ANNUAL REPORT 2013 THANACHART BANK PUBLIC COMPANY LIMITED
SMART GROWTH
900 Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, THAILAND Tel. +66 (0) 2655 9000 Fax +66 (0) 2655 9001 Thanachart Contact Center 1770 Thanachart Smartcar Call Center +66 (0) 2217 5555 www.thanachartbank.co.th Registration No. 0107536001401
SMART GROWTH ANNUAL REPORT 2013
THANACHART BANK PUBLIC COMPANY LIMITED
002 010 014 016 028 046 058 068 069 071 073 213 224 226 227 236 256 280
Financial Highlights Message from the Board of Directors Board of Directors Thanachart Bank Public Company Limited Management Discussion and Analysis Nature of Business Operations Risk Factors Corporate Social Responsibility (CSR) Responsibilities of the Board of Directors for the Financial Report Report of the Audit Committee Independent Auditor’s Report Financial Statements and Note to Financial Statements Corporate Governance Internal Control and Risk Management Report of the Nomination and Remuneration Committee Supervision and Management Structure Board of Directors and Management Team General Information Investment of TBANK in Other Companies TBANK’s References Other References Structure of Major Shareholders Dividend Payment Policy Companies in Thanachart Financial Group Branches of TBANK Summary of Specified Items per form 56-2 in 2013 Annual Report “Investors can learn more on the issuing company’s annual statement (Form 56-2) shown in www.sec.or.th or the Bank’s website: www.thanachartbank.co.th”
Thanachart Group embraces its environmental responsibilities in the reduction of global warming and consumption of natural resources. The 2013 Annual Report used paper produced from farmed trees and was printed with soy-based ink. Designed by Plan Grafik Co., Ltd. Tel. 0 2277 2222
Four Strategic Intents for the Business Operation in 2014
1. We intend to accelerate growth in commercial and unsecured loans under prudent risk standards through the provision of superior service and financial advice while maintaining our dominant position in auto lending. 2. We intend to improve our risk management and reduce LIC across all portfolios through focused origination, risk based policies and use of market leading technology across the credit cycle. 3. We intend to attract new customers and grow and diversify our funding base to meet LCR requirements by offering innovative savings, insurance and investment products. 4. We intend to help our clients succeed financially and grow our fee revenue through relationship-based cross selling of the full suite of financial products and services tailored to meet their needs.
Vision of Thanachart Group To provide fully integrated financial solutions to our targeted customers’ complete financial needs by offering the highest quality of products, services and advice.
Financial highlights As at and for the year ended December 31
Consolidated
2013 2012 (Restated)
Separate financial statements
2011
2010
2009
21,470 6,736 14,734 17,571 32,305 23,346 3,107
2013 2012 (Restated)
2011
2010
2009
Operating results (THB Million) 53,887 27,234 26,653 25,826 52,478 21,259 11,587
48,736 25,556 23,180 12,098 35,277 21,660 2,980
44,052 19,636 24,416 9,465 33,881 20,747 2,504
34,781 11,566 23,216 8,695 31,911 16,062 2,149
15,385
8,354
7,671
8,777
2.79 1.51
1.52 0.90
1.39 0.89
1.92 1.23
16.99
10.72
10.61
2.59 40.51
2.48 61.40
790,017 754,063 1,038,349 1,018,620 811,308 776,521 941,109 934,435 96,218 83,330
Interest income Interest expenses Net interest income Non-interest income Total income(1) Non-interest expenses Bad debt and doubtful accounts(2) Net income(3)
50,549 26,489 24,060 22,958 47,018 18,487 11,201
46,331 25,371 20,959 10,902 31,861 19,522 4,680
4,056 14,113
6,855
6,668
5,719
3,547
2.19 1.06
2.56 1.46
1.24 0.78
1.21 1.13
1.25 1.31
1.91 0.96
15.52
17.01
16.91
9.55
9.42
10.70
15.20
2.92 61.24
3.33 50.33
3.73 56.51
2.59 39.32
2.58 61.27
2.99 61.56
3.63 46.43
3.66 51.64
635,220 886,060 690,336 810,526 74,848
606,851 873,203 707,605 800,809 72,183
285,515 432,970 356,496 405,098 27,811
750,494 990,724 799,186 901,572 89,153
723,023 953,209 769,677 875,708 77,501
616,713 878,053 729,121 807,169 70,884
326,549 482,063 374,883 415,327 66,737
282,577 413,878 357,664 387,523 26,355
29,386 21,397 20,934 14,797 7,375 6,791 14,589 14,022 14,143 6,454 3,322 2,053 21,042 17,344 16,196 12,953 8,053 8,363 1,422 1,280 2,830
Operating performance Basic earnings per share (THB) Return on average assets (ROAA) (Percent) Return on average equity (ROAE) (Percent) Interest spread(4) (Percent) Cost to income ratio net insurance premium income(5) (Percent)
Statement of financial position (THB Million) Loans Total assets Deposits and borrowings Total liabilities Shareholders’ equity(6) Remark
002
Financial Statement Appearance in accordance with the notification of the BOT Re: the Preparation and Announcement of Financial Statements of Financial Institutions dated 28 December 2010 or Sor Nor Sor11/2010 resulted in change various items. However, the Bank and its subsidiaries have revised the financial statement for the year 2011 (exepting Y2010) for analysis and comparison 1. Interest income excludes dividend income 2. Interest expense includes contribution fee to Deposit Protection Agency 3. Non-interest income includes fee paid related to income and insurance/life insruance expenses 4. Non-interest expense excludes fee paid related to income, insurance/life insurance expense and contribution fee to Deposit Protection Agency 5. Financial ratios are calculated on disclosure financial statement
Annual Report 2013
As at and for the year ended December 31
Consolidated
Separate financial statements
2013 2012 (Restated)
2011
2010
2009
2013 2012 (Restated)
2011
2010
2009
97.38
97.11
92.02
85.76
80.09
93.91
93.94
84.58
87.11
79.01
4.23
4.10
5.58
5.60
2.57
3.09
2.63
2.74
2.26
2.49
Asset quality Loans to deposits and borrowings ratio (Percent) NPL-gross to total loans (Percent) NPL-net to total loans (Percent) Coverage ratio(7) (Percent) Total allowance to BOT regulation (Percent) Non-performing loans (NPL) (THB Million)
2.19 2.05 2.64 2.48 0.58 1.69 1.35 1.45 0.57 0.59 85.19 74.21 69.75 71.22 96.41 88.17 76.92 71.53 97.66 92.33 128.17 122.31 104.27 108.05 111.66 134.37 103.12 103.12 105.32 102.85 35,313 32,501 37,677 36,859
8,675 24,394 20,036 17,989
7,648
8,359
Capital measures Tier I capital ratio (Percent) Total capital ratio (Percent) Risk weighted assets (THB Million)
5,514 5,514 17.45
5,514 5,514 15.11
5,514 5,514 13.58
4,563 5,514 13.09
9.47 8.49 9.28 11.71 8.65 14.80 13.99 13.72 14.75 14.10 747,992 724,801 664,103 609,277 273,366
Common share information Common shares outstanding (Million shares) - Average-basic - End of period Book value (THB) Dividends per share (THB)
1,854 1,935 14.38
5,514 5,514 16.17
5,514 5,514 14.06 0.37
5,514 5,514 12.86 0.35
4,563 5,514 12.10 0.40
1,854 1,935 13.62 0.56
9,368 13,286 13,642 14,152 621 630 676 54 55 79
7,871 256 89
7,470 256 92
Other information 15,358 15,193 16,298 16,846
Employees Branches Exchange booth Definition and Formula
(1) Total
income = Net interest income + Non-interest income loss on debt restructuring (3) Excluding minority interest/non-controlling interest (4) Interest spread = Yield - Cost of fund Yield = Interest income/Average earning assets Earning assets = Interbank and money market from interest bearing + net investment + loans Cost of fund = Interest expenses/Average paying liabilities Paying liabilities = Total deposits + interbank and money market from interest bearing + total borrowings (5) Cost to income ratio = Non-interest expenses/Total income (6) Excluding minority interest/non-controlling interest (7) Total allowance/NPL (2) Including
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SMART GROWTH
The core mission of the Thanachart Group is to help our customers become better off financially by providing customized solutions to meet their unique needs. With a foundation of strong capital and liquidity, the full suite of financial products and market leading technology and efficient processes, we are well positioned to deliver on our promise to customers and generate sustainable growth and returns to all our stakeholders.
people
OUR strength
The key to our long term success is the quality and service focus of our people. The Thanachart Group is committed to strengthening our team through ongoing investment in leadership, staff development, accountability and empowerment of our teams throughout the organization. With our staff fully dedicated to serving our customers, we look to the future with confidence.
SME S H O P
INNOVATION
OUR DRIVE
Customer needs are constantly evolving as is the way they want to deal with their financial services provider. In addition to innovative products and services, clients increasingly look for new and easier ways to obtain the services they need. At the Thanachart Group, we are introducing new services to increase customer convenience and making substantial investments to improve and expand our electronic channels and social media access so that customers can bank with us when it is best for them.
efficiency
OUR goal
The financial services industry in Thailand is increasingly competitive with client needs becoming ever more sophisticated. We are making substantial investments in our people, processes and technology in order to allow us to efficiently meet customer needs and control our operating costs and deliver long term sustainable growth to all our stakeholders.
You
OUR focus
The Thanachart Group is committed to operating at the highest standards of ethics and good governance. With our customers at the centre of all our activities, we actively participate in promoting the quality of life of the Thai people and society. The Group also supports various activities that are beneficial for youth and which promote our national culture for the sustainable growth of our organization and the society as a whole.
Message from the Board of directors
(Mr. Banterng Tantivit) Chairman of the Board of Directors
Dear Shareholders, In the past year, the global economy began to emerge after the financial crisis with advanced economies starting to gain momentum. The US economy showed a modest recovery which led to the US Federal Reserve’s decision to begin reducing its bond purchases under the Quantitative Easing Program. Also, the EU economy experienced a fledgling recovery, albeit at a still modest pace with high unemployment still prevalent in many countries. Meanwhile the economic growth of Asian countries was at a gradual pace underpinned by the growth in China, and the resumption of growth in Japan driven by the yen’s depreciation and the government’s economic stimulus measures. On the domestic economic front, the Thai economic growth decelerated in the second half of the year impacted by slowing growth in China, the ongoing political unrest which delayed the launch of the government’s infrastructure development program, and increasing household debt, all of which combined to reduce private sector consumption and investment. Moreover, export growth performed below the target, being impacted by the tepid global economy and the Baht’s appreciation during the first half of 2013.
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Annual Report 2013
The banking industry in 2013 continued to face challenges due to slowing growth, higher consumer debt and adjustments required to comply with extensive new regulations. The Bank of Thailand regulates local and foreign commercial banks operating in Thailand and requires them to comply with the Basel III Guidelines effective on 1 January 2013, which increases capital and liquidity requirements. This along with the promulgation of the Anti-Money Laundering Act (No. 4), B.E. 2556 and the Counter-Terrorism Financing Act B.E. 2556 impacted banks’ activities as well as increases administrative and financing costs in order to comply with the new regulations. However, in the long term, such changes should reduce systemic risks and support sustainable growth in the overall economy. Despite all these challenges, the banking industry still generated loan growth, though at a lower level, coinciding with the slow growth of Thai economy. The reduced demand for auto hire purchase loans was apparent in the second half of the year after the maturity of the first-time car buyer incentive program. Bank deposits continued to expand and with strong market liquidity, we started to see an easing of the fierce pricing competition seen in earlier periods. Of note, the overall banking industry continued to demonstrate good credit quality with improving reserve coverage and capital ratios.
(Mr. Suphadej Poonpipat) Chairman of the Executive Committee
For Thanachart Bank, 2013 was a year of strong accomplishment as we continued to move forward with our strategic optimization initiatives while ensuring we meet the daily needs of our customers and generate good results for our shareholders. Our progress was recognized as we were named “the Fastest Growing Retail Bank Thailand 2013” from Global Banking & Finance Review and “the Trusted Brand 2013” from Reader’s Digest for our market leading Auto Hire Purchase business. Earlier this year, we completed the sale of 100-percent of Thanachart Life Assurance Plc. to Prudential Life Assurance (Thailand) Plc. The capital gain from this sale has further strengthened our capital base. With the commencement of the exclusive 15-year bancassurance partnership, we have started distributing Prudential Thailand’s global leading life insurance products through our extensive branch network across the country. This relationship enables our well-trained staff to provide better products and services to customers to meet their savings and protection needs and helps increase our fee income. During the year, with the support of our strategic shareholder-the Bank of Nova Scotia, we made good progress on our strategic priorities and continued to deliver key infrastructure and system improvements (“Optimization
Initiatives”) throughout the year. For example, our branch redesigned Sales & Service Program and Customer Relationship Management tool continues to be launched through our branch network, retail Credit Scoring has been launched and we are completing the Loan Origination System which is to be launched in Q2 2014. We continue to reengineer key business lines and processes including our Customer Contact Center, Housing Loans, Commercial Banking, Collections and others in order to further improve service to customers. These Optimization Initiatives improve our competitive position in many areas, enabling us to provide superior customer experience, increase productivity, grow high-yielding loans, and increase fee income while maintaining our market dominance in auto hire purchase business. We also delivered various process improvements in branches, auto hire purchase, telesales and Shared Services, by adopting the Six Sigma principle to streamline and improve our processes. Numerous Strategic Sourcing initiatives also play a key role in optimizing our supply base and reducing associated costs. In line with increased market risks, we realigned our risk management and credit policies for prudent risk management while strengthening our collections infrastructure through the launch of predictive dialer technology. In addition, we launched several innovative
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(Mr. Somjate Moosirilert) Chief Executive Officer and President
products and services such as ‘Paperless’ Banking for Deposit, Withdraw, Transfer and Bill Payment AIS mPAY MasterCard (on-line shopping with pre-paid card), Thanachart Pay ‘N Go (new mobile point of sales service), Electronic Juristic Person Certificate Issuance, to enhance convenience for customers. To fully support all of these initiatives and we placed strong effort in improving our human capital by retaining talent and developing leadership throughout the organization. As detailed above, we have fully committed ourselves to be “the Doing Bank”, and to support this theme and increase market awareness, we launched a new branding initiative this year with strong advertising and promotional support across all channels which has resulted in an increase in favorable awareness of Thanachart Bank. In terms of performance, we posted a satisfactory net profit of THB 15,385 million in 2013, bolstered by the capital gain from the sale of Thanachart Life Assurance Plc. Excluding this gain and extra prudential reserves set aside in line with BoT guidelines, underlying Net Income increased by a healthy 21% in 2013. We strongly emphasized efficiency across the organization with the increase in interest income attributable to good loan growth as well as improved interest spread arising from the efficient cost of funds management.
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Annual Report 2013
Meanwhile, fee income and other operating income went up thanks to improving cross-selling and synergies generated across all subsidiaries under the group resulting in their improved performances. Finally, through close control of discretionary expenses and a reduction in fixed costs (despite ongoing investment in new processes and technology) from our Optimization Initiatives, total operating costs decreased by 4% in 2013 leading to a strong improvement in our cost to income ratio. 2014 is expected to be a challenging year for the Thai banking sector. With uncertainties from both local and overseas markets, the growth of overall banking industry is expected to decelerate. A prolonged political turmoil will not be conducive to public and private investment, while the tapering of the Quantitative Easing Program by US Federal Reserve will cause a rebalancing in capital flows and may impact market liquidity and long term interest rates. The existing high household debt, as a result of the re-building efforts following the devastating floods and the utilization of government stimulus measures including the first-time car buyer program in recent years, has already impacted consumer credit demand and debt servicing ability. Finally, regulatory pressure will continue with Basel III implementation and the implementation the Foreign Account Tax Compliance Act (“FATCA”).
(Mr. Brendan King)
Vice Chairman of the Executive Committee and Deputy Chief Executive Officer
Thanachart Bank is well positioned to meet these challenges with strong capital and liquidity and increasingly diversified opportunities for growth across the financial services industry. In addition to detailed, customer focused business strategies, we will continue to implement our Optimization Initiatives which will improve our infrastructure and end-to-end processes across the Group. Most importantly, these investments in state-of-art technology and process redesign along with enhanced staff training will enable us to significantly improve sales productivity across all channels and allow us to build deeper customer relationships, better respond to their needs and offer a differentiated customer experience. Through these investments in our people and infrastructure, we will continue to accelerate growth in high-yielding products while maintaining our dominant position in auto lending. Moreover, we have strengthened our risk management and will reduce credit costs across all portfolios through focused origination, risk based policies and use of market leading technology across the credit cycle. Simultaneously, we will attract new customers and grow and diversify our funding base, particularly current and savings accounts at an appropriate cost level, by offering innovative savings, insurance, and investment products. We are also determined to help our
clients succeed financially and grow our fee revenue through relationship-based cross selling of the full suite of financial products and services tailored to meet their needs. Last but not least, we will pursue on-going strategic sourcing and cost management initiatives while further developing our leadership team as s strategic competitive advantage. The advancements we achieved in 2013 are the result of the focused commitment by all of staff to fulfill our strategic intents and support our customers. This unwavering support and loyalty of our staff, customers, partners, and shareholders has been a source of enduring strength for our Bank. We will continue to draw on this strength as we meet the challenges ahead and are fully confident of a brighter future in the coming years.
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Board of directors thanachart bank public company limited
1. Mr. Banterng Tantivit Chairman
4. Mr. Brendan George John King Director, Vice Chairman of the Executive Committee
7. Mr. Narong Chivangkur Independent Director, Chairman of the Nomination and Remuneration Committee
10. Mr. Rod Michael Reynolds
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Annual Report 2013
Director, Member of the Nomination and Remuneration Committee
2. Mr. Suphadej Poonpipat
3. Mr. Somjate Moosirilert
Vice Chairman, Chairman of the Executive Committee
Director, Member of the Executive Committee
5. Ms. Suvarnapha Suvarnaprathip Director,
6. Mr. Kiettisak Meecharoen
8. Mr. Sataporn Jinachitra
9. Assoc. Prof. Dr. Somjai Phagaphasvivat
Vice Chairperson of the Executive Committee
Independent Director, Member of the Audit Committee, Member of the Nomination and Remuneration Committee
11. Mr. Kobsak Duangdee
Director
Independent Director, Chairman of the Audit Committee
Independent Director, Member of the Audit Committee
12. Mr. Alberto Jaramillo
Director
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Management Discussion and Analysis
(Based upon operating results recorded in financial statements of 2013 comparing to that of 2012)
Major events in 2013 • As an accounting standard of TAS 12 Income Taxes became effective in 2013, Thanachart Bank Public Company Limited (the Bank) and its subsidiaries were to ensure compliance with the aforementioned and, as a result, the Bank was required to adjust the past records as if the standard had been applied throughout in the past including the period when the acquisition of Siam City Bank Public Company Limited (SCIB) took place. Therefore, all items related to the merging i.e. deferred tax assets concerning assets and liabilities in SCIB’s accounts, increase in fair value of SCIB’s assets, and intangible assets, were to be adjusted to determine reallocation of cost of business combination which resulted in an increase in goodwill of THB 2,202 million. Furthermore, in adopting this accounting standard, the Bank and its subsidiaries were to adjust financial statements as of December 31, 2012, which resulted in an increase in deferred tax assets and liabilities of THB 523 million and THB 2,060 million, respectively and consequently affected carry-over retained earnings of THB 1,167 million. • On May 3, 2013, the Bank and Prudential Life Assurance (Thailand) Public Company Limited (Prudential) had signed a 15-year Bancassurance Agreement. The Bank had transferred 328,500,000 of Thanachart Life Assurance Public Company Limited (TLIFE)’s common shares, or 100 percent of total shares to Prudential and received a payment of THB 17,500 million in return in accordance with the agreed terms. For a post-completion adjustment to be made to reflect the net asset value as at the completion date and a further payment of THB 500 million were due in 12 months after the completion date. The transaction would be recognized when the transfer of the shares and related payment are complete. Gain on disposal of THB 12,216 million recorded in the consolidated financial statements and THB 13,128 million in the separate financial statements were recognized in statements of comprehensive income for the year 2013. To be in compliance with the accounting standard, TLIFE’s operating results, included in the consolidated statements, were separately presented as “profit for the year from discontinued operations” item of 2013 and 2012. However, for Management Discussion and Analysis, the item was recorded as non-interest income under item of other operating incomes. As for the analysis, the item was excluded to reflect the true operating results of the Bank and its subsidiaries.
Consolidated Financial Statements were of TBANK and its subsidiaries as follows: Subsidiaries by mean of direct share-holding SCIB Public Company Limited (formerly known as “Siam City Bank Public Company Limited”) Thanachart Securities Public Company Limited Thanachart Insurance Public Company Limited Thanachart Life Assurance Public Company Limited Thanachart Fund Management Company Limited Thanachart Broker Company Limited Thanachart Group Leasing Company Limited Thanachart Management and Services Company Limited Thanachart Legal and Appraisal Company Limited Thanachart Training and Development Company Limited 016
Annual Report 2013
TS Asset Management Company Limited Siam City Life Assurance Public Company Limited SCIB Service Company Limited Ratchthani Leasing Public Company Limited Subsidiary by mean of indirect share-holding National Leasing Company Limited
Overall Operating Result (Analysis comparing performance of 2012 and 2013 based on financial statements) Statement of comprehensive income
Interest income Interest expenses Net interest income Net fees and service income Other operating income(1) Other operating expenses(2) Profit (loss) before impairment loss of loans and debt securities Impairment loss of loans and debt securities Profit (loss) before income tax Income tax Profit for the year from continuing operations Profit for the year from discontinued operations Net profit The Bank’s Non-controlling interests’ Earnings per share (baht) Weighted average number of ordinary shares (million shares) Note:
(1) (2)
2013
2012
(Unit: THB Million)
Variance Increase/ (Decrease)
Percentage
53,887 27,234 26,653 6,903 18,569 21,259
48,736 25,556 23,180 5,070 5,816 21,660
5,151 1,678 3,473 1,833 12,753 (401)
10.57 6.57 14.99 36.15 219.28 (1.85)
30,865 11,587 19,278 4,031 15,247 354 15,601 15,385 216 2.79
12,406 2,980 9,427 2,076 7,351 1,212 8,563 8,354 208 1.52
18,459 8,608 9,851 1,955 7,896 (858) 7,039 7,031 8
148.80 288.91 104.51 94.20 107.42 (70.77) 82.21 84.16 3.68
5,513.66
5,513.66
Operating income deducted by underwriting expenses Excluding underwriting expenses
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The Bank and its subsidiaries had a net profit for the year 2013 of THB 15,601 million, of which THB 15,385 million was the Bank’s; increased by THB 7,031 million or 84.16 percent comparing to the previous year as a result of an extra profit from disposal of investment in a subsidiary company by setting special provision. If excluded the item, in 2013, the Bank’s net profit of Bank and its subsidiaries would total THB 10,101 million; increased from the previous year by THB 1,747 million or 20.91 percent. Changes in key drivers of the business were as follows: • Interest spread increased to 2.59 percent from 2.48 percent in the previous year. Yield on earning asset was at 5.76 percent, decreased from 5.82 percent as a result of policy interest adjustments; from 2.75 percent to 2.50 percent during the 2nd quarter of 2013 and again to 2.25 percent during the last quarter of 2013. Yield decreased partially because of ceasing of revenue recognition from nonperforming loans. Cost of fund was at 3.17 percent, decreased from 3.34 percent as a result of efficient cost and liquidity management that enhanced competitiveness by expanding loan growth. The decrease in cost of fund was also a result of the policy rate adjustments as aforementioned. • Increase in non-interest revenue (excluding special items) of 12.50 percent from banking and securities fees, net profit from investment, and dividend income. Noninterest income ratio in 2013 was at 33.80 percent and when considered non-interest income to average asset to mitigate impact of interest spread, the ratio was at 1.33 percent. • Control and management of operating expenses under the Cost Control policy, cost to income ratio in 2013 was at 52.80 percent, decreased from 61.40 percent and when considered operating expense to average asset, the ratio was at 2.08 percent.
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Annual Report 2013
• Credit cost in 2013 was at 0.78 percent (excluding extra provision of the Bank and its subsidiaries), increased from end of the previous year of 0.40 percent as a result of loss on sales according to demand and supply condition in the used-car market. As for non-performing loans as of December 31, 2013, the amount totaled THB 35,313 million, increased from the previous year of THB 32,501 million on account of growth in hire purchase loan volume. The Bank had formulated policies and management procedures to ensure efficient debt collection. Furthermore, an increase in non-performing loan, mainly attributed to major debtors, was fully covered by the Bank’s reserve so that its financial statements were not affected. NPL ratio was at 4.23 percent comparing end of the previous year of 4.10 percent. • Capital adequacy: the Bank’s total capital counted following the Basel III requirements as of December 31, 2013 was THB 110,683 million, consisting of Tier I capital (Common Equity Tier I and Additional Tier I) of THB 70,818 million and Tier II capital of THB 39,865 million. Capital adequacy ratio was at 14.80 percent comparing to 13.99 percent as of the end of 2012. The Bank’s capital fund included profit from operating result in the first half of 2013 and was affected by the changes from Basel II to Basel III and dividend payment in April 2013.
Net interest income
In 2013, the Bank and its subsidiaries had a net interest income of THB 26,653 million, increased by THB 3,473 million or 14.99 percent comparing to previous year. Total interest income was of THB 53,887 million, increased by THB 5,151 million or 10.57 percent, while interest expense was of THB 27,234 million, increased by THB 1,678 million or 6.57 percent. This result in interest spread to increase from the previous year of 2.48 percent to 2.59 percent in 2013.
Non-interest Income
Non-interest income comprised net fees and service income, net underwriting income, and other operating income, totaling THB 13,610 million; increased from the previous year by THB 1,512 million or 12.50 percent. Non-interest income ratio in 2013 was at 33.80 percent and when taking Non-interest income to average asset into consideration to mitigate impact from interest spread, the ratio was at 1.33 percent. Details of changes were as follows: • Net fee and service income The Bank and its subsidiaries earned from net fee and service income an amount of THB 6,903 million, increased by THB 1,833 million or 36.15 percent from growth in customer base and more diversified financial products of the Bank and subsidiaries. Total fee and service income was THB 8,793 million, increased by THB 2,237 million or 34.13 percent, whereas total fee and service expense was of THB 1,890 million, increased by THB 405 million or 27.24 percent. • Other operating income Other operating income comprised net gain (loss) from trading and foreign exchange transactions, net profit from investments, shares of profit from investments in associated companies under the equity method, dividend income, profit from sales of property foreclosed and other
assets, underwriting income, and others. In 2013, total other operating income was THB 6,707 million, decreased from the previous year by THB 321 million or 4.56 percent mainly due to disposal of investment in TLIFE, and was compensated by fee income. An increase in profit from investment was partially due to receipt of repayment from closing Vayupak fund. Underwriting income, dividend receipt, and shares of profit from investments in associated companies under the equity method were still on an improving trend.
Other Operating Expense In 2013, other operating expense was THB 21,259 million, decrease by THB 401 million or 1.85 percent, as a result of efficient cost control. Cost to Income Ratio was at 52.80 percent, decreased from 61.40 percent and when taking operating expense to average asset into consideration, the ratio was at 2.08 percent.
Impairment Loss on Loans and Debt Securities In 2013, impairment loss on loans and debt securities (excluding extra reserves of the Bank and its subsidiaries) totaled THB 6,207 million. Credit cost was at 0.78 percent, increased from the previous year of 0.40 percent as a result of loss on sales due to demand and supply condition in the used-car market.
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Financial Position of the Bank and Its Subsidiaries’
Consolidated Balance Sheet
Assets Cash Interbank and money market items-net Investments-net Net loans to customers and accrued interest receivables Property foreclosed-net Land, premises and equipment-net Goodwill Other assets Total assets
(Unit: THB Million)
December 31, 2013
December 31, 2012
17,940 69,697 138,825 760,943 6,291 8,037 17,951 18,665 1,038,349
15,181 71,963 146,106 731,010 6,461 8,292 17,951 21,656 1,018,620
Variance Increase/ (Decrease)
Percent
2,759 (2,266) (7,281) 29,933 (170) (255) 0 (2,991) 19,729
18.17 (3.15) (4.98) 4.10 (2.63) (3.08) 0.00 (13.81) 1.94
The Bank and its subsidiaries’ total assets, as of December 31, 2013, was THB 1,038,349 million, increased from end of 2012 by THB 19,729 million or 1.94 percent. The increase was mostly attributed to volume of loan to customers and net interest receivables of THB 29,933 million or 4.10 percent as a result of growth in hire purchase business of 10.96 percent from end of the previous year. Proportion of Retail and SMEs business volume was 69 : 31.
(Unit: THB Million)
Consolidated Balance Sheet
Liabilities and equity Deposits Interbank and money market items-net Liability payable on demand Debt issued and borrowings Provisions Insurance contract liabilities Other liabilities Total liabilities Equity attributable to the Bank Non-controlling interest of the subsidiaries Total liabilities and equity
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Annual Report 2013
December 31, 2013
December 31, 2012
719,079 81,082 3,219 92,229 3,146 15,019 27,335 941,109 96,218 1,022 1,038,349
698,372 87,777 4,989 78,149 2,976 39,632 22,540 934,435 83,330 856 1,018,620
Variance Increase/ (Decrease)
Percent
20,707 (6,695) (1,770) 14,080 170 (24,613) 4,795 6,674 12,888 166 19,729
2.97 (7.63) (35.48) 18.02 5.71 (62.10) 21.27 0.71 15.47 19.39 1.94
Total liabilities of the Bank and its subsidiaries as of December 31, 2013 was THB 941,109 million, increased from the previous year by THB 6,674 million or 0.71 percent. The increase was mostly accounted for the followings: • Deposits of THB 719,079 million, increased by THB 20,707 million or 2.97 percent from end of 2012 as a result of a deposit mobilization restructuring via financial products; Ultra Saving, short-term fixed deposits, fixed deposits with special rates. Throughout the year, strategies for launching new product and interest rate were formulated to match the policy rate and the market condition. • Net Interbank and money market items of THB 81,082 million, decreased by THB 6,695 million or 7.63 percent as a result of liquidity management of the Bank. • Debt issued and borrowings of THB 92,229 million, increased by THB 14,080 million or 18.02 percent on account of issuance of short-term debentures. Shareholders’ equity as of December 31, 2013 was of THB 96,218 million, increased by THB 12,888 million or 15.47 percent from end of 2012. The increase was mainly attributed to profit from operations in 2013. Whereas, dividend payment was made out of the 2012 net profit at a rate of THB 0.37 per share, amounting to a total dividend payment of THB 2,040 million.
Asset Quality The asset quality was considered based on consolidated financial statements.
1. Net loan to customers and accrued interest receivable As of December 31, 2013, the Bank and its subsidiaries’ net loan to customers and accrued interest receivables counted following the Bank of Thailand (BOT)’s regulations totaled THB 759,763 million, increased from end of 2012 by THB 27,254 million or 3.72 percent. During the year 2013, the Bank and its subsidiaries had made debt restructuring agreements with 4,789 debtors in various arrangements; amending terms of repayment, transferring assets and/or shares and/or amending terms of repayment, of which outstanding before undergoing the debt restructuring program was approximately THB 11,303 million. The Bank and its subsidiaries had a total of 44,471 out of 1,863,776 debtors joined the debt restructuring program by the end of 2013 of which their principal and accrued interest receivable amounting to THB 30,377 million. Loan diversification At the end of 2013, proportion of total loans comprised hire purchase of 55.71 percent, followed by housing loans of 10.59 percent, manufacturing and commerce of 10.25 percent, public utilities and services of 8.64 percent, real estate and construction of 6.41 percent, and others of 8.41 percent. Loans to Customers Classified by Type of Business in 2013 8.41% Others
55.71% Hire Purchase
10.25% Manufacturing and Commerce
Loans to Customers Classified by Type of Business in 2012 6.41% Real Estate and Construction 8.64% Public utilities and services 10.59% Housing Loans
9.44% Others
52.63% Hire Purchase
11.78% Manufacturing and Commerce
6.81% Real Estate and Construction 8.39% Public utilities and services 10.96% Housing Loans
Thanachart Bank Public Company Limited
021
2. Loans to customers classified in accordance with the BOT’s regulation As of December 31, 2013, the Bank and its subsidiaries had an outstanding of loan granted and accrued interest receivable classified in accordance with the BOT’s guidelines of THB 759,763 million, increased from the previous year by THB 27,254 million or 3.72 percent. Allowance for doubtful accounts, as of December 31, 2013, was set at THB 28,240 million and total allowance for doubtful accounts to total loans and accrued interest receivable was 3.72 percent. Borrowers classified by the BOT’s regulations Loans to customers and accrued interest receivables
(Unit: THB Million)
Debt balance(1)
Allowance for doubtful accounts
December 31, December 31, December 31, December 31, 2013 2012 2013 2012
Normal Special mentioned Substandard Doubtful Doubtful of loss
689,679 34,903 6,133 9,324 19,724
671,590 28,554 5,273 4,529 22,563
7,163 4,217 2,705 5,125 9,022
4,834 1,475 3,535 2,393 10,109
Total
759,763
732,509
28,232
22,346
Additional allowance for doubtful accounts
8
499
Total allowance for doubtful accounts
28,240
22,845
Ratio of total allowance for doubtful accounts to loans to customers and accrued interest receivables (percent)
3.72
3.12
Note:
022
(1)
Debt balance/book value of normal and special mentioned accounts excluded accrued interest receivables.
Annual Report 2013
3. Non-performing Loans As of December 31, 2013, the Bank and its subsidiaries had a total non-performing loan of THB 35,313 million, increased by THB 2,812 million from 2012 as a result of growth in hire purchase loan volume. The Bank had formulated policies and management procedures to ensure efficient debt collection. Furthermore, an increase in non-performing loan, mainly attributed to major debtors, was fully covered by the Bank’s reserve so that its financial statements were not affected. NPL ratio was at 4.23 percent. Non-performing Loans
(Unit: THB Million)
Total non-performing loans (NPLs) NPLs to total loans (percent) NPL-net under BOT’s regulations NPL-net (percent) NPLs Classified by Type of Business 8.35% Others 18.30% Services
29.55% Manufacturing and Commerce
December 31, 2013
December 31, 2012
35,313 4.23 18,289 2.19
32,501 4.10 16,929 2.05
NPLs Classified by Loan Classification 17.45% Substandard
23.43% Hire Purchase Loans
12.60% Housing Loans
56.04% Doubtful of Loss 26.51% Doubtful
7.79% Real Estate and Construction
Thanachart Bank Public Company Limited
023
4. Investment in securities In 2013, the Bank and its subsidiaries had a total investment in securities of THB 138,254 million. A major portion of approximately 63.32 percent was invested in government and state enterprises securities, followed by 22.49 percent in private debt securities. After adding (deducting) allowance for change in values and impairment, net investment was THB 138,825 million, decreased from 2012 of THB 146,106 million, Details were as follows: Securities Investment classified by types of instruments Type of investment
Debt securities Government and state enterprise securities • Trading • Available-for-sale • Held-to-maturity Private debt securities • Trading • Available-for-sale • Held-to-maturity Foreign debt securities • Trading • Available-for-sale • Held-to-maturity Equity securities Listed securities • Trading • Available-for-sale Investment in receivables • Held-to-maturity Other investment Total debt securities Add (less): Allowance for change in value Allowance for impairment Total investment-Net
024
Annual Report 2013
(Unit: THB Million)
December 31, 2013
Percent
December 31, 2012
Percent
5,150 71,398 10,986
3.73 51.64 7.95
5,745 55,220 21,756
3.97 38.16 15.03
5,266 25,480 352
3.81 18.43 0.25
5,683 29,669 2,731
3.93 20.50 1.89
0 14,691 0
0.00 10.63 0.00
620 11,485 0
0.43 7.94 0.00
17 987
0.01 0.71
16 7,062
0.01 4.88
2 0.00 3,925 2.84 138,254 100.00 594 (23)
5 4,714 144,706 1,456 (56)
0.00 3.26 100.00
138,825
146,106
Liquidity At the end of 2013, the Bank and its subsidiaries had a net cash flow used in financing activities of THB 9,526 million, investing activities of THB 4,495 million, and operating activities of THB 7,790 million, attributed to a net increase in cash of THB 2,759 million. At the end of the year, the Bank and its subsidiaries had THB 17,940 million in cash and cash equivalents, mainly consisted of the following: • Cash flows from operating activities were generated by increase in deposits of THB 20,707 million and decrease in loans of THB 50,015 million. • Cash flows from investing activities were generated by interest from investments of THB 4,119 million, dividend received of THB 666 million, increase in cash flows used in new investment of THB 17,843 million and cash payment for equipments purchase of THB 559 million. • Cash flows from operating activities were generated by repayment of borrowings of THB 77,020 million and cash received from borrowings of THB 91,100 million.
(Unit: THB Million)
Major changes items
2013
2012
Net cash flows from (used in) financing activities Net cash flows from (used in) investing activities Net cash flows from (used in) operating activities
(9,526) 4,495 7,790
181,182 3,264 (185,271)
Net increase (decrease) in cash Cash at beginning of the year
2,759 15,181
(824) 16,006
Cash at end of the year
17,940
15,182
Relations between sources and uses of funds In 2013, the Bank and its subsidiaries’ sources of fund provided deposits and borrowings of THB 719,079 million and THB 92,229 million respectively. Uses of fund in loans and investments were THB 790,017 million and THB 138,254 million respectively. Breakdown of sources and uses of fund by remaining tenor to maturity dates of the financial instruments as of December 31, 2013, a major portion of 58.50 percent of total sources of fund was from deposits that would reach maturity within 1-year period and another 30.71 percent was from deposits at call whereas, uses of fund were mainly in loans with remaining tenor of over 1 year, equivalent to a proportion of 64.48 percent of total uses of fund and those with remaining tenor of less than 1 year of 28.25 percent. However, this incongruence between the sources and uses of fund was common characteristic found in commercial banking and financial institutions industry as most depositors tend to keep the matured cash deposited after the due date. Furthermore, the Bank had formulated policies and executed accordingly to minimize such discrepancy between the sources and uses of fund utilizing financial instruments with effective risk management quality. Employing such method would allow the Bank to receive warning signals in early stages regarding the possible impacts on the sources and uses of fund. Key items of the sources and uses of fund classified by remaining tenor to maturity date as of December 31, 2013 were as follows:
Thanachart Bank Public Company Limited
025
At call
Type
THB Million
Sources of fund Deposits 248,085 Borrowing 1,065 Total sources of fund 249,150
Less than 1 year Percent
Over 1 year
Percent
THB Million
THB Million
30.58 0.13
443,392 31,235
54.65 3.85
27,602 52,799
30.71 474,627
58.50
Unspecified
Percent
THB Million
Percent
3.40 6.51
0 7,130
80,401 9.91 7,130
Total THB Million
Percent
0.00 0.88
719,079 92,229
88.63 11.37
0.88
811,308 100.00
Uses of fund Loans(1) Investment
62,562 1
6.74 0.00
224,489 37,792
24.18 502,966 4.07 95,618
54.18 10.30
0 4,843
0.00 0.52
790,017 138,254
Total uses of fund
62,563
6.74 262,281
28.25 598,584
64.48
4,843
0.52
928,271 100.00
Note:
(1)
85.11 14.89
Loan at call includes stop-accrued loans
Capital Adequacy As of December 31, 2013, the Bank’s total capital funds were THB 110,683 million, of which THB 70,818 million was counted as Tier I capital and THB 39,865 million as Tier II capital. The capital adequacy ratio was at 14.80 percent, higher than end of the previous year of 13.99 percent, comprising 9.47 percent of Tier I and 5.33 percent of the Tier II. An increase in total capital funds was on account of inclusion of profit gained from operating result in the first 6 months of 2013. The capital funds were also affected by the change of regulations from Basel II to Basel III and dividend payment in April 2013. However, the capital adequacy ratio was well over the minimum requirement of BOT of not below 8.50 percent. Details were as follows: Capital apital Adequacy Ratio December 31, 2013 THB Million Percent
Tier I Total capital funds
026
Annual Repor
70,818 110,683
9.47 14.80
December 31, 2012 THB Million Percent
61,546 101,417
8.49 13.99
Thanachart Securities Public Company Limited Daily trading volume of TNS in 2013 was THB 4,074 million, a substantially increase from the daily trading volume in the previous year of THB 2,711 million. The increase was in line with the capital market condition. Market share in this year was at 4.63 percent. Net profit for the year ended December 31, 2013 was THB 801 million, an increase of THB 338 million or 73.25 percent from the previous year. Total income amounted to THB 2,403 million, an increase of 46.11 percent. The main source of income came from brokerage income which totaled to THB 1,828 million, fees and service income amounting to THB 152 million, and interest income from margin loans amounting to THB 205 million. On the other side, financial costs and operating expenses were THB 1,410 million, an increase of 33.73 percent from the previous year in line with a growing business volume and income. As at December 31, 2013, Net Capital Ratio (NCR) was at 94.07 percent higher than the minimum requirement of the SEC of 7.00 percent.
Thanachart Fund Management Company Limited At the end of 2013, TFUND has asset under management amounting to THB 134,410 million, an increase of THB 12,389 million or 10.15 percent from the end of 2012. Asset under management comprised of 78.35 percent mutual funds, 7.83 percent provident funds, and 13.81 percent private funds. For operating results of 2013, TFUND had a net profit of THB 285 million, an increase of 145 million or 103.57 percent from the year 2012. This was mainly due to the higher sales volume of equity fund and flexible fund than that of 2012.
Thanachart Insurance Public Company Limited
TS Asset Management Company Limited In 2013, TS AMC has restructured debts in accordance with policy and business plan of Thanachart Group. As at December 31, 2013, TS AMC had a net profit of THB 404 million, due to the income from debt repayment of THB 850 million. Interest expenses amounted to THB 178 million while income from selling properties foreclosed and other income were THB 111 million. Operating expenses were THB 161 million and provision expenses amounted to THB 103 million. However, TS AMC was able to restructure 257 loan accounts. Income from debt restructuring was THB 819 million.
Ratchthani Leasing Public Company Limited As at December 31, 2013, THANI had total assets of THB 27,296 million, an increase of THB 8,081 million or 42.06 percent from the end of 2012. This was due to an expansion of hire purchase loans, particularly from trucks. At the end of 2013, hire purchase loans of THANI recorded at THB 26,592 million, an increase of THB 7,933 million or 42.52 percent from the end of 2012, accounted for 97.42 percent of total assets. Total liabilities and shareholders’ equity were THB 24,072 million and THB 3,223 million respectively. Net profit for the year 2013 amounted to THB 754 million, an increase of THB 277 million or 57.99 percent from the previous year. Total income for the year 2013 was THB 2,397 million, an increase of THB 814 million or 51.37 percent from the previous year. The increase was due to the domestic automotive industry growth and the continuous hire purchase loan base expansion of THANI. Interest expenses were THB 917 million, an increase of THB 245 million or 36.36 percent. The increase was due to an increase in additional borrowings to support loan growth. Impairment loss of loans of THANI was THB 269 million, an increase of THB 188 million or 231.24 percent, due to the domestic economic condition in the last quarter of 2013 showing a clear sign of a slowdown and also the additional provision provided in accordance with the large expansion of hire purchase loan growth of THANI.
TNI had a net profit for the year 2013 of THB 953 million, an increase of THB 337 million or 54.70 percent from the year 2012. The key factors were given to a focus on profitable products, claims management, and effective cost management. Thanachart Bank Public Company Limited
027
Nature of Business Operations An Overview of the Business Operation Thanachart Bank Public Company Limited (TBANK or the Bank) commenced its operation on April 22, 2002 with Thanachart Capital Public Company Limited (TCAP) as the major shareholder. On December 21, 2006, the Bank of Thailand (BOT) granted approval for TBANK and TCAP to form financial business group in consolidation and having TCAP as a parent company. In 2007, the Bank of Nova Scotia (Scotiabank) became our strategic partner by holding 24.98 percent of TBANK shares, which later increased to 48.99 percent. The current major shareholders are TCAP and Scotiabank, and in 2011, the Bank merged with Siam City Bank Public Company Limited (SCIB). TBANK business structure, TCAP as a parent company, consists of two groups: 1) Financial Group and 2) Supporting Group, which serves a full range of financial services through TBANK branch network and service outlet. It is strongly committed to the good corporate governance principles.
Financial Group 1. Thanachart Capital Public Company Limited (TCAP) operates as the holding company being a parent company of Thanachart Financial Conglomerate. 2. Thanachart Bank Public Company Limited (TBANK) operates commercial banking business and other businesses permitted by the BOT, such as life and non-life insurance broker, a provider of services relating to unit trust and securities such as securities brokerage, proprietary trading, unit trust underwriting, mutual fund trustee service, provident fund custodian service, debt instrument underwriting and trading, securities registrar, and gold derivative trading. 3. Thanachart Securities Public Company Limited (TNS) was permitted by the Ministry of Finance and the Office of the Securities and Exchange Commission of Thailand (SEC) to operate the following activities: 3.1 TNS was granted a Full-Service License to operate securities businesses and related businesses such as securities brokerage (domestically and internationally), securities underwriting, investment advisory service, securities borrowing and lending, financial advisory service, unit trust underwriting and repurchasing, and securities registrar. 3.2 TNS was granted a Derivative Business Sor 1 License to engage in a full range of derivative businesses and related businesses such as derivative brokerage and proprietary trading. 4. Thanachart Fund Management Company Limited (TFUND), which is a joint venture between TBANK (holding 75 percent of the total shares) and the Government Saving Bank (holding 25 percent shares), operates a full range of investment management services in mutual fund management business, private fund and provident fund management business, and investment advisory business. 5. Thanachart Insurance Public Company Limited (TNI) operates a non-life insurance business and a disaster insurance business such as fire insurances, automobile insurances, marine and transportation insurances miscellaneous insurance, and investment business. 6. Siam City Life Assurance Public Company Limited (SCILIFE) operates a life insurance business focusing on middle and higher income customers who are interested in saving and health products. The Company’s sales channel includes telelsales and broker. 7. Thanachart Group Leasing Company Limited (TGL) operates a hire purchase business of all automobile types.
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Annual Report 2013
8. Ratchthani Leasing Public Company Limited (THANI) operates a hire purchase business and financial lease business focusing on the segment of private used cars and commercial cars such as pick-ups, taxis, tractors, and trucks. 9. NFS Asset Management Company Limited (NFS AMC) operates an asset management business by buying or receiving transfers of NPLs and NPAs from financial institutions in the Thanachart Group. 10. MAX Asset Management Company Limited (MAX AMC) operates and asset management business by buying or receiving transfers of NPLs and NPAs from other financial institutions. 11. TS Asset Management Company Limited (TS AMC) operates and asset management business by buying or receiving transfers of NPLs and NPAs from SCIB and TBANK.
Supporting Business Group 1. Thanachart Management and Services Company Limited (TMS) provides services to the Group’s service staff. 2. Thanachart Broker Company Limited (TBROKE) pursues Thanachart Group’s hire purchase customers to insure their automobiles. TBROKE is also an automobile insurance broker of TNI. 3. Thanachart Training and Development Company Limited (TTD) organizes training activities for employees of member companies of Thanachart Group. 4. SCIB Services Company Limited (SCIB Services) provides general services to TBANK and companies in the Group, such as janitor, security, delivery, car rental, car drivers, and outsourcing service.
Business Policy and Strategies of Thanachart Group In 2014, Thanachart Group has determined its strategic direction to become a fully integrated financial services group capable of offering a full range of quality products and services that cater to the financial needs of the customers in an efficient manner. To achieve this goal, Thanachart Group has set up its vision “To provide fully integrated financial solutions to our targeted customers’ complete fianancial needs by offering the highest quality products, services and advice.”
Such vision was developed from three major fundamentals which are providing fully integrated financial services (Universal Banking) with TBANK being the main services offering; focusing on satisfying our customers’ different needs (Customer Centric); and cooperating with all departments to provide excellent services to customers (Collaboration). The endeavor and accomplishment from the three major fundamentals not only allowed Thanachart Group to be a fully integrated financial services group with highly successful in competition, but also is a key to drive Thanachart Group to become one of Thailand’s leading banks over the next three to five years. Thanachart has adopted the professionalism and innovation of Scotiabank and continuously develops its work system such as CRM Tools for Sales and Service. This is considered to be a significant tool to increase advisory capacity, introduce products that match with customers need, and increase the capacity of customer relationship management that brings about customers satisfaction and the Bank’s revenue. Besides, Thanachart Group has communicated its business strategy with all business units and employees at all levels in order to have the same intent and vision in accomplishing the goal. These Four Strategic Intents are as follows: 1. To accelerate growth in commercial and unsecured loan under prudent risk standards through the provision of superior service and financial advice while maintaining our dominant position in auto lending. 2. To improve our risk management and reduce LIC across all portfolios through focused origination, risk based policies and use of market leading technology across the credit cycle. 3. To attract new customers and grow and diversify our funding base to meet LCR requirements by offering innovative savings, insurance and investment products. 4. To help our clients succeed financially and grow our fee revenue through relationship-based cross selling of the full suite of financial products and services tailored to meet their needs In order to ensure that all strategic intents and purposes are progress in the same direction, Thanachart Group came up with the CEO’s Focus Agenda, as a tool to successfully pursue its goal. Thanachart Bank Public Company Limited
029
1. Financial Target: Meet or exceed our key financial target of Net Income, Loan and NIR growth and Cost/Income Ratio. 2. Customer Growth Initiatives: Complete our core infrastructure improvements and end-to-end process reengineering and ensure all sales channels and support teams fully utilize the enhanced processed and tools to improve customer service, cross sell and new customer acquisition. 3. Operational Improvement: Continue with Centralization and Shared Service initiative using best in class technology and processes across key business lines to improve service and reduce risk and cost. 4. Enhancing Human Capital Capabilities: Further develop out leadership and strengthen our team through focused leadership development, staff empowerment, and accountabilities, cross functional transfers and targeted training initiative. 5. Good Corporate Governance: Meet the highest standards of good corporate governance that addresses the need of all stakeholders and ensured full compliance with all regulatory requirements. 6. Public Relations and Communications: Increase TBANK’s positive brand perception and recognition with strong customer service and innovative PR campaigns while streamlining and improving internal communication effectiveness.
Shareholding Structure of Thanachart Group Policy on Division of Operational Functions among Member Companies of Thanachart Group Being a parent company of Thanachart Financial Conglomerate with a controlling interest (i.e. owning more than fifty percent of issued and paid-up capital), TCAP has adopted the following policies and approaches in managing the member companies of the Group as follows:
Business policies TCAP and TBANK are responsible for establishing annual key business policies of Thanachart Group. Each subsidiary is required to formulate business plans and budgets for 3 - 5 years and submit them to the parent
030
Annual Report 2013
company for consideration, in order to ensure that they are in alignment with the established key business policies. The business plans and budgets are also subject to evaluation and review regularly. The objective is to ensure that the business plans and budgets are in line with the changing business conditions.
Supervision of subsidiaries The directors and high-ranking executives of TCAP and TBANK are assigned to be the members of the Board of Directors of the subsidiaries. The arrangement not only enables TCAP and TBANK to assist the subsidiaries in establishing their policies and in determining their future direction, but also ensures the close supervision of the subsidiaries’ business operations. Importantly, the Chief Executive Officers of the subsidiaries are required to present a monthly performance report to the Executive Committee and the matters in the Executive Committee Meeting are than reported to the Board of Directors of TBANK.
Centralizing of support services It is a policy of the Thanachart Group to centralize specific functions of the support services into one company which, then, is responsible for providing such services to all other member companies of the Group. The purpose is to maximize benefits within the existing resources including expertise of operations staff and various information technologies, and to reduce staffing costs. The centralized support services available now within Thanachart Group included information technology, human resource, systems and internal regulatory development, internal audit, operation control, business control, electronic services, administration and procurement, legal and appraisal services, as well as retail debt collections and collections brokerage.
Internal control, audit, and corporate governance of parent company and subsidiaries Thanachart Group places strong emphasis on internal control. The Group adheres to the principle of adequate and appropriate internal control by establishing procedures for business conducts, provision of services, and operations. The Group also separates the duties and responsibilities of each unit to allow internal examination of each other, based on
a check and balance system. In addition, it puts in writing the announcements as well as order mandates, rules and regulations’ covering key business areas and operations, and this information was also disclosed to all staff in such a way that they can always study them to gain a full understanding. A central unit at TBANK is responsible for preparing and proposing the announcements, order mandates rules and regulations of all member companies of the Group. As regard to the internal audit, the internal audit group is responsible for auditing the business operations of all member companies of the Group, ensuring that they comply with the regulations and the established work systems. The internal audit group also assesses an adequacy and effectiveness of an internal control system in operations to ensure the use of resources and properties and prevention or reduction of errors, damages in order in propose corrective measures for improvement. In addition, the Thanachart Group has established the Compliance Unit responsible for closely monitoring changes of laws, notifications, and orders related to the Group’s business affairs and operations and disseminating the information to the staff. The Compliance Unit is also responsible for ensuring that the conduct of business affairs of the member companies of the Group is in compliance with the legal requirements. Moreover, the Audit Committee of each member company of the Group is responsible for governing, controlling, and auditing their respective business operations. The Audit Committee is also allowed to carry out its duties and give its opinions in an independent manner of the management of each company. The purpose is to ensure that internal control and audit systems are effective and that the financial statements are properly reviewed.
established the corporate governance policy and the code of conduct which the directors, executives, and staff of the member companies of Thanachart Group are required to adhere to. Focus is given to integrity, transparency, and avoidance of any conflict of interest.
Risk management TCAP ensured that the member companies of the Group analyze and assess various risks of their business operations and that the risks are properly managed in line with the guidelines given by the authorities. In addition, TCAP conducts an analysis of the key risks faced by the member companies of the Group which may need direct financial or management policy of the Thanachart Financial Conglomerate is in line with the guidelines given by the BOT.
Relationship with business group of major shareholder Scotiabank is the leading international banking institution with branches in 50 countries worldwide. It holds 48.99 percent of TBANK issued shares via Scotia Netherlands Holding B.V., which is the juristic person in Netherlands. Scotiabank is a strategic partner that helps to forge the Bank’s capacity in fund business and management. It passes on the knowledge of professionalism in banking sector, risk management, information technology, and expansion of TBANK services abroad through the network of Scotiabank. Moreover, it sends representatives to participate in the management in the director and executive level.
As regard to the corporate governance, the Board of Directors of TCAP and the companies in the Group place a strong emphasis on the good corporate governance both at the level of the Board of Directors and the level of various Committees. Independent directors are appointed to the Board of Directors and the Committees to provide effective checks and balances on the powers of executive directors. The established scope of responsibilities of the Board of Directors and the Committees are also in line with the principles of good corporate governance. In addition, the Board of Directors of the TCAP and the subsidiaries have
Thanachart Bank Public Company Limited
031
Chart of Shareholding Structure of Thanachart Group As of December 31, 2013 Thanachart Capital Public Company Limited
Scotia Netherlands Holding B.V.
48.99%
Commercial Banking Business 50.96%
Thanachart Bank Public Company Limited
Asset Management Business 100.00% NFS Asset Management Company Limited
Financial Business
83.44% MAX Asset Management Company Limited
Supporting Business 100.00% Thanachart Securities Public Company Limited
Securities Business
100.00% Thanachart Management and Services Company Limited
75.00% Thanachart Fund Management Company Limited
100.00%
100.00%
Thanachart Broker Company Limited
Thanachart Insurance Public Company Limited
Insurance Business
100.00%
100.00%
Siam City Life Assurance Public Company Limited
Thanachart Training and Development Company Limited
100.00% TS Asset Management Company Limited
Asset Management Business
100.00% Thanachart Group Leasing Company Limited
Leasing Business
100.00%
100.00% SCIB Services Company Limited
National Leasing Company Limited
65.18% Ratchthani Leasing Public Company Limited
Note: 1. The above shareholdings include shares held by the related parties. 2. On May 9, 2012, the BOT granted approval for Scotiabank to adjust the shares holding structure of Thanachart Group, which holds 48.99 percent of issued shares via Scotia Netherlands Holding B.V., the registered juristic person in Netherlands.
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Annual Report 2013
Income Structures of TBANK and its subsidiaries Income structures of TBANK and its subsidiaries based on the consolidated financial statements as of December 31, 2013, 2012, and 2011 are as follows: Table of income structures of TBANK and its subsidiaries As of December 31 2012
2013 THB Million
Percent
THB Million
Percent
2011 THB Million
Percent
Interest Income Interbank and money market items Investment for trading Investment for debts securities Loans Hire Purchase and Financial Leases
1,865 457 3,867 21,246 26,452
2,294 480 3,606 21,200 21,156
6.73 1,899 1.41 78 10.58 4,290 62.23 20,774 62.11 17,011
5.60 0.23 12.66 61.32 50.21
Total Interest Income Interest Expenses
53,887 103.38 48,736 27,234 52.25 25,556
143.06 44,052 75.02 19,636
130.02 57.95
Net Interest Income
26,653
51.13 23,180
68.04 24,416
72.07
6,903 531 13,081
13.24 1.02 25.10
5,070 664 312
14.88 1.95 0.92
3,711 891 712
10.95 2.63 2.10
415 2,282 562 1,697
0.80 4.38 1.08 3.25
150 2,147 397 2,146
0.44 6.30 1.17 6.30
156 2,128 708 1,159
0.46 6.28 2.09 3.42
48.87 10,886
31.96
9,465
27.93
100.00 33,881
100.00
Non-interest Income Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments Shares of Profit from Investments in Associated Companies Accounted for Equity Method Insurance Premium/Life Insurance Premium Income-Net Dividend Income Other Income
3.58 0.87 7.42 40.76 50.75
Total Non-interest Income
25,471
Net Operating Income
52,124 100.00 34,066
Thanachart Bank Public Company Limited
033
Business Operations of Each Business Group Commercial Banking Business TBANK operated its businesses in compliance with the Financial Institutions Business Act and other relevant notifications issued by the BOT. It acted as a non-life and life insurance brokerage agent, an advisor and investment unit distributor for mutual funds, trustee services for mutual funds, custodian services for private funds, securities brokerage, securities trading, debt instrument trading, securities registrar, and a selling agent for gold derivatives. As of December 31, 2013, TBANK had a total of 620 branches (excluding Tonson branch, the Headquarter), 54 foreign exchange booths (28 in-branches, and 26 stand-alone), 2,057 ATMs (Automatic Teller Machines), 2 Recycling Machines, 46 CDMs (Cash Deposit Machine), and 127 PUMs (Passbook Update Machine).
Group of Products and Services TBANK improves and develops products to better serve various needs of our customers. Its four main products and services were as follows: Group 1 Deposit Products Characteristics Deposit products are offered to customer, both individuals and corporate. There are four major types of deposit products which are saving deposit, fixed deposit, current deposit, and foreign currency deposit. Competitive Strategies In 2013, TBANK focused on the expansion of small and medium sized customer base as well as retail and corporate customers in order to increase the number of customers who used the Bank service as main bank. The Bank provides variety of products through various sales channels amidst the aggressive competition of other banking institutions especially the Specific Financial Institution: SFIs, commercial banking institutions, and as well as other product competitions such as mutual fund and private debenture. 034
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Apart from the success in providing deposit products, the Bank has launched new financial products and service to serve customer daily demand under the “Fixed Deposit” program in July 2013, which customers can choose their preferred deposit duration or maturity. For customers’ convenience, the Bank also provides “No slip depositwithdrawal and transfer” service in all branches across the country. Group 2 Lending Products 2.1 Corporate Loan Characteristics Corporate Loans are used to meet capital requirements or enhance financial liquidity of businesses. Customers can choose a variety of corporate loan services. 1) Corporate Banking Group To meet the demand of large scale businesses, TBANK has developed many types of products and services, including, inter alia, several forms of loans such as flexible loan, Letter of Guarantee, Project Finance, Trade Finance, Financial Advisory Services, Debt and Capital Market such as issuance of debentures for the purposes of funds mobilization and listing on the Stock Exchange of Thailand as well as risk management tools, particularly Interest Rate Swap (IRS) such as Forward Contract and Foreign currency swap TBANK also provides cash management facility to these customers through a range of products that meet their individual requirements. 2) SME Commercial Banking SME Group are products for small and medium-sized enterprises with flexibility to serve the customers need include, inter alia, Top Up facilities which are special loan limits to meet working capital requirements of overdraft customers, letter of guarantee products for enterprise or individual customers wishing to obtain a guarantee limit to secure their performance in favor of public or private entities, etc. 3) SME S Group is product for small and medium-sized enterprise with the maximum limit of THB 10 million. SME S Group focuses on fast approval process and sells through branch channel.
