mobile phone signal blocking devices for prevention of bomb blasts to branches in the three deep-south provinces and currently in the process of providing bulletproof windshields for vehicles to business units and branches in such areas. - Dispatched officers from the General Services & Security Department to visit branches nationwide while conducting inspection, rectification and giving advice on security system. - Installed additional CCTV in the Head Office to fill up the blind spot areas.

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3.2 Stakeholders’ Participation Stakeholders are given opportunities to take part in Bank activities through their own rights, such as expressing their opinion in the Annual General Meeting, proposing agenda items, nominating appropriate persons to be Directors as earlier described. Moreover, the Bank organized activities encouraging stakeholders’ participation, in particular, Corporate Social and Environmental Responsibility (CSER) activities including: - “Krung Thai Dream Schools near Home” through giving financial support to schools nationwide for development of IT and science studies. - “Krung Thai Young Enterprise” through competition in business plan Thai youths are urged to experience doing small business and be able to choose their future careers themselves. - KTB Lecture Series giving knowledge to clients and employees on interesting issues such as economy, technological innovation art and culture. - “Krung Thai Art and Culture” project through giving support to the National Exhibition of Art so Thai artists are encouraged to create art work continuously. - “Krung Thai White Seedlings” project a competition under sufficiency economy philosophy. Undergraduate students operate business with moral ethics and adhering to sufficiency economy philosophy. - “KTB-CSER Prototype with Thai Environment Institute” project as prototype for business operation with social and environmental responsibility and transfer knowledge in this field to other organizations both local and abroad. In implementing all the aforementioned projects, the Bank gives opportunities to any people to participate in the activities whether they are Bank executives, employees and their family members, clients, students, teachers, instructors or community people concerned.

3.3 Whistle Blowing & Complaints

Customers and general public can lodge their complaints or opinions through the following channels: - Call Center or Krung Thai Phone 1551 - http://www.ktb.co.th or http://www.contactcenter.ktb.co.th - E-mail: call@contactcenter.ktb.co.th - Fax : 02-255-9391-3 - Customer Satisfaction questionnaire under Service Quality Assurance project Bank employees are able to lodge complaints or opinions directly to the Board of Directors via e-mail in the intranet system.

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4. Disclosure of Information and Transparency

4.1 Disclosure of Information as prescribed in Listed Company Requirement The Bank oversees that information, financial and performance related information, is disclosed accurately, completely, transparently, comprehensively and timely as prescribed in the requirements of the Office of the Securities and Exchange Commission of Thailand and those of the Stock Exchange of Thailand. Apart from disclosing annually (form 56-1) and in the Annual Report (56-2), most of the information is also posted on the Bank’s website in Thai and English thus enabling shareholders, customers and interested persons to access the information with ease, equality and reliability. Information disclosed by the Bank included performance of the Directors, their training, roles of the Boards and relevant committees, number of meetings called, number of attendance of each Director and opinions from performing duty as well as remuneration of Directors and senior executives, shareholding structure, business ethics, business operation and targets and corporate governance & social and environmental responsibility policy. 4.2 Disclosure of Information under Official Information Act, B.E. 2540 (1997) As a state enterprise under the Budgeting Act, B.E. 2502 (1959) and its amendments as well as a state enterprise under the Ministry of Finance, the Bank thus has to disclose information to the general public in compliance with the Official Information Act, B.E. 2540 (1997). Procedures on this matter during 2007 included: 4.2.1 IT System Enhancement for Information Dissemination The Bank has made a Quick Link from the website (www.ktb.co.th) to webpage e-procurement to provide interested public with news and information on the Bank’s procurement. Inside such webpage, the Bank summarized all the procurements from February 2003 to date. During 2007, the Bank put up notices on this website comprising procurement through price inquiry and bidding, announcement of price inquiry and bidding cancellation, announcement of winners from price inquiry, bidding and auction. Apart from viewing information on procurement, interested persons can also offer sale of goods or services through such system after having registered. 4.2.2 Disclosure of Bank and Customers’ Information to Requesting and Outsiders Government agencies or private enterprises with or without legal authority are able to request for verification information under the terms and conditions as follows: 1) Agencies with legal authority to request information, documentary evidences for verification or requesting Bank employees to testify in various courts, including court of law, Legal Execution Department, Special Investigation Department, Revenue Department, Royal Thai Police, the Office of the National Counter Corruption Commission (NCCC), Anti-Money Laundering Office (AMLO), Office of the Narcotics Control Board (NCB), Office of the Securities and Exchange Commission of Thailand (SEC), Social Security Office, Office of the Consumer Protection Board (CPB), Office of the Auditor General Thailand, Ministry of Finance Inspector-General, the Office of the Ombudsman InspectorGeneral and the Bank of Thailand (BOT). Such agencies are able to request information and documentary

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evidences concerning account opening, deposit transactions, deposit and withdrawal information and deposit balances. 2) Government agencies, private bodies, general public with no legal authority of information verification, Bank is unable to disclose as stipulated in the Official Information Act, B.E.2540 (1997), Section 24 that government agencies are unable to disclose personal information under their supervision to other government agencies or others without written consent from owner of such information given in advance or at that time. 4.3 Performance of the Board of Directors and Respective Committees 4.3.1 Biography, Responsibility and Term of Office of Directors on Board Information on this part is detailed in Brief Biography of Board of Directors and Executive Officers on page 25-28 and Shareholding and Management Structure under Authority and List of Boards and Committees on page 69-77. 4.3.2 Remunerations for the Board of Directors and Executive Officers Policy on remuneration is sufficiently fair and reasonable. The Nominating and Remuneration Committee will review such remunerations taking into consideration the appropriateness with regard to Directors responsibilities and financial standing of the Bank, comparable to those of the same business and in accordance with the resolution passed by the general meeting. There are four parts to the remunerations. 1) Remuneration in capacity as Director at the rate of Baht 50,000 per month 2) Ex-officio remuneration: - Chairman of the Board of Directors at the rate of Baht 130,000 per month. - Vice Chairman at the rate of Baht 30,000 per month. - Chairman of the Board of Executive Directors, Chairman of the Audit Committee, Chairman of the Nominating and Remuneration Committee and Chairman of the Corporate Governance Committee at the rate of Baht 30,000 per month. 3) Meeting honorarium paid in accordance with number of attendance at the rate of Baht 30,000 per meeting. 4) Gratuity payment to Directors depending on the following conditions: - The Bank has profit from business performance and - The Bank pays dividends to shareholders At the 14th Annual Ordinary General Meeting on April 27, 2007 the meeting approved remuneration payment for Board of Directors consisting of remunerations for attending the Board of Directors meetings in 2007 and gratuity for Directors in 2006 with the following details:

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Remunerations for the Board of Directors in 2007 During 2007, the Bank paid remuneration in cash to the Board of Directors totaling Baht 28,603,225.81 as remuneration for Directors, ex-officio remuneration and meeting honorarium classified into 1) Remuneration for the Board of Directors totaling Baht 17,323,225.81 2) Remuneration for the Board of Executive Directors Baht 6,510,000.00, the Audit Committee Baht 1,620,000.00, the Nominating and Remuneration Committee Baht 1,350,000.00, the Corporate Governance Committee Baht 1,800,000.00, totaling Baht 11,280,000.00. Details are as follows: (Baht)

Remuneration in Cash Nominating and Corporate Board of Name of Director Audit Board of Executive Remuneration Governance Committee Directors Directors Committee Committee

1. Mr. Suparut Kawatkul 2. Dr. Chaiyawat Wibulswasdi 3. Mr. Aswin Kongsiri 4. Mr. Santi Vilassakdanont 5. Mr. Suri Buakhom 6. Ms. Tanya Sirivedhin 7. Mr. Pachara Yutidhammadamrong 8. Mr. Sima Simananta 9. Dr. Jamlong Atikul 10. Mr. Visut Montrivat 11. Mr. Dusit Nontanakorn 12. Mr. Apisak Tantivorawong Directors resigned during the year 1. Dr. Uttama Savanayana

2,910,000.00 1,710,000.00 1,890,000.00 1,260,000.00 1,350,000.00 1,260,000.00 330,000.00 1,350,000.00 330,000.00 1,260,000.00 780,000.00 1,320,000.00 420,000.00 1,350,000.00 690,000.00 1,350,000.00 1,530,000.00 1,320,000.00 420,000.00 623,548.39 1,350,000.00 1,500,000.00 259,677.42

780,000.00 390,000.00 420,000.00 210,000.00

240,000.00

Total remuneration according to 1) 17,323,225.81 Total Remuneration according to 2) 6,510,000.00 1,620,000.00 1,350,000.00 1,800,000.00 Grand total according to 2) 11,280,000.00 Grand total 1) and 2) 28,603,225.81

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Gratuity Payment to Directors in 2006 The Board of Directors allocated the gratuity for Directors in 2006 totaling Baht 27.96 million as follows: (Baht)

Name of Director

1. Mr. Suparut Kawatkul 2. Dr. Chaiyawat Wibulswasdi 3. Mr. Aswin Kongsiri 4. Mr. Santi Vilassakdanont 5. Mr. Suri Buakhom 6. Ms. Tanya Sirivedhin 7. Mr. Pachara Yutidhammadamrong 8. Mr. Sima Simananta 9. Dr. Jamlong Atikul 10. Mr. Visut Montrivat 11. Mr. Apisak Tantivorawong 12. Dr. Uttama Savanayana 13. Dr. Chai-Anan Samudavanija 14. Mr. Somchai Wongsawat 15. Pol.Lt.Gen.Dr. Wichianchot Sukchotrat 16. Mr. Prasit Damrongchai Total

Gratuity

2,726,205.81 2,423,294.05 2,120,382.30 2,120,382.30 1,817,470.54 2,018,305.19 1,817,470.54 1,747,759.34 2,027,434.03 1,258,951.05 2,120,382.30 2,120,382.30 644,828.59 1,684,687.31 1,044,838.09 267,226.26 27,960,000.00

Regarding remuneration for executives, the Nominating and Remuneration Committee has been authorized to setup the policy, criteria and other benefits to be in accordance with their competency and performance. In 2007, the Bank paid out a total Baht 155,094,426.00 as salary, allowance and special incentives to a total of 13 executives. They were the President, First Senior Executive Vice President, Senior Executive Vice President and First Executive Vice President, Group Managing Director. In making such payment, the Bank did not pay its matching fund into the provident fund. 4.3.3 Performance of the Board of Directors The Board of the Year for Exemplary Practices award for 2006/07 was one of the several awards presented to the Bank in 2007. This award reflected the dedication and devotion of the Board of Directors and the collaboration of executives and staff members in bringing the Bank to be Thailandâ&#x20AC;&#x2122;s leading bank, capable of providing excellent services to clients, creating sustainable returns to the shareholders and, in particular, excelling in corporate governance, a security to ensure its future growth.

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Details of the performance of each Board are shown in the report of the Corporate Governance & Social and Environmental Responsibility Committee page 108, report of the Nominating and Remuneration Committee page 109 and report of the Audit Committee, page 126 4.4 Quality of the Financial Statements The Board of Directors gives importance to and takes responsibility for the consolidated financial statements of the Bank and subsidiaries including financial information in the Annual Report. Such financial statements are prepared in accordance with the accounting standards and generally accepted accounting principles through the use of appropriate accounting policy so as to reflect the true operating performance of the Bank. Operating performance and disclosed information is ensured to be transparent and adequate through regular reporting to the Stock Exchange of Thailand for the benefits of the shareholders and general investors. Moreover, the Board of Directors has appointed the Audit Committee comprising independent directors to oversee and review the reliability and accuracy of financial reports as well as the internal control systems, thus the Bank’s financial reports are believed to be reliable. 4.5 Investor Relations The Bank has established the Investor Relations Department to be responsible for providing and disclosing of the Bank’s activities for the benefits of all concerned such as investors, stock analysts, fund managers both local and foreign as well as government agencies concerned on equal and fair basis through diverse organized events. In 2007, the Bank’s executives and investment relations officers met with respective analysts, investors and shareholders on various occasions as follows:

Type of Call

One-on-One Meeting & Conference Call Analyst Meeting Roadshow Total Contact with Investor Relations Department Telephone: +662 208 4790 – 8 Facsimile: +662 256 8800 E-mail: ir@ktb.co.th Address: Krung Thai Bank Pcl. 7th Floor, Nana Nua Bldg. 35 Sukhumvit Rd. Klog Toey Nua Subdistrict Wattana District, Bangkok 10110 Website: http://www.ktb.co.th (select “Investor Relations”)

Number of Call

125 4 1 130

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Moreover, the Bank has assigned the Marketing and Corporate Communications Department to publicize the Bank’s news and activities through the press and media on various occasions during 2007 as follows:

Type of Communications

Press Release Press Conference Press Interview Total

5. Responsibility of the Board of Directors

Number of Time

161 19 50 230

5.1 Independence from the Management The Board of Directors takes responsibility in performing its duty and is independent from Management for the optimum benefits of the Bank and shareholders. There is clear segregation of duty and responsibility between the Board of Directors and the Management. In this respect, the Board of Directors will formulate policies and oversee that work proceed lawfully and ethically under the formulated policies. Moreover, for check-and-balance, the Chairman of the Board of Directors, the Chairman of the Board of Executive Directors and the President are all different people. 5.2 Appropriateness of the Board of Directors The number of Directors is in accordance with the Articles of Association, Article 19 which stipulates that “There shall be no less than 7 directors and no more than 15 directors as determined by the general meeting from time to time and no less than half of the total number of directors must reside in the Kingdom”. The Annual Ordinary General Meeting in 2007 approved the number of 12 directors with term of office under the charter of each committee. Article 22 has stipulated that one-third of the directors must retire at each annual general meeting. If the number cannot be divided exactly into onethird, the number must be closest to one-third. Unless otherwise agreed among themselves, the directors to retire on rotation during the first and second times shall be drawn by lots and subsequently the director that has been longest in the office shall retire. A retiring director is eligible for re-election. All the 12 Directors have wide-ranging qualifications with respect to skills, experience and specialization beneficial to the Bank (details are shown in Brief Biography of the Board of Directors and Executives, page 25-28) including full devotion to their performance. Moreover, the Independent Directors with qualifications as defined by the Bank with details on page 71, comprise as many as 7 from the total 12 directors, more than the requirement of at least one-third as prescribed by the Office of the Securities and Exchange Commission of Thailand. 5.3 Transparency in Nominating Directors In selecting and nominating the Directors, the Bank has clearly and transparently stipulated the criteria as disclosed in “Nominating Directors and Executives” on page 78.

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5.4 Efficiency of the Board of Directors 5.4.1 Formulating Policies and Overseeing Management The Board of Directors has performed its duty honestly and prudently safeguarding the shareholders’ interest particularly in giving its consent to the Bank’s vision, mission, strategy and approving key issues relating to operating direction and policy including business plan and annual budget. In so doing, the Board has adopted principles of logic and justification with careful analysis of business condition and social and environmental factors. In the last quarter of each year, the Board calls a meeting to review the Bank’s policies and targets for forwarding to the Management for brainstorming sessions with the executives of all business units and branches nationwide to come up with an efficient operating strategy toward unified target. Apart from this, the Board of Directors oversees that performance of the Management is in accordance with the determined key performance indicators (KPIs) in early year and monitoring the operating performance on monthly and quarterly basis in order to know the status at every stage. If the operating performance falls short of the target, the Board will conduct an analysis to find the root causes for further solutions. At year–end, the Board will compare the Management’s performance with the KPIs set under the Performance Agreement (PA). Additionally, the Board controls and verifies the Management’s managerial work to ensure transparency and compliance with the Bank’s code of conduct, effective since 1998, with update and revision to suit the changing working environment. The Board also oversees the internal control and risk management so that they would proceed appropriately. As regard to directorship of the President and top executives in other company, the Bank has established clear policy as to type of directorship and number of companies in which they are entitled to hold the post, and such directorship holding must be approved by the Board of Directors. The Bank already disclosed the information on directorship in other companies in the Form 56-1 showing annual information for shareholders. 5.4.2 Relevant Committees The Board of Directors appointed subcommittee to help study and scrutinize the task as deemed necessary to ensure the Board’s higher efficiency and effectiveness in performing its duty as described in “Shareholding and Management Structures”, page 68-77. 5.4.3 Self-Assessment of Individual Performance The Bank requires Board of Directors to do self-assessment twice a year so as to reflect operational efficiency under principles of good corporate governance, details of which are shown in “Shareholding and Management Structure on page 80. 5.4.4 Development of Directors and Executives The Bank insists that the Board of Directors and the executives are provided with training programs to enrich their knowledge on a continuous and regular basis, details in “Brief Biography of Board of Directors and Executive Officers” on page 25-31. Moreover, upon each appointment of Director, the Bank organizes orientation for the newly appointed Director. In 2007, such program was done for Mr. Dusit Nontanakorn as detailed in “Directors Orientation” on page 79.

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5.4.5 Board of Directors Meeting The Board of Directors, in 2007, called 25 meetings, the Board of Executive Directors 51 meetings, the Audit Committee 15 meetings, the Nominating and Remuneration Committee 11 meetings and the Corporate Governance Committee 14 meetings. Details of each Directorâ&#x20AC;&#x2122;s attendance as follows: Name of Director

1. Mr. Suparut Kawatkul 2. Dr. Chaiyawat Wibulswasdi 3. Mr. Aswin Kongsiri 4. Mr. Santi Vilassakdamont 5. Mr. Suri Buakhom 6. Ms. Tanya Sirivedhin 7. Mr. Pachara Yutidhammadamrong 8. Mr. Sima Simananta 9. Dr. Jamlong Atikul 10. Mr. Visut Montrivat 11. Mr. Dusit Nontanakorn 12. Mr. Apisak Tantivorawong Directors resigned during the year 1. Dr. Uttama Savanayana (resigned on Mar 7, 2007)

Board of Directors

Board of Executive Directors

Nominating and Corporate Audit Governance Committee Remuneration Committee Committee

25/25 25/25 51/51 22/25 45/51 22/25 11/11 25/25 11/11 22/25 14/15 24/25 14/15 25/25 11/11 25/25 51/51 24/25 14/15 11/11 25/25 50/51 5/5

14/14 13/14 14/14 7/7

8/9

Note: Number in the table refers to number of attendance/number of Board Meeting held while acting as Director 5.5 Corporate Secretary The Bank has assigned Mr. Somgiat Sangsurane, Senior Executive Vice President, Risk Management and Corporate Governance Group to be the Secretary to the Board of Directors, the Board of Executive Directors as well as Corporate Secretary with the Office of the Board of Directors and Shareholders as support unit to be in line with the principles of good corporate governance. Main duties and responsibilities include: 1) Oversee activities of the Board of Directors to be in compliance with the applicable laws, rules and regulation concerned. 2) Organize shareholders general meeting and the Board of Directors meeting to be in compliance with the relevant laws and the Bankâ&#x20AC;&#x2122;s Articles of Association as well as monitoring the actions taken according to the meeting resolutions for accuracy and consistent compliance. 3) Prepare minutes of the meeting of the Board of Directors and those of the shareholders general meeting as well as monitoring the actions taken according to the resolutions. 4) Provide appropriate recommendations to Directors concerning legal provisions, procedures and rules and regulations of the Bank. 5) Oversee corporate governance issues. 6) Acting as a consultant and coordinator with secretaries of respective committees of the Bank. 7) Communicate with the shareholders to inform them of the rights and news of the Bank.

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Report of

the Audit Committee

The Audit Committee comprises three independent directors, each of whom has a three-year term of office. One year refers to the period from the Ordinary General Meeting of the year the member is appointed to the next Ordinary General Meeting. During 2007, the Audit Committee met 15 times to consider issues within its scope of responsibility including to perform other tasks delegated by the Board of Directors. The Audit Committee reported the outcome of each meeting to the Board of Directors, details of which are summarized as follows: • Reviewed the monthly operating performance, quarterly, half-yearly and annual financial statements with the external auditor and Management of the Accounting Department, to ensure that the accounting system and financial reports were prepared in accordance with generally accepted accounting principles and that the disclosures of information were adequate, complete and reliable. • Reviewed transactions between the Bank and subsidiaries including connected-party transactions or transactions that might lead to conflict of interest, so as to ensure that they are in accordance with normal business practices, that they are sufficient disclosures, and that no transaction has significant negative impact on the Bank. • Reviewed risk management, internal audit reports, internal control assessment and exchanged views with Senior Management, monitored the internal control process and implementation of control self-assessment in accordance with the Office of the Auditor General of Thailand’s regulation governing Internal Control Standards, B.E. 2544 (2001) so as to ensure that the Bank’s internal control system was appropriate and adequate. • Reviewed regularly with Management to ensure the Bank’s compliance with legal provisions and regulatory requirements, such as those prescribed by the Office of the Auditor General of Thailand, the Bank of Thailand and the Bank’s operating rules and regulations. • Consulted with Senior Management concerning crucial management issues that might adversely affect the Bank. • Recommended the external auditor and its remuneration to the Board of Directors for approval at the shareholders’ meeting. • Approved the Internal Audit Group’s action plan and annual budget as well as the plan for annual review of the Bank’s loans and contingency obligations, ensuring objectives and scope of audit cover major risk exposures in each business unit and activity level. The Audit Committee performed its duty with prudence and independence. Opinions expressed were straightforward, transparent and verifiable, in accordance with good corporate governance. In this regard, the Audit Committee is of the opinion that the Bank’s financial statements and disclosures were adequate and prepared in accordance with generally accepted accounting principles. Overall risk management and internal control systems were appropriately implemented consistent with the current business operation environment. (Ms.Tanya Sirivedhin) Chairman of the Audit Committee February 15, 2008

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The Board of Directorsâ&#x20AC;&#x2122;

Responsibility for Financial Reports

The Board of Directors attaches importance to and takes responsibility for the consolidated financial statements of Krung Thai Bank and its subsidiaries, as well as all the financial information appeared in the annual report. Such financial statements have been prepared in accordance with the generally accepted accounting principles and standards using appropriate accounting policy with care, accuracy and completeness to reflect the true operating performance of the Bank. In this connection, the Bank has reported and disclosed key information transparently and adequately to the Stock Exchange of Thailand on continuous basis for the benefit of the shareholders and general investors. The Board of Directors has appointed the Audit Committee consisting entirely of Independent Directors to oversee and review the reliability and accuracy of the financial reports, including the internal control system which has to be adequate and appropriate to ensure that the Bankâ&#x20AC;&#x2122;s financial statements are truly reliable. (Mr. Suparut Kawatkul) (Mr. Apisak Tantivorawong) Chairman of the Board of Directors President

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Report of the Independent

Certified P u b l i c A c c o u n t a n t s

To the Shareholders of Krung Thai Bank Public Company Limited The Office of the Auditor General has audited the accompanying consolidated and the Bank’s Balance Sheet as at December 31, 2007 and 2006, and the related consolidated and the Bank’s Statements of Income, Changes in Shareholders’ Equity, and Cash Flows for the years then ended of Krung Thai Bank Public Company Limited and its subsidiaries. These financial statements are the responsibility of the Bank’s management as to their correctness and completeness of the presentation. The responsibility of the Office of the Auditor General is to express an opinion on these financial statements based on its audits. The Office of the Auditor General conducted the audits in accordance with generally accepted auditing standards. Those standards require that the Office of the Auditor General 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. The Office of the Auditor General believes that the audits provide a reasonable basis for the opinion. In the opinion of the Office of the Auditor General, the consolidated and the Bank’s financial statements referred to above present fairly, in all material respects, the financial position of Krung Thai Bank Public Company Limited and its subsidiaries and of the Krung Thai Bank Public Company Limited as at December 31, 2007 and 2006, and the results of its operations, the changes in shareholders’ equity, and the cash flows for the years then ended of Krung Thai Bank Public Company Limited and its subsidiaries in accordance with generally accepted accounting principles.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Without qualifying opinion, we draw attention to the following matters:

1. Note to the financial statements No. 1.2 disclosed that the Bank has changed the accounting policy for the investments in subsidiaries and associated companies from the equity method to the cost method shown in the Bank’s financial statements followed the Thai Accounting Standard No. 44 (edited in 2007). 2. Note to the financial statements No. 3.3.8, according to the BOT’s Notification dispatched on November 16, 2007 mandatory that Commercial Banks to switch the classification of investments and its related accounting treatments including the valuation of fair value in associated with Collateralized Debt Obligations – CDOs satisfying the IAS 39 effective from accounting period beginning on or after January 1, 2008 onwards. 3. Note to the financial statements No. 3.29 regarding loans under the investigation of the Assets Examination Committee (AEC). JARUVAN MAINTAKA (Khunying Jaruvan Maintaka) Auditor General KANYA WILAILUCKANA (Ms. Kanya Wilailuckana) Director of Audit Office Office of the Auditor General February 20, 2008

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KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

BALANCE SHEETS

AS AT DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS NOTE 2007 2006 2007 2006

(RESTATED) ASSETS CASH 21,456,426,555 18,634,478,284 21,455,775,912 18,633,881,516 INTERBANK AND MONEY MARKET ITEMS 3.1 DOMESTIC ITEMS INTEREST BEARING 49,828,311,439 47,645,533,315 49,802,351,641 47,595,833,739 NON-INTEREST BEARING 4,029,473,302 8,744,452,461 4,024,143,110 8,743,035,134 FOREIGN ITEMS INTEREST BEARING 20,898,986,198 28,543,273,665 20,898,986,198 28,543,273,665 NON-INTEREST BEARING 1,251,523,353 1,195,867,997 1,251,523,353 1,195,867,997 TOTAL INTERBANK AND MONEY MARKET ITEMS, NET 76,008,294,292 86,129,127,438 75,977,004,302 86,078,010,535 SECURITIES PURCHASED UNDER RESALE AGREEMENTS 3.2 600,000,000 21,200,000,000 600,000,000 21,200,000,000 INVESTMENTS 2.4 3.3 CURRENT INVESTMENTS, NET 21,250,859,084 29,048,936,666 21,131,726,050 28,974,764,962 LONG-TERM INVESTMENTS, NET 83,532,573,669 79,863,971,935 83,532,573,649 79,863,971,915 INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED COMPANIES, NET 5,340,847,000 4,665,011,277 6,337,386,871 6,078,581,473 TOTAL INVESTMENTS, NET 110,124,279,753 113,577,919,878 111,001,686,570 114,917,318,350 LOANS AND ACCRUED INTEREST 2.5 3.4 RECEIVABLE LOANS 954,571,215,127 922,678,838,271 958,083,977,003 926,269,398,474 ACCRUED INTEREST RECEIVABLE 5,156,234,120 5,485,434,201 5,160,504,964 5,485,434,201 TOTAL LOANS AND ACCRUED INTEREST RECEIVABLE 959,727,449,247 928,164,272,472 963,244,481,967 931,754,832,675 LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS 2.6 3.5 (35,574,005,942) (38,305,103,931) (35,527,786,794) (38,300,680,731) LESS REVALUATION ALLOWANCE FOR DEBT RESTRUCTURING 2.7 3.6 (1,393,638,695) (1,218,162,887) (1,393,638,695) (1,218,162,887) TOTAL LOANS AND ACCRUED INTEREST RECEIVABLE, NET 922,759,804,610 888,641,005,654 926,323,056,478 892,235,989,057 PROPERTIES FORECLOSED, NET 2.10 3.7 34,717,802,523 34,109,836,000 34,712,283,494 34,108,343,637 CUSTOMERS’ LIABILITIES UNDER ACCEPTANCES 7,402,418,280 3,081,327,279 7,402,418,280 3,081,327,279 PREMISES AND EQUIPMENT, NET 2.8 3.8 23,948,672,306 23,664,364,404 19,120,745,703 19,562,959,295 OTHER DEBTORS -SUKHUMVIT ASSET MANAGEMENT CO., LTD. 32,572,588 32,420,480 32,572,588 32,420,480 OTHER ASSETS 3.9 15,671,772,087 15,757,805,774 14,704,609,849 14,867,015,360 TOTAL ASSETS 1,212,722,042,994 1,204,828,285,191 1,211,330,153,176 1,204,717,265,509 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

BALANCE SHEETS (CONTINUED) AS AT DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS NOTE 2007 2006 2007 2006

(RESTATED) LIABILITIES AND SHAREHOLDERS’ EQUITY DEPOSITS DEPOSITS IN BAHT 2.15 3.10 991,648,220,910 942,421,758,177 993,075,059,873 944,266,023,719 DEPOSITS IN FOREIGN CURRENCIES 9,022,704,500 24,014,799,655 9,022,704,500 24,014,799,655 TOTAL DEPOSITS 1,000,670,925,410 966,436,557,832 1,002,097,764,373 968,280,823,374 INTERBANK AND MONEY MARKET ITEMS 3.11 DOMESTIC ITEMS INTEREST BEARING 33,453,114,260 42,419,882,200 33,482,959,528 42,445,951,597 NON-INTEREST BEARING 1,586,351,671 1,323,460,089 1,586,351,671 1,323,460,089 FOREIGN ITEMS INTEREST BEARING 4,242,698,226 4,669,008,333 4,242,698,226 4,669,008,333 NON-INTEREST BEARING 318,924,244 122,010,591 318,924,244 122,010,591 TOTAL INTERBANK AND 39,601,088,401 48,534,361,213 39,630,933,669 48,560,430,610 MONEY MARKET ITEMS LIABILITIES PAYABLE ON DEMAND 3,390,256,420 2,458,570,801 3,390,256,420 2,458,570,801 BORROWINGS 3.12 SHORT-TERM BORROWINGS 14,560,979,211 41,563,221,077 14,560,979,211 41,502,423,779 LONG-TERM BORROWINGS 35,820,806,000 35,780,504,000 35,820,806,000 35,780,504,000 TOTAL BORROWINGS 50,381,785,211 77,343,725,077 50,381,785,211 77,282,927,779 BANK’S LIABILITIES UNDER ACCEPTANCES 7,402,418,280 3,081,327,279 7,402,418,280 3,081,327,279 ACCRUED INTEREST PAYABLE 4,952,262,340 5,039,309,281 4,952,262,340 5,039,309,281 OTHER CREDITORS 25,417,185 23,858,138 25,417,185 23,858,138 - THAI ASSET MANAGEMENT CO., LTD. OTHER LIABILITIES 3.13 10,637,458,656 9,181,895,882 9,748,237,715 8,758,792,469 TOTAL LIABILITIES 1,117,061,611,903 1,112,099,605,503 1,117,629,075,193 1,113,486,039,731 SHAREHOLDERS’ EQUITY SHARE CAPITAL 3.14 AUTHORIZED SHARE CAPITAL PREFERRED SHARE CAPITAL 5,500,000 @ 5.15 Baht 28,325,000 28,325,000 28,325,000 28,325,000 ORDINARY SHARE CAPITAL 11,191,412,250 @ 5.15 Baht 57,635,773,087 57,635,773,087 57,635,773,087 57,635,773,087 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

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KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

BALANCE SHEETS (CONTINUED) AS AT DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS NOTE 2007 2006 2007 2006

(RESTATED) LIABILITIES AND SHAREHOLDERS’ EQUITY (CONTINUED) ISSUED AND PAID-UP SHARE CAPITAL PREFERRED SHARE CAPITAL 5,500,000 @ 5.15 Baht 28,325,000 28,325,000 28,325,000 28,325,000 ORDINARY SHARE CAPITAL 11,179,749,000 @ 5.15 Baht 57,575,707,350 57,575,707,350 57,575,707,350 57,575,707,350 PREMIUM ON ORDINARY SHARE CAPITAL 1,207,650 1,207,650 1,207,650 1,207,650 APPRAISAL SURPLUS ON ASSETS 5,973,154,085 5,976,648,087 5,971,499,705 5,976,648,087 REVALUATION REVALUATION SURPLUS (DEFICIT) ON INVESTMENTS 3.3.5 383,838,457 (1,849,803,032) (157,133,892) (2,224,879,718) RETAINED EARNINGS APPROPRIATED LEGAL RESERVE 3.15 2,811,464,163 2,501,464,163 2,811,464,163 2,501,464,163 UNAPPROPRIATED 28,886,731,740 28,495,127,716 27,470,008,007 27,372,753,246 MINORITY INTERESTS 2,646 2,754 - - TOTAL SHAREHOLDERS’ EQUITY 95,660,431,091 92,728,679,688 93,701,077,983 91,231,225,778 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,212,722,042,994 1,204,828,285,191 1,211,330,153,176 1,204,717,265,509

OFF-BALANCE SHEET ITEMS 3.17 - CONTINGENCIES AVAL TO BILLS AND GUARANTEES OF LOANS 6,128,436,223 7,163,888,499 6,128,436,223 7,163,888,499 LIABILITIES UNDER UNMATURED IMPORT BILLS 127,108,278 46,128,228 127,108,278 46,128,228 LETTERS OF CREDIT 16,104,628,052 21,631,609,728 16,104,628,052 21,631,609,728 OTHER CONTINGENCIES 320,599,338,415 266,257,137,564 320,599,338,415 266,257,137,564 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

SUPARUT KAWATKUL APISAK TANTIVORAWONG (Mr. Suparut Kawatkul) (Mr. Apisak Tantivorawong) Chairman President

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

STATEMENTS OF INCOME FOR THE YEARS-ENDED DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS NOTE 2007 2006 2007 2006 (RESTATED)

INTEREST AND DIVIDEND INCOME 2.2 LOANS 54,052,569,780 55,209,825,379 54,217,762,421 55,433,949,338 INTERBANK AND MONEY MARKET ITEMS 6,196,871,056 6,464,491,674 6,019,268,376 6,418,846,349 INVESTMENTS 5,927,822,884 5,617,964,610 6,175,627,879 5,914,249,605 TOTAL INTEREST AND DIVIDEND INCOME 66,177,263,720 67,292,281,663 66,412,658,676 67,767,045,292 INTEREST EXPENSE 2.3 DEPOSITS 18,478,646,125 18,576,560,538 18,480,656,750 18,580,959,928 INTERBANK AND MONEY MARKET ITEMS 834,331,156 1,028,703,466 833,260,817 1,028,968,807 SHORT-TERM BORROWINGS 861,911,884 137,811,532 861,911,884 135,143,107 LONG-TERM BORROWINGS 1,964,060,660 1,662,234,570 1,964,060,660 1,661,413,459 TOTAL INTEREST EXPENSE 22,138,949,825 21,405,310,106 22,139,890,111 21,406,485,301 NET INTEREST AND DIVIDEND INCOME 44,038,313,895 45,886,971,557 44,272,768,565 46,360,559,991 BAD DEBTS AND DOUBTFUL ACCOUNTS 19,575,194,511 16,501,955,781 19,500,000,000 16,497,532,581 NET INTEREST AND DIVIDEND INCOME AFTER BAD DEBTS AND DOUBTFUL ACCOUNTS 24,463,119,384 29,385,015,776 24,772,768,565 29,863,027,410 NON-INTEREST INCOME NET GAIN ON INVESTMENTS 3.3.6 1,180,096,757 1,307,786,771 1,186,799,854 1,133,842,804 SHARE OF GAIN FROM INVESTMENTS ON EQUITY METHOD 452,988,475 355,098,920 - - FEES AND SERVICE INCOME ACCEPTANCES, AVAL AND GUARANTEES 1,128,545,726 976,440,869 765,866,026 724,119,445 OTHERS 5,959,159,804 5,519,076,675 5,959,775,738 5,519,411,514 EXCHANGE GAIN 672,078,673 868,897,267 672,078,673 868,897,267 REVERSAL OF LOSS ON IMPAIRMENT OF PROPERTIES FORECLOSED 247,342,396 - 247,342,396 - REVERSAL OF LOSS ON 17,993,598 158,688,650 17,993,598 158,688,650 IMPAIRMENT OF LAND OTHER INCOME 1,375,005,183 1,512,656,090 1,193,691,042 1,131,734,920 TOTAL NON-INTEREST INCOME 11,033,210,612 10,698,645,242 10,043,547,327 9,536,694,600 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

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A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

STATEMENTS OF INCOME (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED FINANCIAL STATEMENTS THE BANK’S FINANCIAL STATEMENTS NOTE 2007 2006 2007 2006 (RESTATED)

NON-INTEREST EXPENSES PERSONNEL EXPENSES 12,738,728,964 11,243,353,300 11,780,011,960 10,489,244,240 PREMISES AND EQUIPMENT EXPENSES 4,959,266,683 3,544,306,883 3,303,386,567 2,590,432,343 TAXES AND DUTIES 2,482,709,724 2,399,459,906 2,480,976,212 2,392,862,347 FEES AND SERVICE EXPENSES 445,481,045 433,256,897 363,329,526 383,795,333 DIRECTORS’ REMUNERATION 70,514,754 69,291,003 56,562,325 56,411,065 CONTRIBUTION TO THE FINANCIAL 4,025,717,357 3,997,807,073 4,025,717,357 3,997,807,073 INSTITUTIONS DEVELOPMENT FUND LOSS ON IMPAIRMENT OF - 478,136,156 - 478,136,156 PROPERTIES FORECLOSED LOSS ON IMPAIRMENT OF OTHER ASSETS 34,400,823 131,024,817 34,400,823 131,024,817 OTHER EXPENSES 3,263,553,197 3,669,799,523 5,659,349,621 5,081,995,158 TOTAL NON-INTEREST EXPENSE 28,020,372,547 25,966,435,558 27,703,734,391 25,601,708,532 INCOME BEFORE INCOME TAX 7,475,957,449 14,117,225,460 7,112,581,501 13,798,013,478 INCOME TAX EXPENSE 2.16 1,069,026,700 39,274,491 1,000,000,000 - INCOME BEFORE MINORITY INTERESTS 6,406,930,749 14,077,950,969 6,112,581,501 13,798,013,478 MINORITY INTERESTS NET INCOME 15 41 - - NET INCOME 6,406,930,764 14,077,951,010 6,112,581,501 13,798,013,478 BASIC EARNINGS PER SHARE 2.17 0.57 1.26 0.55 1.23 DILUTED EARNINGS PER SHARE 2.17 0.57 1.26 0.55 1.23 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

SUPARUT KAWATKUL APISAK TANTIVORAWONG (Mr. Suparut Kawatkul) (Mr. Apisak Tantivorawong) Chairman President

ISSUED AND PREMIUM ON SHARE PAID-UP NOTE SHARE CAPITAL CAPITAL

RETAINED EARNINGS APPRAISAL REVALUATION MINORITY SURPLUS SURPLUS (DEFICIT) APPROPRIATED ON INVESTMENTS LEGAL RESERVE UNAPPROPRIATED SHAREHOLDERS

CONSOLIDATED FINANCIAL STATEMENTS TOTAL

(Baht)