Competitive Strategies To serve SME customers whose credit requirement does not exceed the maximum limit of THB 10 million, the Bank has launched the “SME-S loan” product with an emphasis on speedy approval process. In addition, the Bank focuses on continual establishment of good relationships with large scale businesses and offering of a full range of financial products that answer their individual needs, as well as expansion of business to SME group to meet their demand for financial support from the Bank. 2.2 Automobile SMEs Characteristics TBANK offers this product to car related entrepreneurs who have short-term financial needs with the proceeds of the loans to be used as their working capital or for enhancing their liquidity position as well as those who have long-term financial needs with the proceeds of the loans to be used for business expansion or reducing funding cost for example fleet and financial lease. Competitive Strategies TBANK concentrates on providing loan services to its long lasting business partners in automobile hire purchase sector. Database has been used to develop the tools for considering and screening credit extension and ensuring appropriate risk control (credit scoring). Emphasis is also placed on development of products and processes that suit the respective groups of customers and their credit access channels, for example, customers via automobile manufacturers, new and used automobile customers via automobile hire purchase businesses, or used automobile business operators via automobile auction companies. For the fleet finance and financial lease sector, TBANK focuses on providing services through its long-lasting high potential and financially sound customers, as well as developing information system to expand the capabilities of its sale channels countrywide. 2.3 Trade Finance Characteristics TBANK provides a full range of trade finance products and services including Import Letter of Credit (L/C),
Trust Receipt, Collection Agency of D/P and D/A for oversea buyers, Packing Credit, Export Bills Purchased/Discounted, Export Bills for Collection, Letter of Guarantee, Stand-by L/C, and Oversea Money Transfer. Competitive Strategies The main factors that promote trade finance services to customers are accuracy in services, convenience, competitive interest rate and fees. TBANK took into consideration the customers’ needs and the promotion of business transactions as the main concerns. For the corporate clients, TBANK has the target to expand customer base to large scale businesses and SMEs. TBANK provides trade finance credit limit, liquidity supports, and specialist advices on trade finance documents for customers. TBANK also develops trade finance products and services to cater to customer needs. The global business alliance network is useful for fast and convenience service which provides customers’ satisfactory on TBANK’s products and services. 2.4 Automobile Hire Purchase Loans Characteristics The Bank offers three types of automobile hire purchase loan namely new car loan, used car loan, and sale and lease back loan, under the “CYC program”, which serve customers who need cash with credit line approval higher than personal loan and longer payment duration than normal loans. Customer can choose the tenor and installment payment that comply with their payment capacity. The Bank’s selling point is to provide convenience to customers through 600 Bank branches. Competitive Strategies TBANK’s hire purchase loan services are provided across the country through car dealers and TBANK’s branches. In setting the policy to offer a price, TBANK considers external factors such as a competition in the market and internal factors such as cost of fund and loan risk. In addition, TBANK places an emphasis on sales promotion activities with car dealers in each region, aiming to offer hire purchase loan conditions that meet the need of regional dealers and customers the most, as well as establishing relationships with the automobile hire purchase business and promote the image of a leading loan provider of automobile Thanachart Bank Public Company Limited
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hire purchase. TBANK developed the HiPad (Hire Purchase by iPad) system in order to serve the customers effectively. 2.5 Secured Personal Loan Characteristics Secured Personal Loan consists of: home loans under the brand of “TBANK Home Loan”, multi-purposed loans named “Cash Your Home” and “Home Plus” Competitive Strategies TBANK places emphasis on efficient service delivery and fully integrated products that fulfill to all customer needs. As well, marketing promotion, which is in line with the situation and competitive condition, is highlighted. The Retail Banking Department is responsible for developing products, terms and conditions, as well as interest rates charged. The target customers consist of: customers who needed home loans, customers who needed personal loans with houses as collateral, and hire purchase customers with good repayment records. The main distribution channel is personal sales and marketing teams that are responsible for the sales target set in the business plan. Moreover, branches are channels to advertised personal loans or new products to the customers. 2.6 Unsecured Personal Loan Characteristics TBANK provides many types of unsecured personal loans. To be accessible and responsive to cover a wide range of customer needs, therefore, the purpose of loans may or may not be specified. TBANK’s personal loans are serves under the product names as follows: 1) T-Loan is a multi-purpose loan providing for general customers. The repayments are arranged in equal installment monthly and specified time 2) Wish-List Loan is an additional credit line of loan provided to TBANK’s hire purchase customers who have good repayment record. 3) Special for Staffs Loan, TBANK provides this loan specifically to customers whose companies have a campaign with TBANK. 4) Scholar Loan is a loan for payment of tuition or any expenses for obtaining a master’s or doctorate degree. 036
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5) Pension Secured Loan, this is a special multi-purpose loan for government employees who receive monthly pension payment from the Comptroller General’s Department. 6) Flash Card is a product that provides cardholders with enhanced flexibility as it serves as a source of a revolving credit. Flash Card places an emphasis on fast and convenience service which enables the cardholders to withdraw cash from ATMs worldwide. Flash Card also allows the cardholders to pay the minimum amount in each collection period. 7) Unsecured Flash O/D is an overdraft amount with no collateral. The Bank provides the service to important customers with the investment purpose. 8) Credit Card, this product provides the line of credit to purchase products/services as cash or allows cardholders to withdraw cash. TBANK collaborates with VISA and MasterCard to provide credit card in multiple types suitable to customers’ qualifications and needs under the following names: - Thanachart Drive Card: for customers who need a credit card with cash back for every payment made at any gas stations. - Thanachart MAX Platinum Card: for customers who are looking for exclusive services and privilege benefits in a view of luxury and convenience; and receive cash back for every transaction made via MAX Platinum card. - Thanachart LIVE Platinum Card: for new generation customers who are interested in installment payment with lower interest rate than other credit cards, but still receiving platinum privilege. Competitive Strategies Products under unsecured personal loans defined competitive strategies on product development, marketing campaign, distribution channel, and appropriate services to serve target customers’ needs. Thus TBANK provides a variety of products for customers to choose appropriately by life stage and life style. These products have been designed in such a way that are easily understandable and practical for every day needs. 1. Personal Loan provides a variety of product to carter to customer needs in each group that fit their purposes. 2. Revolving Card provides cardholders with a credit line to spend for any purposes. Customers can
withdraw cash within a credit line as per their needs at ATM worldwide. 3. Credit Card emphasizes on everyday needs of cardholders with simplified and practical use of the card. Cardholders receive benefits as per their needs for every purchase. Group 3 Electronic Products and Services Characteristics TBANK offers electronic products and services that enable customers to make financial transactions at a better efficient manner. These services include fund transfer, Automatic Transfer Service (ATS), online settlement for financial transactions through the Bank of Thailand’s Automatic Highvolume Transaction Network (BAHTNET), automatic money transfers between banks (Bulk Payment System), Bill payment service for goods and services and a debit card. To meet the customer needs, TBANK has also developed the service system through the internet, which are as follows: - Thanachart i-Net service - Thanachart SMS Alert service - Cash Back Debit Card Competitive Strategies The strategy focuses on cross-selling and up-selling via bank branches to both small and large scale companies. For individual customers who need convenient transaction and safety for money transfer, TBANK initiates the promotion campaign aiming at easy accessibility and services. The money can be received on the same day of a transfer. Branches have been available in shopping centers or nearby office areas for customers’ convenience. TBANK offers services as follows: 1. Internet Banking Services, this service was for both individual and juristic person to facilitate customers. For example, account balance information, internal and interbank fund transfer, including the bill payment service. 2. Financial Transaction Notification via SMS service, this 24-hour service notified all transactions i.e. deposit, withdrawn and money transfer via SMS to the customers’ mobile phone number registered with TBANK. 3. An exclusive cash back debit card, the value of this service was that customers receive cash back directly
into their accounts for every spending. The EMV technology provided and ultimate security to protect a card from data stealing. Group 4 Other Products 4.1 Foreign Exchange Service Characteristics TBANK’s services include foreign exchange services in forms of: bank notes and traveler’s cheques, money changers, forward foreign exchange for international business transaction, inward and outward foreign currency transfers for goods and services, transfer for personal accounts, account opening for Foreign Currency Deposit (FCD), etc. Competitive Strategies TBANK has expanded its branch network and currency exchange booths to serve all business sectors and tourists nationwide. TBANK also adjusts exchange rates by benchmarking with the movements of the world’s currency market. As a result, its customers receive real time rates and fair prices. 4.2 Securities Business Support Services Characteristics Securities Business Support Services consist of; Custodian, Trustee, Fund Supervisor, Bondholder Representative and Registrar and Paying Agent Competitive Strategies To fully offer all range of services to meet customer needs, TBANK’s custodian and trustee services offer supplementary products that enhance financial and investment management flexibilities to investment funds, such as cash management products. TBANK has made use of its business network and good relationship with customers to expand the debenture holder representative, securities registrar and payment agent services.
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Factors Influencing Opportunities or Constraints to Business Operations In 2013, Thai economy1 grew at a slower rate following a dampened domestic consumption, a result of large spending in the previous year. Investment was stalled due to economic and political uncertainty. Export was slow to recover due to restriction in some industries, lack of raw materials, and technological constraints. Consequently, economic competitiveness weakened and was unable to meet the global demand. In the 4th quarter of 2013, economy grew 0.6 percent, a decrease from 5.4 percent, 2.9 percent, and 2.7 percent in the 1st, 2nd, and 3rd quarter of 2013, respectively. Positive drivers were government spending, export, and good inventory while domestic consumption continued to be the impediment. Hospitality industry, real estate industry, and agricultural industry experienced growth while construction industry declined. In comparison to the 3rd quarter of 2013, the economy in 2013 grew 2.9 percent. In terms of economic stability, unemployment rate remained low and inflation subsided following deceleration in energy price and current account deficit. This was due to gold import and transfer of profit and dividend back to foreign countries. Capital and financial account surplus was due to foreign borrowings of depository institutions and direct investment of foreign investors, resulting in a balance of payment deficit. Overall headline average inflation for the year was low at 2.18 percent, a decline from previous year in line with the energy price and core inflation. Energy price declined due to global fuel price and electricity price that adjusted up less than the previous year. Core inflation in 2013 slowed down from 2012 at 1.0 percent, as a result of cost pressure remaining low. Although cost increased somewhat in the 4th quarter and Liquefied Petroleum Gas (LPG) price gradually increased, domestic demand was weak and competition was high. Consequently, prices of goods and services did not increase. Outlook for 20142, Thai economy is expected to have slow growth due to stagnation in domestic consumption and private investment. Thai Economy also would be slow recovery and take more time to adjust toward the normal situation due to weak consumers’ confidence. Investors await tangible signs of economic and political recovery. Government spending and investment would also be delayed. Although export in all industry tends to improve gradually, it could not
compensate for sluggish domestic demand. Tourism which was the main economic driver in the past begins to have impact from political circumstance. It is expected to recover quickly after the unrest subsides. Political situation and government actions will continue to be the key indicator of economic direction this year. Aside from its effect on government expenditure and investment, political unrest also affected confidence of the people and investment climate. Monetary Policy Committee (MPC) Meeting dated January 22, 2014 gave opinion that an on-going political drift in Thailand has an impact on private and government spending and tourism. Consequently, MPC issued a resolution to adjust down Thai economic growth projection in 2014 from 4.0 percent in the previous meeting to 3.0 percent. On February 17, 2014, NESDB disclosed its projection of economic growth of 3.0-4.0 percent for the year 2014. Due to economic uncertainty, TBANK monitors closely and constantly on the landscape and market condition of various industries, such as the political development and economic performance. Also, TBANK closely supervises on financial liquidity and global market changes, e.g. the Federal Reserve of USA announcemnet on QE tapering, development on Euro debt crisis which has no clear solution and Spain and Italy still face with high leading rate with strict monetary policy. Easing on the financial sector will gradually impact the real sectors but will take sometime. The Chinese economy is vulnerable in the real estate sector and by the shadow banking, which has high portion to GDP but lack in supervision. This can affect the economic stability for China. Furthermore, Japan will adjust up the comsumption base tax starting from April 2014 which will significantly impact domestic demand. All these factors will influence the fund movement in the capital market, liquidity in the commercial banking system, volatility in exchange rate, and policy rate set by the BOT. Business opportunity in the emergence of Asean Economic Community (AEC) has created expansion in the border cities with the neighboring countries (Burma, Laos, Cambodia and Malaysia). Thailand has a surplus balance of trade from border cities nationwide. The neighboring countries are the emerging market opportunity, especially with increasing tax benefit as AEC draws closer to be fully impletmented in 2015. There is an opportunity to offer financial service to consumers
1 According to the Office of the National Economic and Social Development Board 2 Economic outlook from various financial institutions, e.g. the BOT, researches of commercial banks, and research of Scotiabank
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and business owners in the border area, whether in liqudity management, financial service and financial advisory. In line with the Financial Sector Master Plan Phase 2 which would continue in 2014 together with Payment System Roadmap plan in year 2012-2016, financial service system and electronic channel has to be ready in order to reduce risk in payment transaction. Furthermore, financial institution is strengthened by effective cost management, solid infrastructure, competent human resource, and innovation in products and services. These factors will need to focus on a continuous basis.
Industry and Competition Outlook
Operating results of commercial banking industry3 in 2013 showed a net profit of THB 214,853 million, a growth of 23.60 percent from 2012. Commercial banks registered in Thailand and foreign branches had a net profit growth of 25.09 percent and 10.29 percent, respectively. This substantiated effective management and proficient adaptaion of the commercial bank industry amid uncertain economic and political uncertainty. In 2013, large commercial banks registered in Thailand utilized 2 key competitive strategies, i.e. universal banking and customer centricity, in order to position themselves as the main bank for the customers. Expansion to the neighboring countries can be seen in the preparation for AEC implementation and supporting the business expansion for customer in Asean Countries. Large commercial banks’ net profit grew 24.43 percent in 2013. Medium banks registered in Thailand continue to focus on specific market and utilized on their expertise. They also strategize to reach into untapped market and improve on the information technology system in order to provide superior service to their customers and reduce service cost. Consequently, medium banks’ net profit grew 44.97 percent. Small-size commercial banks put emphasis on customer centricity, product and service innovation, and branding to create more awareness. Small banks’ net profit grew 20.89 percent in 2013. A summary of net profit of 10 Thai commercial banks registered in Thailand is shown in the picture below.
Picture: Net Profit Summary of Thai Commercial Banks registered in Thailand Classified by Each Bank in 2012 - 2013
2012
2013 Unit: MB
17.20%
tmb
tisco
30.29% 3,391 4,418
tbank
14.09% 1,306 1,490
14.68% 3,705 4,249
scb kbank bay
354.97% 1,261 5,737
84.16% 8,354 15,385
-4.15% 14,625 14,019
35,260 41,325
50,233
33,928
BBL ktb
39,235
45.20%
23,366
12.74% 31,847 35,906
28.03%
cimb thai kkb
Source: Unaudited financial statements, management discussion & analysis, and company data
3 Banking industry means commercial banks registered in Thailand and branches of foreign banks, totaling 30 banks.
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As the end of 2013, loan portfolio in Thai commercial banks registered in Thailand was THB 9,523,070 million, an increase of 10.78 percent or THB 926,879 million from 2012. Although loan growth was strong, it grew at a slower rate compared to 13.27 percent growth in 2012. Loan portfolio of commercial banks shifted more toward retail loans from a more cautious corporate loans approval in line with the effect from the slowdown economy. While SME and retail loans grew, they grew also at a slower rate. High household debt resulted in a more cautious credit approval process. Hire purchase loans decreased the most in growth due to unusually high demand from the first-car policy in 2012. Overall, the demand for corporate and retail loans slowed down this year. Slow loan growth and high household debt led to heavy provisioning in commercial banks in order to prepare for future economic uncertainty. Reserve to required reserve increased by 168.3 percent, indicating risk protection and preparation for future unpredictability. In 2013, deposit and borrowing of 10 Thai commercial banks were THB 10,616,361 million, an increase of 9.09 percentfrom 2012. Bills of exchange decreased 57.03 percent from 2012 due to Depository Protection Act. In the first half of the year, banks issued short-term securities to support loan growth and enhance internal liquidity. However, in the latter half, deposit growth slowed down and remained steady till the end of the year, in line with loan growth. TBANK Accomplishment in 2013 TBANK has succeeded in all its six strategic intents with superb financial performance. Each of intent can be described as follows: 1. We intend to provide our customers with a fully integrated financial product and service by offering the best service and a total financial solution to their unique needs. In order to meet various customers’ needs, TBANK offered a broad range of financial products and services. There were more than 650,000 new customers in 2013, mainly in the tax exempt deposit, debit card and hire purchase for new cars and used cars. Furthermore, TBANK’s non-interest income, excluding gain from sale of TLIFE, increased by 12.50 percent in 2013, as a result of a strong operating and successful cross-selling with the existing customers of 040
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TBANK. Cross-selling ratio increased significantly in the new generation and corporate customer groups with six products increase per customer as compared to 2012. 2. We intend to increase our productivity and customer satisfaction through strategic investments in our people, leadership, systems, and processes. TBANK, with Scotiabank cooperation, provided training both domestically and internationally for its personnel in order to increase knowledge, working skill, and leadership. Furthermore, TBANK developed “Optimization Strategy” to increase productivity in working process, e.g. Business Line Reengineering in order to improve end-to-end process, Sales and Service System, CRM tools, Customer Satisfaction Index (CSI), and T-Advisor service, in order to offer superior products and to meet the customer’s requirement service. Also, Collection Optimization System was developed to manage non-performing loans and adequate provisioning. 3. We intend to be the dominant market leader for Hire Purchase Business with increasing share in Used car and CYC segments. In 2013, TBANK continued to be the market leader in the hire purchase market with a focus on balance hire purchase loan structure, asset quality, and complete customer service for all customer groups, i.e. new car, used car and CYC. New car hire purchase grew more than 200,000 units in 2013 while CYC which achieved for expanding the business and gave a high return succeeded with a growth of 40,000 units. To maintain the portfolio balance, TBANK was cautious in expansion in used car market in order to maintain appropriate level of non-performing loans. Furthermore, TBANK emphasized on offering fully integrated financial product and service through Original Equipment Manufacturer (OEM) project, in order to continuously create good relationship with the manufacturers and car dealers. 4. We intend to grow deposit base in order to maintain and improve liquidity to be sufficient for supporting growth. TBANK grew more than 370,000 deposit customers in 2013 in order to manage liquidity and support loan growth. Particularly, tax exempt deposit customers grew 15,000 accounts. Furthermore, TBANK succeeded to restructure its deposit portfolio with more focus on the retail customers
with appropriate CASA to fixed deposit proportion, which in turn led to significant reduction in the cost of fund. 5. We intend to grow our loan market share in targeted segments. In 2013, TBANK put emphasis on a well balance loan portfolio and diversified loan growth in other products beside hire purchase, e.g. corporate loans, SME loans and other retail loans. TBANK had a strategy to focus on high yield products, e.g. SME-S loans, credit card loans and personal loans. In 2013, TBANK also succeeded in expanding corporate and retail loan portfolio with approximately 100,000 new customers. 6. We intend to increase the fee-based income proportion to be on par with industry average. To increase fee based income in the long term and efficient adjust income structure, TBANK put its focus on cross-selling effort with its subsidiary companies’ products, e.g. life insurance, non-life insurance, mutual fund, and etc. Partnership with Prudential has strengthened fee income generation, a result of product innovation, accurate response to market need, and system improvement by world-class company. Furthermore, TBANK was entrusted from credit rating agency of the country and the world. TBANK received the “Trusted Brand 2013” award from Reader Digest, “Automotive Finance Company of the Year” award from Fros & Sullivan Thailand Excellence Award 2013, “Morning start Thailand Fund Award 2013”, “Best Surveyor Award 2012”, excellent insurance company award runner-up 2012, and “Company of the Year 2012” award. These substantiate TBANK competency and capability to be a leading bank which can meet to the customers’ needs with a broad range of its products and services.
Competitive Advantage and Competitors TBANK has the competency and capability to sustain its growth in the future as compared to other commercial banks. In 2013, TBANK’s total assets were THB 1,038,349 million, an increase of THB 19,000 million from 2012, equivalent to 7.33 percent market share in the commercial banking industry. Asset growth was mainly driven by loan growth. In 2013, total loans were THB 790,017 million, an increase of 4.77 percent from 2012, equivalent to 7.04 percent market
share. The two highest growth came from hire purchase and unsecured personal loans. In 2013, TBANK’s deposit and borrowing portfolio ended at THB 811,308 million, an increase of 4.48 percent from 2012. This was due to the expansion in the retail deposit clients in order to reduce cost of deposit. TBANK’s deposit accounted for 6.86 percent market share. TBANK intended to provide convenience and easy access to financial products and services for its customers. In 2013, TBANK had a total of 621 branches, including head office, ranked number fire of the industry, accounted for 9.38 percent of all commercinal banking branches. Furthermore, TBANK offerd electronic channels, e.g. 2,057 ATMs, Thanachart i-Net, Interactive Voice Response (IVR), and etc., in order to offer the proper channel and cover the customers’ needs in each segment.
Securities Business Securities Business is provided to customers through Thanachart Securities Public Company Limited (TNS). The company was granted a full license to operate a full range of securities businesses including securities brokerage (inside and outside Thailand), securities underwriting, investment advisory service, securities borrowing and lending service, financial advisory service, mutual fund management, private fund management, venture capital management, securities registrar, and derivatives business Sor 1. Products and Services TNS operates two key areas of business, brokerage business and investment banking and advisory business. As of December 31, 2013, the company had a total of 35 branches and offered the following services: 1. Brokerage Business covers brokerage services which includes a service of securities dealing, securities trading, and giving investment advices to investors whether individual, retail, institutional, local or foreign, to make decision on their investment. The Company had operated as a broker in selling offshore securities. This service had been provided since 2009. In addition, the Company had planned to provide opportunities to individual and juristic investors, in providing an alternative investment options as well as efficiently allocating the risks. The Company provides this brokerage service Thanachart Bank Public Company Limited
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through DMA (Direct Market Access), allowing to purchase securities from all over the world such as of the following: Asia: Australia, Hong Kong, Singapore, Malaysia, Japan, Philippines, Indonesia, South Korea, Taiwan, China, and plan to expand to Vietnam and Laos in 2014. America: United States of America, Canada. Europe: Netherlands, Belgium, Portugal, France, German, England, Italy, Denmark, Finland, Sweden, Norway, Spain, Switzerland, Poland and Austria. 2. Derivative Business covers trading services for future contracts and derivatives. 3. Securities Borrowing and Lending (SBL) covers services of borrowing or lending securities for customers who has a desire to borrow or lend securities. 4. Derivative warrant (DW) is issued and sold for customers as an alternative of investment to increase liquidity and spread of risk investment. 5. Investment Unit Dealer covers services of sale support and provides fund facts and related information on mutual funds of various asset management companies that TNS represents. 6. Financial Advisory and Securities Underwriting Services cover financial advisory business, underwriting service of debt and equity securities both as a role of lead underwriter, co-underwriter, and dealer. 7. Securities Registrar covers three types of services, namely, a securities issuance registrar, securities holder registrar and a registrar for the Employee Stock Option Program (ESOP). 8. Structure Notes are issued and sold for customers in order to increase an opportunity of investment and spread of risks. Competition and Market Outlook 1. In the past decade, 2013 was considered to be the best year in term of sales volume and price SET index. Securities business in Thailand was immensely engaged in the first six months of the year and decelerated in the second half of the year. The major concern was due to the capital outflow from the emerging markets especially in Asia to the United States of America in case U.S. tapered its Quantitative
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Easing measure. When economic factors recovered, it caused the SET index to fluctuate in Quarter 2. The domestic economy has continuously decelerated after Quarter 1 due to the first car program and household debt. The export sector was slowly recovered from baht appreciation and the shrink of the agricultural and electronic product export volume. The political unrest was also another factor that caused the slowdown of economy in Quarter 4. Performance of securities business in 2013 was at THB 12.33 trillion, in which retail investors hold 57 percent in market and foreign investors’ seller with net selling of THB 193,911 million. In 2013, in term of fund raising, there were 28 registered companies, 13 SET companies, and 15 new securities business (MAI) involved. SET index as of end of year closed at 1,298.71 points lower than the previous year, which closed at 1,391.93 points at 93.22 points or decreased by 6.7 percent of average daily selling at THB 48,070.25 million. TNS ranked 6 from 33 securities companies and market share accounted for 4.66 percent. In 2013, there was an aggressive competition especially in retail investor due to two new emerging securities business namely AEC Company and Apple Wealth Company. Foreign securities business also played a part in the market shares, which led to the business cooperation between the Bank and securities business in its conglomerate. 2. There are a total of 42 members in the Thailand Future Exchange (TFEX). In 2013, total trading volume was 16,664,126 contracts, or a daily average of 68,017 contracts, an increase of 55.2 percent from a daily average of 43,823 contracts in 2012. The key contributing factor was from Stock Futures, SET50 Index Futures, Gold Futures, and USD Futures. Daily market trading value as of 2013 accounted for THB 26,970 million and total trading account of investors’ 87,693 accounts. In term of market share Thanachart ranks 16 or at 2.20 percent. 3. In financial advisory and securities underwriting services, competition was aggressive, especially in mergers & acquisitions, IPOs and fund raising. Though competition focuses on price, the key competitive factor, thus, remains on service quality, expertise on providing a customer with relevant advice and solutions to a problem, having a wide network, as well as product innovation, which can create value-added and greater benefits to customers of TNS.
Fund Management Business TFUND operates in a business of fund for investment including fund management, private fund, provident fund, and investment advisory business. Products and Services TFUND provides various types of fund investment in order to respond to different types of customers at all levels. The company utilizes many types of distribution channels for sales, such as TBANK’s branches and other investment unit distributors licensed by SEC. TFUND’s staffs are legally qualified and strictly adhere to related laws and regulations. For greater convenience, the Bank, acting as investment unit distributor, has been supporting sale and repurchasing of investment units offered by TFUND as well as other investment management companies it represents through electronic channels. Competition and Market Outlook As of December 30, 2013, there were a total of 22 fund management companies, with total assets under management of THB 2,670,044.63 million (excluding Vayupak Fund, Foreign Funds, Property Fund for Resolving Financial Institution Problem and Property and Loan Fund), an increase of 17.86 percent from 2012. During 2013, there were 823 newly issued funds, accounting for THB 1,635,060.98 million of net assets. Among the newly issued funds, 647 were domestic and foreign investment funds fixed-income funds investing in debt securities with maturity not exceeding 1 year, which accounted for THB 1,389,647.76 million of net assets or 84.99 percent of total net assets of the newly issued funds during 2013. Newly issued funds by the TFUND in 2013, 67.97 percent were debt securities with maturity not exceeding 1 year, in accordance to the industry average. As of December 30, 2013, TFUND had THB 134,401 million assets under management from which retail mutual funds accounted for THB 105,308.74 million, private funds accounted for THB 18,565.15 million, and provident funds accounted for THB 10,526.70 million.
Insurance Business The Insurance business of Thanachart Group could be divided into two key areas as follows:
Non-life insurance Non-life insurance business is operated by Thanachart Insurance Public Company Limited (TNI), which offers all types of non-life insurance services. Characteristics TNI offers all types of insurance services e.g. fire, automobile, marine, and miscellaneous. In addition, the company also operates investment businesses. Competition and Market Outlook In 2013, non-life insurance business in Thailand experienced a growth in direct premium income compared to 2012. For the 9-month period of 2013, the growth rate was at 15.8 percent which was an increasing rate as compared to the same period of 2012 which had a growth rate of 27.1 percent; due to the implementation of the government’s first car program, which led to the increase of insurance premium in the current year. As for the non-life insurance market structure in 2013, automobile insurance received the highest share of the market with a total share of 57 percent, followed by miscellaneous insurance with 36 percent, fire and marine & transportation insurance with 5 and 2 percent, respectively. TNI focuses on a standard of products, service quality, productivity, efficiency and honesty, as well as development of new products in order to offer new policies which are more coherent with economic and social conditions and responsive to customer needs, by taking into consideration a fair premium rate to customers. Furthermore, the company constantly adjusts its progressive competitive strategy to be coherent with ever-changing conditions, by ways of increasing sales channels, expanding the customer base, and maintaining the existing customer base. As much as 95 percent of all customers are those with a policy claim limit not exceeding THB 5 million. The customers mostly select automobile and fire insurance and these customers mainly are TBANK’s lending customers as well as customers from the company’s marketing campaigns. This service is only offered to domestic customers. The customer groups with a policy claim limit of THB 5 million are mostly comprised of institutional customers, private Thanachart Bank Public Company Limited
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enterprises that possess branch network, both in commerce and industrial sectors. A major portion of this customer group choose miscellaneous and fire insurances. As aforementioned, it can be concluded that TNI has never relied on any customer group that accounted for more than 30 percent of TNI’s total revenue The non-life insurance industry status according to the 2014 direct premium forecast by Thai Reinsurance Public Company Limited, the Thai economy is expected to continue growing after 2013; therefore, the non-life insurance premium will grow approximately at 16.7 percent. The total direct premium will be at THB 252,383 million. The miscellaneous insurance premium will have the highest growth at 25.0 percent, followed by motor insurance with approximately 12.9 percent growth. The marine insurance and fire insurance will grow at approximately 9.9 percent and 6.9 percent respectively.
Life Insurance Business SCILIFE operates in the life insurance business for institutions, corporate, and individuals. Characteristics SCILIFE provides both individual and group life insurance. These life assurance products serve as a mean for savings and provide life and health protection for individuals, institutional customers and organizations in general.
• Individual life assurance products The Company offers a variety of savings products, limited-term products and lifetime products as described below. SCI Life 20/10M: This product provides a coverage period of 20 years, while its premium payment period is 10 years, with a refund of 3 percent of the initial insured sum at the end of the 1st to the 19th year, and 150 percent of the initial insured sum at the end of the 20th year. The total amount of refund throughout the agreement term is 207 percent of the initial insured sum. Healthy Max: This product provides a coverage period of 5 years, while its premium payment period is 5 years, and covers all kinds of death, whether due to illness or accident. The maximum
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coverage in the case of death is THB 100,000, and in the case of medical expenses is THB 200,000 per incident.
• Group life assurance products The Company offers both the life insurance products and life cum health insurance products. This product provides protection both during and outside working hours. No health examination is required, and a single premium rate is used for all genders and ages. Competition and Market Outlook Target Customers
SCILIFE’s life assurance marketing strategy focuses on both individual and group customers. Health product marketing is aimed at middle to upper income customers. Distribution Channels SCILIFE operates its businesses under a multiple sales channel strategy in order to meet all financial needs and coverage requirements of its target customers. Its sales channels include telesales and brokers.
Assets Management Business Products and Services Assets Management Business operates by TS Asset Management Company Limited (TS AMC) received the transfer of non-performing assets from SCIB, including both non-performing loans and non-performing assets, in order to conduct debt restructuring with the debtors, hence, allow them to repay the debts at their real capacity and turning non-performing assets back to becoming the performing ones. Competition and Market Outlook TS AMC operates its business with a primary objective to manage and restructure the non-performing assets received from SCIB. To manage, divest, or sell those non-performing assets (NPAs) to third parties who are interested in real estate market, TS AMC hires a professional advisory in assets sales to determine the selling price and manage the assets in such a way that creates the highest value. It also appoints a professional asset selling agent to develop value-added
asset packages as well as collaborates with the related group of companies to expand sales channels, such as brokers or auction agents as well as cross selling and through website of TNS and the other channels to reach the target customers as much as possible.
Leasing Business Products and Services Ratchthani Leasing Public Company Limited (THANI) operates in hire purchase business and financial leasing. THANI focuses on the market segment of new cars and used cars for commercial use including pick up cars, taxis, truck puller, and private cars. Moreover, the Company also offers credit for both used and new car at 50 percent and 50 percent respectively of the total credit; and credit for truck and other type of cars at 75 percent and 25 percent respectively. Operating in the business that providing credit for used cars is exposed to greater risk than new car. The Company has to take many factors into consideration prior giving credits including car condition, used car price in market, document checking, license plate, etc. Therefore, professionals in such area are necessarily required. THANI also provides after sales services such as the renewal of the motor-vehicle tax and insurance policy renewal. This also includes taking the vehicle for checkup for renewing the motor-vehicle tax. Not only would this be a convenience to the customers, it also generates income to the Company as well. In addition, this approach benefits the Company as it would insures the customer’s vehicle and prevent losses to the Company. Competition and Market Outlook The overview of the leasing business is relatively aggressive especially those in commercial banking, leasing and hire purchase business that focus on personal vehicle. This led many traders to consider used car segment as a new business with higher interest rate in order to maintain the margin gap. However, the Company has an adjustment plan on the giving credit to commercial trucks including both new and used trucks in 3 - 5 years with the target at 75 percent of the portfolio. In order to increase its competitive advantage, the Company focuses on this business segment. The Company expected the business segment to contribute
to a high growth of customer, higher yield, and lower risk comparing to the personal car segment. With extensive experience in the business sector, speedy service, good relationship with customers, and good deal for used car dealers, the Company remains competitive and maintains its market share despite the aggressive competition in market.
Products and Services Management Sources of fund The source of TBANK’s and its subsidiaries’ fund comprises of issued and paid-up capital, whereby in 2013, was in the amount of THB 55,137 million, in which the statutory reserve and retained earnings were included. Another two key sources of fund were: 1. Deposits as at the end of 2013 were in the amount of THB 719,079 million. 2. Borrowings which were in the amount of THB 92,229 million, of which THB 7,130 million were hybrid tier 1, THB 40,516 million were subordinated debentures, THB 14,246 million were debentures, THB 29,226 million were short-term debentures, THB 1,065 million were bill of exchange, and THB 46 million were others.
Funding or lending to related parties TBANK extended loans to TS AMC for non-performing asset management business, in line with the business policy of Thanachart Group. In 2013, loan outstanding balance was THB 4,555 million, decreased from THB 6,060 million at the end of 2012. The aforementioned loan outstanding balance accounted for 0.68 percent of total loans at the end of 2013. All lending and borrowing activities were transacted under the permission of the BOT.
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Risk Factors An overview of the Risk Management In 2013, the overall recovery of the world economy was slow as the economic figures of the United States (US), Japan, China and many countries in ASEAN increased at a slower rate while the economy in EU still contracted even though it started to show a good trend at year-end. These resulted in the reduction of demand for Thai exports. In addition, Thailand’s domestic demand for private consumption and investment also declined due to the political and economic uncertainty which slowed Thailand’s economy in 2013. The commercial banks’ credits given to private sector and households grew at a slower rate as a result of the slowdowns in private consumption and investments caused by volatile economic conditions and tighter household credit approval process of commercial banks due to the high level of household debts. Car hire purchase loans largely slowed down after all cars purchased under the government’s tax rebate scheme for first-time car buyers in 2012 had been delivered. However, a number of risk factors should be closely monitored in 2014 such as the economic recovery of industrialized countries, the quantitative easing tapering of the U.S. which affects fund flows and Thai baht value, the political uncertainty which affects investments and government spending on infrastructure, and drought problems which seem to be more severe than last year. The economic situation of Japan has weakened and the conflict between Japan and China tends to be longer. In addition, an infrastructure investment of the Government may be delayed and this would be the risk factors for 2013 business and need to be monitored closely. The Bank and its subsidiaries realize the importance of continuous risk management. The Bank has an Internal Capital Adequacy Assessment Process (ICAAP) to support various types of risk in compliance with capital supervisory measures of Basel III framework, in accordance with the Bank of Thailand (BOT) guidelines, which enables the Bank and its subsidiaries to efficiently manage fund, have strong funding position, and firmly support business expansion. Nevertheless, the Board of Directors and executives of the Bank closely oversee, monitor and develop the risk management system regularly to ensure that the measures are updated and in line with the ever-changing internal and external risk factors. The Bank strategically establishes an organization structure to support the risk management under the policy outline via various committees’ supervisions as follows:
The Board and Committees at the Policy Level: The Bank’s Board of Directors and the Executive Committee have a role in policy making and establish guidelines for an efficient enterprise-wide risk management by taking into consideration the impact of risks on the Bank’s operational goal and financial position that have to be in line with its normal operation. Risk Management Committee has a role in establishing strategic plans and developing the risk management procedure as well as considering appropriate risk management policies and guidelines to be proposed to the Executive Committee and the Bank’s Board of Directors for consideration and approval.
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Audit Committee has a role in determining the supervisory guidelines for the operation to comply with measures of related authorities as well as assessing the effectiveness and sufficiency of the risk management process and internal control system.
The Committees at the Operation Level: Asset and Liability Management Committee has a role in supervising the structure of the Bank’s assets and liabilities to be appropriate for characteristics of the business and in line with the Bank’s risk management policy. Investment Portfolio Committee has a role in supervising the investment in financial instruments of the Bank to be in line with the Bank’s market risk management policy. Credit Committee has a role in supervising the credit lending and other credit-related transactions to be in line with the Bank’s credit risk management policy. IT Security Management Committee has a role in establishing policies regarding the IT Security System, proposing preventive measures against risks arising from information and technology system, as well as monitoring, supervising and controlling the operation of the IT Security System to be in line with the proposed plan. Audit Division has a key role in reviewing internal control system, risk management system, the conduct and disclosure of financial information, the operation, the report and supervisory procedures to ensure practices in accordance with policies, work plans, rules and regulations of the Bank and its subsidiaries, official rules and regulations of relevant regulators and good corporate governance principle, and providing consultation with other divisions for further development and proper internal control of the Bank’s and its subsidiaries’ systems.
The Bank’s Risk Management Structure As of December 31, 2013 Board of Directors Audit Committee
Risk Management Committee Chief Risk Officer
Executive Committee
Chief Audit Compliance
Risk Policy and Capital Markets
Credit Risk Management 1
Chief Executive Officer and President
Credit Risk Management 2
Risk Control
Asset and Liability Management Committee
Investment Portfolio Committee
Deputy Chief Executive Officer
Credit Committee
Office of Executive Committee Chairman and CEO
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• The conduct of business affairs is under the system of check and balance with the Middle office, comprising the Risk Control Unit and the Back Office, being separated from the Front Office. • The Bank puts in writing all the established policies and guidelines regarding the risk management that specify responsibilities of related units as the operational guidelines for the employees. Moreover, the Bank has established a four-step guideline for risk management comprising: 1) identification of the characteristics of risks as well as risk factors, 2) development of appropriate tools and models for risk measurement, 3) control of risks within acceptable limits and 4) monitoring of risk status in order to properly manage any possible risks in a timely manner. • The determination of size and proportion of different risk values by the use of risk calculation tools and models allows the Bank to perceive the degree of severity from possible risks. These risk variables could also be used as the ceiling to control risk under the acceptable level as well as to provide warning signals before severe losses occur. The aforementioned risk management systems are developed based on prudent principles, and will be reviewed regularly to suit prevailing situations. The systems are designed to be transparent, examinable, and to take into consideration the interests of shareholders, customers and employees of the Bank.
Key Risk Categories 1. Credit Risk Credit risk arises from a situation in which the debtors or counterparties fail to repay or fulfill their agreed obligations. This might be contributed by the fact that the debtor’s financial position is under distress due to volatilities of economic conditions that pose adverse impact on businesses or the debtors’ mismanagement, which as a result, may adversely affect the Bank and the subsidiaries’ earnings and capital. The credit risk may arise from ordinary financial transactions such as credit lending, financial obligations in the form of avals or guarantees, other transactions related to credit lending, as well as investment in debt instruments issued by state agencies or state enterprises with neither guarantee from government nor the BOT and private debt instruments such as debentures. 048
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Under its credit risk management policies and guidelines, the Bank has successfully established a credit culture. To start with, the credit risk of the borrowers, counterparties or issuers of debt instruments will be independently assessed by the model developed specifically to each type of borrowers or counterparties by the Credit Analysis Unit. At this juncture, authorized Credit Committee would then consider and determine the level of credit risk of borrowers or counterparties, appropriate credit lines and investment budget, as well as terms and conditions on loans or other obligations. The Committee also controls the overall risk status by appropriately diversifying credit risk into various business sectors and groups of customers within the established risk ceilings. In addition, the Committee closely monitors the quality of loans to ensure proper and vigilant management by emphasizing business capability and repayment ability under the supervision of an independent risk control unit. Apart from the aforementioned units, there is also an Internal Audit Division to verify that the credit transactions are in compliance with the BOT’s guidelines. To ensure optimal returns under acceptable risk, the Bank has employed measuring tool called RAROC (Risk Adjusted Return on Capital) to reflect the appropriate level of capital. Moreover, the Bank also performed stress tests to estimate any damage that may occur during the crisis. Under this condition, the borrower’s ability to repay could erode or they could fail to make a repayment under terms and conditions stated in the hypothesized contract. The risk factors in the tests were assumed to affect the industry that the debtors’ business belonged to.
Important credit risk factors
1.1 Credit concentration risk The Bank aims to appropriately diversify its loans to various groups of customers, focusing on high potential customers and attempt to prevent concentration of loans to a particular group of customers. Under such goal, the Bank pursues proper risk management on overall credit portfolios with close monitoring and comprehensive assessment to report to the assigned committees on a regular basis. The purpose is to mitigate exogenous risks that may adversely affect any particular group of business excessively financed by the Bank.
Credit status, as of December 31, 2013 and December 31, 2012 classified by business types was as follows: Business type
2013 Debt balance (THB Million)
2012 Percent
Debt balance (THB Million)
Percent
Agricultural and mining Manufacturing and commerce Real estate and construction Public utilities and services Private consumption Housing loans Margin loans for securities business Hire purchase Others Others
11,991 80,969 50,638 68,224
1.52 10.25 6.41 8.64
16,644 88,813 51,325 63,263
2.21 11.78 6.81 8.39
83,673 3,317 440,097 28,209 22,899
10.59 0.42 55.71 3.57 2.89
82,621 2,613 396,873 31,117 20,794
10.96 0.34 52.63 4.13 2.76
Total loans and accrued interest receivables
790,017
100.00
754,063
100.00
The overall credit data revealed that the Bank’s lending on hire purchase business grew moderately from 52.63 percent as of December 31, 2012 to 55.71 percent of total loans as of December 31, 2013. Most of these hire purchase loans were provided to retail customers whose credit lines were relatively small and with a large number of customers, such risk therefore was well diversified.
1.2 Risks from non-performing loans The non-performing loans are loans classified as substandard, doubtful and doubtful of loss. They have been the major concerns across financial institutions due to their adverse effect on earnings and capital of the Bank and subsidiaries. At this juncture, the Bank has put its efforts into controlling credit quality through appropriate policies and procedures to regularly monitor the quality of the loans. The NPLs ratios of the The Bank and subsidiaries that were financial institution
As of December 31, 2013 and December 31, 2012 were as follows: Loan classification
2013 Debt balance (THB Million)
2012 Percent
Debt balance (THB Million)
Percent
Substandard Doubtful Doubtful of loss
6,133 9,324 19,724
17.43 26.50 56.07
5,273 4,529 22,563
16.29 14.00 69.71
Total
35,181
100.00
32,365
100.00
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The non-performing loans of the Bank and subsidiaries that were financial institutions increased from THB 32,365 million as of December 31, 2012 to THB 35,181 million as of December 31, 2013. From the credit overview, the non-performing loans accounted for 4.63 percent of total loans and accrued interest receivables, increased from 4.42 percent as of December 31, 2012. The Non-Performing Loans Classified by Business Types (excluding accrued interest receivables) Business type
2013 Debt balance (THB Million)
2012 Percent
Debt balance (THB Million)
Percent
Agricultural and mining Manufacturing and commerce Real estate and construction Public utilities and services Private consumption Housing loans Margin loans for securities business Hire purchase Others Others
777 10,383 2,736 6,432
2.21 29.55 7.79 18.30
251 11,943 3,730 3,705
0.78 36.94 11.54 11.46
4,426 0 8,232 1,716 440
12.59 0.00 23.42 4.88 1.26
4,375 0 5,200 2,567 557
13.53 0.00 16.09 7.94 1.72
Total loans
35,142
100.00
32,328
100.00
Troubled Debt Restructuring (Unit: THB Million)
Number of debtors (persons) Outstanding principal and accrued interest receivables Loans not fully covered by collateral Revaluation allowance for debt restructuring Total loans and accrued interest receivables Restructured debts to total loans (percent)
2013
2012
44,471 30,377 15,895 301
54,854 33,661 19,573 344
791,026
755,129
3.84
4.46
The risk on debt restructuring arises from the re-entry of the substandard debtors, i.e. after the debt restructuring, the debtors again default on their repayments and hence re-enter the non-performing status. The problem poses adverse effects on debt-restructuring performance of the Bank and its subsidiaries. As of December 31, 2013, the outstanding principal and the accrued interest receivables of the restructured debt amounted to THB 30,377 million or 3.84 percent of total loans and accrued interest receivables. The net restructured debt (less collateral) amounted to approximately THB 15,895 million.
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1.3 Risks from Collaterals For collateralized loans, the Bank carefully assesses and classifies quality of each type of collateral by taking into account the liquidity and overall risk from that collateral. The assessment result is one of the important factors applied in the classification of each credit exposure. In this regard, the collateral, both in the form of immovable and movable whose value could be appraised, is subject to appraisal or valuation complying with the BOT’s regulation. The Bank’s significant types of collateral are deposits and bills of exchange, marketable equity securities, non-listed equity securities, commercial immoveable property, immovable property from housing, vehicles, machinery, etc. The Bank has determined guidelines, standards and frequency of appraisal and valuation of each type of collateral. Furthermore, a report of the appraisal and valuation is made which includes clear and sufficient data and analysis to determine the price. In case that it cannot be specified whether the collateral price has decreased or declined over time, the impairment of the asset must be considered by an official. In the past years, automobile hire purchase loans of the Bank and its subsidiaries have continued to expand. According to the BOT notification regarding the valueless and non-callable assets dated December 2006, the regulations on provisioning based on IAS39 whereby cars of which ownership belongs to the Bank can be used as collateral. In case of default, the Bank is eligible to immediately repossess to collateral for the purpose of reselling in the used car market. As a result, the Bank and its subsidiaries might be exposed to risk from the inability to repossess the cars or from recovering the incurred loss by reselling the assets. Such conditions depend on various risk factors, for instance, the conditions of the used car market and the repossessed car itself.
1.4 Risks from Guarantees and Avals Providing the current customer service, the Bank and its subsidiaries are also obligated in forms of avals, letter of credits and loan guarantees, which the Bank and its subsidiaries are held responsible for, should the customers are unable to fulfill their obligations. In managing such risk, the Bank carefully scrutinizes supporting information and applies strict approval procedures to these obligations.
The close monitoring on these transactions is undertaken based on the same guideline used for its regular lending procedure of the Bank. As of December 31, 2013, the Bank and its subsidiaries’ obligations in the form of avals and guarantees for loans amounted to THB 28,688 million or 2.76 percent of the total assets.
2. Market Risk The market risk arises from movements in interest rates, exchange rates and prices of instruments in money market and capital market, which may adversely affect earnings and capital of the Bank and its subsidiaries. The market risk can be segmented into three categories including price risk, interest rate risk and exchange rate risk. At this juncture, the Bank’s policies are to control and manage these risks to remain at an appropriate level and in line with the Bank’s policy on risk management.
2.1 Price Risk Price risk arises when the Bank and its subsidiaries’ earnings or capital are adversely affected by changes in the price of debt and equity instruments, causing the value of THE BANK and its subsidiaries’ trading and available-for-sales investment portfolio to decline. The Bank has developed risk measurement tools based on the Value-at-Risk (VaR) model to estimate the maximum loss amount at a certain confidence level and over a given asset holding period. The Bank also determines the various limits of transactions in order to control risk to remain in an acceptable level, for example; Position Limit, Loss Limit and VaR Limit. The Risk Control Unit, separated from the front office and the back office, has the duty of risk control and reporting on the status of the limits to the Board of Directors, departments and executives associated to the risk management. In order to ensure the efficiency and accuracy of its tools for risk measurement, the Bank requires that the tools are subject to back-testing in accordance with the Bank of International Settlement (BIS) standards. Moreover, the Bank has conducted stress testing by formulating stress scenarios which can create extraordinary reduction in stock prices. The test result could therefore shed light on the impact on the Bank’s earnings and required capital should such events occur. Thanachart Bank Public Company Limited
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As of December 31, 2013, the Bank and its subsidiaries’ trading investments and available-for-sale securities classified by type of investment were as follows: Fair Value (THB Million) 2013
2012
4,975 5,214 0 16
5,643 5,736 628 16
Total trading investments
10,205
12,023
Available-for-sale investments Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
71,805 25,686 14,543 1,344
55,433 30,063 11,746 7,691
Total available-for-sale investments
113,378
104,933
Total trading and available-for-sale investments
123,583
116,956
Trading investments Government and state-owned enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
The trading investments value has decreased but the available-for-sale investments value has increased thus the total investments value of the Bank and its subsidiaries has increased. The major increase has come from additional investments in government and state-owned enterprise securities which has resulted in the increase of overall Price Risk value of the Bank and its subsidiaries.
2.2 Interest Rate Risk The interest rate risk is the risk that earnings or capital are adversely affected by changes in interest rates that pose impact on its rate-sensitive items including assets and off-balance sheet items whose repricing periods are mismatched. These changes may have a negative impact on net interest income of the Bank and its subsidiaries. It is the goal of the Bank to run their business operations under a long-term effective interest rate risk management system. In other words, to maintain an appropriate structure of assets and liabilities which are rate-sensitive at different time intervals. To ensure maximum benefits of the Bank’s shareholders, the Bank has developed the Repricing Gap Analysis Model as a tool for measuring interest rate risk by assessing the impact that may arise from the mismatch of the repricing periods of assets, liabilities and obligations at different time intervals, which is used for risk measurement every month. In order to ensure that the risk of the Bank business operations is within an acceptable limit, they have also established an acceptable risk ceiling and an early warning risk level, taking into account the structure of assets, liabilities and obligations as well as interest rate repricing which are expected to take pace in each period of the Bank business plan. The Asset and Liability Management Committee (ALCO) is responsible for monitoring and controlling such risk very closely. To effectively design appropriate measures to accommodate the risks, the committee has to monitor economic conditions, development in the money market and capital market and the interest rate trend which could become important risk factors to the Bank’s rate-sensitive items.
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Annual Report 2013
Details of financial assets and liabilities as of December 31, 2013, classified by the period when the interest rates would be repriced in accordance with contracts related to financial assets and liabilities of the Bank and its subsidiaries were as follows:
(Unit: THB Million)
Period of interest rate repricing or due date Items
Interest rate adjusted 0 - 3 in accordance with market interest rate months
Financial assets Cash Interbank and money market items Derivatives Investments Loans Receivables from purchase and sale securities and derivatives Receivables from clearing house Total financial assets Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Borrowings Payables from purchase and sale securities and derivatives Payables to clearing house Total financial liabilities
- 973 - 2 332,015
- 48,127 - 1,755 17,918
- -
- -
332,990
67,800
245,203 11,077 - - 1,065 - - 257,345
3 - 12 months
1-5 years
Over 5 years
- - - 11,088 - - - - - 27,513 85,381 18,673 11,604 312,602 115,317 - -
- -
- -
50,205 397,983 133,990
222,425 221,391 43,400 18,620 - - - - 23,265 20,100
23,207 6,436 - - 35,283
- - - - 12,516
- -
- -
- -
289,090 260,111
64,926
12,516
- -
No interest
Total
17,940 17,940 9,673 69,861 3,914 3,914 6,765 140,089 561 790,017 1,646 170
1,646 170
40,669 1,023,637 6,853 719,079 1,549 81,082 3,219 3,219 5,701 5,701 - 92,229 1,295 509
1,295 509
19,126 903,114
Based on the aforementioned structure of financial assets and liabilities, the Bank’s net interest income next year would decrease should the market interest rate increase. This was mainly due to the expansion of the Bank’s hire purchase business with fixed-interest-rate feature.
2.3 Exchange Rate Risk The exchange rate risk is a risk that the earnings or capital of the Bank and its subsidiaries can be adversely affected by exchange rate fluctuations from transactions in foreign currencies, exchange rate exposures in their possession of assets or liabilities in foreign currencies. There are two types of exchange rate risk-risk from transactions in foreign currencies (Transaction Risk) and risk from exchanging foreign currency to local currency (Translation Risk). The ALCO is responsible for monitoring and controlling this type of risk through the consideration in the proper matching between the structure and the maturity of assets and liabilities in foreign currencies. The Bank’s policy is to also rely on the VaR ceiling in order to control the impact of exchange rate movements on earnings and capital. Nevertheless, in order to avoid the exchange rate risk, the Bank has also relied on hedging instruments such as forward contracts. Thanachart Bank Public Company Limited
053
As of December 31, 2013, the Bank and its subsidiaries faced with relatively low exchange rate risk as most of the assets in foreign currencies have been hedged by forward contracts.
3. Liquidity Risk Liquidity risk arises from the inability of the Bank and its subsidiaries to repay their debts or obligations upon the delivery date due to the lack of ability to convert assets into cash or to mobilize adequate funds or to mobilize funds at an acceptable cost. This could adversely affect the current and future earnings and capital of the Bank and its subsidiaries. The liquidity risk management mechanism starts with the assessment of the cash flows and liquidity position over particular time horizons of the Bank when the different levels of funds may be required to accommodate deposit withdrawal, reduce other types of the Bank’s liabilities or increase the Bank’s assets by using the Liquidity Gap Analysis. Various liquidity ratios and “What if” scenarios to evaluate the sufficiency of the cash flow liquidity depending on customer behavior in extending contracts upon maturity and estimate the need of liquidity in various “What if” scenarios depending on the economic climate and extraordinary situations that may happen to the Bank and the financial institution system. Meanwhile, the Bank and its subsidiaries developed an emergency plan in case of a liquidity problem and there will be a revision of the significant occurrences that affect working operations. In this regard, the Bank and its subsidiaries have assigned ALCO, controlling and managing the liquidity risk with a weekly meeting to monitor and manage risk. The structure of the Bank’s capital fund could be classified by different types and maturities of sources of funds as follows: Capital Funds Classified by Sources
(Unit: THB Million)
2013
Percent
2012
Percent
Deposits Interbank and money market items Borrowings
719,079 81,082 92,229
80.58 9.09 10.33
698,372 87,777 78,149
80.80 10.16 9.04
Total
892,390
100.00
864,298
100.00
Capital Fund Classified by Maturities
(Unit: THB Million)
2013
Percent
2012
Percent
Less than 1 year More than 1 year
798,311 94,079
89.46 10.54
789,474 74,824
91.34 8.66
Total
892,390
100.00
864,298
100.00
As of December 31, 2013, deposits and borrowings of the Bank and its subsidiaries amounted to THB 892,390 million, where sources of funds were mostly from public deposits with the maturity less than one year. This is considered a common structure of the commercial banks. Nevertheless, the Bank and its subsidiaries also issued other products such as debentures in order to increase the saving alternatives for their customers.
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Annual Report 2013
The financial assets and liabilities as of December 31, 2013 classified by maturity date were as follows: (Unit: THB Million)
Items
The maturity date of financial instruments At call
Less than 1 year
More than 1 year
Not specified
Total
17,940 10,233 - 1 62,562
- 59,508 3,914 37,792 224,489
- 120 - 95,618 502,966
- - - 6,678 -
17,940 69,861 3,914 140,089 790,017
- -
1,646 170
- -
- -
1,646 170
90,736
327,519
598,704
6,678
1,023,637
248,085 12,403 3,219 - 1,065
443,392 62,131 - 5,701 31,235
27,602 6,548 - - 52,799
- - - - 7,130
719,079 81,082 3,219 5,701 92,229
- -
1,295 509
- -
- -
1,295 509
264,772
544,263
86,949
7,130
903,114
Off-balance sheet items Avals to bills and guarantees of loans Obligation under unmatured import bills Letter of credits Other commitments
15 42 326 43,886
571 604 3,741 4,959
79 - - 2,449
- - - -
665 646 4,067 51,294
Total off-balance sheets
44,269
9,875
2,528 -
56,672
Financial assets Cash Interbank and money market items Derivatives Investments Loans Receivables from purchase and sale securities and derivatives Receivables from clearing house Total financial assets Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Borrowings Payables from purchase and sale securities and derivatives Payables to clearing house Total financial liabilities
4. Operational Risk The operational risk is the risk that arises from the damage that occurs from lack of good corporate governance within the organization. Risk may also arise from the inadequate efficiency of the internal audit and internal control systems which could be relating to internal operation process, personnel, systems or external events. This also includes legal risks such as litigations, exploitation by the government and also damage from settlements outside the courtroom. Such risks can pose adverse impact on other risks, especially strategic risk and reputation risk.
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The Bank has established policies and guidelines to ensure the prevention and monitoring of this type of risk. As the internal control system is an important tool in controlling and preventing potential risk that may occur, the Bank has implemented an efficient internal control system as follows:
work operations of financial institutions at present and in the future. The Bank determines policies in order to manage the risk that may occur from outsourcing. These policies have to also be subject to regulations of BOT and must be beneficial to the internal control of the Bank as well.
• Regarding the organization of the Bank’s structure, the Bank has specified the roles, the scope of duties and responsibilities for each position, based on a system of check and balance. The front office where all the transactions take place is separated from the middle office, comprised of the Risk Control Department and the back office who record all items in the transactions.
In the measurement and assessment of operational risk, the Bank determines a principle, form or condition of the process used in the measurement and assessment of risk in the Bank. In the determination of this process, the Bank considers the circumstantial factors such as supervising guidelines of the government units associated with the Bank, state and complexity of the business, the capability of the Bank in accepting risk, probability, likelihood or frequency as well as the impact or severity of risk that has happened or may happen. As per BOT’s specification for commercial banks to maintain funds in proportion to risk-weighted assets in terms of credit, market and operation according to Basel III guidelines, the Bank has employed the Basic Indicator Approach to calculate operational risks.
• Establish the transaction-supporting units which are independent and have expertise in their respective fields of work such as information technology unit, legal and appraisal unit in order to prevent any possible errors that may arise. • Put operational procedures and regulations related to all types of transaction, staff manuals as well as the authority ranks for approval in writings as a guideline to set the same standards for all internal operations within the organization. • Establish the Audit Committee and the Risk Management Committee to control, monitor, and assess the risks of the Bank. The committees are responsible for examining and correcting the pitfalls in order to create soundness and efficiency in the Bank’s operation. • Improve the management of the information technology system and information security system in order to enhance its potential to accommodate business expansion and gain credibility from the customers in the aspect of data and technology. A particular focus is given to the prevention of damages from unauthorized access to the Bank’s information. • Formulate the Business Continuity Plan which consists of an emergency plan, a plan for backup systems, and a business recovery plan to prevent disruption in business operation. In addition, the drills are essential to test the readiness and to consistently improve the plans for its effective implementation. The Bank also employs the services of the third party to operate some group activities as per the direction of the 056
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In addition, to monitor operational risk, the Bank determines a policy for executives of each department to be responsible for monitoring the risk by considering this as a part of their regular duties. This will help promptly identify all risks and problems that occur in order to respond to the changes in an appropriate and timely manner, not damaging to the Bank. Nevertheless, to be informed of the result of business operations and problems that occur, as well as trends and changes in information of risk factors, the Bank organizes a filing and reporting of the information associated with operational risk management such as information on data loss, key risk indicators and important risk points to be continually and regularly reports to the Board of Directors, the Risk Management Committee and the executives to use in the determination of policies, to develop a sufficient risk management system and to be a tool in aiding the Bank to evaluate the capability and efficiency of the internal control system.
5. Strategic Risk This type of risk arises from the inappropriate formulation of strategies, business planning and implementation which are not compatible with internal setups and external environment, resulting in an adverse impact on earnings, capital or the existence of the Bank and its
subsidiaries. In managing the strategic risk, the Bank formulates strategies for the next three years which are reviewed annually or when there is an external event that may impact the achievement of the Bank’s business goals. The Executive Committee is responsible for regular monitoring and evaluating the performance of the work units upon the established targets stated in the annual operation plan.
3. The operations related to Foreign Account Tax Compliance Act (FATCA) because it is the new law and regulation enforced by the U.S. which complicates the operation, the Bank is in the process of preparing the work system to support the regulatory compliance. The Bank will provide knowledge to the officers to understand prior to the law enforcement.
6. Regulatory Risk
4. The operations related to credit information even though the Bank has the information access control system, information access verification by responsible unit, the officers with good knowledge and understanding of relevant regulations, and IT system development for credit information access that requires the user verification prior to accessing the information, the system allows a lot of users to access the information by themselves so both intentional and accidental errors can occur; therefore, this issue must be closely monitored.
The regulatory risk arises from amendments or changes in regulations, laws or requirements of the authorities especially the BOT. Changes in the authority’s policy may affect the strategies and business operations of the Bank and its subsidiaries. In addition, the assessment of regulatory risk in 2013 took both internal and external factors of the Bank into consideration which included the direction of authorities’ governance and reports, business policy, and internal systems supporting specific matters for consideration by assigning different weights, and the possibility of risks to arise from complying with the regulations in order to establish the guideline governing the Bank’s operations to be in line with related regulations. Issues of high risk level in 2013 were as follows: 1. The operations related to Anti Money Laundering Act (AMLO), Ministerial Regulation on Customer Identification, and Counter Terrorism Financing Act because these are new laws and regulations which require the duties of knowing the customers and monitoring the customers’ irregular transactions especially the high-risk customers. Therefore, the Bank has organized the training aimed to provide the knowledge to the operations officers to have certain extent of understanding, and has developed the system to support information recording, and products reporting to AMLO in order to assure the regulatory compliance. 2. The operations of Limited Broker, Dealer, and Underwriter (LBDU) because of new requirements and authorities’ expectation of brokers to offer and sell securities suitable for the acceptable risk level of each customer by conducting the Suitability Test, and to comply with the BOT’s regulations on Cross Selling, regular adjustment of work process is inevitable.
7. Risk from Capital Inadequacy Since January 1, 2013, the Bank calculates its capital to cushion any possible risks, in accordance with Basel III criteria as follows: • Credit risk by means of the Standardized Approach • Market risk to explore status of market risk by means of the Standardized Approach • Operational risk by means of the Basic Indicator Approach In addition, the Bank has assessed its future capital adequacy based on budget and 3-year business plan. The calculated risk is capped with risk capital budget in which the Risk Management Division monthly reports the adequacy of capital to the Executive Committee and the Board of Directors to ensure that the Bank has sufficient capital after risk capital allocation to support sustainable business’ growth as planned. As of December 31, 2013, the Bank’s total capital registered was THB 110,683 million of which THB 64,401 million was Tier I capital and THB 39,865 million was for Tier II. The CET 1, Tier 1 and BIS ratios amounted to 8.61 9.47 and 14.80 percent respectively which exceeded the BOT’s minimum capital requirement at 4.50, 6.00 and 8.50 percent respectively.
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Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) Thanachart Group is determined to play a participative role in building and developing society, by continuing conducting business operations and social responsibility activities at the same time. Although the goal of its operations is to make profit, Thanachart Group conducts its business affairs within the ethical framework and in line with good corporate governance principles, ensuring both transparency and accountability. The purpose is to be an organization capable of developing and operating business in a sustainable manner while maintaining a balance between economic success, social responsibility and environmental protection. It has always been the Group’s intent to be a socially and environmentally responsible organization, both in the conduct of business affairs and in the implementation of corporate social responsibility activities. The purpose is to play a complementary role in supporting social development, environmental protection, as well as promotion and conservation of the Thai culture which serve as an important foundation for strengthening the society and communities in a sustainable manner. Importantly, the Group also encourages its employees to participate in socially responsible activities. Thanachart Group’s Corporate Social Responsibility (CSR) Committee has been established for the purpose of developing and promoting efficient work systems capable of ensuring that the Group’s CSR activities and the related procedures are transparent and accountable. The members of the CSR Committee are selected from qualified experts, both within and without the Group, who possess knowledge and experience in CSR activities. The Committee is responsible for reviewing, directing and advising about the Group’s CSR activities. In this connection, in order to make sure that the Group’s CSR activities cover all key areas as much as possible, Thanachart Group has selected the following topics as its focus areas: 1. Conduct business affairs fairly, 2. Fight against fraud, 3. Respect human rights, 4. Adopt fair labor practices, 5. Demonstrate responsibility towards consumers, 6. Participate in social and community development, and 7. Protect the environment In relation to its CSR activities, apart from focusing on the above areas, Thanachart Group also takes into consideration the interests of all stakeholder groups, regardless of whether they are shareholders, lenders, the Boards of Directors of the Bank and its subsidiaries, employees, customers, trading partners, competitors or even the society and the environment. It is the Group’s intent to treat them appropriately and fairly. The following are the practice guidelines for each group:
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Stakeholders
Practice Guidelines
Shareholders
Conduct business affairs in line with Thanachart Group’s good corporate governance policies.
Lenders
Fulfill terms and conditions of agreements with lenders, ensuring that information provided is transparent and accountable.
Boards of Directors of the Bank and its subsidiaries
Direct and govern business affairs, ensuring that they are conducted in line with Thanachart Group’s good corporate governance policies.
Employees
Train employees and enhance their potential on a continuous basis, treat them fairly based on the principles of human rights, and provide them with a working environment which is in a sound, safe and sanitary condition.
Customers
Develop products and services on a continuous basis, ensuring that they meet the needs of all customer groups. Also make sure that employees keep all customer information completely confidential in line with the guidelines prescribed in the Handbook of the Code of Ethics.
Trading partners
Comply with the policies and practice guidelines pertaining to procurement and employment, ensuring fairness to all the concerned parties.
Competitors
Comply with established rules and compete fairly by adhering to the requirements of the related laws and code and conduct. Also do not accuse, defame or aggravate to competitors.
Society and Environment
Conduct of business affairs in a fair manner. At the same time, pay attention to social and environmental development as well as encouraging employee participation.
Although Thanachart Group has not yet included the stakeholder engagement in the implementation of its CSR activities in order to establish linkages between the stakeholders and its performance, the Group clearly recognizes the importance of such engagement. To ensure that its CSR activities can meet and be aligned with the needs of all the stakeholder groups, the Group is committed to developing practice guidelines for implementing stakeholder engagement activities in the future.
Process in Preparing Thanachart Group’s Reports The standards adopted by Thanachart Group in developing practice guidelines and preparing CSR reports are based on the Stock Exchange of Thailand (SET)’s Approach to Social Responsibility Implementation for Corporations, which are widely recognized by organizations and practitioners working in the field of corporate social responsibility. Adopting the SET’s approach represents a good start for the Group in developing its reports and in preparing itself for sustainability reporting in the future as the sustainability reports will have to include all the key aspects that need to be reported, both at the national and international levels.
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Key Areas in Implementation of CSR Activities
Having analyzed the impacts on the stakeholders and the business performance, Thanachart Group deemed it appropriate to prioritize key areas in relation to the corporate social responsibility activities. In this connection, there were altogether five key areas of CSR activities to be implemented in 2013. The practice guidelines for each key area could be summarized as follows:
1. Fighting against fraud Focus Areas
Practice Guideline
Establish policies to fight against fraud
- Establish good corporate governance policies which will serve as practice framework for executives and employees. - Specify key topics about fighting against fraud in the Code of Conduct and regularly disseminate the information to executives and employees. - Adopt a key business principle not to support any businesses, groups of people or individuals who take an unfair advantage of abuse of power or authority.
Provide education about ethics
- Regularly recheck and evaluate the knowledge and understanding of executives and employees about the observance of the Code of Conduct. - Run monthly training courses on the good corporate governance policies and the handbook of the code of ethics for new staff at all levels. After attending the courses, they will be requested to sign an acknowledgement of the policy and the handbook. - Develop an e-learning online corporate governance courses and making them accessible via intranet so that the staff members can study and learn about the corporate governance by themselves. - Under a project entitled “Thanachart Tham Dai Dharma Dee….CG initiatives and dharma practice”, encourage various work units to perform their functions in line with the principles of good corporate governance through a broad range of corporate media. The objective is to provide the staff with knowledge and understanding about the policies and the ethics, using easily accessible presentations such as VTR, short films, animation movies, and interviews with famous people from various fields as well as national experts in corporate governance. Coordinate with the Office of the National Anti-Corruption Commission (NACC) and the Anti-Money Laundering Office (AMLO) for audio-visual aids related to knowledge and understanding about anti-corruption and anti-money laundering. In addition, organize activities under the Dharma Practice Program in Bangkok and its vicinities as well as in the regions. The objective is to equip the staff with a means to calm one’s mind at work and in daily life.
Control and Protection of Complainants
- Put in place channels accessible by staff or third parties for communicating complaints or information about fraud or wrongdoing. The available channels include, among others, letter, telephone, fax, website, facebook and internal communication channels. - Set clear duties and responsibilities for the work unit responsible for handling complaints. Also specify available channels for submitting complaints and the detailed procedures following the receipt of complaints. - Conduct investigations in a fair manner and inform the complainant of the investigation results in accordance with the established procedures.
Join a social alliance network in fighting against corruption
- Issue a declaration of intent to join the Collective Action Coalition against Corruption (CAC) established by Thailand’s private sector to fight against corruption.
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2. Adopt fair labor practices Focus Areas
Practice Guideline
Employment
- Ensure strict adherence to Labor Protection Act B.E. 2541. - Draw up recruitment guidelines and rules which are clear, transparent and accountable. - Put in place systematic recruitment and selection processes.
Welfare and Staff Care
- Set up a welfare committee for various buildings in the business establishment. The Committee represents the staff in discussing with and giving comments to the Company and its subsidiaries on matters pertaining to the staff welfare. - Developing clear personnel policy manual and employee handbook, with focus given to prevention of discrimination. Also specify clearly the employee benefits to be received.
Human Resource Development and Enhancement of Employee Potential
- Focus on creating a learning organization by supporting the appropriate development of employee potential in a continuous manner. - Develop an employee performance appraisal system which is efficient, transparent, fair, and accountable.
Encourage employee participation
- Encourage employees to participate in the planning and implementation of CSR activities. - Provide all employees with opportunities to give their opinions or suggestions in an appropriate manner through various channels available.
3. Conduct business affairs fairly Focus Areas
Code of Conduct
Practice Guideline
- Establish a Code of Conduct for the Company’s Directors and employees, specifying clearly the Bank’s guidelines for ethical business practice. - Ensure observance of the Code of Conduct which also includes prevention of conflict of interests as well as prevention of money laundering. - Establish a Code of Conduct for the Company’s Directors, executives and employees. The Code will serve as practice guidelines and role models to shape how one should carry out duties and responsibilities in a fair manner and how one should take responsibility for oneself, fellow colleagues, supervisors, and subordinates as well as all the stakeholder groups. - Prepare a 2013 declaration vowing to refrain from taking unfair advantage, and a form for self-assessment on the good corporate governance and ethics. The initiatives are an integral part of the Enhanced CG Awareness Program No. 1/2013. In this connection, 99.7 percent of the employees signed the declaration and filled out the self-assessment form. Out of the participating employees, 95.7 percent answered the questions in the form correctly. - Improved the good corporate governance policy and the Code of Conduct on 28 October 2013, ensuring that they were in line with the updated assessment criteria of the Thai Institute of Directors Association (IOD) for evaluating corporate governance, which would be used for evaluation in 2014. In this connection, the Stock Exchange of Thailand (SET) has revised corporate governance principal for listed companies in 2012. (It was publicized in May 2013.)
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Practice Guideline
Focus Areas
- Summarize and share the updated corporate governance policy and the revised Handbook of the Code of Conduct with members of Thanachart Group. Provide them with advice so that they could apply the updated policy and handbook as they deem appropriate, taking into consideration each company’s nature of business. Support trading partners that are socially responsible
Adopt a clear policy not to do business with any trading partners that are not socially responsible, such as violation of human rights by using child labor or engagement in illegal or immoral business activities.
4. Demonstrate responsibility towards consumers Focus Areas
Practice Guideline
Publicize products and services, providing all customers and members of the general Give clear information about public with detailed product information and the related supporting manuals which are products and services to consumers in an appropriate manner clear and easy to understand. Protect consumer rights
- Deliver high quality services that meet professional standards and keep customer information confidential. - Require employees to strictly safeguard the confidentiality of customer information and refrain from disclosing any customer information to any third party. - Keep customer information confidential and refrain from inappropriate use of the information for the benefit or advantage of the Company and other related parties, unless required by law. - Establish systems or channels through which customers can give opinions or file complaints about services. Take corrective actions and inform the customers in a timely manner.
5. Collaborate on protection of the society and the environment Focus Areas
Practice Guideline
- Participate in the planning and implementation of activities related to social and community Support and promote social development in collaboration with organizations both in the public and private sectors development in collaboration with as well as non-profit organizations. These activities include, among others, education, all the organizations concerned, promotion and conservation of Thai cultures, environmental protection as well as civil both in the public and private society strengthening. sectors, as well as non-profit organizations. Promote energy conservation and environmental protection.
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- Establish clear policies on energy conservation. - Support and encourage employees to recognize the importance of energy conservation and environmental protection in an enthusiastic and sustainable manner.
CSR-after-Process
“self-sufficiency economy” concept. Emphasis is also placed on development of networks and collaboration for providing the society with humanitarian assistance when it is faced with various situations.
This type of corporate social responsibility covers any activities other than those undertaken in the ordinary course of its business. Thanachart Group had been involved in this type of activities for a long time since the beginning of its operations. Later, as the commercial banking services became one of Thanachart Group’s main businesses with an extensive branch network nationwide, the corporate social responsibility activities have been implemented in line with the policy established by the central organization. The activities are supported by the regional hubs with cooperation from the staff members of Thanachart Bank and those of its subsidiaries in each region. Their customers, business counterparts and people living in communities are also invited to participate in the activities.
The following are details about the Central CSR activities implemented by Thanachart Group’s central organization and the network hubs in 2013:
CSR Activities of Central Organization These are activities which have been continuously implemented by the Group’s central CSR organization in collaboration with Thanachart Foundation for Thai Society. The objective is to develop a creative society on various dimensions including promotion of Thai cultural identity, preservation of Buddhism, as well as educational support. In this connection, the following are the activities implemented by the central CSR organization in 2013:
In addition, the Thanachart Foundation for Thai Society has been established to serve as a key mechanism for driving Thanachart Group’s various CSR activities. Most of the Foundation’s activities place emphasis on construction of a creative society as well as social development. It has set a target to build various prototype models for social and community development. The objective is to provide the communities and the society with knowledge to facilitate development, make improvements and changes on their own. Focus is given to knowledge, concepts, practical skills, confidence and the ability to make their own decisions, as well as right attitudes and appropriate value systems for making a living and improving their own livelihoods, in accordance with His Majesty the King’s
Projects for Preservation of Buddhism Presentation of Royal Krathin Robes in 2013 Thanachart Bank has been hosting the presentation of Royal Krathin Robes for eight years. The presentation first took place in 2006 at Wat Keaw Kro Wararam Temple in Krabi Province. Since then, the Bank has been organizing the activity on an annual basis, with focus on the dimension
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1 - 3. Presentation of Royal Krathin Robes in 2013 at Wat That Phra Aram Luang, Muang District, Khon Kaen Province.
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participation in the Annual Red Cross Fair for 37 years was an extension of the project implemented earlier by Bangkok Metropolitan Bank and Siam City Bank respectively. The net proceeds from its sales of Red Cross lottery tickets and from its participation in the fair were humbly presented annually to Her Royal Highness Princess Maha Chakri Sirindhorn, Executive Vice-President of the Council of the Thai Red Cross Society, for charity at the discretion of Her Royal Highness as partial financial support to the Council. In this connection, Thanachart Bank was among the top five donating organizations.
of preserving Buddhism, royal temples and Buddhist places of workship so that they continue to exist as long as Thailand does. In 2013, Thanachart Bank was graciously bestowed by His Majesty the King to offer the Royal Robes at Wat That Phra Aram Luang, Muang District, Khon Kaen Province. In this connection, member companies of Thanachart Group, their customers, trading partners, executives, and staff members as well as members of the general public jointly donated 10,413,028.25 baht in good faith to the temple as part of the funds to be used for constructing Buddha Phra Lab Viharn to house the image of Venerable Monk Phra Lap, which is Khon Kaen’s most important image. In addition, scholarships were awarded to needy students with good academic records and good behavior. Donations were also given to schools in the area to support education.
The participation in the annual fair could be traced back to the year 1976 when Bangkok Metropolitan Bank was the only commercial bank which was invited to join the Red Cross Fair, at which the bank used the name of ‘Bangkok Metropolitan Bank’s Booth’. Later in 2002 when Bangkok Metropolitan Bank merged with Siam City Bank, Siam City Bank participated in the fair, using the name of ‘Siam City Bank’s Booth’. In 2011 when Siam City Bank merged with TBANK, the name at the fair was changed to ‘Thanachart Bank’s Booth’. Today, it is still the only commercial bank with a booth at the Annual Red Cross Fair in Suan Amporn Park.
Project to support Red Cross “Annual Red Cross Fair” Activity Thanachart Bank participated in the sale of Red Cross lottery tickets as well as the Red Cross Fair which has been organized annually. In 2013, the 37th anniversary fair was held from 29 March to 6 April 2013 in Suan Amporn Park, under the theme “Annual Red Cross Fair 2013 in Commemoration of the 120th Anniversary of the Thai Red Cross Society and in Jointly Bringing Happiness to People”. The continuing
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Project for Promoting Thai Cultural Identity “Thanachart Initiates and Fulfills Thai Identity” Project This activity of Thanachart Bank is an extension of Siam City Bank’s previous project entitled “Siam City
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Mr. Brendan George John King humbly presented proceeds from TBANK’s participation in the Annual Red Cross Fair to Her Royal Highness Princess Maha Chakri Sirindhorn. “Thanachart Initiates and Fulfills Thai Identity” Project.
Bank Conserves Thai Identity” which has been continuously implemented for over 40 years. The project was first initiated in 1972 in the form of a contest organized on “Thai Manners” under the auspices of Bangkok Metropolitan Bank. Later in 1980, the first “Reading Aloud Contest by Bangkok Metropolitan Bank” was organized. In 1995, it was humbly requested that Her Royal Highness Princess Maha Chakri Sirindhorn graciously give Royal Cups to top winners of the two contests. In 2002, Bangkok Metropolitan Bank merged with Siam City Bank and the name of the project was changed to “Siam City Bank Conserves Thai Identity”. The key purpose of the Project was to maintain and preserve Thai identity including reading aloud Thai and using Thai manners in daily life. The project helps preserve the unique identity and prevent their disintegration over time as a result of the social situation in which many people get carried away by fads and fashion. Moreover, the project helps inculcate in Thai youth the love of Thai culture. The love makes them cherish the culture and helps keep it as part of Thai society forever. Both Thai language and Thai manners are widely recognized as unique characteristics of Thai identity. Since Siam City Bank merged with TBANK, the activity has been continuously implemented under the project entitled “Thanachart Initiates and Fulfills Thai Identity”.
opportunity to send students from Prathomsuksa 1 to the university level as their representatives to participate in the contests to compete for Her Royal Highness Princess Maha Chakri Sirindhorn’s Cups, honorable shields and certificates of honor, as well as scholarships. In 2013, over 1,000 educational institutions participated in the “Thanachart Initiates and Fulfills Thai Identity” project. Garuda Museum by Thanachart Bank “The Garuda Museum by Thanachart Bank” is considered the first and only Garuda museum in ASEAN. Its establishment could be traced back to the event on 1 October 2011 in which Thanachart Bank acquired Siam City Bank. Before the acquisition, Siam City Bank had been operating for over 70 years and the Royal Garuda Emblems had been graciously bestowed by His Majesty the King upon the Bank for display at its headquarters and branches since 1941. After the merger with Thanachart Bank in 2011, it was necessary to dismount Garuda Emblem (Garuda as the vehicle of Vishnu) in compliance with the Garuda Emblem Act (No. 2) B.E. 2535 (1992). Thanachart Bank recognized the value and the importance of the Royal Garuda Emblem which Thai people had a great faith in and a strong relationship with. The Emblem was also a symbol representing His Majesty the King of Thailand. As a result, the Bank respectfully relocated the Emblems from the headquarters and branches to its Bangpu Training Center in the municipal area of Tambon Bangpu, Samut Prakan Province. This was followed by the founding of the Garuda Museum
The project consists of two main activities including reading aloud contests and Thai manners contests. First rounds of the contests to select qualified candidates are organized in four regions including North, North East, South, and Central. Educational institutions are provided with an
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Photographs taken at the Garuda Museum by Thanachart Bank, which was located at the Bangpu Training Center. Activities for supporting construction of roof structures of young child development center and awarding of scholarships to children of soldiers assigned to the three southernmost provinces, at the 3rd Infantry Battalion of 11th Infantry Regiment of King’s Own Guards, Phetchaburi-Racha Sirindhorn Military Camp, Phetchaburi Province.
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which was designed and created so that visitors could learn about the origin of Garuda in the history from the viewpoints of both Buddhism and Brahmanism. Importantly, an area in the museum had been set aside for exhibiting the Emblems which were respectfully relocated from Siam City Bank’s branches. One of the objectives of the exhibition was to reflect the Royal Garuda Emblem’s relationship with the country’s three fundamental institutions, namely the Nation, Religion, and Monarchy. In addition, the museum served as a resourceful place for children, youth, and interested members of the general public to learn about the history.
children of those soldiers who had been or were assigned to the three provinces.
CSR Activities of Network Hubs These were CSR activities implemented by various network hubs located in all the different regions of Thailand. The key objectives were to conserve local cultural heritage; to promote collaboration among staff members, customers, members of the general public, and different agencies, in both the private and public sectors, which were located in the areas; and to play a complementary role in promoting, enhancing, and publicizing the regional tourism. The following are the activities or projects implemented by the 12 network hubs in 2013:
Projects to Keep up and Boost Morale of Soldiers Assigned to the Three Southernmost Provinces and Their Families Activities for Supporting Construction of Roof Structures of Young Child Development Center and Awarding of Scholarships to Children of Soldiers Assigned to the Three Southernmost Provinces
1. Candle festival for the Buddhist Lent in 2013, which was implemented by the Network Hub 4 of the northeast region (Ubon Ratchathani), 2. Project for constructing a temple assembly hall to house to the image of Phra Lap, which was implemented by the Network Hub 2 of the northeast region (Khon Kaen), 3. Traditional long-tailed boat racing festival in 2013, which was implemented by the Network Hub 2 of the northern region (Phitsanulok), 4. Festival of the tenth lunar month to pay respect to deceased ancestors, which was implemented by the Network Hub 3 of the southern region (Nakhon Si Thammarat), 5. Conservation of Phuket vegetarian festival in 2013, which was implemented by the Network Hub 1 of the southern region (Phuket), 6. Conservation of Chinese vegetarian festival in 2013, which was implemented by the Network Hub 4 of the southern region (Hat Yai),
Recognizing the sacrifice of the soldiers assigned to the three Southernmost provinces and understanding the sufferings of the families of those soldiers who were killed or became disabled during the assignment, Thanachart Bank in collaboration with the Thanachart Foundation for Thai Society organized activities aiming at keeping up and boosting the morale of the soldiers in the three provinces and their families. The activities included the support for constructing roof structures of young child development center at the 3rd Infantry Battalion of 11th Infantry Regiment of King’s Own Guards, PhetchaburiRacha Sirindhorn Military Camp, Phetchaburi Province, which is the work unit responsible for assigning soldiers to the border provinces. Four scholarships were awarded in the past year to children of soldiers who died or became disabled and twenty-one scholarships were also awarded to
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Blood Donation in “Honor of the Royal Father and Mother” in 2013, which was implemented by the Network Hub 2 of the northeastern region (Khon Kaen).
7. Conservation of the annual festival to observe religious precepts and eat vegetables, which was implemented by the Network Hub 2 of the southern region (Surat Thani), 8. Annual teacher day in commemoration of 18th quarter at Wat Laharn Rai and the auspicious ceremony for gold casting of Luangpu Tim’s images, which was implemented by the Network Hub 2 of easthern region (Rayong), 9. Thewo alms offering traditional festival in which the special food named Khao Tom Luk Yon was offered to monks. The activity was implemented by the Network Hub 2 of the central region (Saraburi), 10. Conservation of buffalo racing festival, which was implemented by the Network Hub 1 of the eastern region (Pattaya), 11. Conservation of Yi Peng festival, which was implemented by the Network Hub 1 of the northern region (Chiang Mai), 12. Ayutthaya World Heritage Fair 2013, which was implemented by the Network Hub 1 of the central region (Ayutthaya).
In addition, there was a blood donation activity called “Blood Donation in Honor of the Royal Father and Mother” which has been implemented by the Network Hub 2 of the northeastern region (Khon Kaen) for nine consecutive years. The activity involved a campaign aiming at encouraging both members of the public and staff members to donate blood in honor of His Majesty the King and Her Majesty Queen Sirikit for charity. Donating blood not only helped save the lives of victims of emergent accidents but also alleviated blood shortage during treatment. The activity was well supported by the Faculty of Medicine, Khon Kaen Unviersity, who facilitated the blood donation. Moreover, the Bank also gave financial health check-up to those who participated in the activity. Tree seedlings were also distributed to the participants, as part of the fight global warming campaign. The objective was also to instill into people the cooperation in preserving the environment. In 2013, 596 people donated 243,100 cc of blood to the Thai Red Cross Society.
Thanachart Bank Public Company Limited
067
Responsibilities of the Board of Directors for the Financial Report TBANK’s Board of Directors is responsible for the separated and consolidated financial statements and for financial information presented in this annual report. The aforementioned financial statements were prepared in accordance with financial reporting standards, applying appropriate and consistent accounting policies along with careful judgments and reasonable estimates. Important information is fully disclosed to shareholders and other investors in the notes to financial statements reflecting the Bank’s accurate financial status and performance and its commitment to transparency. TBANK’s Board of Directors has established and maintained appropriate and effective risk management and internal control systems in order to rationally assure that the accounting information is correctly and completely recorded and adequate to sustain TBANK’s assets, as well as to prevent any significant irregular operations or frauds. TBANK’s Board of Directors has appointed the Audit Committee comprising independent directors who have knowledge and expertise in finance and accounting. They are responsible for revision of accounting policies and the quality of the Bank’s financial statements, internal control, and internal audit, as well as the disclosure of related party transactions. The committee’s comments on these issues were included in the Audit Committee Report in this annual report. TBANK and its subsidiaries’ separated and consolidated financial statements were audited by the certified public accountant of Ernst & Young Office Limited. TBANK’s Board of Directors had provided the auditing team all information and document supports in order that the auditor would be able to audit and address his/her opinion to the auditing standards. The auditor’s opinion was included in the Report of Independent Auditor in this annual report. TBANK’s Board of Directors is of the opinion that TBANK’s overall internal control is at a satisfying level and provides reliability on TBANK and its subsidiaries’ separated and consolidated financial statements for the year ended December 31, 2012 which is in compliance with financial reporting standards and relevant rules and regulations.
(Mr. Banterng Tantivit) Chairman of the Board of Director
068
Annual Report 2013
(Mr. Somjate Moosirilert) Chief Executive Officer and President
Report of the Audit Committee The Audit Committee of Thanachart Bank Public Company Limited “TBANK” consisted of three independent directors, who are highly qualified and have experience in accounting, finance, financial institutions and large corporations. The composition was as follows; 1. Mr. Kiettisak Meecharoen 2. Assoc. Prof. Dr. Somjai Phagaphasvivat 3. Mr. Sataporn Jinachitra
Chairman Member Member
Mrs. Vijitra Thumpothong, Executive Vice President, Audit, served as the secretary of the Audit Committee. The Audit Committee was responsible for carrying out the duties as assigned by TBANK’s Board of Directors in line with the regulations imposed by the Securities and Exchange Commission (SEC), notifications of the Stock Exchange of Thailand (SET) and the Bank of Thailand (BOT) as stated in the charter stipulated by the Board of Directors. In 2013, the Audit Committee convened eleven meetings in total with the management, top level executives of the related business units and auditors to acknowledge and consider numerous matters as of the following: • Financial Statement Reviewed the quarterly, year-end and consolidated financial statements of TBANK and its subsidiaries by consulting with the external audits and management of Chief Financial Officer (CFO) in order to ensure financial reporting standards, the accuracy of its significant matters, and the appropriate disclosure of information. In addition, the Audit Committee convened the meetings without the presence of TBANK management in order to ensure the independence of the auditors’ duties and comments. • Internal Control and Internal Audit Reviewed the Bank’s internal control system and internal audit is effective. In consultation with the internal auditors in planning and approving the annual audits plan, consider the adequacy, and appropriateness of personnel in the performance and independence of internal audit by monitoring and evaluating of performance every month, assess the ability of authorities in order to improve the knowledge and performance, provide expert review of the audit and consider examination report of the BOT’s and the auditor in order to assess the adequacy of the internal control system. • Regulatory Compliance Reviewed the performance of the Bank to comply with laws and regulations, such as the SEC, SET, IOC and BOT and acknowledged changes of any rules or regulations that affected operation and ensured the adjustment of operations in response to those changes.
Thanachart Bank Public Company Limited
069
• Risk Management The Audit Committee has focused on risk management and is aware that any change in economy, politics and society will significantly affect the risk management of the Bank. We have meetings with the risk management group in order to make sure that of the Bank has appropriate, adequate and effective oversight. • Audit Committee’s Charter Approved the amendment in the Audit Committee’s Charter to make it up-to-date and more appropriate and evaluation of the performance of the Audit Committee including the results of the evaluation which showed that audit compliance as set forth in the Charter and performance were in line with the best practices that strengthened good governance effectively. • Independent Auditor Nomination of the auditor of the Bank by considering qualifications, capabilities, experiences, independence and quality of previous works and the remuneration of the auditors in line with responsibility by the Board of Directors to propose to the shareholders appointing the auditors and approving the remuneration of the auditors. • Related transactions or conflict of interest Related transactions or transactions which may have conflict of interest based on the principle of accountability, transparency and adequate disclosure to the relevant authorities, as reported from business units before proposing to the Board of Directors. The Audit Committee performed its duties prudently and independently, and provided straightforward comments based on transparency and good governance. The Audit Committee considered core operation jointly with senior executive in charge of concerned groups, and internal and external auditors. The Audit Committee is of the opinion that financial statements have been prepared accurately with adequate information disclosure. The internal control, internal audit and risk management have been appropriate, effective, and in compliance with laws and regulations. Independent auditor was independent to perform duties. Transactions and transactions that may have potential conflicts of interests are reasonable and normal business activities, including adequate disclosure.
(Mr. Kiettisak Meecharoen) Chairman of the Audit Committee
070
Annual Report 2013
Independent Auditor’s Report To the Shareholders of Thanachart Bank Public Company Limited I have audited the accompanying consolidated financial statements of Thanachart Bank Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2013, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Thanachart Bank Public Company Limited for the same period. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Thanachart Bank Public Company Limited
071
Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Thanachart Bank Public Company Limited and its subsidiaries and of Thanachart Bank Public Company Limited as at 31 December 2013, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards. Emphasis of matter I draw attention to Note 3 to the financial statements regarding the change in accounting policy due to the adoption of Thai Accounting Standard 12 Income Taxes. The Bank has restated the consolidated and separate financial statements for the year ended 31 December 2012, presented herein as comparative information, to reflect the adjustment resulting from such change. The Bank has also presented the consolidated and separate statements of financial position as at 1 January 2012 as comparative information, using the same accounting policy for income taxes. My opinion is not qualified in respect of this matter.
(Ratana Jala) Certified Public Accountant (Thailand) No. 3734
Ernst & Young Office Limited Bangkok: 20 February 2014
072
Annual Report 2013
Statement of financial position Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2013 (Unit: Thousand Baht) Consolidated financial statements
Note
31 December
31 December
1 January
2013
2012
2012
(Restated) Assets Cash
17,940,109
15,181,402
16,005,678
Interbank and money market items - net
7
69,697,056
71,963,238
63,201,206
Derivatives assets
8
3,913,805
2,176,536
1,536,490
Investments - net
9
138,825,014
146,106,487
148,344,800
Investments in subsidiary and associated companies - net
10
1,834,705
1,575,798
1,387,014
Loans to customers and accrued interest receivables
11 852,017,050
812,211,277
675,021,253
1,009,123
1,065,745
962,799
Total loans to customers and accrued interest receivables
853,026,173
813,277,022
675,984,052
Less: Deferred revenue
(61,999,696)
(58,148,129)
(39,801,128)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
12
(29,782,135)
(23,774,973)
(25,897,903)
Revaluation allowance for debt restructuring
13
(301,192)
(344,196)
(381,719)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
760,943,150
731,009,724
609,903,302
30,330
41,489
90,531
Property foreclosed - net
15
6,291,062
6,460,825
6,761,904
Land, premises and equipment - net
16
8,037,212
8,292,180
8,758,841
Intangible assets - net
17
3,843,023
4,293,963
4,709,082
Goodwill
18
17,951,311
17,951,311
17,951,311
1,645,667
2,102,713
858,326
27,184
1,046,533
1,019,680
VAT refundable
380,508
2,300,943
56,557
Reinsurance assets
401,450
1,155,601
2,573,393
Receivables from purchase and sale of securities Prepaid corporate income tax
Deferred tax assets
19
641,319
522,735
348,266
Other assets - net
20
5,946,013
6,438,920
5,066,831
1,038,348,918
1,018,620,398
888,573,212
Total assets
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
073
Statement of financial position (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2013 (Unit: Thousand Baht) Consolidated financial statements
Note
31 December
31 December
1 January
2013
2012
2012
(Restated) Liabilities and equity Deposits
21
719,079,168
698,372,192
436,039,579
Interbank and money market items
22
81,082,186
87,776,947
60,150,845
3,218,667
4,989,214
2,130,716
Liability payable on demand Derivatives liabilities
8
5,701,330
1,206,215
2,885,848
Debt issued and borrowings
23
92,228,946
78,148,560
254,296,521
30,330
41,489
90,531
24
3,145,644
2,975,614
2,823,534
Payable from purchase and sale of securities
1,294,515
2,873,534
851,388
Accrued interest payable
4,405,614
4,053,383
3,266,851
Banks' liability under acceptances Provisions
5,312,605
5,047,880
3,855,403
Insurance contracts liabilities
Accrued expenses 25
15,019,053
39,632,420
36,154,060
Deferred tax liabilities
19
1,719,634
2,060,160
1,604,639
Other liabilities
26
8,871,596
7,257,105
7,650,940
941,109,288
934,434,713
811,800,855
75,266,649
59,346,193
59,346,193
55,136,649
55,136,649
55,136,649
2,100,694
2,100,694
2,100,694
28
801,131
1,257,796
411,062
29
2,035,183
1,329,516
989,326
36,144,439
23,505,273
17,421,111
96,218,096
83,329,928
76,058,842
Total liabilities Equity Share capital
27
Registered 7,526,664,903 ordinary shares of Baht 10 each (2012: 5,934,619,272 ordinary shares of Baht 10 each) Issued and paid-up share capital 5,513,664,903 ordinary shares of Baht 10 each Share premium Other components of equity Retained earnings Appropriated - statutory reserve Unappropriated Equity attributable to owner of the company Non-controlling interests of the subsidiaries Total equity Total liabilities and equity The accompanying notes are an integral part of the financial statements.
074
Annual Report 2013
1,021,534
855,757
713,515
97,239,630
84,185,685
76,772,357
1,038,348,918
1,018,620,398
888,573,212
-
-
-
Statement of financial position (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2013 (Unit: Thousand Baht) Separate financial statements
Note
31 December
31 December
1 January
2013
2012
2012
(Restated) Assets Cash
17,938,627
15,180,228
16,004,051
Interbank and money market items - net
7
66,094,560
65,963,698
62,963,184
Derivatives assets
8
3,913,805
2,176,540
1,532,331
Investments - net
9
125,874,271
106,923,850
114,540,693
Investments in subsidiary and associated companies - net
10
9,505,400
13,754,213
40,841,867
Loans to customers and accrued interest receivables
11 808,369,873
778,015,569
654,451,435
984,900
1,029,616
924,925
Total loans to customers and accrued interest receivables
809,354,773
779,045,185
655,376,360
Less: Deferred revenue
(57,875,923)
(54,992,223)
(37,738,871)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
12
(21,208,072)
(15,067,430)
(12,485,712)
Revaluation allowance for debt restructuring
13
(301,192)
(344,196)
(381,719)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
729,969,586
708,641,336
604,770,058
30,330
41,489
90,531
Property foreclosed - net
15
2,996,742
3,166,001
3,653,106
Land, premises and equipment - net
16
7,787,388
7,927,385
8,365,341
Intangible assets - net
17
3,782,061
4,230,138
4,650,449
Goodwill
18
17,941,195
17,941,195
17,941,195
Receivables from purchase and sale of securities
-
3,069
64,929
Prepaid corporate income tax
-
1,012,539
1,011,958
290,759
2,295,101
48,441
4,599,726
3,952,371
3,776,857
990,724,450
953,209,153
880,254,991
VAT refundable Other assets - net Total assets
20
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
075
Statement of financial position (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2013 (Unit: Thousand Baht) Separate financial statements
Note
31 December
31 December
1 January
2013
2012
2012
(Restated) Liabilities and equity Deposits
21
722,262,165
701,281,731
471,617,573
Interbank and money market items
22
74,449,007
82,083,807
59,282,708
3,218,667
4,989,214
2,130,716
Liability payable on demand Derivatives liabilities
8
5,697,046
1,202,000
2,876,790
Debt issued and borrowings
23
76,923,346
68,395,560
257,503,221
30,330
41,489
90,531
2,960,190
2,786,748
2,620,953
1,426
11,265
267,638
Accrued interest payable
4,317,213
3,997,033
3,413,511
Accrued expenses
4,645,020
4,366,477
3,077,407
Banks' liability under acceptances Provisions
24
Payable from purchase and sale of securities
Deferred tax liabilities
19
1,594,806
1,923,874
1,444,113
Other liabilities
26
5,472,579
4,628,999
3,958,095
901,571,795
875,708,197
808,283,256
75,266,649
59,346,193
59,346,193
55,136,649
55,136,649
55,136,649
2,100,694
2,100,694
2,100,694
28
345,109
766,687
162,220
29
2,035,183
1,329,516
989,326
29,535,020
18,167,410
13,582,846
89,152,655
77,500,956
71,971,735
990,724,450
953,209,153
880,254,991
-
-
-
Total liabilities Equity Share capital
27
Registered 7,526,664,903 ordinary shares of Baht 10 each (2012: 5,934,619,272 ordinary shares of Baht 10 each) Issued and paid-up share capital 5,513,664,903 ordinary shares of Baht 10 each Share premium Other components of equity Retained earnings Appropriated - statutory reserve Unappropriated Total equity Total liabilities and equity
The accompanying notes are an integral part of the financial statements.
076
Annual Report 2013
Statement of comprehensive income Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2013 (Unit: Thousand Baht except earnings per share expressed in Baht) Consolidated
Separate
financial statements Note
2013
2012
financial statements 2013
2012
(Restated)
(Restated)
Profit or loss Continuing operations Interest income
32
53,886,402
48,735,570
50,548,597
46,330,705
Interest expenses
33
(27,233,755)
(25,555,897)
(26,488,525)
(25,371,321)
26,652,647
23,179,673
24,060,072
20,959,384
8,792,593
6,555,512
6,431,696
5,407,517
Net interest income Fees and service income Fees and service expenses
(1,889,849)
(1,485,289)
(1,672,452)
(1,330,010)
Net fees and service income
34
6,902,744
5,070,223
4,759,244
4,077,507
Gains on trading and foreign exchange transactions
35
530,998
664,374
685,131
705,399
Gains on investments
36
13,081,096
312,211
13,884,505
269,896
414,865
149,611
-
-
6,723,971
6,125,120
-
-
562,493
396,576
1,856,613
3,788,113
Share of profit from investments accounted for under equity method Insurance/Life insurance income Dividend income Income on supporting service
41,958
99,629
314,217
314,955
Other operating income
1,654,948
2,046,230
1,457,958
1,745,968
Total operating income
56,565,720
38,043,647
47,017,740
31,861,222
Insurance expenses
(4,441,553)
(3,977,917)
-
-
Net operating income
52,124,167
34,065,730
47,017,740
31,861,222
10,465,936
10,464,865
8,767,883
9,085,979
37,612
30,863
28,942
24,473
3,012,758
3,168,068
2,698,223
2,866,517
Other operating expenses Employee's expenses Directors' remuneration
37
Premises and equipment expenses Taxes and duties
887,164
887,017
837,849
836,880
6,855,476
7,108,790
6,153,969
6,707,953
21,258,946
21,659,603
18,486,866
19,521,802
Other expenses Total other operating expenses Impairment losses of loans and debt securities
38
Profit before income tax Income tax
19.2
Profit for the year from continuing operations
11,587,478
2,979,503
11,200,832
4,680,020
19,277,743
9,426,624
17,330,042
7,659,400
(4,030,938)
(2,075,746)
(3,216,709)
15,246,805
7,350,878
14,113,333
6,854,537
354,241
1,211,742
-
-
15,601,046
8,562,620
14,113,333
6,854,537
(804,863)
Discontinued operations Profit for the year from discontinued operations Profit for the year
48
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
077
Statement of comprehensive income (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2013 (Unit: Thousand Baht except earnings per share expressed in Baht) Consolidated
Separate
financial statements Note
2013
financial statements
2012
2013
2012
(Restated)
(Restated)
Other comprehensive income Continuing operations
39
Gains (losses) on changes in value of available-for-sale investments Share of other comprehensive income of associates
(394,390)
1,311,940
(53,490)
146,055
110,077
(270,495)
(528,033) -
748,313 -
Income tax relating to components of other comprehensive income
19.2
106,455
(143,846)
(421,578)
604,467
Total other comprehensive income from continuing operations (loss)
(337,803)
1,187,500
Discontinued operations Other comprehensive income from discontinued operations (loss)
48
Total other comprehensive income (loss)
(118,862)
(340,766)
(456,665)
846,734
(421,578)
604,467
Total comprehensive income Total comprehensive income from continuing operations
14,909,002
8,538,378
13,691,755
7,459,004
235,379
870,976
-
-
15,144,381
9,409,354
13,691,755
7,459,004
15,030,648
7,142,393
14,113,333
6,854,537
354,241
1,211,742
-
-
15,384,889
8,354,135
14,113,333
6,854,537
216,157
208,485
Total comprehensive income from discontinued operations Total comprehensive income Total profit attributable to: The Bank Profit for the year from continuing operations Profit for the year from discontinued operations Profit for the year attributable to the Bank Non-controlling interests Profit for the year from continuing operations Profit for the year from discontinued operations
-
-
216,157
208,485
15,601,046
8,562,620
Profit for the year attributable to non-controlling interests
The accompanying notes are an integral part of the financial statements.
078
Annual Report 2013
Statement of comprehensive income (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2013 (Unit: Thousand Baht except earnings per share expressed in Baht) Consolidated
Separate
financial statements Note
2013
financial statements
2012
2013
2012
(Restated)
(Restated)
Total comprehensive income attributable to: The Bank Total comprehensive income from continuing operations
14,692,845
Total comprehensive income from discontinued operations Total comprehensive income attributable to the Bank
8,329,893
13,691,755
7,459,004
235,379
870,976
-
-
14,928,224
9,200,869
13,691,755
7,459,004
216,157
208,485
-
-
2.56
1.24
Non-controlling interests Total comprehensive income from continuing operations Total comprehensive income from discontinued operations Total comprehensive income attributable to non-controlling interests Earnings per share of the Bank
216,157
208,485
15,144,381
9,409,354
40
Basic earnings per share (Baht per share) Profit attributable to the Bank Profit from continuing operations
2.73
1.30
Profit from discontinued operations
0.06
0.22
-
-
2.79
1.52
2.56
1.24
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
079
080
Annual Report 2013
for deferred tax (Note 3)
2,100,694 -
-
-
55,136,649
The accompanying notes are an integral part of the financial statements.
Balance as at 31 December 2013
Total comprehensive income for the year (loss)
Transfer of retained earnings to statutory reserve (Note 29)
-
-
Dividend paid (Note 31)
Decrease in non-controlling interests of the subsidiaries
-
2,100,694
-
2,100,694
2,100,694
-
-
-
55,136,649
Balance as at 1 January 2013 - as restated
-
55,136,649
Cumulative effect of change in accounting policy
Balance as at 1 January 2013 - as previously reported
-
Total comprehensive income for the year - as restated 55,136,649
-
Transfer of retained earnings to statutory reserve (Note 29)
Balance as at 31 December 2012 - as restated
-
Dividend paid (Note 31)
-
2,100,694
55,136,649
-
2,100,694
(123,379)
-
-
-
(123,379)
-
(123,379)
(123,379)
-
-
-
-
(123,379)
-
(123,379)
common control
share capital
55,136,649
combination under
fully paid-up Share premium
business
Surplus from Issued and
Decrease in non-controlling interests of the subsidiaries
Balance as at 1 January 2012 - as restated
for deferred tax (Note 3)
Cumulative effect of change in accounting policy
Balance as at 1 January 2012 - as previously reported
For the year ended 31 December 2013
Statements of changes in equity
Thanachart Bank Public Company Limited and its subsidiaries
750,558
(289,634)
-
-
1,040,192
(277,606)
1,317,798
1,040,192
596,145
-
-
-
444,047
(149,337)
593,384
of investments
changes in value
Surplus on
Share of
173,952
(48,169)
-
-
222,121
(82,490)
304,611
222,121
131,727
-
-
-
90,394
(52,503)
142,897
associates (loss)
income of
other comprehensive
-
(118,862)
-
-
118,862
(19,143)
138,005
118,862
118,862
-
-
-
-
-
-
relating to assets held for sale
and accumulated in equity
other comprehensive income
Amounts recognised in
Consolidated financial statements Other components of equity
Statements of changes in equity
-
2,035,183
-
705,667
-
-
1,329,516
-
1,329,516
1,329,516
-
340,190
-
-
989,326
-
989,326
statutory reserve
-
36,144,439
15,384,889
(705,667)
-
(2,040,056)
23,505,273
1,545,931
21,959,342
23,505,273
8,354,135
(340,190)
-
(1,929,783)
17,421,111
1,412,372
16,008,739
Unappropriated
Retained earnings Appropriated -
-
1,021,534
216,157
-
(50,380)
-
855,757
21,966
833,791
855,757
208,485
-
(66,243)
-
713,515
28,261
685,254
interests
Non-controlling
-
97,239,630
15,144,381
-
(50,380)
(2,040,056)
84,185,685
1,188,658
82,997,027
84,185,685
9,409,354
-
(66,243)
(1,929,783)
76,772,357
1,238,793
75,533,564
Total
(Unit: Thousand Baht)
Thanachart Bank Public Company Limited
081
-
-
Total comprehensive income for the year (loss)
The accompanying notes are an integral part of the financial statements.
-
55,136,649
-
Balance as at 31 December 2013
-
Transfer of retained earnings to statutory reserve (Note 29)
55,136,649
Dividend paid (Note 31)
Balance as at 1 January 2013 - as restated
for deferred tax (Note 3)
Cumulative effect of change in accounting policy
55,136,649
Balance as at 1 January 2013 - as previously reported
-
Total comprehensive income for the year - as restated 55,136,649
-
Transfer of retained earnings to statutory reserve (Note 29)
Balance as at 31 December 2012 - as restated
-
55,136,649
-
2,100,694
-
-
-
2,100,694
-
2,100,694
2,100,694
-
-
-
2,100,694
-
2,100,694
345,109
(421,578)
-
-
766,687
(192,732)
959,419
766,687
604,467
-
-
162,220
(48,886)
211,106
investments
share capital
55,136,649
in value of Share premium
Surplus on changes
Issued and
of equity -
Other components
2,035,183
-
705,667
-
1,329,516
-
1,329,516
1,329,516
-
340,190
-
989,326
-
989,326
statutory reserve
29,535,020
14,113,333
(705,667)
(2,040,056)
18,167,410
1,186,988
16,980,422
18,167,410
6,854,537
(340,190)
(1,929,783)
13,582,846
1,136,264
12,446,582
Unappropriated
Retained earnings Appropriated -
Separate financial statements
fully paid-up
Dividend paid (Note 31)
Balance as at 1 January 2012 - as restated
for deferred tax (Note 3)
Cumulative effect of change in accounting policy
Balance as at 1 January 2012 - as previously reported
For the year ended 31 December 2013
Statements of changes in equity (continued)
Thanachart Bank Public Company Limited and its subsidiaries
Statements of changes in equity (continued)
89,152,655
13,691,755
-
(2,040,056)
77,500,956
994,256
76,506,700
77,500,956
7,459,004
-
(1,929,783)
71,971,735
1,087,378
70,884,357
Total
(Unit: Thousand Baht)
Statements of cash flows Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows For the year ended 31 December 2013 (Unit: Thousand Baht) Separate
Consolidated financial statements 2013
financial statements
2012
2013
2012
(Restated)
(Restated)
Cash flows from operating activities Profit before income tax from continuing operations
19,277,743
9,426,624
17,330,042
443,187
1,624,808
-
-
19,720,930
11,051,432
17,330,042
7,659,400
Profit before income tax from discontinued operations Profit before income tax
7,659,400
Adjustments to reconcile profit before income tax to net cash received (paid) from operating activities: Share of profit from investments accounted for under equity method
-
-
1,473,165
(414,865)
1,597,212
1,396,170
1,466,423
11,587,478
2,979,503
11,200,832
4,680,020
762,764
152,081
740,650
275,487
Depreciation and amortisation Impairment losses of loans and debt securities Increase in provisions
(149,611)
Amortisation of discounts on investment in debt securities
(23,912)
(28,914)
(3,517)
(62,113)
(32,424)
10,543
(32,467)
56,774
(12,216,258)
-
(13,127,841)
-
Increase (decrease) in allowance for impairment of investments Gain from disposal of investment in a subsidiary company Decrease (increase) in allowance for change in value of investments
186,482
(595)
5,242
(10,110)
Increase in allowance for impairment of property foreclosed
127,294
35,616
111,257
4,063
Increase in allowance for impairment of land, premises and equipment Increase in allowance for impairment of intangible assets
336
4,616
336
5,100
2,800
35,309
2,800
35,309
Interest income and other income from the assets transferred for debt repayment Gain on disposal of equipment Loss from disposal of intangible assets Unrealised loss (gain) on exchange Increase in allowance for impairment of other assets
(19,517)
(5,012)
(19,517)
(5,012)
(28,054)
(41,222)
(23,478)
(40,221)
31,105
46,888
31,105
46,888
(316,185)
298,055
(316,185)
298,055
185,381
20,827
41,015
9,068
(101,431)
(266,724)
(310,147)
(57,479)
Decrease in fees and rental received in advance
(84,471)
(30,302)
(84,471)
(30,302)
Decrease in deferred income
(65,943)
(61,311)
(65,943)
(61,311)
Increase in accrued expenses
312,380
212,529
126,861
309,123
Increase in other income receivable
Amortisation of discounts on borrowings Net interest income
136
13,972
136
13,972
21,087,191
15,874,892
17,002,880
14,593,134
(26,664,934)
(24,103,485)
(24,056,691)
(20,911,243)
Dividend income
(1,856,613)
(3,788,113)
Cash received from interest income
51,488,456
(562,494)
46,009,719
47,067,033
42,644,444
Cash payment for interest expenses
(22,539,380)
(16,651,972)
(22,369,507)
(16,808,865)
Cash paid for corporate income tax
(3,948,945)
(3,629,415)
(3,001,193)
(177,572)
Cash received from corporate income tax refundable
(447,183)
1,013,929
-
1,012,539
-
19,873,823
17,052,556
13,798,448
15,551,785
Income from operating activities before changes in operating assets and liabilities
The accompanying notes are an integral part of the financial statements.
082
Annual Report 2013
Statements of cash flows (continued) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2013 (Unit: Thousand Baht) Consolidated
Separate
financial statements 2013
financial statements
2012
2013
2012
(Restated)
(Restated)
Cash flows from operating activities (continued) Decrease (increase) in operating assets Interbank and money market items
103,663
Investments in trading securities Derivatives assets
(8,833,905)
136,317
(3,107,251)
1,631,837
3,889,938
642,729
3,184,104
231,539
859,366
231,542
855,202
Loans to customers
(50,015,317)
Property foreclosed
8,259,441
(130,721,464) 5,337,743
Receivables from purchase and sale of securities
457,046
(1,244,386)
Reinsurance assets
630,429
1,417,791
Other assets
1,885,550
(3,331,386)
(39,041,889)
(113,965,363)
8,040,643
5,360,987
3,069
61,860
-
-
1,812,330
(2,384,682)
Increase (decrease) in operating liabilities Deposits
20,706,976
262,338,807
20,980,434
229,670,353
Interbank and money market items
(7,830,778)
27,643,485
(8,284,957)
22,818,482
Liability payable on demand
(1,770,547)
2,858,498
(1,770,547)
2,858,498
Derivatives liabilities
668,870
(2,460,410)
Payable from purchase and sale of securities
(1,579,019)
2,022,146
Insurance contract liabilities
(1,976,692)
3,478,360
Other liabilities Net cash flows from (used in) operating activities
668,801 (9,839)
(2,455,567) (256,373)
-
-
(802,845)
875,248
(1,786,472)
355,949
(9,526,024)
181,182,387
(4,579,391)
158,547,984
(19,019,449)
5,281,470
Cash flows from investing activities Decrease (increase) in investments in securities held for investment Cash received from disposal of a subsidiary company
(17,843,236)
(1,108,436)
18,366,774
-
18,351,714
-
Cash paid for acquire investment in subsidiaries
-
-
-
(2,785,000)
Cash paid for acquire investment in associated
-
-
-
(820,858)
Cash received from capital refunded from a subsidiary company Cash received from interest on investments Cash received from dividend Cash paid for purchase of equipment
-
-
528,094
30,642,266
4,118,650
4,827,979
3,555,877
3,374,860
665,984
494,159
1,857,417
3,787,387
(559,490)
(675,262)
(512,192)
(549,164)
Cash received from disposal of equipment
48,663
72,557
36,952
69,485
Cash paid for purchase of intangible assets
(302,407)
(346,639)
(290,615)
(324,194)
Cash received from disposal of intangible assets Net cash flows from investing activities
-
19
-
19
4,494,938
3,264,377
4,507,798
38,676,271
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
083
Statements of cash flows (continued) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2013 (Unit: Thousand Baht) Consolidated
Separate
financial statements 2013
financial statements
2012
2013
2012
(Restated)
(Restated)
Cash flows from financing activities Cash received from borrowings
91,100,065
555,070,968
84,420,465
546,400,268
(77,019,814)
(731,239,095)
(75,892,814)
(735,528,095)
Cash paid for interest from borrowings
(4,200,033)
(7,106,888)
(3,657,603)
(6,990,468)
Cash paid for dividend
(2,040,056)
(1,929,783)
(2,040,056)
(1,929,783)
(50,260)
(59,931)
Cash paid for borrowings
Cash paid for dividend to non-controlling interests Cash paid to non-controlling interests for capital refund
(109)
-
-
(6,311)
-
Net cash flows from (used in) financing activities
7,789,793
(185,271,040)
2,829,992
(198,048,078)
-
Net increase (decrease) in cash
2,758,707
(824,276)
2,758,399
(823,823)
Cash at beginning of the year
15,181,402
16,005,678
15,180,228
16,004,051
Cash at end of the year
17,940,109
15,181,402
17,938,627
15,180,228
-
-
-
-
8,113,273
4,833,924
7,875,336
4,639,587
Supplemental cash flows information Non-cash transactions Transfer of properties foreclosed from receivables for debt settlement Transfer of investment from receivables for debt settlement Accounts payable for purchase of fixed assets Bad debt written-off/hair-cut loan from debt restructuring The accompanying notes are an integral part of the financial statements.
084
Annual Report 2013
-
432,097
-
432,097
287,360
148,859
231,179
140,901
5,370,212
4,957,747
5,032,987
1,909,159
Notes to consolidated financial statements Thanachart Bank Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2013 1.
General information Thanachart Bank Public Company Limited (“Thanachart Bank” or “the Bank”) was incorporated as a public limited company under Thai laws and its parent company is Thanachart Capital Public Company Limited (herein after referred to as “the Parent company”), a public limited company also existing under Thai laws. The Parent company holds 50.96 percent of the Bank issued shares and Scotia Netherlands Holding BV, a company registered in Netherland, holds 49.00 percent of the Bank issued shares. The Bank’s registered address is 900, Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok. The Bank has 621 operational branches (2012: 628 operational branches). All subsidiaries are registered limited or public limited companies under Thai laws and operate their businesses in Thailand. The subsidiaries businesses include non-performing assets management business, securities business, leasing and hire purchase business, nonlife insurance business, life insurance business, fund management business and others.
2.
Basis of preparation of the financial statements
2.1
The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Professions Act B.E. 2547 and the principles stipulated by the Bank of Thailand (“BOT”). The presentation of the financial statements has been made in compliance with the BOT’s Notification relating to the preparation and format of the financial statements of commercial banks and holding company of financial business groups, dated 3 December 2010. The financial statements in Thai language are the official statutory financial statements of the Bank. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.
Thanachart Bank Public Company Limited
085
2.2
Basis of preparation of the consolidated financial statements a)
The consolidated financial statements included the financial statements of the Bank and the following subsidiary companies (“the subsidiaries�). Percentage of holding Nature of business
2013
2012
Subsidiaries directly held by the Bank SCIB Plc.
In liquidation process
99.98
99.98
Thanachart Securities Plc.
Securities business
100.00
100.00
Thanachart Insurance Plc.
Non-life insurance
100.00
100.00
-
100.00
Thanachart Life Assurance Plc.
Life insurance
Thanachart Fund Management Co., Ltd.
Fund management
75.00
75.00
Thanachart Broker Co., Ltd.
Non-life insurance
100.00
100.00
Hire purchase
100.00
100.00
Thanachart Management and Services Co., Ltd.
Services
100.00
100.00
Thanachart Training and Development Co., Ltd.
Training services
100.00
100.00
TS Asset Management Co., Ltd.
Non-performing
100.00
100.00
Life insurance
100.00
100.00
SCIB Service Co., Ltd.
Services
100.00
100.00
Ratchthani Leasing Plc.
Hire-purchase and
65.18
65.18
100.00
100.00
broker Thanachart Group Leasing Co., Ltd.
asset management Siam City Life Assurance Plc.
leasing business Subsidiary indirectly held by the Bank National Leasing Co., Ltd.
b)
Leasing business
Total assets and net operating income of the subsidiaries that have significant impact to and are included in the consolidated financial statements as at 31 December 2013 and 2012 and for the years then ended, after eliminating significant intercompany transactions, are as follows: (Unit: Million Baht) Net operating income for the years *
Total assets 2013
2012
2013
2012
Ratchthani Leasing Plc.
26,654
18,900
1,468
1,091
Siam City Life Assurance Plc.
10,216
12,465
40
392
TS Asset Management Co., Ltd.
9,054
10,045
631
814
Thanachart Insurance Plc.
8,823
8,565
2,950
2,451
Thanachart Securities Plc.
6,541
6,898
2,130
1,429
-
27,283
-
-
Thanachart Life Assurance Plc. * Presented as part of continuing operations
2
086
Annual Report 2013
c)
The consolidated statement of comprehensive income for year ended 31 December 2013 included the operating results of Thanachart Life Assurance Plc. from 1 January 2013 until the date of disposal of the investment. Such subsidiary had total income of Baht 4,025 million and net income of Baht 354 million.
d)
All subsidiaries are fully consolidated, being the date on which the Bank obtains control, and continue to be consolidated until the date when such control ceases.
e)
The financial statements of the subsidiaries are prepared for the same reporting period as the Bank, using the same significant accounting policies. In case where there are different accounting policies, the Bank has adjusted the effect of these in the consolidated financial statements.
f)
The outstanding balances and significant intercompany transactions between the Bank and its subsidiaries have been eliminated from the consolidated financial statements. The investments in subsidiaries as recorded in the Bank’s and subsidiaries’ books of accounts have been eliminated against equity of the subsidiaries.
g)
Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Bank and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position.
2.3
The separate financial statements, which present investments in subsidiary and associated companies under the cost method, have been prepared solely for the benefit of the public.
3.
Accounting standards that became effective in the current accounting year Below is a summary of accounting standards that became effective in the current accounting year. Accounting standards: TAS 12
Income Taxes
TAS 20 (revised 2009)
Accounting for Government Grants and Disclosure of Government Assistance
TAS 21 (revised 2009)
The Effects of Changes in Foreign Exchange Rates
Financial Reporting Standard: TFRS 8
Operating Segments
3 Thanachart Bank Public Company Limited
087
Accounting Standard Interpretations: TSIC 10
Government Assistance - No Specific Relation to Operating Activities
TSIC 21
Income Taxes - Recovery of Revalued Non-Depreciable Assets
TSIC 25
Income Taxes - Changes in the Tax Status of an Entity or its Shareholders
Accounting Treatment Guidance for Transfers of Financial Assets The aforementioned accounting standards do not have any significant impact on the financial statements for the current year, except for TAS 12 Income Taxes. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base and recognise the tax effects as deferred tax assets or liabilities subjecting to certain recognition criteria. The Bank and its subsidiaries have changed this accounting policy in this current year and restated the prior year’s financial statements, presented as comparative information, as though the Bank and its subsidiaries had initially recognised the tax effects as deferred tax assets or liabilities. The cumulative effect of this change in the accounting policies has been separately presented in the statements of changes in equity. As a result of the Bank and its subsidiaries adopting this accounting standard, the Bank is required to restate the financial statements as if it had always applied this accounting standard, including at the acquisition date of Siam City Bank (“SCIB”). The Bank has therefore adjusted the assets and liabilities relevant to the business combination (consisting of the deferred tax assets and deferred tax liabilities related to the assets and liabilities in the accounts of SCIB, the fair value adjustment of SCIB’s assets, and intangible assets) in order to determine the reallocation of cost of business combination. As a result, goodwill arising from the business combination increased by Baht 2,202 million.
4
088
Annual Report 2013
The amounts of adjustments affecting the statements of financial position and the statements of comprehensive income are summarised below. (Unit: Million Baht) Separate financial statements
Consolidated financial statements 31 December
31 December
1 January
31 December
2012
2012
2013
2013
(Restated)
31 December
1 January
2012
2012
(Restated)
Statements of financial position Increase in goodwill Increase in deferred tax assets
2,202
2,202
2,202
2,202
2,202
2,202
641
523
348
-
-
-
1,719
2,060
1,605
1,595
1,924
1,444
62
22
28
-
-
-
1,888
1,546
1,412
1,410
1,187
1,136
(184)
(379)
(202)
(86)
(192)
(49)
Increase in deferred tax liabilities Increase in non-controlling interests of the subsidiaries Increase in unappropriated retained earnings Decrease in other components of equity
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
(Restated)
(Restated)
Statements of comprehensive income Continuing operations Profit or loss Increase (decrease) in income tax
(352)
246
(223)
336
40
(6)
-
-
Increase (decrease) in profit attributable to non-controlling interest of the subsidiaries Increase in profit attributable to equity holders of the Bank Increase in basic earnings per share (Baht per share)
312
153
223
51
0.057
0.028
0.041
0.009
(110)
271
(106)
143
(30)
20
-
-
30
(20)
-
-
0.005
(0.004)
-
-
(28)
(109)
-
-
Other comprehensive income Increase (decrease) in deferred tax relating to components of other comprehensive income Discontinued operations Profit or loss Increase (decrease) in income tax Increase (decrease) in profit attributable to equity holders of the Bank Increase (decrease) in basic earnings per share (Baht per share) Other comprehensive income Decrease in deferred tax relating to components of other comprehensive income
5 Thanachart Bank Public Company Limited
089
4.
Accounting standards that will become effective in the future Below is a summary of accounting standards that will become effective in the future. Effective date Accounting Standards: TAS 1 (revised 2012)
Presentation of Financial Statements
1 January 2014
TAS 7 (revised 2012)
Statement of Cash Flows
1 January 2014
TAS 12 (revised 2012)
Income taxes
1 January 2014
TAS 17 (revised 2012)
Leases
1 January 2014
TAS 18 (revised 2012)
Revenue
1 January 2014
TAS 19 (revised 2012)
Employee Benefits
1 January 2014
TAS 21 (revised 2012)
The Effects of Changes in Foreign Exchange
1 January 2014
Rate TAS 24 (revised 2012)
Related Party Disclosures
1 January 2014
TAS 28 (revised 2012)
Investments in Associates
1 January 2014
TAS 31 (revised 2012)
Investments in Joint Ventures
1 January 2014
TAS 34 (revised 2012)
Interim Financial Reporting
1 January 2014
TAS 36 (revised 2012)
Impairment of Assets
1 January 2014
TAS 38 (revised 2012)
Intangible Assets
1 January 2014
Financial Reporting Standards: TFRS 2 (revised 2012)
Share-Based Payments
1 January 2014
TFRS 3 (revised 2012)
Business Combinations
1 January 2014
TFRS 4
Insurance Contracts
1 January 2016
TFRS 5 (revised 2012)
Non-current Assets Held for Sale and
1 January 2014
Discontinued Operations TFRS 8 (revised 2012)
Operating Segments
1 January 2014
Accounting Standard Interpretations: TSIC 15
Operating Leases - Incentives
1 January 2014
TSIC 27
Evaluating the Substance of Transactions
1 January 2014
Involving the Legal Form of a Lease TSIC 29
Service Concession Arrangements:
1 January 2014
Disclosures TSIC 32
Intangible Assets - Web Site Costs
1 January 2014
Financial Reporting Standard Interpretations: TFRIC 1
Changes in Existing Decommissioning,
1 January 2014
Restoration and Similar Liabilities TFRIC 4
Determining whether an Arrangement
1 January 2014
contains a Lease 6
090
Annual Report 2013
Effective date TFRIC 5
Rights to Interests arising from
1 January 2014
Decommissioning, Restoration and Environmental Rehabilitation Funds TFRIC 7
Applying the Restatement Approach under
1 January 2014
TAS 29 Financial Reporting in Hyperinflationary Economies TFRIC 10
Interim Financial Reporting and Impairment
1 January 2014
TFRIC 12
Service Concession Arrangements
1 January 2014
TFRIC 13
Customer Loyalty Programmes
1 January 2014
TFRIC 17
Distributions of Non-cash Assets to Owners
1 January 2014
TFRIC 18
Transfers of Assets from Customers
1 January 2014
The management of the Bank and its subsidiaries has assessed the effect of the above accounting standards and believes that they will not have any significant impact on the financial statements for the year when they are initially applied, except for TFRS 4, TFRIC 10 and TFRIC 13, of which the management is still evaluating the first-year impact to the financial statements and has yet to reach a conclusion. 5.