BEGINNING BALANCE AS AT JANUARY 1, 2006 57,604,032,350 1,207,650 3,940,225,607 (1,427,122,147) 1,797,566,613 20,714,548,506 665,193 82,631,123,772 REVALUATION SURPLUS ON LAND - - 2,036,422,480 - - - - 2,036,422,480 REVALUATION DEFICIT ON INVESTMENTS - - - (422,680,885) - - - (422,680,885) - - 2,036,422,480 (422,680,885) - - - 1,613,741,595 UN-RECOGNIZED ITEMS IN INCOME STATEMENTS DECREASED OF MINORITY INTERESTS IN CLOSED SUBSIDIARIES - - - - - - (662,396) (662,396) DIVIDENDS PAID 3.16 - - - - - (5,593,474,250) (2) (5,593,474,252) NET INCOME - - - - 703,897,550 13,374,053,460 (41) 14,077,950,969 1,207,650 5,976,648,087 (1,849,803,032) 2,501,464,163 28,495,127,716 2,754 92,728,679,688 ENDING BALANCE AS AT DECEMBER 31, 2006 57,604,032,350 BEGINNING BALANCE AS AT JANUARY 1, 2007 57,604,032,350 1,207,650 5,976,648,087 (1,849,803,032) 2,501,464,163 28,495,127,716 2,754 92,728,679,688 REVALUATION SURPLUS ON LAND - - (3,494,002) - - - - (3,494,002) REVALUATION SURPLUS ON INVESTMENTS - - - 2,233,641,489 - - - 2,233,641,489 - - (3,494,002) 2,233,641,489 - - - 2,230,147,487 UN-RECOGNIZED ITEMS IN INCOME STATEMENTS DECREASED OF MINORITY INTERESTS IN CLOSED SUBSIDIARIES - - - - - - (93) (93) DIVIDENDS PAID 3.16 - - - - - (5,705,326,740) - (5,705,326,740) NET INCOME - - - - 310,000,000 6,096,930,764 (15) 6,406,930,749 1,207,650 5,973,154,085 383,838,457 2,811,464,163 28,886,731,740 2,646 95,660,431,091 ENDING BALANCE AS AT DECEMBER 31, 2007 57,604,032,350 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

FOR THE YEARS-ENDED DECEMBER 31, 2007 AND 2006

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

135

NOTE

ISSUED AND PAID-UP SHARE CAPITAL

PREMIUM ON SHARE CAPITAL

APPRAISAL SURPLUS

RETAINED EARNINGS REVALUATION SURPLUS (DEFICIT) APPROPRIATED ON INVESTMENTS LEGAL RESERVE UNAPPROPRIATED

THE BANK’S FINANCIAL STATEMENTS TOTAL

(Baht)

(RESTATED)

BEGINNING BALANCE AS AT JANUARY 1, 2006 57,604,032,350 1,207,650 3,940,225,607 (1,427,122,147) 1,797,566,613 20,714,548,506 82,630,458,579 ADJUSTMENT FROM CHANGES IN ACCOUNTING 1.2 - - - (324,611,265) - (842,436,938) (1,167,048,203) POLICY FOR INVESTMENTS BALANCE AFTER ADJUSTMENT 57,604,032,350 1,207,650 3,940,225,607 (1,751,733,412) 1,797,566,613 19,872,111,568 81,463,410,376 REVALUATION SURPLUS ON LAND - - 2,036,422,480 - - - 2,036,422,480 REVALUATION DEFICIT ON INVESTMENTS - - - (473,146,306) - - (473,146,306) - - 2,036,422,480 (473,146,306) - - 1,563,276,174 UN-RECOGNIZED ITEMS IN INCOME STATEMENTS DIVIDENDS PAID 3.16 - - - - - (5,593,474,250) (5,593,474,250) NET INCOME - - - - 703,897,550 13,094,115,928 13,798,013,478 1,207,650 5,976,648,087 (2,224,879,718) 2,501,464,163 27,372,753,246 91,231,225,778 ENDING BALANCE AS AT DECEMBER 31, 2006 57,604,032,350 BEGINNING BALANCE AS AT JANUARY 1, 2007 57,604,032,350 1,207,650 5,976,648,087 (2,224,879,718) 2,501,464,163 27,372,753,246 91,231,225,778 REVALUATION SURPLUS ON LAND - - (5,148,382) - - - (5,148,382) REVALUATION SURPLUS ON INVESTMENTS - - - 2,067,745,826 - - 2,067,745,826 - - (5,148,382) 2,067,745,826 - - 2,062,597,444 UN-RECOGNIZED ITEMS IN INCOME STATEMENTS DIVIDENDS PAID 3.16 - - - - - (5,705,326,740) (5,705,326,740) NET INCOME - - - - 310,000,000 5,802,581,501 6,112,581,501 1,207,650 5,971,499,705 (157,133,892) 2,811,464,163 27,470,008,007 93,701,077,983 ENDING BALANCE AS AT DECEMBER 31, 2007 57,604,032,350 NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

FOR THE YEARS-ENDED DECEMBER 31, 2007 AND 2006

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

136 A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

CASH FLOW STATEMENT FOR THE YEARS-ENDED DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED STATEMENTS THE BANK’S FINANCIAL FINANCIAL STATEMENTS

2007

2006

2007

2006 (RESTATED)

CASH FLOWS FROM OPERATING ACTIVITIES NET INCOME 6,406,930,764 14,077,951,010 6,112,581,501 13,798,013,478 ADJUSTMENT TO RECONCILE NET PROFIT TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 2,014,364,070 1,621,405,561 1,072,701,923 835,288,319 DEPRECIATION AND AMORTIZATION 19,575,194,511 16,501,955,781 19,500,000,000 16,497,532,581 BAD DEBT AND DOUBTFUL ACCOUNTS - - SHARE OF GAIN FROM INVESTMENTS ON EQUITY METHOD (452,988,475) (355,098,920) 196,804,996 258,284,996 - - DIVIDEND RECEIVED FROM ASSOCIATED COMPANIES (4,376,628) (53,523,386) (1,813,631) (934,335) GAIN ON DISPOSAL OF ASSETS (797,431,025) (958,405,520) (797,431,025) (958,450,500) GAIN ON DISPOSAL OF INVESTMENTS LOSS ON WRITTEN-DOWN OF INVESTED COMPANY - GENERAL INVESTMENTS 25,153,935 11,093,204 25,153,935 11,093,204 (18,063,882) - (18,063,882) - GAIN ON RECLASSIFICATION OF INVESTMENTS 19,725,230 (31,673,367) 19,725,230 (31,673,367) (GAIN) LOSS ON REVALUATION OF INVESTMENTS (REVERSED) LOSS ON IMPAIRMENT OF PROPERTIES FORECLOSED (247,342,396) 478,136,156 (247,342,396) 478,136,156 (55,179,434) (196,340,336) (61,882,532) (22,351,389) REVERSED ON IMPAIRMENT OF INVESTMENTS (17,993,598) (158,688,650) (17,993,598) (158,688,650) REVERSED ON IMPAIRMENT OF LAND 34,400,823 131,024,817 34,400,823 131,024,817 LOSS ON IMPAIRMENT OF OTHER ASSETS DISCOUNT AMORTIZATION ON INVESTMENTS (458,624,525) (737,302,464) (456,949,527) (732,619,399) 10,568,996 1,862,064,526 10,568,996 LOSS ON REVALUATION OF FOREIGN CURRENCIES 1,862,064,526 INCREASE IN ACCRUED INTEREST INCOME (93,684,827) (756,076,723) (97,955,670) (756,076,723) AND DIVIDEND RECEIVABLE 21,132,653 (113,166,234) 21,132,653 (INCREASE) DECREASE IN OTHER ACCRUED INCOME (113,166,234) INCREASE (DECREASE) IN ACCRUED INTEREST PAYABLE (87,046,942) 2,497,790,900 (87,046,942) 2,497,790,900 INCREASE (DECREASE) IN OTHER ACCRUED (102,648,542) 88,887,942 (102,648,542) 88,887,942 EXPENSES PAYABLE (15) (41) - MINORITY INTERESTS NET LOSS OPERATING INCOME BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 27,686,092,332 32,451,122,609 26,624,333,959 31,708,674,683 (INCREASE) DECREASE IN OPERATING ASSETS 10,163,404,309 (15,729,667,732) 10,143,577,396 (15,875,664,247) INTERBANK AND MONEY MARKET ITEMS SECURITIES PURCHASED UNDER RESALE AGREEMENTS 20,600,000,000 25,810,000,000 20,600,000,000 25,810,000,000 NET INVESTMENT IN SECURITIES FOR TRADING 7,950,057,512 (8,897,448,692) 7,950,057,512 (8,897,448,692) (53,953,322,786) (48,774,854,461) (53,842,125,897) (49,631,046,154) NET LOANS (317,321,053) (401,693,344) (313,294,387) (400,200,982) NET PROPERTIES FORECLOSED (1,369,237,841) (7,924,285,055) (1,292,867,553) (7,917,944,214) NET OTHER ASSETS

NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

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KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

CASH FLOW STATEMENT (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2007 AND 2006

(Baht)

CONSOLIDATED STATEMENTS THE BANK’S FINANCIAL FINANCIAL STATEMENTS

2007

2006

2007

2006

(RESTATED) CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) INCREASE (DECREASE) IN OPERATING LIABILITIES DEPOSITS 34,234,367,578 (16,534,106,584) 33,816,940,999 (14,931,777,125) (8,933,272,811) (3,919,314,447) (8,929,496,940) (3,909,952,350) INTERBANK AND MONEY MARKET ITEMS 931,685,619 233,499,412 931,685,619 233,499,412 LIABILITY PAYABLE ON DEMAND (26,991,444,567) 41,512,047,298 (26,941,444,567) 41,501,250,000 SHORT-TERM BORROWINGS 1,427,909,969 (5,677,649,972) 1,092,093,788 (5,956,708,020) OTHER LIABILITIES NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 11,428,918,261 (7,852,350,968) 9,839,459,929 (8,267,317,689) CASH FLOWS FROM INVESTMENT ACTIVITIES PURCHASE OF AVAILABLE - FOR - SALE SECURITIES (39,152,778,378) (14,593,106,424) (39,152,778,378) (14,593,106,424) CASH RECEIVED FROM DISPOSAL OF AVAILABLE - FOR - SALE SECURITIES 31,057,772,354 6,483,612,820 31,057,772,354 6,483,612,820 PURCHASE OF HELD - TO - MATURITY DEBT SECURITIES (9,590,292,135) (17,999,847,606) (9,472,005,803) (17,903,518,465) CASH RECEIVED FROM DISPOSAL OF HELD - TO - MATURITY DEBT SECURITIES 16,862,295,072 22,642,421,042 16,787,295,062 22,502,731,229 PURCHASE OF GENERAL INVESTMENTS (334,709,600) (44,084,359) (334,709,600) (44,084,359) CASH RECEIVED FROM DISPOSAL OF GENERAL INVESTMENTS 161,422,430 3,754,327,845 161,422,430 3,754,327,845 PURCHASE OF INVESTMENTS IN SUBSIDIARY & ASSOCIATED COMPANIES (252,102,200) (468,423,000) (252,102,300) (968,425,100) INVESTMENTS IN CLOSED SUBSIDIARY COMPANY - ON LIQUIDATION IN TRANSIT - (787,445) - - PURCHASE OF PREMISES AND EQUIPMENT (2,213,347,434) (2,627,216,235) (661,080,076) (1,389,435,033) 18,893,939 297,422,602 1,947,518 1,220,304 CASH RECEIVED FROM DISPOSAL OF PREMISES AND EQUIPMENT NET CASH USED IN INVESTMENT ACTIVITIES (3,442,845,952) (2,555,680,760) (1,864,238,793) (2,156,677,183) CASH FLOWS FROM FINANCING ACTIVITIES 552,000,000 15,692,474,646 552,000,000 15,697,700,000 CASH RECEIVED FROM LONG-TERM BORROWINGS (10,797,298) (10,746,258) - - CASH PAID ON BORROWINGS DIVIDEND PAID – ORDINARY SHARE (5,701,671,990) (5,589,874,500) (5,701,671,990) (5,589,874,500) (3,654,750) (3,599,750) (3,654,750) (3,599,750) DIVIDEND PAID – PREFERRED SHARE NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (5,164,124,038) 10,088,254,138 (5,153,326,740) 10,104,225,750 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,821,948,271 (319,777,590) 2,821,894,396 (319,769,122) BEGINNING BALANCE OF CASH AND CASH EQUIVALENTS 18,634,478,284 18,954,255,874 18,633,881,516 18,953,650,638 ENDING BALANCE OF CASH AND CASH EQUIVALENTS 21,456,426,555 18,634,478,284 21,455,775,912 18,633,881,516 ADDITIONAL DISCLOSURE OF CASH FLOWS INFORMATION CASH PAID DURING THE PERIOD INTEREST EXPENSE 22,262,006,061 18,911,954,552 22,262,006,061 18,908,694,400 332,061,222 6,086,432,954 186,562,844 5,969,761,595 INCOME TAX SIGNIFICANT NON-CASH ITEMS 47,962,596 526,721,163 47,962,596 526,721,163 BANK’S PREMISES TRANSFERRED TO PROPERTIES FORECLOSED NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

1. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The Bank is a public limited company registered in the Kingdom of Thailand with its head office located at 35 Sukhumvit Road, Klongtoey Nua, Wattana, Bangkok, Thailand. It engages in commercial banking business and conducts its business through a nationwide branch network and in certain major centres of the world. Total employees as at December 31, 2007 and 2006 were 16,110 and 15,445, respectively. 1.1 Basis of Presentation of Consolidated Financial Statements and the Bank’s Financial Statements The consolidated financial statements and the Bank’s financial statements are presented in accordance with the Notification issued by the Bank of Thailand dated May 10, B.E. 2544 (2001) prescribing the form of Balance Sheet and Statement of Profit and Loss for Commercial Banks and also in accordance with the Stock Exchange of Thailand (SET)’s regulations, dated January 22, 2001, regarding the Preparation and Submission of Financial Statements and Report on Financial Status and Operation of Listed Companies, B.E. 2544 (2001). Moreover, they are prepared in conformity with generally accepted accounting principles, under Accounting Act B.E. 2543 (2000) and in accordance with the Notification issued by SET No. BOR.JOR.(WOR.) 9/B.E. 2550 (2007), dated March 14, 2007 regarding Principles of Disclosure for Listed Companies in associated with the Effect of Changes in Accounting for Investments from the Equity Method to the Cost Method in Separate Financial Statements. The consolidated financial statements comprise the accounts of the Bank and those of its subsidiaries where the Bank controls and holds more than 50 percent of paid-up shares capital (after eliminating material

inter-company transactions and balances). The 6 consolidated subsidiaries are Krung Thai Legal Services Co., Ltd., Krung Thai General Business Services Co., Ltd., Krung Thai Asset Management Pcl., Krung Thai Computer Service Co., Ltd., Krung Thai Property Development Co., Ltd. (formerly Krung Thai Land and House Co., Ltd.) and KTB Leasing Co., Ltd. (founded on October 27, 2005) except for that of Krung Thai Property Development Co., Ltd. which by the Bank’s Board of Directors has passed a resolution No. 16/B.E. 2547 (626) to dispose its business on July 29, 2004. NC Associates Co., Ltd. was not included in the Bank’s consolidated financial statements due to business dissolution. As such, the registration upon the dissolution with the Ministry of Commerce and Revenue Department was held on December 28, 2005. Liquidation has been done in 2008. Percentages of shareholdings and investments in subsidiaries are shown in Note 3.3.4. Investments in subsidiaries and associated companies, shown in the consolidated financial statements, are accounted for by the equity method. Investments in subsidiaries and associated companies, shown in the Bank’s financial statements, are accounted for by the cost method. The financial statements for the years ended December 31, 2007 and 2006 also included the accounts of domestic and overseas branches, after eliminating material inter-branch transactions and balances. 1.2 Changes in Accounting Policy Following the Federation of Accounting Professions’ prescription No. 26/B.E. 2549 (2006), dated October 11, 2006 regarding Thai Accounting Standards No. 44 Re : Consolidation Financial Statements and Accounting for Investments in Subsidiaries (1st edited), the investments of the parent company in subsidiaries, jointly controlled entities and associates when an entity elects will be recorded by using cost method or on an accrual basis and required the measurement of such financial instrument upon the implementation. This will come into effect for the financial statements prepared in year 2006 and onwards. However, companies that do not want to employ this

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method in year 2006 are allowed to use the equity method towards the end of the year and permitted to start applying the cost method from January 1, 2007 onwards. The Bank has changed the accounting policy for the investments in subsidiaries and associated companies from the equity method to the cost method shown in the Bank’s financial statements. In this regard, the Bank is required to restate its income statements for the year ended December 31, 2006 and balance sheet as at December 31, 2006 in the Bank’s financial statements. As such, the comparative financial statements in this accounting period has employed the same accounting policy. Investments in subsidiaries and associated companies shown in the Bank’s financial statements has been restated and marked at historical cost as to the following results from such changes : 1. Statements of Income in the Bank’s financial statements show a different balance from those in the consolidated financial statements due to different realization of gains on investments. 2. The results from restatement of the Bank’s separate comparative financial statements are set out as follows : - the net outstanding balance of investments in subsidiaries and associated companies, shown in the balance sheet of the Bank’s financial statements, as at December 31, 2006 was Baht 6,078.58 million, a decline of Baht 1,497.45 million (from previous balance of Baht 7,576.03 million) and so a decline in the shareholders’ equity by the same amount, i.e the Baht 375.08 million of Revaluation Deficit on Investments and the Baht 1,122.37 million of Unappropriated Retained Earnings. - Non-interest income as share of profit from investments accounted by equity method, shown in the income statements of the Bank’s financial statements for the year ended December 31, 2006, decreased by Baht 402.23 million whereas Dividend Income increased by Baht 296.28 million and loss on impairment increased by Baht 173.99 million, thus, causing a decrease in net income amounting to Baht 279.94 million. 1.3 Reclassification of Accounts Certain accounts in the financial statements for the year ended December 31, 2006 have been reclassified to conform to the presentation in the financial statements for the year ended December 31, 2007. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Cash and Cash Equivalents Cash and cash equivalents represent cash in hand and cash on collection. 2.2 Recognition of Interest Income Interest income is accrued on a time-apportioned basis using the applicable effective interest rate, except for interest on loans classified as delinquent over 3 months. In accordance with the Bank of Thailand’s regulations, interest income on delinquent loans over 3 months from the due date only recognized as an income from January 1, 2000 had been reversed from the statements of income and recognized on a cash received basis, instead. The recognition of income generated from rental contract of a certain subsidiary company including : - those income from hire-purchasing recognized by using applicable effective rate as to maturity date. - those income from financial lease recognized by using applicable effective rate as time to maturity of financial lease. - those income from operational contract recognized as to rental period. 2.3 Recognition of Interest Expense Interest expense on deposits and borrowings is accrued on a time-apportioned basis using the applicable effective interest rate.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.4 Investments in Securities 2.4.1 Basis for Classification of Investments The Bank classifies its marketable debt and/or equity securities as trading securities and/or as available-for-sale securities. Non-marketable equity securities are classified as general investments. Securities held for less than 1 year are presented as current investments, while those exceeding 1 year and those held-to-maturity, are presented as long-term investments. Trading securities are classified as current investments. 2.4.2 Basis for Valuation of Investments Investments in marketable debt and equity securities classified as trading securities are stated at fair value. Unrealised gains or losses arising from their revaluation are credited or charged directly to the statements of income. Investments in marketable debt or equity securities classified as available-for-sale securities are stated at fair value. Unrealised gains or losses arising from their revaluation are shown as a separate component in shareholders’ equity and realised in the statements of income upon disposal. Investments in debt securities classified as held-to-maturity are carried at the amortized cost. Premiums or discounts arising on acquisition are amortized or accreted at month-end over the period to maturity by using straight line method which the effect is not material from those using the effective interest yield method. Investments in non-marketable equity securities are classified as general investments and stated at cost, net of valuation allowance for impairment. Losses on impairment are charged to the statements of income. Investments in marketable investment units classified as trading and available-for-sale are stated at fair value whereas investments in non-marketable investment units are stated at net value of financial asset. Investments in subsidiaries and associates shown in the Bank’s financial statements are accounted for by using the cost method. Investments in subsidiaries and associates shown in Consolidated and its subsidiaries financial statements are accounted for by using the equity method. The cost of investments on disposal is calculated by using the weighted average method. Dividend income from investments is recognized as income when declared (except for those of associated/subsidiaries company recognized on equity method). 2.5 Loans Loans represent the outstanding principal amounts, except for Bank overdrafts which include accrued interest receivable in the drawn amounts. Unearned discounts are presented as a net deduction from the loans. 2.6 Allowance for Doubtful Accounts The Bank’s allowance for bad debts and doubtful accounts are held in each accounting period and realized as expenses by way of 6 classifications of loans in compliance with the Bank of Thailand’s regulation on loan classification and provisioning, as to the followings : In the first accounting period of 2006, according to the BOT’s new regulations on provisioning in regard to Worthless or Irrecoverable Assets and Doubtful Assets that may be Worthless or Irrecoverable of Commercial Banks dispatched on August 23, 2004, the Bank has been mandated to set aside 100 percent provisions over recorded book value of loans less collateral for debtors classified as doubtful of loss that have not filed lawsuit or entered in debt restructuring. Not only a 100 percent provisions over recorded book value less collateral are required but the overdue period of debt was also taken into account. In this respect, loans overdued over 24 months upto 36 months, over 36 months upto 48 months and over 48 months required more of the allowance provided not less than 25, or 50 or 100 percent, respectively over the loan outstanding balances less allowance having provided.

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Further, the provisioning regulations as such has, not only, included the prescription of with or without

the transfer of reversed excessive allowance to income, but also, included loan classification considered on an account-by-account basis, the modification of TDR debtors related to losses arising on debt restructuring and asset reclassification. In this respect, the Bank has been eligible to adopt the more stringent guideline applicable to provisioning whereas the BOT’s requirement for provisioning would also be instructed at the appropriated rate accordingly. Regulation on Collateral Valuation according to the BOT’s Notification number THOR POR TOR PHOR SOR WOR. (21) WOR. 797/B.E. 2548 (2005) dated May 4, 2005, mandatory that collaterals are required to be

re-appraised on a 3-year basis which enable them to be deductible from recorded book value of loan before provisioning. The BOT has prescribed the new regulations on provisioning and dispatched the Notification regarding Worthless or Irrecoverable Assets and Doubtful Assets that may be Worthless or Irrecoverable of Commercial Banks dated December 7, 2006 which has come into effect since the last six month accounting period of year 2006 and of year 2007 as to the following essences : 1. The commercial banks are required to set provision upto 100 percent for the difference between the book value of loan and the present value of expected cash flows from the debtor or the present value of expected cash flows from the sale of collateral (formerly, BOT required that commercial banks set aside provision for debtors classified as substandard, doubtful and doubtful of loss at the rate of 20, 50 and 100 percent for the difference between the book value of loan and collateral value, respectively). 2. For collaterals that are immovable properties, leasehold, machineries and vehicles are required to calculate the present value of expected cash flows whereas other types of collateral are calculated by using the method specified by the BOT. [e.g. the present value of collaterals as immovable for debtors who are in the process of litigation is approximately 62.03 percent of the appraisal value whereas those for debtors whose collaterals are sold by auction is approximately 66.38 percent of the appraisal value (collateral value formerly used in the calculation of the present value as prescribed by the BOT is equal to 90 percent of the appraisal value)] The new regulations as such also require that the provision gradually set according to timely manner as to the followings : A. For debtors who the court has already adjudged or in the legal execution process and in the litigation process, provision will be set from the second accounting period of year 2006 onwards. B. For debtors classified as doubtful of loss and doubtful, provision will be set from the first accounting period of year 2007 onwards. C. For debtors classified as substandard, provision will be set from the second accounting period of year 2007 onwards. The Bank has been eligible to adopt the more stringent guideline applicable to loan classification and provisioning whereas the BOT’s requirement for provisioning would also be instructed at the appropriated rate, accordingly. As at December 31, 2006 the Bank has fully set provisions according to BOT’s new regulations for debtor groups A. (debtors already adjudged by the court or in the process of legal execution and litigation). As at December 31, 2007, the Bank has already provided the allowance for doubtful accounts in line with the BOT’s new regulation for debtors group A to C (non-performing debtors). Additionally, the BOT has stipulated the new regulation on Collateral Valuation and Methodologies as dispatched in two Notifications, i.e., No. THOR POR TOR. PHOR NOR SOR. (21) WOR. 938/B.E. 2550 and No.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

THOR POR TOR. PHOR NOR SOR. (21) WOR. 1948/B.E. 2550 (2007) Re: Types of Collaterals and Values of Collateral that can be deductible from the book value of debtors before provisioning, dated May 29, 2007 and October 4, 2007. As well as the Notification No. THOR POR TOR. PHOR NOR SOR. (21) WOR. 1950/B.E. 2550 (2007) Re: Regulation on Collateral Valuation, dated October 4, 2007 diversifying types and methodologies on Collateral Valuation that can be deductible from the book value of debtors on provisioning. Further, the Bank has already considered provisioning on a qualitative basis. The Bank gradually set aside the allowance for doubtful accounts on a monthly basis of Baht 300.00 million for accounting period in 2007 and 2006. Apart from this, the additional provisioning has been appropriately pursued by the Management in each accounting period. As such, the Bank’s total provisioning has increased in accounting period years 2007 and 2006 by Baht 15,900.00 million and also Baht 12,976.73 million, respectively. (see Note 3.5) Bad debts written off and bad debts recovered are either deducted from, or, added to the allowance for doubtful accounts whichever the case. Any debtor classified as doubtful of loss and considered as uncollectible would be written off by the value of its underlying provision as prescribed by the Bank’s write-off policy and also in line with that of the BOT. 2.7 Determination of Losses on Troubled Debt Restructuring (TDR) Losses arising on debt restructuring were determined as follows : 2.7.1 Where the Bank accepts relaxation of the repayment conditions without reducing principal and interest prior to trouble debt restructuring, the present value of expected cash flow received was discounted by using the interest rate under the conditions specified in the contract. In cases where the lower of such rate than financial cost rate, the financial cost rate will be used instead. Where the lower of present value computed than the carrying value (the principal amount plus interest receivable included in the outstanding balance of restructured debt), an allowance for losses arising on debt restructuring were totally recognized and taken to income statement for the relevant period. The component of financial costs encompasses the cost of deposits taking and the weighted average loans, including the Bank’s contributions to the Financial Institutions Development Fund and expenses incurred to maintain liquidity. 2.7.2 Where the Bank accepts assets transferred, financial instruments, or debt-equity conversion for repayment, total account receivables would be entirely written off and recorded the assets received at their fair value net of estimated selling cost. Losses arising were charged to Statements of Income instantly upon the receipt of transfer by taking into account the original allowance for doubtful of loss. Hence, the value of assets transferred shall be recorded not higher than book value of the debt plus accrued interest receivable entitled by the Bank. Preliminary apply the practice through No. 2.7.2 where the restructuring of loan involves in asset/financial instruments transferred or debt-equity conversion for partial repayment and through No. 2.7.1 for the residual debt balance where the Bank accepts relaxation of the repayment conditions. 2.8 Property, Premises and Equipment Property, premises and equipment are stated at cost, net of accumulated depreciation and allowance for asset impairment. Land will be revalued on a 3-5 year basis. A deficit on revaluation of land is recognized as a loss on impairment in the Statements of Income. A surplus on revaluation of land is double-entered to land account and appraisal surplus on assets revaluation account and shown in the Shareholders’ Equity. Property related to subsidiaries is stated at cost value.

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Depreciation is calculated on the straight-line basis over their estimated useful lives of the assets at the rate of 5 percent per annum for premises and 20 percent per annum for equipment. Equipment with an acquisition cost not exceeding Baht 3,000.00 is charged directly to expense in the period of acquisition. 2.9 Leasehold Properties Leasehold properties are amortized over the lease term or within 10 years where there is no substantiated lease agreement. 2.10 Properties Foreclosed Properties foreclosed are immovable and movable properties which are stated at lower of cost or market value. Losses on impairment are recognized as non-interest expense in the statements of income. Gains or losses on sale are recognized as other income or non-interest expense in the statement of income upon disposal. 2.11 Asset Impairment The Bank conducts the review on a case by case basis of an impairment arising on investments, property, premises and equipment when there is an indication that the carrying value of those assets is higher than the expected recoverable amounts. As such, losses on impairment will be realized in the Income Statements. The reversal of losses on impairment will be recorded only when there is an indication that such impairment no longer exists or shown at a declining balance, if any, and credited to Other Income. 2.12 Translation of Foreign Currencies Assets and liabilities denominated in foreign currencies are translated into Thai Baht at the rates of exchange prevailing on transaction dates, whereas translation of assets and liabilities balances into Thai Baht uses reference rates of exchange announced by the Bank of Thailand at month-end. Foreign exchange gains or losses arising on translation are dealt with through the profit and loss account in the relevant period. Risk management in relation to foreign currency assets and liabilities is performed under the Bank of Thailandâ&#x20AC;&#x2122;s supervision. Net individual foreign currency position is maintained on a daily basis as long or short not exceeding 15 percent of capital fund or USD 5.0 million whichever the higher, whereas all foreign currency position can be maintained on a daily basis as long or short not exceeding 20 percent of capital fund or USD 10.0 million whichever the higher. Reserve for Exchange fluctuation is provided to moderate the impact of losses expected in subsequent periods. 2.13 Derivatives The accounting treatments for financial derivative transactions in response to their purposes are as follows: 1. Forward Foreign Exchange Contracts For hedging purposes, the difference between the forward rate and the spot rate on the date of entering into the contract is amortized to the Statements of Income over the period of the contract. For trading purposes, transactions are carried at fair value using the Mark-to-Market approach. Gains or losses arising from changes in fair value are recognized in income or expenses for the period. 2. Interest Rate Swaps and Cross Currency Swaps For hedging purposes, the Bank are accounted for income/expenses or gains/losses associated with those financial derivatives measurement in a manner consistent with the accounting measurement of the hedging item. For trading purposes, currency swaps and interest rate swap transactions are carried at their fair value. Gains or losses arising from changes in fair value are taken to income statements for the period.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

2.14 Provident Fund and Retirement The Bank established a Provident Fund under the Provident Fund Act B.E. 2530 (1987) and registered with the Ministry of Finance on June 25, 1992. Permanent employees of the Bank are entitled to apply for membership according to the Fund’s regulations. Employees must contribute to the Fund at the rate of either 3, 6, or 10 percent of basic salary while the Bank’s supplemental contribution is at 10 percent of the employees’ basic salary. Employees whose working tenure totals ten years or more are entitled to special remuneration as prescribed by the Bank which is charged to expenses in the relevant period. 2.15 Unclaimed Balances Unclaimed balances which remain dormant for more than 10 years are taken to income at the accounting period-end. 2.16 Income Tax The Bank’s income tax expenses are recorded based on tax paid and tax accrued for the year. 2.17 Basic Earnings/(Loss) per Share Basic Earnings/(Loss) per share is calculated by dividing the net income/(loss), in associated with ordinary shares, by the weighted average number of ordinary shares outstanding. Diluted Earnings/(Loss) per Share Diluted Earnings/(Loss) per share is calculated by dividing the net income after deducting noncumulative preferred dividend declared during the period by the number of weighted-average dilutive potential ordinary shares. 2.18 Accounting Estimates In compliance with generally accepted accounting principles, the Bank is required to make estimates and assumptions in the financial statements that affect the reported amounts of income, expense, assets and liabilities and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. 2.19 Provisions, Contingent Liabilities The Bank of Thailand has issued the Notification No. THOR POR THOR. PHOR NOR SOR. (21) WOR. 2395/B.E. 2548 (2005), dated December 23, 2005 prescribing the provisioning regulations in associated with the

off-balance sheet obligation underlying significant impacts that may arise from the misuse of the off-balance sheet items. As such, in conformity with Accounting Standard 53 regarding Provisions, Contingent Liabilities and Contingent Assets, the Bank is required to set aside the provisions for off-balance sheet items satisfying the following criteria : 1. Off-balance sheet obligation classified as substandard, doubtful, doubtful of loss and loss according to debt classification regulations as prescribed in the Notification of the BOT regarding Worthless or Irrecoverable Assets and Doubtful Assets that may be Worthless or Irrecoverable of Commercial Banks, dated August 23, 2004 or the supplementary amended edition. 2. Off-balance sheet obligation whichby the Bank should recognized provisions under liabilities shown in Balance Sheet according to item 14 in Thai Accounting Standard No. 53 when satisfying the following criteria : 2.1 A present obligation resulting from past events that may be a legal or a constructive obligation. 2.2 It is possibly certain that there will be a future outflow of resources embodying economic benefit to settle such obligation, and 2.3 A reliable estimate of obligation can be made. 3. Off-balance sheet obligation engage in high credit risk such as guarantee of loan, aval to bill or irrevocable obligation whereby the Credit Conversion Factor stipulated by the BOT in calculating Capital Fund to be maintained is equal to 1.0.

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3. SUPPLEMENTARY INFORMATION 3.1 Interbank and Money Market Items

(Million Baht) Consolidated Financial Statements December 31, 2007 December 31, 2006 Demand Time Total Demand Time Total

3.1.1 Domestic Items Bank of Thailand and Financial Institutions Development Fund 3,973.98 11,500.00 15,473.98 8,670.45 1,200.00 9,870.45 Commercial banks 90.17 - 90.17 132.93 5,250.00 5,382.93 Other banks 0.05 122.00 122.05 0.05 - 0.05 Finance Co., Finance & Securities Co., Securities Co., and Credit Fonciers Co. - 760.00 760.00 - 50.00 50.00 Other financial institutions 99.79 37,618.67 37,718.46 134.94 41,340.45 41,475.39 Total Domestic Items 4,163.99 50,000.67 54,164.66 8,938.37 47,840.45 56,778.82 Add Accrued interest receivable - 44.19 44.19 - 77.30 77.30 Less Allowance for doubtful accounts - (351.07) (351.07) - (466.13) (466.13) Total 4,163.99 49,693.79 53,857.78 8,938.37 47,451.62 56,389.99 3.1.2 Foreign Items US Dollar 838.07 19,558.21 20,396.28 1,140.96 27,095.58 28,236.54 Japanese Yen 349.94 - 349.94 343.86 - 343.86 Other currencies 593.11 709.81 1,302.92 523.51 606.21 1,129.72 Total Foreign Items 1,781.12 20,268.02 22,049.14 2,008.33 27,701.79 29,710.12 Add Accrued interest receivable - 106.24 106.24 - 31.12 31.12 Less Allowance for doubtful accounts - (4.87) (4.87) - (2.10) (2.10) Total 1,781.12 20,369.39 22,150.51 2,008.33 27,730.81 29,739.14 Total Domestic and Foreign Items 5,945.11 70,063.18 76,008.29 10,946.70 75,182.43 86,129.13

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

(Million Baht) The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Demand Time Total Demand Time Total

3.1.1 Domestic Items

Bank of Thailand and Financial Institutions Development Fund 3,973.98 11,500.00 15,473.98 8,670.45 1,200.00 9,870.45 Commercial banks 58.88 - 58.88 81.81 5,250.00 5,331.81 Other banks 0.05 122.00 122.05 0.05 - 0.05 Finance Co., Finance & Securities Co., Securities Co., and Credit Fonciers Co. - 760.00 760.00 - 50.00 50.00 Other financial institutions 99.79 37,618.67 37,718.46 134.94 41,340.45 41,475.39 Total Domestic Items 4,132.70 50,000.67 54,133.37 8,887.25 47,840.45 56,727.70 Add Accrued interest receivable - 44.19 44.19 - 77.30 77.30 Less Allowance for doubtful accounts - (351.07) (351.07) - (466.13) (466.13) Total 4,132.70 49,693.79 53,826.49 8,887.25 47,451.62 56,338.87 3.1.2 Foreign Items US Dollar 838.07 19,558.21 20,396.28 1,140.96 27,095.58 28,236.54 Japanese Yen 349.94 - 349.94 343.86 - 343.86 Other currencies 593.11 709.81 1,302.92 523.51 606.21 1,129.72 Total Foreign Items 1,781.12 20,268.02 22,049.14 2,008.33 27,701.79 29,710.12 Add Accrued interest receivable - 106.24 106.24 - 31.12 31.12 Less Allowance for doubtful accounts - (4.87) (4.87) - (2.10) (2.10) Total 1,781.12 20,369.39 22,150.51 2,008.33 27,730.81 29,739.14 Total Domestic and Foreign Items 5,913.82 70,063.18 75,977.00 10,895.58 75,182.43 86,078.01 3.2 Securities Purchased under Resale Agreements

Government & BOT Bonds Total

(Million Baht) C onsolidated and the Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006

600.00 600.00

21,200.00 21,200.00

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3.3 Investments

(Million Baht)

3.3.1 Current Investments Trading Securities Government & state 4,636.12 4.02 (0.09) 4,640.05 9,601.86 9.50 (0.27) 9,611.09 enterprise securities Private enterprise debt securities 9.50 - (0.04) 9.46 206.53 - (1.33) 205.20 Domestic marketable equity securities 63.80 0.87 (3.58) 61.09 79.49 34.72 (1.33) 112.88 Total 4,709.42 4.89 (3.71) 4,710.60 9,887.88 44.22 (2.93) 9,929.17 Add Allowance for revaluation 1.18 - - - 41.29 - - - Total 4,710.60 4,710.60 9,929.17 9,929.17 Available-for-Sale Securities Government & state 2,814.51 19.94 (0.22) 2,834.23 3,748.58 0.83 (7.73) 3,741.68 enterprise securities Private enterprise debt securities 2,625.00 - (98.63) 2,526.37 - - - - Foreign debt securities 102.27 - - 102.27 223.86 - (3.70) 220.16 Domestic marketable equity securities - - - - 9.40 4.18 (0.77) 12.81 Others - VAYUPAKSA - - - - 1,192.68 - (131.19) 1,061.49 MUTUAL FUND 1 Total 5,541.78 19.94 (98.85) 5,462.87 5,174.52 5.01 (143.39) 5,036.14 Less Allowance for revaluation (78.91) - - - (137.61) - - - Less Allowance for impairment - - - - (0.77) - - - Total 5,462.87 5,462.87 5,036.14 5,036.14 Held-to-Maturity Debt Securities Government & - - 10,555.61 13,966.36 - - 13,966.36 state enterprise securities 10,555.61 Private enterprise debt securities 521.78 - - 521.78 - - - - Foreign debt securities - - - - 117.26 - - 117.26 Total 11,077.39 11,077.39 14,083.62 14,083.62 Total Current Investments - net 21,250.86 21,250.86 29,048.93 29,048.93