Significant accounting policies
5.1
Revenue recognition a)
Interest and discounts on loans Interest on loan is recognised as income on an accrual basis, based on the amount of principal outstanding. Interest on hire purchase and financial lease is recognised based on the effective interest method. For loans on which principal or interest payments have been defaulted for more than three months past the due date, the Bank and its subsidiaries cease accrual of interest income, and accrued interest already recorded is reversed from the Bank and its subsidiaries’ accounts. Interest is then recognised as income on a cash basis until settlement of such overdue balance has been received from the debtors. Interest income on restructured loans is recognised as income on an accrual basis, with reference to the interest rate stipulated in the agreements, with the exception of interest on loans that are subject to monitoring for compliance with restructuring conditions, which the Bank and its subsidiaries recognise as income on a cash basis until the receivable is able to comply with the restructuring conditions for a period of no less than three months or three installments, whichever is longer. 7 Thanachart Bank Public Company Limited
091
The Bank and its subsidiaries recognise interest income on investments in purchased/transferred loans for which loan repayment is received during the year based on the effective yield rate of the portfolio multiplied by the new book value (acquisition cost) of the outstanding balances of receivables, to the extent that this is not greater than the amount received from such receivables. After the restructuring, interest income is recognised by the effective interest method for those receivables from which loan repayment was received during the year. Interest or discounts already included in the face value of notes receivable or loans are recorded as deferred interest and taken up as income evenly throughout the term of the notes or loans or in proportion of debt repayment. Interest income received in advance on hire purchase represents discounted on interest given to debtors by dealers, is recognised based on the effective interest method, in the same manner as interest income on hire purchase receivables. b)
Interest and dividends on investments Interest on investments is recognised as income on an accrual basis based on the effective interest rate. Dividends are recognised as income when the right to receive the dividends is established.
c)
Brokerage fee income Brokerage fees on trading of securities and derivatives are recognised as income on the transaction date.
d)
Interest on margin loans for purchase of securities Interest on margin loans for purchases of securities is recognised as income over the term of the loans based on the amount of principal outstanding. The subsidiary company ceases accruing interest for certain loans that fall under the conditions set by the Securities and Exchange Commission (“SEC�).
e)
Gains (losses) on investments and derivatives Gains (losses) on investments and derivatives are recognised as income/expenses on the transaction date.
f)
Fees and service income Fees and service income are recognised as income on an accrual basis.
8
092
Annual Report 2013
g)
Insurance/life insurance premium income Non-life insurance contract Premium income consists of direct premium and reinsurance premium less premium of cancelled policies and premiums refunded to policy holders, and adjusted with unearned premium reserve. Direct premium income is recognised on the date the insurance policy comes into effect. For long-term insurance policies with coverage periods of longer than 1 year, related premium are recorded as unearned items, and recognised as income over the coverage period. Reinsurance premium income is recognised as income when the reinsurer places the reinsurance application or the statement of accounts. Life insurance contract Premium income is recognised as income on the date the insurance policy comes into effect, after deducting premium ceded and refunded. For renewal policy, premium income is recognised as income when the premium is dued, only if the policy is still in force at the year-end date.
5.2
Expenses recognition a)
Interest expenses Interest expenses are charged to expenses on an accrual basis. Interest on notes payable included in the face value is recorded as deferred interest and amortised to expenses evenly throughout the term of the notes.
b)
Commission and direct expenses charged on hire purchase/financial leases For hire purchase/financial lease contracts originating on or after 1 January 2007, initial direct expenses at the inception of a hire purchase/financial lease contract (i.e. commission expenses and stamp duty expenses) are to be deferred and amortised using the effective interest method, with amortisation deducted from interest income throughout the contract period, in order to reflect the effective rate of return on the contracts. Unearned income on hire purchase/financial leases is presented net of commission expenses and initial direct cost on the inception of the contracts.
c)
Fees and service expenses Fees and service expenses are recognised as expenses on an accrual basis. 9 Thanachart Bank Public Company Limited
093
5.3
Investments Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss in the statements of comprehensive income. Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income in the statements of comprehensive income, and will be recognised in profit or loss when the securities are sold. Investments
in
held-to-maturity
debt
securities
are
stated
at
amortised
cost.
Premiums/discounts on debt securities are amortised/accreted by the effective rate method with the amortised/accreted amount presented as an adjustment to the interest income. Investments in non-marketable equity securities, which are classified as general investments, are stated at cost net of allowance for impairment (if any). The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of debt securities is determined using the yield rates quoted by the Thai Bond Market Association, other markets, or yield rate of government bond adjusted by an appropriate risk factor, as the case may be. The fair value of unit trusts is determined from their net asset value. The fair value of embedded derivatives investments which no active market or no available market value is determined using an internal model. The gains/losses arising from revaluation are recognised in profit or loss in the statements of comprehensive income. This method of measurement is in compliance with the principles stipulated by the BOT. The Bank and its subsidiaries recognise loss on impairment (if any) of available-for-sale securities, held-to-maturity debt securities and general investments in profit or loss in the statements of comprehensive income. In the event that the Bank and its subsidiaries transfer investments to another category, the investments are valued at their fair values prevailing on the transfer date. Differences between the carrying amount of the investments and their fair value on that date are recorded as profit or loss or other comprehensive income in the statements of comprehensive income, depending on the type of investment being reclassified. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss in the statements of comprehensive income. In case of disposal partial of the investment, the carrying value per share used to calculate the cost of the portion sold is determined using the weighted average method.
10
094
Annual Report 2013
5.4
Investments in receivables purchased and allowance for impairment Investments in receivables purchased are presented at their acquisition cost net of allowance for impairment (if any). Loss on impairment is recognised as an expense in profit or loss in the statements of comprehensive income. In case that the receivables purchased enter into troubled debt restructuring agreements, they are transferred to loans and presented at fair value. The fair value is determined based on the outstanding balance of investments as at the transfer date or as at the date of restructuring. Allowance for impairment of investments in receivables purchased is determined based on the fair value, with reference to the collateral value.
5.5
Investments in subsidiary and associated companies Investments in subsidiary and associated companies in the separate financial statements are accounted for under the cost method net of allowance for impairment (if any). Loss on impairment is recognised as expenses in part of profit or loss in the statements of comprehensive income. Investments in associated companies in the consolidated financial statements are accounted for under the equity method. Under this method, investments are initially recorded at acquisition cost and are adjusted to reflect the attributable shares of the net income from the operations of the associated companies, in proportion to the investment.
5.6
Loans Loans are stated at the principal balances, excluding accrued interest receivable, except for overdrafts which are presented at the principal balances plus accrued interest receivable. Unrecognised deferred income and discounts on loans are deducted from the loan balances. Hire purchase receivables and financial lease receivables are stated at the contract value of the hire purchase receivables and financial lease receivables net of unearned income, which is presented after netting commission expenses and initial direct cost on the inception of the contracts. Securities and derivatives business receivables comprise the net balances of securities business receivable and derivatives business receivables. Securities business receivable comprises credit balance receivables (for which the securities purchased are used as collateral), securities borrowing and lending receivables and guarantee deposit receivables (which comprise cash placed as guarantee for borrowers of securities or Thailand Securities Depository) as well as other receivables, such as overdue amounts in cash accounts and receivables which are under legal proceedings, are undergoing restructuring, or are being settled in installments. The receivable balance of cash accounts is presented as “Receivables from purchase and sale of securities�. 11 Thanachart Bank Public Company Limited
095
5.7
Allowances for doubtful accounts a)
Allowance for doubtful accounts for loans The Bank and its subsidiary companies, that operates in asset management business, provide allowance for doubtful accounts in accordance with the Notifications of the BOT and adjust these by the additional amount which is expected not to be collectible based on an evaluation of the current status of the debtors, taking into consideration the recovery risk and the value of collateral. Increase (decrease) in an allowance for doubtful accounts is recognised as an expense during the year. For loans, excluding hire purchase receivable - personal consuming of the Banks, the Bank and its subsidiary companies set provision for normal loans (including restructured receivables) and special mention loans at minimum rates of 1% and 2%, respectively, of the loan balances (excluding accrued interest receivable) net of collateral value. For non-performing loans, provision is set at a rate of 100% of the debt balance remaining after deducting the present value of expected future cash flows from debt collection or the present value of expected cash flows from collateral disposal, based on the use of a discount rate and assumptions as to the time needed to dispose of the collateral, in accordance with the BOT’s guideline. However, non-performing hire purchase receivables and financial lease receivables are treated as uncollateralised. The Bank sets provision for hire purchase receivable - personal consuming of the Bank using the collective approach, which classifies groups of receivables having similar credit risk characteristics, and taking into account the historical loss of loans calculated based on the probability of default and a percentage of the loss given default. Furthermore, the Bank has set aside an additional provision by taking into consideration the potential additional loss arising from changes in economic circumstances that may impact certain borrowers’ ability to pay. This methodology, its parameters and assumptions have been reviewed in detail and will be monitored on an ongoing basis for continued applicability.
b)
Subsidiary engaged in securities business has provided an allowance for doubtful accounts based on a review of debtors’ repayment capability, taking into consideration the risk of recovery and the value of collateral. An allowance is set aside for doubtful debts not fully covered by collateral and/or those which may not be fully recovered. Such debt classifications and provisions are made in accordance with the Notifications of the SEC.
12
096
Annual Report 2013
c)
Subsidiaries engaged in hire purchase and leasing businesses have provided allowance for doubtful accounts at percentages of the amount of principal outstanding net of unearned income, based on the number of months overdue (with reference to the classification of loans under BOT’s guidelines). Allowance for doubtful accounts is provided based on the loan balances after net of collateral value for receivables overdue no more than 3 months, while provided based on the loans balance without deducting collateral value for receivables overdue more than 3 months.
d)
Allowance for doubtful accounts for other receivables is set up based on the amount of debt that may not be collectible, determined from a review of the current status of the receivables as at the financial reporting date.
e)
The Bank and its subsidiaries write off receivables when they determine that such receivables may not be collectible. Amounts written off as bad debts or bad debt recovery are deducted from or added to the allowance for doubtful accounts.
5.8
Troubled debt restructuring In cases where the debt restructuring involves modifications of the terms of repayment, the fair value of the receivables after restructuring is based on the net present value of expected future cash flows, discounted by the market’s minimum interest rate for credit to large customers as at the date of the debt restructuring. The differences between the fair values of receivables as of the restructuring date and their previous book values is recorded in “Revaluation allowance for debt restructuring”, and recognised as an expense in part of profit or loss in the statements of comprehensive income in the restructuring period. The Bank and its subsidiaries review such revaluation allowance based on the net present value of future cash flows over the remaining period to maturity, recognising adjustments against impairment losses of loans accounts. In cases where the troubled debt restructuring involves the transfer of assets or equity, the Bank and its subsidiaries record the assets or equity interest received as a result of debt restructuring at their fair value (based on the value appraised by internal appraisers or external independent appraisers) providing this does not exceed the amount of principal legally claimable from the debtor (including interest of which recognition has ceased until the restructuring date). Any excess of the fair value of the assets over the book value is recognised as gain on restructuring or interest income in part of profit or loss in the statements of comprehensive income, as the case may be. Losses arising from debt restructuring through waivers of part of principal or recorded accrued interest receivable are recognised as losses in part of profit or loss in the statements of comprehensive income when incurred.
13 Thanachart Bank Public Company Limited
097
5.9
Recognition and amortisation of customers’ assets Assets which customers have placed with the subsidiary company for securities trading, in term of cash accounts and credit balance accounts, including amounts which customers have placed as security for derivative trading, are recorded as assets and liabilities of the subsidiary company for internal control purpose. As at the reporting date, the subsidiary company write off those amounts which there are no guarantee obligations from both assets and liabilities and present only those assets which belong to the subsidiary company.
5.10 Property foreclosed Property foreclosed is stated at the lower of cost (fair value with reference to appraisal value, providing this does not exceed the legally claimable amount of debt) or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. Gains on disposal of property foreclosed are recognised as income in part of profit or loss in the statements of comprehensive income on the disposal date, unless the purchase is made with a loan from the Bank. In such cases, gains are recognised in accordance with the BOT’s guideline. Losses on disposal and impairment losses are recognised as expenses in part of profit or loss in the statement of comprehensive income. 5.11 Land, premises and equipment and depreciation a)
Land and assets under installation are stated at cost, and depreciation is not provided.
b)
Premises and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any). Depreciation is calculated by reference to their cost on a straight-line basis over the following estimated useful lives: Buildings
-
20 - 30
years
Buildings improvement
-
5 - 10
years
Furniture, fixtures and equipment
-
3 - 10
years
Motor vehicles
-
5
years
Depreciation is included in determining income. c)
Land, premises and equipment are derecognised upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising on disposal of these assets (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in profit or loss in the statement of comprehensive income. 14
098
Annual Report 2013
5.12 Intangible assets and amortisation Intangible assets acquired through business combination are initially recognised at their fair value on the date of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial recognition, the intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses (if any). The Bank and its subsidiaries amortised intangible assets with finite lives on a systematic basis over their economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense and loss on impairment are recognised as expenses in part of profit or loss in the statement of comprehensive income. The intangible assets with finite useful lives have useful lives of approximately 3 - 10 years. No amortisation for computer software under development. 5.13 Leasehold rights Leasehold rights are stated at cost less accumulated amortisation. Leasehold rights are amortised on a straight-line basis over the lease periods and the amortisation amounts are recognised as expenses in part of profit or loss in the statements of comprehensive income. 5.14 Business combination and goodwill Business combination accounted for under purchase method. Goodwill is initially recorded at cost, which equals to the excess of the cost of business combination over the fair value of the net assets acquired. Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested for impairment annually or when circumstances indicate that the carrying value may be impaired. 5.15 Receivables from/payable to Clearing House Receivables from/payable to Clearing House comprise the net balance receivable/payable in respect of securities trades settled and derivatives business. These also include amounts pledged with Thailand Clearing House as security for derivatives trading.
15 Thanachart Bank Public Company Limited
099
5.16 Securities purchased under resale agreements/ securities sold under repurchased agreements The Bank enters into agreements with private entities to purchase/sell securities whereby there is an agreement to resell/repurchase the securities at certain dates and at fixed price. Amounts paid for the securities purchased are presented as assets under the caption of interbank and money market items or loans, depending on the counter party, and the underlying securities are treated as collateral to such receivables. The securities sold under repurchase agreement at the amounts received are presented as liabilities under the caption of interbank and money market items in the statement of financial position and the underlying securities are treated as collateral. 5.17 Premium receivable and allowance for doubtful accounts Premium receivable from both direct and reinsurance is stated at its net realisable value. Subsidiary companies provide an allowance for doubtful accounts based on the estimated loss that may be incurred in collection of the premium due, on the basis of collection experiences and a review of current status of the premium receivables as at the end of reporting period. 5.18 Reinsurance assets and liabilities a)
Reinsurance assets represent amounts due from reinsurers (consisting of claims receivable and various other items receivable for reinsurers excluding reinsurance premium receivable less allowance for doubtful accounts), amounts deposited on reinsurance and insurance reserve refundable from reinsurers. Insurance reserve refundable from reinsurers is estimated based on the proportion of premium reserve and loss reserve made in accordance with the law regarding insurance reserve calculation that has been reinsured.
b)
Amounts due to reinsurers are stated at the outstanding balances payable from reinsurance and amounts withheld on reinsurance. Amounts due to reinsurers consist of reinsurance premiums and other items payable to reinsurers.
16
100
Annual Report 2013
5.19 Assets held for sale and discontinued operations Assets held for sale are measured at the lower of their carrying value and fair value less costs to sell. Disposal groups of assets are classified as assets held for sale if their carrying values are recovered principally through a sales transaction rather than through continuing use. In such case, the assets must be available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and their sale must be highly probable. Management of the Bank and its subsidiaries must be committed to the sale plan, which should be expected to qualify for recognition as a complete sale within one year from the date the assets are classified as assets held for sale. In the consolidated statements of comprehensive income of the reporting period and the prior comparable year, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations and shown as profit for the year from discontinued operation in the line item next to profit for the year from continuing operations. 5.20 Premium reserve/life insurance premium reserve Non-life insurance contract Premium insurance reserve comprise with unearned premium reserve and unexpired risks reserve. a)
Unearned premium reserve Unearned premium reserve is calculated based on direct premium before deducting premium ceded as follows: Transportation (cargo), travelling
-
100% of premium as from the date policy
accident with coverage periods
is effective, throughout the period of
of not over six-months
insurance coverage
Others
-
Monthly average basis (the one-twenty fourth basis)
b)
Unexpired risks reserve Unexpired risks reserve is the reserve for the future claims that may be incurred in respect of in-force policies. Unexpired risks reserve is set aside using an actuarial method, at the best estimate of the claims that are expected be incurred during the remaining period of coverage, based on historical claims data.
17 Thanachart Bank Public Company Limited
101
At the end of each reporting date, the subsidiary compares the amounts of unexpired risks reserve with the unearned premium reserve, and if unexpired risks reserve is higher than unearned premium reserve, the difference is recognised as unexpired risks reserve in the financial statements. Life insurance contract Life assurance policy reserve represents the accumulated total liabilities for estimated future claims under all policies in force as at the financial statement date. Subsidiaries determine life assurance policy reserve under long-term policies by using the higher of the net level premium valuation method (NPV) and the gross premium valuation method (GPV). Life assurance policy reserve under NPV method is a type of actuarial method with the main assumptions used relating to mortality rate, morbidity rate, longevity and discount rates. Calculation of life assurance policy reserve under GPV method is another type of actuarial method with main assumptions used relating to lapse rate or surrender rate, selling and administrative expenses, mortality and morbidity rate, discount rates and non-guaranteed dividend rate. This calculation method is in compliance with the bases stipulated in the Office of Insurance Committee (“OIC”)’s notification regarding valuation of assets and liabilities of life insurance company. 5.21 Loss reserve and outstanding claims/Benefits payment to life policy Non-life insurance contract Outstanding claims are recorded at the actual amount to be paid. Loss reserve is recorded upon the receipt of the claims advice from the insured based on the number of claims notified by the insured and estimates made by a subsidiary’s management. The estimated value of losses is limited to not more than the sum insured of the related insurance policies. In addition, the subsidiaries set up additional reserve for incurred but not reported (IBNR) claims using an actuarial method based on a best estimate of claims which are expected to be paid in the future for losses occurring before or as at the reporting date, including both reported and unreported claims, and net of recorded claims. Life insurance contract Benefits paid under life policies are provided for upon receipt of the claims advices from the insured or in accordance with the conditions of the policy.
18
102
Annual Report 2013
5.22 Long-term leases Leases that transfer substantially all the risks and rewards of ownership to the Bank and its subsidiaries are classified as financial leases. Financial leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other payables, while the interest element is charged to profit or loss in the statement of comprehensive income over the lease period. Assets acquired under finance leases are depreciated over their estimated useful lives. Leases of assets which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised expenses on a straight-line basis over the lease term. 5.23 Financial derivatives The Bank and its subsidiaries have entered into derivative financial instruments in order to manage risk of the Bank and its subsidiaries and in response to customer needs. Financial derivative contracts which were originated for trading purposes are recorded as offbalance items. Gains or losses arising from changes in the fair value of the contracts are recognised as part of profit or loss in the statement of comprehensive income. The fair values of the contracts are based on the quoted market prices. If the fair value of financial derivatives cannot be determined with reference to market price, it is determined using valuation techniques and models, in which the variables used are derived from observable markets factors. Other financial derivative contracts (forward foreign currency contracts, interest rate swap contracts and cross currency and interest rate swap contracts) which were not originated for trading purposes are recorded as off-balance items, and presented on an accrual basis. Foreign currency components are translated at the year-end exchange rate, in the same manner as the hedged items, with unrealised gains or losses on translation recognised as part of profit or loss in the statement of comprehensive income. Interest rate components are presented on an accrual basis, in the same manner as the hedged assets or liabilities, with gains or losses recorded to interest income and interest expense over the terms of the contracts. Receivables and payables under foreign exchange contracts are presented at the net amount in the statement of financial position.
19 Thanachart Bank Public Company Limited
103
5.24 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Bank and its subsidiaries, whether directly or indirectly, or which are under common control with the Bank and its subsidiaries. They also include associated companies and individuals which directly or indirectly own a voting interest in the Bank and its subsidiaries that give them significant influence over the Bank and its subsidiaries, key management personnel, directors and officers with authority in the planning and direction of the Bank’s and its subsidiaries’ operations. 5.25 Impairment of assets At the end of each reporting date, the Bank and its subsidiaries assess whether there is an indication that an asset may be impaired. The Bank and its subsidiaries perform impairment review whenever events or changes in circumstances indicate that an asset may be impaired. Loss on impairment is recognised when the asset’s recoverable amount is less than the book value. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. Fair value less costs to sell reflects the amount that the Bank and its subsidiaries could obtain at the financial reporting date from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Bank and its subsidiaries recognise impairment losses as expenses in part of profit or loss in the statement of comprehensive income. In assessing impairment of asset other than goodwill, if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Bank and its subsidiaries estimate the asset’s recoverable amount. A previously recognised impairment loss for assets other than goodwill is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in part of profit or loss in the statement of comprehensive income.
20
104
Annual Report 2013
5.26 Employee benefits a)
Short-term employee benefits The Bank and its subsidiaries recognised short-term employee benefits, such as salary, wages, bonuses, contributions to the social security fund, and vacation, as expenses when incurred.
b)
Post-employment benefits (Defined contribution plans) The Bank, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Bank and its subsidiaries. The fund’s assets are held in a separate trust fund, and the Bank and its subsidiaries’ contributions are recognised as expenses when incurred.
c)
Post-employment benefits (Defined benefit plans) The Bank and its subsidiaries have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Bank and its subsidiaries treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary, using the projected unit credit method. Actuarial gains and losses arising from post employment benefits are recognised immediately in profit or loss in the statement of comprehensive income.
5.27 Foreign currencies The consolidated and separate financial statements are presented in Baht, which are also the Bank and its subsidiaries’ functional currency. Items of each entity included in the consolidated financial statements of each entity are measured using the functional currency of that entity. Foreign currency transactions are translated into Baht at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies and commitment outstanding on the financial reporting date have been translated into Baht at the rates ruling at the reporting date. Exchange gains and losses arising from trading or translation of foreign currencies are included in determining income.
21 Thanachart Bank Public Company Limited
105
5.28 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Bank and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised. At each reporting date, the Bank and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Bank and its subsidiaries record deferred tax directly to equity if the tax relates to items that are recorded directly to equity. 5.29 Provisions Provisions are recognised when the Bank and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 6.
Significant accounting judgments and estimates The preparation of financial statements in conformity with Thai Financial Reporting Standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgments and estimates are as follows:
22
106
Annual Report 2013
6.1
Recognition and derecognition of assets and liabilities In considering whether to recognise or to derecognise assets or liabilities, the management is required to make judgment on whether significant risk and rewards of those assets or liabilities have been transferred, based on their best knowledge of the current events and arrangements.
6.2
Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables are intended to adjust the value of loans for probable credit losses. The management uses the BOT’s and SEC’s regulations regarding the provision of allowance for doubtful accounts and judgments to estimate losses on outstanding loans when there is any doubt about the borrower’s capability to repay the principal and/or the interest. The allowances for loan losses are determined through a combination of specific reviews, probability of default, value of collateral and current economic conditions.
6.3
Allowance for impairment of investments in securities The Bank and its subsidiaries review an impairment of investments in securities when indication of impairment exists. The determination of what is indication of impairment requires the management’s judgment.
6.4
Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercised judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments.
6.5
Allowance for impairment of property foreclosed The Bank and its subsidiaries assess allowance for impairment of property foreclosed when net realisable value falls below the book value. The management uses the BOT’s regulation and judgment to estimate impairment losses, taking into consideration the latest appraisal value, the type and the nature of the assets.
23 Thanachart Bank Public Company Limited
107
6.6
Land, premises and equipment/Depreciation In determining depreciation of premises and equipment, the management is required to make estimates of the useful lives and salvage values of the premises and equipment, and to review these estimated useful lives and salvage values when there are any changes. In addition, the management assesses whether there are indicators of the impairment of land, premises and equipment, and record impairment losses in the period when it is determined that the recoverable amounts are lower than the carrying amounts. This requires judgments in terms of forecasting future revenues and expenses relating to the assets subject to the review.
6.7
Goodwill and intangible assets The initial recognition and measurement of goodwill and intangible assets, and subsequent impairment testing, require management to exercise judgment as to the recoverable amount to be generated by the asset, using the discounted cash flows method, and including the selection of a suitable discount rate in order to determine the present value of that cash flow. The estimated cash flows may differ as a result of competitive forces, or changes in revenue trends, cost structures, and the discount rate, industry circumstances or related market conditions.
6.8
Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that future taxable profit will be available against which the temporary differences and losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimated future taxable profits.
6.9
Finance lease/Operating lease In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement.
24
108
Annual Report 2013
6.10 Loss sharing from transfer of non-performing loans to TAMC In estimating losses arising from the transfer of non-performing loans to the Thai Asset Management Corporation (“TAMC�), the Bank uses the latest information received from TAMC and projections of the amounts expected to be received from the debtors or from debtors’ collateral value. The management uses judgment in determining the assumptions as to the percentage on the amount expected to be recovered from the debt restructuring agreement, or as to collateral value. The management considers these assumptions to be appropriate given the current available information and current situation. 6.11 Unearned premium/Life insurance premium reserve Unexpired risk reserve is calculated under an actuarial method, which reflects the best estimate of losses expected to be incurred over the remaining period of the insurance. Life assurance policy reserve is calculated under an actuarial method, based on the best estimate at that time, which reflects current assumptions or assumption established at inception of the contract. Such reserve requires the management to exercise judgment in order to reflect the best estimates at that time. 6.12 Loss reserve and outstanding claims At the end of each reporting date, subsidiaries estimate loss reserves and outstanding claims in two parts; loss incurred for which the claims advice has been received from the insured, and loss incurred but not yet reported (IBNR). The IBNR reserve is calculated using an international standard actuarial method. The main assumptions underlying these techniques relate to historical claims experience, including development of estimates of paid and incurred losses, average costs per claim, and claim numbers. Such estimates require the management to exercise judgment in order to reflect the best estimates available at that time. 6.13 Post-employment benefits under defined benefit plans Obligations under the defined benefit plan are determined by using actuarial technique. Such determination is made based on various assumptions, including discount rate, future salary increase rate, staff turnover rate, and mortality rate, based on their best knowledge of current situation.
25 Thanachart Bank Public Company Limited
109
6.14 Litigation and contingent liabilities The Bank and its subsidiaries have contingent liabilities as a result of litigation and contingent liabilities as a result of transfer of business and transfer of non-performing assets. The management has used judgment to assess of the results of the litigation, and in case where they believe that there will be no losses, they will not provide provisions and contingent liabilities. 7.
Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2012
2013 Term
At call
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
8,251
1,500
9,751
8,282
2,000
10,282
601
23,047
23,648
1,106
20,414
21,520
71
99
170
68
29
97
369
23,803
24,172
300
23,634
23,934
9,292
48,449
57,741
9,756
46,077
55,833
Add: Accrued interest receivables
1
43
44
10
43
53
Less: Allowance for doubtful accounts
-
(231)
(231)
-
(217)
(217)
9,293
48,261
57,554
9,766
45,903
55,669
719
10,663
11,382
244
15,478
15,722
34
-
34
50
-
50
Others
165
541
706
317
-
317
Total
918
11,204
12,122
611
15,478
16,089
Add: Accrued interest receivables
-
32
32
-
208
208
Less: Deferred revenues
-
(2)
(2)
-
-
-
Less: Allowance for doubtful accounts
-
(9)
(9)
-
(3)
(3)
918
11,225
12,143
611
15,683
16,294
10,211
59,486
69,697
10,377
61,586
71,963
Commercial banks Specialised financial institutions Other financial institutions Total
Total domestic items Foreign US Dollar Euro
Total foreign items Total
26
110
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2012
2013 Term
At call
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
8,251
1,500
9,751
8,282
2,000
10,282
378
19,250
19,628
395
15,000
15,395
64
-
64
61
-
61
919
23,804
24,723
300
23,834
24,134
9,612
44,554
54,166
9,038
40,834
49,872
1
22
23
-
17
17
(6)
(231)
(237)
-
(219)
(219)
9,607
44,345
53,952
9,038
40,632
49,670
719
10,663
11,382
244
15,478
15,722
34
-
34
50
-
50
Others
165
541
706
317
-
317
Total
918
11,204
12,122
611
15,478
16,089
Add: Accrued interest receivables
-
32
32
-
208
208
Less: Deferred revenues
-
(2)
(2)
-
-
-
Less: Allowance for doubtful accounts
-
(9)
(9)
-
(3)
(3)
918
11,225
12,143
611
15,683
16,294
10,525
55,570
66,095
9,649
56,315
65,964
Commercial banks Specialised financial institutions Other financial institutions Total Add: Accrued interest receivables Less: Allowance for doubtful accounts Total domestic items Foreign US Dollar Euro
Total foreign items Total
As at 31 December 2013, the Bank had loan to a subsidiary company, which was a financial institution, of Baht 550 million in the separate financial statements (2012: Baht 200 million).
27 Thanachart Bank Public Company Limited
111
8.
Derivatives As at 31 December 2013 and 2012, the notional amount and the fair value of trading derivatives, and the adjustments made on an accrual basis for hedging derivatives (banking book), were classified by type of risk as follow. (Unit: Million Baht) Consolidated financial statements 2013
2012
Fair value/Adjustment
Fair value/Adjustment
on an accrual basis Assets
Notional
Liabilities
amount*
on an accrual basis Assets
Notional
Liabilities
amount*
Types of risk Foreign exchange rate Derivatives for trading
1,260
1,356
73,700
766
674
77,561
12
878
23,142
316
19
27,038
2,569
2,534
280,730
493
490
101,254
-
-
26,100
-
-
26,100
Derivatives for trading
24
18
1,640
18
6
1,595
Derivatives for banking book
49
914
12,754
584
13
10,650
-
1
281
-
4
54
3,914
5,701
418,347
2,177
1,206
244,252
Derivatives for banking book Interest rate Derivatives for trading Derivatives for banking book Foreign exchange rate and interest rate
Others Derivatives for trading Total
* Disclosed only in case that the Bank and its subsidiaries have an obligation to pay
(Unit: Million Baht) Separate financial statements 2013
2012
Fair value/Adjustment
Fair value/Adjustment
on an accrual basis Assets
Notional
Liabilities
amount*
on an accrual basis Assets
Notional
Liabilities
amount*
Types of risk Foreign exchange rate Derivatives for trading
1,260
1,353
73,700
766
674
77,579
12
878
23,142
316
19
27,038
2,569
2,534
280,730
493
490
101,254
-
-
26,100
-
-
26,100
Derivatives for trading
24
18
1,640
18
6
1,595
Derivatives for banking book
49
914
12,754
584
13
10,650
3,914
5,697
418,066
2,177
1,202
244,216
Derivatives for banking book Interest rate Derivatives for trading Derivatives for banking book Foreign exchange rate and interest rate
Total
* Disclosed only in case that the Bank has an obligation to pay
28
112
Annual Report 2013
Derivatives for banking book are obligations under contracts which are not held for trading, and are measured on an accrual basis. Gain (loss) on exchange at the end of the year is presented under derivatives assets/derivatives liabilities. Accrued interest receivables (payables) per the contracts are recorded as receivables and payables in other assets/other liabilities. Below are the proportions of trading derivatives transactions classified by counterparty, determined based on the notional amount, as at 31 December 2013 and 2012. Consolidated financial statements Counterparties
Financial institutions
2013
2012
2013
2012
Percent
Percent
Percent
Percent
95.83
90.99
95.83
90.99
-
-
0.07
0.03
4.17
9.01
4.10
8.98
100.00
100.00
100.00
100.00
Companies within Thanachart Group Third parties Total
9.
Investments
9.1
Classified by type of investments
Separate financial statements
(Unit: Million Baht) Consolidated financial statements 2013
Separate financial statements
2012
2013
2012
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
Fair value
cost
Fair value
cost
Fair value
cost
Fair value
Trading securities Government and state enterprises 5,150
4,975
5,745
5,643
1,614
1,618
1,638
1,639
Private debt securities
securities
5,266
5,214
5,683
5,736
36
36
35
35
Foreign debt securities
-
-
620
628
-
-
620
628
17
16
16
16
-
-
-
-
10,433
10,205
12,064
12,023
1,650
1,654
2,293
2,302
Domestic marketable equity securities Add (less): Allowance for change in value Net
(228)
(41)
4
9
10,205
12,023
1,654
2,302
Available-for-sale securities Government and state enterprises 71,398
71,805
55,220
55,433
70,619
71,027
49,044
49,247
Private debt securities
securities
25,480
25,686
29,669
30,063
22,481
22,661
19,091
19,331
Foreign debt securities
14,691
14,543
11,485
11,746
14,691
14,543
11,485
11,746
987
1,344
7,062
7,691
868
859
5,860
6,119
112,556
113,378
103,436
104,933
108,659
109,090
85,480
86,443
Domestic marketable equity securities Add: Allowance for change in value Net
822
1,497
431
963
113,378
104,933
109,090
86,443
29 Thanachart Bank Public Company Limited
113
(Unit: Million Baht) Consolidated financial statements 2013
Separate financial statements
2012
Cost/
2013
Cost/
Amortised
Amortised
cost
Cost/
Amortised
cost
Fair value
2012
Cost/
Amortised
cost
Fair value
cost
Fair value
Fair value
Held-to-maturity debt securities Government and state enterprises securities Private debt securities
10,986
11,286
21,756
22,496
10,944
11,244
12,734
13,108
352
369
2,731
2,802
300
317
800
829
2
1
5
3
2
1
5
3
11,340
11,656
24,492
25,301
11,246
11,562
13,539
13,940
Investment in receivables purchased Less: Allowance for impairment Net
(1)
(1)
(1)
(1)
11,339
24,491
11,245
13,538
87
564
87
564
3,799
4,111
3,781
4,093
39
39
39
39
3,925
4,714
3,907
4,696
General investment Investment in property fund Domestic non-marketable equity securities Foreign non-marketable equity securities Less: Allowance for impairment Net Total investment - net
9.2
(22)
(55)
(22)
(55)
3,903
4,659
3,885
4,641
138,825
146,106
125,874
106,924
Classified by remaining period of debt securities (Unit: Million Baht) Consolidated financial statements 2013
2012
Due within
Due within
Less than 1 year
Over 1 - 5 years
Less than
5 years
1 year
Total
Over 1 - 5 years
5 years
Total
Available-for-sale securities Government and state enterprises 21,384
42,482
7,532
71,398
28,698
26,463
59
Private debt securities
securities
2,894
19,173
3,413
25,480
955
20,074
8,640
29,669
Foreign debt securities
2,921
11,439
331
14,691
2,647
7,290
1,548
11,485
27,199
73,094
11,276
111,569
32,300
53,827
10,247
96,374
Total
55,220
Add (less): Allowance for change in value Total
84
401
(20)
465
72
626
170
868
27,283
73,495
11,256
112,034
32,372
54,453
10,417
97,242
-
10,944
42
10,986
2,883
13,383
5,490
21,756
177
25
150
352
1,326
1,227
178
2,731
Held-to-maturity debt securities Government and state enterprises securities Private debt securities Investment in receivables purchased Total Less: Allowance for impairment Total Total debt securities
2
-
-
2
2
3
-
5
179
10,969
192
11,340
4,211
14,613
5,668
24,492
(1)
-
-
(1)
(1)
-
-
(1)
178
10,969
192
11,339
4,210
14,613
5,668
24,491
27,461
84,464
11,448
123,373
36,582
69,066
16,085
121,733
30
114
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2013
2012
Due within
Due within
Over
Less than 1 - 5 years
1 year
Less than Total
5 years
Over 1 - 5 years
1 year
Total
5 years
Available-for-sale securities Government and state enterprises securities
20,933
42,368
7,318
70,619
22,945
26,099
-
49,044
Private debt securities
2,370
17,706
2,405
22,481
575
16,966
1,550
19,091
Foreign debt securities
2,921
11,439
331
14,691
2,647
7,290
1,548
11,485
26,224
71,513
10,054
107,791
26,167
50,355
3,098
79,620
80
384
(24)
440
70
585
49
704
26,304
71,897
10,030
108,231
26,237
50,940
3,147
80,324
-
10,944
-
10,944
1,785
10,949
-
12,734
150
-
150
300
500
150
150
800
2
-
-
2
2
3
-
5
152
10,944
150
11,246
2,287
11,102
150
13,539
(1)
-
-
(1)
(1)
-
-
(1)
151
10,944
150
11,245
2,286
11,102
150
13,538
26,455
82,841
10,180
119,476
28,523
62,042
3,297
93,862
Total Add (less): Allowance for change in value Total Held-to-maturity debt securities Government and state enterprises securities Private debt securities Investment in receivables purchased Total Less: Allowance for impairment Total Total debt securities
9.3
As at 31 December 2013, the Bank and its subsidiaries recorded no revaluation deficit arising from transfers of investments in debt securities in either the consolidated or separate financial statements (2012: Baht 9 million in the consolidated financial statements and Baht 4 million in the separate financial statements).
31 Thanachart Bank Public Company Limited
115
9.4
Investments in securities in which the Bank and its subsidiaries hold not less than 10 percent of the equity of the investee As at 31 December 2013 and 2012, investments in companies which the Bank and its subsidiaries hold not less than 10 percent of the equity of the investee, but which are not treated as subsidiaries or associated companies, separated by industry as follow: (Unit: Million Baht) Separate financial statements
Consolidated financial statements 2012
2013 Banking and finance sector Hotel
2013
2012
142
1,440
142
549
-
311
-
311
Investments in banking and finance sector as mentioned above include investments in unit trusts in which the Bank and its subsidiaries hold not less than 20 percent of the units issued. The Bank and its subsidiaries do not treat these investments as investments in subsidiaries or associates because the Bank and its subsidiaries do not have control or influence over the financial and operating policies of these funds, which are independently managed by fund managers in accordance with the details of each fund project, and are under the supervision of the SEC. The Bank and its subsidiaries therefore record them as available-for-sale or general investments, based on their investment objectives. Consolidated financial statements 2013
Securities
2012
2013
2012
Net book
Percentage
Net book
Percentage
Net book
Percentage
Net book
Percentage
value
of holding
value
of holding
value
of holding
value
of holding
Million
Percent
Million
Percent
Million
Percent
Million
Percent
Baht Business Strategic Fund
Separate financial statements
Baht
Baht
Baht
-
-
278
67.33
-
-
278
67.33
-
-
61
27.79
-
-
-
-
-
-
829
23.53
-
-
-
-
-
-
121
100.00
-
-
121
100.00
Thanachart Long Term Fixed Income Fund SCB Foreign Fix Income Fund 1Y22 Hua Hin Property Fund
32
116
Annual Report 2013
10.
Investments in subsidiary and associated companies
10.1 Separate financial statements As at 31 December 2013 and 2012, investments in subsidiary and associated companies in the separate financial statements stated under the cost method, consist of investment in ordinary shares of the following subsidiary and associated companies: (Unit: Million Baht) Separate financial statements Value of investment
Company’s name
Paid-up share
Percentage
under the
Dividend income
capital
of holding
cost method
for the years
2013
2012
2013
2012
2013
2012
2013
2012
Subsidiary companies SCIB Plc.
21,128
21,128
99.98
99.98
1,385
1,913
-
-
TS Asset Management Co., Ltd.
2,000
2,000
100
100
2,000
2,000
-
-
Thanachart Securities Plc.
1,500
1,500
100
100
1,858
1,858
431
270
Ratchthani Leasing Plc.
1,611
1,342
65.18
65.18
1,201
1,201
26
70
Thanachart Insurance Plc.
740
740
100
100
867
867
500
-
Siam City Life Assurance Plc.
700
700
100
100
761
761
-
-
-
3,285
-
100
-
3,721
-
2,785
Thanachart Group Leasing Co., Ltd.
360
360
100
100
400
400
104
94
Thanachart Broker Co., Ltd.
100
100
100
100
104
104
110
75
Thanachart Fund Management Co., Ltd.
100
100
75
75
97
97
109
67
10
10
100
100
5
5
-
1
6
6
100
100
6
6
-
-
5
5
100
100
5
5
20
15
8,689
12,938
1,300
3,377
(5)
(5)
8,684
12,933
821
821
42
21
821
821
42
21
9,505
13,754
1,342
3,398
Thanachart Life Assurance Plc.
SCIB Service Co., Ltd. Thanachart Management and Services Co., Ltd. Thanachart Training and Development Co., Ltd. Total investments in subsidiary companies Less: Allowance for impairment Total investments in subsidiary companies - net Associated company MBK Plc.
1,886
1,886
4.07
4.07
Total investments in associated company Total investments in subsidiary and associated companies
33 Thanachart Bank Public Company Limited
117
In February 2013, SCIB Plc. returned capital to its shareholders at a rate of Baht 0.25 per share, totaling Baht 528 million. The Bank therefore recognised this amount by deducting it against the value of its investments. In May 2013, The Bank disposed of investments in common shares of Thanachart Life Assurance Plc. amounting to Baht 18,440 million, with gain on disposal of Baht 13,128 million. 10.2 Consolidated financial statements As at 31 December 2013 and 2012, investments in associated companies, which presented under the equity method, in the consolidated financial statements consist of investments in ordinary shares of the following companies which operate in Thailand: (Unit: Million Baht)
Paid-up share
Percentage
capital
of holding
Company’s name
MBK Plc. (operating in
2013
Value of investment Cost method
2012
2013
Equity method
2012
2013
2012
Dividend
Share of profit
income
(loss) for the
for the years
for the years
2013
2012
2013
2012
2013
2012
1,886
1,886
9.90
9.90
984
984
1,835
1,576
103
98
415
175
-
-
-
-
-
-
-
-
-
-
-
(25)
984
984
1,835
1,576
103
98
415
150
property rental, hotel and services business) Siam Samsung Life Insurance Co., Ltd. (operating in life insurance business) Total investments in associated companies
The Bank and its subsidiaries classified investment in MBK Plc. as investment in an associated company since the Parent company, the Bank and its subsidiaries had significant influence in that company. In March 2012, Siam Samsung Life Insurance Co., Ltd. issued additional share capital but the Bank did not exercise its right to purchase the new shares. As a result, the Bank’s shareholding decreased from 25 percent to 19.23 percent of the total shares in issue and the investment therefore changed from investment in an associated company to general investment. The value of the investment on the date of the change is treated as the new cost of investment.
34
118
Annual Report 2013
10.3 Summarised financial information of an associated company a)
Summarised financial information of MBK Plc. as at 30 September 2013 and 2012 and for the years then ended is as follows: (Unit: Million Baht) Total income
Profit for the
Paid-up share capital
Total assets
Total liabilities
for the years ended
years ended
30 September
30 September
30 September
30 September
30 September
2013
2012
1,886
1,886
2013
2012
39,584
30,499
2013
2012
2013
2012
2013
2012
23,617
15,008
12,923
8,953
4,195
1,761
The share of profit from investment in MBK Plc. accounted for under the equity method was determined based on financial statements of MBK Plc. that were prepared for periods different from those of the Bank, due to limited information available. However, they are financial statements prepared for the same length of time and based on the principle of consistency. Therefore, share of profit of the associate under the equity method for the year ended 31 December 2013 was determined based on financial statements that were prepared with reference to financial statements for the year ended 30 September 2013 that had been audited or reviewed by the associate’s auditor and adjusted for the effect of differences in accounting policies by the Bank’s management. In addition, the Bank’s management considered that the income for the year ended 30 September 2013 is not materially different from the income for the year ended 31 December 2013. b)
Summarised financial information of Siam Samsung Life Insurance Co., Ltd. as at 31 December 2013 and 2012 and for the years then ended are as follows: (Unit: Million Baht) Paid-up share capital
Company’s name
Siam Samsung Life Insurance
Total assets
Total liabilities
Total income
Profit (loss)
for the years
for the years
2013
2012
2013
2012
2013
2012
2013
2012
2013
-
-
-
-
-
-
-
270
-
2012 (100)
Co., Ltd.
Income, profit or loss and shares of profit (loss) from investments in associated companies were determined based on the financial statements of those companies for the period starting from the date that the Bank and/or the subsidiaries invested in such companies, in proportion to the shareholding interest, and until the Bank disposed of such investment or its status was changed. c)
As at 31 December 2013, the fair value of investment in an associated company (MBK Plc.), which is listed on the Stock Exchange of Thailand, amounting to Baht 2,606 million in the consolidated financial statements and Baht 1,072 million in the separate financial statements (2012: Baht 2,036 million in the consolidated financial statements and Baht 838 million in the separate financial statements). 35 Thanachart Bank Public Company Limited
119
10.4 Cash flow information of an asset management company that is a subsidiary Cash flow information of TS Asset Management Company Limited, a subsidiary, for the years ended 31 December 2013 and 2012 is as follows: (Unit: Million Baht) 2012
2013 Cash flows from operating activities Profit before income tax
541
2,201
(290)
(1,811)
Adjustments to reconcile profit (loss) before income tax to net cash provided by (paid for) operating activities Reversal of bad debt and doubtful account Increase in allowance for impairment of property foreclosed and other assets Increase in provisions Interest income - net
17
21
1
-
(351)
(358)
540
619
Cash paid for interest expense
(179)
(253)
Cash paid for corporate income tax
(148)
(571)
131
(152)
Cash received from interest income
Income (loss) from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Loans
980
2,749
Property foreclosed
284
439
Other assets
(13)
38
Increase (decrease) in operating liabilities Interbank and money market items
(1,505)
(3,762)
Provision
(3)
(23)
Other liabilities
69
(42)
(57)
(753)
Net cash flows used in operating activities Cash flows from investing activities Cash paid for purchase of equipment Net cash flows used in investing activities
-
(1)
-
(1)
Net decrease in cash and cash equivalents
(57)
(754)
Cash and cash equivalents at beginning of the year
118
872
61
118
Cash and cash equivalents at end of the year
36
120
Annual Report 2013
11.
Loans to customers and accrued interest receivables
11.1 Classified by loan type (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
22,104
21,528
22,104
21,528
273,398
276,482
260,429
261,810
49,535
54,597
54,090
60,657
501,914
454,777
470,286
432,067
1,548
2,002
1,260
1,741
201
212
201
212
Loans to customers Overdrafts Loans Notes receivable Hire purchase receivables Financial lease receivables Others
(62,000)
(58,148)
(57,876)
(54,992)
786,700
751,450
750,494
723,023
1,009
1,066
985
1,030
787,709
752,516
751,479
724,053
- Individual Approach
(20,955)
(17,572)
(12,565)
(9,049)
- Collective Approach
(8,635)
(5,520)
(8,635)
(5,520)
(20)
(511)
(8)
(499)
(301)
(344)
(301)
(344)
Less: Deferred revenues Total loans to customers net of deferred revenues Add: Accrued interest receivables Total loans to customers net of deferred revenues and accrued interest receivables Less: Allowance for doubtful accounts 1)
BOT’s minimum requirement provision
2) Excess provision Less: Revaluation allowance for debt restructuring Loans to customers and accrued interest receivables - net
757,798
728,569
729,970
708,641
3,144
2,424
-
-
173
189
-
-
3,317
2,613
-
-
-
-
Securities business receivables Credit balances receivables Other receivables Total securities business receivables Less: Allowance for doubtful accounts Securities business receivables - net
(172)
(172)
3,145
2,441
-
-
760,943
731,010
729,970
708,641
Loans to customers and accrued interest receivables - net
37 Thanachart Bank Public Company Limited
121
11.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2013
2012
Domestic
Foreign
767,017
Baht US Dollar
Total
Domestic
Foreign
-
767,017
729,983
485
730,468
17,384
5,318
22,702
19,472
3,393
22,865
298
-
298
361
369
730
784,699
5,318
790,017
749,816
4,247
754,063
Other currencies Total*
Total
* Total loans net of deferred revenues (Unit: Million Baht) Separate financial statements 2013
2012
Domestic
Foreign
727,494
Baht US Dollar
Total
Domestic
Foreign
-
727,494
698,943
485
699,428
17,384
5,318
22,702
19,472
3,393
22,865
298
-
298
361
369
730
745,176
5,318
750,494
718,776
4,247
723,023
Other currencies Total*
Total
* Total loans net of deferred revenues
11.3 Classified by type of business and loan classification (Unit: Million Baht) Consolidated financial statements 2013 The Bank and a subsidiary company which is a financial institution Special
Sub-
Doubtful
Subsidiary
Normal
mention
standard
Doubtful
Agricultural and mining
11,180
32
21
577
179
11,989
2
11,991
Manufacturing and commerce
70,056
410
1,654
2,594
6,135
80,849
120
80,969
Real estate and construction
47,593
293
410
222
2,104
50,622
16
50,638
Public utilities and services
59,812
1,876
357
3,165
2,910
68,120
104
68,224
77,940
1,299
580
547
3,299
83,665
8
83,673
-
-
-
-
-
-
3,317
3,317
374,455
29,946
2,302
1,968
3,962
412,633
27,464
440,097
25,304
976
699
160
857
27,996
213
28,209
Others
22,414
32
108
83
249
22,886
13
22,899
Total*
688,754
34,864
6,131
9,316
19,695
758,760
31,257
790,017
Total
of loss
companies
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
*
Total loans net of deferred revenues
38
122
Annual Report 2013
(Unit: Million Baht) Consolidated financial statements 2012 The Bank and a subsidiary company which is a financial institution Special
Sub-
Doubtful
Normal
mention
standard
Doubtful
Agricultural and mining
16,376
13
9
38
204
16,640
4
16,644
Manufacturing and commerce
75,514
1,267
2,395
1,603
7,945
88,724
89
88,813
Real estate and construction
46,506
1,080
179
359
3,192
51,316
9
51,325
Public utilities and services
55,949
3,500
355
598
2,752
63,154
109
63,263
77,192
1,051
438
666
3,271
82,618
3
82,621
-
-
-
-
-
-
2,613
2,613
351,384
20,701
1,143
982
3,075
377,285
19,588
396,873
27,516
855
570
275
1,722
30,938
179
31,117
Others
20,190
30
176
8
373
20,777
17
20,794
Total*
670,627
28,497
5,265
4,529
22,534
731,452
22,611
754,063
of loss
Subsidiary companies
Total
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
*
Total loans net of deferred revenues
(Unit: Million Baht) Separate financial statements 2013 Special
Doubtful
Normal
mention
Agricultural and mining
11,148
26
10
538
67
11,789
Manufacturing and commerce
69,778
361
328
614
3,623
74,704
Real estate and construction
47,518
275
391
221
1,130
49,535
Public utilities and services
58,505
1,869
279
2,845
1,566
65,064
Housing loans
77,784
1,269
557
528
2,230
82,368
Hire purchase
374,389
29,939
2,302
1,968
3,962
412,560
25,274
972
693
133
378
27,450
Others
26,961
32
3
18
10
27,024
Total*
691,357
34,743
4,563
6,865
12,966
750,494
Substandard
Doubtful
of loss
Total
Personal consuming
Others
* Total loans net of deferred revenues
39 Thanachart Bank Public Company Limited
123
(Unit: Million Baht) Separate financial statements 2012 Special
Doubtful
Normal
mention
Agricultural and mining
16,312
12
8
38
60
16,430
Manufacturing and commerce
75,048
1,263
393
1,382
3,326
81,412
Real estate and construction
46,383
1,069
162
348
2,114
50,076
Public utilities and services
54,597
3,465
280
336
1,353
60,031
Housing loans
77,118
1,026
419
658
1,895
81,116
Hire purchase
351,384
20,701
1,143
982
3,075
377,285
27,481
849
564
272
1,178
30,344
Others
26,249
30
5
8
37
26,329
Total*
674,572
28,415
2,974
4,024
13,038
723,023
Substandard
Doubtful
of loss
Total
Personal consuming
Others
* Total loans net of deferred revenues
11.4 Non-performing loans As at 31 December 2013 and 2012, the Bank and its subsidiaries (securities and asset management business) had non-performing loans classified in accordance with the Notification of the BOT and SEC (debtors classified as substandard, doubtful and doubtful of loss) as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
24,393
20,036
24,394
20,036
173
173
-
-
10,747
12,292
-
-
Non-performing loans (excluding accrued interest receivables) Banking business Securities business Asset management business
The above definition of non-performing loans does not include overdue loans which have been already restructured and are now qualified for classification as Normal or Special mention debt.
40
124
Annual Report 2013
Additionally, the Bank and its subsidiaries engaged in the securities business had loans for which income recognition under an accrual basis has been discontinued, as follows: (Unit: Million Baht)
Banking business Securities business
Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
24,417
19,896
24,418
19,896
173
173
-
-
The subsidiary company engaged in the asset management business recognises income from loan on a cash basis. 11.5 Debt restructuring During the years ended 31 December 2013 and 2012, the Bank and its subsidiaries, asset management and securities business, have entered into debt restructuring agreements with their debtors as follows: Consolidated financial statements For the years ended 31 December
Number of Type of restructuring
debtors
Outstanding
Outstanding
balance
balance
before
after
restructuring
(1)
restructuring
(1)
Million Baht
Million Baht
21
21
4,762
10,162
10,130
26
1,120
886
Fair value of Type of assets
assets to be
to be
transferred under
transferred
agreement Million Baht
2013 Transfer of ordinary shares (debt -
1
Ordinary shares
-
Land, land and
427
equity swap) Modification of repayment conditions Transfer of assets and/or ordinary
building and
shares and/or modification of
movable assets
repayment conditions Total
4,789
11,303
11,037
15,232
16,078
13,151
34
1,293
1,118
2012 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land, land and
1,129
building ,
repayment conditions
ordinary shares and unit trusts
Total
15,266
17,371
14,269
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivable)
41 Thanachart Bank Public Company Limited
125
Separate financial statements For the years ended 31 December Fair value of Number of Type of restructuring
debtors
Outstanding
Outstanding
Type of assets
assets to be
balance before
balance after
to be
transferred under
transferred
agreement
restructuring
(1)
restructuring
(1)
Million Baht
Million Baht
4,499
6,570
6,570
19
270
270
Million Baht
2013 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
149
building
repayment conditions Total
4,518
6,840
6,840
14,988
7,217
7,217
15
670
508
2012 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
489
shares and
repayment conditions Total
Land, ordinary
unit trusts 7,887
15,003
7,725
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivable)
Counting from the end of the year, the remaining periods to maturity of receivables which entered into debt restructuring agreements during the years 2013 and 2012, are summarised below. Consolidated financial statements 2013
2012 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht Past due after restructuring
Million Baht
2,111
4,064
4,996
4,623
Due within the year
454
2,723
2,409
3,966
Less than 5 years
701
1,081
6,805
3,541
1,300
2,564
850
1,557
10 - 15 years
77
304
66
237
Over 15 years
146
301
140
345
4,789
11,037
15,266
14,269
5 - 10 years
Total
42
126
Annual Report 2013
Separate financial statements 2013
2012 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht Past due after restructuring
Million Baht
2,076
2,869
4,960
2,985
Due within the year
397
2,043
2,346
1,060
Less than 5 years
660
787
6,749
2,374
1,204
768
790
859
10 - 15 years
53
121
49
182
Over 15 years
128
252
109
265
4,518
6,840
15,003
7,725
5 - 10 years
Total
Supplemental information for the years 2013 and 2012 relating to restructured loan is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2012
2013
2013
2012
Interest income recognised in the statements of comprehensive income Cash repayment from receivables
2,067
2,285
1,651
1,873
11,227
12,090
9,661
8,537
829
1,684
551
1,043
5
15
5
15
Properties foreclosed received for debts settlement Loss on debt restructuring (net of allowance for doubtful accounts as previously recorded)
As at 31 December 2013 and 2012, the Bank and its subsidiaries have the following restructured receivables balances (principal and accrued interest receivable): Restructured receivables Outstanding balances,
Total number of outstanding receivables 2013
2012
Number of receivables 2013
2012
Outstanding balances 2013
2012
net of collateral 2013
2012
Million Baht Million Baht Million Baht Million Baht Thanachart Bank Plc. Thanachart Securities Plc.
1,861,434
1,719,657
43,138
53,284
20,222
24,058
10,983
14,604
538
517
3
4
35
50
35
50
1,804
2,257
1,330
1,566
10,120
9,553
4,877
4,919
TS Asset Management Co., Ltd.
43 Thanachart Bank Public Company Limited
127
11.6 Hire purchase/Financial lease receivables As at 31 December 2013 and 2012, hire purchase/financial lease receivables of the Bank and its subsidiaries, which are engaged in the hire purchase and financial lease business, mostly comprise hire purchase agreements or financial lease agreements for cars, trucks and motorcycles. The terms of the agreements are generally between 3 and 7 years and they carry interest at fixed rates stipulated in the agreements. (Unit: Million Baht) Consolidated financial statement as at 31 December 2013 Amounts due under lease agreements Less than 1 - 5 years
1 year*
Over 5 years
Total
Gross investment in the lease
141,793
341,001
20,668
503,462
Less: Unearned finance income
(22,924)
(38,057)
(962)
(61,943)
118,869
302,944
19,706
441,519
Present value of minimum lease payments receivables Allowance for doubtful accounts
(10,366)
Hire purchase/Financial lease receivables - net
431,153
* Included non-performing receivables (Unit: Million Baht) Consolidated financial statement as at 31 December 2012 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Over 5 years
Total
Gross investment in the lease
125,943
308,966
21,870
456,779
Less: Unearned finance income
(21,174)
(35,881)
(1,020)
(58,075)
104,769
273,085
20,850
398,704
Present value of minimum lease payments receivables Allowance for doubtful accounts Hire purchase/Financial lease receivables - net
(6,643) 392,061
* Included non-performing receivables
44
128
Annual Report 2013
(Unit: Million Baht) Separate financial statement as at 31 December 2013 Amounts due under lease agreements Less than 1 - 5 years
1 year*
Over 5 years
Total
Gross investment in the lease
140,289
310,724
20,533
471,546
Less: Unearned finance income
(22,871)
(34,008)
(941)
(57,820)
117,418
276,716
19,592
413,726
Present value of minimum lease payments receivables Allowance for doubtful accounts
(8,995) 404,731
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(Unit: Million Baht) Separate financial statement as at 31 December 2012 Amounts due under lease agreements Less than 1 - 5 years
1 year*
Over 5 years
Total
Gross investment in the lease
124,742
287,531
21,535
433,808
Less: Unearned finance income
(21,104)
(32,859)
(956)
(54,919)
103,638
254,672
20,579
378,889
Present value of minimum lease payments receivables Allowance for doubtful accounts
(5,885) 373,004
Hire purchase/Financial lease receivables - net * Included non-performing receivables
45 Thanachart Bank Public Company Limited
129
11.7 Classified by classification As at 31 December 2013 and 2012, the Bank and its financial institution subsidiary (asset management business) classified and made allowances against their loans in accordance with the BOT’s guidelines as summarised below. (Unit: Million Baht) Consolidated financial statements
(1)
Net balance used in made Loans and accrued interest
allowance for doubtful
Allowance for doubtful
receivables
accounts
accounts
2013
2012
2013
2012
689,679
671,590
492,418
480,914
7,163
4,834
34,903
28,554
31,413
22,591
4,217
1,475
Substandard
6,133
5,273
3,888
3,721
2,705
3,535
Doubtful
9,324
4,529
5,566
2,555
5,125
2,393
19,724
22,563
10,300
10,514
9,022
10,109
759,763
732,509
543,585
520,295
28,232
22,346
8
499
28,240
22,845
Normal Special mention
Doubtful of loss Total
2013
Additional allowance for possible uncollectability debts Total (1)
2012
Only the Bank and subsidiary company subject to BOT’s regulations; and after deducting intragroup transactions.
(Unit: Million Baht) Separate financial statements Net balance used in made Loans and accrued interest
allowance for doubtful
Allowance for doubtful
receivables
accounts
accounts
2013
2012
2013
2012
692,285
675,527
495,610
485,339
5,845
3,260
34,782
28,473
31,382
22,581
4,186
1,465
Substandard
4,565
2,975
3,265
1,975
2,082
1,790
Doubtful
6,865
4,024
3,576
2,264
3,135
2,102
12,982
13,054
7,230
6,357
5,952
5,952
751,479
724,053
541,063
518,516
21,200
14,569
8
499
21,208
15,068
Normal Special mention
Doubtful of loss Total
Additional allowance for possible uncollectability debts Total
2013
2012
46
130
Annual Report 2013
Percentage of allowance for doubtful account The Banks’ hire purchase receivablespersonal consumer
(2)
Other loans
2012
2013
2013
2012
Normal
0.58
0.2
1
1
Special mention
8.49
3.5
2
2
Substandard
47.13
83.14
100
100
Doubtful
41.73
83.14
100
100
Doubtful of loss
57.91
83.14
100
100
(2) These percentages are average rates used in setting up allowance for doubtful accounts
11.8
Loan to companies which have settlement problems As at 31 December 2013 and 2012, loans of the Bank and its subsidiaries (which engaged in asset management and hire purchase and financial lease business) in the consolidated financial statements and the separate financial statements included amounts due from companies with weak financial positions and poor operating results, as follows: Consolidated financial statements Allowance for doubtful accounts provided Number of debtors 2013
1. Listed companies possible to
2012
Debt balance
Collateral value
in the accounts
2013
2012
2013
2012
2013
2012
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
6
6
811
835
73
64
768
771
7
10
554
584
324
329
230
238
1,214
1,168
18,445
17,523
10,459
9,695
8,779
8,702
delisting from the SET 2. Non - listed companies with similar operating results and financial positions to listed companies possible to delisting from the SET 3. Companies which have loan settlement problems or have defaulted on the repayment
47 Thanachart Bank Public Company Limited
131
Separate financial statements Allowance for doubtful accounts provided Number of debtors 2013
1. Listed companies possible to
Debt balance
2012
Collateral value
in the accounts
2013
2012
2013
2012
2013
2012
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
3
3
168
168
28
28
140
140
7
10
554
584
324
329
230
238
891
813
9,554
7,207
5,999
4,323
3,555
2,887
delisting from the SET 2. Non - listed companies with similar operating results and financial positions to listed companies possible to delisting from the SET 3. Companies which have loan settlement problems or have defaulted on the repayment
11.9 Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission As at 31 December 2013 and 2012, a subsidiary company operating in the securities business classified securities business receivables and accrued interest receivables, and provided related allowance for doubtful accounts, in accordance with the Notification of the Securities and Exchange Commission (SEC), as follows: (Unit: Million Baht) Debt balances net of allowance Receivable balances 2013 Normal Substandard Doubtful Total
Allowance for doubtful accounts
2012
2013
2012
for doubtful accounts 2013
2012
3,144
2,440
-
-
3,144
2,440
3
5
2
4
1
1
170
168
170
168
-
-
3,317
2,613
172
172
3,145
2,441
Allowance for doubtful accounts for substandard loans set aside by the subsidiary is higher than the minimum amount required by the SEC, and takes into account uncertainties as to collateral value and the risk from collection of such receivables.
48
132
Annual Report 2013
11.10 Hire purchase/financial lease receivables of subsidiaries classified by aging As at 31 December 2013 and 2012, hire purchase and financial lease receivables balances of subsidiary companies engaged in hire purchase and financial lease businesses are classified by the due date of the contracts (after elimination) as follows: (Unit: Million Baht) 2013
2012
26,657
19,269
712
249
Overdue more than 1 year
62
64
Debtors under legal actions
288
233
27,719
19,815
1,370
758
Current or overdue not over 90 days Overdue 91 - 365 days
Total Allowance for doubtful accounts provided in the accounts
11.11 As at 31 December 2013 and 2012, the Bank has loans to subsidiary companies as follows: Contract period as at
Interest rate as at
Outstanding balances
Company’s name
Type of credit
31 December 2013
31 December 2013
TS Asset Management Co., Ltd.
Promissory note
At call
The Bank’s cost of fund plus a
2013
2012
Million Baht
Million Baht
4,555
6,060
4,555
6,060
fixed interest rate per annum Total
12.
Allowance for doubtful accounts (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 The Bank and a subsidiary company which is a financial institution Special
Sub-
Doubtful
General
Normal
mention
standard
Doubtful
of loss
provision
4,834
1,475
3,535
2,393
10,109
499
22,845
930
23,775
2,329
2,742
(830)
2,732
4,459
(491)
10,941
664
11,605
Bad debts recovery
-
-
-
-
563
-
563
13
576
Bad debts written-off
-
-
-
-
(5,033)
-
(5,033)
(35)
(5,068)
Reversal from hair cut
-
-
-
-
(378)
-
(378)
-
(378)
Reversal from disposal of loans
-
-
-
-
(698)
-
(698)
(30)
(728)
7,163
4,217
2,705
5,125
9,022
8
28,240
1,542
29,782
Balance - beginning of the year
Subsidiary Total
companies Consolidated
Increase (decrease) during the year
Balance - end of the year
49 Thanachart Bank Public Company Limited
133
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2012 The Bank and a subsidiary company which is a financial institution
Normal Balance - beginning of the year
Special
Sub-
mention
standard
Doubtful
General
Doubtful
of loss
provision
Subsidiary Total
companies Consolidated
3,970
722
3,870
7,507
8,348
383
24,800
1,098
25,898
Increase (decrease) during 871
753
(333)
(2,669)
4,236
116
2,974
(6)
2,968
Bad debts recovery
the year
-
-
-
-
451
-
451
10
461
Bad debts written-off
-
-
-
-
(1,909)
-
(1,909)
(55)
(1,964)
(7)
-
(2)
(2,445)
(535)
-
(2,989)
(117)
(3,106)
-
-
-
-
(482)
-
(482)
-
(482)
4,834
1,475
3,535
2,393
10,109
499
22,845
930
23,775
Reversal from hair cut Reversal from disposal of loans Balance - end of the year
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2013 Special Normal
mention
Substandard
Doubtful
Doubtful
General
of loss
provision
Total
Balance - beginning of the year
3,260
1,465
1,790
2,102
5,952
499
15,068
Increase (decrease) during 2,585
2,721
292
1,033
5,075
(491)
11,215
Bad debts recovery
the year
-
-
-
-
563
-
563
Bad debts written-off
-
-
-
-
(5,033)
-
(5,033)
Reversal from hair cut
-
-
-
-
(64)
-
(64)
Reversal from disposal of loans
-
-
-
-
(541)
-
(541)
5,845
4,186
2,082
3,135
5,952
8
21,208
Balance - end of the year
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2012 Special Normal
mention
Substandard
Doubtful
Doubtful
General
of loss
provision
Total
Balance - beginning of the year
2,812
721
1,500
1,791
5,278
383
12,485
448
744
290
311
2,764
116
4,673
-
-
-
-
451
-
451
Bad debts written-off
-
-
-
-
(1,909)
-
(1,909)
Reversal from hair cut
-
-
-
-
(150)
-
(150)
-
-
-
-
(482)
-
(482)
3,260
1,465
1,790
2,102
5,952
499
15,068
Increase during the year Bad debts recovery
Reversal from disposal of loans Balance - end of the year
50
134
Annual Report 2013
13.
Revaluation allowance for debt restructuring (Unit: Million Baht) Separate financial statements
Consolidated financial statements 2013
2012
Balance - beginning of the year
14.
2013
2012
344
382
344
382
Decrease during the year
-
(2)
-
(2)
Amortised during the year
(43)
(36)
(43)
(36)
Balance - end of the year
301
344
301
344
Classification of assets As at 31 December 2013 and 2012, the quality of assets of the Bank and its financial institution subsidiary (asset management business) classified in accordance with the announcements of the Bank of Thailand are as follows: (Unit: Million Baht) Consolidated financial statements 2013 Loans to Interbank and
customers and Property
money market accrued interest items
receivables
Investments
foreclosed
Other assets
Total
44,361
689,679
-
-
277
734,317
Special mention
-
34,903
-
-
135
35,038
Substandard
-
6,133
-
-
18
6,151
Doubtful
-
9,324
-
-
16
9,340
Doubtful of loss
-
19,724
293
301
260
20,578
44,361
759,763
293
301
706
805,424
Normal
Total
(Unit: Million Baht) Consolidated financial statements 2012 Loans to Interbank and
customers and Property
money market accrued interest items
receivables
Investments
foreclosed
Other assets
Total
39,224
671,590
-
-
199
711,013
Special mention
-
28,554
-
-
93
28,647
Substandard
-
5,273
-
-
7
5,280
Doubtful
-
4,529
-
-
6
4,535
Doubtful of loss
-
22,563
56
179
247
23,045
39,224
732,509
56
179
552
772,520
Normal
Total
51 Thanachart Bank Public Company Limited
135
(Unit: Million Baht) Separate financial statements 2013 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Property Investments
foreclosed
Other assets
Total
44,911
692,285
-
-
277
737,473
Special mention
-
34,782
-
-
135
34,917
Substandard
-
4,565
-
-
18
4,583
Doubtful
-
6,865
-
-
16
6,881
Doubtful of loss
-
12,982
298
264
246
13,790
44,911
751,479
298
264
692
797,644
Total
(Unit: Million Baht) Separate financial statements 2012 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Property Investments
foreclosed
Other assets
Total
39,424
675,527
-
-
199
715,150
Special mention
-
28,473
-
-
93
28,566
Substandard
-
2,975
-
-
7
2,982
Doubtful
-
4,024
-
-
6
4,030
Doubtful of loss
-
13,054
61
152
241
13,508
39,424
724,053
61
152
546
764,236
Total
52
136
Annual Report 2013
15.
Property foreclosed (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 Balance -
Balance -
beginning of the year
Additions
Change
end
Disposals
appraiser
of the year
Assets transferred in settlement of debts Immovable assets External appraiser
5,199
293
(970)
30
4,552
30
4
(4)
(30)
-
674
8,058
(7,449)
-
1,283
443
167
(84)
4
530
3
1
-
(4)
-
300
87
(146)
-
241
Total property foreclosed
6,649
8,610
(8,653)
-
6,606
Less: Allowance for impairment
(188)
(851)
724
-
(315)
Property foreclosed - net
6,461
7,759
(7,929)
-
6,291
Internal appraiser Movable assets Assets foreclosed from purchase by bid on the open market Immovable assets External appraiser Internal appraiser Non-used branches External appraiser
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2012 Balance -
Balance Change
end
Disposals
appraiser
of the year
(1,230)
77
5,199
beginning of the year
Additions
Assets transferred in settlement of debts Immovable assets External appraiser Internal appraiser
5,615
737
97
14
(4)
(77)
30
365
4,777
(4,468)
-
674
External appraiser
707
20
(342)
58
443
Internal appraiser
64
-
(3)
(58)
3
116
232
(48)
-
300
Total property foreclosed
6,964
5,780
(6,095)
-
6,649
Less: Allowance for impairment
(202)
(389)
403
-
(188)
Property foreclosed - net
6,762
5,391
(5,692)
-
6,461
Movable assets Assets foreclosed from purchase by bid on the open market Immovable assets
Non-used branches External appraiser
53 Thanachart Bank Public Company Limited
137
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2013 Balance -
Balance Change
end
Disposals
appraiser
of the year
beginning of the year
Additions
Assets transferred in settlement of debts Immovable assets External appraiser
1,904
98
(564)
11
1,449
7
5
(1)
(11)
-
641
7,726
(7,224)
-
1,143
464
41
(79)
2
428
2
-
-
(2)
-
300
87
(146)
-
241
Total property foreclosed
3,318
7,957
(8,014)
-
3,261
Less: Allowance for impairment
(152)
(811)
699
-
(264)
Property foreclosed - net
3,166
7,146
(7,315)
-
2,997
Internal appraiser Movable assets Assets foreclosed from purchase by bid on the open market Immovable assets External appraiser Internal appraiser Non-used branches External appraiser
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2012 Balance -
Balance Change
end
Disposals
appraiser
of the year
beginning of the year
Additions
Assets transferred in settlement of debts Immovable assets External appraiser
2,564
108
(847)
79
1,904
89
1
(4)
(79)
7
345
4,583
(4,287)
-
641
External appraiser
624
10
(228)
58
464
Internal appraiser
63
-
(3)
(58)
2
116
232
(48)
-
300
Total property foreclosed
3,801
4,934
(5,417)
-
3,318
Less: Allowance for impairment
(148)
(345)
341
-
(152)
Property foreclosed - net
3,653
4,589
(5,076)
-
3,166
Internal appraiser Movable assets Assets foreclosed from purchase by bid on the open market Immovable assets
Non-used branches External appraiser
54
138
Annual Report 2013
16.
Land, premises and equipment (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 Buildings
Furniture,
Assets
and building
fixtures and
under
improvement
equipment
4,514
2,444
5,586
184
112
12,840
-
-
501
9
189
699
-
(60)
(230)
(3)
-
(293)
Transfers/disposals
(59)
(25)
(86)
(62)
(138)
(370)
31 December 2013
4,455
2,359
5,771
128
163
12,876
31 December 2012
-
308
3,997
143
-
4,448
Transfer/disposals
-
(2)
(202)
(59)
-
(263)
-
(27)
(156)
(3)
-
(186)
Depreciation for the year
-
130
594
16
-
740
31 December 2013
-
409
4,233
97
-
4,739
31 December 2012
68
26
6
-
-
100
31 December 2013
68
26
6
-
-
100
4,387
1,924
1,532
31
163
8,037
Land
installation
Vehicles
Total
Cost 31 December 2012 Additions Decrease from disposal of a subsidiary company
Accumulated depreciation
Decrease from disposal of a subsidiary company
Allowance for impairment
Net book value 31 December 2013
740
Depreciation charge for the year
55 Thanachart Bank Public Company Limited
139
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2012
Land
Buildings
Furniture,
Assets
and building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 31 December 2011
4,704
2,484
5,117
226
146
12,677
-
-
478
9
163
650
Transfers/disposals
(190)
(40)
(9)
(51)
(197)
(487)
31 December 2012
4,514
2,444
5,586
184
112
12,840
31 December 2011
-
165
3,493
165
-
3,823
Transfer/disposals
-
3
(178)
(49)
-
(224)
Depreciation for the year
-
140
682
27
-
849
31 December 2012
-
308
3,997
143
-
4,448
68
26
1
-
-
95
-
-
5
-
-
5
68
26
6
-
-
100
4,446
2,110
1,583
41
112
8,292
Additions
Accumulated depreciation
Allowance for impairment 31 December 2011 Increase during the year 31 December 2012 Net book value 31 December 2012
849
Depreciation charge for the year
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2013 Buildings
Furniture,
Assets
and buildings
fixtures and
under
improvement
equipment
4,429
2,267
4,048
79
105
10,928
-
-
435
1
183
619
Transfers/disposals
(59)
(25)
(34)
(26)
(126)
(270)
31 December 2013
4,370
2,242
4,449
54
162
11,277
31 December 2012
-
229
2,709
58
-
2,996
Transfer/disposals
-
(2)
(147)
(24)
-
(173)
Depreciation for the year
-
126
527
9
-
662
31 December 2013
-
353
3,089
43
-
3,485
31 December 2012
-
-
5
-
-
5
31 December 2013
-
-
5
-
-
5
4,370
1,889
1,355
11
162
7,787
Land
installation
Vehicles
Total
Cost 31 December 2012 Additions
Accumulated depreciation
Allowance for impairment
Net book value 31 December 2013 Depreciation charge for the year
662
56
140
Annual Report 2013
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2012
Land
Buildings and
Furniture,
Assets
buildings
fixtures and
under
improvement
equipment
Vehicles
Total
installation
Cost 4,618
2,314
3,540
110
144
10,726
-
-
414
-
148
562
Transfers/disposals
(189)
(47)
94
(31)
(187)
(360)
31 December 2012
4,429
2,267
4,048
79
105
10,928
31 December 2011
-
100
2,189
72
-
2,361
Transfers/disposals
-
(3)
(65)
(30)
-
(98)
Depreciation for the year
-
132
585
16
-
733
31 December 2012
-
229
2,709
58
-
2,996
31 December 2011
-
-
-
-
-
-
Increase during the year
-
-
5
-
-
5
31 December 2012
-
-
5
-
-
5
4,429
2,038
1,334
21
105
7,927
31 December 2011 Additions
Accumulated depreciation
Allowance for impairment
Net book value 31 December 2012
733
Depreciation charge for the year
As at 31 December 2013 and 2012, the Bank and its subsidiaries have vehicles acquired under financial leases with net book values amounting to approximately Baht 15 million and Baht 22 million, respectively. In addition, the Bank and its subsidiaries have office equipment and vehicles which have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for impairment loss amounted to approximately Baht 2,439 million and Baht 1,887 million, respectively (separate financial statements: the Bank have vehicles acquired under financial leases with net book values amounting to approximately Baht 12 million and Baht 18 million, respectively and have office equipment and vehicles which have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for impairment loss amounted to approximately Baht 2,107 million and Baht 1,617 million, respectively).
57 Thanachart Bank Public Company Limited
141
17.
Intangible assets (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 Membership fees for Intangible
Thailand
assets from
Futures
Computer
business
Computer
Exchange and
software under
combination
software
others
development
Total
Cost 31 December 2012
4,100
1,651
7
274
6,032
-
129
-
173
302
-
(40)
-
(1)
(41)
Transfers/disposals
-
175
-
(206)
(31)
31 December 2013
4,100
1,915
7
240
6,262
1,140
531
7
-
1,678
-
(22)
-
-
(22)
515
185
-
-
700
1,655
694
7
-
2,356
31 December 2012
-
60
-
-
60
Increase during the year
-
3
-
-
3
31 December 2013
-
63
-
-
63
2,445
1,158
-
240
3,843
Additions Decrease from disposal of a subsidiary company
Accumulated amortisation 31 December 2012 Decrease from disposal of a subsidiary company Amortisation for the year 31 December 2013 Allowance for impairment
Net book value 31 December 2013
700
Amortisation expenses for the year Remaining amortisation period (years)
6.3 years
0 - 9.9 years
-
-
58
142
Annual Report 2013
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2012 Membership fees for Intangible
Thailand
assets from
Futures
Computer
business
Computer
Exchange and
software under
combination
software
others
development
Total
Cost 31 December 2011
4,100
1,466
7
180
5,753
Additions
-
131
-
229
360
Transfers/disposals
-
54
-
(135)
(81)
31 December 2012
4,100
1,651
7
274
6,032
31 December 2011
602
411
6
-
1,019
Transfers/disposals
-
(34)
-
-
(34)
538
154
1
-
693
1,140
531
7
-
1,678
31 December 2011
-
25
-
-
25
Increase during the year
-
35
-
-
35
31 December 2012
-
60
-
-
60
2,960
1,060
-
274
4,294
Accumulated amortisation
Amortisation for the year 31 December 2012 Allowance for impairment
Net book value 31 December 2012
693
Amortisation expenses for the year
59 Thanachart Bank Public Company Limited
143
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2013 Computer
Intangible assets from business
Computer
software under
combination
software
development
Total
Cost 31 December 2012
3,613
1,374
269
5,256
Additions
-
118
157
275
Transfers/disposals
-
166
(197)
(31)
31 December 2013
3,613
1,658
229
5,500
31 December 2012
653
313
-
966
Amortisation for the year
515
174
-
689
1,168
487
-
1,655
31 December 2012
-
60
-
60
Increase during the year
-
3
-
3
31 December 2013
-
63
-
63
2,445
1,108
229
3,782
Accumulated amortisation
31 December 2013 Allowance for impairment
Net book value 31 December 2013
689
Amortisation expenses for the year Remaining amortisation period (years)
6.3 years
2.4 - 9.7 years
-
60
144
Annual Report 2013
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2012 Intangible Computer
assets from business
Computer
software under
combination
software
development
Total
Cost 31 December 2011
3,613
1,199
164
4,976
Additions
-
123
217
340
Transfers/disposals
-
52
(112)
(60)
31 December 2012
3,613
1,374
31 December 2011
115
Transfers/disposals
-
269
5,256
186
-
301
(12)
-
(12)
Accumulated amortisation
Amortisation for the year
538
139
-
677
31 December 2012
653
313
-
966
31 December 2011
-
25
-
25
Increase during the year
-
35
-
35
31 December 2012
-
60
-
60
2,960
1,001
269
4,230
Allowance for impairment
Net book value 31 December 2012
677
Amortisation expenses for the year
As at 31 December 2013 and 2012, the Bank and its subsidiaries have computer software which have been fully amortised but are still in use with original costs before deducting accumulated amortisation, amounting to approximately Baht 54 million and Baht 44 million, respectively (separate financial statements: Baht 7 million and Baht 7 million, respectively). 18.
Goodwill As at 31 December 2013 and 2012, goodwill as stated in the financial statements is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
(Restated) Goodwill - beginning of the year Increase during the year Goodwill - ending of the year
(Restated)
17,951
17,951
17,941
17,941
-
-
-
-
17,951
17,951
17,941
17,941
61 Thanachart Bank Public Company Limited
145
19.
Deferred tax assets/ liabilities and income tax
19.1 Deferred tax assets/ liabilities As at 31 December 2013 and 2012 and 1 January 2012, deferred tax assets and liabilities are as follows: (Unit: Million Baht) Consolidated financial statements
Separate financial statements
31 December
31 December
1 January
31 December
31 December
1 January
2013
2012
2012
2013
2012
2012
(Restated) Deferred tax assets
641
523
(Restated) 348
-
-
-
Deferred tax liabilities
(1,719)
(2,060)
(1,605)
(1,595)
(1,924)
(1,444)
Net
(1,078)
(1,537)
(1,257)
(1,595)
(1,924)
(1,444)
The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 31 December
31 December
1 January
2013
2012
2012
(Restated) Deferred tax assets Non-accrued interest income
108
83
94
312
280
245
Provisions for employee benefits
372
383
387
Provisions
252
210
173
Accrued interest payable/ accrued expenses
149
165
202
-
-
86
Fees income received in advance
384
70
62
Late payment fee income
136
110
96
Insurance contract liabilities
272
286
254
Others
418
260
101
2,403
1,847
1,700
(1,110)
(1,148)
(1,149)
(1,546)
(1,239)
(803)
Intangible assets
(489)
(574)
(705)
Others
(336)
(423)
(300)
Deferred tax liabilities
(3,481)
(3,384)
(2,957)
Net
(1,078)
(1,537)
(1,257)
Allowance for doubtful accounts - general provision/other assets
Unused tax loss
Deferred tax assets Deferred tax liabilities Assets transferred as a result of business combination Deferred commission fee and direct expenses charged on hire purchase
62
146
Annual Report 2013
(Unit: Million Baht) Separate financial statements 31 December
31 December
1 January
2013
2012
2012
(Restated) Deferred tax assets Non-accrued interest income
105
83
94
60
151
127
Provisions for employee benefits
338
347
351
Provisions
252
210
173
Accrued interest payable/ accrued expenses
136
141
182
-
-
86
Fees income received in advance
384
70
62
Late payment fee income
136
110
96
Others
154
24
29
1,565
1,136
1,200
(1,110)
(1,148)
(1,149)
(1,471)
(1,185)
(764)
(489)
(574)
(705)
(90)
(153)
(26)
Deferred tax liabilities
(3,160)
(3,060)
(2,644)
Net
(1,595)
(1,924)
(1,444)
Allowance for doubtful accounts - general provision/other assets
Unused tax loss
Deferred tax assets Deferred tax liabilities Assets transferred as a result of business combination Deferred commission fee and direct expenses charged on hire purchase Intangible assets Others
63 Thanachart Bank Public Company Limited
147
19.2 Income tax Income tax expenses for the years ended 31 December 2013 and 2012 are as follows: (Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2013
2012
2012
(Restated)
(Restated)
Continuing operations Current income tax: Corporate income tax charge
4,320
2,093
3,371
558
Adjustment in respect of income tax from previous year
63
(263)
69
246
(223)
(89)
Deferred tax: Relating to origination and reversal of temporary differences
(352)
336
Income tax expense reported in statements of comprehensive income
4,031
2,076
3,217
805
119
540
-
-
(30)
(127)
-
-
89
413
-
-
Discontinued operations Current income tax: Corporate income tax charge Deferred tax: Relating to origination and reversal of temporary differences Income tax expense reported in statements of comprehensive income
64
148
Annual Report 2013
The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2013 and 2012 are as follows: (Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2013
2012
2012
(Restated)
(Restated)
Continuing operations Deferred tax relating to gain on changes in value of available-for-sale investments
(105)
256
(106)
143
(5)
15
(110)
271
(28)
(109)
-
-
(28)
(109)
-
-
Deferred tax relating to share of other comprehensive income of associates
-
-
(106)
143
Discontinued operations Deferred tax relating to gain on changes in value of available-for-sale investments
Reconciliations between income tax expenses and the product of accounting profit multiplied by the applicable tax rates for the years ended 31 December 2013 and 2012 are as follows: (Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
(Restated)
(Restated)
Accounting profit before tax - continuing operations
19,278
9,427
17,330
7,659
443
1,625
-
-
19,721
11,052
17,330
7,659
Accounting profit before tax - discontinued operations Applicable tax rate
20%
23%, 30%
20%
23%
Accounting profit before tax multiplied by applicable tax rate
3,945
2,552
3,466
1,762
Adjustment in respect of income tax from previous year Effects of changes in the applicable tax rates
63
(263)
69
(89)
-
(58)
-
(99)
Effects of non - taxable revenue and non-deductible expenses - net
112
258
4,120
2,489
3,217
805
4,031
2,076
3,217
805
89
413
-
-
4,120
2,489
3,217
805
(318)
(769)
Income tax expenses reported in statements of comprehensive income Income tax expenses - continuing operations Income tax expenses - discontinued operations
65 Thanachart Bank Public Company Limited
149
20.
Other assets (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Accrued premium insurance income
230
496
-
-
Other receivables
796
1,408
791
1,402
1,069
1,162
938
795
276
327
276
323
306
225
272
209
Deposit
327
313
300
288
Estimated insurance claims recoveries
312
256
-
-
Receivable from clearing house
170
944
-
-
Prepaid expenses
413
337
110
95
Deposit from derivative contracts
1,034
102
1,034
102
Others
1,526
1,197
1,186
1,004
Total
6,459
6,767
4,907
4,218
Less: Allowance for impairment
(513)
Other assets - net
5,946
Accrued interest and dividend income receivables Prepaid leasehold rights Other receivables - VAT paid in advance for customers
21.
(328) 6,439
(307)
(266)
4,600
3,952
Deposits
21.1 Classified by type of deposits (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Current
8,768
8,514
8,806
8,559
Saving
239,231
239,328
239,715
239,931
6,241
2
6,241
2
99,551
119,833
100,437
119,981
- 6 months and up to 1 year
167,756
202,761
169,505
204,761
- Over 1 year
197,532
127,934
197,558
128,048
719,079
698,372
722,262
701,282
Certificates of deposit Fixed deposits - Less than 6 months
Total deposits
66
150
Annual Report 2013
21.2 Classified by currency and countries (Unit: Million Baht) Consolidated financial statements 2013 Domestic Baht US Dollar Other currencies Total
2012
Foreign
Total
Domestic
Foreign
Total
718,629
1
718,630
698,079
1
698,080
361
23
384
122
21
143
20
45
65
130
19
149
719,010
69
719,079
698,331
41
698,372
(Unit: Million Baht) Separate financial statements 2013
Baht US Dollar Other currencies Total
22.
2012
Domestic
Foreign
721,812
1
361
Total
Domestic
Foreign
Total
721,813
700,989
1
700,990
23
384
122
21
143
20
45
65
130
19
149
722,193
69
722,262
701,241
41
701,282
Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2013 At call
2012
Term
Total
At call
Term
Total
Domestic Bank of Thailand and the FIDF Commercial banks Specialised financial institutions Other financial institutions Total domestic items
708
7,500
8,208
708
6,869
7,577
1,220
16,732
17,952
1,121
23,311
24,432
598
8,074
8,672
192
13,722
13,914
8,931
17,736
26,667
9,828
16,427
26,255
11,457
50,042
61,499
11,849
60,329
72,178
104
18,638
18,742
54
14,336
14,390
Foreign US Dollar Euro
4
-
4
-
-
-
Baht currency
837
-
837
486
723
1,209
Total foreign items
945
18,638
19,583
540
15,059
15,599
12,402
68,680
81,082
12,389
75,388
87,777
Total
67 Thanachart Bank Public Company Limited
151
(Unit: Million Baht) Separate financial statements 2013 At call
2012
Term
Total
At call
Term
Total
Domestic Bank of Thailand and the FIDF
708
7,500
8,208
708
6,869
7,577
Commercial banks
215
9,902
10,117
679
17,213
17,892
Specialised financial institutions
598
8,074
8,672
162
13,722
13,884
9,033
18,836
27,869
10,325
16,807
27,132
10,554
44,312
54,866
11,874
54,611
66,485
104
18,638
18,742
54
14,336
14,390
4
-
4
-
-
-
Baht currency
837
-
837
486
723
1,209
Total foreign items
945
18,638
19,583
540
15,059
15,599
11,499
62,950
74,449
12,414
69,670
82,084
Other financial institutions Total domestic items Foreign US Dollar Euro
Total
As at 31 December 2013, interbank and money market items in the consolidated financial statements included loans of a subsidiary company amounting to Baht 2,794 million, consisting of ((i) a loan of Baht 73 million, repayable in 36 monthly installments from the date of the loan drawdown, and carrying interest at a fixed rate per annum, payable monthly, (ii) a loan of Baht 800 million, repayable in full within 3 years from the date of the loan drawdown and carrying interest at a fixed rate per annum, payable monthly, (iii) a loan of Baht 224 million, repayable in quarterly installments, carrying interest at MLR minus a fixed rate, payable monthly, (iv) a loan of Baht 500 million, repayable in full within 4 years from the date of the loan drawdown, carrying interest at a fixed rate per annum, payable monthly, (v) a loan of Baht 417 million, repayable in quarterly installments, carrying interest at a fixed rate per annum, payable monthly, and (vi) a loan of Baht 780 million in the form of promissory notes, repayable at the date as specified in each promissory note, and carrying interest at fixed rates per annum, payable monthly). In addition, the subsidiary has to comply with the terms and conditions specified in the loan agreements, such as maintenance of a debt to equity ratio (2012: included loans of a subsidiary company amounting to Baht 1,754 million).
68
152
Annual Report 2013
23.
Debt issued and borrowings As at 31 December 2013 and 2012, the balance of debt issued and domestic borrowings, which stated in Baht, are as follows: (Unit: Million Baht) Interest rate
Consolidated
Separate
per annum (as at
financial statements
financial statements
2013
2013
Types of borrowings
31 December 2013)
Maturity date
2012
2012
Perpetual subordinated hybrid
8.25 percent
Dissolution
7,130
7,130
7,130
7,130
5.25 percent
2019 and
5,000
5,000
5,000
5,000
4.70 - 6.00 percent
2015 - 2022
35,516
33,773
35,516
33,773
-
1,743
-
1,743
bonds issued under Tier I (a) Subordinated hybrid bonds issued under Tier II (b) Subordinated debentures
2024
issued under Tier II (c - h) Subordinated debentures (h) Unsubordinated debentures
4.70 - 5.50 percent
2014 - 2017
14,246
11,072
-
2,072
2.65 - 2.95 percent
2014
29,226
13,235
29,226
13,235
-
41
-
41
(i - n) Short-tem debentures Bills of exchange Bills of exchange Promissory note
0.50 - 4.25 percent
At call
0.50 percent
2014 - 2017
Borrowings - Department of
-
4,889
-
5,299
1,065
1,168
5
5
46
98
46
98
92,229
78,149
76,923
68,396
Alternative Energy Development and Efficiency Total debt issued and borrowings
(a)
On 22 April 2010, the Bank issued 7,130,000 name registered of perpetual, non-cumulative, subordinated, hybrid Tier 1 bonds, with a face value of Baht 1,000 each, and sold them to two major shareholders of the Bank. The bonds mature upon dissolution or liquidation of the Bank. The bonds are unsecured and non-convertible and bear interest at a fixed rate equal to the highest interest rate for a six-month fixed deposit plus 6 percent per annum, payable semi-annually. The Bank has a call option to early redeem the bonds at par if the condition specified are met.
(b)
On 24 July 2009, the Bank issued 5,000,000 name registered of cumulative subordinated hybrid bonds, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. Of these, 3.5 million units mature in 2019 and bear interest at a fixed rate of 5.25 percent per annum for the first five years, and 5.5 percent per annum for the sixth to tenth years, while 1.5 million units mature in 2024 and bear interest at a fixed rate of 5.25 percent per annum for the first five years, 6.0 percent per annum for the sixth to tenth years and 6.5 percent per annum for the eleventh to fifteenth years, payable quarterly. The Bank has a call option to early redeem these debentures at par and has option to postpone principal and/or interest payment date if the conditions as specified are met. 69 Thanachart Bank Public Company Limited
153
(c)
On 9 May 2008, the Bank issued 5,000,000 name registered subordinated, unsecured, unconvertible debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2015 and bear interest at a fixed rate of 5.1 percent per annum for the first three years, and 6 percent per annum for the fourth to seventh years, payable quarterly.
(d)
On 3 April 2009, the Bank issued 2,000,000 name registered subordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2019 and bear interest at a fixed rate of 5.25 percent per annum for the first three years, 5.75 percent per annum for the fourth to seventh years, and 6.5 percent per annum for the eighth to tenth years, payable quarterly. The Bank has a call option to early redeem these debentures at par if the conditions specified are met.
(e)
On 2 April 2010, the Bank issued 6,000,000 name registered subordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2020 and bear interest at a fixed rate of 5 percent per annum for the first five years and 5.5 percent per annum for the sixth to tenth years, payable quarterly. The Bank has a call option to early redeem these debentures at par if the conditions specified are met.
(f)
On 20 June 2011, the Bank issued 10,000,000 unsecured subordinated debentures with a face value of Baht 1,000 each. The debentures mature in 2019 and bear interest at fixed rates of 6.00 percent per annum until June 2016, and 6.50 percent per annum for the remaining years, payable quarterly. The Bank has a call option to early redeem these debentures at par if the conditions specified are met. This debenture was issued to replace SCIB’s debentures which were early redeemed in accordance with the BOT stipulations regarding the transfer of the entire business of SCIB.
(g)
On 20 July 2012, the Bank issued 8,497,000 name registered subordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2022 and bear interest at a fixed rate of 4.70 percent per annum, payable quarterly. The Bank has a call option to early redeem these debentures at par if the conditions specified are met.
(h)
On 19 October 2012, the Bank issued 4,018,500 name registered subordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2022 and bear interest at a fixed rate of 4.70 percent per annum, payable quarterly. The Bank has a call option to early redeem these debentures at par if the conditions specified are met. All debentures meet the criteria to be counted as Tier 2 capital (2012: some of the debentures, amounting to Baht 2,276 million could be counted as Tier 2 Capital).
70
154
Annual Report 2013
(i)
On 27 March 2012, the Bank issued 2,072,100 name registered unsubordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in the first quarter of 2013 and bear interest at fixed rate of 3.45 percent per annum, payable quarterly.
(j)
On 27 April 2012, a subsidiary company issued 6,000,000 name registered unsubordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. Of these, 2 million units bear interest at fixed rate of 4.90 percent per annum and mature in 2014, and 1.5 million units bear interest at fixed rate of 5.20 percent per annum and mature in 2015, and another 2.5 million units bear interest at fixed rate of 5.50 percent per annum and mature in 2016. All debentures pay interest quarterly. The subsidiary has to comply with the terms and conditions as specified in the loan agreement, such as maintenance of a debt to equity ratio.
(k)
On 1 November 2012, a subsidiary company issued 3,000,000 name registered unsubordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2016 and bear interest at fixed rate of 5.00 percent per annum, payable quarterly. In addition, the subsidiary has to comply with the terms and conditions as specified in the loan agreement, such as maintenance of a debt to equity ratio.
(l)
On 14 June 2013, a subsidiary company issued 2,000,000 name registered unsubordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2017 and bear interest at fixed rate of 4.70 percent per annum, payable quarterly. In addition, the subsidiary has to comply with the terms and conditions as specified in the loan agreement, such as maintenance of a debt to equity ratio.
(m) On 30 August 2013, a subsidiary company issued 760,000 units of name registered unsubordinated,
unsecured,
unconvertible
debentures
with
no
debenture
holders’
representative, with a face value of Baht 1,000 each. The debenture mature in 2017 and bear interest at fixed rate of 4.759 percent per annum, payable semi-annually. In addition, the subsidiary has to comply with the terms and conditions as specified in the loan agreement, such as maintenance of a debt to equity ratio. (n)
On 25 October 2013, a subsidiary company issued 3,000,000 units of name registered unsubordinated, unsecured, unconvertible debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debenture mature in 2017 and bear interest at fixed rate of 4.80 percent per annum, payable quarterly. In addition, the subsidiary has to comply with the terms and conditions as specified in the loan agreement, such as maintenance of a debt to equity ratio. 71 Thanachart Bank Public Company Limited
155
24.
Provisions (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 Obligations from
Balance as at 1 January 2013 Increase during the year Utilised
Loss from
Employee
off-balance
litigation
benefits
items
186
1,922
54
73
(48)
Others
Total
222
646
2,976
357
329
813
(95)
-
(431)
(574)
(22)
-
-
(22)
-
-
-
(47)
1,878
579
544
3,146
Decrease from disposal of a subsidiary company
-
Reversal of provisions
(47)
Balance as at 31 December 2013
145
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2012 Obligations from
Balance as at 1 January 2012 Increase during the year
Loss from
Employee
off-balance
litigation
benefits
items
85
1,953
270
516
2,824
101
80
32
134
347
-
(4)
(115)
-
(80)
Utilised
-
Reversal of provisions
-
-
186
1,922
Balance as at 31 December 2012
(111)
Others
(80) 222
Total
646
2,976 (Unit: Million Baht)
Separate financial statements For the year ended 31 December 2013 Obligations from Loss from
Employee
off-balance
litigation
benefits
items
185
1,735
222
645
2,787
-
2
-
-
2
54
47
357
329
787
Utilised
(48)
(92)
(430)
(570)
Reversal of provisions
(46)
Balance as at 31 December 2013
145
Balance as at 1 January 2013
Others
Total
Employee benefits for staff transferred from TS AMC Increase during the year
-
-
-
-
1,692
579
544
(46) 2,960
72
156
Annual Report 2013
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2012 Obligations from Loss from
Employee
off-balance
litigation
benefits
items
84
1,755
270
512
2,621
-
24
-
-
24
101
65
32
133
331
-
-
(109)
-
(80)
Balance as at 1 January 2012
Others
Total
Employee benefits for staff transferred from TS AMC Increase during the year Utilised
-
Reversal of provisions
-
-
185
1,735
Balance as at 31 December 2012
(109)
(80) 222
645
2,787
Long-term employee benefits Provision for long-term employee benefits, which is compensations on employees’ retirement, was as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2012
2013
2013
2012
Defined benefit obligation at beginning of the year
1,902
1,929
1,714
1,732
-
-
2
24
Decrease from disposal of a subsidiary company
(22)
-
-
-
Current service cost
147
171
127
144
87
107
79
98
(213)
(236)
(210)
(216)
Decrease from curtailment
(69)
(69)
(69)
(68)
Benefits paid during the year
(45)
-
(41)
-
1,787
1,902
1,602
1,714
Employee benefits for staff transferred from TS AMC
Interest cost Actuarial gain
Defined benefit obligation at end of the year
73 Thanachart Bank Public Company Limited
157
Long-term employee benefits which is recognised in profit or loss for the years ended 31 December 2013 and 2012 can be summarised as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2012
2013 Current service cost
2013
2012
147
171
127
144
87
107
79
98
(221)
(213)
(204)
(191)
8
(23)
(6)
(25)
Decrease from curtailment
(69)
(69)
(69)
(68)
Total expense recognised in profit or loss
(48)
(27)
(73)
(42)
Interest cost Actuarial (gain) loss recognised during the year - Assumptions changing adjustments - Experience adjustments
Amounts of defined benefit obligation for the current and previous three years are as follows: (Unit: Million Baht) Experience adjustments arising on the plan liabilities
Defined benefit obligation Consolidated
Separate
Consolidated
Separate
financial statements
financial statements
financial statements
financial statements
Year 2013
1,787
1,602
8
(6)
Year 2012
1,902
1,714
(23)
(25)
Year 2011
1,929
1,732
-
-
Year 2010
2,272
356
-
-
The principal actuarial assumptions used to calculate the defined benefit obligations are as follows: (Percent per annum) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Discount rate
4.40 - 4.78
4.07 - 4.38
4.62
4.38
Future salary increase rate
5.11 - 7.84
5.50 - 7.35
5.11
5.50
0.00 - 59.57
0.00 - 47.76
0.17 - 14.00
0.00 - 19.02
Average staff turnover rate (depending on age)
74
158
Annual Report 2013
25.
Insurance contract liabilities (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2012
2013 Life policy reserve
2012
10,297
34,291
-
-
Loss reserve and outstanding claims
1,766
1,975
-
-
Unearned premium reserve
2,889
3,116
-
-
67
250
-
-
15,019
39,632
-
-
Other liabilities under insurance policies Total insurance contract liabilities
26.
2013
Other liabilities (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013 Other payables
2012
2013
2012
1,510
1,341
1,136
1,106
302
444
245
399
Insurance premium payable
359
393
298
603
Income received in advance
1,980
434
1,977
432
Corporate income tax payable
1,264
1,193
717
288
509
126
-
-
Others
2,948
3,326
1,100
1,801
Total other liabilities
8,872
7,257
5,473
4,629
Suspense cash received from account receivables
Payable to clearing house
27.
Share capital On 4 April 2013, the Annual General Meeting of Shareholders of the Bank approved the decrease and increase in the Bank’s registered share capital as follows: -
Approved a reduction of share capital from Baht 59,346,192,720 (5,934,619,272 shares with a par value of Baht 10 each) to Baht 55,136,649,030 (5,513,664,903 shares with a par value of Baht 10 each) by reduction of 420,954,369 unissued ordinary shares with a par value of Baht 10 each. The Bank registered the decrease with the Ministry of Commerce on 17 April 2013.
-
Approved an increase of share capital from Baht 55,136,649,030 (5,513,664,903 shares with a par value of Baht 10 each) to Baht 75,266,649,030 (7,526,664,903 shares with a par value of Baht 10 each) by issuing 2,013,000,000 ordinary shares with a par value of Baht 10 each. The Bank registered the increase in share capital with the Ministry of Commerce on 17 April 2013. 75 Thanachart Bank Public Company Limited
159
28.
Other components of equity (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2013
2012
2012
Surplus from business combination under (123)
common control
-
-
Revaluation surplus on investments Revaluation surplus on investments Available-for-sale investments Debt instruments
719
901
676
705
Equity instruments
484
607
25
259
1,203
1,508
701
964
Total Revaluation deficit on investments Available-for-sale investments Debt instruments Equity instruments
(252) (36)
(43) -
(236)
(1)
(34)
-
Held-to-maturity investments (transfer from available-for-sale investments) Total Total revaluation surplus on investments Less: The effect of deferred tax liabilities Net revaluation surplus on investments
(288) 915 (165)
(9) (52) 1,456 (297)
(270)
(4) (5)
431
959
(86)
(192)
750
1,159
345
767
193
247
-
-
(19)
(25)
-
-
174
222
-
-
801
1,258
345
767
Share of other comprehensive income of associates Less: The effect of deferred tax liabilities Net share of other comprehensive income of associates Total
76
160
Annual Report 2013
29.
Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Bank is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. In September 2013, the Bank’s Board of Director passed a resolution to allocate Baht 508 million of net income to statutory reserve, and on 31 December 2013, the Bank additional allocated Baht 198 million of net income for the year 2013 to the statutory reserve (2012: Baht 340 million).
30.
Capital funds The primary objectives of the Bank’s capital management are to maintain the Bank’s ability to continue as a going concern and to maintain a capital adequacy ratio in accordance with the Act on Undertaking of Banking business B.E. 2551. As at 31 December 2013, capital funds of the Bank calculated in accordance with the BOT’s regulation regarding “Elements of Capital Funds’ for Commercial Bank Incorporate in Thailand” dated 8 November 2012, consist of the following: (Unit: Million Baht) 31 December 2013 Tier I capital Common Equity Tier I capital Issued and fully paid up share capital
55,137
Share premium
2,101
Statutory reserve
1,837
Retained earnings - unappropriated
23,274
Other components of equity - Revaluation surplus on investment in equity securities - net
(7) 82,342
Less: goodwill
(17,941)
Total Common Equity Tier I capital
64,401
Additional Tier I capital Perpetual subordinated hybrid bonds (Hybrid Tier I) Total Tier I capital
6,417 70,818
Tier II capital Reserve for assets classified as normal
6,101
Subordinated debentures
33,764
Total Tier II capital
39,865
Total capital funds
110,683
77 Thanachart Bank Public Company Limited
161
On 26 September 2013, the Board of Directors’ meeting of the Bank passed a resolution to allocate amounting Baht 508 million of net income for the six-month period ended 30 June 2013 to statutory reserve. The remaining net income of Baht 7,147 million and the increase in retained earnings as the result of the change in accounting policy following the adoption of TAS 12 Income Tax, amounting to Baht 1,187 million, were allocated as capital funds of the Bank. As at 31 December 2013, the capital adequacy ratio of the Bank calculated in accordance with the BOT’s regulation regarding the calculation of capital fund, dated 8 November 2012, is as follows: 31 December 2013 Minimum
Total capital to risk-weighted assets (percent)
Capital ratio
requirement
of the Bank
by BOT
14.80
8.50
Total Common Equity Tier I to risk-weighted assets (percent)
8.61
4.50
Total Tier I to risk-weighted assets (percent)
9.47
6.00
As at 31 December 2012, capital funds of the Bank calculated in accordance with the BOT’s regulation regarding “Elements of Capital Funds for Commercial Bank Incorporated in Thailand”, dated 27 November 2008 was as follows: (Unit: Million Baht) 31 December 2012 Tier I capital Issued and fully paid up share capital
55,137
Share premium
2,101
Perpetual subordinated hybrid bonds (Hybrid Tier I)
7,130
Statutory reserve
1,060
Retained earnings - unappropriated
11,858
Total
77,286
Less: goodwill Total Tier I capital
(15,740) 61,546
Tier II capital Reserve for assets classified as normal Subordinated debentures Revaluation surplus on investment in equity securities - net
3,982 35,773 116
Total Tier II capital
39,871
Total capital funds
101,417
78
162
Annual Report 2013
As at 31 December 2012, the capital adequacy ratio of the Bank calculated in accordance with the BOT’s regulation regarding the calculation of capital fund, dated 27 November 2008. 31 December 2012 Minimum Capital ratio
requirement
of the Bank
by BOT
Total capital to risk-weighted assets (percent) Total Tier I to risk-weighted assets (percent)
13.99
8.50
8.49
4.25
The Bank will disclose qualitative and quantitative information regarding capital maintenance as at 31 December 2013 in accordance with the Notification of the Bank of Thailand Re: Public Disclosure of Capital Maintenance Information for Commercial Banks on its website at www.thanachartbank.co.th, within April 2014. 31.
Dividends Dividends
Dividends on net income for the year 2012 Dividends on net income for the year 2011
32.
Approved by
Total dividends
Dividend per share
Million Baht
Baht
Annual General Meeting of the Shareholders on 4 April 2013
2,040
0.37
1,930
0.35
Annual General Meeting of the Shareholders on 5 April 2012
Interest income Interest income for the years ended 31 December 2013 and 2012 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013 Interbank and money market items
2012
2013
2012
1,865
2,294
1,738
2,229
457
480
69
68
3,867
3,606
3,722
3,418
Loans to customers
21,246
21,200
20,697
20,914
Hire purchase and financial lease
26,452
21,156
24,323
19,702
Total interest income
53,887
48,736
50,549
46,331
Investments and trading transactions Investments in debt securities
79 Thanachart Bank Public Company Limited
163
33.
Interest expenses Interest expenses for the years ended 31 December 2013 and 2012 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
17,862
14,549
17,915
14,713
1,463
1,564
1,261
1,472
3,598
2,994
3,598
2,994
- Subordinated debentures
2,784
2,435
2,784
2,435
- Unsubordinated debentures
1,418
318
869
79
100
3,682
61
3,650
9
14
1
28
27,234
25,556
26,489
25,371
Deposits Interbank and money market items Contribution fee to FIDF and the Deposit Protection Agency Issues debt instruments
- Others Fees and services expense on borrowing Total interest expenses
34.
Fees and service income Fees and service income for the years ended 31 December 2013 and 2012 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Fees and service income Acceptance, aval and guarantees
317
331
317
331
1,823
1,216
-
-
733
710
733
710
Hire purchase fee income
1,340
1,081
1,260
1,049
Insurance brokerage fee income
1,513
1,105
1,815
1,767
676
438
-
-
Credit card fee
1,027
763
1,032
770
Others
1,364
911
1,275
781
8,793
6,555
6,432
5,408
Fees and service expenses
(1,890)
(1,485)
(1,673)
(1,330)
Net fees and service income
6,903
5,070
4,759
4,078
Brokerage fee from securities/ derivatives ATM and electronic banking services
Management fees
Total fees and service income
80
164
Annual Report 2013
35.
Gains on trading and foreign exchange transactions Gains (loss) on trading and foreign exchange transactions for the years ended 31 December 2013 and 2012 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Foreign exchange and derivatives relating to foreign exchange Derivatives relating to interest Debt securities
585
628
591
20
2
20
2
(139)
65
35
112
Equity securities
(9)
(1)
-
-
Others
50
13
2
-
531
664
685
Total
36.
609
705
Gains on investments Gains (losses) on investments for the years ended 31 December 2013 and 2012 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2013
2012
2012
Gains (losses) on disposal Available-for-sale securities Other investments Investments in subsidiary company (Note 48)
350 (2)
321 5
242 (2)
320 5
12,216
-
13,128
2
-
1
-
-
Reversal of impairment (losses) Available-for-sale investments General investments
33
(15)
33
(52) (5)
Investments in associated and subsidiary companies Gain on capital refunded from investments Total
-
-
-
484
-
484
-
13,081
312
13,885
270
81 Thanachart Bank Public Company Limited
165
37.
Directors’ remuneration Directors’ remuneration represents the benefits paid to the directors of the Bank and public subsidiary companies in accordance with Section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits payable to directors who hold executive positions but including the payment of remuneration amounting to Baht 18 million to the Bank’s and its subsidiaries’ directors, which was approved by the Annual General Meeting of Shareholders of the Bank and its subsidiaries.
38.
Impairment loss of loans and debt securities Impairment loss of loans and debt securities for the years ended 31 December 2013 and 2012 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Bad debts and doubtful accounts Loans to customers
11,605
2,968
11,215
4,673
20
27
24
27
(43)
(36)
(43)
(36)
Loss from debt restructuring
5
15
5
15
Impairment loss of debt securities
-
1
-
1
Haircut loss from the court ruling
-
5
-
-
11,587
2,980
11,201
4,680
Interbank and money market items Amortisation of revaluation allowance for debts restructured during the year
Total
82
166
Annual Report 2013
39.
Components of other comprehensive income Components of other comprehensive income for the years ended 31 December 2013 and 2012 of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
(Restated)
2012 (Restated)
Other comprehensive income Continuing operations: Available-for-sale investments: Unrealised gains (losses) during the year
(44)
1,633
(286)
1,068
Less: Reclassification of adjustment for the realised gains that included in profit or loss
(350)
(321)
(394)
1,312
(54)
146
(448)
1,458
(242)
(320)
(528)
748
Share of other comprehensive income in associated companies (loss) Other comprehensive income for the year (loss)
-
-
(528)
748
(143)
Impact from related income tax: Income tax - gains (losses) on changes in value of available-for-sale investments
105
(256)
106
5
(15)
-
110
(271)
106
(143)
(422)
605
Income tax - share of other comprehensive income of associated companies Impact from related income tax Other comprehensive income for the year - net (loss)
(338)
1,187
-
83 Thanachart Bank Public Company Limited
167
40.
Earnings per share Basic earnings per share is calculated by dividing profit for the years attributable to equity holders of the Bank (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the years. Consolidated
Separate
financial statements
financial statements
2013
2013
2012
2012
(Restated) Profit for the year from continuing operations (Million Baht)
(Restated)
15,031
7,142
14,113
6,855
2.73
1.30
2.56
1.24
354
1,212
-
-
0.06
0.22
-
-
5,514
5,514
5,514
5,514
Earnings per share from continuing operations (Baht/share) Profit for the year from discontinued operations (Million Baht) Earnings per share from discontinued operations (Baht/share) Weighted average number of ordinary shares (Million shares)
41.
Provident fund The Bank, its subsidiaries and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Employees contributed to the fund monthly, at rates of 3 -10 percent of their basic salaries, and the Bank and its subsidiaries contributed to the fund at stipulated rates. The fund will be paid to the employees upon termination of employment in accordance with the fund rules. During the year 2013, the Bank and its subsidiaries contributed Baht 422 million to the fund (separate financial statements: Baht 374 million) (2012: Baht 413 million in the consolidated financial statements and Baht 367 million in the separate financial statements).
84
168
Annual Report 2013
42.
Related party transactions During the years, the Bank and its subsidiaries had significant business transactions with its related parties. These transactions have been concluded on commercial terms and based agreed upon in the ordinary course of businesses between the Bank and those companies. Below is a summary of those significant transactions. (Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2013
2012
Transfer pricing policy (For the year 2013)
2012
Transactions occurred during the years Parent company Purchase of debt securities
3,603
50
3,603
50
At market price
29,189
33,393
29,189
33,393
At market price
(Related gain)
1
2
1
2
Interest income
1
1
-
-
Sales of debt securities
At interest rate of 7.52 - 7.85 percent per annum
Fee and service income
5
1
2
-
At the rate agreed under the service contract
Income on supporting service
11
13
11
13
At the rate agreed under the service contract
Other income Interest expenses
8
-
-
-
336
327
336
327
At interest rate of 0.60 - 3.20, 5.00, 5.25, 8.25 and 8.50 percent per annum
Rental expenses
7
76
6
62
At the rate agreed under the rental contracts
Other expenses Dividend payment
49
50
49
50
1,040
983
1,040
983
As declared
85 Thanachart Bank Public Company Limited
169
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Purchase of debt securities
-
-
8,781
17,150
At market price
Sales of debt securities
-
-
10,899
24,646
At market price
(Related gain)
-
-
2
13
Purchase of investments in
-
-
-
983
-
-
1,108
1,789
-
-
259
485
Transfer pricing policy (For the year 2013)
Transactions occurred during the years (continued) Subsidiary companies
equity instruments Purchase/sales of forward
At market price
exchange contracts Interest income
At interest rate of 3.15 - 4.10 and 7.78 percent per annum
Dividend income
-
-
1,300
3,377
As declared
Fee and service income
-
-
1,233
1,820
At the rate agreed under the service contract
Income on supporting service
-
-
294
292
At the rate agreed under the service contract
Other income
-
-
17
5
Interest expenses
-
-
156
307
At interest rate of 0.50 - 4.00 percent per annum
Fee and service expenses
-
-
-
4
Rental expenses
-
-
6
22
At the rate agreed under the rental contracts
Other expenses
-
-
193
281
Sales of debt securities
-
270
-
270
Interest income
-
1
-
1
Dividend income
-
-
42
Other income
11
-
-
Interest expenses
88
78
Associated companies
21
As declared
-
88
78
At interest rate of 0.60 - 3.15 and 5.25 percent per annum
Rental expenses
114
49
91
40
At the rate agreed under the rental contracts
Other expenses
11
9
8
6
86
170
Annual Report 2013
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2013
2012
2013
229
75
10,358
19,115
-
Transfer pricing policy (For the year 2013)
2012
Transactions occurred during the years (continued) Related parties (presented as part of continuing operations) Purchase of debt securities
75
At market price
10,358
19,115
At market price
1
-
1
459,061
523,737
457,204
520,808
Sales of property foreclosed
-
34
-
34
(Related gain)
-
7
-
7
Interest income
307
315
303
315
Sales of debt securities (Related gain) Purchase/sales of forward
229
At market price
exchange contracts
At interest rate 0.10 - 8.00 percent per annum
Dividend income Fee and service income
44
23
26
7
As declared
1
-
-
-
At the rate agreed under the service contract
Insurance/Life insurance
27
40
-
-
income Income on supporting service
At the rate agreed under the service contract
9
10
9
10
At the rate agreed under the service contract
Other income Interest expenses
11
18
-
4
390
415
390
415
At interest rate of 0.33 - 3.60, 5.22, 5.25, 6.00 and 8.25 percent per annum
Rental expenses
101
109
65
73
At the rate agreed under the rental contracts
Other expenses
55
21
36
17
900
851
900
851
Dividend income
-
4
-
-
Life insurance income
2
2
-
-
Dividend payment
As declared
Related companies (presented as part of discontinued operations)
At the rate agreed under the service contract
Rental expenses
5
17
-
-
At the rate agreed under the rental contracts
87 Thanachart Bank Public Company Limited
171
Moreover, in September 2012, Thanachart Bank purchased investments in equity securities from a subsidiary at a price of Baht 983 million, with reference to market price. Since this transaction was an intercompany transaction, a gain on disposal of Baht 630 million was recognised in the financial statements of the subsidiary company and eliminated in the consolidated financial statements. The outstanding balances of the above transactions during the years ended 31 December 2013 and 2012 have been shown at the average balance at the end of each month as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2013
2012
2012
Parent company Loans to customers
14
17
-
-
Deposits
1,334
817
1,334
817
Debt issued and borrowings
3,637
3,638
3,637
3,638
Interbank and money market items (assets)
-
-
1,346
392
Loans to customers
-
-
5,901
11,207
Deposits
-
-
2,538
10,791
Interbank and money market items (liabilities)
-
-
572
536
Debt issued and borrowings
-
-
221
1,303
991
259
991
259
1,200
1,422
1,200
1,422
246
395
246
395
Loans to customers
8,068
9,589
7,616
8,541
Deposits
2,571
1,348
2,571
1,348
12,582
10,788
12,582
10,788
3,894
4,123
3,894
4,123
Subsidiary companies
Associated companies Deposits Debt issued and borrowings Related companies Interbank and money market items (assets)
Interbank and money market items (liabilities) Debt issued and borrowings
88
172
Annual Report 2013
As at 31 December 2013 and 2012, the significant outstanding balances of the above transactions are as follows: (Unit: Million Baht) Consolidated financial statements 2013 Liabilities
Assets Interbank
Loans to
and money
Interbank
customers
market
Investments -
and interest
Other
items
debt securities
receivables
assets
Deposits
and money
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
12
25
3,030
-
3,638
84
-
-
-
-
34
963
-
1,200
11
-
258
-
-
-
-
14,409
3,494
82
2,680
Associated company MBK Plc. Related companies The Bank of Nova Scotia GMM Grammy Plc.
-
-
232
-
550
-
-
2
-
Thai Reinsurance Plc.
-
-
-
2
680
-
-
13
-
Thai Hua Rubber Plc.
-
-
213
-
313
-
-
1
407
Krungthai Card Plc.
-
-
4,970
-
7
-
-
-
-
Srithai Superware Plc.
-
-
594
-
50
-
-
-
19
Synphaet Co., Ltd.
-
-
443
-
7
-
-
-
5
-
-
1,135
173
1,673
119
400
80
469
258
-
7,599
234
7,273
14,528
8,732
273
3,580
Other related companies
(Unit: Million Baht) Consolidated financial statements 2012 Liabilities
Assets Interbank
Loans to
and money
Interbank
customers
market
Investments -
and interest
Other
items
debt securities
receivables
assets
Deposits
and money
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
5
16
25
4,833
-
3,637
93
-
-
-
-
30
1,042
-
1,200
17
-
57
-
-
39
-
11,615
3,494
100
1,971
Associated company MBK Plc. Related companies The Bank of Nova Scotia GMM Grammy Plc.
-
-
36
-
-
-
-
-
-
Thai Reinsurance Plc.
-
-
-
51
102
-
-
-
-
Thai Hua Rubber Plc.
-
-
2,744
-
349
-
-
2
487
Krungthai Card Plc.
-
-
4,138
-
11
-
-
-
-
Srithai Superware Plc.
-
-
711
-
69
-
-
-
-
Synphaet Co., Ltd.
-
-
829
-
36
-
-
-
5
Other related companies
-
-
1,468
178
958
165
400
78
320
57
5
9,942
323
7,400
11,780
8,731
290
2,783
89 Thanachart Bank Public Company Limited
173
(Unit: Million Baht) Separate financial statements 2013 Liabilities
Assets Loans to
Interbank
Investments
customers
and money
market
- debt
and interest
Other
items
securities
receivables
assets
Interbank and money
Deposits
Debt
market
issued and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
-
20
3,030
-
3,638
84
-
-
-
-
-
1,516
-
-
4
-
Subsidiary companies SCIB Plc. Thanachart Group Leasing Co., Ltd.
-
-
-
-
203
-
-
2
-
Thanachart Securities Plc.
550
-
-
24
-
14
-
26
764
Thanachart Insurance Plc.
-
-
-
67
938
-
-
192
10
Thanachart Broker Co., Ltd.
-
-
-
6
297
-
-
1
-
TS Asset Management Co., Ltd.
-
-
4,557
-
62
-
-
-
-
Siam City Life Assurance Plc.
-
-
-
1
-
1,181
-
1
-
Ratchthani Leasing Plc.
-
514
-
16
114
-
-
-
30
Other subsidiary companies
-
-
-
24
84
8
-
28
-
-
-
-
28
963
-
1,200
11
-
258
-
-
-
-
14,409
3,494
82
2,680
GMM Grammy Plc.
-
-
232
-
550
-
-
2
-
Thai Reinsurance Plc.
-
-
-
-
680
-
-
13
-
Thai Hua Rubber Plc.
-
-
213
-
313
-
-
1
407
Krungthai Card Plc.
-
-
4,970
-
7
-
-
-
-
Srithai Superware Plc.
-
-
594
-
50
-
-
-
19
Synphaet Co., Ltd.
-
-
443
-
7
-
-
-
5
Other related companies
-
-
619
161
1,677
118
400
74
205
808
514
11,628
347
10,491
15,730
8,732
521
4,120
Associated company MBK Plc. Related companies The Bank of Nova Scotia
90
174
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2012 Liabilities
Assets Interbank
Loans to
Interbank and money
Debt
market
issued and
Other
items
borrowings
liabilities
and money
Investments
customers
market
- debt
and interest
Other
items
securities
receivables
assets
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
5
-
20
4,833
-
3,637
93
-
-
-
-
-
2,016
-
-
5
-
Subsidiary companies SCIB Plc. Thanachart Group Leasing Co., Ltd.
-
-
-
-
25
-
-
-
-
Thanachart Securities Plc.
200
-
-
64
-
20
-
12
158
Thanachart Insurance Plc.
-
-
-
116
359
-
-
417
10
Thanachart Life Assurance Plc.
-
-
-
187
-
530
-
117
1
Thanachart Broker Co., Ltd.
-
-
-
2
237
-
-
-
-
TS Asset Management Co., Ltd.
-
-
6,062
2
118
-
-
-
-
Siam City Life Assurance Plc.
-
-
-
2
-
333
410
11
-
Ratchthani Leasing Plc.