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Cost / Unrealized Unrealized Cost / Unrealized Unrealized Amortized Gains Losses Fair Value Amortized Gains Losses Fair Value Cost Cost 3.3.2 Long-Term Investments Available-for-Sale Securities Government & state 17,738.28 1.37 (122.76) 17,616.89 13,008.94 50.04 (39.60) 13,019.38 enterprise securities Private enterprise debt securities 1.96 0.31 - 2.27 2.40 0.37 - 2.77 Foreign debt securities 165.41 0.65 (2.19) 163.87 136.11 - (2.62) 133.49 Domestic marketable equity securities 1,593.71 1,131.66 (11.61) 2,713.76 1,509.53 1,071.74 (63.62) 2,517.65 Others - VAYUPAKSA 29,411.16 - (1,039.24) 28,371.92 28,212.38 - (3,113.21) 25,099.17 MUTUAL FUND 1 Total 48,910.52 1,133.99 (1,175.80) 48,868.71 42,869.36 1,122.15 (3,219.05) 40,772.46 Less Allowance for revaluation (39.04) - - - (2,091.70) - - - Less Allowance for impairment (2.77) - - - (5.20) - - - Total 48,868.71 48,868.71 40,772.46 40,772.46 Held-to-Maturity Debt Securities Government & state 19,510.53 - - 19,510.53 30,674.43 - - 30,674.43 enterprise securities Private enterprise debt securities 480.50 - (2.52) 477.98 899.54 - (2.52) 897.02 Foreign debt securities 10,512.54 - - 10,512.54 3,609.32 - - 3,609.32 Total 30,503.57 - (2.52) 30,501.05 35,183.29 - (2.52) 35,180.77 Less Allowance for impairment (2.52) - - - (2.52) - - - Total 30,501.05 30,501.05 35,180.77 35,180.77 General Investments Domestic non-marketable equity securities 5,513.03 - (1,412.26) 4,100.77 5,312.05 - (1,456.12) 3,855.93 Foreign non-marketable equity securities 92.97 - (30.93) 62.04 93.77 - (38.96) 54.81 Total 5,606.00 - (1,443.19) 4,162.81 5,405.82 - (1,495.08) 3,910.74 Less Allowance for impairment (1,443.19) - - - (1,495.08) - - - Total 4,162.81 4,162.81 3,910.74 3,910.74 Total Long-Term Investments - net 83,532.57 83,532.57 79,863.97 79,863.97

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(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Maturity Maturity Total Total

Within 1 year Over 1 to 5 years Over 5 years

3.3.3 Maturity Schedule of Debt Securities Available-for-Sale Securities Government & state enterprise securities 2,814.51 17,737.30 0.98 20,552.79 3,748.58 12,290.63 718.31 16,757.52 Private enterprise debt securities 2,625.00 1.96 - 2,626.96 - 2.40 - 2.40 Foreign debt securities 102.27 78.55 86.86 267.68 223.86 136.11 - 359.97 Total 5,541.78 17,817.81 87.84 23,447.43 3,972.44 12,429.14 718.31 17,119.89 Add (Less) Allowance for revaluation (78.91) (120.84) (0.08) (199.83) (10.60) 16.15 (6.39) (0.84) Less Allowance for impairment - (1.71) - (1.71) - (1.57) - (1.57) Total 5,462.87 17,695.26 87.76 23,245.89 3,961.84 12,443.72 711.92 17,117.48 Held-to-Maturity Debt Securities Government & state enterprise securities 10,555.61 14,407.54 5,102.99 30,066.14 13,966.36 22,878.70 7,795.73 44,640.79 Private enterprise debt securities 521.78 480.50 - 1,002.28 - 897.02 2.52 899.54 Foreign debt securities - 5,116.80 5,395.74 10,512.54 117.26 3,609.32 - 3,726.58 Total 11,077.39 20,004.84 10,498.73 41,580.96 14,083.62 27,385.04 7,798.25 49,266.91 Less Allowance for impairment - (2.52) - (2.52) - - (2.52) (2.52) Total 11,077.39 20,002.32 10,498.73 41,578.44 14,083.62 27,385.04 7,795.73 49,264.39 Total Debt Securities 16,540.26 37,697.58 10,586.49 64,824.33 18,045.46 39,828.76 8,507.65 66,381.87 (Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2006 December 31, 2007 Cost / Unrealized Unrealized Cost / Unrealized Unrealized Amortized Gains Losses Fair Value Amortized Gains Losses Fair Value Cost Cost 3.3.1 Current Investments Trading Securities Government & state enterprise securities 4,636.12 4.02 (0.09) 4,640.05 9,601.86 9.50 (0.27) 9,611.09 Private enterprise debt securities 9.50 - (0.04) 9.46 206.53 - (1.33) 205.20 Domestic marketable equity securities 63.80 0.87 (3.58) 61.09 79.49 34.72 (1.33) 112.88 Total 4,709.42 4.89 (3.71) 4,710.60 9,887.88 44.22 (2.93) 9,929.17 Add Allowance for revaluation 1.18 - - - 41.29 - - - Total 4,710.60 4,710.60 9,929.17 9,929.17

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

(Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Cost / Unrealized Unrealized Cost / Unrealized Unrealized Fair Value Amortized Gains Losses Amortized Gains Losses Fair Value Cost Cost

3.3.1 Current Investments (continued) Available-for-sale Securities Government & state enterprise securities 2,814.51 19.94 (0.22) 2,834.23 3,748.58 0.83 (7.73) 3,741.68 - (98.63) 2,526.37 - - - - Private enterprise debt securities 2,625.00 102.27 - - 102.27 223.86 - (3.70) 220.16 Foreign debt securities Domestic marketable - - - - 9.40 4.18 (0.77) 12.81 equity securities Others - VAYUPAKSA MUTUAL FUND 1 - - - - 1,192.68 - (131.19) 1,061.49 5,541.78 19.94 (98.85) 5,462.87 5,174.52 5.01 (143.39) 5,036.14 Total - - - (137.61) - - - Less Allowance for revaluation (78.91) - - - - (0.77) - - - Less Allowance for impairment 5,462.87 5,462.87 5,036.14 5,036.14 Total Held-to-Maturity Debt Securities Government & state enterprise securities 10,436.47 - - 10,436.47 13,892.19 - - 13,892.19 - - 521.78 - - - - Private enterprise debt securities 521.78 - - - - 117.26 - - 117.26 Foreign debt securities 10,958.25 10,958.25 14,009.45 14,009.45 Total Total Current Investments - net 21,131.72 21,131.72 28,974.76 28,974.76 3.3.2 Long-Term Investments Available-for-sale Securities Government & state enterprise securities 17,738.28 1.37 (122.76) 17,616.89 13,008.94 50.04 (39.60) 13,019.38 1.96 0.31 - 2.27 2.40 0.37 - 2.77 Private enterprise debt securities 165.41 0.65 (2.19) 163.87 136.11 - (2.62) 133.49 Foreign debt securities Domestic marketable equity securities 1,593.71 1,131.66 (11.61) 2,713.76 1,509.53 1,071.74 (63.62) 2,517.65 Others - VAYUPAKSA MUTUAL FUND 1 29,411.16 - (1,039.24) 28,371.92 28,212.38 - (3,113.21) 25,099.17 Total 48,910.52 1,133.99 (1,175.80) 48,868.71 42,869.36 1,122.15 (3,219.05) 40,772.46 - - - (2,091.70) - - - Less Allowance for revaluation (39.04) - - - (5.20) - - - Less Allowance for impairment (2.77) Total 48,868.71 48,868.71 40,772.46 40,772.46

151

152

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(Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2006 Cost / Unrealized Unrealized Cost / Unrealized Unrealized Fair Value Amortized Gains Losses Amortized Gains Losses Fair Value Cost Cost

3.3.2 Long-Term Investments

(continued) Held-to-Maturity Debt Securities Government & state 19,510.53 - - 19,510.53 30,674.43 - - 30,674.43 enterprise securities - (2.52) 477.98 899.54 - (2.52) 897.02 Private enterprise debt securities 480.50 10,512.54 - - 10,512.54 3,609.32 - - 3,609.32 Foreign debt securities Total 30,503.57 - (2.52) 30,501.05 35,183.29 - (2.52) 35,180.77 - - - (2.52) - - - Less Allowance for impairment (2.52) Total 30,501.05 30,501.05 35,180.77 35,180.77 General Investments Domestic non-marketable 5,513.03 - (1,412.26) 4,100.77 5,312.05 - (1,456.12) 3,855.93 equity securities Foreign non-marketable 92.97 - (30.93) 62.04 93.77 - (38.96) 54.81 equity securities Total 5,606.00 - (1,443.19) 4,162.81 5,405.82 - (1,495.08) 3,910.74 - - - (1,495.08) - - - Less Allowance for impairment (1,443.19) Total 4,162.81 4,162.81 3,910.74 3,910.74 Total Long-Term 83,532.57 83,532.57 79,863.97 79,863.97 Investments - net Shown in the Consolidated and the Bank’s financial statement as at December 31, 2007 and 2006, the Bank’s long-term investments in Government and State Enterprise debt securities held-to-maturity included promissory notes issued by the Thai Asset Management Corporation (TAMC) in exchange for the transfer of the Bank’s impaired assets amounting to Baht 13,109.89 million and Baht 13,844.35 million, respectively. (see Note 3.27) As at February 28, 2007, the Bank has switched short term available-for-sale investments to long term available-for-sale investments. Its cost value stated at Baht 1,202.09 million whereas the Baht 1,053.83 million stated as fair value, the Baht 147.49 million as allowance for revaluation and the Baht 0.77 million as allowance for impairment. As at December 31, 2007, having included in the Baht 10,512.54 million of long-term investments,

held-to-maturity foreign debt securities is the Baht 5,395.74 million of investments in Collateralized Debt

Obligations-CDOs. (See Note 3.3.8)

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

In 2006, the Bank has switched long-term general investments to long-term investments, available-for-sale marketable equity securities at the cost value on the transferred date of Baht 497.28 million. Related allowance for impairment was Baht 186.93 million and fair value at Baht 598.25 million. Income generating from reversal of impairment was, subsequently, taken to income statements amounting to Baht 186.93 million and shown as revaluation surplus in shareholdersâ&#x20AC;&#x2122; equity amounting to Baht 100.97 million. On December 31, 2006, the Bank has reclassified investments in foreign debt securities by switching from current investments, trading securities amounting to Baht 180.97 million to current investments, available-for-sale amounting to Baht 109.07 million coupled with long-term investments, available-for-sale amounting to Baht 71.90 million as to maturity schedule of debt securities. (Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2006 December 31, 2007 Maturity Maturity Total Total

Within 1 year Over 1 to 5 years Over 5 years

3.3.3 Maturity Schedule

Within 1 year Over 1 to 5 years Over 5 years

of Debt Securities Available-for-sale Securities Government & state 2,814.51 17,737.30 0.98 20,552.79 3,748.58 12,290.63 718.31 16,757.52 enterprise securities - 2,626.96 - 2.40 - 2.40 Private enterprise debt securities 2,625.00 1.96 102.27 78.55 86.86 267.68 223.86 136.11 - 359.97 Foreign debt securities 5,541.78 17,817.81 87.84 23,447.43 3,972.44 12,429.14 718.31 17,119.89 Total Add (Less) Allowance (78.91) (120.84) (0.08) (199.83) (10.60) 16.15 (6.39) (0.84) for revaluation - (1.71) - (1.71) - (1.57) - (1.57) Less Allowance for impairment 5,462.87 17,695.26 87.76 23,245.89 3,961.84 12,443.72 711.92 17,117.48 Total Held-to-Maturity Debt Securities Government & state 10,436.47 14,407.54 5,102.99 29,947.00 13,892.19 22,878.70 7,795.73 44,566.62 enterprise securities - 1,002.28 - 897.02 2.52 899.54 Private enterprise debt securities 521.78 480.50 - 5,116.80 5,395.74 10,512.54 117.26 3,609.32 - 3,726.58 Foreign debt securities 10,958.25 20,004.84 10,498.73 41,461.82 14,009.45 27,385.04 7,798.25 49,192.74 Total - (2.52) - (2.52) - - (2.52) (2.52) Less Allowance for impairment 10,958.25 20,002.32 10,498.73 41,459.30 14,009.45 27,385.04 7,795.73 49,190.22 Total Total Debt Securities 16,421.12 37,697.58 10,586.49 64,705.19 17,971.29 39,828.76 8,507.65 66,307.70

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3.3.4 Investments in Subsidiaries and Associated Companies

Name of Company

Type of Business

Type of Shares (Preferred/ Ordinary Shares)

(Million Baht) Consolidated Financial Statements December 31, 2007 Percentage of Shareholding Investments Investments Dividend (Preferred/ (Cost Method) (Equity Method)

Ordinary Shares)

Subsidiaries Rubber Wood Agent Ordinary 54.39 NC Associates Co., Ltd. Total Associated Companies Krungthai Axa Life Life Insurance Ordinary 50.00 Insurance Co., Ltd. Credit Card Business Ordinary 47.60 Krungthai Card Pcl. Non-Life & Krungthai Panich Life Insurance Ordinary 45.00 Insurance Co., Ltd. Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 Securities Trades Ordinary 50.00 KTB Securities Co., Ltd. Total Total Investments in Subsidiaries and Associated Companies - net Name of Company

Type of Business

Type of Shares (Preferred/ Ordinary Shares)

0.54 0.54

0.79 0.79

- -

593.57 479.28 1,960.00 2,830.49

- 122.50

971.30 1,513.57 64.75 35.00 - - 87.38 261.90 9.55 432.00 254.82 - 4,079.25 5,340.06 196.80

4,079.79 5,340.85 196.80 (Million Baht) Consolidated Financial Statements December 31, 2006 Percentage of Investments Investments Shareholding Dividend (Preferred/ (Cost Method) (Equity Method)

Ordinary Shares)

Subsidiaries NC Associates Co., Ltd. Rubber Wood Agent Ordinary 54.39 0.54 0.79 - Total 0.54 0.79 - Associated Companies Krungthai Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 191.84 - Krungthai Card Pcl. Credit Card Business Ordinary 47.61 1,960.00 2,706.36 183.75 Krungthai Panich Non-Life & Insurance Co., Ltd. Life Insurance Ordinary 40.00 719.20 1,118.84 64.00 Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 228.43 10.53 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 418.75 - Total 3,827.15 4,664.22 258.28 Total Investments in Associated Companies - net 3,827.69 4,665.01 258.28

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

NC Associates Co., Ltd. was not included in the Bankâ&#x20AC;&#x2122;s consolidated financial statements due to business dissolution. (see Note 1.1) Investments in Associated Companies accounted for under the equity method, were reported by their unaudited/unreviewed financial statements. The Bankâ&#x20AC;&#x2122;s investments in Krungthai Charoensri Co., Ltd., accounted for under the equity method, were reported at nil value when losses exceeded the carrying amounts of investments as at December 31, 2007 and 2006. The company has discontinued its operation and entered into disposing its entire business. 3.3.4 Investments in Subsidiaries and Associated Companies (continued)

Name of Company

Type of Business

(Million Baht) Consolidated Financial Statements December 31, 2007 Type of Shares Percentage of Investments (Preferred/ Shareholding Dividend Ordinary Shares) (Preferred/ (Cost Method) Ordinary Shares)

Subsidiaries Krung Thai Legal Services Co., Ltd. Legal Services Ordinary 100.00 30.00 21.00 Krung Thai General Business Services Co., Ltd. General Services Ordinary 100.00 140.00 - Krung Thai Asset Management Pcl. Asset Management Ordinary 100.00 210.90 30.00 Krung Thai Computer Services Co., Ltd. IT Services Ordinary 100.00 1,300.00 - Krung Thai Property Development Real Estate & Co., Ltd. Development Ordinary 100.00 1,147.18 - KTB Leasing Co., Ltd. Hire Purchase Ordinary 100.00 100.00 - NC Associates Co., Ltd. Rubber wood Agent Ordinary 54.39 0.54 - Total 2,928.62 51.00 Less Allowance for Impairment * (101.33) - Total 2,827.29 51.00 Associated Companies Krungthai Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 - Krungthai Card Pcl. Credit Card Business Ordinary 47.60 1,960.00 122.50 Krungthai Panich Insurance Co., Ltd. Non-Life & Life Insurance Ordinary 45.00 971.30 64.75 Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 9.55 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 - Total 4,079.25 196.80 Less Allowance for Impairment * (569.15) - Total 3,510.10 196.80 Total Investments in Subsidiaries and Associated Companies - net 6,337.39 247.80

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3.3.4 Investments in Subsidiaries and Associated Companies (continued)

Name of Company

Type of Business

Type of Shares (Preferred/ Ordinary Shares)

(Million Baht) The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2006 Percentage of Investments Shareholding Dividend (Preferred/ (Cost Method) Ordinary Shares)

Subsidiaries Krung Thai Legal Services Co., Ltd. Legal Services Ordinary 100.00 30.00 - Krung Thai General Business General Services Ordinary 100.00 140.00 - Services Co., Ltd. Ordinary 100.00 210.90 38.00 Krung Thai Asset Management Pcl. Asset Management Krung Thai Computer Services Co., Ltd. IT Services Ordinary 100.00 1,300.00 - Krung Thai Property Development Real Estate Co., Ltd. Development Ordinary 100.00 1,147.18 - KTB Leasing Co., Ltd. Hire Purchase Ordinary 100.00 100.00 - NC Associates Co., Ltd. Rubber wood Agent Ordinary 54.39 0.54 - Total 2,928.62 38.00 Less Allowance for Impairment * (100.97) - Total 2,827.65 38.00 Associated Companies Krungthai Axa Life Insurance Co., Ltd. Life Insurance Ordinary 50.00 593.57 - Krungthai Card Pcl. Credit Card Business Ordinary 47.61 1,960.00 183.75 Krungthai Panich Insurance Co., Ltd. Non-Life & Life Insurance Ordinary 40.00 719.20 64.00 Krungthai Charoensri Co., Ltd. Hire Purchase Ordinary 35.00 35.00 - Krung Thai IBJ Leasing Co., Ltd. Hire Purchase Ordinary 49.00 87.38 10.53 KTB Securities Co., Ltd. Securities Trades Ordinary 50.00 432.00 - Total 3,827.15 258.28 Less Allowance for Impairment * (576.22) - Total 3,250.93 258.28 Total Investments in Subsidiaries and Associated Companies - net 6,078.58 296.28

* Allowance for Impairment of investments in Subsidiaries and Associated Companies arising when cost value is greater than carrying value. The Bank has increased the investments amounting to Baht 252.10 million in Krungthai Panich Insurance Co., Ltd. on March 22, 2007. In 2006, the Bank has increased the investments in subsidiaries and associated companies as follows : - Krung Thai Computer Services Co., Ltd., a subsidiary company amounting to Baht 500.00 million. - Krung Thai IBJ Leasing Co., Ltd., an associated company amounting to Baht 36.43 million and KTB securities Co., Ltd., an associated company amounting to Baht 432.00 million by way of private placement.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

The Bank’s Financial Statements December 31, 2006

3.3.5 Revaluation Surplus (Deficit) on Investments

Consolidated Financial Statements

(Million Baht) The Bank’s Financial Statements

December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Balance brought forward Changes for the period Balance carried forward

(1,849.80) 2,233.64 383.84

(1,427.12) (422.68) (1,849.80)

(2,224.88) 2,067.75 (157.13)

(1,751.73) (473.15) (2,224.88)

In addition, the Bank has acquired the investments in other securities classified by industrial sector whichby the Bank holds equal to or more than 10 percent of the shareholdings stated at their fair value as follows : Consolidated Financial Statements

(Million Baht) The Bank’s Financial Statements

December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Manufacturing Banking and Financial Public Utilities and Services Others Total

51.00 240.58 978.60 - 1,270.18

38.38 169.26 931.00 16.67 1,155.31

51.00 240.58 978.60 - 1,270.18

38.38 169.26 931.00 16.67 1,155.31

As at December 31, 2007 and 2006, the Bank’s investments in foreign debt securities which were affected by adverse foreign exchange rate movements, resulting in a decline of Baht 230.55 million and Baht 536.18 million, respectively.

157

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3.3.6 Gain (Loss) on net Investments shown in Statements of Income for the years ended December 31, 2007 and 2006 comprise the followings : (Million Baht) Consolidated Financial Statements December 31, 2007 December 31, 2006 Gain/Reversed Unrealized Gain

Realized Gain (Loss) on disposal of Trading Securities Realized Gain (Loss) on disposal of Available-for-Sale Current Investments Realized Loss on disposal of Held-to-Maturity Current Investments Realized Gain (Loss) on disposal of Available-for-Sale Long-term Investments Realized Gain on disposal of Long-term General Investments Gain (Loss) on Revaluation of Marketable Trading Securities Gain (Loss) on Reclassification of Investments Impairment Loss on Investments Loss on Written-down of invested company - General Investments Total Non-interest Income - Gain on Investments, net

Gain/Reversed Unrealized Gain

Loss

381.23 (26.93)

154.04 (19.51)

167.35 (0.24)

- (0.40)

- (0.04)

575.51 - 54.90 (0.08) - (19.73) 18.06 - 55.18 -

62.48 (5.64) 901.97 - 29.64 - - - 196.34 -

- (25.15) 1,252.23 (72.13) 1,180.10

- (11.09) 1,344.47 (36.68) 1,307.79

(Million Baht) The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Gain/Reversed Unrealized Gain

Realized Gain (Loss) on disposal of Trading Securities Realized Gain (Loss) on disposal of Available-for-Sale Current Investments Realized Gain (Loss) on disposal of Available-for-Sale Long-term Investments Realized Gain on disposal of Long-term General Investments Gain (Loss) on Revaluation of Marketable Trading Securities Gain (Loss) on Reclassification of Investments Impairment Loss on Investments Loss on Written-down of invested company - General Investments Total Non-interest Income - Gain on Investments, net

Loss

Gain/Reversed Unrealized Gain

Loss

381.23 (26.93)

154.04 (19.51)

167.35 (0.24)

- (0.40)

575.51 - 54.90 (0.08) - (19.73) 18.06 - 61.88 - - (25.15) 1,258.93 (72.13) 1,186.80

62.48 (5.64) 901.97 - 29.64 - - - 22.35 - - (11.09) 1,170.48 (36.64) 1,133.84

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.3.7 Investments in listed companies whose financial position and operations fall under SET’s delisted criteria as of December 31, 2007 were as follows : Cost Value

Fair Value

Equity Securities Prasit Pattana Pcl. 0.77 - Manager Media Group Pcl. 0.29 - Debt Securities Manager Media Group Pcl. 27.98 27.98

(Million Baht) Allowance for Impairment

0.77 0.29 -

3.3.8 Investments in Collateralized Debt Obligations - CDOs As at December 31, 2007, having included in the Baht 10,512.54 million of long-term investments, held-tomaturity foreign debt securities is the Baht 5,395.74 million of investments in Collateralized Debt Obligations-CDOs with the Investment Grade Corporate as an asset-backed and regard as not subprime lending. Investments in CDOs diversify among several industrial sectors. It has been classified as long-term investments, held-to-maturity debt securities and valued at the amortized cost shown in the Bank’s financial statements. However, as at December 31, 2007 the financial institutions issued such securities have still been granted credit scoring as used to which is BBB rated and above. The Bank is also eligible to receive the interest on investments in full rate. The Bank has intended and been capable to hold to maturity, as such, the impairment has not, subsequently, been taken into consideration. According to the BOT’s Notification No. SOR NOR SOR. 8/B.E. 2550, dispatched on November 16, 2007 Re : the Permission granted to Commercial Banks to invest in Collateralized Debt Obligations - CDOs foreign debt securities, the Bank has been stipulated to switch the classification of investments and its related accounting treatments including the valuation of fair value in associated with CDOs satisfying the IAS 39 (Financial Instrument, Recognition and Measurement) which has come into effect from accounting period begining on or after January 1, 2008 onwards. For the last six-month accounting period ended December 31, 2007, the disclosure of investments in CDOs and subsequent impact upon the financial statements or the capital fund is required. Further, valuation of fair value over Credit Linked Notes/ Deposits, First to default Credit Linked Notes/ Deposits, Proportionate Credit Linked Notes/ Deposits as well as deposits or loans underlying with embedded derivatives having offered before this Notification being enforced including hedging instruments are also required to disclose in notes to the financial statements. Book Value

Fair Value

Collateralized Debt Obligations (CDOs) 5,395.74 3,053.85 Credit Linked Notes (CLN) 675.35 678.34 First to Default Credit Linked Notes (FTDN) 921.85 906.66 Realization of impact over financial statements

(Million Baht) Realization of Impact

(2,341.89) 2.99 (15.19) (2,354.09)

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As to conform with the IAS 39 criteria, the Bank is required to reclassify the purpose of investments to

trading securities and state as their fair value. Based on the clarification mentioned above, the Bank has to realize a decline in such value amounting to Baht 2,354.09 million as an expense. Valuation of fair value as such has caused an adverse effect upon the ratio of total capital fund to risk-weighted assets to a decline from 15.16 percent to 14.88 percent which is fortunately greater than the statutory ratio. 3.4 Loans and Accrued Interest Receivable

Loans Accrued interest receivable Less Unearned discounts Total Loans and Accrued Interest Receivable

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

955,948.88 5,156.23 (1,377.66)

922,977.05 5,485.43 (298.21)

958,125.56 5,160.50 (41.58)

926,403.39 5,485.43 (133.99)

959,727.45

928,164.27

963,244.48

931,754.83

3.4.1 Classified by Type of Loans

Overdrafts Fixed loans Bills receivable Hire purchase receivable Financial lease receivable Others Total Add Accrued interest receivable Less Allowance for doubtful accounts Allowance for TDR revaluation Total Less Unearned discounts Total

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

110,362.66 560,303.98 273,638.19 7,047.57 1,167.74 3,428.74 955,948.88 5,156.23 (35,574.01) (1,393.64) 924,137.46 (1,377.66) 922,759.80

105,002.72 533,437.36 278,964.13 729.72 217.61 4,625.51 922,977.05 5,485.43 (38,305.10) (1,218.16) 888,939.22 (298.21) 888,641.01

110,362.66 565,464.97 278,869.19 - - 3,428.74 958,125.56 5,160.50 (35,527.79) (1,393.64) 926,364.63 (41.58) 926,323.05

105,002.72 537,374.03 279,401.13 - - 4,625.51 926,403.39 5,485.43 (38,300.68) (1,218.16) 892,369.98 (133.99) 892,235.99

As at December 31, 2007 and 2006, the Bank’s other loans of Baht 3,428.74 million and Baht 4,625.51 million had included Baht 2,829.21 million and Baht 3,905.70 million, respectively, of debts resulting from the Bank’s liabilities under acceptances or guarantees.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.4.2 Classified by Remaining Maturity

(Million Baht) Consolidated Financial Statements The Bank’s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Within 1 year Over 1 year Total Add Accrued interest receivable Total Less Unearned discounts Total

404,408.96 551,539.92 955,948.88 5,156.23 961,105.11 (1,377.66) 959,727.45

389,924.14 533,052.91 922,977.05 5,485.43 928,462.48 (298.21) 928,164.27

407,460.95 550,664.61 958,125.56 5,160.50 963,286.06 (41.58) 963,244.48

390,137.55 536,265.84 926,403.39 5,485.43 931,888.82 (133.99) 931,754.83

3.4.3 Classified by Currency and Customer’s Residence

(Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Domestic Overseas Total Domestic Overseas Total

Thai Baht 917,702.63 52.22 917,754.85 878,792.19 76.50 878,868.69 US Dollar 31,669.83 5,162.01 36,831.84 34,600.32 8,060.62 42,660.94 Other currencies 1,103.29 258.90 1,362.19 1,369.77 77.65 1,447.42 Total 950,475.75 5,473.13 955,948.88 914,762.28 8,214.77 922,977.05 Add Accrued interest receivable 5,097.01 59.22 5,156.23 5,382.27 103.16 5,485.43 Total 955,572.76 5,532.35 961,105.11 920,144.55 8,317.93 928,462.48 Less Unearned discounts (1,377.66) (298.21) Total 959,727.45 928,164.27 (Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2006 Domestic Overseas Total Domestic Overseas Total

Thai Baht 919,879.31 52.22 919,931.53 882,218.53 76.50 882,295.03 US Dollar 31,669.83 5,162.01 36,831.84 34,600.32 8,060.62 42,660.94 Other currencies 1,103.29 258.90 1,362.19 1,369.77 77.65 1,447.42 Total 952,652.43 5,473.13 958,125.56 918,188.62 8,214.77 926,403.39 Add Accrued interest receivable 5,101.28 59.22 5,160.50 5,382.27 103.16 5,485.43 Total 957,753.71 5,532.35 963,286.06 923,570.89 8,317.93 931,888.82 Less Unearned discounts (41.58) (133.99) Total 963,244.48 931,754.83

161

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3.4.4 Classified by Business Types and Loan Classification

Consolidated Financial Statements December 31, 2007 Pass Special Mention Substandard Doubtful Doubtful of Loss

(Million Baht)

Total

Agriculture and mining 26,567.61 1,726.43 301.60 479.92 1,480.08 30,555.64 Manufacturing and commercial 271,810.57 9,711.50 2,245.30 13,349.95 33,744.45 330,861.77 Real estate and construction 113,629.84 2,152.35 749.77 8,899.30 21,336.03 146,767.29 Public utilities and services 156,152.11 1,189.27 315.02 4,708.55 3,584.84 165,949.79 122,580.18 1,196.61 335.74 375.01 1,927.55 126,415.09 Housing loans Others 152,017.10 1,114.49 276.12 221.95 1,769.64 155,399.30 Total 842,757.41 17,090.65 4,223.55 28,034.68 63,842.59 955,948.88 Add Accrued interest receivable 4,274.11 159.91 2.41 312.14 407.66 5,156.23 Total 847,031.52 17,250.56 4,225.96 28,346.82 64,250.25 961,105.11 Less Unearned discounts (1,377.66) Total 959,727.45 (Million Baht)

Consolidated Financial Statements December 31, 2006 Pass Special Mention Substandard Doubtful Doubtful of Loss

Total

Agriculture and mining 35,642.96 4,617.86 252.91 560.48 2,081.45 43,155.66 Manufacturing and commercial 288,472.61 4,196.38 6,146.65 15,543.71 18,776.53 333,135.88 Real estate and construction 111,163.39 2,287.02 1,512.57 7,463.30 20,891.34 143,317.62 Public utilities and services 160,163.10 1,875.08 1,842.75 4,221.41 3,728.09 171,830.43 Housing loans 104,041.02 1,332.73 382.18 603.25 4,232.68 110,591.86 Others 118,949.57 543.23 126.89 651.17 674.74 120,945.60 Total 818,432.65 14,852.30 10,263.95 29,043.32 50,384.83 922,977.05 Add Accrued interest receivable 4,493.07 114.43 8.90 307.90 561.13 5,485.43 Total 822,925.72 14,966.73 10,272.85 29,351.22 50,945.96 928,462.48 Less Unearned discounts (298.21) Total 928,164.27

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.4.4 Classified by Business Types and Loan Classification (continued)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 Pass Special Mention Substandard Doubtful Doubtful of Loss

(Million Baht)

Total

Agriculture and mining 26,448.95 1,725.78 301.03 479.92 1,480.08 30,435.76 Manufacturing and commercial 271,165.28 9,709.10 2,245.30 13,349.95 33,744.45 330,214.08 Real estate and construction 117,281.31 2,120.47 742.86 8,899.30 21,336.03 150,379.97 Public utilities and services 160,826.52 1,181.28 315.02 4,708.55 3,584.84 170,616.21 122,580.18 1,196.61 335.74 375.01 1,927.55 126,415.09 Housing loans Others 146,995.12 811.15 266.59 221.95 1,769.64 150,064.45 Total 845,297.36 16,744.39 4,206.54 28,034.68 63,842.59 958,125.56 Add Accrued interest receivable 4,278.38 159.91 2.41 312.14 407.66 5,160.50 Total 849,575.74 16,904.30 4,208.95 28,346.82 64,250.25 963,286.06 Less Unearned discounts (41.58) Total 963,244.48 (Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2006 Pass Special Mention Substandard Doubtful Doubtful of Loss

Total

Agriculture and mining 35,630.68 4,617.86 252.91 560.48 2,081.45 43,143.38 Manufacturing and commercial 288,407.69 4,196.38 6,146.65 15,543.71 18,776.53 333,070.96 Real estate and construction 111,108.30 2,287.02 1,512.57 7,463.30 20,891.34 143,262.53 Public utilities and services 164,356.39 1,875.08 1,842.75 4,221.41 3,728.09 176,023.72 Housing loans 104,041.02 1,332.73 382.18 603.25 4,232.68 110,591.86 Others 118,352.47 505.67 126.89 651.17 674.74 120,310.94 Total 821,896.55 14,814.74 10,263.95 29,043.32 50,384.83 926,403.39 Add Accrued interest receivable 4,493.07 114.43 8.90 307.90 561.13 5,485.43 Total 826,389.62 14,929.17 10,272.85 29,351.22 50,945.96 931,888.82 Less Unearned discounts (133.99) Total 931,754.83

163

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3.4.5 Classified by Loan Classification

(Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 Minimum Loans and Debt Allowance Allowance Accrued Required Net of Rate Interest as to BOTâ&#x20AC;&#x2122;s (1) Collateral (%) Regulations Receivable

Pass ** 760,789.32 334,562.60 1 3,887.29 Special Mention ** 15,378.83 2,958.99 2 132.72 Substandard - Based on IAS 39 4,126.31 1,649.13 100 1,649.13 Doubtful - Based on IAS 39 28,346.82 4,751.25 100 6,780.81 Doubtful of Loss - Based on IAS 39 64,172.09 14,604.57 100 20,133.33 872,813.37 358,526.54 32,583.28 Total Allowance for doubtful accounts for total loans under BOT regulations 32,583.28 Less Allowance for doubtful accounts for interbank and money market items (355.93) Allowance for doubtful accounts for loans under BOT regulations 32,227.35 Allowance for doubtful accounts provided as at December 31, 2007 (see Note 3.5) 35,527.79 Excess allowance for doubtful accounts over and above the BOT minimum requirement 3,300.44 Consolidated Financial Statements has shown loans and accrued interest receivable as at December 31, 2007 totaling to Baht 869,296.34 million and an allowance for doubtful accounts required for loans amounting to Baht 32,273.57 million (having provided Baht 35,574.01 million) which included loans and allowance for doubtful accounts of subsidiaries amounting to Baht 7,110.40 million and Baht 46.22 million, respectively.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.4.5 Classified by Loan Classification (continued)

(Million Baht)

The Bank’s Financial Statements December 31, 2006 Minimum Loans and Debt Allowance Allowance Accrued Required Net of Rate Interest as to BOT’s (1) Collateral (%) Receivable Regulations

Pass ** 785,275.99 320,312.36 1 3,192.71 Special Mention ** 10,763.20 1,316.77 2 26.34 (2) Substandard 10,197.01 2,890.48 20,100 1,318.31 Doubtful 29,351.22 8,340.83 50,100 (2) 10,665.09 Doubtful of Loss 50,917.79 17,796.89 100 (2) 18,640.00 Total 886,505.21 350,657.33 33,842.45 Allowance for doubtful accounts for total loans under BOT regulations 33,842.45 Less Allowance for doubtful accounts for interbank and money market items (468.23) Allowance for doubtful accounts for loans under BOT regulations 33,374.22 Allowance for doubtful accounts provided as at December 31, 2006 (see Note 3.5) 38,300.68 Excess allowance for doubtful accounts over and above the BOT minimum requirement 4,926.46 Consolidated financial statements as at December 31, 2006 has shown loans and accrued interest receivable totaling to Baht 882,899.32 million and an allowance for doubtful accounts required for loans amounting to Baht 33,378.64 million (having provided Baht 38,305.10 million) which included loans and allowance for doubtful account of subsidiaries amounting to Baht 767.77 million and Baht 4.42 million, respectively. * Allowances provided by the Bank represent the minimum allowance required for classified debtors multiply by allowance rate not as less than as prescribed by the BOT, which included additional allowance stipulated by BOT under debt classification and debt qualitative reviewed by the Bank. In 2006, the Bank has also included debtors having provided for according to the BOT’s new regulation and reported under a certain debt classification accordingly. ** Accrued interest receivable were not included in Pass and Special Mention Categories. (1) Debts net of collateral represent those after deducting the present value of expected cash flows from debtors or from the sale of collateral. (2) Debts adjudged by the court order or in the process of legal execution and litigation are required to provide for in full 100 percent as to the BOT’s notification on December 7, 2006.

165

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As at December 31, 2007 and 2006, the Bank’s classified loans and accrued interest receivable included interbank and money market items were Baht 1,009,427.93 million and Baht 974,252.03 million, respectively. Such loans, when net of exempt classified debts as at December 31, 2007 and 2006 thus comprised loans guaranteed by MOF of Baht 135,159.41 million and Baht 87,502.50 million and restructuring loans on which a loss was recognized of Baht 1,455.15 million and Baht 244.32 million, respectively. Thus, the residual amount of loans and accrued interest receivable of Baht 872,813.37 million and Baht 886,505.21 million, respectively, were required to provide for as prescribed by the Bank of Thailand’s loan classification guidelines. As at December 31, 2007 and 2006, the Bank’s allowance for doubtful accounts for loans in the Bank’s financial statements totaling Baht 35,527.79 million and Baht 38,300.68 million, which were in excess over the BOT minimum requirement by Baht 3,300.44 million and Baht 4,926.46 million, respectively. 3.4.6 Non-Performing Loans (NPLs) As at December 31, 2007 and 2006, the Bank’s non-performing loans according to the BOT’s guideline comprised loans classified as substandard, doubtful, doubtful of loss and loss which ceased to be recognized, amounting to Baht 96,083.81 million and Baht 89,692.10 million or 9.53 percent and 9.22 percent of the Bank’s loan portfolio (including loans to banks and money market as financial institutions.), respectively. Loans ceasing to be recognized in line with the Bank of Thailand’s definition comprised loans classified according to BOT’s classification guideline as substandard, doubtful, doubtful of loss and loss. For the years-ended December 31, 2007 and 2006, impaired-assets were written off both principal and accrued interest receivable amounting to Baht 23,239.40 million and Baht 16,995.30 million, respectively. 3.4.7 Sales of Impaired Assets In 2006, the Bank’s impaired-assets of Baht 2,619.52 million were sold to other financial institution and Baht 72.82 million to Farmer Rehabilitation Development Fund. Debt repayment to the Bank as agreed upon stood at 50 percent on principal, totaling to Baht 2,692.34 million which was provided for in full before sold. 3.4.8 Loans to Closed Financial Institutions As at December 31, 2007, the Bank’s loans outstanding and accrued interest receivable to 4 debtors, whose businesses were officially ordered discontinuing and considered as impaired-assets, were Baht 68.38 million which fully covered by collateral, thus, required no provisioning. 3.4.9 Loans to Potential Delisted Companies As at December 31, 2007 and 2006, the Bank’s loans extended to 5 and 7 potential delisted companies were Baht 1,618.87 million and Baht 4,407.02 million including accrued interest receivable amounting to Baht 0.01 million and Baht 11.75 million, respectively, bringing up the total to Baht 1,618.88 million and Baht 4,418.77 million. They were provided for Baht 142.27 million and Baht 89.70 million, respectively, as an allowance for doubtful accounts in accordance with the Bank of Thailand’s regulations for debt classification and an allowance for TDR revaluation.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.4.10 Troubled Debt Restructuring The original value of the 5,661 and 10,033 cases of troubled debts restructured for the years-ended December 31, 2007 and 2006 were Baht 18,338.38 million and Baht 43,720.13 million, respectively. Those related interest and principal repayments were Baht 7,170.58 million and Baht 8,791.62 million, whereas lending extended increased by Baht 2,114.85 million and Baht 1,807.63 million and losses resulted from restructuring were Baht 215.76 million and Baht 223.22 million, respectively. Troubled Debt Restructuring for the year-ended December 31, 2007 was set out as follows :

(Million Baht)

Troubled Debt Restructuring Approaches

The Bankâ&#x20AC;&#x2122;s Financial Statements Book Value of Type of Assets Fair Value No. of Cases Debt as to Transferred Original Term

Asset transferred 15 135.13 Land & Premises 127.21 Debt-equity swap - - Loan terms modification 1,108 4,787.95 Combination of restructuring 4,538 13,415.30 5,661 18,338.38 Troubled Debt Restructuring for the year ended December 31, 2006 was set out as follows :

(Million Baht)

Troubled Debt Restructuring Approaches

The Bankâ&#x20AC;&#x2122;s Financial Statements Book Value of Type of Assets No. of Cases Debt as to Fair Value Transferred Original Term

Asset transferred 18 803.20 Land & Premises 803.05 Debt-equity swap - - Loan terms modification 1,571 7,984.68 Combination of restructuring 8,444 34,932.25 10,033 43,720.13 As at December 31, 2007 the Bank has outstanding restructured loans for 26,420 cases amounting to Baht 74,970.26 million, of which 539 cases amounting to Baht 4,984.35 million, have been monitored under the new contractual agreements.