-
-
-
-
133
-
-
-
30
Other subsidiary companies
-
-
-
26
51
7
-
47
-
-
-
-
24
1,042
-
1,200
17
-
Associated company MBK Plc. Related companies The Bank of Nova Scotia
57
-
-
39
-
11,615
3,494
100
1,971
GMM Grammy Plc.
-
-
36
-
-
-
-
-
-
Thai Reinsurance Plc.
-
-
-
-
102
-
-
-
-
Thai Hua Rubber Plc.
-
-
2,744
-
349
-
-
2
487
Krungthai Card Plc.
-
-
4,138
-
11
-
-
-
-
Srithai Superware Plc.
-
-
711
-
69
-
-
-
-
Synphaet Co., Ltd.
-
-
829
-
36
-
-
-
5
Other related companies
-
-
999
160
960
165
400
113
320
257
5
15,519
642
10,341
12,670
9,141
934
2,982
As at 31 December 2013 and 2012, the Bank has loans to subsidiary companies as mentioned in Note 11.11 to the financial statements. As at 31 December 2013, the Bank and its subsidiaries have investments amounting to approximately Baht 809 million (Baht 435 million in the separate financial statements) in related companies in which they are related by means of members of their management being shareholders and/or directors of those companies (2012: Baht 737 million in the consolidated financial statements and Baht 413 million in the separate financial statements).
91 Thanachart Bank Public Company Limited
175
As at 31 December 2013 and 2012, the Bank and its subsidiaries have the following related parties transactions with executive employees of the Bank and companies within Thanachart Group, including related persons who together with these employees: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
82
68
75
65
906
696
906
696
Loans to customers Deposits
Directors and management’s remuneration During the years 2013 and 2012, the Bank and its subsidiaries paid the following benefits to their key management personnel, including directors, totaled 121 persons and 130 persons, respectively (the separate financial statements: 47 persons and 46 persons, respectively): (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013 Short-term employee benefits Post-employment benefits
2012
2013
2012
539
542
267
281
13
14
6
6
552
556
273
287
92
176
Annual Report 2013
43.
Financial information classified by operating segment
43.1 Financial position and results of operations classified by business activity The financial position as at 31 December 2013 and 2012, and the operating results for the years then ended, classified by domestic and foreign operations, are as follows: (Unit: Million Baht) Consolidated financial statements 2013
Total assets
Domestic
Foreign
operations
operations
Eliminations
Total
1,038,460
24,511
(24,622)
1,038,349
77,273
17,046
(24,622)
69,697
131,414
7,411
-
138,825
1,835
-
-
1,835
760,943
-
-
760,943
719,079
-
-
719,079
Interbank and money market items (liabilities)
81,094
24,610
Debt issued and borrowings
92,229
-
Interbank and money market items (assets) Investments Investments in associated companies Loans to customers and accrued interest receivables Deposits
(24,622)
81,082
-
92,229 (Unit: Million Baht)
Consolidated financial statements 2012
Total assets
Domestic
Foreign
operations
operations
Eliminations
Total
1,018,539
13,991
(13,910)
1,018,620
72,728
13,145
(13,910)
71,963
145,320
786
-
146,106
1,576
-
-
1,576
731,010
-
-
731,010
698,372
-
-
698,372
Interbank and money market items (liabilities)
87,777
13,910
Debt issued and borrowings
78,149
-
Interbank and money market items (assets) Investments Investments in associated companies Loans to customers and accrued interest receivables Deposits
(13,910) -
87,777 78,149
93 Thanachart Bank Public Company Limited
177
(Unit: Million Baht) Consolidated financial statements 2013
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
53,813
168
(94)
53,887
(27,234)
(94)
94
(27,234)
26,579
74
-
26,653
Net fee and service income
6,903
-
-
6,903
Net insurance/Life insurance income
2,282
-
-
2,282
-
16,286
Interest expenses Net interest income
Other operating income
16,308
(22)
Other operating expenses
(21,259)
-
-
(21,259)
Impairment loss of loans and debt securities
(11,587)
-
-
(11,587)
52
-
19,278
-
-
(4,031)
15,195
52
-
15,247
443
-
-
443
(89)
-
-
(89)
52
-
Profit before income tax
19,226
Income tax
(4,031)
Profit from continuing operations before noncontrolling interests Profit from discontinued operations before income tax Income tax Profit before non-controlling interests
15,549
15,601 (Unit: Million Baht)
Consolidated financial statements 2012
Interest income Interest expenses Net interest income
Domestic
Foreign
operations
operations
Eliminations
Total
48,677
147
(88)
48,736
(25,556)
(88)
88
(25,556)
23,121
59
-
23,180
Net fee and service income
5,070
-
-
5,070
Net insurance/Life insurance income
2,147
-
-
2,147
Other operating income
3,657
-
3,669
Other operating expenses Impairment loss of loans and debt securities Profit before income tax Income tax
12
(21,659)
-
-
(21,659)
(2,980)
-
-
(2,980)
-
9,427
-
(2,076)
-
7,351
9,356 (2,076)
71 -
Profit from continuing operations before noncontrolling interests
7,280
71
Profit from discontinued operations before income tax Income tax Profit before non-controlling interests
1,625
-
-
1,625
(413)
-
-
(413)
-
8,563
8,492
71
94
178
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2013 Domestic
Foreign
operations
operations
990,835
Eliminations
Total
24,511
(24,622)
990,724
73,671
17,046
(24,622)
66,095
118,463
7,411
-
125,874
Investments in subsidiary and associated companies
9,505
-
-
9,505
Loans to customers and accrued interest receivables
729,970
-
-
729,970
Deposits
722,262
-
-
722,262
Interbank and money market items (liabilities)
74,461
24,610
Debt issued and borrowings
76,923
-
Total assets Interbank and money market items (assets) Investments
(24,622) -
74,449 76,923
(Unit: Million Baht) Separate financial statements 2012 Domestic
Foreign
operations
operations
953,128
Eliminations
Total
13,991
(13,910)
953,209
66,729
13,145
(13,910)
65,964
106,138
786
-
106,924
Investments in subsidiary and associated companies
13,754
-
-
13,754
Loans to customers and accrued interest receivables
708,641
-
-
708,641
Deposits
701,282
-
-
701,282
Interbank and money market items (liabilities)
82,084
13,910
Debt issued and borrowings
68,396
-
Total assets Interbank and money market items (assets) Investments
(13,910) -
82,084 68,396
(Unit: Million Baht) Separate financial statements 2013
Interest income Interest expenses Net interest income Net fee and service income Other operating income
Domestic
Foreign
operations
operations
50,475
168
(94)
50,549
(26,489)
(94)
94
(26,489)
23,986
74
-
24,060
4,759
-
-
4,759
-
18,199
18,221
(22)
Eliminations
Total
Other operating expenses
(18,487)
-
-
(18,487)
Impairment loss of loans and debt securities
(11,201)
-
-
(11,201)
Income tax
(3,217)
-
-
(3,217)
Profit for the year
14,061
52
-
14,113
95 Thanachart Bank Public Company Limited
179
(Unit: Million Baht) Separate financial statements 2012 Domestic
Foreign
operations
operations
46,272
147
(88)
46,331
(25,371)
(88)
88
(25,371)
20,901
59
-
20,960
Net fee and service income
4,078
-
-
4,078
Other operating income
6,812
12
-
6,824
(19,522)
-
-
(19,522)
(4,680)
-
-
(4,680)
(805)
-
-
(805)
71
-
Interest income Interest expenses Net interest income
Other operating expenses Impairment loss of loans and debt securities Income tax Profit for the year
6,784
Eliminations
Total
6,855
43.2 Financial positions and results of operations classified by business type Identification of the Bank’s operating segments The Bank’s operating segments are identified in accordance with the Bank’s organisation structure, which is determined based on the Bank’s management policies. The three operating segments identified are as follows: 1.
Retail banking segment: This serves individual customers, with related products offering such as deposits, housing loans, hire purchase loans, and credit card services.
2.
Corporate and SME segment: This serves business customers, with related products offering such as short-term and long-term loans, and import and export trade financing.
3.
Treasury, investment and other business segment: These deal with money market and investment transactions, transactions with related companies, staff welfare loans and others.
The accounting policies for segment reporting are the same as those applied by the Bank. The Bank allocates only revenue-generating assets based on the type of business. Assets that do not generate revenue are allocated to other business segment.
96
180
Annual Report 2013
The chief operating decision maker reviews the operating results of each segment separately in order to make decisions on the allocation of resources to each operating segment and to assess performance. The Bank measures segment performance based on net interest income generated by each segment with net interest income being interest income and interest expenses from external customers, net of interest income and interest expenses from inter-segment lending and borrowing that is presented in the other business segment. For inter-segment borrowing, market interest rates are charged. Operating expenses are allocated in proportion to the operations of each segment. Expenses arising in respect of the assets that do not generate income, such as depreciation and leasehold amortization, are presented in other business segment. Operating Segments: Thanachart Bank and Subsidiaries The Bank and its subsidiaries have five operating segments, which are 1) the banking segment, consisting of the three segments described above 2) the securities business segment 3) the life insurance segment 4) the non-life insurance segment and 5) the asset management segment. Financial information of the Bank and its subsidiaries presented by segment is as follow:
97 Thanachart Bank Public Company Limited
181
182
Annual Report 2013 8,792
2,322
2,999
Profit before non-controlling interest
Income tax
-
-
-
8,792
-
2,322
(1,886)
Profit from discontinued operations before income tax
non-controlling interests
Profit (loss) from continuing operations before 2,999
(581)
(750)
Profit (loss) before income tax
Income tax
2,903
3,749
Impairment loss of loans and debt securities 10,678
(1,969) (5,194)
(310)
17,123
-
718
(2,022)
777
-
4,458
and others
(5,697)
5,058
-
18,884
and SME
Investment
(14,496)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Treasury &
Banking business
1,086
-
-
1,086
(264)
1,350
-
(1,457)
2,555
-
252
business
Securities
329
(89)
443
(25)
6
(31)
-
(95)
(166)
(272)
502
business
insurance
Life
954
-
-
954
(238)
1,192
-
(933)
129
1,744
252
business
insurance
Non-life
422
-
-
422
(119)
541
291
(202)
100
-
352
business
management
Asset
For the year ended 31 December 2013
981
-
-
981
(254)
1,235
(248)
(591)
796
-
1,278
business
Other
(2,284)
-
-
(2,284)
55
(2,339)
(429)
506
(3,183)
810
(43)
Eliminations
98
15,601
(89)
443
15,247
(4,031)
19,278
(11,587)
(21,259)
23,189
2,282
26,653
Consolidated
(Unit: Million Baht)
Thanachart Bank Public Company Limited
183
3,375
632
2,848
-
-
-
-
3,375
235
603
-
-
603
(171)
774
21
(1,177)
1,740
-
190
business
Securities
1,426
(413)
1,625
214
(100)
314
-
(95)
(46)
(41)
496
business
insurance
Life
616
-
-
616
(234)
850
-
(676)
88
1,251
187
business
insurance
Non-life
521,044 484,345
As at 31 December 2012
Asset for segment
As at 31 December 2013
Retail
255,028
213,836
219,950
and others
and SME
249,730
Investment
Corporate
Treasury &
Banking business
7,293
7,121
business
Securities
41,015
11,399
business
insurance
Life
9,228
9,896
business
insurance
Non-life
Assets for segment of the Bank and its subsidiaries as at 31 December 2013 and 2012 are as follows:
Profit before non-controlling interest
Income tax
Profit from discontinued operations before income tax
interests
Profit from continuing operations before non-controlling 632
(851)
2,848
821 (189)
3,699
Profit before income tax 3,140
6
(1,746)
Income tax
(1,900)
(2,010)
5,077
-
(43)
(2,940)
919
-
3,658
and others
(15,612)
4,906
-
17,345
and SME
Investment
Impairment loss of loans and debt securities
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Treasury &
Banking business
10,163
9,116
business
management
Asset
1,670
-
-
1,670
(531)
2,201
1,810
(182)
214
-
359
business
management
Asset
For the year ended 31 December 2012
22,481
30,021
business
Other
801
-
-
801
(245)
1,046
(42)
(507)
654
-
941
business
Other
(24,769)
(19,928)
8,563
(413)
1,625
7,351
(2,076)
9,427
(2,980)
(21,659)
8,739
2,147
23,180
Consolidated
99
1,018,620
1,038,349
Consolidated
(Unit: Million Baht)
Eliminations
(3,408)
-
-
(3,408)
10
(3,418)
(89)
500
(4,813)
937
47
Eliminations
(Unit: Million Baht)
43.3 Major customers For the year 2013 and 2012, the Bank and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues. 44.
Encumbrance of assets As at 31 December 2013 and 2012, the Bank and its subsidiaries have the assets, which are subject to restriction, presented at book value as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2012
2013
2013
2012
Interbank and money market items (assets) Guarantee placed with the registrar Placed with court for stay of execution
1,950
1,950
-
-
8
7
-
-
-
5,985
-
5,985
1,783
6,379
-
-
384
22
297
22
352
640
259
535
629
487
147
440
5,106
15,470
703
6,982
Investment in securities Guarantee placed with commercial banks Guarantee placed with the registrar Placed with court for stay of execution Property foreclosed Immovable assets subject to buyback options or first refusal rights Immovable assets subject to purchase or sell agreements with clients but currently being settled in installments or through transfer of ownership
100
184
Annual Report 2013
45.
Commitments and contingent liabilities As at 31 December 2013 and 2012, significant commitments and contingent liabilities consisted of:
45.1 Commitments (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2012
2013
2012
Aval to bills
665
554
665
554
Liability under unmatured import bills
646
885
646
885
4,067
3,183
4,067
3,183
27,984
28,249
27,984
28,249
25,957
23,256
25,925
58,828
56,618
58,796
Letter of credits Other obligations Committed (but not draw) overdraft
23,310
Others
56,672
Total
In addition, the Bank and its subsidiaries have commitments in respect of foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and gold futures contracts, as mentioned in Note 8 to the financial statements. 45.2 As at 31 December 2013, the Bank and its subsidiaries have commitments to pay the service fees in relation to property foreclosed, computer system services and other services, including commitments in respect of office rental and related service fees under long-term contracts, as follow: (Unit: Million Baht)
Year
Consolidated
Separate
financial statements
financial statements
Other
Parent
Other
Parent
parties
company
parties
company
2014
1,890
19
1,800
18
2015
1,322
1
1,232
1
2016 onward
2,249
-
2,206
-
In addition, the Bank has obligations to pay an administrative fee to a subsidiary company, determined at actual cost plus a margin, for the period stipulated in the agreement.
101 Thanachart Bank Public Company Limited
185
45.3 Commitments of SCIB from transfer of business from Bangkok Metropolitan Bank Public Company Limited and transfer of non-performing assets to Sukhumvit Asset Management Company Limited SCIB entered into a business transfer agreement with Bangkok Metropolitan Bank Plc. (“BMB”), effective from 1 April 2002, and transferred its assets and those of BMB to Petchburi Asset Management Co., Ltd. (“PAM”), before they were transferred to Sukhumvit Asset Management Co., Ltd. (“SAM”). Subsequently, SCIB transferred its entire business, including commitments and agreements with PAM and SAM, to Thanachart Bank, effective from 1 October 2011. Thanachart Bank thus has commitments as a result of such transfer. However, the commitments of FIDF to SCIB have been transferred to/assumed by Thanachart Bank as the purchaser of SCIB’s shares from the Financial Institutions Development Fund (“FIDF”). As at 31 December 2013, outstanding obligations are summarised below. a)
There was an outstanding difference of Baht 93 million, as a result of the transfer of assets to SAM. This comprised receivables awaiting collection and the difference is presented under the caption of “Differences as a result of assets transferred to SAM” in the statements of financial position. Such amounts mainly relate to transfers of guarantee claims, for which there are pending issues with regard to proof the rights of claim or the qualification of the assets transferred in accordance with the conditions set out in the transfer agreements. Such differences are now being examined and/or negotiated among Thanachart Bank, SAM and the FIDF for final resolution. As at 31 December 2013, such differences consist of (i) Baht 10 million of transactions incurred directly by SCIB, for which full allowance for doubtful debts has been set aside, and (ii) Baht 83 million of transactions incurred by BMB. If losses arise on the latter and collection cannot be made from SAM, the FIDF will consider compensating for all losses. Thanachart Bank’s management believes that no significant further losses will arise.
b)
SAM is re-examining certain previously transferred assets (both of SCIB and BMB) in order to determine whether to transfer the assets back, to request price adjustments or to request settlement together with interest. The major pending issue relates to the proof of rights of claim over these assets.
102
186
Annual Report 2013
As at 31 December 2013, the transferred assets which SAM is re-examining totaling Baht 136 million consist of (i) Baht 7 million of transactions incurred directly by SCIB, for which full allowance for doubtful loss has set aside under the caption of “Provision for liabilities” in the statements of financial position, and (ii) Baht 129 million of transactions incurred by BMB. If losses arise from (ii), Thanachart Bank will receive compensation for loss from FIDF and any adjusting transactions will be within the limit of the funds set aside by FIDF to compensate losses in such cases, amounting to approximately Baht 68 million. In addition, SAM is now negotiating with Thanachart Bank to request interest payment on the assets transferred back, or a price adjustment. c)
Lawsuits in which SCIB is involved as a result of the transfer of business from BMB amounting to Baht 11,617 million, as disclosed under contingent liabilities in Note 46 to the financial statements.
d)
Outstanding letters of guarantee
The FIDF deposited an amount equal to the loss compensation limit with Thanachart Bank in the FIDF’s account. Such deposit account is to compensate for losses incurred as a result of the transfer of business from BMB, if such losses are actually incurred due to the outstanding issues described in a), b), c) and d) above. As at 31 December 2013, the deposit account of the FIDF with Thanachart Bank to fund the payment of compensation for losses has an outstanding balance of approximately Baht 707 million. In addition, there is a memorandum of agreement concerning conditions for additional loss compensation if Thanachart Bank incurs losses in relation to the two lawsuits discussed in c), with claims totaling Baht 9,965 million. However, Thanachart Bank and SAM had a meeting and mutually agreed a resolution to such pending issues. Thanachart Bank believes that no significant further losses will be incurred, other than losses for which it has already set aside full allowance for doubtful debts and/or amount that will compensate by FIDF. 45.4 Commitments arising from sale of ordinary shares of Siam City Securities As a result of the sale of all ordinary shares of Siam City Securities in August 2011, SCIB is obligated to pay compensation to indemnify the buyer from pending lawsuits including litigation in which Siam City Securities is pursuing collection of debt amounts and/or future litigation which made claims against its debtor that arose before the disposal date of such shares. Moreover, SCIB undertakes to compensate the buyer for any expenses incurred whenever the buyer or Siam City Securities provide SCIB with written notification of reasons for such compensation, together with evidence, for up to 3 years from the share transfer date. Such commitment of SCIB has transferred to Thanachart Bank at the date of the entire business transfer. However, Thanachart Bank’s management believes that no further losses will be incurred. 103 Thanachart Bank Public Company Limited
187
46.
Litigation As at 31 December 2013, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 14,806 million (separate financial statements: Baht 14,435 million) in respect of litigation. However, the Bank and its subsidiaries’ management have already made certain provisions for contingent losses, and for the remaining portion the management believes that no losses will result and therefore no liabilities are currently recorded. Part of the contingent liabilities for litigation mentioned above, amounting to Baht 11,617 million, relates to lawsuits involving the Bank as a result of the transfer of business from BMB to SCIB, and the Bank is entitled to compensation for actual losses incurred if such losses are in accordance with the conditions agreed with the FIDF (Baht 9,586 million of this amount relates to a single case brought by a debtor that BMB had already transferred to SAM before SCIB received the transfer of business from BMB, and the Bank believes that the lawsuit has been brought against the wrong party, and is not SCIB’s or the Bank’s responsibility). In addition, SCIB was requested to make restitution as a result of a person forging SCIB’s documents and using such counterfeit documents. However, SCIB has already filed a complaint against the person who produced and used the counterfeit documents so as to proceed with a legal action. The court has already ordered the transfer of all cases to the Bank. The Bank’s management believes that no liability will arise from such restitution claim.
47.
Letter of guarantees As at 31 December 2013, the Bank and its subsidiaries had letter of guarantees issued by banks on behalf of the Bank and its subsidiaries, amounting approximately Baht 33 million, placed for electricity usage of the branches (separate financial statements: Baht 33 million).
48.
Disposal of investment in a subsidiary company / Discontinued operations Investment in Thanachart Life Assurance Plc. On 5 November 2012, the Bank signed a Share Purchase Agreement with Prudential Life Insurance (Thailand) Plc. (“the Buyer”) to sell the common shares of Thanachart Life Assurance Public Company Limited (“Thanachart Life Assurance”) held by the Bank, which represented 100% of the total issued and paid-up capital. The value of the transaction was Baht 17,500 million, with a post-completion adjustment to be made based on agreed terms to reflect the net asset value as at the completion date. A further payment of Baht 500 million is also due in 12 months after the completion date. Under this agreement, the share payment and transfer will occur after the Buyer receives an approval from the Office of Insurance Commission (“OIC”) and both parties sign the Exclusive Bancassurance Agreement. The transaction will be recognised when the transfer of the shares and related payment are complete. 104
188
Annual Report 2013
On 29 March 2013, the Buyer received an approval from the Office of Insurance Commission (“OIC”) to acquire more than 10% of the issued and paid up shares of Thanachart Life Assurance for the purpose of the business combination, which was an important condition in the agreement. On 3 May 2013, the Share Purchase Agreement became legally effective as both parties fulfilled the conditions stated in the agreement, including the conclusion of an Exclusive Bancassurance Agreement between Thanachart Bank and Prudential Life Insurance, which will be effective for a period of 15 years. The Bank transferred 328,500,000 shares of Thanachart Life Assurance Plc., representing 100% of shares, and received payment for the shares in the amount of Baht 17,500 million in accordance with the agreement. A post-completion adjustment on the net asset value of Thanachart Life Assurance as at the completion date amounting to Baht 940 million was recognised as a part of this transaction and payment of this amount was received in July 2013. During the year, the Bank therefore recognised the transaction and allocated the full selling price of investment between the value of the shares and the service to be provided by the Bank under the Exclusive Bancassurance Agreement, based on the estimated fair value of shares as determined by the Bank’s management and other factors. Gain on disposal of Baht 12,216 million in the consolidated financial statements and Baht 13,128 million in the separate financial statements were recognised in the statement of comprehensive income for the year 2013. In addition, the Bank is to receive a further payment amounting to Baht 500 million for granting the right to use Thanachart logo. The further payment is due in 12 months after the date the payment was made for the shares. The Bank amortises the amount to income over the period. According to the Bancassurance agreement, the Bank is to recognise such allocated income throughout the period as specified in the agreement and to present such allocated service fee as a part of “Other liabilities - income received in advance”. In addition, the Bank has to comply with the terms and conditions as specified in such agreement.
105 Thanachart Bank Public Company Limited
189
Therefore, to comply with the requirements of accounting standards, the operating results of Thanachart Life Assurance Plc. were separately presented under “Profit for the year from discontinued operations” and “Other comprehensive income from discontinued operations” in the consolidated statement of comprehensive income for the year 2013, and that of 2012 for comparative purposes. The details are as follows. (Unit: Million Baht) For the years ended 31 December 2013(1)
2012
Consolidated statements of comprehensive income Profit or loss Interest income
358
939
Fees and service expenses
(1)
(3)
Gains on investments
17
136
Life insurance income
3,644
9,936
Dividend income
4
51
Other operating income
3
1
Total operating income
4,025
11,060
(3,452)
(9,061)
Insurance expenses Net operating income
573
1,999
Employee's expenses
49
116
Premises and equipment expenses
21
67
Taxes and duties
11
28
Other expenses
49
163
Total other operating expenses
130
374
Profit before income tax
443
1,625
Income tax
(89)
(413)
Profit for the year from discontinued operations
354
1,212
(147)
(450)
Other operating expenses
Other comprehensive income Gains (losses) on changes in value of available-for-sale investments Income tax relating to components of other comprehensive income Other comprehensive income from discontinued operations (loss) Total comprehensive income
28 (119) 235
109 (341) 871
(1) The operating results of Thanachart Life Assurance Plc. since 1 January 2013 to the date of disposal of the investment
106
190
Annual Report 2013
Changes of operating assets and operating liabilities of Thanachart Life Assurance Plc. which included in consolidated cash flows statements for the years ended 31 December 2013 and 2012 are as follows. (Unit: Million Baht) (1)
2012
2013 Operating assets (increase) decrease -
Interbank and money market items
538
(2,717)
-
Investment - net
-
Other assets
16
(64)
-
Others
44
688
(2,862)
(3,020)
(2,264)
(5,113)
Operating liabilities increase (decrease) -
Insurance contract liabilities
706
3,625
-
Income tax payable
115
147
-
Payable from purchase and sale of securities
959
-
-
Other liabilities
115
63
-
Others
(17)
21
1,878
3,856
(1) Cash flows information of Thanachart Life Assurance since 1 January 2013 to the date of disposal of the investment
Cash flow information of Thanachart Life Assurance Plc. for the years ended 31 December 2013 and 2012 is as follows: (Unit: Million Baht) 2013(1)
2012
Cash flows from (used in) operating activities
2,819
2,895
Cash flows from (used in) investing activities
(2,819)
(2,895)
(1) Cash flows information of Thanachart Life Assurance Plc. since 1 January 2013 to the date of disposal of the investment
107 Thanachart Bank Public Company Limited
191
49.
Financial instruments Financial instruments are any contracts which give rise to both a financial assets of one enterprise and a financial liability or equity instruments of another enterprise.
49.1 Credit risk Credit risk is the risk that the party to a financial instrument will fail to fulfill an obligation, causing the Bank and its subsidiaries to incur a financial loss. The amount of maximum credit risk exposure is the carrying amount of the financial assets less provision for losses as stated in the statements of financial position and the risk of commitments from avals, guarantees of loans, other guarantees and derivative contracts. In addition, the Bank and its subsidiaries manage credit risk by the means of careful consideration of credit approval process, analysis of risk factors and, the ability to service debt of customers, and a credit review process, which examines and reviews the quality of the loan portfolio so as to prevent and provide a remedy for problem loans in the future. 49.2 Market risk Market risk is the risk that changes in interest rates, foreign exchange rates and securities prices may have an effect on the Bank and its subsidiaries’ foreign currency position and investment status. As such, market risk consists of interest rate risk, foreign exchange risk and equity/commodity position risk. a)
Interest rate risk
Interest rate risk is the risk that the value of financial instrument will fluctuate as a result of changes in market interest rates. The Bank and its subsidiaries manage the changes in interest rate risk by means of an appropriate structuring of holdings in assets and liabilities with different repricing dates, taking into account the direction of market interest rates, in order to generate a suitable yield while maintaining risk at acceptable levels. Such management is under the supervision of the Asset and Liabilities Management Committee.
108
192
Annual Report 2013
As at 31 December 2013 and 2012, financial assets and liabilities classified by types of interest rate are as follows: (Unit: Million Baht) Consolidated financial statements 2013
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
17,940
17,940
951
59,237
9,673
69,861
Derivatives assets
-
-
3,914
3,914
Investments
2
133,322
4,930
138,254
-
-
1,835
1,835
325,621
463,835
561
790,017
Receivable from purchase and sale of securities
-
-
1,646
1,646
Other assets - receivable from clearing house
-
-
170
170
245,172
467,054
6,853
719,079
9,802
69,731
1,549
81,082
Liabilities payable on demand
-
-
3,219
3,219
Derivatives liabilities
-
-
5,701
5,701
Debt issued and borrowings
4
92,225
-
92,229
Payable from purchase and sale of securities
-
-
1,295
1,295
Other liabilities - payable to clearing house
-
-
509
509
Interbank and money market items
Investments in associated companies Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
109 Thanachart Bank Public Company Limited
193
(Unit: Million Baht) Consolidated financial statements 2012
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
15,181
15,181
2,216
60,172
9,534
71,922
Derivatives assets
-
-
2,177
2,177
Investments
5
132,909
11,792
144,706
Investments in associated companies
-
-
1,576
1,576
328,852
424,842
369
754,063
Receivable from purchase and sale of securities
-
-
2,103
2,103
Other assets - receivable from clearing house
-
-
944
944
244,810
446,617
6,945
698,372
7,791
77,753
2,233
87,777
Liabilities payable on demand
-
-
4,989
4,989
Derivatives liabilities
-
-
1,206
1,206
Debt issued and borrowings
4
78,104
41
78,149
Payable from purchase and sale of securities
-
-
2,874
2,874
Other liabilities - payable to clearing house
-
-
126
126
Interbank and money market items
Loans to customers(1)
Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
110
194
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2013
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
17,939
17,939
782
55,892
9,612
66,286
Derivatives assets
-
-
3,914
3,914
Investments
2
120,685
4,775
125,462
-
-
9,510
9,510
314,056
435,927
511
750,494
245,656
469,715
6,891
722,262
9,441
63,445
1,563
74,449
Liabilities payable on demand
-
-
3,219
3,219
Derivatives liabilities
-
-
5,697
5,697
Debt issued and borrowings
4
76,919
-
76,923
Payable from purchase and sale of securities
-
-
1
1
Interbank and money market items
Investments in subsidiary and associated companies Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
111 Thanachart Bank Public Company Limited
195
(Unit: Million Baht) Separate financial statements 2012
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
15,180
15,180
1,683
54,929
9,349
65,961
Derivatives assets
-
-
2,177
2,177
Investments
5
95,447
10,556
106,008
Investments in subsidiary and associated companies
-
-
13,759
13,759
317,792
404,952
279
723,023
-
-
3
3
245,414
448,878
6,990
701,282
7,490
72,316
2,278
82,084
Liabilities payable on demand
-
-
4,989
4,989
Derivatives liabilities
-
-
1,202
1,202
Debt issued and borrowings
4
68,351
41
68,396
Payable from purchase and sale of securities
-
-
11
11
Interbank and money market items
Loans to customers(1) Receivable from purchase and sale of securities Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
With respect to financial instruments that carry fixed interest rates, the periods from the financial position date to the repricing or maturity date (whichever is the earlier) are presented below: (Unit: Million Baht) Consolidated financial statements 2013 Weighted
Repricing or maturity date
Transactions
At call
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items Investments Loans to customers
22
48,127
11,088
-
-
59,237
3.21 - 3.58
-
1,755
27,513
85,381
18,673
133,322
3.32 - 4.93
6,394
17,918
11,604
312,602
115,317
463,835
7.70 - 8.95
Financial liabilities Deposits
31
222,425
221,391
23,207
-
467,054
3.02
Interbank and money market items
1,275
43,400
18,620
6,436
-
69,731
1.73 - 3.62
Debt issued and borrowings
1,061
23,265
20,100
35,283
12,516
92,225
4.65 - 4.96
112
196
Annual Report 2013
(Unit: Million Baht) Consolidated financial statements 2012 Weighted
Repricing or maturity date
Transactions
At call
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items
-
52,667
3,045
4,460
-
60,172
3.14 - 3.92
Investments
-
7,561
33,576
67,930
23,842
132,909
3.50 - 3.57
5,807
21,258
11,171
264,373
122,233
424,842
7.81 - 8.92
71
268,497
170,514
7,535
-
446,617
3.23
3,145
61,062
5,117
8,429
-
77,753
2.23 - 3.77
1
15,855
12,140
37,592
12,516
78,104
4.67 - 4.99
Loans to customers Financial liabilities Deposits Interbank and money market items Debt issued and borrowings
(Unit: Million Baht) Separate financial statements 2013 Repricing or maturity date
Transactions
At call
Weighted
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items Investments Loans to customers
572
46,863
8,457
-
-
55,892
3.21
-
1,470
26,509
82,502
10,204
120,685
3.32
6,140
17,854
10,625
286,166
115,142
435,927
7.70
31
223,424
223,053
23,207
-
469,715
3.02
495
44,433
13,632
4,885
-
63,445
1.81
1
23,265
18,100
23,037
12,516
76,919
4.65
Financial liabilities Deposits Interbank and money market items Debt issued and borrowings
(Unit: Million Baht) Separate financial statements 2012 Repricing or maturity date
Transactions
At call
Weighted
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items Investments Loans to customers
200
52,036
2,693
-
-
54,929
3.14
-
4,800
27,866
59,533
3,248
95,447
3.50
5,638
21,151
10,544
245,657
121,962
404,952
7.81
Financial liabilities Deposits Interbank and money market items Debt issued and borrowings
71
268,567
172,705
7,535
-
448,878
3.23
2,645
56,847
5,268
7,556
-
72,316
2.26
1
15,855
11,387
28,592
12,516
68,351
5.01
113 Thanachart Bank Public Company Limited
197
In addition, the average balances of the financial assets and liabilities of the Bank and its subsidiaries generating revenues and expenses, calculated based on the average balances outstanding during the year, and the average interest rate for the years ended 31 December 2013 and 2012 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements For the years ended 31 December 2013
2012
Average balances
Interest
Average
Average
rate (%)
balances
Average Interest
rate (%)
Interest bearings financial assets Interbank and money market items
50,316
1,865
3.71
58,855
2,294
3.90
Investments and trading operations
13,126
457
3.48
15,028
480
3.19
107,971
3,867
3.58
95,676
3,606
3.77
756,613
47,698
6.30
660,148
42,356
6.42
695,558
21,460
3.09
556,234
17,543
3.15
Interbank and money market items
76,464
1,463
1.91
68,068
1,564
2.30
Debt issued and borrowings
90,814
4,311
4.75
149,190
6,449
4.32
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
(Unit: Million Baht) Separate financial statements For the years ended 31 December 2013 Average
2012 Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
46,522
1,738
3.74
55,389
2,229
4.02
Investments and trading operations
3,858
69
1.79
5,227
68
1.30
104,006
3,722
3.58
91,726
3,418
3.73
720,855
45,020
6.25
635,886
40,616
6.39
698,073
21,513
3.08
566,986
17,707
3.12
Interbank and money market items
68,666
1,261
1.84
64,837
1,472
2.27
Debt issued and borrowings
78,938
3,715
4.71
144,495
6,192
4.29
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
114
198
Annual Report 2013
b)
Foreign exchange risk
Foreign exchange risk is the risk that changes in foreign exchange rates may result in changes in the value of financial instruments, and fluctuations in revenues or the values of financial assets and liabilities. Since the Bank and its subsidiaries have foreign exchange transactions, it may be exposed to foreign exchange risk. However, the Bank and its subsidiaries have a policy to mitigate this foreign exchange exposure through management of its net exchange position and operation in accordance with a risk management policy which has been approved by their Board of Directors and is in strict accordance with BOT guidelines. The status of the Bank and its subsidiaries’ foreign currency balances as at 31 December 2013 and 2012 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements 2013 US Dollar
Euro
Yen
Yuan
Others
Foreign currency in the statement of financial position Cash
1,303
586
62
3
475
Interbank and money market items
11,409
34
63
545
101
Investments
10,638
1
-
2,921
1,170
Loans to customers
22,824
137
112
-
50
Other assets
1,123
-
-
13
1
Total assets
47,297
758
237
3,482
1,797
384
45
-
-
20
22,319
4
-
-
-
Other liabilities
10
-
-
-
-
Total liabilities
22,713
49
-
-
20
Net
24,584
709
237
3,482
1,777
466
29
102
-
7
3,605
39
292
-
53
901
52
1
-
47
Deposits Interbank and money market items
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
115 Thanachart Bank Public Company Limited
199
(Unit: Million Baht) Consolidated financial statements 2012 US Dollar
Euro
Yen
Yuan
Others
Foreign currency in the statement of financial position Cash
520
350
62
2
228
Interbank and money market items
15,930
50
77
4
236
Investments
10,187
607
1,312
-
38
Loans to customers
22,952
167
494
-
74
Other assets
205
-
6
-
-
Total assets
49,794
1,174
1,951
6
576
143
36
-
-
113
Interbank and money market items
15,340
-
-
-
-
Total liabilities
15,483
36
-
-
113
Net
34,311
1,138
1,951
6
463
314
23
159
-
7
2,638
129
355
-
13
814
47
5
-
16
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
(Unit: Million Baht) Separate financial statements 2013 US Dollar
Euro
Yen
Yuan
Others
Foreign currency in the statement of financial position 1,303
586
62
3
475
Interbank and money market items
11,409
34
63
545
101
Investments
10,638
1
-
2,921
1,170
Loans to customers
22,824
137
112
-
50
Other assets
1,121
-
-
13
1
Total assets
47,295
758
237
3,482
1,797
384
45
-
-
20
Interbank and money market items
22,319
4
-
-
-
Total liabilities
22,703
49
-
-
20
Net
24,592
709
237
3,482
1,777
466
29
102
-
7
3,605
39
292
-
53
901
52
1
-
47
Cash
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
116
200
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2012 US Dollar
Euro
Yen
Yuan
Others
Foreign currency in the statement of financial position Cash
520
350
62
2
228
Interbank and money market items
15,930
50
77
4
236
Investments
10,187
607
1,312
-
38
Loans to customers
22,952
167
494
-
74
Other assets
205
-
6
-
-
Total assets
49,794
1,174
1,951
6
576
143
36
-
-
113
Interbank and money market items
15,340
-
-
-
-
Total liabilities
15,483
36
-
-
113
Net
34,311
1,138
1,951
6
463
314
23
159
-
7
2,638
129
355
-
13
814
47
5
-
16
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
In addition, the Bank and its subsidiaries have commitments from foreign currency exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts and other derivative contracts which have to pay or receive repayment in foreign currency that the Bank and its subsidiaries made for trading transactions or hedging transactions (banking book) as follow: (Unit: Million Baht) Consolidated financial statements 2013 US Dollar
Euro
Yen
Yuan
Others
Foreign exchange contracts - Bought
41,331
144
133
-
334
- Sold
53,266
889
375
3,546
970
1,885
-
-
-
-
12,451
-
-
-
1,140
- Bought
40,990
-
-
-
-
- Sold
40,990
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
117 Thanachart Bank Public Company Limited
201
(Unit: Million Baht) Consolidated financial statements 2012 US Dollar
Euro
Yen
Yuan
Others
Foreign exchange contracts - Bought
39,587
245
375
-
222
- Sold
63,801
817
978
8
678
487
-
-
-
-
9,830
608
1,312
-
-
- Bought
6,818
-
-
-
-
- Sold
6,818
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Separate financial statements 2013 US Dollar
Euro
Yen
Yuan
Others
Foreign exchange contracts - Bought
41,067
144
133
-
334
- Sold
53,531
889
375
3,546
970
1,885
-
-
-
-
12,451
-
-
-
1,140
- Bought
40,990
-
-
-
-
- Sold
40,990
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Separate financial statements 2012 US Dollar
Euro
Yen
Yuan
Others
Foreign exchange contracts - Bought
39,565
- Sold
63,841
245 817
375
-
222
978
8
678
Cross currency and interest rate swap contracts - Bought
487
-
-
-
-
9,830
608
1,312
-
-
- Bought
6,818
-
-
-
-
- Sold
6,818
-
-
-
-
- Sold Interest rate swap contracts
118
202
Annual Report 2013
c)
Equity position risk/commodity risk
Equity position risk/commodity risk is the risk that changes in the market prices of equity securities/commodity which will result in fluctuations in revenue and the value of financial assets. The Bank and its subsidiaries have a policy to manage market risk by setting manageable limits on transactions, such as position limit and loss limits. The Risk Control Unit, which is separated from front office and back office functions, is responsible for control of risk and reporting on compliance with the various limits to the Board of Directors, related business unit and related management, in order to facilitate responsive risk management, under the supervision of the Investment Portfolio Committee. 49.3 Liquidity risk Liquidity risk is the risk that the Bank and its subsidiaries will be unable to liquidate their financial assets and/or procure sufficient funds to discharge their obligations in a timely manner, resulting in the Bank and its subsidiaries incurring a financial loss. The Bank and its subsidiaries manage liquidity risk by means of appropriate structuring of short-term and long-term sources of capital. In addition, the Bank and its subsidiaries have a policy to maintain liquidity to ensure that it has sufficient liquidity to meet both present and future requirements, under the supervision of the Asset and Liability Management Committee.
119 Thanachart Bank Public Company Limited
203
Counting from the financial position date, the periods to maturity of financial instruments held as at 31 December 2013 and 2012 are as follows: (Unit: Million Baht) Consolidated financial statements 2013
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
17,940
Interbank and money market items
10,233
Derivatives assets
-
Investments
1
Investments in associated companies Loans to customers
(1)
62,562
-
-
-
17,940
59,508
120
-
69,861
3,914
-
-
3,914
37,792 224,489
95,618 -
4,843
138,254
1,835
1,835
502,966
-
790,017
Receivable from purchase and sale of securities
-
1,646
-
-
1,646
Other assets - receivable from clearing house
-
170
-
-
170
Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings
248,085
443,392
27,602
-
719,079
12,403
62,131
6,548
-
81,082
-
-
3,219
-
-
5,701
3,219 1,065
5,701 31,235
52,799
7,130
92,229
Payable from purchase and sale of securities
-
1,295
-
-
1,295
Other liabilities - payable to clearing house
-
509
-
-
509
Aval to bill
15
571
79
-
665
Liability under unmatured import bills
42
604
-
-
646
326
3,741
-
-
4,067
43,886
4,959
-
51,294
Commitments
Letter of credits Other commitments
2,449
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
120
204
Annual Report 2013
(Unit: Million Baht) Consolidated financial statements 2012
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
15,181
-
-
-
15,181
Interbank and money market items
11,817
56,895
3,210
-
71,922
Derivatives assets
-
2,177
-
-
2,177
Investments
-
48,072
86,067
10,567
144,706
Investments in associated companies
-
-
-
1,576
1,576
50,395
225,527
478,141
-
754,063
Receivable from purchase and sale of securities
-
2,103
-
-
2,103
Other assets - receivable from clearing house
-
944
-
-
944
248,014
441,579
8,779
-
698,372
12,889
66,081
8,807
-
87,777
4,989
-
-
-
4,989
-
1,206
-
-
1,206
46
20,865
50,108
7,130
78,149
Payable from purchase and sale of securities
-
2,874
-
-
2,874
Other liabilities - payable to clearing house
-
126
-
-
126
11
429
114
-
554
Liability under unmatured import bills
450
435
-
-
885
Letter of credits
258
2,925
-
-
3,183
43,578
8,179
2,448
2
54,207
Loans to customers(1)
Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings
Commitments Aval to bill
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
121 Thanachart Bank Public Company Limited
205
(Unit: Million Baht) Separate financial statements 2013
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
17,939
-
-
-
17,939
Interbank and money market items
10,552
55,614
120
-
66,286
Derivatives assets
-
3,914
-
-
3,914
Investments
1
28,024
92,748
4,689
125,462
-
-
-
9,510
9,510
52,722
223,279
474,493
-
750,494
248,608
446,052
27,602
-
722,262
11,499
58,064
4,886
-
74,449
3,219
-
-
-
3,219
Derivatives liabilities
-
5,697
-
-
5,697
Debt issued and borrowings
5
29,235
40,553
7,130
76,923
Payable from purchase and sale of securities
-
1
-
-
1
Aval to bill
15
571
79
-
665
Liability under unmatured import bills
42
604
-
-
646
326
3,741
-
-
4,067
43,886
4,959
2,395
-
51,240
Investments in subsidiary and associated companies Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items Liability payable on demand
Commitments
Letter of credits Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
122
206
Annual Report 2013
(Unit: Million Baht) Separate financial statements 2012
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
15,180
-
-
-
15,180
Interbank and money market items
10,049
55,912
-
-
65,961
Derivatives assets
-
2,177
-
-
2,177
Investments
-
29,910
66,416
9,682
106,008
-
-
-
13,759
13,759
41,276
224,540
457,207
-
723,023
-
3
-
-
3
248,663
443,840
8,779
-
701,282
12,414
62,114
7,556
-
82,084
4,989
-
-
-
4,989
-
1,202
-
-
1,202
46
20,112
41,108
7,130
68,396
-
11
-
-
11
11
429
114
-
554
Liability under unmatured import bills
450
435
-
-
885
Letter of credits
258
2,925
-
-
3,183
43,578
8,179
2,415
2
54,174
Investments in subsidiary and associated companies Loans to customers
(1)
Receivable from purchase and sale of securities Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings Payable from purchase and sale of securities Commitments Aval to bill
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
123 Thanachart Bank Public Company Limited
207
49.4 Fair value Fair value represents the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The Bank and its subsidiaries have estimated the fair value of financial instruments as follows: a)
Financial assets
The method used for determining the fair value depends upon the characteristics of the financial instruments. The fair values of most financial assets are presented at the amount stated in the statement of financial position, including cash, interbank and money market items, derivatives assets, receivable from purchase and sale of securities, receivables from clearing house and loans. These financial assets have their fair value approximate to their respective carrying value since the values of these financial instruments are predominantly subject to market interest rates. Financial instruments with standard terms and conditions which are traded on an active and liquid market, such as investments, have their fair values determined by the quoted market price. Investment in subsidiary and associated companies are stated at the book value. b)
Financial liabilities
The fair values of financial liabilities, including deposits, interbank and money market items, liabilities payable on demand, derivatives liabilities, debt issued and borrowings, payable from purchase and sale of securities, and payable to clearing house, are considered to approximate their respective carrying values for the same reasons as described above.
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As at 31 December 2013 and 2012, the book value and fair value of financial instruments of the Bank and its subsidiaries are as follow. (Unit: Million Baht) Consolidated financial statements 2013 Book value
2012 Fair value
Book value
Fair value
Financial assets Cash
17,940
17,940
15,181
15,181
Interbank and money market items - net
69,697
69,697
71,963
71,963
3,914
3,914
2,177
2,177
138,825
139,142
146,106
146,916
1,835
1,835
1,576
1,576
760,943
760,943
731,010
731,010
1,646
1,646
2,103
2,103
170
170
944
944
719,079
719,079
698,372
698,372
81,082
81,082
87,777
87,777
Liabilities payable on demand
3,219
3,219
4,989
4,989
Derivatives liabilities
5,701
5,701
1,206
1,206
92,229
92,229
78,149
78,149
1,295
1,295
2,874
2,874
509
509
126
126
Derivatives assets Investments - net Investments in associated companies Loans to customers - net Receivables from purchase and sale of securities Other assets - receivable from clearing house Financial liabilities Deposits Interbank and money market items
Debt issued and borrowings Payable from purchase and sale of securities Other liabilities - payable to clearing house
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(Unit: Million Baht) Separate financial statements 2013 Book value
2012 Fair value
Book value
Fair value
Financial assets Cash
17,939
17,939
15,180
15,180
Interbank and money market items - net
66,095
66,095
65,964
65,964
3,914
3,914
2,177
2,177
125,874
126,191
106,924
107,326
9,505
9,505
13,754
13,754
729,970
729,970
708,641
708,641
-
-
3
3
722,262
722,262
701,282
701,282
74,449
74,449
82,084
82,084
Liabilities payable on demand
3,219
3,219
4,989
4,989
Derivatives liabilities
5,697
5,697
1,202
1,202
76,923
76,923
68,396
68,396
1
1
11
11
Derivatives assets Investments - net Investments in subsidiary and associated companies - net Loans to customers Receivables from purchase and sale of securities Financial liabilities Deposits Interbank and money market items
Debt issued and borrowings Payable from purchase and sale of securities
49.5 Financial derivatives The Bank and its subsidiaries engage in financial derivatives activities as required in the normal course of their business to manage risk and to meet their clients’ needs. These financial derivatives include foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and commodity futures contracts. The Bank and its subsidiaries have set a policy and limit to mitigate related risk, and require risk reporting for the various types of risk, as a control over financial derivative activities. The Bank and its subsidiaries manage the credit risk associated with financial derivatives on the basis of the credit limits granted to customers in general. The same credit approval process as used when granting loans to a customer is adopted for financial derivative customers, and so the Bank and its subsidiaries are able to maintain risk at acceptable levels.
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As at 31 December 2013 and 2012, the Bank and its subsidiaries have financial derivatives for trading and hedging (banking book) as classified by their maturities as follows: (Unit: Million Baht) Consolidated financial statements 2013
2012
Less than
Over
1 year
1 year
Less than
Over
Total
1 year
1 year
Total
Foreign exchange contracts - Bought
41,942
-
41,942
40,429
-
40,429
- Sold
59,046
-
59,046
66,282
-
66,282
Cross currency and interest rate swap contracts - Bought
217
1,668
1,885
-
487
487
- Sold
217
13,374
13,591
2,533
9,217
11,750
- Paid fixed interest rate
26,434
140,977
167,411
1,000
75,947
76,947
- Paid floating interest rate
14,229
125,190
139,419
1,000
49,407
50,407
- Received fixed interest rate
14,229
125,190
139,419
1,000
49,407
50,407
- Received floating interest rate
26,434
140,977
167,411
1,000
75,947
76,947
Interest rate swap contracts
Future contracts - Sold
272
-
272
40
-
40
9
-
9
-
-
-
14
-
14
Derivative Warrants - Bought - Sold
-
-
-
(Unit: Million Baht) Separate financial statements 2012
2013 Less than
Over
Less than
Over
1 year
1 year
Total
1 year
1 year
- Bought
41,678
-
41,678
40,407
-
40,407
- Sold
59,311
-
59,311
66,322
-
66,322
- Bought
217
1,668
1,885
-
487
487
- Sold
217
13,374
13,591
2,533
9,217
11,750
- Paid fixed interest rate
26,434
140,977
167,411
1,000
75,947
76,947
- Paid floating interest rate
14,229
125,190
139,419
1,000
49,407
50,407
- Received fixed interest rate
14,229
125,190
139,419
1,000
49,407
50,407
- Received floating interest rate
26,434
140,977
167,411
1,000
75,947
76,947
Total
Foreign exchange contracts
Cross currency and interest rate swap contracts
Interest rate swap contracts
127 Thanachart Bank Public Company Limited
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50.
Events after the reporting period On 20 February 2014, the Board of Directors of the Bank passed a resolution to propose the payment of a dividend of Baht 0.45 per share to the ordinary shareholders in respect of the operating results for the year 2013, or a total of Baht 2,481 million, to be considered by the Annual General Meeting of Shareholders.
51.
Approval of financial statements These financial statements were authorised for issue by the Bank’s Board of Directors on 20 February 2014.
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Corporate Governance Report on Corporate Governance The Bank’s Board of Directors has put in place written policy guidelines on corporate governance since 2003. The Board also conducts an annual review of corporate governance policies to conform with the principle of corporate governance assessment issued by the Thai Institute of Directors Association (IOD: CGR) and the principle of good corporate governance for listed companies 2012 issued by the Stock Exchange of Thailand (SET). The Bank has also established the reporting process on business compliance with corporate governance principles of the Bank, and has improved the business ethics as well as codes of conduct for directors, executives, and staff in order to establish a framework for all personnel of the Bank. The Bank has established a corporate governance policy (the Policy) as well as business codes of conduct and codes of conduct for directors, executives, and staffs. The policy can be easily accessed via the Bank’s website “www.thanachartbank. co.th” and Thanachart Group’s intranet system which is intended to be a channel for communicating with staff of the Group at every level and every stakeholder about governance established and practiced by the Board of Directors. In 2013, the developments in the area of corporate governance include: • Revision of the good corporate governance policy and codes of conduct to be consistent with the revised principle of corporate governance assessment issued by the IOD, the principle of good corporate governance for listed companies 2012 issued by the SET in order to establish the same practice for Thanachart Group; • Provision of a summary of the revised policies, and advice to companies of Thanachart Group for their implementation of consistent policies and codes of conduct as appropriate for their respective businesses; • Training on the Policy and codes of conduct for newly recruited employees of all levels, and the requirement for executives and staff of all levels to sign and acknowledge the corporate governance policies and codes of conduct on a monthly basis; • Requirement for executives and staff of all levels to sign a written confirmation on non-exploitation of benefits; • Evaluation of all levels of Thanachart Group’s employees in order to assess and evaluate their knowledge and comprehension of good corporate governance practices. Two evaluations were conducted, of which 99.7 percent of employees participated, and 95.7 percent of questions were answered correctly; and • Development of CG E-learning on Intranet enabling the employees to conduct self-learning. Moreover, Thanachart Group has continually supported good corporate governance and recognition of corporate social responsibility awareness (CG & CSR Project) among staff in the Group, both through its policies and in various forms of activities, with the intent to increase their awareness of the working principles of various business units in accordance with good corporate governance. Various internal channels which allow easy access, such as VTRs, short movies, cartoons and interviews of famous people in various industries and national experts in corporate governance through the cooperation with the Office of the National Anti-Corruption Commission (NACC) and the Anti-Money Laundering Office (AMLO) on instructional media enhancing the knowledge and understanding of anti-corruption and money laundering are used under the “Thanachart Tam-Dai, Tam-Dee..CG Ri-Rerm Term-Tham” program. Morals activities are also arranged in Bangkok and its vicinities, and other regions of the country in order to provide employees with guidelines of mental management for their work and daily life.
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Board of Directors and Sub-Committees Board of Directors The Board of Directors’ composition, duties and responsibilities are as follows: Composition of the Board of Directors The Bank has specified the number of the Board of Directors to be in accordance with the rule of law and harmonize with the type and size of the business so that the Board of Directors shall be effective. Moreover, of the total number of the Board members, not more than a half shall be executive directors and at least one-third shall be directors who are independent of the management and do not have any vested interest in or any connection with the Bank’s business and in fair proportion of the investment of each shareholders group. The name list of the Bank’s Board of Directors as of December 31, 2013 is as per the table of the Bank’s Board of Directors structure in page 227 Roles and Responsibilities of the Board of Directors 1. Discharge duties with responsibility and to the best of their abilities and fairness to the organization, shareholders, executives, and employees of the Bank. 2. Set out key policies, strategic plans, financial goals and budgets and make a review as deemed fit and the business can be sustainable. 3. Specify a clear policy and guideline for the Bank’s CEO & President, and high executives in assuming a director position at other companies including the type of director position and number of companies that can assume the position, for example, a prior approval from the Board of Directors shall be obtained, etc. 4. Oversee and control its affiliated companies in order to protect the interest of the Bank’s investment. The Board of Directors has considered the appropriateness of the person to be sent to assume a director position at an affiliated company to control business management to be in accordance with the Bank’s policy and to ensure that all transactions shall be executed in accordance with the
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law and criteria of the securities and stock exchange laws, declarations of the stock exchange, and other related laws. 5. Oversee, monitor and ensure the Bank’s business conduct is in compliance with the objectives, goals, Articles of Association, resolutions of the shareholders’ meeting and principles of good corporate governance on the basis of integrity and honesty, while exercising due care in the protection of the interests of the Bank. 6. Ensure that the Bank has in place the audit process, internal control, risk management, and monitoring and compliance systems that are adequate and fit with the prevailing business environment. 7. The Board of Directors shall provide a system to control work execution, financial reporting, and compliance to the rules, regulations, and policies. The Board of Directors shall provide independent person or institute to audit such monitoring system and must be exhibited in the annual report. 8. The Board of Directors or the Audit Committee shall comment on the sufficiency of the internal control system and risk management in the annual report. 9. Ensure fair treatment to all groups of stakeholders and assume responsibility for financial reporting and information disclosure on an accurate, transparent and timely basis. 10. Prepare a report on responsibilities of the Board of Directors for financial report for publishing, together with report of an auditor, in the Bank’s annual report, covering therein all crucial matters specified in the ‘code of best practices for listed company directors,’ to assure that the Bank’s financial reports are accurate, complete and reliable. The Bank has duly complied with the accounting standards by adopting, and adhering consistently to, appropriate accounting policies. 11. Appoint members of all Board committees as deemed appropriate. 12. Determine scope of power and duties of the CEO & President. 13. Conduct a performance evaluation and determine compensation and employment terms and conditions for the CEO & President based on recommendation by the Nomination and Remuneration Committee. 14. Evaluate the whole Board performance. 15. Ensure one’s continuous knowledge and competence development.
Sub-Committees Executive Committee The Board of Directors appoints the Executive Committee which consists of executive directors or directors representing major shareholders or directors who are external parties. The Executive Committee reports directly to the Board of Directors. As of December 31, 20013, the name list of the Executive Committee was as follows:
7. Authorized to approve salaries or other compensation benefits for employees and advisors to support TBANK’s normal business operations; 8. To consider and approve appointments of independent appraisers; 9. To establish expense budgets for appraising the value of the collateral as well as controlling the related expenses; 10. Authorized to delegate its authority to other staff of the Bank for the purpose of efficiency.
1. Mr. Suphadej Poonpipat Chairman 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson 3. Mr. Brendan George John King Vice Chairman 4. Mr. Somjate Moosirilert Member Ms. Angkana Swasdipoon Secretary
The Executive Committee is authorized to approve lines of credit, investments and obligations in compliance with the requirements imposed by the BOT. Chairman of the Executive Committee considers agenda for approval proposed by CEO & President. The Executive Committee has also established a number of Sub-Committees to consider and manage the Bank’s business conducts in a correct, proper, efficient, and effective manner.
Roles and Responsibilities of the Executive Committee
The Board of Directors appoints the Audit Committee consisting of three independent directors, all of which posses knowledge, understanding and experience in accounting or finance, as its important tool for monitoring the Bank’s management of business affairs to ensure that it upholds appropriate standards and transparency and complies with the rules and regulations of concerned authorities and those of the Bank. The Audit Committee is responsible for ensuring that the Bank puts in place sound internal control systems and reporting systems that are reliable and useful to all concerned parties including the shareholders. As of December 31, 2013, the members of the Audit Committee were as follows: 1. Mr. Kiettisak Meecharoen Chairman (Independent Director) 2. Mr. Sataporn Jinachitra Member (Independent Director) 3. Assoc. Prof. Dr.Somjai Phagaphasvivat Member (Independent Director) Mrs. Vijitra Thumpothong Secretary
1. Authorized to approve lines of credit for the benefit of the Bank as well as approve debt restructuring in compliance with the Financial Institution Business Act as well as the rules and regulations of the Bank of Thailand (BOT); 2. Authorized to approve investments aimed at generating earnings for TBANK in compliance with the Financial Institutions Businesses Act as well as the rules and regulations of the BOT; 3. To manage business operations in line with the Bank’s business objectives as well as managing liquidity, risks and the interest rate structures; 4. Authorized to make purchases, take transfers, and dispose of TBANK’s assets in an amount up to 5 percent of the Bank’s share capital; 5. To consider and screen matters which are beyond the authority of the Executive Committee and to present them to those having higher authority for consideration; 6. Authorized to restructure and manage the organization, to establish rules and regulations related to work process, to appoint and remove employees, to appoint advisors, as well as directing and governing the conduct of the Bank’s business affairs;
The Audit Committee
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Roles and Responsibilities of the Audit Committee 1. Financial Reporting • To review the Bank’s financial reports and the disclosure of information therein, and to evaluate the appropriateness of significant accounting policies; • To review the accountability of material transactions in financial reports, including complex or irregular transactions and transactions requiring an exercise of discretion. 2. Internal Control and Risk Management • To review the Bank’s internal control, including the internal control of its information technology system, as well as the guidelines for communicating the significance of internal control and risk management throughout the Bank; • To ensure that the internal auditors’ and the auditors’ recommendations on internal control are implemented by the management; • To review the supervision of the policies and duties relating to risk management of the Bank, so as to ensure its adequacy. 3. Internal Audit • To review and approve the internal audit charter, annual plan as well as necessary personnel and resources for the performance of duties; • To review the audit reports and recommendations of the auditors, as well as to follow up the results of the implementation of such recommendations; • To ensure that the Internal Audit Group complies with the internal audit standards; • To evaluate the independence of the Internal Audit Group. 4. Compliance with the Rules and Regulations • To review and approve the charter of the Compliance Group, its annual plan as well personnel and resources necessary for the performance of duties; • To review the process of monitoring the business conducts of the Bank to ensure compliance with the related laws, rules, codes of conducts, policy guidelines and regulations; • To review any amendments to the laws and regulations which affect the Bank’s operations; • To review any findings by the Compliance Group and the authorities, as well as to follow up on the implementation of their recommendations. 216
Annual Report 2013
5. Auditors • To consider the qualifications, independence, performance and remuneration of the auditors, and to provide recommendations on the appointment of auditors and determination of auditors’ fee to the Board of Directors; • To hold a meeting with the auditors without other management present at least once a year. 6. Connected Transactions or Transactions which May Lead to Conflicts of Interest • To review connected transactions as well as transactions which may lead to conflicts of interest in accordance with the law and regulations of the authorities, to ensure that they are reasonable and for the best interests of the Bank. 7. Report of the Audit Committee • To prepare and disclose in the Bank’s annual report a report of the Audit Committee which is signed by the chairman of the Audit Committee and consists of at least the information stipulated under the regulations of the Stock Exchange of Thailand; • To provide opinions in an annual compliance report submitted to the Bank of Thailand; • To review the accountability of the charter of the Audit Committee at least once a year, and to submit it to the Board of Directors for its approval in the case of any amendments thereto. 8. Other Responsibilities • To ensure that the business conducts of the Bank and its subsidiaries are in compliance with the Bank’s policies, by giving the Internal Audit Group the following assignments: 1) To report to the Bank’s Audit Committee a summary of the overall performance of the Internal Audit Group which is responsible for auditing the subsidiaries; 2) To report to the Audit Committee of Thanachart Capital Public Company Limited (TCAP) a summary of the overall performance of the Internal Audit Group which is responsible for auditing the Bank and its subsidiaries, for further submission to the Bank’s Board of Directors; 3) For the reporting under 1) and 2), if there are material issues, i.e. conflicts of interest, fraud and violation of law, the Internal Audit Group must report them in detail. • To report to the Bank’s Board of Directors in order to make improvement and rectification in a timely
manner as deemed appropriate by the Audit Committee if it finds or is doubtful that there are transactions or acts which may materially affect the Bank’s financial position and operating results, viz. 1) Conflict of interest transactions; 2) Any fraud, irregularity or material deficiency in the internal control system; 3) Any violation of the law relating to financial institution businesses, or regulations of the authorities or other related laws. If the Bank’s Board of Directors or management fails to make improvement and rectification within a reasonable time, the Audit Committee shall disclose such failure in the annual report and report it to the Bank of Thailand. • To conduct a self-evaluation of the entire Audit Committee and submit it to the Board of Directors on an annual basis; • To perform any other duties assigned by the Board of Directors with the approval of the Audit Committee. The Nomination and Remuneration Committee Recognizing the importance of good corporate governance, the Board of Directors has therefore appointed the Nomination and Remuneration Committee to propose policy, forms, and criteria relating to nomination and remuneration of directors and Sub-Committee’s directors, Chief Executive Officer and President, and executives to ensure that the nomination and payments of remuneration are in line with the related law, the organization’s visions and missions. As of December 31, 2013, the members of the Nomination and Remuneration Committee were as follows: 1. Mr. Narong Chivangkur Chairman (Independent Director) 2. Mr. Sataporn Jinachitra Member (Independent Director) 3. Mr. Rod Michael Reynolds Member (Non-Executive Director) Mr. Thaneit Khantikaroon Secretary
Roles and Responsibilities of the Nomination and Remuneration Committee 1. To propose policy relating to nomination and remuneration of directors, Sub-Committee’s directors, Chief Executive Officer and President, and executives to the Bank’s Board of Directors; 2. To propose criteria relating to nomination and remuneration of directors and Sub-Committee’s directors, Chief Executive Officer and President, and executives to the Bank’s Board of Directors; 3. To propose performance appraisal criteria of Chief Executive Officer and President and Executives for annual consideration of remuneration package; 4. To select and examine the candidates with appropriate qualifications for appointment as director, Sub-Committee’s directors, or Chief Executive Officer and President and to propose qualified candidates to the Bank’s Board of Directors or Annual General Meeting of Shareholders (depending on the situation); 5. To consider annual remunerations of director, Sub-Committee’s directors, Chief Executive Officer and President, and executives which are in alignment of the criteria that have been set; 6. To review policy and principles of nomination and remuneration of directors, Chief Executive Officer and President, and executives to be appropriate with job descriptions and the market. The Corporate Governance Committee The Board of Directors places a strong emphasis on upholding good corporate governance in conformity with the code of best practices for listed companies, as well as disclosure of information on corporate governance practices in the Bank’s annual report. To this end, the Bank therefore deems it proper to appoint the Board of Directors as a whole to act as the Corporate Governance Committee whom determines policy on corporate governance in compliance with the Securities and Exchange Commission (SEC), the SET, and the BOT’s guidelines, and international standards.
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The Risk Management Committee The Board of Directors appoints the Risk Management Committee with a duty in specifying risk management policy to cover the entire organization. Such policy must be presented to be approved and oversee by the Board of Directors and the management shall follow the policy and report back to the Board of Directors on a regular basis. A revision or assessment of risk management shall be done at least once a year, must be disclosed in the annual report, and in each interval that risk has changed. Advance warnings and report of unusual incidents shall be given importance. As of December 31, 2013, the members of the Risk Management Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Mr. Brendan George John King Vice Chairman 3. Mr. Ziad El-Hoss Member 4. Mr. Piyaphong Artmangkorn Member 5. Mr. Anuwat Luengtaweekul Member 6. Mr. Enghug Nontikarn Member 7. Mr. Ricky Jon Yakabowich Member 8. Mr. Kalyanaraman Sivaramakrishnan Member 9. Mrs. Kjitphan Chunharit Member 10. Mr. Sakda Chantrasuriyarat Member Head of Risk & Capital Markets Member and Secretary Roles and Responsibilities of the Risk Management Committee 1. To propose policy on overall risk management of the Bank to the Board of Directors for approval. In this regard, monitoring and auditing standards must be established to ensure that the risk management policy is strictly adhered to;
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2. To formulate risk management strategies in accordance with the risk management policy and to ensure that the Bank’s risks are appropriately measured, monitored, and maintained at an appropriate level; 3. To review the adequacy of risk management policy, including the effectiveness of the risk management system and the adherence to the established policy; 4. To establish risk management measures which aims at preventing possible losses from occurring and at finding resolutions; 5. To assess both internal and external factors that might have material impact on the Bank’s financial positions. The assessment results will be taken into account in the adjustment of the Bank’s overall risk management policy; 6. To determine and instruct business units under the Risk Management Committee for the development of more efficient risk managing, controlling, and monitoring mechanisms; 7. To consider and appoint a committee or an officer, and delegating the authority to the appointed committee or officer under roles and responsibilities of the Risk Management Committee; 8. To monitor and control the risk management conduct of committees and/or business units to ensure that they adhere to the established policy; 9. To report the committee’s performance to the Audit Committee regularly on areas that need improvement, ensuring that the improvements are in line with the established risk management policy and strategies. The Asset and Liability Management Committee The Executive Committee has established the Asset and Liability Management Committee to manage the Bank’s liquidity, interest rates and exchange rates effectively. As of December 31, 2013, the members of the Asset and Liability Management Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Ms. Suvarnapha Suvarnaprathip Member 4. Mr. Brendan George John King Member
5. Mr. Enghug Nontikarn Member 6. Mr. Piyaphong Artmangkorn Member 7. Mrs. Noossara Roonsamrarn Member 8. Mr. Anuwat Luengtaweekul Member 9. Mr. Ajay Pratap Mundkur Member 10. Mr. Sanong Kumnuch Member 11. Mr. Ziad El-Hoss Member 12. Ms. Wisarnsri Nilodom Member 13. Mr. Lalit Dodampe Gamage Dharmaseri Member Representative of the Risk Control Department Secretary Roles and Responsibilities of the Asset and Liability Management Committee 1. To formulate the Bank’s liquidity, interest rate, and exchange rate risk management plans under the policy established by the Executive Committee; 2. To manage the Bank’s liquidity and exchange rate risks in accordance with the trends of the money market and capital market conditions; 3. To manage the Bank’s interest rate structure and determine the rate of interest both floating and fixed interest rates in order to prevent any adverse impacts from interest rate volatility; 4. To approve investments in bonds and private debt instruments within budget limits; 5. To authorize a person or a group of persons under the authority of the Asset and Liability Management Committee; 6. To report on the performance of liquidity, interest rate and exchange rate management to the Executive Committee. The Investment Portfolio Committee The Executive Committee has established the Investment Portfolio Committee in order to ensure efficient
investments of the Bank. As of December 31, 2013, the members of the Investment Portfolio Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Ms. Suvarnapha Suvarnaprathip Member 4. Mr. Brendan George John King Member 5. Mr. Piyaphong Artmangkorn Member Representative of the Risk Control Department Secretary Roles and Responsibilities of the Investment Portfolio Committee 1. To determine investment policies as well as to consider and approve investment plans; 2. To approve investments within the scope of authority specified by the Bank, which must be complied within established position limits and VaR limits and to examine investment proposals that exceed its approval authority before proposing them to the Executive Committee which has higher approval authority; 3. To review the investment performance and determine guidelines aimed at improving investment performance; 4. To acknowledge and delegate the approving authority to the respected committee or individuals under the roles and responsibilities of the Investment Portfolio Committee; 5. To manage the market risk arising from changes in prices of investment portfolios; 6. To establish and review the ratio of provisioning or determine the impairment value of the securities invested. The Credit Committee The Executive Committee has established the Credit Committee to enhance the efficiency of the Bank’s credit approval process. As of December 31, 2013, the members of the Credit Committee were as follows: 1. Mr. Somjate Moosirilert Chairman Thanachart Bank Public Company Limited
219
2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson 3. Mr. Brendan George John King Vice Chairman 4. Mr. Ziad El-Hoss Member 5. Mrs. Noossara Roonsamrarn/ Ms. Wisarnsri Nilodom/ Mr. Sutut Chitmonkongsuk Member* 6. Mrs. Sasima Taweeskulchai Member 7. Mr. Wuttichai Suraratchai Member 8. Mr. Noel Singh Member Representative of the Risk Control Department Secretary Note: * Attends only when his/her agendas are presented Roles and Responsibilities of the Credit Committee 1. To regulate operating plan and credit approval procedures, management and corporate governance under the policy of the Executive Committee and the Board of Directors; 2. To establish covenants and conditions of credit lines and approve new credit lines as well as adjust conditions on credit lines within the delegated authority, taking into account the credit risk assessments within the scope specified by the Bank’s Executive Committee or Board of Directors; 3. To establish the authority on credit approval to a person or a group of persons within delegated authority of the Credit Committee; 4. To consider the approval of the retail credit policies, which include credit risk, market risk, legal risk and operational risk; 5. To manage the level of credit risk and qualities of loans under the Bank’s acceptable risk level, in terms of business prioritization by clearly monitoring the end to end process; 6. To screen credit applications which exceed the scope of authorization of the Credit Committee in order to propose them to the Bank’s Executive Committee or Board of
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Directors for approval. In case of urgency, the Credit Committee may propose credit applications to the aforementioned committee without screening; 7. To report credit approval results, credit risk management and loan qualities to the Bank’s Executive Committee or Board of Directors.
The Nomination and Appointment of Executives of the Highest Level Qualifications of Directors The Bank has specified the qualifications of directors including the additional qualifications required for executive directors and independent directors of which have been clearly written in the good corporate governance policy of the Bank as follows: 1. Have knowledge, skill and experience in diverse fields that are useful and contribute to the Bank’s business and must be an expertise in the area that should benefit the Bank with at least one non-executive director with experience in the Bank’s business, whereby gender is disregarded; 2. Not possess any of the prohibited characteristics prescribed by applicable laws and regulations; 3. Not hold board positions in any other entity that operates a business of the same nature as and competing with the Bank, whether for personal benefit or for the benefit of other parties, unless it is notified in the shareholders’ meeting before any appointment. The Nomination and Remuneration Committee, which has the duty to nominate director candidates for shareholders’ consideration and election, shall examine and ensure that those candidates do not hold board positions in or operate a business of the same nature as and competing with the Bank; 4. Directors, executives or related persons are allowed to enter into a transaction that is in the usual course of business with the Bank and members of its group, provided that the transaction is under the same commercial terms as those an ordinary person would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation and without any dependent interest, except for the transactions prohibited by laws or the authority’s directives; 5. Additional qualifications required for each of the following positions:
Executive Directors • Being involved with day-to-day management of the Bank and overseeing and ensuring that the management implements the policies established by the Board of Directors. • Numbering not more than a half of the total Board members. Independent Directors (applicable to public limited companies or as required by the authority) • Not holding more than 0.5 percent of the Bank’s paid-up registered capital. • Qualifications are in accordance with the criteria set by the BOT, SET, or SEC, or other governing bodies. • Not exhibiting any characteristics that violate the criteria for independent directors set out by the Capital Market Supervisory Board. • Numbering not less than one-third of the total Board members. • At least 1 independent director that has banking experience. 6. The Chairman of the Board of Directors and Chief Executive Officer and President shall not be the same person and must be exhibited in the annual report and on the Bank’s website; 7. Each director should assume a director position in not more than 5 listed companies. If over, the director should be confident that he/she can allocate sufficient time in taking a director role of the Bank. Anyhow, the director position of other companies shall not conflict with the rules and regulations of other governing bodies. Director Nomination Procedures The Nomination and Remuneration Committee selects and examines the candidates with appropriate qualifications for appointment as directors, and to propose qualified candidates to the Bank’s Board of Directors or the Annual General Meeting of Shareholders (depending on the situation) for approval to fill in any vacancies due to the completion of directorship tenure and for other cases as specified in the Nomination and Remuneration policy and the charter of the Nomination and Remuneration Committee. The directorship must conform with the Articles of Association of the Bank and other related laws, and receive the approval from the BOT as per the Financial Institution Business Act B.E. 2551. In addition, to enhance the good corporate governance relating to the Annual General Meeting of Shareholders specifically in regards to the protection of shareholders’ right to propose agenda, and nominate qualified candidate(s) to be appointed as director(s). The shareholders can nominate qualified candidate(s) whom have been approved by the Nomination and Remuneration Committee not less than 3 months prior to the Annual General Meeting day, and submit the documents with the details of qualifications, and the consent letter from the nominee(s). Currently, the directors are from 2 groups of major shareholders as follows: Company
Number of Director (person)
1. Thanachart Capital Public Company Limited
4
2. Scotia Netherlands Holding B.V.
4
Thanachart Bank Public Company Limited
221
Director Appointment Criteria and Methods According to the Bank’s Articles of Association and the good corporate governance policy, the director appointment criteria and methods are as follows: 1. In case of the appointment of a new director to replace the one who is retired by rotation, the approval from the shareholders’ meeting is required. According to Article 18 of the Bank’s Articles of Association which specifies the criteria and methods as follows: (1) A shareholder shall have one vote per share; (2) At the election of the directors, the shareholders’ meeting may vote for the directors, either one candidate at a time or candidates consisting in a group or by any other method as it deems expedient. However, at each voting time, a shareholder must exercise his right according to the number of votes specified under (1) and his votes may not be distributed howsoever to elect any other person; (3) At the election of the directors, the votes shall be decided by majority. In case of an equality of vote, the Chairman of the meeting shall have a casting vote. 2. In case of the appointment made during the directorship tenure due to a vacancy, the Board of Directors is able to approve the director’s appointment as selected and proposed by the Nomination and Remuneration Committee. According to Articles 21 and 23 of the Bank’s Articles of Association which states that if the office of director is vacant otherwise than by completion of a vacating director’s term of office, the Board of Directors, by votes of not less than three-fourths (3/4) of the remaining directors, may appoint a person who is qualified and is not of a forbidden nature under the laws, as a director in his or her place at the following meeting of the Board of Directors, except for the event that the vacating director’s term of office is less than the period stipulated by the law. Any person appointed or elected as a replacement director shall retain his or her office during such time only for the remaining tenure of his or her predecessor. Nomination of Executives of the Highest Level The Nomination and Remuneration Committee conducts preliminary consideration and proposes for the Board of Directors’ approval of the qualified candidate(s) possessing the knowledge, competency, skills and experience of use 222
Annual Report 2013
to the Bank’s operations to be nominated for the position of the Chief Executive Officer and President. This position requires thorough understanding of the Bank’s business, and the ability to manage the business in a way that achieves objectives and goals set by the Bank’s Board of Directors.
Governance of the Business Conducts of Subsidiaries and Associated Companies (1) Governance of the business conducts of subsidiaries and associated companies In accordance with the good corporate governance policy of the Bank, and the roles and responsibilities of the Board of Directors as shown on page 214 (2) Agreements between the Bank and other shareholder(s) in regards to the management of subsidiaries and associated companies - None -
The Controls of the Use of Internal Information The Bank has specified the controls of the use of internal information in the ethics and code of conduct which can be summarized as follows: • An appropriate oversight on the internal data maintenance system is required for all business units within the Bank; • In compliance with the SEC regulations, executives in manager position, the next four positions below manager position and the highest ranking position in the Accounting and Finance Department are required to report their holdings of the Bank’s shares on a quarterly basis; • Directors, executives, staffs, employees and advisors who have access to the confidential information are prohibited from seeking any benefit from such information for their own or other’s interest. This is indicated in Thanachart Group’s ethics and code of conduct; • According to the Bank’s notification on securities trading supervision and abusive internal data control, the Bank’s directors and executives are prohibited from engaging in any trading of the TCAP’s shares fifteen days before the end of each quarter until two days after the disclosure of the financial statements; • The use of internal data for the individual interest is considered as policy misconduct and will be subject to the penalties according to the judgment of the Disciplinary Committee.
Auditors’ Fee The Audit Committee considers the appointment of auditors to propose for the Board of Directors’ approval, and determines of auditors’ fee to propose to the Board of Directors and the shareholders for approval during the Annual General Meeting of Shareholders. According to the 20th Annual General Meeting of Shareholders held on April 4, 2013, the shareholders considered and approved the appointment of Ernst & Young Office Limited as the auditor of the Bank. The BOT approved the 3 auditors as follows: 1. Miss Ratana Jala Certified Auditor No. 3734 and/or 2. Miss Phuphun Charoensuk Certified Auditor No. 4950 and/or 3. Miss Rungnapa Lertsuwankul Certified Auditor No. 3516 from Ernst & Young Office Limited. The 2013 auditors’ fee charged by Ernst & Young Office Limited, the office which audited the accounting of the Bank and its subsidiaries, for the Bank’s accounting audit conducted by Miss Ratana Jala, Certified Auditor No. 3734; details were as follows:
(1) Audit Fee 1.1 Audit Fee of the Bank of THB 10,440,000 1.2 Audit Fee of 14 Subsidiaries of THB 7,420,000 (2) Non-Audit Fee The Bank and its subsidiaries paid the non-audit fee for the special audit and the audit of electronic money transfer system as required by the BOT, the review and audit of the report on the risk-based capital requirement as required by the Office of Insurance Commission, the audit of specific objective(s), and the consultation for the non-accounting audit matters for the fiscal year 2013 in an amount of THB 4,700,000.
Other Practices In Accordance With Good Corporate Governance In accordance with the good corporate governance policy of the Bank.
Related Transactions Details of related transactions are shown in the footnotes to the financial statements No. 42: Transactions with Related Parties.
Thanachart Bank Public Company Limited
223
Internal Control and Risk Management The Bank recognizes the importance of internal control by constantly emphasizing that a good internal control procedure will enable the bank to conduct business effectively, achieve goals and help prevent damage that may derive from the operation and exploitation of their executives and employees. In addition to the focus on internal control procedure, the Bank recognizes that recommendations from external auditors and inspectors from the Bank of Thailand (BOT) will help the development of the internal control system to be effective. The internal control system is summarized as follows:
1. Organization and Environment The Bank determines its organizational structure and authority of staff and executives in a clear written form, dividing duties of the worker, approver, controller and evaluator apart. In order to prevent conflicts of interests and to balance the influence of each other as well as to ensure the Bank’s in appropriate business operations and good governance, and to issue policies, procedures and operation manuals in writing, as well as the appointment of the Audit Committee to consider the adequacy of internal control system and subcommittees to consider and make decisions on banking matters effectively. The Board of Directors determines the target of business operations that are measurable and tracking performance to meet defined goal. In addition, the Bank has provided corporate governance policies and codes of conduct to guide the directors, executives, employees, including self-evaluation concerning good governance to raise an awareness every year. Regarding personnel, the Bank organizes staff training to increase employees’ capability and knowledge. Remuneration and benefits are given at sufficient level in order to attract and retain quality employees. Succession plan is set in order for the work to progress effectively.
2. Risk management The Board of Directors assigned the Risk Management Committee and the Risk Management Group to consider and ensure that risk management in various areas is effective and consistent with the purposes of the business operations by setting written policies and guidelines for risk management and publishes in Intranet for all directors, executives, and employees adhere to the guidelines. Assessing changes in external factors that may impact business operations, internal controls, and financial report, as well as setting measures to cope with changes. A report of the Risk Management Committee and significant issues that may contribute to other risks must be presented to the Audit Committee and the Board of Directors on a quarterly and monthly basis respectively.
3. The Operational control of the management The Bank has appropriate authority and level of approval by separating duties of worker, the approver, accounting and information recording officer, and custodian, who act as check and balance protection against fraud. The Bank has established guidelines to prevent conflicts of interests in good governance policy, which the approval must not be done by stakeholders. Providing a loan or investment, which is the Bank’s core business in lending to major shareholders or related parties or invest in businesses that have related interest, specifically by the BOT. Regarding controlling standard of IT system, IT regulation, IT security standard policy, and as well as IT maintenance policy are set as a standard to control the performance and safeguard the IT system of the Bank.
224
Annual Report 2013
4. Information and Communication System The Bank provides quality and relevant information to support the performance of internal control. Necessary information enables directors to perform their task and contribute to the sufficient decision making. The Bank continuously develops the information system of the Bank and as well as its financial business group to effectively support the business growth. Communication channel (Whistle-blower hotline) is provided for people inside and outside the organization to report information regarding fraud or corruption through the Bank channel.
5. Monitoring and tracking System The Bank provides the performance monitoring and reporting process to report on business units’ performance target to the Board of Directors on a monthly basis and review goals every six months. Audit Division reporting directly to the Audit Committee is responsible for monitoring and reviewing agencies and processes to evaluate the effectiveness and efficiency of internal control systems and risk management system of the banking and financial business of the Bank as well as to report problems and solutions of each business sector to the Audit Committee on the monthly basis. End-to-End monitoring process and integrated audit enable the auditing process to operate effectively. Moreover, the Audit Committee has encouraged a continuous of work improvement. In 2013, the Bank arranged the Quality Assurance Review of the internal audit for external consulting firm to evaluate. The result supports that the Bank Internal Audit is in accordance with International Standards for the Professional Practice Audit.
The Bank has set up Compliance Department to monitor the code of conduct and prohibition that would lead to the conflict of interest; and report to the Audit Committee, Executive Committee, and Board of Directors every six months. The Board of Directors Meeting No. 2/2014 on February 20, 2014, the Board of Directors agreed that the Bank’s internal control system is adequate and appropriate in 5 areas, including organization and environment, risk management, operational control of the management, information and communication system, and monitoring system.
Head of Internal Audit and Head of Compliance of the Bank Head of Internal Audit The Bank assigned Mrs. Vijitra Thumpothong as Head of Internal Audit and responsible for Bank internal audit. As she has been working in internal audit area for commercial banking for over 10 years, she possesses the knowledge and professionalism in banking operations. Thus, she is suitable to perform the task. When considering the appointment, evaluation, demotion, transfer, and layoff, the Head of Internal Audit must obtain the approval from the Audit Committee. Head of Compliance The Bank assigned Mr. Sakda Chantrasuriyarat as Head of Compliance to be in charge of rules and regulations, which align with the operating business.
Thanachart Bank Public Company Limited
225
Report of the Nomination and Remuneration Committee On March 26, 2002, the Bank’s Board of Directors approved the establishment of the Nomination Committee and the Remuneration Committee. On March 25, 2009, the Bank’s Board of Directors’ meeting adopted a resolution to combine the Nomination Committee and the Remuneration Committee together and name the Committee “the Nomination and Remuneration Committee”, which was responsible for directors and senior management. The Committee consisted of two independent directors and one non-executive director whose names as of December 31, 2013 were as follows: 1. Mr. Narong 2. Mr. Rod 3. Mr. Sataporn Mr. Thaneit
Chivangkur Michael Reynolds Jinachitra Khantikaroon
Chairman (Independent Director) Member (Non-Executive Director) Member (Independent Director) Secretary
In 2013, the Nomination and Remuneration Committee convened seven meetings to process the following matters; 1. To select and nominate appropriate persons to be appointed as directors replacing the directors resigning to the Bank’s Board of Directors. 2. To review and nominate appropriate persons to be appointed as directors replacing the directors retiring by rotation for the year 2013 to the Bank’s Board of Directors’ meeting and the Annual General Meeting of the Shareholders. 3. To select and nominate the appropriate persons to be appointed as Executives to the Board of Directors. 4. To provide opportunities for shareholders to propose appropriate persons to be appointed as Bank’s directors in the 2014 Annual General Meeting of the Shareholders of TBANK. 5. To review and consider the annual remuneration packages for directors and members of sub-committees, taking into consideration that such remuneration package commensurate with the assigned duties and responsibilities, the Board of Directors’ and sub-committee performances, and the Bank’s policy and performance. The 2013 remuneration packages were proposed for approval at the Bank’s Board of Directors’ meeting and the Annual General Meeting of the Shareholders for the year 2013. 6. To consider the performance evaluation, adjustment of annual salary and bonus of Chief Executive Officer and President, and Executives. 7. To consider the remuneration of the Chairman of the Executive Committee and Chief Executive Officer and President. 8. To recommend the Thanachart Group’s Executives Succession Plan. 9. To recommend related issues of the salary structure and salary survey results of financial institutions.
(Mr. Narong Chivangkur) Chairman of the Nomination and Remuneration Committee
226
Annual Report 2013
Supervision and Management Structure The Board of Directors The Bank’s Board of Directors is composed of well qualified persons who have expertise, skills and experience in finance, accounting, management and other professional areas which provide the Bank with great benefits. The Bank has determined the number of the Board of Directors to be in accordance with the rule of law and the type and size of business so that the Board of Directors’ performance shall be effective. Moreover, of the total number of the Board members, not more than a half shall be executive directors and at least one-third shall be directors who are independent of the management and do not have any vested interest in or any connection with the Bank’s business and in fair proportion of the investment of each shareholders group. Details of the Bank’s Board of Directors structure as of December 31, 2013 were as follows: Name
Non-Executive Director
Independent Director
Position
Executive Director
Chairman
-
✓
-
Vice Chairman
✓
-
-
1. Mr. Banterng
Tantivit
2. Mr. Suphadej
Poonpipat
3. Mr. Kiettisak
Meecharoen
Director
-
-
✓
4. Mr. Narong
Chivangkur
Director
-
-
✓
5. Mr. Sataporn
Jinachitra
Director
-
-
✓
6. Assoc. Prof. Dr. Somjai Phagaphasvivat
Director
-
-
✓
7. Mr. Alberto
Jaramillo
Director
-
✓
-
8. Mr. Rod
Michael Reynolds
Director
-
✓
-
9. Mr. Kobsak
Duangdee
Director
-
✓
-
10. Ms. Suvarnapha
Suvarnaprathip
Director
✓
-
-
11. Mr. Brendan
George John King
Director
✓
-
-
12. Mr. Somjate
Moosirilert
Director
✓
-
-
Director
-
✓
-
Directors resigned in 2013 1. Mr. Claude David Morin
Notes: 1) Mr. Claude David Morin resigned from his directorship on January 15, 2013. 2) Mr. Rod Michael Reynolds has assumed his directorship since January 15, 2013. 3) The Bank’s directors who are authorized signatories include Mr. Suphadej Poonpipat, Ms. Suvarnapha Suvarnaprathip, Mr. Brendan George John King, and Mr. Somjate Moosirilert. Any two out of the four authorized signatories can jointly sign with the Bank’s seal affixed. Thanachart Bank Public Company Limited
227
Board of Directors Meetings The Bank determines frequency and agenda of Board and Committee Meetings in each year in advance and notifies each director of the schedule so that he/she can arrange time for the meeting, as follow: 1. The Board of Directors meeting is held approximately once a month. 2. The Executive Committee meeting is held at least once a month. 3. The Audit Committee meeting is held at least once every quarter. 4. The Nomination and Remuneration Committee meeting is held at least twice a year. 5. For all other committees, the decision on their meeting frequency rests with the Chairman of each committee.
228
Annual Report 2013
TBANK’s Board of Directors convenes its meeting regularly in the last week of each month. It may also hold additional meetings as deemed appropriate. The meeting agenda will be clearly determined in advance including the regular agenda such as business performance monitoring, approval of business transactions, and risk management. The Secretary of the Board of Directors is responsible for sending meeting invitations to all members of the Board along with the agenda as well as supporting documents in advance so that the Board has sufficient time to review them before attending the meetings. In 2013, the Board of Directors convened twelve general meetings. In the Board of Directors’ meeting, every director is encouraged to express their opinions and to adopt resolutions independently. The Chairman of the Board of Directors shall provide opportunities to all directors to express their opinions before requesting the adoption of resolutions. The notices and opinions of the directors at meetings are documented. The minutes of the meetings are approved by the Board of Directors and are available to be examined by the Board and related parties.
Table of Directors’ Attendance at Meetings held in 2013
Board of Directors
Executive Committee
Audit Committee
(12 Meetings)
(67 Meetings)
(11 Meetings)
(7 Meetings)
(11 Meetings)
1. Mr. Banterng Tantivit
11
-
-
-
-
2. Mr. Suphadej Poonpipat
12
65
-
-
-
3. Mr. Kiettisak
Meecharoen
12
-
11
-
-
4. Mr. Narong
Chivangkur
12
-
-
7
-
5. Mr. Sataporn Jinachitra
12
-
10
7
-
6. Assoc. Prof. Dr.Somjai Phagaphasvivat
12
-
10
-
-
7. Mr. Alberto
Jaramillo
10
-
-
-
-
8. Mr. Rod
Michael Reynolds2)
9
-
-
5
-
9. Mr. Kobsak
Duangdee3)
12
2
-
-
-
10. Ms. Suvarnapha Suvarnaprathip
11
60
-
-
-
11. Mr. Brendan
George John King
11
58
-
-
8
12. Mr. Somjate
Moosirilert
11
62
-
-
10
-
-
-
-
-
List of TBANK’s Directors
Directors resigned in 2013 1. Mr. Claude David Morin1) Notes:
Nomination and Risk Management Remuneration Committee Committee
1) Mr.
Claude David Morin resigned from his directorship on January 15, 2013. Rod Michael Reynolds has assumed his directorship since January 15, 2013. 3) Mr. Kobsak Duangdee resigned from Member of the Executive Committee on February 1, 2013. 2) Mr.
Thanachart Bank Public Company Limited
229
Executives As of December 31, 2013, there were executives in the manager’s position and the first four executives subsequent to the manager, according to the Securities and Exchange Commission (SEC) and Section 4 and Section 25 of Financial Institution Business Act B.E. 2551 guidelines as follows: 1. Mr. Suphadej Poonpipat Chairman of the Executive Committee 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson of the Executive Committee 3. Mr. Somjate Moosirilert Chief Executive Officer and President 4. Mr. Brendan George John King Deputy Chief Executive Officer 5. Mrs. Noossara Roonsamrarn Executive Vice President – Corporate Banking Team 1 6. Mr. Piyaphong Artmangkorn Executive Vice President – Investment Management 7. Mr. Anuwat Luengtaweekul Executive Vice President – Chief Financial Officer 8. Mr. Ajay Pratap Mundkur Executive Vice President – Retail Banking 9. Mr. Enghug Nontikarn Executive Vice President – Treasury & Debt Capital Markets 10. Mr. Amorn Kittinartintranee Executive Vice President – Business Support 11. Mr. Praphan Anupongongarch Executive Vice President – Secured Lending and Deposits 12. Mr. Sanong Kumnuch Executive Vice President – Retail Sales 13. Mrs. Sasima Taweeskulchai Executive Vice President – Credit Risk Management 1 14. Mr. Kalyanaraman Sivaramakrishnan Executive Vice President – Retail Risk Management & Business Infrastructure 15. Mrs. Kjitphan Chunharit Executive Vice President – Information Technology 16. Mr. Ricky Jon Yakabowich Executive Vice President – Shared Services 17. Ms. Angkana Swasdipoon Executive Vice President – Office of Executive Committee Chairman and CEO 18. Ms. Abhiradee Sukhajoti Executive Vice President – Human Resources 19. Ms. Kanoksri Rojmeta Executive Vice President – Sales & Branch Network Team 3 20. Mr. Chaiyanandh Lapitananuvat Executive Vice President – SME Province Team 3 21. Mr. Cherd Suppana Executive Vice President – Appraisal
230
Annual Report 2013
2 2. Mr. Wutthichai Suraratchai 23. Mrs. Vijitra Thumpothong 24. Mr. Kriangkrai Phurivitvattana 25. Mr. Wichak Praditavanij 26. Mr. Vivek Chandra 27. Mr. Ziad El-Hoss 28. Mr. Sutut Chitmongkongsuk 29. Ms. Wisarnsri Nilodom 30. Mr. Chatchai Kaivalkul 31. Mr. Songwut Chaowalit 32. Mr. Chatchawal Jantararuangtong 33. Mr. Lalit Dodampe Gamage Dharmaseri 34. Mr. Noel Singh 35. Mr. Watchara Permphithak 36. Mr. Albert John Dimauro 37. Mrs. Phenchan Weerawuth 38. Mrs. Teranuj Koomsap
Executive Vice President – Credit Risk Management 2 Executive Vice President – Chief Audit Executive Vice President – Banking Operations Executive Vice President – Strategy & Retail Customer Executive Vice President – Business Transformation Executive Vice President – Chief Risk Officer Executive Vice President – SME Banking Executive Vice President – Corporate Banking Team 2 Senior Vice President – Processing Support Centre Senior Vice President – Sales & Branch Network Team 1 Senior Vice President – General Audit Senior Vice President – Treasury Senior Vice President – Corporate & SME Products Senior Vice President – Asset Development Senior Vice President – Customer Contact Centre Senior Vice President – Accounting Senior Vice President – Finance
Notes: 1. Executive number 3 - 9 and 37 - 38 as executive managers and the first four of the criteria of the SEC. 2. Executive number 1 - 36 is an authority to deal under Section 4 and Section 25 of the Financial Institution Business Act B.E. 2551. 3. The changes during 2013 follow: 3.1 Mr. Kobsak Duangdee resigned from Executive Vice President – FI & Correspondent Banking on February 1, 2013. 3.2 Mrs. Angelina Dick retired from Executive Vice President – Chief Risk Officer on March 1, 2013. 3.3 Mr. Vivek Chandra has been appointed as Executive Vice President – Business Transformation since April 26, 2013. 3.4 Mr. Ziad El-Hoss has been appointed as Executive Vice President – Chief Risk Officer since May 9, 2013. 3.5 Mr. Albert John Dimauro has been appointed as Senior Vice President – Customer Contract Center since August 22, 2013. 3.6 Mr. Pornchai Padmindra resigned from Executive Vice President – Corporate Banking Team 2 on September 1, 2013. 3.7 Mr. Jiratchyuth Amyongka resigned from Executive Vice President – SME Banking on September 27, 2013. 3.8 Mr. Sutut Chitmonkongsuk has been appointed as Executive Vice President – SME Banking since October 18, 2013. 3.9 Ms. Wisarnsri Nilodom has been appointed as Executive Vice President – Corporate Banking Team 2 since October 18, 2013.
On January 1, 2014, the Bank had a change of manager and executive position according to the criteria of the SEC, including the authority to deal under Section 4 and Section 25 of the Financial Institution Business Act B.E. 2551 as follows: 1. Mr. Amorn Kittinartintranee retired from Executive Vice President – Business Support. 2. Mr. Chaiyanandh Lapitananuvat retired from Executive Vice President – SME Province Team 3. 3. Mr. Cherd Suppana retired from Executive Vice President – Appraisal. 4. Mrs. Phenchan Weerawuth retired from Senior Vice President – Accounting. 5. Mrs. Pittimart Sanguansook has been appointed as Senior Vice President – Accounting
Thanachart Bank Public Company Limited
231
Management structure of the Bank as at December 31, 2013
Board of Directors Nomination and Remuneration Committee
Audit Committee
Risk Management Committee
Executive Committee
Asset and Liability Management Committee Investment Portfolio Committee Credit Committee
Executive Vice President, Chief Risk Officer
2
1
Chief Executive Officer and President
Executive Vice President, Office of Executive Committee Chairman and CEO
Executive Vice President, Business Transformation
First Vice President, Compliance
Deputy Chief Executive Officer
3
4
5
6
Executive Vice President, Corporate Banking Team 1
Executive Vice President, Treasury & Debt Capital Markets
Executive Vice President, Retail Banking
Executive Vice President, Investment Management
Executive Vice President, Corporate Banking Team 2
Executive Vice President, Share Services
Executive Vice President, Retail Sales
Executive Vice President, Business Support
Executive Vice President, SME Banking
Executive Vice President, Information Technology
Senior Vice President, Asset Development
Executive Vice President, Human Resources
Senior Vice President, Corporate & SME Products
Senior Vice President, Investment Banking
Senior Vice President, Communication & Brand Management
First Vice President, Compensation & Payroll Management
7 Executive Vice President, Chief Financial Officer
8
Annual Report 2013
Senior Vice President, Accounting
9
9 means executives according to SEC’s definition. Remark: 1 -
232
Executive Vice President, Chief Audit
Senior Vice President, Finance
Company Secretary The Bank’s Board of Directors does not appoint a company secretary. In accordance with the principles of good corporate governance, the Board of Directors has assigned Office of Executive Committee Chairman and CEO to perform as a company secretary in order to ensure the Bank’s good corporate governance and effective business management.
The Remuneration of Directors and Executives (1) Financial remuneration
(a) Remuneration of the Board of Directors each year
As of December 31, 2013, TBANK has remunerated three committees, i.e. the Board of Directors, the Audit Committee, and the Nomination and Remuneration Committee totaling THB 28,941,520.61. The remuneration has been paid in forms of meeting stipends, position allowance and performance-based allowance (from the Bank’s performance in 2012) which can be summarized as follows: Table of the remuneration of the Board of Directors Type of remuneration (Baht per year) List of Directors 1. Mr. Banterng
Tantivit
2. Mr. Suphadej
Monthly compensation
Meeting stipends
Performance allowance
Total
1,069,025.00
528,400.00
2,533,736.63
4,131,161.63
Poonpipat
534,512.50
289,200.00
1,266,868.29
2,090,580.79
3. Mr. Kiettisak
Meecharoen
534,512.50
289,200.00
1,266,868.29
2,090,580.79
4. Mr. Narong
Chivangkur
534,512.50
289,200.00
1,266,868.29
2,090,580.79
5. Mr. Sataporn
Jinachitra
534,512.50
289,200.00
1,266,868.29
2,090,580.79
6. Assoc. Prof. Dr. Somjai Phagaphasvivat
534,512.50
289,200.00
1,266,868.29
2,090,580.79
7. Mr. Alberto
Jaramillo
534,512.50
239,200.00
1,266,868.29
2,040,580.79
8. Mr. Rod
Michael Reynolds
521,472.18
217,800.00
0.00
739,272.18
9. Mr. Kobsak
Duangdee
534,512.50
289,200.00
1,266,868.29
2,090,580.79
10. Ms. Suvarnapha
Suvarnaprathip
534,512.50
264,200.00
1,266,868.29
2,065,580.79
11. Mr. Brendan
George John King
534,512.50
264,200.00
1,266,868.29
2,065,580.79
12. Mr. Somjate
Moosirilert
534,512.50
264,200.00
1,266,868.29
2,065,580.79
1. Mrs. Michele
Chiu Kwok
0.00
0.00
512,285.54
512,285.54
2. Mr. Claude
David Morin
13,040.32
0.00
605,743.04
618,783.36
6,948,662.50
3,513,200.00
16,320,448.11
26,782,310.61
Directors resigned in 2013
Total
Notes: 1) Mrs. Michele Chiu Kwok resigned from her directorship on May 28, 2012. 2) Mr. Claude David Morin resigned from his directorship on January 15, 2013. 3) Mr. Rod Michael Reynolds has assumed his directorship since January 15, 2013. Thanachart Bank Public Company Limited
233
Table of the remuneration of the Audit Committee List of Directors
Type of remuneration (Baht per year) Monthly compensation Meeting stipends
Total
1. Mr. Kiettisak
Meecharoen
457,230.00
322,500.00
779,730.00
2. Mr. Sataporn
Jinachitra
295,365.00
146,250.00
441,615.00
295,365.00
147,500.00
442,865.00
1,047,960.00
616,250.00
1,664,210.00
3. Assoc. Prof. Dr. Somjai Phagaphasvivat Total
Table of the remuneration of the Nomination and Remuneration Committee List of Directors
Type of remuneration (Baht per year) Meeting stipends
1. Mr. Narong
Chivangkur
235,000.00
2. Mr. Sataporn
Jinachitra
145,000.00
3. Mr. Rod
Michael Reynolds
115,000.00
4. Mr. Claude
David Morin
Total
0.00 495,000.00
Notes: 1) Mr. Claude David Morin resigned from his directorship on January 15, 2013. 2) Mr. Rod Michael Reynolds has assumed his directorship since January 15, 2013.
The remuneration of the Independent Director of the Subsidiaries Mr. Kiettisak Meecharoen, Independent Director of the Bank, has received compensation for services as directors of TLIFE between January to April 2013, totaling THB 100,000.
234
Annual Report 2013
(b) The amount of the total compensation of Executive Committee and Executive of the Bank in the past year and type of compensation In 2013, the Bank’s paid compensation includes compensation in the form of salary, allowances, provident fund, etc. to managers and executives according to the SEC and Section 4 and Section 25 of Financial Institution Business Act B.E. 2551, regarding “Executives”, totaling forty persons, amounting to THB 240,549,258.
(2) Other remuneration (if any) Other remuneration of Directors The Bank has no other compensation paid to the directors. Remuneration of Executive Committee and Executives of the Bank The Bank provides the provident fund to Executive, with the rate of 3 or 5 or 7 or 10 of the salary, depending on the working period of each executive. In total, the Bank has paid THB 8,086,686.
Thanachart Bank Public Company Limited
235
Board of Directors and Management Team Mr. Banterng Tantivit
Chairman (Non-Executive Director) Date of Appointment
22 April 2002
Age
69 years
Education(s) • Master of Science (Finance) in Management, Massachusetts Institute of Technology, U.S.A. • Bachelor of Science in Electrical Engineering, Massachusetts Institute of Technology, U.S.A. Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Director Accreditation Program (DAP), Class 25/2004
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2012 - Present • Chairman, Thanachart Insurance Public Company Limited 2006 - Present • Director, Siam Piwat Holding Company Limited • Chairman and Chairman of the Executive Committee, MBK Public Company Limited 2003 - Present • Chairman, MBK Resort Public Company Limited • Director, Siam Piwat Company Limited • Director, B.V. Holding Company Limited • Chairman, Plan Estate Company Limited 2001 - Present • Advisor, Dusit Thani Public Company Limited • Advisor, Patum Rice Mill and Granary Public Company Limited 1994 - Present • Chairman, Thanachart Capital Public Company Limited 1987 - Present • Director, Deebuk Company Limited • Director, Thai Farming Company Limited 2006 - 2012 • Vice Chairman, Thanachart Insurance Public Company Limited 2005 - 2012 • Chairman, Thanachart Life Assurance Public Company Limited 2010 - 2011 • Chairman, Siam City Bank Public Company Limited 2006 - 2010 • Director, Arsom Silp Institution of the Arts Council
236
Annual Report 2013
Mr. Suphadej Poonpipat
Vice Chairman and Chairman of the Executive Committee (Executive Director) Date of Appointment
1 September 2005
Age
63 years
Education(s) • Master of Science (Finance) in Management, Massachusetts Institute of Technology, U.S.A. • Bachelor of Science in Electrical Engineering, Massachusetts Institute of Technology, U.S.A. Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Role of the Chairman Program (RCP), Class 28/2012 • Role of the Compensation Committee (RCC), Class 15/2012 • Financial Institutions Governance Program (FGP), Class 4/2012 • Director Accreditation Program (DAP), Class 8/2004 Capital Market Academy, The Stock Exchange of Thailand • Leadership Program, Class 8/2009
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2011 - Present • Vice Chairman and Chairman of the Executive Committee, Patum Rice Mill and Granary Public Company Limited • Director, DMS Property Investment Private Limited 2010 - Present • Chief Executive Officer, Thanachart Capital Public Company Limited 2007 - Present • Vice Chairman and Chairman of the Executive Committee, Thanachart Capital Public Company Limited • Director, Royal Orchid Hotel (Thailand) Public Company Limited • Director, Thai Royal Orchid Real Estate Company Limited 2006 - Present • Director, Siam Piwat Holding Company Limited 2005 - Present • Director and Chairman of the Executive Committee, Thanachart Insurance Public Company Limited • Director, MBK Resort Public Company Limited 2003 - Present • Director, Plan Estate Company Limited • Director, Siam Piwat Company Limited • Vice Chairman and Vice Chairman of the Executive Committee, MBK Public Company Limited 2003 - 2013 • Director and Chairman of the Executive Committee, Thanachart Life Assurance Public Company Limited 2010 - 2011 • Vice Chairman, Siam City Bank Public Company Limited 2000 - 2011 • Advisor, Patum Rice Mill and Granary Public Company Limited 1992 - 2010 • Director, Advanced Info Service Public Company Limited 2006 - 2009 • Chief Executive Officer, Thanachart Capital Public Company Limited
Thanachart Bank Public Company Limited
237
Mr. Kiettisak Meecharoen
Chairman of the Audit Committee (Independent Director) Date of Appointment
22 April 2002
Age
67 years
Education(s) • Master of Arts in Theoretical Economics, Keio University, Tokyo, Japan • Bachelor of Science in Finance, Hitotsubashi University, Kunitachi, Tokyo, Japan Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Director Accreditation Program (DAP), Class 40/2005 • Audit Committee Program (ACP), Class 10/2005 World Bank • Futures Exchange (1995) Merrill Lynch, New York • Portfolio Investment (1994) JP Morgan, New York • Reserve Management (1993) Harvard Institute for International Development, Harvard University • Banking and Monetary Policy in Developing Countries (1988)
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2005 - Present • Independent Director, Tararom Enterprise Public Company Limited 2000 - Present • Independent Director and Chairman of the Audit Committee, Safety Insurance Public Company Limited 2000 - 2013 • Independent Director, Thanachart Life Assurance Public Company Limited 2010 - 2011 • Independent Director and Chairman of the Audit Committee, Siam City Bank Public Company Limited
238
Annual Report 2013
Mr. Narong Chivangkur
Chairman of the Nomination and Remuneration Committee (Independent Director) Date of Appointment
22 April 2002
Age
69 years
Education(s)
• Higher Diploma in Business and Marketing, Assumption Commercial College
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Anti-Corruption Executive Program (ACEP), Class 3/2011 • Role of the Nominations and Governance Committee (RNG), Class 1/2011 • Financial Institutions Governance Program (FGP), Class 2/2011 • Audit Committee Program (ACP), Class 32/2010 • Financial Statement for Directors (FSD), Class 4/2009 • Successful Formulation & Execution the Strategy (SFE), Class 2/2008 • Role of the Compensation Committee (RCC), Class 4/2007 • Chartered Director Class (CDC), Class 1/2007 • Corporate Social Responsibility (CSR), Class 1/2007 • Director Certification Program (DCP), Class 34/2003 • Director Examination, Class 11/2003 Asian Institute of Management, Philippines • Management Development Program Rochester Institute of Technology, U.S.A. • Financial Management Program
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2005 - Present • Director, The Antique Boat Hotel Company Limited (the former name was Momchailai Development Company Limited) 2003 - Present • Director, Momentum IM Company Limited 2000 - Present • Director, Momentum BBS Company Limited 2010 - 2011 • Independent Director and Chairman of the Nomination and Remuneration Committee, Siam City Bank Public Company Limited 2004 - 2011 • Director, Momentum Sale and Distribution Company Limited
Thanachart Bank Public Company Limited
239
Mr. Sataporn Jinachitra
Member of the Audit Committee and Member of the Nomination and Remuneration Committee (Independent Director) Date of Appointment
19 July 2007
Age
65 years
Education(s) • Master of Science in Econometrics, The London School of Economics and Political Science (University of London), England • Bachelor of Science in Economics (Upper Second Class Honours), University College London, England • Bachelor of Arts (Law), Sukhothai Thammathirat Open University Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Anti-Corruption Executive Program (ACEP), Class 4/2012 • The Executive Director Course (EDC), Class 1/2012 • Role of the Chairman Program (RCP), Class 24/2010 • Role of the Compensation Committee (RCC), Class 10/2010 • Successful Formulation & Execution of Strategy (SFE), Class 4/2009 • Corporate Social Responsibility (CSR), Class 1/2007 • DCP Refresher Course, Class 2/2006 • Director Certification Program (DCP), Class 0/2000
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2010 - 2011 • Independent Director, Member of the Audit Committee and Member of the Nomination and Remuneration Committee, Siam City Bank Public Company Limited 2006 - 2011 • Dispute Resolution Committee, Interconnection Institution, NTC 1999 - 2011 • Director, Thai Institute of Directors Association 2002 - 2006 • President, Export-Import Bank of Thailand
240
Annual Report 2013
Assoc. Prof. Dr. Somjai Phagaphasvivat Member of the Audit Committee (Independent Director) Date of Appointment
26 March 2009
Age
67 years
Education(s) • Doctorado de Estado, Facultad de Ciencia Politica, Universidad Complutense de Madrid, Spain • Diplome d’Etudes Superieures, (Economic Integration), Universite de Nancy, France • Licenciatura, Facultad de Ciencia Politica y Economica, Universidad Complutense de Madrid, Spain • Bachelor of Arts, Chulalongkorn University Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Director Accreditation Program (DAP), Class 34/2005
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2013 - Present • Director and Chairman, SEAFCO Public Company Limited • Independent Director and Chairman of the Audit Committee, Amarin Printing and Publishing Public Company Limited 1997 - Present • Independent Director and Chairman of the Audit Committee, Lee Feed Mill Public Company Limited • Director and Chairman of the Audit Committee, Krungthep Thanakom Company Limited • Director Chairman of the Audit Committee, Thai Hua Rubber Public Company Limited 2006 - 2013 • Independent Director and Chairman of the Audit Committee, SEAFCO Public Company Limited 1993 - 2013 • Independent Director and Member of the Audit Committee, Amarin Printing and Publishing Public Company Limited 2010 - 2011 • Independent Director and Member of the Audit Committee, Siam City Bank Public Company Limited
Thanachart Bank Public Company Limited
241
Mr. Alberto Jaramillo
Director (Non-Executive Director) Date of Appointment
27 September 2011
Age
42 years
Education(s) • Master of Business Administration, Universite de Montreal Ecole des Hautes Etudes Commerciales, Canada • Diploma of Business Administrator, Instituto Colombiano de Estudios Superiores de Incolda, Colombia Training Program Related to Roles, Duties, and Skills of Directorship
CFA Institute • Chartered Financial Analyst (CFA)
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2013 - Present 2011 - Present 2011 2005 - 2011 2001 - 2005 1998 - 1999 1996 - 1998
242
Annual Report 2013
• Manager, CGA Arkad Investment Public Company Limited • Director, The Bank of Nova Scotia Asia Limited, Singapore • Director, Scotiabank (Hong Kong) Limited, Hong Kong • Vice President & Regional Treasurer, The Bank of Nova Scotia, Hong Kong • Director, Siam City Bank Public Company Limited • Treasurer, The Bank of Nova Scotia Inverlat, Mexico • Risk Manager Latin America, The Bank of Nova Scotia, Canada • Trading Group Director, Corfinsura Colombia • Trader, Corfivalle Colombia
Mr. Rod Michael Reynolds
Director and Member of the Nomination and Remuneration Committee (Non-Executive Director) Date of Appointment
15 January 2013
Age
56 years
Education(s)
• Master of Business Administration, York University, Toronto, Canada • Bachelor of Science in Engineering, Queen’s University, Ontario, Canada
Training Program Related to Roles, Duties, and Skills of Directorship
Euromoney Training • Euromoney Asia Corporate Governance Program (2012)
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2012 - Present 2009 - Present 1983 - Present 2009 - 2013
• Director, C.H. Bailey Public Company Limited • Director, Logarithmics Company Limited • President, Asia Pacific, The Bank of Nova Scotia • Director, Tulsa Inspection Resources
Thanachart Bank Public Company Limited
243
Mr. Kobsak Duangdee Director (Non-Executive Director) Date of Appointment
1 April 2009
Age
57 years
Education(s) • Master of Business Administration (Finance), University of Tennessee, Knoxville, U.S.A. • Bachelor of Commerce and Accountancy, Chulalongkorn University Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Chartered Director Class (CDC), Class 7/2013 • Successful Formulation & Execution of Strategy (SFE), Class 19/2013 • Director Certification Program (DCP), Class 155/2012 • Financial Institutions Governance Program (FGP), Class 2/2011 • Director Accreditation Program (DAP), Class 73/2008
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2011 - Present • Liquidator, SCIB Public Company Limited 2012 - 2013 • Member of the Audit Committee, Thanachart Securities Public Company Limited 2008 - 2013 • Director and Member of the Executive Committee, Thanachart Securities Public Company Limited • Vice President and Country Head, The Bank of Nova Scotia, Bangkok Representative Office 2010 - 2011 • Director and Member of the Executive Committee, Siam City Bank Public Company Limited • Director, Siam City Securities Company Limited 2006 - 2010 • Director, Thai-Canadian Chamber of Commerce 1997 - 2008 • Vice President and Country Head, The Bank of Nova Scotia, Bangkok Branch
244
Annual Report 2013
Ms. Suvarnapha Suvarnaprathip
Vice Chairperson of the Executive Committee (Executive Director) Date of Appointment
22 April 2002
Age
68 years
Education(s)
• Bachelor of Economics, Monash University, Australia
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Director Accreditation Program (DAP), Class 20/2004 Banker Trust, New York, U.S.A. • Certificate, Executive Commercial Lending Training Program
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2005 - Present • Director and Chairperson of the Executive Committee, Thanachart Capital Public Company Limited 1991 - Present • Director, Seacon Development Public Company Limited 2005 - 2013 • Director and Member of the Executive Committee, Thanachart Life Assurance Public Company Limited 2010 - 2011 • Director and Vice Chairperson of the Executive Committee, Siam City Bank Public Company Limited
Thanachart Bank Public Company Limited
245
Mr. Brendan George John King
Vice Chairman of the Executive Committee and Deputy Chief Executive Officer (Executive Director) Date of Appointment
19 July 2007
Age
50 years
Education(s) • Master of Business Administration in Finance & International Business, York University, Toronto, Canada • Bachelor of Arts in Business & Economics, York University, Toronto, Canada Training Program Related to Roles, Duties, and Skills of Directorship
• Marketing Certificate, Queen’s University Executive Management Program • Honors Diploma in General Management, the Institute of Canadian Bankers • The Fundamentals of Coaching Excellence • Moody’s Risk Analysis • Commercial Sales Leadership Program, Scotiabank • International Commercial Banker Development Program, Scotiabank • Merchant Banking Introductory Course • Introduction to Investment Banking and Bond Structuring • Leader-Coach Program, Scotiabank • Strategic Selling Skills Course, Scotiabank
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2013 - Present • Director, Thanachart Securities Public Company Limited • Director, Thanachart Insurance Public Company Limited 2012 - Present • Director, The Bank of Nova Scotia Asia Limited, Singapore 2012 - 2013 • Director, Thanachart Life Assurance Public Company Limited 2011 - 2013 • Director, Scotia Netherlands Holding B.V. 2010 - 2011 • Director and Vice Chairman of the Executive Committee, Siam City Bank Public Company Limited 2004 - 2011 • Director, Scotiabank (Hong Kong) Limited, Hong Kong • Director, Scotia Nominees (Hong Kong) Limited, Hong Kong 2006 - 2010 • Vice President, Corporate Development Asia/Pacific, the Bank of Nova Scotia, Hong Kong 2004 - 2010 • Vice President, Greater China, the Bank of Nova Scotia, Hong Kong
246
Annual Report 2013
Mr. Somjate Moosirilert
Member of the Executive Committee and Chief Executive Officer and President (Executive Director) Date of Appointment
29 October 2009
Age
57 years
Education(s) • Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Business Administration, Thammasat University Training Program Related to Roles, Thai Institution of Directors Association Duties, and Skills of Directorship • Certificate, Role of the Chairman Program (RCP), Class 5/2001 Thai Listed Companies Association, The Stock Exchange of Thailand • Certificate, TLCA Leadership Development Program (LDP)/2012 Capital Market Academy, The Stock Exchange of Thailand • Certificate, Leadership Program, Class 5/2007 Judicial Training Institute • Certificate in the program for Senior Executives on Justice Administration, Class 9/2005 Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2013 - Present • Chairman of the Executive Committee, Thanachart Securities Public Company Limited • Chairman, Thanachart Fund Management Company Limited 2011 - Present • Executive Director, The Thai Bankers’ Association • Director and Vice Chairman, Thai Listed Companies Association • Chairman, TS Asset Management Company Limited • Chairman of the Executive Committee, Thanachart Fund Management Company Limited 2010 - Present • Chairman and Chairman of the Executive Committee, Siam City Life Assurance Public Company Limited • Director and Member of the Executive Committee, Thanachart Insurance Public Company Limited • Director, Thanachart Fund Management Company Limited • Advisor, Association of Securities Companies 2009 - Present • Chairman, Thanachart Securities Public Company Limited • Director, Member of the Executive Committee and Senior Executive Vice President, Thanachart Capital Public Company Limited 2011 - 2012 • Governor, The Stock Exchange of Thailand 2010 - 2011 • Chairman, Siam City Asset Management Company Limited • Chairman, Thanachart Fund Management Company Limited • Chairman, Siam City Securities Company Limited • Director, Chairman of the Executive Committee and Chief Executive Officer and President, Siam City Bank Public Company Limited 2009 - 2011 • Vice Chairman, The Stock Exchange of Thailand • Director, Thai Capital Market Development Committee 2010 • Director, Thanachart Life Assurance Company Limited 2009 - 2010 • Chief Executive Officer, Thanachart Capital Public Company Limited • Senior Executive Vice President, Thanachart Bank Public Company Limited • Director, TSFC Securities Public Company Limited • Executive Director, Association of Securities Companies 2009 • Chairman of the Executive Committee, Thanachart Securities Public Company Limited 2002 - 2008 • President, Thai Asset Management Corporation Thanachart Bank Public Company Limited
247
Mrs. Noossara Roonsamrarn
Executive Vice President, Corporate Banking Team 1 Date of Appointment
22 April 2002
Age
55 years
Education(s) • Master of Business Administration, National Institute of Development Administration • Bachelor of Political Science, Chulalongkorn University Training Program
Harvard Business School • Certificate in Advanced Management Program (AMP 168) Thailand National Defence College • The Joint-State-Private Sectors Course (NDC22) Capital Market Academy, The Stock Exchange of Thailand • Leadership Program, Class 7 (CMA 7) Thai Institute of Directors Association • DCP Refresher Course, Class 4/2007 • Director Certification Program (DCP), Class 19/2002
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 1997 - Present • Director and Member of the Audit Committee, Thanachart Insurance Public Company Limited 2005 - 2008 • Director and Member of the Audit Committee, Thanachart Fund Management Company Limited
248
Annual Report 2013
Mr. Piyaphong Artmangkorn
Executive Vice President, Investment Management Date of Appointment
1 September 2005
Age
56 years
Education(s) • Master of Public Administration (Taxation), University of Southern California, U.S.A. • Bachelor of Economics, Thammasat University Training Program
Thai Institute of Directors Association • Director Accreditation Program (DAP), Class 8/2004
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2006 - Present • Executive Committee, MBK Public Company Limited 1998 - Present • Director, MBK Public Company Limited 2010 • Director, Siam City Bank Public Company Limited 2005 - 2009 • Chairman and Chairman of the Executive Committee, Thanachart Securities Public Company Limited 2001 - 2008 • Director, Thai Royal Orchid Real Estate Company Limited 2000 - 2008 • Director, Royal Orchid Hotel (Thailand) Public Company Limited
Thanachart Bank Public Company Limited
249
Mr. Anuwat Luengtaweekul
Executive Vice President, Chief Financial Officer Date of Appointment
1 June 2009
Age
50 years
Education(s)
• Master of Business Administration, Rangsit University • Bachelor of Science (Accounting), Kasetsart University
Training Program
Thai Institute of Directors Association • Successful Formulation & Execution the Strategy (SFE), Class 3/2009 • Director Certification Program (DCP), Class 24/2002 • Board and Performance Evaluation Program Association of Finance Companies • Financers’ Executive Development Program, Class 9/1994
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2012 - Present • Member of the Nomination and Remuneration Committee, Ratchthani Leasing Public Company Limited 2010 - Present • Director, Ratchthani Leasing Public Company Limited 2010 • Director, Siam City Bank Public Company Limited 2007 - 2009 • Director, Member of the Executive Committee and Executive Vice President, Thanachart Capital Public Company Limited
250
Annual Report 2013
Mr. Ajay Pratap Mundkur
Executive Vice President, Retail Banking Date of Appointment
23 June 2009
Age
49 years
Education(s) • Master of Business Administration, John M. Olin School of Business, Washington University, St. Louis, U.S.A. • Post Graduate Diploma in Financial Management, Symbiosis Institute of Business Management, Pune, India • Bachelor of Commerce (Accounting and Auditing), University of Pune, India Training Program
None
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2012 - Present • Senior Vice President, International Banking, The Bank of Nova Scotia 2005 - 2012 • Vice President, Retail Banking, Asia-Pacific Region, The Bank of Nova Scotia
Thanachart Bank Public Company Limited
251
Mr. Enghug Nontikarn
Executive Vice President, Treasury and Debt Capital Markets Date of Appointment
1 June 2011
Age
57 years
Education(s)
• Master of Business Administration, Thammasat University • Bachelor of Economics, Thammasat University
Training Program
Thai Institute of Directors Association • Director Accreditation Program (DAP), Class 25/2004
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 1995 - Present • Independent Director, Member of the Audit Committee and Member of the Nomination Committee, Srithai Superware Public Company Limited 2006 - 2011 • Senior Executive Vice President, Siam City Bank Public Company Limited
Mrs. Phenchan Weerawuth
Senior Vice President, Accounting Date of Appointment
1 October 2012
Age
60 years
Education(s)
• Master of Accounting, Thammasat University • Bachelor of Accounting, Thammasat University
Training Program
None
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2005 - 2011
• First Vice President, Accounting, Siam City Bank Public Company Limited
Note: Mrs. Phenchan Weerawuth retired from Senior Vice President, Accounting on January 1, 2014.
252
Annual Report 2013
Mrs. Pittimart Sanguansook
Senior Vice President, Accounting Date of Appointment
1 January 2014
Age
49 years
Education(s)
• Bachelor of Accounting, Thammasat University • High Diploma in Auditing, Thammasat University
Training Program
Seminar IFRS, Toronto, Canada
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2008 - 2013
• Vice President, Citibank
Note: Mrs. Pittimart Sanguansook has been appointed as Senior Vice President, Accounting since January 1, 2014.