167

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3.5 Allowance for Doubtful Accounts Pass

รวม

(Million Baht)

The Bank’s Financial Statements December 31, 2007 Allowance Special Substandard Doubtful Doubtful in excess Total of Loss of BOT’s Mention Guideline

Opening balance 2,725.20 25.62 1,318.31 10,665.09 18,640.00 4,926.46 38,300.68 Increased (Decreased) allowance 806.30 106.96 330.82 (3,884.28) 23,766.22 (1,626.02) 19,500.00 for doubtful accounts Allowance for doubtful accounts transferred to TDR revaluation - - - - (175.48) - (175.48) - - - - 1,084.03 - 1,084.03 Bad debts recovered - - - - (23,239.40) - (23,239.40) Bad debts written off Others - - - - 87.33 - 87.33 3,531.50 132.58 1,649.13 6,780.81 20,162.70 3,300.44 35,557.16 Total Allowance for doubtful accounts transferred from SAM (net) - - - - 13.68 - 13.68 Allowance for doubtful accounts transferred to TAMC (net) - - - - (53.02) - (53.02) Transfer of impairment allowance

from potential losses arising on debt transferred to TAMC - - - - 9.97 - 9.97 3,531.50 132.58 1,649.13 6,780.81 20,133.33 3,300.44 35,527.79 Closing Balance

The Baht 35,574.01 million of an allowance for doubtful accounts shown in the Bank’s consolidated financial statements as at December 31, 2007 included those of its subsidiaries amounting to Baht 46.22 million.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.5 Allowance for Doubtful Accounts (continued)

รวม

(Million Baht)

Pass Opening balance Increased (Decreased) allowance for doubtful accounts Allowance for doubtful accounts

The Bank’s Financial Statements December 31, 2006 Allowance Special Substandard Doubtful Doubtful in excess Total of Loss of BOT’s Mention Guideline

2,584.59

28.02 229.53 6,856.65 16,295.29 13,710.92 39,705.00

140.61

(2.40) 1,088.78 3,808.44 20,246.56 (8,784.46) 16,497.53

- - - - 202.06 - 202.06 transferred from TDR revaluation - - - - 550.23 - 550.23 Bad debts recovered Bad debts written off and impaired-asset sold - - - - (18,641.54) - (18,641.54) Others - - - - (6.39) - (6.39) 2,725.20 25.62 1,318.31 10,665.09 18,646.21 4,926.46 38,306.89 Total Allowance for doubtful accounts transferred from SAM (net) - - - - 8.16 - 8.16 Allowance for doubtful accounts transferred to TAMC (net) - - - - (21.76) - (21.76) Transfer of impairment allowance from potential losses arising on debt transferred to TAMC - - - - 0.81 - 0.81 Allowance for doubtful accounts transferred from contingent provision - - - - 6.58 - 6.58 2,725.20 25.62 1,318.31 10,665.09 18,640.00 4,926.46 38,300.68 Closing Balance The Baht 38,305.10 million of an allowance for doubtful accounts in the Bank’s consolidated financial statements as at December 31, 2006 included those of its subsidiaries amounting to Baht 4.42 million.

169

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For the year 2006, the Bank has set aside monthly provisioning of Baht 300.00 million and set Baht 12,976.73 million more bringing the total to Baht 16,576.73 million. With the inclusion of those of overseas branches, which stated a net decline of Baht 79.20 million, the Bank has to provide a total of Baht 16,497.53 million. Excessive provisioning over BOT’s minimum requirement in this period was Baht 4,926.46 million, a decline by Baht 8,784.46 million from the correspondent period due to providing to the allowance for doubtful accounts to fully satisfying BOT’s requirement. For the year ended December 31, 2007, the Bank has set aside provisions as to such requirement amounting to Baht 3,520.43 million and set Baht 15,900.00 million more, thus, total provisioning was Baht 19,420.43 million and with the inclusion of those of overseas branches, which stated a net increase of the Baht 79.57 million, the Bank has to provide a total of Baht 19,500.00 million. An increase of such allowance in this accounting period was mostly set aside more to satisfy the BOT’s new regulations. 3.6 Revaluation Allowance for Debt Restructuring (Million Baht)

Consolidated and the Bank’s Financial Statements December 31, 2007 December 31, 2006

Opening balance 1,218.16 1,420.22 175.48 (202.06) Transfer from (to) allowance for doubtful accounts 1,393.64 1,218.16 Closing balance The revaluation allowance for troubled debt restructuring (TDR) was transferred from allowance for doubtful accounts for restructured debtors, and vice versa when the debtors failed to comply with the TDR new agreement. The allowance for revaluation on TDR has not been amortized and recognized as income upon receipt of debt repayment but transferred to an allowance for doubtful accounts instead as the restructured debts may again become non-performing due to economic instability.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.7 Properties Foreclosed

Type of Properties Foreclosed

(Million Baht)

The Bank’s Financial Statements December 31, 2007 Opening Balance Additions Disposals Closing Balance

Acquired from debt settlement Immovable assets 35,488.23 11,819.25 9,581.86 37,725.62 Movable assets 19.37 - - 19.37 Total 35,507.60 11,819.25 9,581.86 37,744.99 Others (closed branches) 438.11 47.96 194.46 291.61 Properties foreclosed in transit 3,420.83 9,939.47 11,673.76 1,686.54 39,366.54 21,806.68 21,450.08 39,723.14 Total Less Allowance for impairment (5,258.20) - (247.34) (5,010.86) Properties Foreclosed, net 34,108.34 21,806.68 21,202.74 34,712.28 The Baht 34,717.80 million of properties foreclosed shown in the Bank’s consolidated financial statements as at December 31, 2007 included those immovable assets of its subsidiaries amounting to Baht 5.52 million. (Million Baht)

Type of Properties Foreclosed

The Bank’s Financial Statements December 31, 2006 Opening Balance Additions Disposals Closing Balance

Acquired from debt settlement Immovable assets 32,970.56 6,861.70 4,344.03 35,488.23 Movable assets 19.37 - - 19.37 Total 32,989.93 6,861.70 4,344.03 35,507.60 - 461.41 23.30 438.11 Others (closed branches) Properties foreclosed in transit 5,575.70 5,233.55 7,388.42 3,420.83 Total 38,565.63 12,556.66 11,755.75 39,366.54 Less Allowance for impairment (4,780.06) (478.14) - (5,258.20) Properties Foreclosed, net 33,785.57 12,078.52 11,755.75 34,108.34 The Baht 34,109.84 million of properties foreclosed shown in the Bank’s consolidated financial statements as at December 31, 2006 included those immovable assets of its subsidiaries amounting to Baht 1.49 million. The reversal or increase of impairment loss has caused a decline and an increase of the allowance for properties foreclosed impairment amounting to Baht 247.34 million and Baht 478.14 million as at December 31, 2007 and 2006, respectively. The Bank generated the Baht 796.02 million and the Baht 667.59 million of net profit on sale of properties foreclosed for the years ended December 31, 2007 and 2006, respectively.

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3.8 Properties, Premises and Equipment Properties, premises and equipment as at December 31, 2007 and 2006 were as follows : (Million Baht)

Consolidated Financial Statements December 31, 2007

(Net) Allowance Properties, for Premises and Opening Balance Additions Disposals Closing Balance Opening Balance Depreciation Disposals Closing Balance Impairment Equipment Cost

Accumulated Depreciation

Land - - - - 38.55 5,810.83 Historical cost 5,872.56 13.68 36.86 5,849.38 - 5.15 5,971.50 - - - - - 5,971.50 Revaluation surplus 5,976.65 Premises Historical cost 9,673.00 339.24 18.67 9,993.57 4,173.72 479.41 7.51 4,645.62 - 5,347.95 11,875.56 2,002.43 54.89 13,823.10 5,486.92 1,513.93 54.01 6,946.84 113.00 6,763.26 Equipment Others 96.77 - 41.64 55.13 - - - - - 55.13 Total 33,494.54 2,355.35 157.21 35,692.68 9,660.64 1,993.34 61.52 11,592.46 151.55 23,948.67 (Million Baht)

Consolidated Financial Statements December 31, 2006

(Net) Allowance Properties, for Premises and Opening Balance Additions Disposals Closing Balance Opening Balance Depreciation Disposals Closing Balance Impairment Equipment Cost

Accumulated Depreciation

Land - - - - 56.54 5,816.02 Historical cost 5,830.94 589.68 548.06 5,872.56 - 5,976.65 - - - - - 5,976.65 Revaluation surplus 3,940.22 2,036.43 Premises Historical cost 10,505.89 470.28 1,303.17 9,673.00 3,937.79 497.81 261.88 4,173.72 - 5,499.28 Equipment 9,532.83 2,475.28 132.55 11,875.56 4,609.91 1,055.70 178.69 5,486.92 113.00 6,275.64 Others 36.75 60.02 - 96.77 - - - - - 96.77 Total 29,846.63 5,631.69 1,983.78 33,494.54 8,547.70 1,553.51 440.57 9,660.64 169.54 23,664.36

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.8 Properties, Premises and Equipment (continued) (Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007

(Net) Allowance Properties, for and Opening Balance Additions Disposals Closing Balance Opening Balance Depreciation Disposals Closing Balance Impairment Premises Equipment Cost

Accumulated Depreciation

Land - - - - 38.55 6,031.79 Historical cost 6,096.57 10.63 36.86 6,070.34 Revaluation surplus 5,976.65 - 5.15 5,971.50 - - - - - 5,971.50 Premises Historical cost 9,346.79 250.35 18.67 9,578.47 4,072.91 453.29 7.51 4,518.69 - 5,059.78 Equipment 5,891.90 442.77 54.89 6,279.78 3,598.79 619.41 54.04 4,164.16 113.00 2,002.62 Others 92.29 - 37.24 55.05 - - - - - 55.05 27,404.20 703.75 152.81 27,955.14 7,671.70 1,072.70 61.55 8,682.85 151.55 19,120.74 Total (Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2006

(Net) Allowance Properties, for Premises and Opening Balance Additions Disposals Closing Balance Opening Balance Depreciation Disposals Closing Balance Impairment Equipment Cost

Accumulated Depreciation

Land - - - - 56.54 6,040.03 Historical cost 5,762.30 520.48 186.21 6,096.57 Revaluation surplus 3,940.22 2,036.43 - 5,976.65 - - - - - 5,976.65 Premises Historical cost 10,181.72 468.24 1,303.17 9,346.79 3,865.77 469.02 261.88 4,072.91 - 5,273.88 4,856.73 1,167.72 132.55 5,891.90 3,369.02 408.46 178.69 3,598.79 113.00 2,180.11 Equipment 36.75 55.54 - 92.29 - - - - - 92.29 Others 24,777.72 4,248.41 1,621.93 27,404.20 7,234.79 877.48 440.57 7,671.70 169.54 19,562.96 Total

The allowance for impairment of land as at December 31, 2007 and 2006 was set out as follows :

(Million Baht)

Beginning balance Less Reversed to income Ending balance

December 31, 2007

56.54 (17.99) 38.55

December 31, 2006

215.23 (158.69) 56.54

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3.9 Other assets (Million Baht)

Consolidated Financial Statements The Bank’s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Accrued interest receivable and dividend income 1,770.26 1,275.89 1,769.93 1,275.89 Prepaid expense 404.11 231.54 295.74 194.10 Advances & prepayment 41.77 47.18 40.98 46.61 Inter-office accounts - 1,858.68 - 1,858.68 Account receivable - Dhipyasin Co., Ltd. (formerly Sayam Bank Ltd.) 335.00 555.00 335.00 555.00 (see Note 3.25.1) Intangible assets 777.82 706.29 771.85 706.29 Differences from derivative revaluation 4,218.84 4,256.91 4,218.84 4,256.91 Account receivable - Revenue Department 2,592.30 2,341.32 2,478.58 2,341.32 Sundry debtors and assets 5,531.67 4,485.00 4,793.69 3,632.22 Total 15,671.77 15,757.81 14,704.61 14,867.02 Included in “Accrued Interest Receivable and Dividend Income” as at December 31, 2007 and 2006 were Baht 306.00 million and Baht 384.57 million, respectively representing accrued interest receivable on government and state enterprise bonds. Included in “Sundry Debtors and Assets” as at December 31, 2007 and 2006 were the differences between debts transferred to BBC Asset Management Co., Ltd. and a promissory note received amounting to Baht 139.57 million which was included in the balances notified to the FIDF on August 15, 2002. (see Note 3.25.2)

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.10 Deposits 3.10.1 Classified by Product

(Million Baht)

Consolidated Financial Statements The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Demand deposits 75,129.89 77,800.86 76,017.09 78,646.92 489,338.54 448,673.65 489,877.23 449,670.94 Savings deposits Time deposits 196,386.12 197,893.56 196,387.06 197,894.47 - Less than 6 months 63,937.74 81,265.12 63,937.74 81,265.12 - 6 months - less than 1 year 175,878.64 160,803.37 175,878.64 160,803.37 - 1 year and over 1,000,670.93 966,436.56 1,002,097.76 968,280.82 Total 3.10.2 Classified by Remaining Maturity (Million Baht)

Consolidated Financial Statements The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Within 1 year 940,039.84 901,621.72 60,631.09 64,814.84 Over 1 year 1,000,670.93 966,436.56 Total 3.10.3 Classified by Currency and Residence of Depositors

941,466.67 60,631.09 1,002,097.76

903,465.98 64,814.84 968,280.82 (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Domestic Overseas Total Domestic Overseas Total

Thai Baht US Dollar Other currencies Total

991,631.67 7,087.26 826.88 999,545.81

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Domestic Overseas Total Domestic Overseas Total

Thai Baht US Dollar Other currencies Total

993,058.50 7,087.26 826.88 1,000,972.64

16.56 991,648.23 942,405.28 1,079.44 8,166.70 22,359.60 29.12 856.00 651.08 1,125.12 1,000,670.93 965,415.96

16.56 993,075.06 944,249.54 1,079.44 8,166.70 22,359.60 29.12 856.00 651.08 1,125.12 1,002,097.76 967,260.22

16.48 942,421.76 919.20 23,278.80 84.92 736.00 1,020.60 966,436.56 (Million Baht)

16.48 944,266.02 919.20 23,278.80 84.92 736.00 1,020.60 968,280.82

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3.11 Interbank and Money Market Items (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Demand Time Total Demand Time Total

3.11.1 Domestic items Bank of Thailand and Financial Institutions Development Fund 8.85 14,361.85 14,370.70 8.07 17,199.61 17,207.68 Commercial banks 1,384.09 5,783.16 7,167.25 2,298.22 13,894.31 16,192.53 Other banks 466.18 - 466.18 306.18 0.13 306.31 Finance Co., Finance&Securities Co., Securities Co., and 1,347.05 265.96 1,613.01 1,090.57 5.62 1,096.19 Credit Foncier Co. Other financial institutions 10,424.89 997.44 11,422.33 8,607.55 333.08 8,940.63 13,631.06 21,408.41 35,039.47 12,310.59 31,432.75 43,743.34 Total Domestic Items 3.11.2 Foreign items US Dollar 34.80 4,058.83 4,093.63 9.65 4,666.85 4,676.50 Japanese Yen - 181.72 181.72 - - - Other currencies 286.27 - 286.27 114.52 - 114.52 321.07 4,240.55 4,561.62 124.17 4,666.85 4,791.02 Total Foreign Items Total Domestic & Foreign Items 13,952.13 25,648.96 39,601.09 12,434.76 36,099.60 48,534.36

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.11 Interbank and Money Market Items (continued)

(Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Demand Time Total Demand Time Total

3.11.1 Domestic items Bank of Thailand and Financial 8.85 14,361.85 14,370.70 8.07 17,199.61 17,207.68 Institutions Development Fund Commercial banks 1,384.09 5,783.16 7,167.25 2,298.22 13,894.31 16,192.53 Other banks 466.18 - 466.18 306.18 0.13 306.31 Finance Co., Finance&Securities Co., Securities Co., and 1,376.57 266.28 1,642.85 1,116.33 5.93 1,122.26 Credit Foncier Co. Other financial institutions 10,424.89 997.44 11,422.33 8,607.55 333.08 8,940.63 13,660.58 21,408.73 35,069.31 12,336.35 31,433.06 43,769.41 Total Domestic Items 3.11.2 Foreign items US Dollar 34.80 4,058.83 4,093.63 9.65 4,666.85 4,676.50 Japanese Yen - 181.72 181.72 - - - Other currencies 286.27 - 286.27 114.52 - 114.52 321.07 4,240.55 4,561.62 124.17 4,666.85 4,791.02 Total Foreign Items Total Domestic & Foreign Items 13,981.65 25,649.28 39,630.93 12,460.52 36,099.91 48,560.43 Mostly disclosed in Bank of Thailand and Financial Institutions Development Fund as at December 31, 2007 and 2006 were the Baht 14,361.83 million and the Baht 17,199.59 million, respectively, of low-interest loans as debt relief extended to affected poultry farm from avian flu, tsunami victims and SMEs.

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3.12 Borrowings

Borrowings classified by types of securities and sources of fund were as follows : (Million Baht)

Type of Borrowings

Consolidated Financial Statements December 31, 2007 December 31, 2006 Domestic Overseas Total Domestic Overseas Total

Short-term Borrowings - From Ministry of Finance 1.17 - 1.17 1.17 - 1.17 - From Subsidiaries - - - 50.00 - 50.00 - From Other Sources - - - 10.80 - 10.80 - KTB Debenture Bond - - - 41,501.25 - 41,501.25 Project 1/2006 - Short-term B/E 14,559.81 - 14,559.81 - - - Total Short-Term Borrowings 14,560.98 - 14,560.98 41,563.22 - 41,563.22 Long-term Borrowings - KTB Subordinated notes No. 1/2004 10,000.00 - 10,000.00 10,000.00 - 10,000.00 No. 1/2005 10,400.00 - 10,400.00 10,400.00 - 10,400.00 - KTB Debenture No. 1/2006 6,000.00 - 6,000.00 6,000.00 - 6,000.00 - Perpetual Hybrid Tier 1 Securities 1,440.00 7,428.81 8,868.81 1,440.00 7,940.51 9,380.51 - Principal Protected Index Linked P/N 122.00 - 122.00 - - - - Long-term B/E 430.00 - 430.00 - - - Total Long-Term Borrowings 28,392.00 7,428.81 35,820.81 27,840.00 7,940.51 35,780.51 Total Borrowings 42,952.98 7,428.81 50,381.79 69,403.22 7,940.51 77,343.73

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.12 Borrowings (continued) (Million Baht)

Type of Borrowings

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Domestic Overseas Total Domestic Overseas Total

Short-term Borrowings - From Ministry of Finance 1.17 - 1.17 1.17 - 1.17 - KTB Debenture Bond Project 1/2006 - - - 41,501.25 - 41,501.25 - Short-term B/E 14,559.81 - 14,559.81 - - - Total Short-Term Borrowings 14,560.98 - 14,560.98 41,502.42 - 41,502.42 Long-term Borrowings - KTB Subordinated notes No. 1/2004 10,000.00 - 10,000.00 10,000.00 - 10,000.00 No. 1/2005 10,400.00 - 10,400.00 10,400.00 - 10,400.00 - KTB Debenture No. 1/2006 6,000.00 - 6,000.00 6,000.00 - 6,000.00 - Perpetual Hybrid Tier 1 Securities 1,440.00 7,428.81 8,868.81 1,440.00 7,940.51 9,380.51 Principal Protected Index Linked P/N 122.00 - 122.00 - - - - Long-term B/E 430.00 - 430.00 - - - Total Long-Term Borrowings 28,392.00 7,428.81 35,820.81 27,840.00 7,940.51 35,780.51 Total Borrowings 42,952.98 7,428.81 50,381.79 69,342.42 7,940.51 77,282.93 Short-term borrowings Short-term borrowing from the Ministry of Finance (MOF) was subsequently refinanced as an assistance to the affected parties in the event of Thailand Tantalum rioting in Phuket. The maturity fall due in 1998. The Bank had filed a bankruptcy proceedings against the guarantor as the debtor entered a default on payment. Such proceedings was resolved. It has been during the proceeds distribution process paid to MOF under Bankruptcy Act. The Bank has issued and offered for sale KTB Debenture Bond Project 1/2006 amounting to Baht 65,000 million on December 1-25, 2006 and December 27, 2006 according to the resolution passed by the ordinary shareholdersâ&#x20AC;&#x2122; meeting No. 13 on April 21, 2006. It represents unsecured Notes with holder certificate, principal drawback at maturity, non-transferable, non-subordinated, non-convertible and no representatives. The maturity is 210 days (213 days only for the issuance on December 1, 2006) with the face value of Baht 1,000.00. The coupon rate is 5 percent for the amount bought less than 1,000 units whereas 5.125 percent is for the amount bought 1,000

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units and above. The interest will be paid one time on the maturity date. The Bank has achieved selling for Baht 41,501.25 million as at December 31, 2006. In 2007, the Bank has offered more for sale amounting to Baht 18,000.00 million. Redemption as to maturity amounting to Baht 59,501.25 million was done as at December 31, 2007. In 2007, the Bank has offered Bill of Exchange underlying loan-taking from public amounting to Baht 14,559.81 million with the maturity due in 1 mth, 3 mths and 6 mths. The coupon rate is 2.60 percent for the amount Baht 0.10 million to less than Baht 1 million and 2.80 percent for the amount Baht 1 million and above. Interest will be paid when due. Long-term borrowings Subordinated Notes of Baht 20,400.00 million represented the unsecured notes with holder certificates and non-convertible holding by shareholder representative. The maturity was 10 years from the issued date, having a face value of Baht 1,000.00. The Bank is eligible to redeem ahead of their maturity when due in 5 years or on the interest-paid date after 5 years from the issued date at the face value. The unsecured notes comprise the followings : 1. Subordinated Notes No. 1/2004 of Baht 10,000.00 million issued on October 22, 2004, redeemable on October 22, 2014 at a fixed coupon of 5.15 percent p.a. during year 1-5 and 6.70 percent p.a. during year 6-10. The interest was paid half-yearly on April 22 and October 22, annually, over the time to maturity. The first repayment was on April 22, 2005. The Bank has issued and offered subordinated notes for sale according to the resolution passed by the shareholdersâ&#x20AC;&#x2122; extraordinary meeting No.1/2002, on September 24, 2002, in the amount not exceeding Baht 10,000.00 million or other currencies equivalent. 2. Subordinated Notes No. 1/2005 of Baht 10,400.00 million, issued on May 18, 2005, redeemable on May 18, 2015 at a fixed coupon of 4.60 percent p.a. during year 1-5 and 6.0 percent p.a. during 6-10. The interest was paid half-yearly on May 18 and November 18, annually, over the time to maturity. The first repayment was on November 18, 2005. The shareholdersâ&#x20AC;&#x2122; ordinary meeting No. 12, on April 22, 2005 has passed a resolution for the Bank to issue and offer for sale the Subordinated Notes in Thai Baht and/or other currencies equivalent in the amount not exceeding Baht 40,000.00 million with 5-year maturity. The Baht 6,000.00 million represented the first issuance of debentures on March 16, 2006 with the maturity fall due on March 16, 2009. Such debentures characterized as unsubordinated in name certificates and unsecured without bondholder representative. The maturity was 3 years, having a face value of Baht 1,000.00 each, redeemable when fall due at a fixed coupon of 5.34 percent p.a. The interest will be paid semiannually on March 16 and September 16, annually, over the time to maturity. The first payment has fall on September 16, 2006 whereas the final payment will be on March 16, 2009. Perpetual Tier 1 Securities The US$ 220,000,000 Perpetual Non-Cumulative Tier 1 Securities (Hybrid Tier 1) have been issued and offered on October 10, 2006 by Krung Thai Bank Pcl. in conformity with the regulations stipulated by the BOT. The securities have been offered and sold through the Singapore branch. The securities will constitute unsecured and subordinated obligation of the Bank. Interest will be non-cumulative and interest payment will be suspended if on

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

any payment date the Bank would experience current loss. As at December 31, 2006 the Baht 7,940.51 million has been included in Tier 1 Capital Fund. Non-cumulative Hybrid Tier 1 Securities have been issued and offered on November 28, 2006 amounting to Baht 1,440.00 million. The BOT has approved the inclusion of Hybrid Tier 1 Securities to Tier 1 Capital Fund. It has been offered for sale to eleven (11) domestic investors at the whole amount. Further, the ordinary shareholders’ meeting No. 13 held on April 21, 2006 has passed a resolution for the Bank to issue and offer more of Hybrid Tier 1 Securities at the amount not exceeding Baht 100,000.00 million or in other currencies equivalent within 5 years from the previous approved at Baht 40,000 million in the year 2005. On April 27, 2007 the ordinary shareholders’ meeting No. 14 has also passed a resolution for the Bank to issue and offer various types of securities additionally at the amount not exceeding Baht 100,000.00 million. On August 24, 2007, the Bank has offered Bill of Exchange underlying loan-taking from public amounting to Baht 430.00 million with 3-year maturity and rate of return equal to THBFIX6M-0.15 percent. Interest will be paid on every August 24 and February 24 of the year. On September 20, 2007, the Bank has issued Principal Protected Index Linked P/N on behalf of a certain Fund Unit within Baht 122.00 million, with 3-year maturity at a discount rate of 97 percent and, simultaneously, bought back Principal Protected Index Linked P/N from a certain financial institution at the same discount rate of 97 percent. For the entirely hedging purpose, the P/N has been issued on October 5, 2010 with the Baht 122.00 million face value, non-transferable and non-convertible. 3.13 Other liabilities Other liabilities comprise the followings : (Million Baht)

Accrued expenses account Inter-office account Suspense account creditors Payable to revenue dept. Deferred income account Provisions, Contingent liabilities Sundry liabilities Total

Consolidated Financial Statements The Bank’s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

1,520.26 664.09 2,442.82 1,313.63 1,351.55 2,715.81 629.30 10,637.46

1,604.95 - 2,493.84 310.14 1,379.46 2,765.75 627.76 9,181.90

1,128.47 664.09 2,065.34 1,302.00 1,351.55 2,715.81 520.98 9,748.24

1,206.04 - 2,237.25 304.34 1,379.46 2,765.75 865.95 8,758.79

The Provisions as at December 31, 2007 and 2006 encompassed the potential impaired-assets transferred to TAMC amounting to Baht 2,715.79 million and Baht 2,725.75 million,(see Note 3.27) and Contingent amounting to Baht 0.02 million and Baht 40.00 million, respectively. (see Note 3.17)

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3.14 Share Capital 3.14.1 Ordinary Shares Of the 11,191,412,250 registered ordinary shares were the 11,179,749,000 paid-up shares. The residual of 11,663,250 registered shares served as the back up to the warrants granted to the Bank’s employees. The warrants as such have been entirely exercised on December 30, 2004. The registration of a decline residual ordinary shares will be undertaken simultaneously with that of other debentures, on the convenient manner. 3.14.2 Preferred Share The 5.5 million of preferred shares are fully paid-up. Preferred share has more preference over the ordinary share. Apart from entitling to the same voting rights and claims on dividends as ordinary share, it may enjoy certain preferential rights to a special dividend at a 3 percent fixed rate p.a. prior to the ordinary share when paid. 3.14.3 As at December 31, 2007 and 2006, the Bank’s shareholder distributions were as follows :

The Bank’s Financial Statements December 31, 2007 December 31, 2006 Ordinary Preferred Ordinary Preferred Shares Total (%) Shares Shares Total (%) Shares (No.of Shares) (No.of Shares) (No.of Shares) (No.of Shares)

Top ten shareholders Financial Institutions Development Fund 6,184,072,567 - 55.29 6,186,635,967 - 55.31 Thailand Securities Depository Co., Ltd. for Thai Depositors 2,466,660,579 5,461,170 22.10 2,065,055,885 5,461,170 18.51 Thailand Securities Depository Co., Ltd. for Depositor 2,251,791,317 - 20.13 2,710,883,889 - 24.23 The Government Savings Bank 88,145,858 - 0.79 88,145,858 - 0.79 Yarwood Engineering & Trading Ltd. 70,000,000 - 0.62 - - - Mr. Supot Subtaweechaikul 4,000,000 - 0.04 4,000,000 - 0.04 Mrs. Charoonsri PongKriangyos 3,500,086 - 0.03 3,500,086 - 0.03 Mr. Kamthorn Poonsakudomsin - - - 2,051,347 - 0.02 Mr. Wichai Praepanich 1,071,500 - 0.01 - - - Mr. Taksin Wiprakasith 1,000,000 - 0.01 1,000,000 - 0.01 Mr. Kornwit Subhudipong 1,000,000 - 0.01 1,000,000 - 0.01 Mr. Kittiya Srilertfah 700,000 - 0.01 700,000 - 0.01 Total 11,071,941,907 5,461,170 11,062,973,032 5,461,170

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.14.3 As at December 31, 2007 and 2006, the Bank’s shareholder distributions were as follows : (continued)

Juristic entities Thais 2,670,836 240 0.02 (62 entities in 2007) 2,698,866 240 0.02 (65 entities in 2006) Foreigners 12 - - (2 entities in 2007) 12 - - (2 entities in 2006) 2,670,848 240 2,698,878 240 Total Individuals Thais (11,728 entities in 2007) 104,236,182 38,590 0.93 113,043,901 38,590 1.01 (12,222 entities in 2006) Foreigners 900,063 - 0.01 (51 entities in 2007) 1,033,189 - 0.01 (53 entities in 2006) 105,136,245 38,590 114,077,090 38,590 Total 11,179,749,000 5,500,000 100.00 11,179,749,000 5,500,000 100.00 Grand Total 3.14.4 Statutory Capital Fund

(Million Baht)

Tier 1 Capital Tier 2 Capital Total Capital Fund before less items Less Revaluation deficit (net) on investments in available-for-sale equity securities Total Capital Fund

The Bank’s Financial Statements December 31, 2007 December 31, 2006

96,717.63 31,782.45 128,500.08

93,497.14 29,283.92 122,781.06

- 128,500.08

(2,228.47) 120,552.59

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The BOT’s regulation requires that commercial bank registered in Thailand maintain a ratio of capital fund to assets and contingencies of not less than 8.5 percent under the condition that tier 1 capital must not be less than 4.25 percent of such assets and contingencies. As at December 31, 2007 and 2006 the Bank maintained a ratio of capital fund to assets and contingencies as prescribed by the BOT’s regulation as follows:

Rate (%) December 31, 2007 December 31, 2006

Total Capital Fund 15.16 14.03 Tier 1 Capital 11.41 10.88 3.15 Legal Reserve (Million Baht)

2007

Net Income for the year Capital Reserve (5%) Balance brought forward Total

6,112.58 310.00 2,501.46 2,811.46

2006

14,077.95 703.90 1,797.56 2,501.46

Under the Public Limited Companies Act, the Bank is required to allocate to the capital reserve not less than 5 percent of its net income less accumulated losses brought forward, if any, until the capital reserve of not less than 10 percent of registered share capital is met. 3.16 Net Income Appropriation for the year 2006 and Dividend Paid Net income of 2006 amounting to Baht 14,077.95 million were appropriated according to the resolution passed by the shareholders’ ordinary meeting No. 14 on April 27, 2007 and net income of 2005 amounting to Baht 13,024.07 million were appropriated according to the resolution passed by the shareholders’ ordinary meeting No.13 on April 21, 2006, as follows: (Million Baht)

Net Income 2006

Legal reserve Dividend - Preferred shares (@ Baht 0.6645 and 0.6545) Dividend - Ordinary shares (@ Baht 0.51 and 0.50) Net income carried forward

703.90 3.65 5,701.67 7,668.73

Net Income 2005

651.20 3.60 5,589.87 6,779.40

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.17 Contingencies

(Million Baht)

Consolidated and the Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Thai Baht Foreign Currencies Total Thai Baht Foreign Currencies Total

Aval and guarantees Aval for bills 1,450.58 - 1,450.58 2,469.21 - 2,469.21 Guarantees for loans 1,616.67 3,061.19 4,677.86 1,865.05 2,829.63 4,694.68 3,067.25 3,061.19 6,128.44 4,334.26 2,829.63 7,163.89 Liability under unmatured import bills - 127.11 127.11 - 46.13 46.13 Letters of credit 1,373.70 14,730.93 16,104.63 942.65 20,688.96 21,631.61 Other contingencies Firm underwriting debt instruments or securities 0.06 - 0.06 0.43 - 0.43 Other guarantees 46,909.85 9,689.54 56,599.39 41,043.77 11,470.54 52,514.31 FX forward/swap contracts - Bought - 49,631.70 49,631.70 - 38,056.17 38,056.17 - Sold - 104,199.90 104,199.90 - 83,348.87 83,348.87 FX option contracts - Bought - 479.71 479.71 - - - - Sold - 479.71 479.71 - - - Interest rate swap contracts 6,118.00 3,444.26 9,562.26 1,338.00 180.46 1,518.46 Undrawn overdraft 97,997.81 47.29 98,045.10 90,793.85 25.04 90,818.89 Credit Linked Notes (CLN) - 1,597.19 1,597.19 - - - Others - 4.31 4.31 - - - Total Other Contingencies 151,025.72 169,573.61 320,599.33 133,176.05 133,081.08 266,257.13 Grand Total 155,466.67 187,492.84 342,959.51 138,452.96 156,645.80 295,098.76 The Bank has invested the USD 47.30 million equivalent to Thai Baht 1,597.19 million in CLN as at December 31, 2007 and booked as Investments including committed in off-balance sheet item. The Bankâ&#x20AC;&#x2122;s other material contingent liabilities as at December 31, 2007 and 2006 were civil proceedings brought against the Bank of Baht 21,408.52 million and Baht 20,082.75 million, respectively. The Bank has set up provisions for contingencies amounting to Baht 0.02 million and Baht 40.00 million as at December 31, 2007 and 2006, respectively and shown in Other Liabilities. (see Note 3.13)

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3.18 Assets Pledged as Collateral

(Million Baht)

Consolidated and the Bank’s Financial Statements December 31, 2007 December 31, 2006

Government and state enterprise bonds pledged as collateral - at court 265.45 253.37 - to BOT as condition upon branch opening - 641.26 Total 265.45 894.63

3.19 Related-Party Transactions

3.19.1 Loans to the Bank’s executives (Senior Vice President and above), as at December 31, 2007 and 2006 were Baht 314.88 million and Baht 235.47 million, respectively. The average outstanding balance of loans at month-end was Baht 279.20 million and Baht 227.10 million, respectively. The loans outstanding as at December 31, 2007 and 2006 to close family of the Bank’s executives as referred to in the preceding paragraph were Baht 60.26 million and Baht 50.52 million, respectively. (Million Baht)

Pricing Policy for Loans and Contingencies

The Bank’s Financial Statements December 31, 2007 December 31, 2006 Loans Contingencies Loans Contingencies

3.19.2 The Bank’s loans and contingencies to businesses in which the Bank totally hold from 10 to 20 percent of shareholdings Dhipaya Insurance Pcl.

Normal Bank Policy

13.68

5.43

3.19.3 Loans and contingencies to businesses in which the Bank acquired 10 percent and more of shares from TDR Thai Baroda Industries Ltd. Cotco Metal Works Co., Ltd. Kiatpapha Co., Ltd. Manager Media Group Pcl. Lanna Agribusiness Co., Ltd. Kamol Kij Co., Ltd. Kirikhan Farm Co., Ltd. Amorn-Chai Co., Ltd. Thai-German Products Pcl.

Normal Bank Policy Normal Bank Policy Normal Bank Policy Normal Bank Policy Normal Bank Policy Normal Bank Policy Normal Bank Policy Normal Bank Policy Normal Bank Policy

516.48 375.78 134.36 - 67.04 33.45 - - -

9.53 543.39 21.15 410.32 0.33 220.80 0.29 - - 65.56 - 27.02 - 4.31 - 1.05 - 83.57

41.45 60.67 0.33 0.29 - - 0.10 - 0.01

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

(Million Baht)

Pricing Policy for Loans and Contingencies

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Loans Contingencies Loans Contingencies

3.19.4 Loans and contingencies to subsidiaries and associated companies Subsidiaries Krung Thai General Business Normal Bank Policy 78.13 0.20 20.00 Services Co., Ltd. Krung Thai Computer Services Co., Ltd. Normal Bank Policy 2,455.15 1.55 2,996.23 KTB Leasing Co., Ltd. Normal Bank Policy 7,858.71 0.07 1,357.45 Associated Companies - - - Krungthai Panich Insurance Co., Ltd. Normal Bank Policy Krung Thai IBJ Leasing Co., Ltd. Normal Bank Policy 517.00 3.14 865.33 Krungthai Card Pcl. Normal Bank Policy 2,800.00 - 500.00

50.55 1.00 1.00 0.01 3.00 -

3.19.5 Loans and contingencies to related companies With Common Director Electricity Generating Pcl. Normal Bank Policy - - - 0.83 Saha Pathana Inter-Holding Pcl. Normal Bank Policy - - 0.68 - Padaeng Industry Pcl. Normal Bank Policy - 3.00 - 3.00 Provincial Electricity Authority Normal Bank Policy - 278.11 - 565.04 CH. Karnchang Pcl. Normal Bank Policy 6.27 1,736.55 3,202.20 2,947.68 IRPC Pcl. Normal Bank Policy - - 2,700.00 115.10 RCL Pcl. Normal Bank Policy 1,924.96 - 1,612.15 - Thai Airways International Pcl. Normal Bank Policy - 0.37 - - State Railway of Thailand Normal Bank Policy 18,302.31 13.96 - - Loxley Pcl. Normal Bank Policy 100.71 282.42 - - With Common Management Executives Bangkok Mass Transit System Pcl. Normal Bank Policy 4,198.36 14.38 4,257.00 14.38 Bangkok Commercial Asset Management Co., Ltd. Normal Bank Policy 6,995.47 - 9,995.47 - Sri Siam Paper Pcl. Normal Bank Policy 4,311.12 2.40 4,298.12 15.31 The Bangchak Petroleum Pcl. Normal Bank Policy 8,242.22 415.92 8,983.76 318.85 Thai Rubber Latex Corporation (Thailand) Pcl. Normal Bank Policy 336.65 1.35 334.28 - Bangkok Expressway Pcl. Normal Bank Policy 6,284.38 - 9,790.26 - Si-Chang Flying Service Co., Ltd. Normal Bank Policy 944.76 219.54 1,062.68 263.75 Millennium Microtech (Thailand) Co., Ltd. Normal Bank Policy - - 440.51 -

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(Million Baht)

Pricing Policy for Loans and Contingencies

The Bank’s Financial Statements December 31, 2007 December 31, 2006 Loans Contingencies Loans Contingencies

3.19.5 Loans and contingencies to related companies (continued) Internet Thailand Pcl. Normal Bank Policy - 3.74 - 5.55 World Flex Pcl. Normal Bank Policy 86.66 4.82 135.28 63.72 TPT Petrochemical (Thailand) Pcl. Normal Bank Policy 2,058.63 11.25 1,926.24 22.72 [Tuntex Petrochemicals (Thailand) Pcl.] Advance Agro Pcl. Normal Bank Policy 1,199.71 214.49 850.01 339.38 Thai Smart Card Co., Ltd. * Normal Bank Policy - - - 39.55 Thai Nam Plastic Pcl. Normal Bank Policy 87.18 4.02 90.21 5.14 * No common management executives as at December 31, 2007 3.19.6 Intercompany Trading Transactions Subsidiaries 1) Krung Thai Computer Services Co., Ltd. (KCS) has been designated mainly to provide information technology (IT) services to various work units in the Bank. Services offered consist of introducing IT to the Bank’s business operation and modernizing the existing systems in line with the Bank’s requirement, rendering system control and maintenance, system software development and offering preliminary consultancy service and organizing training in various application of IT and techniques. The Bank incurred service charges on a cost plus method, thus, the Baht 2,200.00 million and Baht 2,036.50 million for the years ended December 31, 2007 and 2006, respectively. Since 2003, the GFMIS project Phase 2 has been developed and implemented, on behalf of the Bank, by KCS. The Bank and the Office of GFMIS attached to the Secretariat of the Prime Minister have unanimously signed on the Memorandum of Agreement upon the submission of deliverables and disbursement asssociated to the investments on the GFMIS project on September 22, 2005. Further, the Bank has signed the hiring contract for the implementation and maintenance with the Office of GFMIS on the same day. 2) The Bank incurred service charges on its subsidiaries (including service charges mentioned in # 1) for the years ended December 31, 2007 and 2006 amounting to Baht 3,558.97 million and Baht 3,226.47 million, respectively at the agree-upon rate. 3) Other Information

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Intercompany Considerations Intercompany income and expense were based on the rate agreed-upon and the amount specified in the contract, whereas, cost plus system has been applicable to some certain transactions. The consolidated financial statements included the accounts of subsidiaries after eliminating inter-office transactions and balances. Associated Companies 1) For the years ended December 31, 2007 and 2006, the Bank generated premises rental income from associated companies amounting to Baht 1.18 million and Baht 1.34 million at the agree-upon rate. 2) For the years ended December 31, 2007 and 2006, the Bank generated fee income of Baht 124.11 million and Baht 136.76 million at the agree-upon rate under the supportive service contract. 3.20 Overseas Branches The Bank has operated 7 branches - in Los Angeles, Phnom Penh, Kunming, Vientiane, Singapore, Mumbai and Siem Reap Province Sub-branch whereby other certified accountants have been appointed to audit their financial statements on annual basis. The assets and liabilities of the overseas branches included in consolidated financial statements (after elimination of inter-branch items) for the years ended December 31, 2007 and 2006, were as follows: (Million Baht)

The Bank’s Financial Statements December 31, 2007 December 31, 2006

Assets 11,808.85 Ratio to total assets 0.97 Liabilities 14,542.69 Ratio to total liabilities 1.30

13,766.50 1.14 14,603.95 1.31

Included in the net income (loss) of Baht (260.28) million and Baht 439.88 million as at December 31, 2007 and 2006 were gains from translation of the oversea branches’ financial statements totaling Baht 32.88 million and Baht 14.60 million, respectively. Before the elimination of inter-branch items totaling Baht 2,712.18 million and Baht 1,025.29 million, the overseas branches’ assets as at December 31, 2007 and 2006 totaling Baht 14,521.03 million and Baht 14,791.80 million, or 1.20 percent and 1.23 percent, respectively. Overseas branches’ liabilities amounted to Baht 14,542.69 million and Baht 14,603.95 million, or 1.30 percent and 1.31 percent of total liabilities, respectively. Net income for the periods ended December 31, 2007 and 2006, were Baht 105.44 million and Baht 344.19 million, respectively.

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3.21 Significant Financial Position and Operations Classified by Domestic and International Business Segment 3.21.1 Financial Position Classified by Business Segment (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Domestic International Domestic International Total Total Business Business Business Business Segment Segment Segment Segment

Total assets Interbank and money market items Loans Investments Deposits Interbank and money market items Borrowings Contingencies

1,200,913.19 14,521.03 1,215,434.22 1,191,061.78 14,791.80 1,205,853.58 71,814.98 4,193.31 76,008.29 83,595.55 2,533.58 86,129.13 947,466.69 7,104.53 954,571.22 912,139.08 10,539.76 922,678.84 109,715.27 409.01 110,124.28 113,107.01 470.91 113,577.92 998,414.84 2,256.08 1,000,670.92 964,744.83 1,691.73 966,436.56 35,124.30 4,476.79 39,601.09 43,844.60 4,689.76 48,534.36 42,952.98 7,428.81 50,381.79 69,403.22 7,940.51 77,343.73 340,814.48 2,145.03 342,959.51 293,101.85 1,996.91 295,098.76 (Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Domestic International Domestic International Total Total Business Business Business Business Segment Segment Segment Segment

Total assets 1,199,521.30 14,521.03 1,214,042.33 1,190,950.76 14,791.80 1,205,742.56 Interbank and money market items 71,783.69 4,193.31 75,977.00 83,544.43 2,533.58 86,078.01 Loans 950,979.45 7,104.53 958,083.98 915,729.64 10,539.76 926,269.40 Investments 110,592.68 409.01 111,001.69 114,446.40 470.91 114,917.31 Deposits 999,841.68 2,256.08 1,002,097.76 966,589.09 1,691.73 968,280.82 Interbank and money market items 35,154.14 4,476.79 39,630.93 43,870.67 4,689.76 48,560.43 Borrowings 42,952.98 7,428.81 50,381.79 69,342.42 7,940.51 77,282.93 Contingencies 340,814.48 2,145.03 342,959.51 293,101.85 1,996.91 295,098.76 Total assets shown in the Bankâ&#x20AC;&#x2122;s financial statements as at December 31, 2007 and 2006 of Baht 1,214,042.33 million and Baht 1,205,742.56 million, were stated before the elimination of inter-company items of Baht 2,712.18 million and Baht 1,025.29 million, respectively.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.21.2 Operations Classified by Business Segment (Million Baht)

Consolidated Financial Statements December 31, 2007 December 31, 2006 Domestic International Domestic International Total Total Business Business Business Business Segment Segment Segment Segment

Interest and dividend income 65,739.09 1,551.23 67,290.32 66,643.78 1,405.91 68,049.69 Interest expenses (22,035.82) (1,216.19) (23,252.01) (21,188.73) (973.99) (22,162.72) Net Interest Income 43,703.27 335.04 44,038.31 45,455.05 431.92 45,886.97 Non-interest income 10,991.54 41.67 11,033.21 10,669.81 29.76 10,699.57 Non-interest expense (47,324.29) (271.27) (47,595.56) (42,393.23) (76.08) (42,469.31) Income before Income Tax and Minority Interests 7,370.52 105.44 7,475.96 13,731.63 385.60 14,117.23 (Million Baht)

Interest and dividend income 65,974.49 1,551.23 67,525.72 67,118.55 1,405.91 68,524.46 Interest expenses (22,036.76) (1,216.19) (23,252.95) (21,189.91) (973.99) (22,163.90) Net Interest Income 43,937.73 335.04 44,272.77 45,928.64 431.92 46,360.56 Non-interest income 10,001.87 41.67 10,043.54 9,507.86 29.76 9,537.62 Non-interest expense (46,932.46) (271.27) (47,203.73) (42,024.09) (76.08) (42,100.17) Income before Income Tax 7,007.14 105.44 7,112.58 13,412.41 385.60 13,798.01 Total interest and dividend income and total interest expense, in the Bankâ&#x20AC;&#x2122;s financial statements as at December 31, 2007 and 2006 of Baht 67,525.72 million and Baht 23,252.95 million and Baht 68,524.46 million and Baht 22,163.90 million, respectively, were stated before the adjustment of inter-company items of Baht 1,113.06 million and Baht 757.42 million, respectively. Total interest and dividend income as at December 31, 2007 and 2006 included fee income and other income generated from loan extension amounting to Baht 1,094.29 million and Baht 804.69 million, respectively.

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3.22 Net Foreign Exchange Position

The Bank’s net foreign exchange position (USD equivalent) as at December 31, 2007 and 2006 were as follows : (Million USD)

Consolidated and the Bank’s Financial Statements December 31, 2007 December 31, 2006 Domestic International Domestic International Total Total Business Business Business Business Segment Segment Segment Segment

Spot 1,477.06 Forward Forward contract 413.28 Swap contract (1,224.64) CCS contract (684.80) (19.10)

(0.64)

1,476.42

1,142.22

5.20 1,147.42

- 413.28 - (1,224.64) - (684.80) (0.64) (19.74)

(39.61) (196.41) (910.02) (3.82)

- (39.61) - (196.41) - (910.02) 5.20 1.38

3.23 Disclosure of Financial Instruments Thai Accounting Standards No. 48 regarding “Financial Instruments: Disclosure and Presentation” is used as a reference for disclosing information on the Bank’s financial instruments. The information aims to assist users of the financial statements to assess the Bank’s exposure to risks associated with significant financial instruments. Financial Instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is: - Cash - A contractual right to receive cash or another financial asset from another enterprise - A contractual right to exchange financial instruments with another enterprise under conditions that are potentially favorable - An equity instrument of another enterprise A financial liability is any liability that is a contractual obligation: - to deliver cash or another financial asset to another enterprise - to exchange financial instruments with another enterprise under conditions that are potentially unfavorable. An equity instrument is any contract that evidences a residual interest in the assets of an enterprise after deducting all of its liabilities. Financial instruments include both: - Primary Instruments such as Receivables, Payables and Equity Securities - Derivative Instruments such as Option Contracts, Futures Contracts, Forward Contracts, Interest Rate Swap Contracts, Currency Swap Contracts and Credit Linked Notes. Derivative Instruments, whether recognized or unrecognized in Balance Sheet, meet the definition of a financial instrument.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.23.1 Interest Rate Risk Interest rate risk in the balance sheet arises from market interest rate volatility and the mismatch in repricing dates of the Bank’s assets and liabilities that may have an adverse effect on the net interest earnings of the Bank. The majority of the Bank’s financial assets earn interest at floating rates such as MOR, MRR and MLR, except for investments in bonds with a fixed interest rate and maturity. The majority of the Bank’s financial liabilities, include those saving deposit in the domestic money market which pay interest at floating rates and 3-month,

6-month and 12-month time deposits which pay at short-term fixed interest rates. Primary information relating to fixed and floating interest rates applicable to loans as at December 31, 2007 and 2006 were as follows :

(Million Baht)

Consolidated Financial Statements The Bank’s Financial Statements December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Fixed interest rate Floating interest rate Total loans (financial institutions included)

259,340.65 745,856.24 1,005,196.89

284,186.96 685,596.57 969,783.53

259,340.65 749,365.06 1,008,705.71

284,186.96 689,187.13 973,374.09

3.23.2 Credit Risk Credit risk is defined as the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms or due to the deterioration of credit quality which lead the Bank to fail to take full payment finality as agreed-upon in the contract. It also causes an adverse effect over the Bank’s income and capital fund. The carrying amount for each class of financial asset recognized in the balance sheet, net of applicable allowance for doubtful debts (see Note 3.5), represents the Bank’s exposure to credit risk where no material concentration of credit risk. In addition, the Bank incurs risk arising from the potential default on its contractual obligations by the other party, including aval for bills, guarantees for loans, liability under unmatured import bills, letters of credit and other contingencies. The credit exposure on these instruments is represented by the notional amount recorded

off-balance sheet. The Bank has set up measures for managing credit risk by laying importance to the followings : 1. Establishing policy and procedure used in credit risk management to ensure the Bank of streamlining practices as well as in conformity with the BOT’s risk management supervision policy and meet Basel II criteria. 2. Formulating credit policy used as a guideline for the Bank’s credit extension, revision and improvement of credit policy to ensure flexible practice and meet international standards. 3. Modernizing qualitative business research that includes the analysis and estimation of economic situation, financial and banking as well as conducting Industry Risk Rating encompassing more of all businesses according to ISIC Code coupled with Potential Customer Analysis Profile. In addition, preparing KTB Business Index (KTBI) and Potential Regional Industrial Analysis Profile are essential to make available for the management as supplementary data to initiate strategic planning and for Account Officer in decision making associated to credit extension.

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4. Establishing Standard Operation Procedure (SOP) used in credit approval and troubled debt restructuring. 5. Development of tools for customer risk analysis based on groups of customer as follows : 5.1 Credit scoring used for retail customer groups 5.2 Credit risk rating by making use of Probability of Default applicable for medium and corporate customer groups 6. Regularly establishing and properly reviewing the Bank’s Delegated Lending Authorities (DLA) and Delegated Restructuring Authorities (DRA) to assure the same standard and prudential practices regarding credit approval and debt restructuring. Credit regulations stipulated by the Bank in credit consideration and approval principally require that both DLA and DRA be appointed in form of Committee. 7. Following up and managing the quality of loan by closely monitoring approved lending activities to ensure that the compliance to the Bank’s terms and conditions of loan agreement is met by carrying out the NPLs reduction expedition project. Watch list debtors with weak performance will be corrected and controlled in continuation to prevent such loans become NPLs. Further, debt restructuring coupled with legal proceedings has put in place in case of NPLs debtors. NPLs reduction expedition project will encourage precise debt management in solving NPLs problem. Regular progress reportings will help expediting debt repayment with minimum loss. 8. In assessing the adequacy of provisioning as prescribed by the BOT, the Bank is required to conduct credit examination regarding the correctness and completeness of loan classification and debt-restructuring data base. In addition, collateral data are also taken into account in term of type and value of collateral. Such related data potentially have significant impact on the Bank’s provisioning. 9. Any assets classified as doubtful of loss with no underlying collateral or provision has been fully made,

will be totally written off. Written-off process has been developed which includes related form and regulations. Operating procedure has been completely accommodated for, ranging from written-off approval and accounting entries recorded in credit system and GL. In this respect, written-off items will still be continually called for uncollectible amount or taken legal proceedings to the final action as prescribed by the Bank’s regulations. 10. Establishing credit review to ensure compliance with standard operation procedures in relation to credit approval and debt restructuring. In addition, qualitative assessments for loan and other related assets will be useful for debtors’ classification as prescribed by the BOT. 11. Communications are required to ensure the Bank’s resources to have a more risk sensitivity together with realizing the importance of risk control. Development of training related to risk management encompassing credit risk, market risk and operational risk are also essential to enable them to have a better understanding of risk management in line with New Capital Accord or Basel II. 12. Establishment of consultant and taskforce accountable for preparing ahead in term of information and risk measurement tools etc. 13. Self-Assessment of risk in associated with the Bank as stipulated by the BOT and preparation of report on such the implication submitted to the Bank’s Board of Directors including set up practical guidelines to mitigate risk and to monitor streamlining performance. 14. Enhancement of information technology system to ensure the completeness and adequacy of information system for risk management and decision making as well as to minimize work redundancy and error arising from employees’ performance.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.23.3 Interest Earning Financial Assets and Interest-bearing Financial Liabilities The table below represents the Bankâ&#x20AC;&#x2122;s average outstanding balance of interest income/expense and average interest rates on interest earning-financial assets and interest-bearing financial liabilities, for the years ended December 31, 2007 and 2006.

(Million Baht)

Consolidated Financial Statements December 31, 2006 December 31, 2007 Average Interest Average Interest Average Average Outstanding Income/ Rate Income/ Outstanding (%) Rate (%) Balance Expense Expense Balance

Interest Earning Financial Assets Interbank and money market items and securities purchased under resale agreement 118,770.79 6,196.87 5.22 115,924.06 6,464.49 5.58 Investments in securities 121,850.77 5,927.82 4.86 106,168.39 5,617.96 5.29 Loans 923,688.77 54,052.57 5.85 906,676.34 55,209.83 6.09 1,164,310.33 66,177.26 5.68 1,128,768.79 67,292.28 5.96 Total Interest-Bearing Financial Liabilities Deposits 1,015,113.28 18,478.65 1.82 991,189.56 18,576.56 1.87 Interbank and money market items 44,588.45 834.33 1.87 48,102.22 1,028.70 2.14 Long-term borrowings 35,653.07 1,964.06 5.51 28,751.76 1,662.23 5.78 1,095,354.80 21,277.04 1.94 1,068,043.54 21,267.49 1.99 Total

(Million Baht)

The Bankâ&#x20AC;&#x2122;s Financial Statements December 31, 2007 December 31, 2006 Interest Average Average Interest Average Average Outstanding Income/ Rate Income/ Outstanding (%) Rate (%) Expense Balance Expense Balance

Interest Earning Financial Assets Interbank and money market items and securities purchased under resale agreement 118,696.54 6,019.27 5.07 115,830.33 6,418.85 5.54 Investments in securities 122,966.38 6,175.63 5.02 108,988.96 5,617.96 5.15 Loans 927,281.11 54,217.76 5.85 909,905.08 55,433.95 6.09 1,168,944.03 66,412.66 5.68 1,134,724.37 67,470.76 5.95 Total Interest-Bearing Financial Liabilities Deposits 1,016,239.66 18,480.66 1.82 992,547.82 18,580.96 1.87 Interbank and money market items 44,618.55 833.26 1.87 48,129.84 1,028.97 2.14 Long-term borrowings 35,653.07 1,964.06 5.51 28,745.13 1,661.41 5.78 1,096,511.28 21,277.98 1.94 1,069,422.79 21,271.34 1.99 Total

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3.23.4 Maturity Profile of Assets and Liabilities The table below represents the Bankâ&#x20AC;&#x2122;s maturity profile of on-balance sheet financial assets and financial liabilities as at December 31, 2007 and 2006. (Million Baht)

December 31, 2007 Less than 1-3 months Over 3 months Over 1 year No Maturity 1 month upto 1 year

Total

Financial Assets Interbank and money 35,394.11 18,594.38 20,688.78 1,299.73 - 75,977.00 market items Securities purchased under 600.00 - - - - 600.00 resale agreement - - 21,131.73 89,869.96 - 111,001.69 Investments in securities 117,715.64 104,923.90 181,869.63 553,574.81 - 958,083.98 Loans 153,709.75 123,518.28 223,690.14 644,744.50 - 1,145,662.67 Total Financial Liabilities 576,473.02 185,799.40 179,194.25 60,631.09 - 1,002,097.76 Deposits Interbank and money 15,537.70 133.25 14,880.31 9,079.67 - 39,630.93 market items 1.17 4,567.28 9,992.53 35,820.81 - 50,381.79 Borrowings 592,011.89 190,499.93 204,067.09 105,531.57 - 1,092,110.48 Total (Million Baht)

December 31, 2006 Less than 1-3 months Over 3 months Over 1 year No Maturity 1 month upto 1 year

Total

Financial Assets Interbank and money market items 11,902.47 65,206.22 7,574.33 86.15 108.28 84,877.45 Securities purchased under resale agreement 22,400.00 - - - - 22,400.00 - - 28,974.77 79,863.97 7,576.03 116,414.77 Investments in securities 33,675.88 231,890.41 124,437.27 536,265.84 - 926,269.40 Loans 67,978.35 297,096.63 160,986.37 616,215.96 7,684.31 1,149,961.62 Total Financial Liabilities 535,551.10 190,687.28 177,227.60 64,814.84 - 968,280.82 Deposits Interbank and money market items 13,590.24 32.55 20,889.11 14,048.53 - 48,560.43 1.17 18,000.00 23,551.25 35,730.51 - 77,282.93 Borrowings 549,142.51 208,719.83 221,667.96 114,593.88 - 1,094,124.18 Total

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

3.23.5 Derivatives A derivative is a financial contract whose value is derived from the value of an underlying reference rate, index, or other instrument. Asset and Liability Management The Bank uses derivatives to hedge its market risk arising from its assets and liabilities, which are predominantly related to interest rate and foreign exchange risks. The Bankâ&#x20AC;&#x2122;s customers are also exposed to market risks and may choose to use derivatives as part of their risk management strategies. The Bankâ&#x20AC;&#x2122;s general policy is to hedge risks arising from customer positions. The Bank has also pursued a policy to maintain foreign exchange positions stipulated by the Bank of Thailand as in Note 2.12 and to monitor and to alleviate exposures in view of interest rate risk management within a timely manner. Fair Value of Derivatives Fair value represents the amount the Bank expects to pay or receive to exchange or settle a derivative contract. The net fair value may be determined by several generally accepted methods based on the economic characteristics of a derivative and the financial market in which it operates. When a financial instrument with standard terms and conditions is traded in an active and liquid market, its quoted market price provides the best evidence of fair value. A fair value may be obtained from quoted market prices such as interest and foreign exchange rates which are subsequently incorporated into generally accepted discounted cash flow models. Derivative financial instruments as at December 31, 2007 and 2006 were as follows : (Million Baht)

December 31, 2007 Notional Up to 1 year Amount Total Over 1 year

Forward exchange contract Foreign exchange swap contract Cross currency swap and interest rate swap Interest rate swap Buy Option Sell Option Total

49,087.30 - 49,087.30 348.56 75,706.73 - 75,706.73 89.94 6,500.00 22,537.57 29,037.57 3,620.67 560.53 9,001.73 9,562.26 89.73 479.71 - 479.71 2.21 479.71 - 479.71 (2.21) 132,813.98 31,539.30 164,353.28 4,148.90

Fair Value Assets (Liabilities)

(Million Baht)

Forward exchange contract Foreign exchange swap contract Cross currency swap and interest rate swap Interest rate swap Total

December 31, 2006 Notional Up to 1 year Amount Total Over 1 year

Fair Value Assets (Liabilities)

31,851.07 - 31,851.07 466.44 53,178.97 - 53,178.97 (78.16) 8,500.00 27,875.00 36,375.00 3,354.66 948.88 569.59 1,518.47 2.87 94,478.92 28,444.59 122,923.51 3,745.81

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3.23.6 Fair Value Fair value is the value for which the Bank’s and its subsidiaries’ financial assets and liabilities could be exchanged or settled. Quoted market prices, or present value estimates derived from generally accepted financial models, are used to determine fair value. The table below summarized the outstanding balance of on-balance sheet items and the estimated fair value of financial assets and liabilities as at December 31, 2007 and 2006. (Million Baht)

Consolidated Financial Statements December 31, 2006 December 31, 2007 Outstanding Fair Value Outstanding Fair Value Balance Balance

Financial Assets Cash 21,456.43 21,456.43 18,634.48 18,634.48 Interbank and money market items 76,008.29 76,008.29 86,129.13 86,129.13 Securities purchased under resale agreements 600.00 600.00 21,200.00 21,200.00 Investments in securities, net 110,124.28 110,156.34 113,577.92 113,496.66 Loans and accrued interest receivable 959,727.45 959,727.45 928,164.27 928,164.27 Customers’ liabilities under acceptances 7,402.42 7,402.42 3,081.33 3,081.33 Other debtor-SAM 32.57 32.57 32.42 32.42 Other assets 7,648.50 7,648.50 6,220.89 6,220.89 Financial Liabilities Deposits 1,000,670.93 1,000,670.93 966,436.56 966,436.56 Interbank and money market items 39,601.09 39,601.09 48,534.36 48,534.36 Liabilities payable on demand 3,390.26 3,390.26 2,458.57 2,458.57 Borrowings 50,381.79 49,915.03 77,343.73 77,824.03 Customers’ liabilities under acceptances 7,402.42 7,402.42 3,081.33 3,081.33 Accrued Interest Payable 4,952.26 4,952.26 5,039.31 5,039.31 Other creditor, net -TAMC 25.42 25.42 23.86 23.86 Other liabilities 4,248.66 4,248.66 4,164.52 4,164.52

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

(Million Baht)

The Bank’s Financial Statements December 31, 2006 December 31, 2007 Outstanding Fair Value Outstanding Fair Value Balance Balance

Financial Assets Cash 21,455.78 21,455.78 18,633.88 18,633.88 Interbank and money market items 75,977.00 75,977.00 86,078.01 86,078.01 Securities purchased under resale agreement 600.00 600.00 21,200.00 21,200.00 Investments in securities, net 111,001.69 111,033.75 114,924.02 114,842.76 Loans and accrued interest receivable 963,244.48 963,244.48 931,754.83 931,754.83 Customers’ liabilities under acceptances 7,402.42 7,402.42 3,081.33 3,081.33 Other debtor-SAM 32.57 32.57 32.42 32.42 Other assets 6,711.24 6,711.24 5,330.10 5,330.10 Financial Liabilities Deposits 1,002,097.76 1,002,097.76 968,280.82 968,280.82 Interbank and money market items 39,630.93 39,630.93 48,560.43 48,560.43 Liabilities payable on demand 3,390.26 3,390.26 2,458.57 2,458.57 Borrowings 50,381.79 49,915.03 77,282.93 77,763.23 Customers’ liabilities under acceptances 7,402.42 7,402.42 3,081.33 3,081.33 Accrued Interest Payable 4,952.26 4,952.26 5,039.31 5,039.31 Other creditor, net - TAMC 25.42 25.42 23.86 23.86 Other liabilities 8,336.61 8,336.61 3,741.42 3,741.42 The significant assumptions made in measuring the fair value of financial assets and financial liabilities are disclosed as follows : The carrying value of cash, interbank and money market items (assets and liabilities), securities purchased under resale agreements, deposits, liabilities payable on demand, customers’ liabilities under acceptances and

off-balance sheet items under contingencies, approximate to their fair value. The quoted market values applicable to trading, available-for-sale and held-to-maturity debt securities determine their fair value. For non-marketable debt securities, fair value is based on the most recent bid yield. Where such prices are not available, a yield curve lately published by Thai BDC is used to determine its fair value. The net carrying amount of general investments approximates their fair value. The carrying value as disclosed in the balance sheet of loans and accrued interest receivable (net of allowance for doubtful accounts fully provided as required by the Bank of Thailand) approximates their fair value. The fair value of borrowings is the carrying value as disclosed in the balance sheet, except for those of Perpetual Tier 1 Securities are stated at fair value calculated by way of Bloomberg and Thai BMA. The fair value of off-balance sheet items as derivatives are stated in Note 3.23.5 whereas the others are reflected by their notional amount.

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3.24 Long-terms Leased Asset (Million Baht)

Period of time

The Bank’s Financial Statements Leasing Amount Land/Premises Equipment December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006

Jan. 1 - Dec. 31, 2007 Jan. 1 - Dec. 31, 2008 Jan. 1 - Dec. 31, 2009 Jan. 1 - Dec. 31, 2010 Jan. 1 - Dec. 31, 2011 Jan. 1, 2012 onwards

- 142.91 95.85 54.97 16.71 109.89

111.58 81.71 35.84 16.91 13.22 102.65

- 273.82 197.41 178.94 133.81 15.17

317.32 233.16 158.32 137.41 94.46 -

3.25 The Acquisition of Assets and Liabilities 3.25.1 The Acquisition of Assets and Liabilities of Sayam Bank Limited On August 17, 1987, the assets and liabilities of Sayam Bank Limited, (now called Dhipyasin Co., Ltd.) were transferred to the Bank with liabilities exceeding assets by Baht 7,371.60 million. The Bank, therefore, designated Sayam Bank Limited (Dhipyasin Co., Ltd.) as a debtor under non-interest earning accounts receivable. An effect arising on the transfer as such would be guaranteed and borne by the Government. The excess of liabilities over assets outstanding as at December 31, 2007 and 2006 were Baht 335.00 million and 555.00 million, respectively, shown in other Assets. 3.25.2 The Acquisition of Assets and Liabilities of Bangkok Bank of Commerce Public Company Limited During the period from October 8, 1998 to December 31, 1998, the Bank acquired certain liabilities (depositors and creditors) and performing assets of Bangkok Bank of Commerce Public Company Limited (BBC) (as now called Bangkok Commerce Pcl.). BBC was recorded as a Bank’s debtor for the difference of Baht 16,580.57 million and was liable to pay interest at the weighted average cost of 3 mth-fixed deposit rate of the previous month, plus 1 percent p.a. on the net debtor amount. The transfer value as such was settled since October 8, 2003. The Bank has yet to be repaid amounting to Baht 966.70 million related to debts borne by the Bangkok Commerce Pcl. as to the notice letter to FIDF dated August 15, 2002. On September 25, 2002 Krung Thai Legal Services Co., Ltd. acting as a fiduciary for the Bank, filed a claim with the Receiver against the Bangkok Commerce Pcl., a debtor in Bankruptcy, for which the amount included accrued interest receivable amounting to Baht 816.44 million and Baht 139.57 million suspended in other assets.

A permission has been passed by the court’s order but the amount of repayment has yet to be considered. Where such claim was not fully met, the Bank would be totally set off by the FIDF. On July 2, 2004, the Bank has raised the issue to the FIDF whether the accrued interest receivable of Baht 816.44 million and other assets of Baht 139.57 million, under Financial Institution Rehabilitation Plan as on August 14, 1998, have been entitled to compensation borne by Ministry of Finance. It has yet to be considered by the Ministry of Finance, as informed to the Bank on December 16, 2004.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

As at December 31, 2007 and 2006, the Bank’s outstanding balance of suspense account debtor comprised interest receivable since year 1998 amounting to Baht 816.44 million and the difference from the transfer, booked in other assets approximated Baht 139.57 million. Claims for repayment has been pledged to the FIDF, as to asset and liability transferred agreement in compliance with the Cabinet’s resolution passed on August 14, 1998.

3.26 The Transfer of Non-Performing Loans to Sukhumvit Asset Management Company Limited

On April 18, 2000 the Cabinet approved a plan to manage delinquent problem loans of the Bank through the establishment of the Asset Management Company wholly owned 100 percent by the Financial Institutions Development Fund (FIDF). As at September 21, 2000 the Baht 519,378.17 million and Baht 198,126.15 million of non-performing assets (including those transferred from First Bangkok City Bank Pcl.) and allowance for doubtful accounts, respectively, were transferred to Sukhumvit Asset Management Co., Ltd. (SAM), in accordance with the guidelines issued by the Cabinet on April 18, 2000. A 5-year promissory note avaled by the FIDF of Baht 321,252.02 million was issued as payment to the Bank. The transferred price can be modified under the terms and conditions specified in the contract, such as the inaccuracy of information relating to the transferred asset, unqualified assets, or other circumstances as otherwise stated. The price modification could be made up to three times, expiring on May 15, 2001 unless a mutual agreement for time expansion was met. The transfer price would be subsequently modifiable over time. Collateral value has been reviewed by SAM for repricing. As specified in the contract, the Bank will be obliged to compensate any damage or expense incurred by SAM. A promissory note issued by SAM, avaled by the FIDF of Baht 108,000.00 million was paid to the Bank on September 21, 2000 to set off the written-back allowance and that was subsequently repaid to the FIDF by the same amount. On September 14, 2001, SAM modified transfer prices by issuing a second P/N due in 4 years, avaled by FIDF, amounting to Baht 281,763.15 million in exchange for the former P/N, bearing interest calculated from the Bank’s weighted average deposit rate. As at December 31, 2005 SAM has settled such promissory notes including accrued interest receivable. On February 16, 2005, the Bank has suggested that SAM issue a new promissory note with an increase of Baht 5,832.54 million to settle the transfer cost arising from an increase of collateral value. The Bank has also suggested that SAM repay the Baht 4,630.51 million for the Bank’s advances as of June 30, 2005. SAM has issued the P/Ns drawn on September 20, 2005, amounting to Baht 10,000.00 million represented partially the compensation to the Bank for the supplement transfer of NPLs, initially verification to SAM and the settlement of inter-company transactions including those L/G and revolving loans. Settlement of P/Ns as such was completed on September 21, 2005 totaling to Baht 10,000.00 million, consequently, accounting treatments would be less on Other Debtors, net SAM amounting to Baht 5,524.60 million, less on Prepayment - SAM and other related account amounting to

Baht 643.33 million. The residual amount was treated as an allowance for Doubtful Accounts transferred from SAM amounting to Baht 3,832.07 million whereas partially adjusted transfer cost, requested by the Bank, has been under verification by SAM. As at December 31, 2007 and 2006, the settlement between the Bank and SAM has been accrued and booked in Other Debtors, net - SAM amounting to Baht 32.57 million and Baht 32.42 million.

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Moreover, the impaired-asset management fee has been accrued since 2002. The Bank treated as accrued receivable partly shown in Other Assets. As at December 31, 2007 and 2006, it stood unchanged at Baht 137.61 million. 3.27 The Transfer of Non-Performing Loans to Thai Asset Management Corporation (TAMC) TAMC was established under Emergency Decree on Thai Asset Management Corporation B.E. 2544 (2001) with an objective to manage impaired assets of financial institutions by taking transfer of impaired assets of financial institutions as well as any other rights over the property being held as collateral for debt repayments with respect to such impaired assets. Under such decree, financial institutions shall transfer their impaired assets to TAMC as well as any other rights over the property held as collateral under the conditions and within the timeframe specified by TAMC. The transfer price shall be equal to the value of assets held as collateral, with respect to such impaired assets, according to the appraisal criteria specified by the BOT. The Bank shall have the right to request a new appraisal of the collaterals within specified criteria and timeframe. TAMC and the Bank agree to recognize and share profit or loss arising from the management of impaired assets at the end of fifth year and the end of tenth year starting from July 1, 2001. TAMC shall calculate the profit or loss for the transferred impaired-assets of each debtor having completely repaid or only debtors whose assets are disposed in the case of asset transferred for repayment. The calculation as such will base on accumulated asset recoveries on a cash basis up to the date of calculation less transfer cost, other operating expenses incurred by TAMC including all interest paid to the Bank. In the case of generating the profits, the first 20 percent of profit will be evenly shared between the Bank and TAMC. The 20 percent of profit thereafter not exceeding the difference between the book value and transfer price will be accrued to the Bank. The remaining profit will be accrued to TAMC. In the case of realizing losses, the first 20 percent of the transfer price will be absorbed solely by the Bank whereas the second 20 percent will be evenly shared between the Bank and TAMC. The remaining losses will be wholly absorbed by TAMC. Total losses absorbed by the Bank, therefore, will be up to 30 percent of the transfer price. Recognition of profit or loss sharing from such impaired-asset management has fall due at the end of 5th year (as at June 30, 2006). TAMC has prescribed the specific criteria and practical guideline regarding the recognition of profit/loss computation on impaired-asset management on April 28, 2006. Computed profit/loss sharing has been allocated to the transferors within 120 days commencing at the end of 5th and 10th year from July 1, 2001 onwards. Likewise, profit/loss sharing computed for each debtor would be notified to the Bank within 30 days in written document from the day of computation done. Recently, the Bank has been informed the result of impaired-asset management by the letter No. PHOR THOR SOR. 2319/B.E. 2550, dated November 23, 2007 from TAMC that as at June 30, 2007 (end of 6th year), the Bank has absorbed net losses of Baht 1,087.26 million, which served as the preliminary information as to terms and conditions prescribed by TAMC committees. The effective inspection at the 10th year-end would depend upon the management of the residual impaired assets transferred by the Bank approximately 4,085 cases. The further report will be submitted to the Bank from time to time whether the management will generate an income from paying back either installment or done according to the TDRsâ&#x20AC;&#x2122; agreement. An income generated from enforcement sale of collateral by auction is also taken into account.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Impaired assets before 2005 with the net transfer price totaling to Baht 18,105.23 million were transferred to TAMC as of December 31, 2007. TAMC shall complete a preliminary verification of asset price within 180 days for each transfer. Having confirmed matching asset price, TAMC shall issue non-negotiable promissory notes, with

10-year maturity and avaled by the FIDF, to the Bank. TAMC may exercise the right to redeem these promissory

notes ahead of maturity. Interest rates will be calculated by using reference weighted average deposit interest rate of the large scale commercial banks announced by the BOT and will be paid at the last working day of the year. Up to December 31, 2007, the Bank has received partial payment with transfer price payable amounting to Baht 13,109.89 million comprising 30 P/Ns, included and shown under long-term investments for debtors engaged in pledging machinery as collateral amounting to Baht 1,744.49 million. The lower of face value has been adjusted by TAMC whereas the Bank has held up the receiving of such P/N until the resolution regarding transfer cost would be passed. Accrued interest receivable was booked at Baht 561.78 million. The Bank has been entered into the management of impaired assets transferred to TAMC without consideration according to the memorandum of assignment in managing impaired assets dated July 4, 2003.

The Bank has been hired to manage the impaired assets transferred from other financial institutions as to the agreement dated August 26, 2003 and September 30, 2003, respectively. The management fee shall be charged on a monthly basis at the rate of 0.75-1 percent calculated on the outstanding balance of book value of debtors as agreed upon. The other 0.5 percent is calculated on the outstanding balance of book value of debtors having repaid through debt restructuring without default for 6 consecutive allotments. Documents and information related to each debtor must be completely prepared and submitted to TAMC Board of Directors seeking approval within 6 months from the signing date. The Bank has satisfied the agreement and generated an income from such management from April to June 2007 amounting to Baht 100.73 million (whereas from July to December 2007 the fee has yet to be paid). In addition, the consideration shall be rendered to the Bank as to the hiring engagement dated November 10, 2003 and July 6, 2004 for the contractual and legislative administration in associated with such impaired assets, subsequently, as at December 31, 2007 the Bank has generated the Baht 1.26 million from such engagement (whereas from July to December 2007 the fee has yet to be paid). Provisions that may arise from losses on impaired-assets transferred to TAMC have been estimated at 15 percent upon transfer price. As at December 31, 2007 provisions as such stood at Baht 2,715.79 million shown in other liabilities. (see Note 3.13) 3.28 Government Fiscal Management Information System Project (GFMIS) On July 3, 2003 the Steering Committees to the GFMIS, chaired by the Prime Minister, has passed the approval to designate the Bank as the service provider to proceed with the system design, interfacing network development and implementation of the GFMIS Phase 1 in line with the government sectorâ&#x20AC;&#x2122;s requirement.

The Cabinet has also passed a resolution on July 22, 2003 to approving the Bank to further to GFMIS Phase 2.

The Bank has pre-invested the Baht 1,400.00 million on the project. The GFMIS would bring about significant changes in Planning & Budgeting System, Government Cash Position, National Accounting System, E-Payment and

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Settlement System, Auditing and Evaluation Monitoring System and Analytical Database System. The GFMIS would run on the online-real time basis. The Krung Thai Computer Services Co., Ltd. has been subcontracted on behalf of the Bank. As at December 31, 2005 the Bank has paid up front totaling to Baht 1,372.92 million booked in Suspense A/C Debtors-GFMIS, shown in Other Assets. The process of examination of deliverables has been completed and the consideration to the Bank has been paid on May 17, 2006 amounting to Baht 1,398.17 million. The Bank has realized Baht 25.25 million as an income. The Bank has signed the implementation and maintenance hiring contract dated September 22, 2005 with the Office of GFMIS for 2 years term commencing from October 1, 2004 to September 30, 2006. KCS has been proceeded with the subcontract on behalf of the Bank. The cabinet has passed a resolution on July 4, 2006 approving the Office of GFMIS to extend the hiring contract for the implementation and maintenance with the Bank for another one year (from October 1, 2006 to September 30, 2007) within the budget line of Baht 390.00 million (VAT included). For the year ended December 31, 2007 the consideration from such services has been realized amounting to Baht 563.73 million upon payment (deliverable period 4 from April 1, 2006 up to September 30, 2006 and also from October 1, 2006 up to September 30, 2007). The Bank has also incurred expenses according to the contract signed over with KCS amounting to Baht 551.43 million at the relevant period and the Bank has realized the Baht 93.46 million as an income receivable (for the period from October 1, 2007 to December 31, 2007) and incurred expenses of Baht 90.47 million to KCS at the relevant period. 3.29 Others Loans under the investigation of the Assets Examination Committee (AEC) included those extended to certain debtors approving on December 9, 2003 with the credit line of Baht 9,900.00 million. It has been drawn down amounting to Baht 8,368.73 million. As at December 31, 2007, such the amount has been totally accrued including the interest and classified as doubtful of loss debtors. The Bank has fully set aside the allowance for doubtful accounts to satisfy the BOTâ&#x20AC;&#x2122;s regulation, accordingly. 3.30 Approval of the Financial Statements The Bankâ&#x20AC;&#x2122;s Board of Directors has approved the presentation of this financial statements on February 20, 2008.

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

General Information

Name of Company : Krung Thai Bank Public Company Limited Registration Number : 0107537000882 (formerly Bor.Mor.Jor.335) Business Type : Commercial Banking Head Office : 35 Sukhumvit Road, Klong Toey Nua Subdistrict, Wattana District, Bangkok 10110 Telephone Number : +66 2 255-2222 Call Center : 1551 Facsimile : +66 2 255-9391-3 Website : www.ktb.co.th

Nature of Business

Krung Thai Bank Pcl. conducts commercial banking business under the license issued by the Ministry of Finance and other related agencies. The Bank operates business under the Commercial Banking Act of Thailand, other directives of the Bank of Thailand, Ministry of Finance and other related agencies. Bank’s Shares as at December 31, 2007 The Bank’s registered capital amounted to Baht 57,664,098,087.50 classified into Ordinary shares 11,191,412,250 shares at Baht 5.15 per share Preferred shares 5,500,000 shares at Baht 5.15 per share Total 11,196,912,250 shares The Bank’s paid-up capital amounted to Baht 57,604,032,350.00 classified into Ordinary shares 11,179,749,000 shares at Baht 5.15 per share Preferred shares 5,500,000 shares at Baht 5.15 per share Total 11,185,249,000 shares • Ordinary Share Ordinary shares are traded both on domestic and foreign boards – KTB for domestic and KTB-F for foreign board. • Preferred Share Preferred share refers to share invested in full par value whereby the shareholder not only has the right to vote in the general meeting and the right to receive dividend, but also receive special dividend at the fixed rate of 3 percent per annum in preference to ordinary shareholder. Currently the Bank has a total of 5,500,000 preferred shares. Preferred shares are traded on the domestic and foreign boards as well. Symbol used is KTB-P for domestic and KTB-Q for foreign board.

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• Other Shares

As at December 31, 2007 the Bank had non-voting depositary right (NVDR) amounting to 367,158,953 units whereby the NVDR holder has no voting right in the general meeting except when voting on delisting of reference securities from the stock exchange. However, the amount of this NVDR is equivalent to 3.28 percent of the Bank’s shares. Investors can check the amount of NVDR on the web site of the Stock Exchange of Thailand at http:// www.set.or.th • Debt Instruments or Convertible Securities Issuance Date

Type of Debt Instruments

Credit Rating*

Jun. 2003 Bill of Exchange - Jun. 2003 Bill of Exchange - Jun. 2004 Floating Rate Baa1 by Certificates of Deposit Moody’s Oct. 2004 Subordinated AA (tha) by Debenture Fitch Ratings May 2005 Subordinated AA (tha) by Debenture Fitch Ratings Mar. 2006 Senior Unsecured AA+ (tha) by Debenture Fitch Ratings Oct. 2006 Hybrid Tier I BBB- by Fitch Ratings BB+ by S&P Ba1 by Moody’s Nov. 2006 Hybrid Tier I A+ (tha) by Fitch Ratings Aug. 2007 Promissory Note - - Aug. 2007 Bill of Exchange Sep. 2007 Promissory Note - Nov. 9 - Bill of Exchange - Dec. 28, 2007 * Credit Rating as at December 31, 2007

Amount

Period

Interest Rate

Redemption Date

Baht 3,000 million 5 yrs 2.50% p.a. Jun. 2008 Baht 3,500 million 5 yrs THBFIX 6 mths Jun. 2008 + 0.25% p.a. USD 150 million 5 yrs LIBOR 6 mths Jun. 2009 + 0.40% p.a. Baht 10,000 million 10 yrs Year 1 - 5 = 5.15% p.a. Oct. 2014 Year 6 - 10 = 6.70% p.a. Baht 10,400 million 10 yrs Year 1 - 5 = 4.60% p.a. May 2015 Year 6 - 10 = 6.00% p.a. Baht 6,000 million 3 yrs 5.34% p.a. Mar. 2009 USD 220 million - Year 1-10 = 7.378% p.a. First date to Year 11 onwards redeem is LIBOR 6 mths Oct. 2016. + 3.27% p.a. Baht 1,440 million - Year 1-10 = average First date to FIX 6 mths of reference redeem is banks + 2.55% p.a Nov. 2016. Year 11 onwards average FIX 6 mths of reference banks + 3.55% p.a Baht 500 million 5 yrs THBFIX 6 mths Aug. 2012 - 0.15% p.a. Baht 430 million 3 yrs THBFIX 6 mths Aug. 2010 - 0.15% p.a. Baht 122 million 3 yrs Return depends on Oct. 2010 Basket of Fixed Income + + Income Asia Baht 14,560 million 1,3 and 2.60% – 2.80% p.a. depend depend on the 6 months on the amount of Bills date of purchase

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

• Binding Obligation for Future Share Issuance

The Bank is not obligated to issue share in the future.

Dividend Payment Policy

• Payment of Dividend The Bank has the policy to pay dividend not less than 40 percent of the net profit. Consideration is based on future performance of the Bank, increase in credit extension and provisioning, retained earnings and legal provisioning and other provisioning as the Bank deems necessary including the resolution from the Board meeting or shareholders general meeting. For 2006 performance the Bank paid Baht 0.5100 per ordinary share and Baht 0.6645 per preferred share, total 40.53 percent of net income on May 14, 2007. • Payment of Subsidiaries Dividend Dividend payment of subsidiaries depends on each company’s operating performance in the prior year, cash management, retained earnings, legal provisioning and other required provisioning as appropriate including resolution from the Board meeting and shareholders general meeting.

Auditor’s Fee Paid

1) Audit fee The Bank and subsidiaries paid a total of Baht 6,582,569 for the audit fee in the past accounting period. The amount comprised of Baht 5,970,000 for auditing and Baht 612,569 for other expenses. 2) Non-audit fee The Bank and subsidiaries paid to the auditors for preparation of special report and report on foreign exchange profit in the past accounting period totaling Baht 400,000 which has to be paid in the future as service is not completed in the past accounting period.

Other References

• Securities Register

Thailand Securities Depository Co., Ltd. 62 Stock Exchange of Thailand Bldg. Ratchadapisek Road, Klong Toey Subdistrict Klong Toey District Bangkok 10110 Telephone +66 2 229-2800 Fax. +66 2 359-1259

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• Debenture Holder

Subordinated debentures of 10-year period due in October 2014 and May 2015 (Hybrid Tier I) TMB Public Company Limited 2nd Floor, Computer Bldg. 393 Silom Road, Bangrak District Bangkok 10500 Telephone +66 2 230-6295 Fax. +66 2 230-6093

• Auditor

Office of the Auditor General Rama VI Road, Sam Sen Nai Subdistrict Phaya Thai District Bangkok 10400 Telephone +66 2 273-9674-9 ext. 1443 Fax. +66 2 618-5788

• Legal Advisors

Legal Consultant Department Policy & Corporate Governance Sector, Risk Management & Corporate Governance Group, Krung Thai Bank Pcl. 8th Floor, Nana Nua Building 35 Sukhumvit Road, Klong Toey Nua Subdistrict Klong Toey District, Bangkok 10110 Telephone +66 2 208-3850-59 Fax. +66 2 256-8028

Krung Thai Legal Services Co., Ltd. 19th Floor, CTI Tower 191/50-53 Ratchadapisek Road Klong Toey Subdistrict Klong Toey District, Bangkok 10110 Telephone +66 2 261-3739 Fax. +66 2 261-3748-50

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Legal Disputes As of the latest accounting period there is only one case where the Bank is the defendant with capital of over Baht 4,500 million or more than 5 percent of shareholders’ equity. Details follow: The case in the Bangkok South Civil Court: civil case No. Black 3129/2546 between Mrs. Kloy Koombang on her personal behalf and in her capacity as the administrator of Mr. Sa-Nga Koombang through Mrs. Nanthana Pinyocheep, assignee as plaintiff and Krung Thai Bank Pcl. defendant with capital amounting to Baht 5,238,784,360.52 on charge of infringement, claim of damage and claim of assets. The case was filed on May 13, 2003 and the Court of First Instance issued the verdict on September 30, 2003 to dismiss the charges and the court fee to be non-refundable. The plaintiff later lodged an appeal and the Court of Appeal confirmed the same judgment as the Court of First Instance on July 26, 2004. The plaintiff lodged an appeal to the Supreme Court on December 28, 2004 and the Bank filed answer back on March 18, 2005. Currently the case is under the consideration of the Supreme Court. This legal case still has no significant effect on the Bank’s business. Apart from the case mentioned above, the Bank was not informed of any current or future lawsuits that might have significantly negative impact on its financial standing. As for the progress of cases that the Bank has disclosed before in which the Bank is defendant and capital of less than Baht 4,500 million or lesser than 5 percent of the shareholders’ equity, there were 2 cases at the latest accounting period. Details follow: 1) The case in the Civil Court: civil case No. Black 470/2549 between Wijitphand Construction Co., Ltd. the first, Prayoonwisva Karnchang Co., Ltd. the second, Seesang-karnyotha (1979) Co., Ltd. the third, Krung Thon Engineer Co., Ltd. the fourth and Gateway Development Co., Ltd. the fifth plaintiffs and Standard Chartered (Thai) Pcl. the first, Thai Military Bank Pcl. the second, Krung Thai Bank Pcl. the third, Kasikorn Bank Pcl. the fourth, United Overseas Bank Pcl. the fifth defendants with capital of Baht 4,415,962,040.10 on charge of breach of contract, claim of money and claim of damage. The case was filed on February 2, 2006 and Krung Thai Bank filed an answer to the court on May 2, 2006 stating that the plaintiff’s claim is unclear. Plaintiff has no right to sue as it still has other dispute in court with environmental control department, hence the Bank asked the court to dismiss this charges. Plaintiff withdrew the case on February 22, 2008. 2) The case in the Bangkok South Civil Court: civil case No. Black 4124/2543 between Markland Real Estate Co., Ltd. plaintiff and Krung Thai Bank Pcl. defendant with capital amounting to Baht 3,148,430,000 on charge of breach of reciprocal loan agreement, claim of damage. The case was filed on June 2, 2000 and the Court of First Instance issued its verdict on the case No. Red 4511/2547 on June 30, 2004 to dismiss the charges and the court fee to be non-refundable. The plaintiff later lodged an appeal to the Court of appeal on August 27, 2003 and the Bank filed back answer on June 28, 2005. This case is currently under the consideration of the Court of Appeal and poses no significant effect on the Bank’s business operation.

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Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007

Name and Address

Type of Total Shares Business Issued

Life / Non-Life Insurance

1. Krungthai-AXA Life Insurance Co., Ltd. Life Insurance 135,500,000 32nd – 33rd Fl., Italthai Tower, 2034/136, 138-143 New Phetchburi Rd., Bang Kapi, Huay Khwang, Bangkok 10320 Tel. +662 723-4000 Fax. +662 723-4032 2. Krungthai Panich Insurance Co., Ltd. Non–Life 11,000,000 208 Wireless Rd., Lumpini, Insurance Pathumwan, Bangkok 10330 Tel. +662 302-0111, +66 02 651-5500 Fax. +662 651-5511 3. Dhipaya Insurance Pcl. Non-Life 300,000,000 63/2 Rama IX Rd., Huay Khwang, Insurance Bangkok 10320 Tel. +662 248-0059 Fax. +662 248-7850

Hire Purchase / Leasing

4. KTB Leasing Co., Ltd. 4th Fl., SM Tower, 977/3 Phaholyodhin Rd., Sam Sen Nai, Phaya Thai, Bangkok 10400 Tel +662 299-3860 Fax. +662 279-8610 5. Krung Thai IBJ Leasing Co., Ltd. 18th Fl., Nantawan Bldg., 161 Rajadamri Rd., Lumpini, Pathumwan, Bangkok 10330 Tel. +662 252-9620, +662 651-8120 Fax. +662 254-6119

No. of Percentage Type of of Shares Invested Shareholding Share 67,750,000

50.00

Ordinary

4,950,000

45.00

Ordinary

50,880,000

16.96

Ordinary

Hire Purchase 10,000,000 and Leasing

9,999,993

100.00

Ordinary

Hire Purchase, 10,000,000 Leasing and Factoring

4,899,998

49.00

Ordinary

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007 (continued)

Name and Address

Type of Total Shares Business Issued

No. of Percentage Type of of Shares Invested Shareholding Share

6. Krungthai Charoensri Co., Ltd. Hire Purchase (In the process of Liquidating Process) 277/3 Charoensri Complex Bldg., Prachaksinlapakhom Rd., Makkhaeng, Muang Udon Thani, Udon Thani 41000 Tel. +6642 249-216 -20 Fax. +6642 344-143

1,000,000

350,000

35.00

Ordinary

7. Krung Thai Asset Management Pcl. Asset M,G Fl., Q House Sathorn Bldg., Management 11 South Sathorn Rd., Thung Maha Mek, Sathorn, Bangkok 10120 Tel. +662 670-4900 Fax. +662 679-1820 8. KTB Securities Co., Ltd. Securities 16th Fl., The Officecase@Central World Bldg., Company 999/9 Rama I Rd., Pathumwan, Bangkok 10330 Tel. +662 264-5888, +662 658-4888 Fax. +662 264-5880

20,000,000

19,999,994

100.00

Ordinary

86,400,000

43,200,000

50.00

Ordinary

10,000

5,439

54.39

Ordinary

839,000

419,000

49.94

Ordinary

Securities

Manufacturing Industry

9. NC Associates Co., Ltd. Parawood (In the process of Liquidating Process) Products 6th Fl., Viboon Tanee Tower 1, Distribution 3195/11 Rama IV Rd., Klong Ton, Klong Toey, Bangkok 10110 Tel. +662 677-2000 ext. 2710 10. Kiatpapha Co., Ltd. Paints 2 Moo 12, Kingkaew Rd., Racha Thewa, Manufacturing Bang Phli, Samut Prakarn 10540 and Distribution Tel. +662 750-2478 Fax. +662 3121-4482

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Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007 (continued)

Name and Address

Type of Total Shares Business Issued

11. Amorn-Chai Co., Ltd. Vegetable Oil 293/23-26 Surawong Rd., Suriyawong, Manufacturing Bangrak, Bangkok 10500 Tel. +662 234-1502 -09 Fax. +662 236-5197 Steel Bar 12. P.T.K. Metal Co., Ltd. 956/3-6 Toed Thai Rd., Talad Plu, Distribution Thonburi, Bangkok 10600 Tel. +662 472-0021 Fax. +662 472-2314 13. Lanna Agri Business Co., Ltd. Vegetable Oil, 293/23 Surawong Rd., Suriyawong, Fat Oil Bangrak, Bangkok 10500 Manufacturing Tel. +662 234-1502 -09 Fax. +662 236-5197 14. Alphatec Electronics Pcl. Electronics 15th Fl., Bangkok City Tower, Components 179/74â&#x20AC;&#x201C;80 South Sathorn Rd., Manufacturing Thung Maha Mek, Sathorn, Bangkok 10120 15. Kamol Kij Co., Ltd. Rice Export and 293/23 Surawong Rd., Suriyawong, Vegetable Oil Bangrak, Bangkok 10500 Manufacturing Tel. +662 234-1502 -09 Fax. +662 236-5197 16. Thai Baroda Industries Ltd. Canvas for Tyres 3 Mab Ta Pud Industrial Estate, Manufacturing Muang Rayong, Rayong 21150 Tel. +6638 683-102 -3 Fax. +6638 638-101 -2

No. of Percentage Type of of Shares Invested Shareholding Share

45,000

22,400

49.78

Ordinary

481,310,451

236,434,397

49.12

Preferred

387,500

120,000

30.97

Ordinary

2,642

806

30.51

Ordinary

391,000

113,000

28.90

Ordinary

9,050,000

1,035,600

11.44

Ordinary

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007 (continued)

Name and Address

Type of Total Shares Business Issued

No. of Percentage Type of of Shares Invested Shareholding Share

17. Siam Ferro Industry Co., Ltd. Steel Pipe 2,500,000 258/21 Soi Wat Chan Nok, Rama 3 Rd., Manufacturing Bang Kholaem, Bangkok 10120 and Distribution Tel +662-291-1022 Canned 100,000 18. K.M.B. International Co., Ltd. 2nd Fl., Abico Bldg., 401/1 Moo 8, Pineapple Phaholyodhin Rd., Lumlookka, Manufacturing Pathumtani 12130 and Distribution Tel. +662 992-5757 Fax. +662 992-5781

263,144

10.53

Ordinary

10,000

10.00

Ordinary

19. Krung Thai General Business General 1,400,000 Services Co., Ltd. Services 96/12 Soi Ladprao 106 (Boon-Udom 1), Ladprao Rd., Wang Thong Lang, Bangkok 10310 Tel. +662 935-3719 Fax. +662 935-3708 20. Krung Thai Legal Services Co., Ltd. Legal Services 300,000 19th Fl., CTI Tower, 191/50-53 Ratchadapisek Rd., Klong Toey, Bangkok 10110 Tel. +662 261-3739 ext. 8777 Fax. +662 261-3748 -51 21. Krung Thai Computer Services Co., Ltd. IT Services 13,000,000 2nd â&#x20AC;&#x201C; 7th Fl., Sawai Brown Bldg., 22 Soi Sukhumvit 1, Sukhumvit Rd., Klong Toey Nua, Wattana, Bangkok 10110 Tel. +662 655-1921 -40 Fax. +662 655-6195

1,399,990

100.00

Ordinary

299,993

100.00

Ordinary

12,999,994

100.00

Ordinary

Others

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Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007 (continued)

Name and Address

Type of Total Shares Business Issued

22. Krung Thai Property Property 17,000,000 Development Development Co., Ltd. 96/12 Building 4, Soi Ladprao 106 (Boon-Udom 1), Wang Thonglang, Bangkok 10310 Tel. +662 791-9920 -23 Fax. +662 791-9833 Credit Card 257,570,076 23. Krungthai Card Pcl. 14th Fl., UBC II Bldg., Business 591 Sukhumvit Rd., Klong Ton Nua, Wattana, Bangkok 10110 Tel. +662 665-5100 Fax. +662 261-7695 24. Kirikhan Farm Co., Ltd. Land 45,000 293/23 Surawong Rd., Suriyawong, Development Bangrak, Bangkok 10500 Tel. +662 234-1502 -09 Fax. +662 236-5197 25. WTA (Thailand) Ltd. Business Taken 1,000 313 CP Tower, Silom Rd., Silom, over from True Bangrak, Bangkok 10500 Corporation Pcl. Tel. +662 230-2019 Fax. +662 236-0499 26. Trinity Watthana Pcl. Holding 175,552,000 26th Fl., Bangkok City Tower, Company 179/111 South Sathorn Rd., Thung Maha Mek, Sathorn, Bangkok 10120 Tel. +662 670-9100, +662 343-9888 Fax. +662 286-9050

No. of Percentage Type of of Shares Invested Shareholding Share 16,999,957

100.00

Ordinary

122,500,000

47.56

Ordinary

12,000

26.67

Ordinary

250

25.00

Ordinary

34,125,000

19.44

Ordinary

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007 (continued)

Name and Address 27. National ITMX Co., Ltd. 17th Fl., GPF Witthayu Tower A, 93/1, Wireless Rd., Lumpini, Pathumwan, Bangkok 10330 Tel. +662 650-6800 Fax. +662 650-6808 28. Manager Media Group Pcl. 98/3–10 Phra–Athit Rd., Chana Songkram, Phra Nakorn, Bangkok 10200 Tel. +662 629-4488 Fax. +662 629-4469 29. M. Grand Hotel Co., Ltd. 1045 Phaholyodhin Rd., Sam Sen Nai, Phaya Thai, Bangkok 10400 Tel. +662 629-2211 30. Thanathep Printing Co., Ltd. 111 Km. 9, Ladprao Rd., Klong Chan, Bang Kapi, Bangkok 10240 Tel. +662 377-5074 Fax. +662 377-6289 31. Nok Airlines Co., Ltd. 17th Fl., Rajanakarn Bldg., 183 South Sathorn Rd., Yannawa, Sathorn, Bangkok 10120 Tel. +662 627-2000 Fax. +662 286-9830

Type of Total Shares Business Issued

No. of Percentage Type of of Shares Invested Shareholding Share

Interbank Transaction Management

500,000

86,909

17.38

Ordinary

Printing and Publishing

129,354,620

20,814,928

16.09

Ordinary

Hotel

100,000,000

15,000,000

15.00

Ordinary

Printing and Publishing

100,000

10,000

10.00

Ordinary

Airline

50,000,000

5,000,000

10.00

Ordinary

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Companies in which Krung Thai Bank holds 10 percent or more of the total shares issued as at December 31, 2007 (continued)

Name and Address 32. Suvarnabhumi Airport Hotel Co., Ltd. Suvarnabhumi Airport Hotel Bldg., 999 Moo 1, Nongprue, Bangpli, Samut Prakarn 10210 Tel. +662 131-1042 -4 Fax. +662 131-1189 33. Saraburi New Industrial City Co., Ltd. 24th Fl., Thai Life Insurance Bldg., 123 Ratchadapisek Rd., Dindang, Bangkok 10400 Tel. +662 247-0247 ext. 2112 Fax. +662 246-9487

Type of Total Shares Business Issued Hotel

No. of Percentage Type of of Shares Invested Shareholding Share

10,177,800

1,017,780

10.00

Ordinary

Industrial Estate 25,000,000

2,500,000

10.00

Ordinary

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Executives Directory as at March 1, 2008

Metropolitan Network Sector 1

President Mr. Apisak Tantivorawong Office of the President Senior Vice President & Manager Ms. Mayurasiri Pongtaranont Marketing & Corporate Communications Dept. Senior Vice President & Manager Mr. Panya Prahmnee

Executive Vice President - Director Mr. Suphat Intustitayakul Nana Nua Office First Vice President & Manager Mr. Boonrat Tangchivinsatien

First Executive Vice President - Managing Director Ms. Chujit Niyamosot

Central Region Network Sector

Internal Audit Group Internal Audit Sector

Executive Vice President - Director Mr. Chairat Buchitratanakhun Head Office Audit Dept. Senior Vice President & Manager Ms. Tiparatana Nillkan Corporate Business & Business Center Audit Dept. First Vice President & Manager Ms. Waewduan Charoen Metropolitan Network Audit Dept. First Vice President & Manager Mr. Kijjar Onlamai Provincial Network Audit Dept. acting First Vice President & Manager Mr. Chairat Buchitratanakhun Credit Review & Audit Dept. First Vice President & Manager Mr. Phanchoke Ekarohita Information Technology Audit Dept. Senior Vice President & Manager Mr. Saroj Chantawatchai

Network Group

Senior Executive Vice President - Managing Director Mr. Boonlers Srichareon Executive Vice President Mr. Kanoksak Soontornkitprapai Senior Vice President & Manager Mr. Gorgiat Wong-aree

Metropolitan Network Sector 2

Executive Vice President - Director Ms. Lawan Baiyoke Senior Vice President - Director Ms. Sumalee Suksawang

Eastern Region Network Sector Executive Vice President - Director Mr. Somjit Pongpitakwises

North-Eastern Region Network Sector 1

Executive Vice President - Director Mr. Chanchai Chaiwanitphon

North-Eastern Region Network Sector 2

Senior Vice President - Director Mr. Danai Smanot

Northern Region Network Sector 1

Executive Vice President - Director Mr. Prasit Amporn

Northern Region Network Sector 2

Senior Vice President - Director Mr. Suwat Nestsawat

Southern Region Network Sector 1

Executive Vice President - Director Mr. Mitree Kor-udom

Southern Region Network Sector 2 Senior Vice President - Director Mr. Voravut Tepkulmanon

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Southern Region BC Dept. 1 Senior Executive Vice President - Managing Director First Vice President & Manager Mr. Panupun P.Vannapruck Mr. Wanchai Thanittiraporn Southern Region BC Dept. 2 SMEs Strategy Dept. Senior Vice President & Manager acting First Vice President & Manager Mr. Korakot Rattanapittayaporn Ms. Troungchit Limpabandh

Business Center Group

Metropolitan BC Sector

Executive Vice President - Director Ms. Vannee Chareonthong Metropolitan BC Dept. 1 First Vice President & Manager Mr. Suwat Teerasetthamrong Metropolitan BC Dept. 2 First Vice President & Manager Mr. Pativate Santavanond Metropolitan BC Dept. 3 Senior Vice President & Manager Mr. Udomsak Rojviboonchai

Northern & North-Eastern Region BC Sector

Executive Vice President - Director Mr. Prasit Wasupath Northern Region BC Dept. 1 Senior Vice President & Manager Mr. Alongkorn Tasabamroong Northern Region BC Dept. 2 Senior Vice President & Manager Mr. Amphol Worawutthikunchai North-Eastern Region BC Dept. 1 First Vice President & Manager Mr. Nuttasak Jeansirisomboon North-Eastern Region BC Dept. 2 First Vice President & Manager Mr. Virath Tearakul

Government & State Enterprise Relations Group

Senior Executive Vice President - Managing Director Mr. Preecha Phukham

Government & State Enterprise Relations Sector

Executive Vice President - Director Ms. Sriprabha Pringpong Government Relations Dept. 1 First Vice President & Manager Mr. Apichat Jaroenruanglert Government Relations Dept. 2 First Vice President & Manager Ms. Roongtip Singsuwan State Enterprise Relations Dept. Senior Vice President & Manager Mr. Dhanit Laksanaphuk Government Project Management Dept. First Vice President & Manager Mr. Boonchai Sasiwong Community Bank Senior Vice President & Manager Ms. Nisanart Yothasmut

Corporate Banking Group

First Executive Vice President â&#x20AC;&#x201C; Managing Director Ms. Sompit Charoenkiatikul

Corporate Banking Sector 1

Central, Eastern & Southern Region BC Sector Senior Vice President - Director

Executive Vice President - Director Mr. Weidt Nuchjalearn Central Region BC Dept. First Vice President & Manager Mr. Suwat Dendomrongkul Eastern Region BC Dept. First Vice President & Manager Mr. Vivish Shevakidakarn

Mr. Sutthichai Krairit Industrial Finance Dept. 1 First Vice President & Manager Ms. Yupa Chanaudomsuk Industrial Finance Dept. 2 acting First Vice President & Manager Ms. Aungkana Pulsombat

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Commercial Finance Dept. First Vice President & Manager Ms. Boonsri Waitanomsat

Corporate Banking Sector 2

acting Executive Vice President - Director Ms. Arisara Dharamadhaj Agricultural Finance Dept. First Vice President & Manager Ms. Saranya Ramkiattisak Construction Finance Dept. First Vice President & Manager Mr. Jaruk Saengthong

Corporate Banking Sector 3

Executive Vice President - Director Ms. Arisara Dharamadhaj Services Finance Dept. Senior Vice President & Manager Ms. Duangjai Sunthornkarn Project Finance Dept. 1 First Vice President & Manager Mr. Werapong Suppasedsak Project Finance Dept. 2 First Vice President & Manager Ms. Suthini Visessmit

Financial Management Group

Senior Executive Vice President - Managing Director Ms. Kittiya Todhanakasem First Vice President & Manager Mr. Somsak Likitkranchanakul Asset & Liabilities Management Dept. Senior Vice President & Manager Mr. Jakkrit Prasatthai Treasury Dept. Senior Vice President & Manager Mr. Tawan Puntawong Accounting Dept. Senior Vice President & Manager Mr. Narong Rugfugfon

Financial Planning Sector

Executive Vice President - Director Ms. Patcharasiri Kiatkumjai

Planning & Budgeting Dept. First Vice President & Manager Ms. Walairat Lertumpornpisal Cashier Dept. First Vice President & Manager Mr. Kan Pimolkiat Management Information Dept. Senior Vice President & Manager Mr. Viruch Wongnirund Customer Information Dept. Senior Vice President & Manager Ms. Kulnaree Kettong

Treasury & Capital Market Sector

Executive Vice President - Director Ms. Pannipa Apichatabutra Capital Markets Dept. First Vice President & Manager Mr. Gridsn Nuengsigkapian Investor Relations Dept. First Vice President & Manager Mr. Kaival Pongnontakul Financial Institutions & Overseas Offices Dept. Senior Vice President & Manager Mr. Somsak Nontaganok

Products & Marketing Management Group

Senior Executive Vice President - Managing Director Mr. Sahas Treetipbut Retail Banking & Network Strategy Dept. Senior Vice President & Manager Mr. Dumrong Kaewprasith

Retail Products Management Sector

Executive Vice President - Director Mr. Assanee Subvanich Personal Loan Products Management Dept. Senior Vice President & Manager Mr. Tinnakorn Boonyakalin Housing Loan Products Management Dept. Senior Vice President & Manager Mr. Thirin Taothong Alliance Products Management Dept. First Vice President & Manager Mr. Prapat Noonpukdee

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Marketing Promotion Dept. First Vice President & Manager Mr. Chutichai Chanakorn

Central & Eastern Region BC CRTM Dept. First Vice President & Manager Mr. Prayut Poonsurapun Southern Region BC CRTM Dept. Financial & Electronic Banking Products Sector First Vice President & Manager Executive Vice President - Director Mr. Kittisap Muttameta Mr. Anantapol Punpeng Corporate CRTM Sector Financial Products Management Dept. Executive Vice President - Director First Vice President & Manager Mr. Prasert Thiranakanat Ms. Siriporn Nopwattanapong Card Products Management Dept. Industrial Business CRTM Dept. First Vice President & Manager First Vice President & Manager Ms. Umaporn Mungklasthieal Ms. Luckana Leelaamornsin Commercial & Service Business CRTM Dept. Retail Electronic Banking Products Management Dept. Senior Vice President & Manager First Vice President & Manager Mr. Verasak Prommas Agricultural Business CRTM Dept. Mr. Vachara Kanchanabundhu Customer Relationship Management & Senior Vice President & Manager Marketing Information Dept. Mr. Weerachai Supaviratbuncha Construction Business CRTM Dept. First Vice President & Manager First Vice President & Manager Dr. Tanarug Issadisai Mr. Boonlert Kethirun Credit Risk Transaction Management Group Project & Finance Institution Financing CRTM Dept. Senior Executive Vice President - Managing Director acting First Vice President & Manager Ms. Nongnutch Thienpaitoon Ms. Rapee Kaewsringam Credit Committee Administration Dept. Asset & Legal Management Group First Vice President & Manager Senior Executive Vice President - Managing Director Mr. Sakdee Cheablam Mr. Sayan Satangmongkol Business Center CRTM Sector Executive Vice President - Director Credit Monitoring & Asset Disposition Sector Executive Vice President - Director Mr. Teerapol Pussadet Metropolitan BC CRTM Dept. Ms. Plernpid Thanvarachorn Credit Monitoring Dept. Senior Vice President & Manager Senior Vice President & Manager Mr. Suravit Trisuvan First Vice President & Manager Ms. Roongjit Punnahitananda Asset Disposition Management Dept. Mr. Santi Parivisutt Northern Region BC CRTM Dept. First Vice President & Manager First Vice President & Manager Ms. Suvapa Kesungkul Mr. Paisal Ampeungard First Vice President & Manager North-Eastern Region BC CRTM Dept. Ms. Poungpetch Vongyimyong Asset Disposition Administration Dept. First Vice President & Manager First Vice President & Manager Mr. Prasit Thaisomboon Mr. Kasem Swasdee

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Legal Management Sector

Executive Vice President - Director Mr. Somchai Ngowwatana Special Cases Dept. First Vice President & Manager Mr. Chinapat Vatayanon Legal Monitoring Dept. 1 First Vice President & Manager Mr. Kamthorn Chavanaves Legal Monitoring Dept. 2 Senior Vice President & Manager Mr. Ukrit Thanapatpaiboon Legal Management & Loan Collection Expedition Dept. First Vice President & Manager Mr. Sujin Nisamaneejarus

Credit Restructuring Group

Senior Executive Vice President - Managing Director Mr. Dusit Tengniyom

Operation Process Development Dept. First Vice President & Manager Mr. Thamrongsak Leunanonchai

Cash Management Sector

Executive Vice President - Director Dr. Anuchit Anuchitanukul Cash Management Products Dept. First Vice President & Manager Ms. Amara Klabprathum Medium Business & Network Cash Management Dept. acting First Vice President & Manager Dr. Anuchit Anuchitanukul Corporate Cash Management Dept. First Vice President & Manager Mr. Boonsun Prasitsumrit

Banking Operation Sector

Executive Vice President - Director Mr. Chinorot Suntarat Credit Restructuring Dept. 1 Senior Vice President & Manager Ms. Aorratip Vanichkij Credit Restructuring Dept. 2 First Vice President & Manager Mr. Samart Noosuetrong

Executive Vice President - Director Ms. Supattra Hiranras Branch Support Dept. First Vice President & Manager Ms. Natharee Sakriganon Cash Management Dept. First Vice President & Manager Mr. Wisun Supasombatolarn Electronic Channel Support Dept. Senior Vice President & Manager Acting Sub Lt. Pairoj Deeruksa

Acting Senior Vice President - Director Ms. Taypee Srisukh Credit Restructuring Dept. 3 Senior Vice President & Manager Mr. Wisit Treesuvanna Credit Restructuring Dept. 4 First Vice President & Manager Mr. Choochart Vivatdejakul

Executive Vice President - Director Mr. Pichai Kojamitr Foreign Exchange Business Dept. First Vice President & Manager Mr. Chainarong Nisamaneewong International Trade Services Dept. First Vice President & Manager Acting Lt. Surat Naweera

First Senior Executive Vice President - Managing Director Dr. Pongsathorn Siriyodhin

Executive Vice President - Director Mr. Winit Sangaroon

Credit Restructuring Sector 1

Credit Restructuring Sector 2

Operation Group

International Business Operation Sector

Credit Operation Sector

221

222

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Credit Operation Dept. First Vice President & Manager Ms. Wirisara Taptimtong Credit Agreement Operation Dept. First Vice President & Manager Ms. Supin Hongsiripong Collateral Function Dept. First Vice President & Manager Mr. Visit Paisanvorajit Custody & Collateral System Dept. First Vice President & Manager Ms. Rungluk Darunaithorn

Premises & Facilities Management Sector

Senior Vice President - Director Ms. Suwannee Sukhavachana General Services & Security Dept. First Vice President & Manager Mr. Jintawat Jangsri Premises & Property Management Dept. Senior Vice President & Manager Mr. Phisek Phonakorn

Human Resources & Organization Management Group

Senior Executive Vice President - Managing Director Ms. Sumana Vonggapan Executive Vice President Ms. Yaovaluk Likitwattananurak Senior Vice President & Manager Mr. Thanee Derojvan

Human Resources & Organization Management Sector

Executive Vice President - Director Mr. Suthee Tripornchaisak Human Resources Management Dept. Senior Vice President & Manager Ms. Malinee Bodhisundara Discipline & Welfare Dept. Senior Vice President & Manager Mr. Chaianun Siravanichkarn Human Resources Development Dept. First Vice President & Manager Ms. Penjantra Teanpramuk

Organization Development Dept. First Vice President & Manager Mr. Adisorn Anutarapong Medical Dept. First Vice President & Manager Sen. Lt. Khakkanant Kiratisountorn R.N., M.D.

Risk Management & Corporate Governance Group Senior Executive Vice President - Managing Director Mr. Somgiat Sangsurane

Policy & Corporate Governance Sector

Senior Vice President - Director Ms. Wallaya Kaewrungruang Office of the Board of Directors & Shareholders Senior Vice President & Manager Mr. Suchart Dejittirut Policy & Procedures Dept. First Vice President & Manager Mr. Thanawat Pattamuk Compliance Dept. First Vice President & Manager Mr. Witoon Kantaapa Legal Consultant Dept. First Vice President & Manager Ms. Dujhathai Somboonitaya

Risk Management Sector

Senior Vice President - Director Dr. Wallop Lipiphun Credit Risk Management Dept. acting First Vice President & Manager Dr. Wallop Lipiphun Market Risk Management Dept. First Vice President & Manager Mr. Chuchird Wannatong Enterprise Risk Management Dept. First Vice President & Manager Mr. Preecha Nawaprakarn Business Research Dept. Senior Vice President & Manager Ms. Orapin Suthum

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Banking Network

Domestic Branches: 776 Branches as at March 1, 2008

Working hours: Mon.-Fri. 8.30-16.30 hrs. (except specific branches indicated in the bracket) Branch Name Bangkok (192 Branches)

Telephone

Asok +662 664-1600 -5 Asok-Dindaeng Road +662 246-0735 -7 Baiyoke Center * +662 251-7237 -8 (Mon-Sun 10.30-18.30 hrs.) Bang Bon +662 416-0090 -3 Bang Chan +662 517-1223 -5 Bang Chark +662 311-4706, 4710, 6069 Bang Khun Non +662 435-1893 -5 Bang Khun Thian +662 416-3015 -6, 3315 Bang Plad +662 424-7572, 9028 Bangkok Airport * +662 535-2468 Bangkok Bus Terminal (Chatuchak) * +662 537-9097 -8 (Mon-Sun 09.00-18.00 hrs.) Bangkok Bus Terminal +662 894-6015 -6 (Thanon Borommaratchachonnani) * (Mon-Sun 10.00-19.00 hrs.) Bangkok Metropolitan Administration * +662 226-3879 Bangkok Metropolitan +662 245-5174 -5 Administration 2 * Banglampu +662 281-6121, +662 282-8436 Bangpo +662 585-3562 -3 Bangyikhan +662 434-4895, 7157 Carrefour Samrong * +662 380-2657 -8 (Mon-Sun 10.00-20.00 hrs.) Central Bangna Tower +662 361-0993 -4 (Mon-Fri 8.30-16.30 hrs. Sat 10.00-17.30 hrs.) Central Ladprao * +662 541-1637 (Mon-Sun 11.00-19.00 hrs.) Central Pinklao +662 884-9000 -7 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 10.00-17.30 hrs.) Central Power Center Huamark * +662 718-7641, (Mon-Sun 10.30-19.30 hrs.) +662 718-7643 Central Rama 3 * +662 673-7112 (Mon-Sun 11.00-20.00 hrs.) Central World Plaza * +662 646-1062-3 (Mon-Sun 11.00-19.00 hrs.) Century * (Mon-Sun 11.00-19.00 hrs.) +662 245-7358 -9 Chaeng Wattana +662 574-4197 -8 Chan Road +662 213-2233, +662 286-2095 -7 Charansanitwongse 13 +662 411-1288 -90 Charoen Nakhon Road +662 438-9551 -3 Chatuchak Market 2 (Minburi) * +662 540-7931 -2 (Wed-Sun 11.00-19.00 hrs.) Chokchai 4 Soi 22 +662 530-2571, 3616 Communication Authority of Thailand * +662 506-4024 -5 Dindaeng +662 692-6351 -3, 6373 -5 Ekamai +662 381-4052 -4, +662 390-1921 Exchange Tower * +662 261-5274 (Mon-Fri 10.30-20.00 hrs. Sat-Sun 10.30-16.30 hrs.) Exim Building * +662 278-1786 -7 Fashion Island * +662 947-5236 -7 (Mon-Sun 11.00-19.00 hrs.)

Fax. +662 260-1365 +662 248-0134 +662 251-7239 +662 416-0094 +662 517-1444 +662 331-6067 +662 435-8006 +662 415-3015 +662 424-9313 +662 535-2445 +662 537-9075 +662 894-6017 +662 226-3879 +662 245-5176 +662 281-6120 +662 585-3564 +662 435-3681 +662 380-2659 +662 361-0995 +662 541-1639 +662 884-9011 +662 718-7722 +662 673-7113 +662 646-1064 +662 245-7359 +662 574-5778 +662 287-1738 +662 411-4027 +662 438-7600 +662 540-7933 +662 530-2572 +662 574-2937 +662 692-6350 +662 391-2950 +662 260-3047 +662 278-1785 +662 947-5238

Branch Name

Telephone

Fortune Town * +662 641-1081 (Mon-Sun 11.00-19.00 hrs.) Government House * +662 243-6107, +662 244-1479, +662 282-6911 Government Pharmaceutical +662 354-8892 -3 Organization * Happyland Road +662 375-6058, 6513, 6653 Hi Mall Bangkrabue * +662 636-9784 -5 (Mon-Sun 11.00-19.00 hrs.) Hua Takhe (Lad Krabang) +662 326-6243 -4 IT Square Laksi * +662 576-0527 -8 (Mon-Sun 11.00-19.00 hrs.) Kao San Road +662 281-1987, 2301 (Mon-Fri 9.30-17.30 hrs.) +662 282-8507 -8 King Mongutâ&#x20AC;&#x2122;s Institute of +662 326-4700 -1 Technology Ladkrabang * Krasruang Sueksathikan +662 282-3132, 5457 Krungkasem +662 223-2431 -2 Labour and Social Welfare * +662 247-7763, 8030 Lad Krabang Industrial Estate +662 326-0545 -6 Ladplakhao 41 +662 570-7020, 7116 -7 Ladprao 33 +662 511-3316, +662 513-9430 Ladprao 71 * +662 538-4041, 4102 Ladprao 102 +662 530-4092, 4243 Ladprao 130/1 * +662 731-3123 -4 Lak Si +662 522-7690 -1 Mahanak (Mon-Sun 11.00-19.00 hrs.) +662 225-5611 -4 Major Hollywood Ramkhamhaeng * +662 369-1466 -7 (Mon-Sun 11.00-19.00 hrs.) MBK Center * +662 686-3945 -6 (Mon-Sun 11.00-19.00 hrs.) Meenburi +662 918-8880 -4 Metropolitan Waterworks * +662 503-9474 Ministry of Finance * +662 273-9665 -6 N Mark Plaza * +662 375-4220 -1 (Mon-Sun 11.00-19.00 hrs.) Nananua Office +662 208-4200 -1, 4230 -2 Nanglingee Road +662 678-8411 -3 National Assembly * +662 243-6107, +662 244-1479, +662 282-6911 National Housing Authority +662 374-1450, 1466 Nawamin Road +662 375-2844 -6 New Phetchaburi Road +662 314-5580 -7 Nongchok * +662 548-3241 -2 On Nuch +662 322-8932 -4 Pakklong Talad +662 226-6350 -2 Pathum Wan +662 215-0050 -4 Petroleum Authority +662 537-8006 -9 Phahonyothin 20 +662 272-0648 -9 Phahonyothin 39 +662 561-1725 -6, 3458, +662 562-0217 Phatthanakarn 17 +662 319-3910 -1, 7881 Phatthanakarn 65 +662 322-8549 -50

Fax. +662 641-1083 +662 280-3682 +662 354-8890 +662 375-6849 +662 636-9782 +662 326-6243 +662 576-0528 +662 282-8506 +662 326-4702 +662 282-5458 +662 223-2430 +662 247-8072 +662 326-0547 +662 570-7223 +662 513-9432 +662 538-4130 +662 530-6252 +662 375-6647 +662 522-7692 +662 225-5615 +662 369-1468 +662 686-3947 +662 918-8885 +662 503-9930 +662 273-9955 +662 375-6518 +662 256-8425, 8696 +662 678-8414 +662 280-3682 +662 374-1670 +662 375-1154 +662 314-5588 +662 548-3243 +662 322-8933 +662 221-7552 +662 215-7717 +662 936-2471 +662 272-0645 +662 561-1724

+662 319-7958 +662 322-8552

223

224

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Fax.

Phetkasem 29 (Phasi Charoen) +662 458-0778 -9 +662 467-5456 Phetkasem 39 +662 454-8085 -7 +662 454-8084 Phetkasem 65/1 (Bangkhaenua) +662 421-9753 -5 +662 421-0372 Phetkasem 77/2 (Nong Khaem) +662 444-2783 -5 +662 444-2786 Phetkasem 81 * +662 487-5760 -1 +662 487-5762 Phetkasem 84 (Bangkae) +662 454-2100 -1 +662 454-2102 Ploenchit Metropolitan Electricity +662 251-9114 -6 +662 255-2989 Port Authority of Thailand * +662 350-2389 -90 +662 350-2391 Prachaniwet +662 591-1742 +662 591-3947 Pracharaj Road +662 911-3105 -8 +662 585-4010 Prachautis Road (Toongkru) * +662 428-8813 -4 +662 428-8815 Prachautit +662 934-7416, +662 934-7417 7418 -20 Pradipat 13 +662 618-4855 -62 +662 270-0056 Pradipat 16 +662 278-1612 -3 +662 279-6395 Prakanong +662 391-1961, +662 390-0150 +662 392-9173 Prannok +662 411-5590 -2 +662 411-5593 Praram 2 Road +662 468-4959, +662 468-6344 +662 877-1450 -1 Praram 3 (Soi 7) +662 291-0756 -7 +662 291-0758 Pratunam +662 252-9472 -3, +662 255-1008 +662 253-4192 Pratunam Center * +662 250-6326 -7 +662 250-6328 (Mon-Sun 10.00-18.00 hrs.) Provincial Electricity Authority * +662 591-6314 +662 591-3141 PTT.Raminthra Km.3 * +662 522-6156 -7 +662 522-6158 (Mon-Sun 09.00-18.00 hrs.) Q.House Lumpini * +662 343-8828 -9 +662 343-8830 (Mon-Fri 10.30-18.30 hrs.) Queen Sirikit National +662 229-4235 -9 +662 229-4234 Convention Center Rachadapisek - Huaikhwang +662 276-0096 -100 +662 276-0101 Rajadamnoen +662 281-6950 -2 +662 281-1841 Rajathevi +662 215-8080 -3 +662 215-8084 Rajawongse +662 222-2171 -8 +662 222-9881 Rajchawat * +662 241-4204 -5 +662 241-4206 Rama 4 Road +662 249-3178, +662 249-3350 3184, 3316 Rama 9 Soi 13 +662 717-0121 -3 +662 717-0125 Ramindra Km.2 +662 521-1980, +662 552-6029 +662 971-6167 -70 Raminthra Km.4 +662 510-6630 -1 +662 509-0386 Raminthra Km.10 +662 518-1112 -5 +662 517-5375 Ramkhamhaeng 65 (FBT Building) * +662 318-6130 -1 +662 318-6121 (Mon-Sun 11.00-19.00 hrs.) Revenue Department * +662 617-2566 -7 +662 617-2568 Saint Louis Soi 3 +662 212-3379, 5702 +662 212-7981 Sampeng +662 221-8666 -7 +662 221-0375 Samyan +662 215-4007 -8 +662 216-2967 Samyod +662 222-1171 -4 +662 225-9276, +662 226-1372 Sanphawut +662 361-1765 -8 +662 361-1769 Saphan Kasatsuek +662 214-4147, 4846, +662 214-1826 +662 215-3127 Saphan Khao +662 282-2463 -4, +662 282-0786 5007 -8 Saphanmai +662 551-0545 -7, +662 521-1300 +662 972-5792 -3 Sathorn Road +662 670-1700 -4 +662 670-1705 Sathupradit +662 295-4921 -3 +662 295-4924 Seri Center +662 746-0907 -9 +662 746-0620 (Mon-Sun 10.00-19.00 hrs.)

Branch Name

Telephone

Fax.

Sermmit Tower +662 260-2697 -8 +662 260-2698 Si Ayutthaya Road +662 246-7774 -9, +662 246-2855 +662 247-9256 -8 Si Nakarin +662 379-3241 -2 +662 379-3243 Si Nakarin Km.9 +662 721-8010 -3 +662 721-8014 Siam Square +662 251-1476, +662 254-8686 +662 252-1479, 4070, +662 254-3428 Silom +662 233-2383 -4, +662 237-5920 +662 235-8153 -4 Siyaek Arun Amrin +662 433-0619, +662 433-0620 +662 435-3508, 3510 Siyaek Bankhaek +662 465-7048 +662 466-1989 +662 466-1650 Siyaek Praya Sri +662 221-8570, +662 222-9252 +662 222-2206, 3670 Siyaek Rajawongse +662 221-1193 -4, +662 222-6368 +662 222-2580 Siyaek Saphan Krungthon +662 423-0530 -1 +662 435-0423 Soi Arlee +662 271-2575 -6 +662 271-2579 Sriyan +662 243-3738 -40 +662 243-2863 Srong Prapa * +662 566-4388 +662 566-4472 State Tower * +662 630-5918 -9 +662 630-5917 Suanmali +662 223-7718, +662 223-7759 7721, 7731, 7774, +662 621-6500 Suanplu * +662 286-2626 +662 287-1489 +662 287-1252, 1587 Sukhaphiban 2 +662 375-1653 +662 375-1644 Sukhaphiban 3 Road +662 728-5523 -6 +662 729-5424 Sukhumvit 22 * +662 663-7001 +662 663-7002 Sukhumvit 49 +662 258-0624, +662 258-0511 +662 261-6480 -1 Sukhumvit 71 +662 381-2603 -5 +662 381-2602 Sukhumvit 77 * +662 333-0440 +662 311-6701 Sukhumvit 93 +662 311-4216, 4514, +662 331-6667 +662 332-5219 -21 Surawongse +662 234-7837 -8 +662 237-6596 Sutthisanwinitchai +662 276-9351 -3 +662 276-9354 Taksin Road +662 438-0023 -4, +662 438-2625 Talad Huai Khwang +662 275-2306, +662 275-2503 2385, 2554 Talad Noi +662 236-4866 -7 +662 233-8875 Talad Plu +662 466-2464, 7342, +662 466-7345 +662 472-7019 Talad Wongsakorn * +662 533-3379 +662 533-3243 (Mon-Fri 10.00-18.00 hrs.) Tanam Rajawongse +662 221-1284, +662 225-9708 4624, 8368 Tanon Fuangnakhon +662 221-1832 +662 224-3996 Tanon Kanchana Phisek (Bangwaek) * +662 449-6013 -4 +662 449-6015 Tanon Mahachai +662 222-9444 +662 225-3965 Tao Poon +662 585-1312, 2198 +662 585-8075 Tesco Lotus Pinklao * +662 433-8884-5 +662 433-8886 (Mon-Sun 10.00-20.00 hrs.) Tha Tien +662 222-0198 -9 +662 221-8483 Thadindaeng +662 437-2979 +662 437-4491 Thai Airways International * +662 512-2008, +662 512-2154 +662 545-0121 Ext. 2069 Thanon Kheha Romklao * +662 557-0626, 0643 +662 557-0676 Thanon Ramkhamhaeng 2 +662 316-4934 +662 316-7495 (Bangna-Trad) *

225

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Thanon Romklao +662 909-8266 -7 (Moo Baan Preecha) * Thanon Suksawat +662 468-6860 -1, +662 476-3824, 4027 Thanon Watcharaphol * +662 519-8500, 8604 Thanonnawamin 161 (Sahafarms) * +662 509-5402 -3 (Mon-Sun 10.00-18.00 hrs.) Thapra +662 457-8208 -9, +662 868-2330 -1 The Customs Department +662 249-9310 -2 The Mall Bangkae * +662 454-9201 -2 (Mon-Sun 10.30-20.00 hrs.) The Mall Bangkapi * +662 363-3476 -7 (Mon-Sun 10.30-20.00 hrs.) The Mall Thapra * +662 477-7300-1 (Mon-Sun 10.30-20.00 hrs.) Thewet +662 281-1332, 1570 Thonburi-Paktho +662 428-6362 -3 Thong Lo +662 381-3508, 3867 TOT (Cheang Wattana) * +662 574-9410 +662 250-1504 Tourism Authority of Thailand * Udomsuk +662 399-1168 -9, 1351 Union Mall Ladprao +662 511-4330, 4336 (Mon-Sun 11.00-19.00 hrs.) Victory Memorial +662 298-0016 -20 Viphavadi-Rangsit 5 +662 272-2214 -5, 2241 -2, 2484 Vorachak +662 221-4578, +662 223-2311, +662 225-2395 Wannasorn Building * +662 306-0878 -80 (Mon-Sun 11.00-19.00 hrs.) Wisut Kasat Road +662 281-7476, 7483 Wong Sawang +662 913-2347 -9 Wongsawang Town Center * +662 913-9716 -9 (Mon-Sun 10.30-19.30 hrs.) Yan Nawa +662 211-0156, 3300 Yaowaraj +662 222-0131 -45

Fax. +662 909-8268 +662 468-5255 +662 519-8639 +662 509-4791 +662 457-2344 +662 249-9313 +662 454-9203 +662 363-3478 +662 477-7307 +662 281-1127 +662 427-6550 +662 381-3868 +662 574-9412 +662 250-1503 +662 399-1375 +662 511-4295 +662 298-0884 +662 272-2386 +662 221-5878 +662 306-0881 +662 280-1874 +662 913-2346 +662 913-9720 +662 211-9989 +662 225-9275

Bangkok Vicinity (83 Branches)

Nakhon Pathom (15 Branches) Bang Len Big C Nakhonphathom * (Mon-Sun 10.00-19.00 hrs.) Kamphaeng Saen Nakhon Chaisi Nakhon Pathom Om Yai Phrapratone Phutthamonthon Sai 5 * Prapatomjedee Salaya Sam Phran Siyaek Sanamchan Tesco Lotus Nakhon Chaisri * (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Nakhon Pathom * (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Salaya * (Mon-Sun 10.00-20.00 hrs.)

+6634 391-032 -3 +6634 251-755

+6634 391-034 +6634 251-780

+6634 351-434 -6 +6634 331-113 -6 +6634 250-770 -2 +662 420-4980 -1, 4989, 5183 +6634 293-052 -3 +662 420-8772 -3 +6634 254-297 -8 +662 441-4451 -2 +6634 322-900 -2 +6634 254-533 -5 +6634 339-456

+6634 351-632 +6634 332-163 +6634 253-956 +662 420-4983

+6634 259-751 -2

+6634 259-753

+6624 822-130 -1

+6624 822-132

+6634 395-052 +662 420-8773 +6634 254-237 +662 441-4450 +6634 323-155 +6634 254-240 +6634 339-576

Branch Name

Telephone

Fax.

Nonthaburi (21 Branches) Bang Bua Thong +662 571-7668 -9, +662 571-7667 +662 924-1031 -3 Bang Kruai +662 447-0652 -4 +662 447-1554 Bangkruai Electricity Generating * +662 434-8308, +662 433-4663 +662 436-1590 -1 Center Point (Bang Yai) * +662 594-0507 -9 +662 594-0506 (Mon-Sun 11.00-19.00 hrs.) Central Plaza Rattanathibet * +662 526-0336 -7 +662 526-0338 (Mon-Sun 10.00-19.00 hrs.) Ministry of Commerce * +662 547-5941 -2 +662 547-5943 Ministry of Public Health Tiwanon * +662 580-7000 +662 580-9435 Muang Thong Thani +662 503-4893 -4 +662 503-4899 Ngamwongwan +662 580-1594, +662 589-8855 +662 591-6180 -1 Nonthaburi +662 525-0421, 0447, +662 525-0857 +662 527-1037, 1148 Office of Civil Service Comission * +662 525-4727 -8 +662 525-4729 Pak Kret +662 583-8616 -7, +662 583-8618 +662 584-3157 -8 Ratanathibet +662 591-3598 -9, +662 591-3599 8363 Software Park Building * +662 584-1319 +662 584-1039 Suan Yai (Tanam Nonthaburi) +662 525-0683, +662 525-1139 0957, 0913 Ta Nam Pakkret * +662 584-0669, 1032 +662 584-1258 (Mon-Fri 8.30-16.30 hrs.) Talad Klang Bangyai +662 595-0596 -7 +662 595-0719 (Mon-Sun 10.00-19.00 hrs.) Talad Ruamjai (Muang Thong Thani) * +662 503-3927 -8 +662 503-3929 (Mon-Fri 10.30-18.30 hrs.) Tanon Kanchana Phisek (Bangyai) +662 443-6682 -4 +662 443-6684 The Mall Ngamwongwan * +662 550-1226 -7 +662 550-0789 (Mon-Sun 10.30-20.00 hrs.) Tiwanon 3 +662 591-5525 -7, +662 580-2254 8228 -30 Pathum Thani (15 Branches) Amphoe Sam Khok +662 593-1381 -3 +662 593-1380 Future Park Rangsit +662 567-3607, +662 567-5019 (Mon-Sun 11.00-19.00 hrs.) 4498, 5019 Lat Lum Kaew (Yak Noppawong) +662 599-1086 -9 +662 599-1087 Navanakorn Industrial * +662 529-6333 -5 +662 529-6335 (Mon-Fri 11.00-19.00 hrs.) Pathum Thani +662 581-2245 -6 +662 581-1465 Phithaksanti (Talad Pathum Thani) +662 581-6331 -3 +662 581-4055 Rung Sit +662 567-1001 -5 +662 531-3450 Rungsit-Nakhonnayok Klong 4 +662 990-9939 -42 +662 533-1543 Rungsit-Nakhonnayok Klong 6 * +662 577-5827, 5853 +662 577-5923 Rungsit-Nakhonnayok Klong 10 * +662 546-1239 -40 +662 546-1241 Talad Simummueng +662 531-5111 -3 +662 531-7245 Talad Tai +662 529-2022, +662 529-4786 4206 -7, 4222 Tesco Lotus Navanakorn * +662 529-2883 -4 +662 529-5172 (Mon-Sun 10.30-19.30 hrs.) Thamasat University Rangsit Center * +662 564-3377 +662 564-3378 Zeer Rangsit * +662 992-6373 -4 +662 992-6375 (Mon-Sun 11.00-19.00 hrs.) Samut Prakarn (24 Branches) Airport Operating Building * +662 134-1923 +662 134-1925 Bang Bo * (Mon-Fri 08.30-16.30 hrs.) +662 708-5503 -4 +662 708-5505 Bang Kru +662 462-7860 -2 +662 817-8819

226

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Fax.

Bang Phli +662 316-1935 -6 +662 316-1938 Bang Poo +662 395-0326, +662 395-3048 3047 -9 Big C Bangphli * +662 312-2732 +662 312-2733 (Mon-Sun 10.00-20.00 hrs.) Big C Samutprakan * +662 395-4190 +662 395-4191 (Mon-Sun 10.00-20.00 hrs.) Carrefour Samrong * +662 380-2657 -8 +662 380-2659 (Mon-Sun 10.00-20.00 hrs.) Free Zone Building +662 134-1929 -30 +662 134-1931 Suvarnabhumi Airport * Mueang Mai Bang Phli * +662 315-2284 -5 +662 315-2286 Operation Center Thai Airways +662 134-1920 -1 +662 134-1922 International * Pak Nam +662 387-0704, 2564, +662 387-0705 +662 389-0993 -7 Phra Pradaeng +662 462-5000, 7988, +662 463-3721 +662 463-3722 -3 Public Transportation Center +662 134-1926 -7 +662 134-1928 Suvarnabhumi Airport * +662 384-2757 -9 +662 394-0955 Puchao Saming Phrai Road Samrong +662 384-4974 +662 384-4448 Samut Prakan +662 389-1161 +662 387-1182 Si Nakarin Km.14 +662 385-8167 +662 385-8292 Srisamut Road +662 387-1003, +662 387-1002 +662 389-5970, +662 395-1564 Talad Nhamdaeng +662 385-1205 -6 +662 385-1207 Tepharak +662 394-4750, +662 394-0720 6839 -40 Tesco Lotus Bang Phli * +662 325-1087 -8 +662 325-1088 (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Bangpoo * +662 710-9067-8 +662 710-9069 (Mon-Sun 10.00-20.00 hrs.) Thanon Phraeksa * +662 382-6712 -3 +662 382-6714 Samut Sakorn (8 Branches) +6634 481-173, +6634 481-364 Ban Pheo +6634 850-684 Krathum Baen +6634 471-926 -7, +6634 471-928 +6634 846-713 Krok Krak * +6634 425-184 -5 +6634 425-176 Phetkasem 91(Om Noi) +662 420-5454 -5 +662 420-5456 Pho Chae * (Mon-Fri 08.30-16.30 hrs.) +6634 491-481 -2 +663 449-1483 Samut Sakhon +6634 411-186, 788, +6634 421-600 +6634 421-601, +6634 424-795, +6634 425-170, +6634 428-180 Talad Mahachai +6634 810-257 -8 +6634 427-702 Thanon Settakit 1 +6634 448-154 -5 +6634 448-156

Central Region (77 Branches)

Ang Thong (4 Branches) Ang Thong +6635 611-720 -1 Pa Mok +6635 661-329, 429 Pho Thong +6635 691-352 -3 Wisetchaichan +6635 631-740 -1 Chainat (3 Branches) Chai Nat +6656 412-406 -7 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-1500 hrs.) Hankha +6656 451-099 -101

+6635 611-665 +6635 661-323 +6635 691-351 +6635 631-742 +6656 411-107 +6656 451-269

Branch Name

Telephone

Sankha Buri +6656 481-061 -2 Kanchanaburi (7 Branches) Bophloi +6634 628-492 -4 Kanchanaburi +6634 512-289 -90 Saengchuto Road +6634 511-292 Sai Yok +6634 634-263 Tha Maka +6634 640-682, +6634 643-310, 312 Tha Muang +6634 611-441, 891 Thong Pha Phum +6634 599-065 -6, 537 -8 Lop Buri (10 Branches) +6636 471-239 Ban Mi Khao Phra Ngam +6636 486-615 Khok Samrong +6636 441-239, 723 Lamnarai +6636 461-044, +6636 630-797 -8 Lop Buri +6636 411-204 -5 Phatthananikhom +6636 639-313 -4 Tesco Lotus Lop Buri Inn Plaza * +6636 446-150 (Mon-Sun 10.00-20.00 hrs.) Tha Wung +6636 622-039 Vichayen Road +6636 617-953 -4 Wong Wien Srakaew +6636 413-678, +6636 420-082 Pha Nakorn Si Ayutthaya (10 Branches) +6635 211-483 -4 Ayutthaya Ayutthayapark Shopping Complex +6635 201-289, 389 (Mon-Sun 10.00-19.00 hrs.) Bang Pa-In +6635 221-025 -7 Phachi +6635 311-089 Phak Hai +6635 391-458 -9 Pratunam Phra In +6635 361-334 -6 Rojana +6635 243-289, 389, 489 Sena +6635 201-289, 389 Talad Hua Raw +6635 252-365 -6 Tha Rua +6635 341-089, 189 Phetchaburi (4 Branches) Cha-am +6632 471-600 Phetchaburi +6632 425-501, 516 Phra Nakhonkiri +6632 424-229 Tha Yang +6632 461-551 -3 Prachuap Khiri Khan (7 Branches) +6632 692-254 -5 Bang Saphan Hua Hin +6632 511-307, 812, +6632 512-053 Hua Hin Market Village * +6632 526-192 -3 (Mon-Sun 11.00-19.00 hrs.) Kui Buri +6632 681-585 Prachuap Khiri Khan +6632 551-140, +6632 602-366, +6632 611-171, 353, 372, Pran Buri +6632 621-444, 664 Talad Chat-Chai (Hua Hin) +6632 513-208 -9 (Mon-Fri 10.00-18.00 hrs.)

Fax. +6656 481-006 +6634 628-495 +6634 514-518 +6634 516-768 +6634 634-266 +6634 543-311 +6634 611-890 +6634 599-100

+6636 471-360 +6636 486-651 +6636 441-160 +6636 461-043 +6636 420-955 +6636 491-506 +6636 446-152 +6636 622-040 +6636 618-836 +6636 413-723

+6635 241-266 +6635 346-051 +6635 221-028 +6635 311-389 +6635 391-457 +6635 362-006 +6635 213-951 +6635 201-089 +6635 252-368 +6635 341-990 +6632 471-601 +6632 428-229 +6632 427-099 +6632 461-552 +6632 692-263 +6632 511-242 +6632 526-242 +6632 681-546 +6632 611-575

+6632 542-366 +6632 513-300

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Ratchaburi (12 Branches) Ban Pong +6632 342-988 Big C Ratchaburi * +6632 332-787 -9 (Mon-Sun 11.00-20.00 hrs.) Chom Bung +6632 362-350 -1 Damnoen Saduak +6632 241-500 -2 Kraiphet Road +6632 322-049 Pak Tho +6632 281-479 Pho Tharam +6632 231-075, 926 Ratchaburi +6632 337-146 Ratchaburi City Hall * +6632 325-947 Si Suriyawong +6632 323 394 -5, +6632 326-721 Suan Phung +6632 364-262 -3 Tanon Khatha Thorn +6632 325-948 Samut Songkhram (2 Branches) +6634 716-352 -3 Maeklong (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Samut Songkhram +6634 711-166, 199 Saraburi (8 Branches) Hin Kong +6636 337-412, +6636 379-493 Na Phra Lan +6636 347-192 -3, +6636 351-192 -3 Nong Khae +6636 326-452, +6636 371-374 Nong Zang +6636 399-239 -40 Pakpreaw +6636 212-507, +6636 312-543 Sao Hai +6636 332-036 -7, +6636 391-219 Sara Buri +6636 222-093 -4 Thalan +6636 281-427 Sing Buri (2 Branches) In Buri +6636 581-476 -8 Sing Buri +6636 511-004, 115, +6636 512-032, 581, +6636 522-717 Suphan Buri (8 Branches) Dan Chang +6635 509-503 -4 Don Chedi +6635 591-301 -3 Phraphanvasa Road +6635 523-475 Sam Chuk +6635 571-755 Song Phi Nong +6635 531-395, 454 Suphan Buri +6635 523-042, +6635 525-202 -5 Suphanburi Government Centre +6635 535-060 -3 U-Thong +6635 551-927 -8

Fax. +6632 211-891 +6632 332-789 +6632 261-300 +6632 254-133 +6632 325-590 +6632 281-480 +6632 231-927 +6632 321-737 +6632 350-006 +6632 323-393 +6632 364-264 +6632 314-262 +6634 716-351 +6634 723-834 +6636 379-494 +6636 351-192 +6636 371-324 +6636 399-237 +6636 222-580 +6636 391- 170, 218 +6636 222-095 +6636 281-334 +6636 581-331 +6636 511-006

+6635 595-367 +6635 591-304 +6635 523-722 +6635 571-022 +6635 531-453 +6635 523-315 +6635 535-064 +6635 551-929

Nothern Region (122 Branches)

Chiang Mai (30 Branches) Big C Chiang Mai * +6653 246-709 -10 (Mon-Sun 10.00-20.00 hrs.) Big C Hang Dong * +6653 447-809 -10 (Mon-Sun 10.00-20.00 hrs.) Bo Sang +6653 338-289, 389 Central Airport Plaza Chiang Mai * +6653 279-337 (Mon-Sun 10.00-20.00 hrs.) Chaiprakarn +6653 457-002 -3

+6653 246-791 +6653 447-811 +6653 338-376 +6653 279-676 +6653 457-004

Branch Name

Telephone

Fax.

Changklan Road +6653 272-093 -5 +6653 818-368 Chiang Dao +6653 388-599 -600, +6653 455-147 +6653 455-237 -9 Chiang Mai +6653 245-250 -1 +6653 248-868 Chiangmai University * +6653 223-191 +6653 223-172 Chom Thong +6653 341-351, +6653 341-350 +6653 826-840 Fang +6653 451-481 -3 +6653 452-006 Hang Dong +6653 441-097 -8 +6653 441-096 Huai Kaew Road +6653 225-808 -9 +6653 225-810 Kad Suan Kaew Shopping Center * +6653 223-254, 268 +6653 225-807 (Mon-Sun 10.00-20.00 hrs.) Khuang Sing +6653 409-545 +6653 409-548 Mae Joe +6653 353-431 -3 +6653 353-430 Mae Rim +6653 297-221, +6653 297-222 223, 969, +6653 298-401 Night Bazaar Chiang Mai * +6653 280-667 -9 +6653 282-782 (Mon-Fri 10.00-18.00 hrs.) Nim City Daily (Chiang Mai) * +6653 280-670 -1 +6653 280-672 (Mon-Fri 10.00-18.00 hrs.) Phra Sing +6653 283-270 -1 +6653 283-269 San Pa Khoi +6653 241-110, 854, +6653 245-405 +6653 243-188 Sanpatong +6653 311-519 -21 +6653 311-503 Siyaek Nong Hoy +6653 800-475 -6, 478 +6653 800-477 Siyaek Sanambin Chiang Mai +6653 280-965 -7 +6653 280-968 Sri Nakorn Pink +6653 234-395, 890, +6653 251-724 +6653 251-044 -6 Sun Kumphaeng +6653 331-993, +6653 331-994 +6653 332-311, 628 Suthep Road +6653 278-084, 087 +6653 278-871 Tesco Lotus Chiang Mai Hang Dong * -6653 280-610 -1 +6653 280-612 (Mon-Sun 10.00-20.00 hrs.) Tesco Lotus Mae Tang * +6653 471-292 -3 +6653 471-294 (Mon-Sun 10.00-20.00 hrs.) Tha Pae +6653 252-801 -5 +6653 232-537 Chiang Rai (8 Branches) Big C Chiangrai * +6653 717-641 -2 +6653 717-789 (Mon-Sun 10.00-20.00 hrs.) Chiang Khong +6653 791-665 +6653 791-772 Chiang Rai +6653 744-282 -3 +6653 711-700 Chiang Saen +6653 650-696 -7 +6653 650-698 Hayaek Phokhun Mengrai +6653 717-740 -3 +6653 719-147 Mae Chan +6653 771-940 -2 +6653 771-939 Mae Sai +6653 731-624 -5 +6653 731-831 Phan +6653 721-370 -1 +6653 721-622 Kamphaeng Phet (6 Branches) +6655 711-003 +6655 714-024 Chakangrao (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Kamphaeng Phet +6655 711-007, 117 +6655 713-567 Khanu Woralaksaburi +6655 725-024 +6655 779-014 Klong Khlung +6655 781-114 -6 +6655 781-113 Lan Krabu +6655 769-117 -9 +6655 769-174 Salokbat +6655 771-100, +6655 771-491 200, 300 Lampang (8 Branches) Kalangnakorn +6654 230-193 -5 +6654 230-192 Lam Pang +6654 221-649, +6654 225-748 +6654 225-074

227

228

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Mae Mo +6654 266-004, 176 Mae Tha +6654 289-155 Pratuchai +6654 223-638, +6654 225-050 Tesco Lotus Lampang * +6654 230-443 -4 (Mon-Sun 10.00-20.00 hrs.) Thoen +6654 291-111, 333 Wang Nua +6654 279-118 -9 Lamphun (6 Branches) +6653 591-111, 311 Ban Hong Big C Lamphun * +6653 582-810 -1 (Mon-Sun 10.00-20.00 hrs.) Lamphun +6653 511-109, +6653 512-110 Lumphun Industrial Estate * +6653 581-442 Mae Thar +6653 574-322 -5 Tesco Lotus Pasang * +6653 521-302 -3 (Mon-Sun 10.00-20.00 hrs.) Mae Hong Son (4 Branches) Khun Yuam +6653 691-043 Mae Hong Son +6653 612-019, 399 Mae Sariang +6653 681-111, 482 Pai +6653 699-028 -9 Nakorn Sawan (12 Branches) Banphot Phisai +6656 279-034, 068 Chumsaeng +6656 282-103, 229 Fairy Land (Nakhonsawn) * +6656 372-122 -3 (Mon-Sun 10.00-20.00 hrs.) Lat Yao +6656 271-267, 618 Matuli Road +6656 229-904, 935 Nakhon Sawan +6656 216-281 -3 Pak Nam Pho +6656 227-597, 643 Phayuha Khiri +6656 341-502 Sawanviti Road +6656 221-628, 776 Tak Fa +6656 241-074, 178 Takhli +6656 261-557 V - Square (Big C) Nakorn Sawan * +6656 372-116 -7 (Mon-Sun 10.00-20.00 hrs.) Nan (2 Branches) Nan +6654 772-543 -4, +6654 774-089 Nara Hypermart * +6654 773-163, (Mon-Sun 10.00-20.00 hrs.) +6654 775-134 Phayao (4 Branches) Chiang Kham +6654 451-800, 965, +6654 452-096 Dok Kham Tai +6654 491-478 -9 Phayao +6654 431-032, 801 Pong +6654 497-038 Phetchabun (7 Branches) Bueng Samphan +6656 732-503 -5 Chon Daen +6656 761-276 -7 Lom Sak +6656 701-029 Nong Phai +6656 781-886 -8 Phetchabun +6656 711-167, 344, 388

Fax. +6654 266-005 +6654 289-154 +6654 225-051 +6654 230-445 +6654 291-555 +6654 279-117 +6653 591-211 +6653 582-812 +6653 511-189 +6653 581-443 +6653 574-821 +6653 521-332

+6653 691-033 +6653 612-219 +6653 681-222 +6653 699-030 +6656 279-227 +6656 282-218 +6656 372-123 +6656 271-328 +6656 229-853 +6656 216-284 +6656 221-706 +6656 341-455 +6656 226-790 +6656 241-177 +6656 262-500 +6656 372-118

+6654 710-209 +6654 774-056

+6654 451-675 +6654 491-476 +6654 431-802 +6654 497-035 +6656 732-505 +6656 761-276 +6656 701-676 +6656 781-884 +6656 711-168

Branch Name

Telephone

Fax.

Phetcharoen Road +6656 711-644 -5 +6656 711-646 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Wichian Buri +6656 791-316 +6656 791-318 Phichit (7 Branches) Bang Mun Nak +6656 631-177, +6656 631-414 202 -3, 830, 977 Phichit +6656 611-376 +6656 611-396 Pho Thale +6656 681-022 +6656 681-024 Rajkasemutit +6656 651-393 -5 +6656 651-396 Sak Leg +6656 699-127 -9 +6656 699-130 Taphan Hin +6656 621-159, 179 +6656 621-959 Thap Klo +6656 641-317, 334 +6656 641-307 Phitsanulok (9 Branches) Bang Rakam +6655 371-228 -9 +6655 371-148 Hayaek Khokmatoom +6655 245-457 -8 +6655 302-011 Nakhon Thai +6655 389-297 +6655 389-090 Naresuan University +6655 227-093 -4 +6655 227-445 Phitsanulok +6655 230-371 -5 +6655 242-112 Phrom Phiram +6655 369-111 +6655 369-112 Singhawat Road +6655 230-721 -4 +6655 230-723 Topland Phitsanulok * +6655 247-444, 755 +6655 247-833 (Mon-Sun 10.00-20.00 hrs.) Wang Thong +6655 311-314 +6655 311-231 Phrae (3 Branches) Big C Phrae * +6654 532-183 -4 +6654 532-185 (Mon-Sun 10.00-20.00 hrs.) Long +6654 581-666 +6654 581-456 Phrae +6654 511-630 +6654 522-928 Sukhothai (5 Branches) Kong Krailat +6655 691-132 -3 +6655 691-131 Sawankhalok +6655 641-060, 422 +6655 641-539 Si Nakhon +6655 652-636, 638 +6655 652-637 Si Samrong +6655 681-366 +6655 681-320 Sukhothai +6655 611-298, 383 +6655 612-921 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Tak (3 Branches) Mae Sot +6655 531-193 +6655 531-436 Rim Ping * +6655 511-963 +6655 511-965 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Tak +6655 511-116, 423 +6655 511-597 Uthai Thani (2 Branches) +6656 544-126 +6656 544-127 Sawang Arom Uthai Thani +6656 511-330 +6656 512-400 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Uttaradit (6 Branches) Nam Pat +6655 481-011 -2, 229 +6655 481-081 Phichai +6655 421-002 +6655 421-001 Si Utra Road +6655 413-860 +6655 414-692 Tesco Lotus Uttaradit * +6655 413-853, 863 +6655 413-783 (Mon-Sun 10.00-20.00 hrs.) Tron +6655 491-013 +6655 491-014 Uttaradit +6655 411-225 +6655 411-477

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Northeastern Region (127 Branches)

Fax.

Amnat Charoen (1 Branch) Amnat Charoen +6645 511-784 +6645 511-785 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Buri Ram (10 Branches) Big C Buri Ram +6644 690-186 -7 +6644 690-249 (Mon-Sun 10.00-19.00 hrs.) Buri Ram +6644 611-520, +6644 613-434 +6644 613-558 -9 Krasang +6644 691-020 -1 +6644 691-382 Kumueng +6644 699-121 +6644 699-123 Lam Plaimat +6644 661-209 +6644 623-121 Nangrong +6644 632-105 -7 +6644 632-104 Phutthaisong +6644 689-201 -3 +6644 689-201 Prakhon Chai +6644 671-117, 434 +6644 671-391 Satuk +6644 627-415 +6644 681-282 Thani Road +6644 611-560 +6644 614-306 Chaiyaphum (6 Branches) +6644 887-132 Bantant +6644 887-109 Bumnet Narong +6644 859-221 -2 +6644 859-223 Chaiyaphum +6644 821-321 -4 +6644 821-578 Haruethai Road * +6644 821-799 -800 +6644 811-325 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Nong Bua Rawe +6644 897-225 -6 +6644 897-112 Pu Keaw +6644 861-277, 363 -5 +6644 861-411 Kalasin (4 Branches) Kalasin +6643 811-731 +6643 812-232 Kalasin Plaza +6643 815-683 -4 +6643 815-684 (Mon-Sun 11.00-19.00 hrs.) Kuchinarai +6643 851-312, 314 +6643 851-052 Nong Kung Si +6643 881-123 -4 +6643 881-222 Khon Kaen (14 Branches) Ban Phai +6643 272-116, 776 +6643 272-886 Big C Khon Kaen * +6643 226-012 -3 +6643 226-014 (Mon-Sun 10.00-20.00 hrs.) Chum Phae +6643 311-119, +6643 311-139 +6643 312-017, 252, 809, 908 Khon Kaen +6643 246-837 -40 +6643 246-838 Khonkaen University +6643 244-461 +6643 247-044 Klangmuang Road +6643 321-647 -8 +6643 321-649 Kranuan +6643 251-700 -2 +6643 252-013 Maliwan Road +6643 241-605 -6 +6643 241-607 Muang Phon +6643 414-273 -4 +6643 414-275 Nong Rua +6643 294-013 -4, +6643 294-118 117, 119 Pratumuang +6643 271-135 -7 +6643 222-966 Si Chan +6643 245-634, +6643 241-865 246-604 Tesco Lotus Khon Kaen * +6643 472-506 -7 +6643 472-508 (Mon-Sun 10.00-20.00 hrs.) Ubol Ratana +6643 446-001 -4 +6643 446-005 Loei (3 Branches) +6642 891-273, 275 +6642 891-274 Dan Sai Loei +6642 812-650 -1 +6642 811-728 Tanon Ouaaree * +6642 811-940 -1 +6642 811-942 (Mon-Sun 8.30-16.30 hrs.)

Branch Name

Telephone

Fax.

Maha Sarakham (6 Branches) Borabu +6643 771-452 +6643 771-113 Hayaek Mahasarakham University * +6643 721-125 +6643 721-625 Kosum Phisai +6643 761-846 +6643 761-844 Maha Sarakham +6643 711-048 +6643 721-512 Phayakkaphumphisai +6643 791-401 -2 +6643 791-112 Sermthai Plaza * +6643 723-070 +6643 723-061 (Mon-Sun 11.00-19.00 hrs.) Mukdahan (4 Branches) +6642 691-188 Khamcha-i +6642 691-144 Mukdahan +6642 611-507, 509, +6642 611-508 +6642 633-420 Mukdahan City Hall * +6642 614-923 +6642 614-980 (Mon-Sun 10.00-19.00 hrs.) Nikhom Kham Soi +6642 638-312 +6642 681-075 Nakhon Phanom (4 Branches) Nakae +6642 571-121 -3 +6642 571-323 Nakhon Phanom +6642 513-993 +6642 511-571 Ranu Nakhon +6642 579-125 -7 +6642 579-124 Tesco Lotus That Phanom * +6642 540-251 +6642 540-250 (Mon-Sun 10.00-20.00 hrs.) Nakhon Ratchasima (18 Branches) Ampawan Subbranch +6644 352-589 +6644 352-590 Bua Yai +6644 461-030 -1 +6644 461-120 Chok Chai +6644 491-701 -3 +6644 491-704 Dan Khun Thot +6644 389-428 -9, 492 +6644 389-258 Jua Hua +6644 371-035, 405 +6644 371-158 Klang Dong +6644 361-686 -7 +6644 361-688 Maharat Hospital Nakornratchasima +6644 243-300 +6644 241-328 Mitraphap Road +6644 255-368, +6644 259-067 +6644 257-470 -3 Nakhon Ratchasima +6644 254-918 -9 +6644 257-432 Nakhon Ratchasima City Hall * +6644 258-865 -6 +6644 258-868 Pak Chong +6644 311-095, 143 +6644 311-401 Pak Thong Chai +6644 441-090, 245 +6644 441-244 Phoklang Road +6644 244-194, 222, +6644 244-154 +6644 253-710 Pra Thai +6644 479-464 -5 +6644 479-467 Samyaek Pakthongchai +6644 222-122 -4 +6644 222-125 Si Khiu +6644 411-666 +6644 411-600 The Mall Nakornratchasima * +6644 245-432 +6644 245-444 (Mon-Fri 10.30-19.30 hrs. Sat-Sun 10.00-19.00 hrs.) Wang Num Khieo +6644 228-035 -7 +6644 228-038 Nong Bua Lumphu (1 Branch) Nong Bua Lumphu +6642 312-027 -9 +6642 312-026 Nong Khai (8 Branches) Bigjieng Nongkhai * +6642 413-927 -9 +6642 413-926 (Mon-Sun 10.00-20.00 hrs.) Bung Kan +6642 491-756 -8 +6642 491-760 Nong Khai +6642 420-065 -7 +6642 420-068 Seka +6642 489-089 +6642 489-098 Si Chiang Mai +6642 451-541, 641 +6642 451-741 Tesco Lotus Thabo * +6642 432-115, 155 +6642 432-047 (Mon-Sun 10.00-20.00 hrs.) Tha Bo +6642 431-793 -4 +6642 431-796 Thasadej +6642 460-024 -7 +6642 460-028

229

230

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Roi Et (7 Branches) Bung Planchai Nong Phok Roi Et Selaphum Suwannaphum Talad Haisoke Tesco Lotus Roi Et * (Mon-Sun 10.00-19.00 hrs.) Sakon Nakhon (6 Branches) Akat Amnuai Charoenmuang Nevada Multiplex Sakonnakhon * (Mon-Sun 11.00-20.00 hrs.) Phang Khon Sakon Nakhon Sawang Daen Din Si Sa Ket (5 Branches) Kantharalak Khun Han Si Sa Ket Tepha Road * Uthumphon Phisai Surin (6 Branches) Chom Phra Lukmuang Road Prasat Si Khoraphum Surin Surin Plaza * (Mon-Sun 10.30-20.00 hrs.) Ubon Ratchathani (14 Branches) Aupparaj Road * Buntharik Chayangkul Road Det Udom Khong Chiam Sappasit Road Siyaek Kilosoon Talad Big C Ubon Ratchathani * (Mon-Sun 11.00-19.00 hrs.) Tesco Lotus Det Udom * (Mon-Sun 10.00-20.00 hrs.) Ubon Ratchathani Ubon Ratchathani University * (Mon-Sun 10.00-19.00 hrs.) Ubonwatsadu Ubonratchathani * (Mon-Sun 10.00-19.00 hrs.) Warin Chamrap Yingcharoen Park * (Mon-Sun 11.00-19.00 hrs.)

Telephone

Fax.

+6643 520-489 +6643 579-179, 230 +6643 511-153 +6643 551-251 -2 +6643 581-252 +6643 522-168 -9 +6643 519-536, 576

+6643 520-491 +6643 579-099 +6643 511-992 +6643 551-252 +6643 581-011 +6643 513-333 +6643 519-741

+6642 798-123, +6642 799-252 +6642 715-089 +6642 716-850 -1

+6642 799-251 +6642 713-391 +6642 716-852

+6642 771-030, 122 -3 +6642 771-417 +6642 711-024, 231 +6642 712-938 +6642 721-680 -1 +6642 721-033 +6645 661-245 -6 +6645 679-042 -3 +6645 611-115, 558, +6645 612-508, 537 +6645 622-871 -2 +6645 691-199

+6645 661-730 +6645 679-044 +6645 613-204

+6644 581-188 -9 +6644 519-416 -9 +6644 551-308 +6644 561-323 -4 +6644 511-021, +6644 514-567 -8 +6644 714-005 -6

+6644 581-021 +6644 519-415 +6644 551-309 +6644 561-322 +6644 511-423

+6645 240-381 -2 +6645 376-005 -7 +6645 280-157 -9, +6645 313-304 -5 +6645 282-457, +6645 361-058 -9 +6645 351-124 -5 +6645 240-099, +6645 244-848 -9 +6645 244-790 -4 +6645 317-944, 955

+6645 240-384 +6645 376-008 +6645 313-306

+6645 244-792 +6645 317-366

+6645 362-721

+6645 362-743

+6645 314-931 -4 +6645 433-097 -80

+6645 314-935 +6645 433-099

+6645 243-503 -4

+6645 243-621

+6645 321-894, +6645 322-841 -3 +6645 474-011 -2

+6645 321-613

+6645 622-873 +6645 691-198

+6644 714-007

+6645 282-458 +6645 351-126 +6645 242-629

+6645 474-011

Branch Name

Udon Thani (7 Branches) Ban Phu Charoensi Complex (Mon-Sun 10.00-18.00 hrs.) Kumphawapi Markkaeng Road Talad Nong Bua Udon Thani Udondusadee Road Yasothon (3 Branches) Kut Chum Loeng Noktha Yasothon

Telephone

Fax.

+6642 281-281 -2 +6642 249-210 -2

+6642 281-283 +6642 249-210

+6642 331-055 +6642 249-701 -3 +6642 244-035 +6642 247-755 -7 +6642 222-490

+6642 331-006 +6642 249-704 +6642 247-654 +6642 247-758 +6642 241-768

+6645 789-416 -7 +6645 789-114 +6645 781-171, 374 -5 +6645 781-172 +6645 712-684, 695 +6645 712-215

Eastern Region (73 Branches)

Chachoengsao (10 Branches) Bang Khla Bang Nam Prieo Bang Pakong Bangpakong Thermal Plant Carrefour Chachoengsao * (Mon-Sun 9.00-19.00 hrs.) Chachoengsao Mahachakapad Road Panich Road Phanom Sarakham Sanam Chai Khet Chanthaburi (10 Branches) Chanthaburi Khlung Na Yai Am Pleaw Pong Nam Ron Robinson Chanthaburi * (Mon-Sun 11.00-20.00 hrs.) Soydow Srirongmueng Road Tanon Triratana Tesco Lotus Chantaburi * (Mon-Sun 10.00-20.00 hrs.) Chon Buri (29 Branches) Amata Nakorn Industrial Estate * Ao Udom Ban Bung Bang Pla Soi Banglamung (Talad Naklua) * Big C Chonburi * (Mon-Sun 10.00-20.00 hrs.) Borwin (331 Road) * Burapha University * Chalermthai Shopping Mall * (Mon-Sun 10.30-19.30 hrs.) Chon Buri

+6638 541-014, 838 +6638 581-215 -7 +6638 531-211 -2, +6638 532-088 +6638 573-574 -5 +6638 514-676 -7

+6638 827-499 +6638 581-179 +6638 531-213

+6638 511-045 -6, 468 -73 +6638 511-514 +6638 511-203, +6638 514-449 +6638 516-691 -3 +6638 551-600 -1 +6638 597-068, 999

+6638 981-567, +6638 511-514

+6639 311-008, 507, +6639 322-050 +6639 441-239 -40 +6639 371-236 -7 +6639 397-221 -5 +6639 387-106 -8 +6639 303-255 -6

+6639 321-153

+6638 573-574 +6638 514-678

+6638 512-023 +6638 516-694 +6638 551-154 +6638 597-067

+6639 441-241 +6639 371-235 +6639 397-222 +6639 387-109 +6639 303-257

+6639 381-035, 301 +6639 321-188, +6639 322-116 -7 +6639 325-931 -2 +6639 303-414

+6639 381-511 +6639 322-052

+6638 440-518 -20 +6638 351-357, 620, 665 +6638 443-006, 498 +6638 274-093 -5 +6638 416-874 -5 +6638 192-150 -1

+6638 440-520 +6638 351-679 +6638 443-005 +6638 274-092 +6638 416-876 +6638 192-210

+6639 313-718 +6639 303-415

+6638 346-216 -7 +6638 346-218 +6638 394-527 -9 +6638 394-526 +6638 288-496, 638 +6638 288-696 +6638 273-584 -7

+6638 273-582

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Fax.

Chonburi Hospital * +6638 288-101 -2 +6638 288-103 (Mon-Sun 9.00-17.00 hrs.) Jadjamnong Road +6638 272-456, 458, +6638 272-458 +6638 283-457 -8 Najomtien (Bann Amphur) * +6638 235-786 -7 +6638 235-788 Nong Yai +6638 219-472 -3 +6638 219-471 Nongmon +6638 392-059 -60, +6638 392-058 +6638 393-141 Pacific Park Sriracha * +6638 312-152, 154 +6638 312-085 (Mon-Sun 11.00-20.00 hrs.) Pattaya (Sukhumvit Road) * +6638 427-863, 891 +6638 427-897 Pattaya Klang +6638 428-436 +6638 423-505 Pattayatai +6638 425-014 -7, +6638 423-820 +6638 429-275 -6 Phan Thong * +6638 452-493 -4 +6638 452-495 (Mon-Fri 8.30-16.30 hrs.) Phanat Nikhom +6638 471-400 +6638 473-041 +6638 473-034, Plutaluang +6638 245-057 -8 +6638 245-091 Prayasatja Road * +6638 275-871 -2 +6638 275-873 Sahapat Industrial Park * +6638 482-928 -30 +6638 482-932 Samyaek Angsila +6638 272-471 -3 +6638 272-475 Sattahip +6638 438-042 -3 +6638 438-044 Si Racha +6638 312-002, 854, +6638 312-001 +6638 321-661 Talad Sriracha +6638 312-200 -1, +6638 312-202 +6638 323-224 -5 Tha Rua Laemchabang +6638 494-320 -2 +6638 494-324 Nakhon Nayok (2 Branches) +6637 381-191, 228 -9 +6637 381-668 Ban Na Nakhon Nayok +6637 312-038 +6637 311-076 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Prachin Buri (3 Branches) 304 Industrial Park (Khlong Rang) +6637 274-631 -2 +6637 274-633 Kabin Buri +6637 281-635 -6, +6637 281-637 +6637 282-423 Prachin Buri +6637 212-022, +6637 211-369 +6637 213-184 Rayong (11 Branches) +6638 601-680, +6638 603-256 Ban Chang +6638 602-684 Ban Phe +6638 651-541 -3 +6638 651-540 Big C Rayong * +6638 621-793, 853 +6638 621-914 (Mon-Sun 10.00-20.00 hrs.) Klaeng +6638 671-200, 765 -6 +6638 671-240 Mabtapud +6638 607-995 -9 +6638 607-994 Rayong +6638 611-592, +6638 611-205 +6638 613-964 -5 Rayong Trade Centre * +6638 011-401 -2 +6638 011-400 Siam Eastern Industrial * +6638 660-046 -7 +6638 660-048 Tesco Lotus Rayong * +6638 624-161, 511 +6638 624-019 (Mon-Sun 10.00-20.00 hrs.) Tha Pradu +6638 615-180 +6638 615-181 Wangchan +6638 888-254 - 5 +6638 666-382 Srakaew (4 Branches) Aranyaprathet +6637 232-576 +6637 231-331 Srakaew (Mon-Fri 8.30-16.30 hrs. +6637 241-577, +6637 241-576 Sat-Sun 9.00-15.00 hrs.) +6637 242-694 -5 Ta Phraya +6637 269-114 -5 +6637 269-116

Branch Name

Watthana Nakhon Trad (4 Branches) Khlong Yai Ko Chang * (Mon-Sun 10.00-19.00 hrs.) Santung Trad

Telephone

Fax.

+6637 261-021, 031 +6637 261-022 +6639 581-243 -5 +6639 551-621 -2

+6639 581-244 +6639 551-623

+6639 599-121 -3 +6639 520-542 -4

+6639 599-124 +6639 520-545

Southern Region (102 Branches)

Chumphon (4 Branches) Chumphon +6677 511-158, 887 +6677 511-889 Lung Suan +6677 541-091, +6677 541-947 109, 851 Pathomphon +6677 502-926 -8 +6677 502-925 Sawi +6677 531-276, 500 +6677 531-275 Krabi (6 Branches) Ao Luk +6675 681-112 +6675 681-113 Aonang * (Mon-Fri 9.00-17.00 hrs.) +6675 695-535 -6 +6675 695-572 Klong Thom +6675 640-502, +6675 699-039 +6675 699-038, 054 Krabi +6675 611-193 -4, +6675 612-727 +6675 612-775 -6 Nua Khlong +6675 961-114 -5 +6675 691-113 Tesco Lotus Krabi * +6675 650-740 -1 +6675 650-742 (Mon-Sun 10.00-20.00 hrs.) Nakhon Si Thammarat (16 Branches) Cha Uat +6675 381-344 -6 +6675 381-348 Chandi +6675 486-271 -2 +6675 486-271 Chawang +6675 481-272 +6675 481-172 Chian Yai +6675 362-485 -6 +6675 362-485 Khanom +6675 529-441 -2 +6675 529-100 Maharat Hospital +6675 340-250 +6675 342-011 Nakhonsithummarat * Nakhon Si Thammarat +6675 342-772, +6675 341-197 +6675 356-017, 919 Nakhon Si Thammarat City Hall +6675 357-137 -8 +6675 357-145 Pak Phanang +6675 517-120 -1, 609 +6675 517-760 Robinson Ocean +6675 346-331 -2 +6675 346-331 -2 Nakhon Si Thammarat * (Mon-Sun 10.30-20.00 hrs.) Talad Hua It +6675 343-015 +6675 315-826 Taladkaset +6675 411-311 +6675 411-411 Tesco Lotus Nakhon Si Thammarat * +6675 343-752 -3 +6675 347-832 (Mon-Sun 10.00-20.00 hrs.) Tha Sala +6675 521-453 -4 +6675 521-455 Thawang +6675 347-334 -7 +6675 347-338 Thung Song +6675 411-200, +6675 411-601 +6675 420-788 Narathiwat (4 Branches) Narathiwat (Mon-Fri 9.00-15.00 hrs.) +6673 511-004 +6673 512-012 Sungai Kolok +6673 612-000 +6673 614-314 (Mon-Fri 9.00-15.00 hrs.) Tak Bai +6673 524-375, +6673 581-261 (Mon-Fri 9.00-15.00 hrs.) +6673 581-262 -3 Tanyongmas (Mon-Fri 9.00-15.00 hrs.) +6673 671-113 +6673 671-451 Pattani (4 Branches) Big C Pattani * +6673 439-049 +6673 312-555 (Mon-Sun 10.00-18.00 hrs.)

231

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A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Branch Name

Telephone

Fax.

Charoen Pradit +6673 335-990 +6673 335-991 (Mon-Fri 9.00-15.00 hrs.) Pattani (Mon-Fri 9.00-15.00 hrs.) +6673 333-024 -6 +6673 331-036 Yarang (Mon-Fri 9.00-15.00 hrs.) +6673 352-277, +6673 439-112 +6673 439-049 Phang Nga (4 Branches) +6676 581-403 +6676 434-754 Khok Kloi Khura Buri +6676 491-392 +6676 491-118 Phang Nga +6676 411-365, 565 -6 +6676 411-810 (Mon-Fri 8.30-16.30 hrs. Sat-Sun 9.00-15.00 hrs.) Takua Pa +6676 421-888, +6676 421-999 +6676 422-484 Phatthalung (4 Branches) +6674 691-124 +6674 691-032 Khao Chaison Mae Khri +6674 695-138 -9 +6674 633-231 Pak Phayun +6674 699-038 +6674 699-028 Phatthalung (Mon-Fri 8.30-16.30 hrs. +6674 611-432, +6674 612-156 Sat-Sun 9.00-15.00 hrs.) +6674 613-033 Phuket (7 Branches) +6676 248-291 -2 +6676 248-290 Central Festival Phuket * (Mon-Sun 11.00-20.00 hrs.) Jungcetlon Patong Phuket * +6676 366-057 -8 +6676 376-059 (Mon-Sun 11.00-20.00 hrs.) Patong +6676 344-301 -2 +6676 344-300 Phuket +6676 211-158, +6676 213-598 351, 893 Phuket Airport * +6676 327-294, 483 +6676 328-150 Rusda Road +6676 217-632, 510, +6676 211-586 +6676 225-116 Thep Kasattri Road +6676 355-284 -7 +6676 355-288 Ranong (2 Branches) Ranong +6677 811-502, +6677 811-646 +6677 823-039, 060 Ruengraj Road +6677 811-105, 716, +6677 811-152 +6677 823-841 Satun (2 Branches) Khuan Ka Long +6674 797-020 -1 +6674 797-019 Satun +6674 721-340 -1 +6674 721-344 Songkhla (17 Branches) +6674 555-463 -4 +6674 555-465 Carrefour Hatyai * (Mon-Sun 10.00-20.00 hrs.) Chung Loon * +6674 557-124 -5 +6674 557-126 Had Yai Nai +6674 230-917 -8, +6674 237-988 +6674 237-987 Hat Yai +6674 220-704 -5, +6674 238-236 +6674 230-622 -3 Hat Yai Hospital +6674 245-388 -9 +6674 244-667 Na Thawi (Mon-Fri 9.00-15.00 hrs.) +6674 371-545 -8 +6674 371-546 Nipatutit 2 +6674 220-795, +6674 246-652 +6674 239-088 -9 Padang Besar +6674 521-616 -7 +6674 521-615 Phetkasem Road (Hadyai) +6674 237-742, 960-1, +6674 246-634 +6674 239-086, +6674 245-854

Branch Name

Telephone

Fax.

Poonnakan (Mor-Or. Hat Yai) * +6674 500-263-4, +6674 500-265 (Mon-Fri 11.00-19.00 hrs.) Rajyindee +6674 230-481 -2, 498 +6674 230-499 +6674 411-007, 955 -6 +6674 411-957 Sadao Sathing Phra +6674 397-115 -6 +6674 397-044 Singha Nakhon +6674 331-252, +6674 331-278 276, 297 Songkhla (Mon-Fri 8.30-16.30 hrs. +6674 311-585, 064, +6674 323-316 Sat-Sun 9.00-15.00 hrs.) +6674 324-648 Thanon Nakhon Nok +6674 315-236 -7 +6674 315-239 Thung Lung +6674 291-487, +6674 291-486 +6674 471-254 -5 Surat Thani (16 Branches) +6677 484-745 -6 +6677 484-744 Chaweng * Don Sak +6677 371-095 +6677 371-096 Haadrin * (Mon-Fri 11.00-19.00 hrs.) +6677 375-033, 233 +6677 375-569 Khiri Ratthanikhom +6677 391-074 -5 +6677 391-019 Ko Phangan +6677 377-184, 237 +6677 377-123 Ko Samui +6677 421-504 -5 +6677 421-503 Lamai * +6677 424-569 -70 +6677 424-600 Maenam * +6677 427-295-6 +6677 427-405 Phunphin +6677 311-016, +6677 311-988 134, 334 Srivichai Road +6677 286-002-3, 442 +6677 286-001 Surat Thani +6677 281-829, 830, +6677 283-964 +6677 282-923, 924 Surat Thani Cooperative * +6677 441-089, 091 +6677 441-116 Talad Mai Road +6677 273-967, +6677 289-042 +6677 283-042 -3 Tesco Lotus Surat Thani * +6677 206-945 -6 +6677 206-946 (Mon-Sun 10.00-20.00 hrs.) Tha Chang +6677 389-053 -4 +6677 389-015 Wiengsa * +6677 363-100 -1 +6677 362-012 Trang (8 Branches) +6675 251-753 Kantang +6675 251-178, +6675 252-898 -9 Kapang +6675 286-251-2, 254 +6675 286-253 Nayong +6675 242-464 -5 +6675 242-466 Sikao +6675 291-034 -5 +6675 291-036 Talad Muengtrang +6675 219-871 -2, +6675 213-023 +6675 223-435 -6 Thab Thiang +6675 211-482 -4 +6675 211-485 Trang +6675 218-093, 110 +6675 211-192 Yan Ta Khao +6675 281-194, 198 +6675 281-196 Yala (8 Branches) Ban Nang Sata +6673 289-422 +6673 289-363 Betong (Mon-Fri 9.00-15.00 hrs.) +6673 231-372, 376 +6673 245-793 Coliseum Cineplex Yala * +6673 213-026 +6673 213-057 (Mon-Sun 10.00-18.00 hrs.) Raman (Mon-Fri 9.00-15.00 hrs.) +6673 295-101 -2, 295 +6673 295-024 Siroros (Mon-Fri 9.00-15.00 hrs.) +6673 211-749 -51 +6673 213-732 Sukyang Road (Mon-Fri 9.00-15.00 hrs.) +6673 230-024 +6673 230-867 Yaha (Mon-Fri 9.00-15.00 hrs.) +6673 250-358, +6673 291-209 +6673 291-034 Yala (Mon-Fri 9.00-15.00 hrs.) +6673 212-596 -7, 545 +6673 213-458

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Business Office Centers (BOC): 63 Centers as at March 1, 2008 Working hours : Mon.-Fri. 8.00 - 17.00 hrs.

Business Office Center Name

Bangkok and Vicinity: 20 Centers Bang Bon Chaengwattana Charoennakorn Ekamai Ladprao Nana Nua Nonthaburi Omnoi Onnuch Paknam Patanakarn Pathumthani Pra Pinklao Rajawongse Ramindra Samyod Sapankhao Suanmali Surawongse Wong Sawang Central Region: 8 Centers Ayutthaya Lopburi Nakornpathom Petchaburi Ratchaburi Samut Sakorn Saraburi Supanburi Northern Region: 9 Centers Chiangmai Chiangrai Kampaengpet

Telephone +662 415-8116, 8125, 8130 +662 573-0367, 0368 +662 437-6459, 6829, 6832, 9943 +662 382-1135 -8 +662 538-2803, 2831, 3847 +662 208-3301 -6 +662 580-7544, 7561, 7563 +662 420-5953 -7 +662 320-2476 -8 +662 385-8615 -6, 8621 -3 +662 714-6473 -9 +662 581-8455 -6 +662 435-8391, 8401 +662 225-3423 -9 +662 521-7617 -22 +662 225-3043 -5 +662 280-1036 -40, 281-1374, 1478, 1530 +662 223-5812, 225-3031, 3040 -2 +662 637-0572 -7 +662 556-1641 -2

Fax. +662 415-8014 +662 573-0381 +662 437-6886 +662 382-1134 +662 538-4175 +662 256-8174 +662 580-7603 +662 420-9577 +662 320-2480 +662 385-8625 +662 714-6470 +662 581-8458 +662 435-8385 +662 222-9208 +662 521-7613 -4 +662 222-2107 +662 281-0847 +662 225-3034 +662 637-0578 +662 556-1640

+6635 345-091 -6 +6635 345-098 +6636 414-175 -6 +6636 414-177 +6634 395-553, 582, 592 -4, 636 +6634 395-174 +6632 423-835 -7 +6632 423-840 +6632 310-956 -8, 967 -8, 977 +6632 311-022 +6634 421-521, 422-328, 462, 425-143, 350, 861 +6634 425-616 +6636 308-125 -31 +6636 308-124 +6635 525-570 -1 +6635 525-887 +6653 409-536 -9 +6653 748-802 -8 +6655 717-026 -7

+6653 409-543 +6653 748-801 +6655 713-093

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A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Business Office Center Name

Lam Pang Nakornsawan Phichit Phitsanulok Sudhep Road Uttaradit North-Eastern Region: 10 Centers Burirum Chaiyaphum Khonkaen Mukdahan Nakornratchasima Roi-et Sakonnakorn Surin Ubonratchathani Udonthani Eastern Region: 6 Centers Chachoengsao Chanthaburi Chonburi Prachinburi Rayong Siracha Southern Region: 10 Centers Chumporn Hatyai Koh Samui Krabi Nakornsithammarat Phuket Songkhla Suratthani Trang Yala

Telephone

Fax.

+6654 230-407, 426, 607 +6656 222-400, 224-219 +6656 650-670 -1 +6655 232-460 -5 +6653 281-672 -6 +6655 412-333, 416-333

+6654 230-523 +6656 224-593 +6656 650-672 +6655 232-469 +6653 281-670 +6655 413-399, +6655 411-477

+6644 618-748 -9 +6644 813-516 -7 +6643 338-419 -24 +6642 614-587 -9 +6644 222-114 -20 +6643 516-002 -3, 520-416 -7 +6642 733-793 -6 +6644 521-503 -8 +6645 283-027 -33 +6642 325-126 -31

+6644 618-764 +6644 813-524 +6643 338-418 +6642 614-593 +6644 222-113, 125 +6643 520-418 +6642 733-802 +6644 511-423 +6645 283-034 +6642 325-132

+6638 824-280 -2 +6639 340-294 -5 +6638 288-694, 289-093 -94 +6637 214-592, 917, 954 +6638 624-983 -5, 990 +6638 324-067

+6638 824-283 +6639 340-296 +6638 289-013 +6637 214-814 +6638 624-986 +6638 314-130

+6677 576-807 -8 +6674 239-130, 132, 306 +6677 426-155 -6 +6675 623-340, 367 +6675 313-669 -75 +6676 232-566 -8 +6674 313-141, 312 +6677 221-648, 661 -3, 696 +6675 217 941 -7 +6673 222-283 -5, 255-385 -8

+6677 576-809 +6674 234-185 +6677 426-199 +6675 623-209 +6675 313-676 +6676 232-473 +6674 323-312 +6677 221-660 +6675 217-938 +6673 222-281

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

International Business Centers (IBC): 19 Centers as at March 1, 2008 Working hours : Mon.-Fri. 8.00 - 17.00 hrs.

International Business Center Name

Telephone

Fax.

Bangkok and Vicinity: 14 Centers Ekamai Om Yai Pak Nam Pathumwan Phrapinklao Rajawongse Samut Prakan Samut Sakhon Samyod Saphan Khao Saphan Mai Suanmali Surawongse Wong Sawang

+662 382-1092 -6, 1099 +662 811-4322 -5 +662 389-3183 -4 +662 215-8485, +662 216-2570 -3 +662 884-6910 -3 +662 225-4505, 4507 -14 +662 385-8820 -1, 8935, 8938 +6634 413-057 -8 +662 224-8928, 8931, 8933 +662 282-5151, 7152 -54 +662 521-6340 -2, 6344 +662 223-7717, 7738, +662 226-4837 +662 233-3921 -5 +662 913-2660 -3

+662 382-1090 +662 431-0156 +662 389-2802 +662 215-8473 +662 884-6914 +662 225-4506 +662 385-8464 +6634 413-059 +662 224-8929 +662 282-5152 +662 521-6343 +662 225-3036 +662 224-3926 +662 585-9469

Central Region: 1 Center Ayuthaya

+6635 353-671 -3

+6635 353-674

Northern Region: 1 Center Chiang Mai

+6653 216-028, +6653 225-567

+6653 214-998

Eastern Region: 1 Center Chon Buri

+6638 252-210 -1

+6638 352-209

Southern Region: 2 Centers Hat Yai Phuket

+6674 351-570 -4 +6676 232-470 -2

+6674 236-045 +6676 232-473

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A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Overseas Branches: 7 Branches as at March 1, 2008 Los Angeles International Branch

General Manager & Vice President : Mr. Soonthorn Pipake Address : 707 Wilshire Boulevard, Suite 3150 Los Angeles, CA 90017 USA Telephone : +1 213 488-9897 +1 213 488-9899 Fax. : +1 213 891-0733 Swift : KRTH US 6L E-mail : br.losangeles@ktb.co.th ktbla@pacbell.net

Siem Reap Province Sub-Branch

General Manager & Vice President : Mr. Sethayut Maneesri Address : 10-11, Sivatha Road, Mondol 2 Khum Svay Dangkom Siem Reap District Siem Reap Province, Cambodia Telephone : +855 63 964-758 Tel. & Fax. : +855 63 964-759 E-mail : br.siemreap@ktb.co.th ktbsre@camshin.com.kh

Kunming Branch

General Manager & Vice President : Mr. Pipat Anegsiripong Address : 1st Floor South Building, Kunming Hotel No.52 Dong Feng Road (East), Kunming, Yunnan The Peopleâ&#x20AC;&#x2122;s Republic of China 650051 Telephone : +86 871 313-8370-1 +86 871 313-8359 Fax. : +86 871 313-8367 Telex : 64190 KTB KM E-mail : br.kunming@ktb.co.th ktbkmxcn@public.km.yn.cn Vientiane Branch

General Manager & Assistant Vice President : Mr. Jaturong Bunnag Address : 80 Lanexang Road, B.Xiengngeuanthong M.Chanthabouly, Vientiane Peopleâ&#x20AC;&#x2122;s Democratic Republic of Lao Tel. & Fax. : +856 21 213480 +856 21 222761 +856 21 222762 E-mail : br.vientiane@ktb.co.th ktblao@laotel.com

A N N U A L R E P O R T 2 0 0 7 K r u n g T h a i B a n k P c l .

Phnom Penh Branch

General Manager & Vice President : Mr. Pisit Buranakitpinyo Address : 149 Road 215, Sangkat Deipo 1 Market Tuankok District, Phnom Penh City, Cambodia Telephone : +855 23 882-959 +855 23 355-881 -2 +855 23 350-421 : +855 23 366-005 Fax. Swift : KRTH KH PP E-mail : br.phnompenh@ktb.co.th ktbpmp@online.com.kh Singapore Branch

General Manager & First Vice President : Mr. Pumin Leelayoova Address : 32-05/08 OCBC Centre 65 Chulia Street, Singapore 049513 Telephone : +65 6533-6691 +65 6533-0131 Fax. : +65 6533-0930 +65 6533-0932 Swift : KRTH SG SG E-mail : br.singapore@ktb.co.th ktbs@pacific.net.sg

Mumbai Branch

General Manager & Vice President : Ms. Nuannapha Wongthawatchai Address : 6th Floor, 62 Maker Chambers VI Nariman Point, Mumbai 400-021, India Telephone : +91 22 2287-3741-3 +91 22 2283-7693 +91 22 2287-5458 Fax. : +91 22 2287-3744 Swift : KRTH IN BB E-mail : br.mumbai@ktb.co.th ktbmbin@bom3.vsnl.net.in

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Summary of Items in accordance with Form 56-2 Item

Page

Message from the Chairman and the President 8 – 9 Board of Directors’ Responsibility for Financial Reports 127 Report of the Nominating and Remuneration Committee 109 Report of the Audit Committee 126 Report of the Corporate Governance & Social and Environmental Responsibility Committee 108 1. General Information 1.1 Company information 205 1.2 Other companies where shareholding is 10% or more 210 – 216 1.3 Other references 207 – 208 2. Financial Highlights 3 3. Business Operation 3.1 Business operation of the Bank and affiliated companies 42 – 67 3.2 Income structure 54 – 56 3.3 Major changes in business operation 60 – 62 4. Risk Factors 98 – 107 5. Shareholding and Management Structure 5.1 Shareholders 1) Top 10 shareholders 68, 182 – 183 2) Shareholders who have influence on the Bank’s policy significantly 68, 71, 182 – 183 5.2 Management 1) Management structure (1.1) Structure and scope of power and duty of the committees 12 – 13, 68 – 77 (1.2) Names of Directors and nominating process 17 – 20, 25 – 28, 70 – 79 (1.3) Board of Directors meeting 125 (1.4) Profile of Executives and Corporate Secretary 21 – 24, 28 – 31, 125 2) Nomination of Directors and Executives and Minority Shareholders’ Rights 78 – 81, 111 – 123 3) Remuneration for Directors and Executives 119 – 121 4) Good Corporate Governance 110 – 125 5) Supervision of the use of inside information 113 – 114 6) Internal control and audit 110, 122 – 124, 126 5.3 Dividend payment policy 207 113, 186 – 189 6. Related Party Transactions 7. Analysis of Operating Performance and Financial Standing 84 – 97 8. Financial Statements 8.1 Consolidated and the Bank’s financial statements 130 – 204 8.2 Auditor’s fee 207 9. Industrial Situation and Competition 37 – 41 10. Other Factors that may affect Investment Decision 209 11. Information on Debentures or Financial Instruments 178 – 181, 206, 208