Mrs. Teranuj Koomsap
Senior Vice President, Finance Date of Appointment
14 November 2012
Age
40 years
Education(s) • Master of Business Administration, Smeal College of Business, Pennsylvania State University, University Park, U.S.A. • Bachelor of Science (Accounting), Thammasat University Training Program
Thai Institution of Directors Association • Director Accreditation Program (DAP), Class 10/2004
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2010 - 2012 2003 - 2010
• Senior Vice President, Siam Commercial Bank Public Company Limited • Vice President, Consumer Finance Business, Citi Thailand
Thanachart Bank Public Company Limited
253
5
6
7
4
3
1
2
Subsidiary Companies
Parent Company
8
9
Annual Report 2013
Note XXX = Chairman XX = Vice Chairman A = Chief Exeutive Officer E = Executive Vice President
X/
XX //
X X X
X X F
F X X X
X
X
F
/ = Member of the Executive Committee D = Senior Executive Vice President H = Liquidator
H
XXX X X X X
X X
X XX /// X X X
X X X
X
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Related Companies
XXX /// X XXX X X XXX X X
10
Associated Company
X = Director /// = Chairman of the Executive Committee // = Vice Chairman/Chairperson of the Executive Committee B = Chief Executive Officer and President C = Deputy Chief Executive Officer F = Authorized Person Manangement Power G = Senior Vice President
Mr. Banterng Tantivit XXX XXX XXX Mr. Suphadej Poonpipat XX /// XX /// A X /// Mr. Kiettisak Meecharoen X Mr. Narong Chivangkur X Mr. Sataporn Jinachitra X Assoc. Prof. Dr. Somjai Phagaphasvivat X Mr. Alberto Jaramillo X Mr. Rod Michael Reynolds X Mr. Kobsak Duangdee X Ms. Suvarnapha Suvarnaprathip X // X // X/ Mr. Brendan George John King X // C X X Mr. Somjate Moosirilert X / B X / D XXX /// XXX /// X / XXX /// XXX Mrs. Noossara Roonsamrarn E X Mr. Piyaphong Artmangkorn E Mr. Anuwat Luengtaweekul E X Mr. Ajay Pratap Mundkur E Mr. Enghug Nontikarn E Mrs. Phenchan Weerawuth G Mrs. Pittimart Sanguansook G Mrs. Teranuj Koomsap G
Name
As of December 31, 2013
The information of the Executives and Authorized persons’ position in subsidiary, associated and related companies
TBANK
254
List of Parent Company, Subsidiary, Associated and Related Companies Parent Company 1. Thanachart Capital Public Company Limited
Subsidiary Companies 2. Thanachart Securities Public Company Limited 3. Thanachart Fund Management Company Limited 4. Thanachart Insurance Public Company Limited 5. Siam City Life Assurance Public Company Limited
6. 7. 8. 9.
TS Assets Management Company Limited Rachthani Leasing Public Company Limited Thanachart Management and Service Company Limited Thanachart Training and Development Company Limited
26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42.
Momentum BBS Company Limited SEAFCO Public Company Limited Lee Feed Mill Public Company Limited Krungthep Thanakom Company Limited Thai Hua Rubber Public Company Limited Amarin Printing & Publishing Public Company Limited The Bank of Nova Scotia Asia Limited, Singapore Scotiabank (Hong Kong) Limited, Hong Kong The Bank of Nova Scotia, Hong Kong CGA Arkad Investments Public Company Limited Asia Pacific, The Bank of Nova Scotia C.H. Bailey Public Company Limited Logarithmics Company Limited Seacon Development Public Company Limited SCIB Public Company Limited The Bank of Nova Scotia Srithai Superware Public Company Limited
Associated Companies 10. MBK Public Company Limited
Related Companies 1 1. Siam Piwat Holding Company Limited 12. MBK Resort Public Company Limited 13. Siam Piwat Company Limited 14. B.V. Holding Company Limited 15. Plan Estate Company Limited 16. Deebuk Company Limited 17. Thai Farming Company Limited 18. Patum Rice Mill and Granary Public Company Limited 19. DMS Property Investment Private Limited 20. Royal Orchid Hotel (Thailand) Public Company Limited 21. Thai Royal Orchid Real Estate Company Limited 22. Tararom Enterprise Public Company Limited 23. Safety Insurance Public Company Limited 24. The Antique Boat Hotel Company Limited (The former name was Mom Chailai Development Company Limited) 25. Momentum IM Company Limited
Thanachart Bank Public Company Limited
255
General Information Investment of TBANK in Other Companies Juristic persons in which the Bank holds 10 percent or above of the total issued shares. No.
Company/Location
Type of Business
of Type of Total number of Total number Percent TBANK’s shares paid-up shares of share held shareholding1
1. Thanachart Securities PCL. Securities Ordinary 444 MBK Tower, 14th, 18th and 19th Floor, Share Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8888, 2217-9595 Fax +66 (0) 2217-9642 2. Thanachart Insurance PCL. Non-life Ordinary 999/1 the Nine Tower, Insurance share Rama 9 Road, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9300 Fax +66 (0) 2308-9333 3. Thanachart Management and Services Co., Ltd. Services Ordinary 2 Suan Mali Building, 2nd Floor, share Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Fax +66 (0) 2220-2520
1,500,000,000 1,499,999,930
100.00
74,000,000
73,999,434
100.00
600,000
599,993
100.00
4. Thanachart Training and Development Co., Ltd. Training 2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Fax +66 (0) 2220-2300
Ordinary share
500,000
499,993
100.00
5. Thanachart Group Leasing Co., Ltd. Leasing 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000, 2613-6000 Fax +66 (0) 2217-8098
Ordinary share
36,000,000
35,999,994
100.00
6. National Leasing Co., Ltd.2 Leasing 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000
Ordinary share
600,000
599,994
100.00
256
Annual Report 2013
No.
Company/Location
7. Siam City Life Assurance PCL. 231 Thanachart Park Place, 10th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2252-5070 Fax +66 (0) 2252-7155
Type of Business
Life Ordinary assurance Share
70,000,000
69,999,994
100.00
Ordinary Share
100,000
99,998
100.00
Non- Ordinary performing Share asset management
200,000,000
199,999,997
100.00
10,000,000
9,999,000
99.99
2,112,810,676 2,112,375,422
99.98
8. SCIB Services Co., Ltd. Services 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5061-2 Fax +66 (0) 2651-6611 9. TS Asset Management Co., Ltd. 1101 Petchburi Building, 9th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5000 Fax +66 (0) 2253-6130
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
10. Thanachart Broker Co., Ltd. 333 Thanachart Wongsawang Building, 3rd Floor, Ratchadaphisek Road, Wongsawang, Bang Sue, Bangkok 10800 Tel. +66 (0) 2685-0200 Fax +66 (0) 2685-0333
Life and Non-life Insurance Broker
Ordinary Share
11. SCIB PCL.3 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400
Sale of company assets
Ordinary Share
12. Thanachart Fund Management Co., Ltd. 231 Thanachart Park Place, 5th-7th Floor, Ratchadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2126-8300 Fax +66 (0) 2126-8398
Mutual Ordinary fund Share management
13. Ratchthani Leasing PCL. Leasing 77/35-36 Sinn Sathorn Tower, 11th Up Floor, Krung Thonburi Road, Klong Ton Sai, Klong San, Bangkok 10600 Tel. +66 (0) 2440-0844 Fax +66 (0) 2440-0848
10,000,000
7,499,993
75.00
Ordinary 1,610,819,597 1,049,967,600 Share
65.18
Thanachart Bank Public Company Limited
257
No.
Company/Location
Type of Business
14. Thoon Ruam Kan Co., Ltd.3 Others 133/2 Soi Sukhumvit 21, Sukhumvit Road, Klongtoey, Bangkok 10110
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding Ordinary Share
240,000
80,000
33.33
15. Siam Media and Communication Co., Ltd.3 Communication Ordinary 18 Building 2 West SCB Park Plaza, 17th-22nd Floor, Share Ratchadapisek Road, Ladyao, Chatuchak, Bangkok 10990
7,000,000
1,633,800
23.34
Ordinary Share
29,999,971
4,500,000
15.00
Industrial Ordinary pipe Share Manufacturing
500,001
70,470
14.09
Ordinary Share
100,000
9,998
10.00
19. Crystal City Development Co., Ltd.3 Construction Ordinary 419 Sathupradit Road, Share Chong Nonsi, Yannawa, Bangkok 10120
750,000
75,000
10.00
16. Siam City Leasing and Factoring PCL. Leasing 1091/179-181 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2254-8743-7 Fax +66 (0) 2253-5371 17. High Pressure Steal Pipe Industry Co., Ltd.3 36/4 Moo 2, Soi Wat Mahawong, Phuchaosmingprai Road, Samrong, Prapha Daeng, Samut Prakarn 10130 18. Puen Pob Paet Co., Ltd. 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330
Medical Clinic
20. Metropolitan Industrial Leasing Co., Ltd.3 Leasing 81/42 Moo 5, Surasak, Sriracha, Chonburi 20110 Tel. +66 (0) 3804-8052 Fax +66 (0) 3804-8053
Ordinary Share
5,000,000
500,000
10.00
21. Sahakol Chassis Co., Ltd. Vehicle 1418/6-8 Phaholyotin Road, Lad Yao, Chatuchak, Bangkok 10900
Ordinary Share
45,000,000
4,500,000
10.00
22. Siam Tire Cord Co., Ltd. 46/1 Moo 9, Bangna – Trad Road, K.M. 39, Bangprakong, Chachoengsao 24180 Tel. +66 (0) 3853-8403-5 Fax +66 (0) 3853-8399
Ordinary Share
20,000
2,000
10.00
258
Annual Report 2013
Textiles and apparel
No.
Company/Location
Type of Business
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
23. Soonvijai Development Co., Ltd.3 Construction Ordinary 1740 New Petchburi Road, Share Bangkapi, Huay Klang, Bangkok 10310
13,000
1,300
10.00
24. Modular Samko Co., Ltd.3 Household Ordinary 155 Moo 14, Sukhumvit Sai Kao Road, Share Bangpakong, Chachoengsao 24130
3,500,000
350,000
10.00
Ordinary Share
13,000,000
1,300,000
10.00
26. Siam City Real Estate Services Co., Ltd.3 Construction Ordinary st 62 Thaniya Building, 1 Floor, Share Silom Road, Suriyawong, Bangrak, Bangkok 10500
1,000,000
100,000
10.00
25. Siam Euro Leasing Co., Ltd.3 20/22 Soi Prommitr, Sukhumvit Road, Klong Tan Nuea, Watthana, Bangkok 10110
Finances and Securities
Notes: 1. Shareholding percentage has shown included the shareholding of related companies. 2. TBANK indirectly held shares through TGL which was in line with the definition of subsidiary company announced by the SET. 3. Held by TBANK, which is in the process of liquidation, dissolution, bankruptcy, receivership or abandoned.
TBANK’S REFERENCES Location of Head office
: 900 Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand
Registration No.
: 0107536001401
Type of Business
: Commercial Banking
Registered Capital
: THB 75,266,649,030, consist of common shares of 7,526,664,903 shares with a value of THB 10 per share.
Paid-up Capital
: THB 55,136,649,030, consist of common shares of 5,513,664,903 shares with a value of THB 10 per share.
Website
: www.thanachartbank.co.th
Telephone
: +66 (0) 2655-9000
Fax
: +66 (0) 2655-9001
Thanachart Contact Center : 1770 Thanachart Bank Public Company Limited
259
Other References Registrar: Ordinary shares
Thailand Securities Depository Company Limited 62 The Stock Exchange of Thailand Building, Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel. +66 (0) 2229-2800 Call Center +66 (0) 2229-2888 Fax +66 (0) 2359-1259 Website: www.tsd.co.th
Debenture TBANK155A, TBANK194A, Thai Military Bank Public Company Limited TBANK197A, and TBANK247A 3000 Phahonyothin Road,
Chom Phon, Chatuchak, Bangkok 10900, Thailand Tel. +66 (0) 2299-1111 Fax +66 (0) 2273-7806 Website: www.tmbbank.co.th
Debenture TBANK204A
CIMB Thai Public Company Limited 44 Langsuan Building, 15th Floor, Langsuan Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2626-7503 Fax +66 (0) 2633-9026 Website : www.cimbthai.com
Debenture TBANK196A, TBANK227A, Thanachart Bank Public Company Limited and TBANK22OA Registrar and Paying Agent Department
1101 Petchburi Building, 2nd Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400, Thailand Tel. +66 (0) 2208-5000 Ext. 5017, 4519 Fax +66 (0) 2651-7899, 2651-7915 Website: www.thanachartbank.co.th
Debenture Hybrid Tier I
260
Annual Report 2013
T hanachart Bank Public Company Limited Securities Operation Section 444 MBK Tower, 20th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Ext. 3833 Fax +66 (0) 2611-4839 Website: www.thanachartbank.co.th
Bondholders’ Representative: Debenture TBANK155A, TBANK194A, TBANK196A, TBANK197A, TBANK227A, TBANK247A, and TBANK22OA
Thai Military Bank Public Company Limited 3000 Phahonyothin Road, Chom Phon, Chatuchak, Bangkok 10900, Thailand Tel. +66 (0) 2299-1111 Fax +66 (0) 2273-7806 Website: www.tmbbank.co.th
Debenture TBANK204A
CIMB Thai Public Company Limited 44 Langsuan Building, 15th Floor, Langsuan Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2626-7503 Fax +66 (0) 2633-9026 Website: www.cimbthai.com
Debenture Hybrid Tier I
- None -
Auditor:
Miss Ratana Jala Certified Public Accountant (Thailand) No. 3734 Ernst & Young Office Limited 193/136-137, Lake Rajada Office Complex, 33rd Floor, New Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel. +66 (0) 2264-0777 Fax +66 (0) 2264-0789-90 Website: www.ey.com
Legal Advisor:
- None -
Advisor or management under the management agreement:
- None -
Thanachart Bank Public Company Limited
261
Structure of Major Shareholders (1) List of major shareholders (a) Top ten major shareholders are as follows: Rank
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
List of Shareholders
Thanachart Capital Public Company Limited Scotia Netherlands Holdings B.V. Mr. Thung-ngern Pum-ngern Ms. Kittima Tolieng Mr. Sathit Mujarintangkur Ms. Piengjai Hanphanit Mr. Wanchai Chirathivat Mr. Thanawat Chareonthassanont Mr. Pinit Laosoontorn Mr. Somyos Jittipralangsri By redeivership of Legal Execution Department of Thai Finance and Securities PCL. Other Shareholders
Number of Shares
Percentage of Shareholding
2,809,726,575 2,701,627,557 418,462 157,525 110,327 96,665 84,809 70,000 63,569 60,000
50.959 48.999 0.008 0.003 0.002 0.002 0.002 0.001 0.001 0.001
1,249,414
0.023
Total Paid-up Capital
5,513,664,903
100.000
Thai Shareholders
2,811,994,046
51.000
Foreign Shareholders
2,701,670,857
49.000
Notes: 1) Report of the Bank’s major shareholders as of March 15, 2013 (As of closing date of shareholders) prepared by Thailand Securities Depository Co., Ltd. 2) On May 9, 2011, the Bank of Thailand (BOT) allows Scotiabank changed its shareholding in TBANK holds 48.99 percent of the total paid-up shares of TBANK, through Scotia Netherlands Holding B.V., a legal entity incorporated in the Netherlands.
(b) Group of major shareholders who have significant influence over the formulation of management policies include Thanachart Capital Public Company Limited (TCAP) and the Scotia Netherlands Holding B.V., which holds 50.959 percent and 48.999 percent of the total paid-up shares respectively. TCAP does not have any major shareholder which has significant influence over its management policies or its operation.
(2) Shareholders’ Agreement TCAP and Scotiabank hold an agreement between the shareholders namely Shareholders’ Agreement, which required to send representatives to participate in the management in the director and executive level as well as directors in major subsidiaries. Moreover, any resolution made by the Board of Directors and the shareholders on the significant issues shall comply with the Articles of Association. Such agreement is put in place for the Bank’s management to achieve the goals of shareholders from both parties.
262
Annual Report 2013
Dividend Payment Policy Dividend Payment Policy of Thanachart Bank TBANK has a policy to pay dividend out of its net profit after deduction of all reserve funds according to requirements of the relevant laws. Payment of dividends is subject to investment plans and other necessaries as seen appropriate by the Board of Directors. The Board, however, may approve to pay an interim dividend and will report to the shareholders at the next Shareholders Meeting.
Dividend Payment Policy of the Subsidiary Companies TBANK has not fixed a dividend payout ratio for its subsidiaries. Their dividend payments shall depend on the operating results of each company. The subsidiary companies, similar to TBANK, have a policy to pay dividend out of their net profit after deduction of all reserve funds according to requirements of the relevant laws. Payment of dividends is subject to investment plans and other necessaries as seen appropriate by the Board of Directors. The Board, however, may approve to pay an interim dividend and will report to the shareholders at the next Shareholders Meeting.
Previous Dividend Payment TBank’s dividend payment in the previous year was approved by the Annual General Meeting of Shareholders No. 20/2013 on April 4, 2013, which approved the payment of dividends from retained earnings subject to corporate income tax at the rate of 30 percent to all shareholders at the rate of THB 0.37 per share, totaling THB 2,040,056,014.11 or 29.98 percent of the net profit of the separate financial statements. Dividend payment for year 2008-2012 was paid according to the performance of previous years. The table below shows the information of previous dividend payment. Performance of the year Paid in
2008 2009
2009 2010
2010 2011
2011 2012
2012 2013
Earnings per share (THB)
0.63
0.75
1.91
1.25
1.21
Dividend per share (THB)
0.43
0.56
0.56
0.40
0.35
68.76
74.47
30.54
38.57
28.94
Dividend Payout Ratio (Percent)
Thanachart Bank Public Company Limited
263
Companies in Thanachart Financial Group Thanachart Capital Public Company Limited 16th-17th
Siam City Life Assurance Public Company Limited
444 MBK Tower, Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8444, 2217-8000, 2611-9111 Fax +66 (0) 2217-8312 www.thanachart.co.th Registration No. 0107536000510
231 Thanachart Park Place, 9th, 11th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2252-5070 Fax +66 (0) 2252-7155 www.scilife.co.th Registration No. 0105540057138
Thanachart Bank Public Company Limited
TS Asset Management Company Limited
900 Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2655-9000 Fax +66 (0) 2655-9001 www.thanachartbank.co.th Registration No. 0107536001401
1101 Petchburi Building, 9th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400, Thailand Tel. +66 (0) 2208-5000 Fax +66 (0) 2253-6130 http://property.scib.co.th/property Registration No. 0105554031624
Thanachart Securities Public Company Limited
Thanachart Group Leasing Company Limited
Thanachart Fund Management Company Limited
Ratchthani Leasing Public Company Limited
444 MBK Tower, 14th, 18th and 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8888, 2217-9595 Fax +66 (0) 2217-9642 www.tnsitrade.com Registration No. 0107557000591 5th-7th
231 Thanachart Park Place, Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2126-8300 Fax +66 (0) 2126-8398 www.thanachartfund.co.th Registration No. 0105535049696
Thanachart Insurance Public Company Limited 999/1 The Nine Tower, Rama 9 Road, Suanluang, Bangkok 10250, Thailand Tel. +66 (0) 2308-9300 Fax +66 (0) 2308-9333 www.thanachartinsurance.co.th Registration No. 0105540060091
264
Annual Report 2013
444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000, 2613-6000 Fax +66 (0) 2217-8098 Registration No. 0105538045861
77/35-36 Sinn Sathorn Tower, 11th up Floor, Krung Thonburi Road, Klong Ton Sai, Klong San, Bangkok 10600, Thailand Tel. +66 (0) 2440-0844 Fax +66 (0) 2440-0848 www.ratchthani.com Registration No. 0107545000209
BRANCHES OF THANACHART BANK PUBLIC COMPANY LIMITED Information as of 31 December 2013
Charan Sanitwong 13 Branch Tel. +66 (0) 2864-1560-3 Fax +66 (0) 2864-1566
Central Rama III Branch Tel. +66 (0) 2211-8260 Fax +66 (0) 2211-8190
Charan Sanitwong 35 Branch Tel. +66 (0) 2411-0511, 2411-0605 Fax +66 (0) 2411-0607
Central Ram Inthra Branch Tel. +66 (0) 2552-7462, 2552-7467-8 Fax +66 (0) 2970 5518
Tel. +66 (0) 2655-9065-76 Fax +66 (0) 2655-9079
Chamchuri Square Branch Tel. +66 (0) 2160-5254-7 Fax +66 (0) 2160-5258
Central Bang Na Branch Tel. +66 (0) 2398-9572-3 Fax +66 (0) 2398-9574
Cha Ru Mueang Branch Tel. +66 (0) 2214-1488, 2214-1739 Fax +66 (0) 2214-2038
Central Plaza Grand Rama IX Branch Tel. +66 (0) 2160-2950-3 Fax +66 (0) 2160-2954
Charoen Krung 17 Branch Tel. +66 (0) 2224-1839, 2225-7194 Fax +66 (0) 2224-2059
Central Lat Phrao Branch Tel. +66 (0) 2937-1279-80 Fax +66 (0) 2937-1283
Charoen Nakhon Soi 36 Branch Tel. +66 (0) 2862-5010-6 Fax +66 (0) 2862-5017
Central World Branch Tel. +66 (0) 2646-1346-9, 2646-1353 Fax +66 (0) 2646-1350
Charoen Phon Branch Tel. +66 (0) 2215-6628-30 Fax +66 (0) 2215-6627
Don Mueang Branch Tel. +66 (0) 2929-7004, 2566-1950-1 Fax +66 (0) 2566-3425
Charn Issara Tower (Rama IV) Branch Tel. +66 (0) 2267-4296-8 Fax +66 (0) 2267-4299
The Avenue Chaengwattana Branch Tel. +66 (0) 2573-0673-5 Fax +66 (0) 2573-0677
Charn Issara Tower II Branch Tel. +66 (0) 2308-2955-8, 2718-1834 Fax +66 (0) 2308-2950
The Nine (Thanon Rama IX) Branch Tel. +66 (0) 2319-1662-4, 2716-7868 Fax +66 (0) 2718-7869
Kluai Nam Thai Branch Tel. +66 (0) 2258-6620-1 Fax +66 (0) 2258-5505
Chok Chai 4 Branch Tel. +66 (0) 2931-0895-7 Fax +66 (0) 2931-0798
The Paseo (Lat Krabang) Branch Tel. +66 (0) 2346-4103-4, 2346-4109 Fax +66 (0) 2346-4111
Crystal Design Center Branch Tel. +66 (0) 2102-2410-2 Fax +66 (0) 2102-2413
Seacon Square Branch Tel. +66 (0) 2721-8548-50 Fax +66 (0) 2721-8551
The Mall Bangkapi Branch Tel. +66 (0) 2375-1575 Fax +66 (0) 2375-1686
Khlong Chan Branch Tel. +66 (0) 2377-1364, 2377-1368-9 Fax +66 (0) 2377-3609
Seacon Square Srinagarindra Branch Tel. +66 (0) 2721-9955 Fax +66 (0) 2721-8321
The Mall 2 Ramkhamhaeng Branch Tel. +66 (0) 2369-2486, 2369-2482 Fax +66 (0) 2369-2484
Khlong Tan Branch Tel. +66 (0) 2314-2642-4, 2719-8030 Fax +66 (0) 2719-8031
Century The Movie Plaza Branch Tel. +66 (0) 2245-8500-2 Fax +66 (0) 2245-8504
The Mall Tha Phra Branch Tel. +66 (0) 2477-7321-3 Fax +66 (0) 2477-7324
Khlong Toei Branch Tel. +66 (0) 2240-0161, 2249-2633 Fax +66 (0) 2249-4789
Central Pin Klao Branch Tel. +66 (0) 2884-9680-3 Fax +66 (0) 2884-9684
The Mall Bang Khae Branch Tel. +66 (0) 2803-8310 Fax +66 (0) 2803-8305
Khlong Thom Branch Tel. +66 (0) 2221-1677, 2221-1671 Fax +66 (0) 2221-1679
Central Rama II Branch Tel. +66 (0) 2872-4770 Fax +66 (0) 2872-4769
Trok Chan Branch Tel. +66 (0) 2211-1286, 2211-4511 Fax +66 (0) 2211-4653
HEAD OFFICE Tonson Branch
BANGKOK AND VICNITIES BANGKOK Tonson Branch Tel. +66 (0) 2655-9065-76 Fax +66 (0) 2655-9079 Phetchaburi Office Branch Tel. +66 (0) 2208-5000, 2253-0200-43 Fax +66 (0) 2253-6198 Suan Mali Office Branch Tel. +66 (0) 2220-2222 # 2106-7, 2112 Fax +66 (0) 2224-3810 Department of Land Transport Branch Tel. +66 (0) 2272-6073-6 Fax +66 (0) 2272-6077 Green Place (Soi Wat Phai Ngoen) Branch Tel. +66 (0) 2211-3515, 2211-3519-20 Fax +66 (0) 2674-9704
Thanachart Bank Public Company Limited
265
Talat Bang Khae Branch Tel. +66 (0) 2801-1004-6 Fax +66 (0) 2801-1007
Thanon Borom Rat Chonnani Branch Tel. +66 (0) 2446-8061-4 Fax +66 (0) 2446-8065
Thanon Ramkhamhaeng 2 Branch Tel. +66 (0) 2397-6173-5, 2728-4060 Fax +66 (0) 2728-4061
Talat Phlu Branch Tel. +66 (0) 2466-7404, 2466-7423 Fax +66 (0) 2465-1767
Thanon Burapha (Phahurat) Branch Tel. +66 (0) 2221-2069, 2221-5239 Fax +66 (0) 2221-5128
Talat Ying Charoen Branch Tel. +66 (0) 2552-8043, 2552-8045 Fax +66 (0) 2972-3161
Thanon Prajadhipok (Wongwian Yai) Branch Tel. +66 (0) 2437-0188, 2437-2596 Fax +66 (0) 2437-5784
Thanon Sathon Tai (Thai CC Tower) Branch Tel. +66 (0) 2675-5697-700 Fax +66 (0) 2675-5701
Talat Saphan Mai Don Mueang Branch Tel. +66 (0) 2521-1670, 2521-0612-3 Fax +66 (0) 2521-0611 Talat Samrae Branch Tel. +66 (0) 2472-2045-50 Fax +66 (0) 2472-2052 Talat Mo Chit Branch Tel. +66 (0) 2278-5300-1, 2270-0308 Fax +66 (0) 2279-3411 Taling Chan Branch Tel. +66 (0) 2882-7790-4 Fax +66 (0) 2882-7796 Tao Pun Branch Tel. +66 (0) 2587-7292, 2587-7284-5 Fax +66 (0) 2587-7379 TOYOTA BUZZ Kaset-Nawamin Branch Tel. +66 (0) 2561-0069-72 Fax +66 (0) 2561-0073 Thanon Romklao Housing Branch Tel. +66 (0) 2543-9200-1, 2543-9191 Fax +66 (0) 2543-9192 Thanon Chan Branch Tel. +66 (0) 2285-5360, 2285-5368 Fax +66 (0) 2285-5361 Thanon Charoen Nakhon Branch Tel. +66 (0) 2438-6953-5, 2860-2018 Fax +66 (0) 2860-4355
Thanon Rama II (Thon Buri Housing 3) Branch Tel. +66 (0) 2451-4402, 2451-4409 Fax +66 (0) 2451-4882 Thanon Rama II (Soi 3) Branch Tel. +66 (0) 2427-1552-3 Fax +66 (0) 2427-1551 Thanon Rama IX Branch Tel. +66 (0) 2246-7829-30 Fax +66 (0) 2246-8473 Thanon Phrasumen (Bang Lamphu) Branch Tel. +66 (0) 2281-6821, 2281-6332 Fax +66 (0) 2281-7457 Thanon Phatthanakan Branch Tel. +66 (0) 2369-2814-7 Fax +66 (0) 2369-2818 Thanon Phatthanakan 22 Branch Tel. +66 (0) 2318-7241-2, 2318-7620 Fax +66 (0) 2318-7393 Thanon Petchaburi Soi 20 Branch Tel. +66 (0) 2251-6018, 2251-6852 Fax +66 (0) 2252-6935 Thanon Petchaburi Tat Mai Branch Tel. +66 (0) 2254-0252-4 Fax +66 (0) 2254-0255
Thanon Chalong Krung Branch Tel. +66 (0) 2327-8111-3 Fax +66 (0) 2327-8114
Thanon Pho Phanit (Ratchawong) Branch Tel. +66 (0) 2622-9050, 2622-4093 Fax +66 (0) 2622-9029
Thanon Nang Linchi Branch Tel. +66 (0) 2286-1971, 2286-1898 Fax +66 (0) 2286-1939
Thanon Mangkon Branch Tel. +66 (0) 2225-3331, 2225-3863 Fax +66 (0) 2225-8364
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Thanon Sathon Nuea Branch Tel. +66 (0) 2267-7512-4, 2637-8651 Fax +66 (0) 2637-8975 Thanon Sirindhorn Branch Tel. +66 (0) 2434-5028-9, 2434-5947-8 Fax +66 (0) 2434-5661 Thanon Suea Pa Branch Tel. +66 (0) 2221-4327-9, 2623-0578 Fax +66 (0) 2623-0579 Thanon Ekkachai (Bang Bon 5) Branch Tel. +66 (0) 2450-3741-3 Fax +66 (0) 2450-3744 Thong Lo Branch Tel. +66 (0) 2381-8421-2, 2381-8364-5 Fax +66 (0) 2381-8423 Thong Lo Soi 3 Branch Tel. +66 (0) 2392-5802-4, 2712-8245 Fax +66 (0) 2712-8168 Thong Lo Soi 17 Branch Tel. +66 (0) 2185-2756, 2185-2758-61 Fax +66 (0) 2185-2757 Tops RCA Branch Tel. +66 (0) 2203-0267-9, 2641-5120 Fax +66 (0) 2641-5121 Tha Din Daeng Branch Tel. +66 (0) 2863-1283-8 Fax +66 (0) 2863-1289 Tha Phra Chan Branch Tel. +66 (0) 2221-7511, 2222-0686 Fax +66 (0) 2222-4794 Thewet Branch Tel. +66 (0) 2628-7240-4, 2628-7247 Fax +66 (0) 2282-8810 Tesco Lotus Bang Kapi Branch Tel. +66 (0) 2377-8029, 2377-8092 Fax +66 (0) 2377-8508
Tesco Lotus Rama II Branch Tel. +66 (0) 2415-9130-3 Fax +66 (0) 2892-8004
Bang Khae Branch Tel. +66 (0) 2454-6225-7, 2454-2790-2 Fax +66 (0) 2413-1329
BigC Phet Kasem Branch Tel. +66 (0) 2444-2927, 2444-2904 Fax +66 (0) 2444-2909
Tesco Lotus Rama IV Branch Tel. +66 (0) 2249-7533-6 Fax +66 (0) 2249-7537
Bang Khlo Branch Tel. +66 (0) 2289-4223, 2289-4236 Fax +66 (0) 2289-4159
Tesco Lotus Phet Kasem 81 Branch Tel. +66 (0) 2489-2087-9, 2812-4072 Fax +66 (0) 2812-4073
Bang Sue Branch Tel. +66 (0) 2587-0616, 2587-0686 Fax +66 (0) 2585-9659
BigC Sukhaphiban 3 (Ramkhamhaeng) Branch Tel. +66 (0) 2916-3584-5, 2916-3603 Fax +66 (0) 2916-3607
Tesco Lotus Lat Phrao Branch Tel. +66 (0) 2512-1955, 2512-1963 Fax +66 (0) 2939-3043
Bang Na Branch Tel. +66 (0) 2398-0182-4 Fax +66 (0) 2398-0185
Tesco Lotus Wang Hin Branch Tel. +66 (0) 2578-6194-6 Fax +66 (0) 2578-6197
Bang Na-Trat Km. 4 Branch Tel. +66 (0) 2399-2841-4 Fax +66 (0) 2399-2845
Thian Kua Thian Branch Tel. +66 (0) 2221-3575-6, 2622-9063 Fax +66 (0) 2221-3575
Bang Bon Branch Tel. +66 (0) 2899-8533-5 Fax +66 (0) 2899-8540
Thai Summit Tower (Thanon Petchaburi Tat Mai) Branch Tel. +66 (0) 2252-6458, 2251-1327 Fax +66 (0) 2251-1357
Bang Phlat Branch Tel. +66 (0) 2435-7205, 2435-6808-10 Fax +66 (0) 2435-6807
Thaniya Branch Tel. +66 (0) 2236-3520-1, 2236-9129 Fax +66 (0) 2236-9119 Nawamin 42 Branch Tel. +66 (0) 2375-1281-2, 2375-1284 Fax +66 (0) 2375-1285 Nawamin 66 Branch Tel. +66 (0) 2519-5724, 2519-4616 Fax +66 (0) 2519-4627 Nawamin Market Place Branch Tel. +66 (0) 2519-1142, 2519-1154 Fax +66 (0) 2946-7432 Nang Loeng Branch Tel. +66 (0) 2281-0842, 2281-2169 Fax +66 (0) 2281-2322 Na Na Nuea Branch Tel. +66 (0) 2252-0709, 2252-6540 Fax +66 (0) 2253-5668 Bang Khun Non Branch Tel. +66 (0) 2424-9778-9, 2433-6028-9 Fax +66 (0) 2434-9772
BigC Ekkamai Branch Tel. +66 (0) 2714-8274-7, 2551-0641 Fax +66 (0) 2714-8268 Bo Bae Branch Tel. +66 (0) 2356-0755-8 Fax +66 (0) 2356-0759
Bang Mod Branch Tel. +66 (0) 2428-6913-5 Fax +66 (0) 2428-6994 Bang Rak Branch Tel. +66 (0) 2234-4227-9, 2630-9026 Fax +66 (0) 2630-9027 Bang Lamphu Branch Tel. +66 (0) 2356-0783, 2356-0785-6 Fax +66 (0) 2356-0787 Bamrung Mueang Branch Tel. +66 (0) 2216-9794-7, 2214-0606-8 Fax +66 (0) 2216-9798 BigC Don Mueang Branch Tel. +66 (0) 2551-0638-9, 2551-0641 Fax +66 (0) 2551-0642 BigC Bang Na Branch Tel. +66 (0) 2396-0482, 2396-0484-5 Fax +66 (0) 2396-0500 BigC Bang Bon Branch Tel. +66 (0) 2416-9969-71 Fax +66 (0) 2416-9974
BigC Sukhaphiban 5 Branch Tel. +66 (0) 2153-1513-4, 2153-1566 Fax +66 (0) 2153-1567
Bobae Tower Branch Tel. +66 (0) 2628-1693-5, 2628-1690 Fax +66 (0) 2628-1696 PTT Thanon Seri Thai Branch Tel. +66 (0) 2187-2009-12 Fax +66 (0) 2187-2013 Pracha Chuen Branch Tel. +66 (0) 2585-6811, 2585-9656-7 Fax +66 (0) 2585-2666 Pracha Uthit Branch Tel. +66 (0) 2873-4721-3, 2873-5848 Fax +66 (0) 2873-5849 Pracha Uthit (Huai Khwang) Branch Tel. +66 (0) 2934-4181-3 Fax +66 (0) 2934-4184 Pratu Nam Branch Tel. +66 (0) 2208-0072, 2208-0074-5 Fax +66 (0) 2208-0076 Prawet Branch Tel. +66 (0) 2322-2223, 2722-1371-2 Fax +66 (0) 2322-8943 Pak Khlong Talat Branch Tel. +66 (0) 2221-7511, 2222-0686 Fax +66 (0) 2222-4794 Pin Klao Branch Tel. +66 (0) 2435-4273-4, 2435-7374 Fax +66 (0) 2435-4518
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Rama III Branch Tel. +66 (0) 2682-7322-6, 2682-7328-9 Fax +66 (0) 2682-7327
Fashion Island Branch Tel. +66 (0) 2947-6402-5 Fax +66 (0) 2947-6410
Ratchawong Branch Tel. +66 (0) 2224-5705, 2224-5870 Fax +66 (0) 2224-5792
Rama IV Branch Tel. +66 (0) 2249-4201-3, 2671-0260 Fax +66 (0) 2249-4204
Money Park Branch Tel. +66 (0) 2686-3960-2 Fax +66 (0) 2686-3959
Ratcha Wat Branch Tel. +66 (0) 2241-0868, 2243 6183 Fax +66 (0) 2241-1483
Phran Nok Branch Tel. +66 (0) 2418-0785, 2418-0787 Fax +66 (0) 2418-0786
Mah Boon Krong Branch Tel. +66 (0) 2611-5710-4 Fax +66 (0) 2611-5717
Ramkhamhaeng 73 Branch Tel. +66 (0) 2375-2126-7, 2374-9644 Fax +66 (0) 2375-2452
Phlapphlachai Branch Tel. +66 (0) 2224-6922-3, 2224-6930 Fax +66 (0) 2224-6947
Min Buri Branch Tel. +66 (0) 2517-8014-5, 2517-9321 Fax +66 (0) 2517-8016
Ramkhamhaeng 155 Branch Tel. +66 (0) 2373-0005, 2373-0007-8 Fax +66 (0) 2373-0004
Phahon Yothin Soi 6 Branch Tel. +66 (0) 2279-9874-5 Fax +66 (0) 2279-9895
Major Ratchayothin Branch Tel. +66 (0) 2512-1082, 2512-1102 Fax +66 (0) 2939-5372
Ramkhamhaeng Soi 24 Branch Tel. +66 (0) 2300-4956-8 Fax +66 (0) 2719-1258
Phahon Yothin Soi 9 Branch Tel. +66 (0) 2270-1371-3, 2619-6399 Fax +66 (0) 2619-6339
Union Mall Lat Phrao Branch Tel. +66 (0) 2511-0236, 2511-0246 Fax +66 (0) 2511-0268
Ramkhamhaeng Soi 122 Branch Tel. +66 (0) 2372-2377-9 Fax +66 (0) 2728-2950
Phatthanakan Branch Tel. +66 (0) 2719-4580-3 Fax +66 (0) 2719-4591
Yaowarat Branch Tel. +66 (0) 2221-1868, 2221-1845-7 Fax +66 (0) 2221-1869
Ramkhamhaeng Soi 129 Branch Tel. +66 (0) 2372-3318-20, 2729-5625 Fax +66 (0) 2729-5832
Paradise Park Branch Tel. +66 (0) 2325-9072-4 Fax +66 (0) 2325-9075
Ratchada Phisek Branch Tel. +66 (0) 2641-2225-8 Fax +66 (0) 2641-3233
Ram Inthra Branch Tel. +66 (0) 2943-5630-2, 2519-0824-5 Fax +66 (0) 2519-0826
Phahurat Branch Tel. +66 (0) 2221-4409, 2221-4419-20 Fax +66 (0) 2623-8098
Ratchada Phisek (Glas Haus Building) Branch Tel. +66 (0) 2693-9811, 2290-3500 Fax +66 (0) 2693-9820
Ram Inthra (Km. 7) Branch Tel. +66 (0) 2510-9610, 2510-9882 Fax +66 (0) 2510-9197
P.B. Tower (Khlong Tan) Branch Tel. +66 (0) 2381-3114-5, 2381-3121-2 Fax +66 (0) 2381-3124 Phet Kasem Branch Tel. +66 (0) 2456-0337-42 Fax +66 (0) 2454-4116 Phet Kasem 69 Branch Tel. +66 (0) 2809-3034-8 Fax +66 (0) 2809-3041 Phloen Chit Center Branch Tel. +66 (0) 2656-8403-7 Fax +66 (0) 2656-8400 Platinum Pratu Nam Branch Tel. +66 (0) 2121-9683-6 Fax +66 (0) 2121-9687
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Ratchada Phisek-Tha Phra Branch Tel. +66 (0) 2878-8845-50 Fax +66 (0) 2878-8852 Ratchada-Huai Khwang Branch Tel. +66 (0) 2694-1489-91, 2694-1495 Fax +66 (0) 2694-1496
Ram Inthra (Km. 8) Branch Tel. +66 (0) 2510-6900, 2510-2342 Fax +66 (0) 2510-9875 Navaminthra 9 Hospital Branch Tel. +66 (0) 2518-1100, 2518-2360-1 Fax +66 (0) 2518-2363
Ratchadamnoen Branch Tel. +66 (0) 2221-3391, 2226-0178-9 Fax +66 (0) 2222-9635
Paolo Memorial Hospital Chok Chai 4 Branch Tel. +66 (0) 2514-3277, 2514-3293-4 Fax +66 (0) 2933-2292
Ratchadamnoen Klang Branch Tel. +66 (0) 2226-3083-5, 2621-2185 Fax +66 (0) 2621-2186
Ramkhamhaeng Hospital Branch Tel. +66 (0) 2374-1523-5, 2374-1561 Fax +66 (0) 2374-1562
Ratchadamri Branch Tel. +66 (0) 2251-3113, 2251-4314 Fax +66 (0) 2251-4316
Phyathai 1 Hospital Branch Tel. +66 (0) 2246-7713-5 Fax +66 (0) 2246-7716
Vichaiyut Hospital Branch Tel. +66 (0) 2278-2194-6 Fax +66 (0) 2278-2606
Watcharaphon Branch Tel. +66 (0) 2508-2185-7 Fax +66 (0) 2508-2207
Song Prapha Branch Tel. +66 (0) 2928-8542-5 Fax +66 (0) 2928-8546
Vibhavadi Hospital Branch Tel. +66 (0) 2561-5320-2 Fax +66 (0) 2941-3006
Wat Phra Ya Kai Branch Tel. +66 (0) 2289-3026-7, 2289-5033 Fax +66 (0) 2289-5032
Suan Phlu Branch Tel. +66 (0) 2287-3084-5, 2287-3074 Fax +66 (0) 2679-3028
Samitivej Hospital Sukhumwit 49 Branch Tel. +66 (0) 2712-7013-4 Fax +66 (0) 2712-7016
Wutthakat Branch Tel. +66 (0) 2466-9981-2, 2466-6160 Fax +66 (0) 2472-5838
Suan Lumphini (Thanon Sarasin) Branch Tel. +66 (0) 2252-2677-8, 2651-9037 Fax +66 (0) 2252-2679
Lat Krabang Branch Tel. +66 (0) 2327-2754-7 Fax +66 (0) 2327-2706
Woeng Nakhon Khasem Branch Tel. +66 (0) 2222-2430, 2221-7201-4 Fax +66 (0) 2222-6475
Saphan Khwai Branch Tel. +66 (0) 2279-6060-1 Fax +66 (0) 2616-6747
Lat Phrao Branch Tel. +66 (0) 2512-2343-4, 2938-2433 Fax +66 (0) 2512-2342
Si Worachak Branch Tel. +66 (0) 2222-1912, 2222-1917 Fax +66 (0) 2622-9338
Rama VII Bridge (Bang Phlat) Branch Tel. +66 (0) 2423-9011-4 Fax +66 (0) 2423-9015
Lat Phrao 53 Branch Tel. +66 (0) 2539-1167, 2539-1507 Fax +66 (0) 2539-2261
Siwara Branch Tel. +66 (0) 2538-8466, 2538-8986 Fax +66 (0) 2538-9378
Sathu Pradit 49 Branch Tel. +66 (0) 2682-0610-8 Fax +66 (0) 2682-0619
Lat Phrao 80 Branch Tel. +66 (0) 2933-9172, 2933-9174-5 Fax +66 (0) 2933-9178
Appeal Court Branch Tel. +66 (0) 2938-3421-6 Fax +66 (0) 2938-3428
Sam Yan Branch Tel. +66 (0) 2215-1549, 2215-4199 Fax +66 (0) 2216-6170
Lat Phrao 118 Branch Tel. +66 (0) 2539-2925-7 Fax +66 (0) 2530-4348
Sirirat Branch Tel. +66 (0) 2412-4515, 2412-4583-4 Fax +66 (0) 2866-3218
Sam Yaek Branch Tel. +66 (0) 2223-2706-8 Fax +66 (0) 2223-2705
Lat Phrao Soi 101 Branch Tel. +66 (0) 2187-0162-5 Fax +66 (0) 2187-0161
Vichaiyut Medical Center Branch Tel. +66 (0) 2357-1916-8, 2619-7042 Fax +66 (0) 2619-7043
Sam Yaek Fai Chai Branch Tel. +66 (0) 2411-3446, 2418-3575-6 Fax +66 (0) 2411-2321
Lam Sa Li Branch Tel. +66 (0) 2735-2060-3 Fax +66 (0) 2735-2067
The Government Complex Commemorating Chaengwattana (Building B) Branch Tel. +66 (0) 2143-9393-6 Fax +66 (0) 2143-9397
Sam Pheng Branch Tel. +66 (0) 2222-7396, 2222-7551 Fax +66 (0) 2225-8468
Leng Noei Yi Branch Tel. +66 (0) 2221-1248, 2221-3501 Fax +66 (0) 2223-3211 Wongwian Yai Branch Tel. +66 (0) 2438-2486, 2438-2562 Fax +66 (0) 2438-2568 Wong Sawang Branch Tel. +66 (0) 2834-9999, 2834-9900 Fax +66 (0) 2834-9905 Wong Sawang Town Center Branch Tel. +66 (0) 2586-0420-2 Fax +66 (0) 2910-7949
Sanam Pao Branch Tel. +66 (0) 2271-0026-9 Fax +66 (0) 2271-0030 Siam Discovery Branch Tel. +66 (0) 2658-0491-3 Fax +66 (0) 2658-0494 Siam Paragon Branch Tel. +66 (0) 2129-4374-7 Fax +66 (0) 2129-4372 Siam Square Branch Tel. +66 (0) 2252-7363-6 Fax +66 (0) 2252-7367
Samrae Branch Tel. +66 (0) 2468-0609, 2468-1008-9 Fax +66 (0) 2476-5423 Si Kak Phra Ya Si Branch Tel. +66 (0) 2222-4477-8, 2226-2267 Fax +66 (0) 2225-7036 Si Phra Ya Branch Tel. +66 (0) 2233-5305-7, 2267-2191-4 Fax +66 (0) 2233-4174 Si Yaek Kaset Branch Tel. +66 (0) 2579-1340, 2579-3483 Fax +66 (0) 2579-6794
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Si Yaek Chaloem Buri (Yaowarat) Branch Tel. +66 (0) 2221-1236, 2221-7194 Fax +66 (0) 2225-0580 Si Yaek Ban Khaek Branch Tel. +66 (0) 2465-2115, 2466-1950 Fax +66 (0) 2465-5071 Si Yaek Prawet Branch Tel. +66 (0) 2328-8023-5 Fax +66 (0) 2328-8027 Silom Branch Tel. +66 (0) 2266-7414, 2266-7417-8 Fax +66 (0) 2266-7416 Silom (Thanon Pan) Branch Tel. +66 (0) 2237-9317-20, 2235-5800-2 Fax +66 (0) 2237-9321 Silom Soi 15 Branch Tel. +66 (0) 2237-4192-4, 2635-0272 Fax +66 (0) 2635-0270 Silom Complex Branch Tel. +66 (0) 2231-3237, 2231-3663-5 Fax +66 (0) 2235-8833 Sukhumwit 71 Branch Tel. +66 (0) 2391-6067, 2392-5944 Fax +66 (0) 2392-2534 Sukhumwit Soi 25 Branch Tel. +66 (0) 2259-4726-9 Fax +66 (0) 2259-4730 Sukhumwit Soi 47 Branch Tel. +66 (0) 2204-0307-9, 2662-7708 Fax +66 (0) 2662-5632 Sukhumwit Soi 66 Branch Tel. +66 (0) 2393-5782 Fax +66 (0) 2399-2399 Sukhumwit Soi 101/1 (Piyarom Place) Branch Tel. +66 (0) 2332-7060-2, 2741-8016 Fax +66 (0) 2741-8017 Sutthi San Branch Tel. +66 (0) 2616-3553-8 Fax +66 (0) 2616-3561 Surawong Branch Tel. +66 (0) 2234-5964-6, 2631-7030 Fax +66 (0) 2631-7031
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Annual Report 2013
Seri Thai 32 Branch Tel. +66 (0) 2376-1043-6 Fax +66 (0) 2376-1122
Siam Kit Building Branch Tel. +66 (0) 2251-6763, 2252-5252 Fax +66 (0) 2253-9429
Nong Khaem Branch Tel. +66 (0) 2445-4788, 2445-4790-2 Fax +66 (0) 2445-4789
India Emporium Branch Tel. +66 (0) 2224-0133, 2224-0135-6 Fax +66 (0) 2623-9434
Huai Khwang Branch Tel. +66 (0) 2692-0061, 2692-2098-100 Fax +66 (0) 2276-1134
Udom Suk Branch Tel. +66 (0) 2398-4024-7 Fax +66 (0) 2398-4028
Hua Lam Phong Branch Tel. +66 (0) 2237-9710-4 Fax +66 (0) 2237-9713
Ekkamai 28 Branch Tel. +66 (0) 2392-2831, 2392-7278-9 Fax +66 (0) 2392-2832
Hua Mak Branch Tel. +66 (0) 2314-2627, 2314-0086-7 Fax +66 (0) 2314-7277
MBK Center Branch Tel. +66 (0) 2611-4752-4, 2611-4843 Fax +66 (0) 2611-4751
Anu Wong Branch Tel. +66 (0) 2222-0161-3, 2222-0169 Fax +66 (0) 2225-8931
Esplanade Ratchada Branch Tel. +66 (0) 2354-2052-4 Fax +66 (0) 2660-9250
Victory Monument Branch Tel. +66 (0) 2644-7474-6 Fax +66 (0) 2354-9351
IT Square Branch Tel. +66 (0) 2576-0104-5 Fax +66 (0) 2576-0106
Asok Branch Tel. +66 (0) 2260-7831-4 Fax +66 (0) 2260-7839
Ocean Tower II Branch Tel. +66 (0) 2204-1695-6 Fax +66 (0) 2204-1698-9
Asok-Din Daeng Branch Tel. +66 (0) 2641-7547-9 Fax +66 (0) 2641-7566
Thanon Kanchanaphisek (Thawi Watthana) Branch Tel. +66 (0) 2447-9206-8 Fax +66 (0) 2447-9209
On Nuch 52 Branch Tel. +66 (0) 2322-1557-9 Fax +66 (0) 2322-1556 All Seasons Place Branch Tel. +66 (0) 2250-7611-4 Fax +66 (0) 2250-7615 Berli Jucker House (Kluai Nam Thai) Branch Tel. +66 (0) 2381-5065-7 Fax +66 (0) 2381-5068 Vorawat Building Silom Branch Tel. +66 (0) 2635-1150-2 Fax +66 (0) 2635-1157 Vibulthani Tower (Rama IV) Branch Tel. +66 (0) 2661-5534-7 Fax +66 (0) 2661-5539
VICNITIES King Kaeo Branch Tel. +66 (0) 2316-1990-2 Fax +66 (0) 2317-1312 Khru Nai Branch Tel. +66 (0) 2462-8020, 2462-8034 Fax +66 (0) 2462-6193 Khlong Luang Branch Tel. +66 (0) 2516-1230-33, 2516-1202 Fax +66 (0) 2516-1203 Chaeng Wattana Branch Tel. +66 (0) 2982-9192-5 Fax +66 (0) 2982-9441
Chaeng Wattana (Software Park Building) Branch Tel. +66 (0) 2962-0066, 2962-0415-6 Fax +66 (0) 2962-0376
Tesco Lotus Navanakhon Branch Tel. +66 (0) 2529-6187-9 Fax +66 (0) 2909-7097
BigC Samrong 2 Branch Tel. +66 (0) 2380-1100-2 Fax +66 (0) 2755-0240
Tesco Lotus Rattana Thibet Branch Tel. +66 (0) 2950-1160, 2950-1297 Fax +66 (0) 2950-1157
BigC Suk Sawat Branch Tel. +66 (0) 2463-0992-3 Fax +66 (0) 2463-0980
Central Rattanathibet Branch Tel. +66 (0) 2525-4736-8, 2969-7536 Fax +66 (0) 2969-7537
Tesco Lotus Lam Luk Ka Khlong 6 Branch Tel. +66 (0) 2569-1694, 2569-1655 Fax +66 (0) 2998-8164
Pathum Thani Branch Tel. +66 (0) 2581-5766, 2581-6976 Fax +66 (0) 2581-6925
Zeer-Rangsit Branch Tel. +66 (0) 2992-6807-9 Fax +66 (0) 2992-6810
Tesco Lotus Srinagarindra Branch Tel. +66 (0) 2175-7844-6 Fax +66 (0) 2759-9054
The Mall Ngamwongwan Branch Tel. +66 (0) 2550-1231-4 Fax +66 (0) 2550-1235
Nonthaburi Branch Tel. +66 (0) 2526-3453-6 Fax +66 (0) 2526-3457
Talat Klang Bang Yai Branch Tel. +66 (0) 2595-0682-4 Fax +66 (0) 2595-0685
Navanakhon Branch Tel. +66 (0) 2909-0620-3 Fax +66 (0) 2909-0625
Talat Thai Branch Tel. +66 (0) 2529-6171-2 Fax +66 (0) 2529-6175
Bang Pu Industrial Estate Branch Tel. +66 (0) 2324-0360, 2324-0364 Fax +66 (0) 2324-0805
Talat Bang Bua Thong Branch Tel. +66 (0) 2571-3598-9, 2571-3373-5 Fax +66 (0) 2571-7845
Bang Kruai Branch Tel. +66 (0) 2447-2897, 2447-5095 Fax +66 (0) 2883-8619
Huachiew Chalermprakiet University Branch Tel. +66 (0) 2312-6600-5 Fax +66 (0) 2312-6603
Talat Samrong Branch Tel. +66 (0) 2756-8411-4 Fax +66 (0) 2756-8419
Bang Khru Branch Tel. +66 (0) 2817-5417-9 Fax +66 (0) 2817-5423
Mueang Mai-Bang Phli Branch Tel. +66 (0) 2706-0322-6 Fax +66 (0) 2706-0329
Thanon Rangsit-Pathum Thani Branch Tel. +66 (0) 2567-2738-9 Fax +66 (0) 2567-5809
Bang Bua Thong Branch Tel. +66 (0) 2571-7124, 2571-7142-3 Fax +66 (0) 2920-9603
Megabangna Branch Tel. +66 (0) 2105-1681-3 Fax +66 (0) 2105-1684
Thanon Samakkhi Branch Tel. +66 (0) 2574-2794-5 Fax +66 (0) 2574-2793
Bang Pu Branch Tel. +66 (0) 2323-2960-3 Fax +66 (0) 2323-2964
Rangsit Branch Tel. +66 (0) 2567-1117, 2567-5586 Fax +66 (0) 2567-6694
Tha Nam Nonthaburi Branch Tel. +66 (0) 2527-0255-60 Fax +66 (0) 2527-0254
Bang Yai Branch Tel. +66 (0) 2594-1143, 2594-1152 Fax +66 (0) 2594-1161
Rangsit-Khlong 3 Branch Tel. +66 (0) 2990-8806-8 Fax +66 (0) 2533-1659
Tha Nam Phra Pradaeng Branch Tel. +66 (0) 2463-0488, 2463-2228 Fax +66 (0) 2464-2156
BigC Bang Phli Branch Tel. +66 (0) 2312-2284, 2312-2300 Fax +66 (0) 2312-2321
Rattanathibet Branch Tel. +66 (0) 2969-9040-3, 2969-9046 Fax +66 (0) 2969-9048
Thepharak Branch Tel. +66 (0) 2759-6061-4, 2759-6066 Fax +66 (0) 2759-6067
BigC Samut Prakan Branch Tel. +66 (0) 2702-1792-3, 2702-1859 Fax +66 (0) 2702-1982
Paolo Memorial Hospital Samut Prakan Branch Tel. +66 (0) 2182-7239-41 Fax +66 (0) 2182-7243
Central Chaeng Wattana Branch Tel. +66 (0) 2193-8114-6 Fax +66 (0) 2101-0710
Pak Kret Branch Tel. +66 (0) 2960-9928-30, 2583-7246 Fax +66 (0) 2583-7562 Pu Chao Saming Prai Branch Tel. +66 (0) 2183-2044, 2183-2046-7 Fax +66 (0) 2183-2043 Phra Pradaeng Branch Tel. +66 (0) 2463-3940-1, 2463-8415-7 Fax +66 (0) 2463-6897 Future Park Rangsit Branch Tel. +66 (0) 2958-5116-9 Fax +66 (0) 2958-5121
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Lam Luk Ka Branch Tel. +66 (0) 2994-5747-51 Fax +66 (0) 2994-5753
Kanchanaburi Branch Tel. +66 (0) 3451-5096-100 Fax +66 (0) 3451-5102
Samut Prakan Branch Tel. +66 (0) 2388-0099, 2395-0045 Fax +66 (0) 2395-2021
Kamphaeng Saen Branch Tel. +66 (0) 3435-1100, 3435-1614 Fax +66 (0) 3435-1094
Bang Kadi Industrial Park Branch Tel. +66 (0) 2501-1254-6 Fax +66 (0) 2501-1257
Kaeng Khoi Branch Tel. +66 (0) 3624-4176, 3624-4179 Fax +66 (0) 3624-4178
Sam Yaek Phra Pradaeng Branch Tel. +66 (0) 2463-2156-7 Fax +66 (0) 2462-5355
304 Industrial Park Branch Tel. +66 (0) 3741-4378-80 Fax +66 (0) 3741-4381
Samrong Branch Tel. +66 (0) 2396-0278-80, 2745-3482-3 Fax +66 (0) 2399-5103
Khao Wang Branch Tel. +66 (0) 3242-5350, 3242-8352 Fax +66 (0) 324-8351
Samrong Nuea Branch Tel. +66 (0) 2384-7141, 2384-7244 Fax +66 (0) 2384-7678
Khlong Khru Branch Tel. +66 (0) 3482-7086, 3482-7093 Fax +66 (0) 3482-7094
Si Mum Mueang-Rangsit Branch Tel. +66 (0) 2531-9774, 2531-3445 Fax +66 (0) 2531-9636
Cha-am Branch Tel. +66 (0) 3243-4130-1, 3247-1158 Fax +66 (0) 3247-1185
Nam Daeng Branch Tel. +66 (0) 2385-2511-2, 2385-2920 Fax +66 (0) 2385-2921
Dan Chang Branch Tel. +66 (0) 3559-5497-8 Fax +66 (0) 3559-5499
Ha Yaek Pak Kret Branch Tel. +66 (0) 2583-7574, 2583-9144 Fax +66 (0) 2584-3959
Damnoen Saduak Branch Tel. +66 (0) 3225-3810-2 Fax +66 (0) 3225-3813
Imperial World Samrong Branch Tel. +66 (0) 2380-2943-5, 2756-9023 Fax +66 (0) 2756-9024
Talat Chao Prom Branch Tel. +66 (0) 3524-4768, 3524-5162-3 Fax +66 (0) 3524-5441
Homework Ratchaphruek Branch Tel. +66 (0) 2447-6690-2 Fax +66 (0) 2447-6693
Talat Tha Na (Nakhon Chai Si) Branch Tel. +66 (0) 3433-1107-9 Fax +66 (0) 3433-1151
Thanon Ekkachai (Samut Sakhon) Branch Tel. +66 (0) 3441-1127, 3441-1225-6 Fax +66 (0) 3442-5204
Talat Pak Nam Branch Tel. +66 (0) 2702-8380-4 Fax +66 (0) 2702-8388
Talat Mahachai Branch Tel. +66 (0) 3481-0287-8 Fax +66 (0) 3481-0467
Thong Pha Phum Branch Tel. +66 (0) 3459-9073, 3459-9352 Fax +66 (0) 3459-9613
Talat Suphan Buri Branch Tel. +66 (0) 3551-1330, 3552-3882-3 Fax +66 (0) 3552-3881
Tha Muang Branch Tel. +66 (0) 3461-1119, 3461-1403 Fax +66 (0) 3461-2419
Thanon Khun San (Sing Buri) Branch Tel. +66 (0) 3651-1199, 3652-1200-1 Fax +66 (0) 3652-1202
Tha Yang Branch Tel. +66 (0) 3246-1445-6, 3246-1823-4 Fax +66 (0) 3246-1447
CENTRAL REGION Kabin Buri Branch Tel. +66 (0) 3728-0796, 3728-0798 Fax +66 (0) 3728-0799 Krathum Baen Branch Tel. +66 (0) 3447-2422, 3447-2651-2 Fax +66 (0) 3447-1511
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Annual Report 2013
Thanon Sai Phra (Nakhon Pathom) Branch Tel. +66 (0) 3425-5317-9 Fax +66 (0) 3425-4915 Thanon Songphon Branch Tel. +66 (0) 3220-0427, 3221-1899 Fax +66 (0) 3220-0426 Thanon Bowon Branch Tel. +66 (0) 3451-1022, 3451-2387 Fax +66 (0) 3451-1597 Suphun Buri Branch Tel. +66 (0) 3552-1575, 3552-1963 Fax +66 (0) 3552-1964 Thanon Phahon Yothin (Saraburi) Branch Tel. +66 (0) 3621-1166, 3621-2420-1 Fax +66 (0) 3621-2421 Thanon Ratchawithi (Nakhon Pathom) Branch Tel. +66 (0) 3424-2348, 3425-1080 Fax +66 (0) 3425-1081 Thanon Setthakit 1 (Om Noi) Branch Tel. +66 (0) 2810-4596-9 Fax +66 (0) 2810-4605 Thanon Sut Banthat (Saraburi) Branch Tel. +66 (0) 3631-4512 Fax +66 (0) 3631-5404 Thanon Amarin (Ratchaburi) Branch Tel. +66 (0) 3233-7142, 3232-5802-5 Fax +66 (0) 3232-5801
Tha Ruea-Kanchanaburi Branch Tel. +66 (0) 3456-1130, 3456-1040 Fax +66 (0) 3456-2073
Prachuap Khiri Khan Branch Tel. +66 (0) 3260-4464-7 Fax +66 (0) 3260-4468
Robinson Suphan Buri Branch Tel. +66 (0) 3545-4360-2 Fax +66 (0) 3545-4364
Tha Ruea-Ayutthaya Branch Tel. +66 (0) 3534-1019, 3534-1029 Fax +66 (0) 3534-1795
Prachin Buri Branch Tel. +66 (0) 3721-1300, 3721-3855-9 Fax +66 (0) 3721-3080
Lop Buri Branch Tel. +66 (0) 3641-1233, 3641-1595 Fax +66 (0) 3642-1023
Thung Khok Branch Tel. +66 (0) 3556-8086-7 Fax +66 (0) 3556-8069
Pran Buri Branch Tel. +66 (0) 3262-1643, 3262-2373-4 Fax +66 (0) 3262-2055
Lat Bua Luang Branch Tel. +66 (0) 3537-9290-1 Fax +66 (0) 3537-9292
Tesco Lotus Mahachai Branch Tel. +66 (0) 3482-6231, 3482-6060 Fax +66 (0) 3442-1356
Pak Phriao Branch Tel. +66 (0) 3621-1833-4, 3622-1286 Fax +66 (0) 3622-1884
Wang Nam Yen Branch Tel. +66 (0) 3725-1543-7 Fax +66 (0) 3725-1546
Nakhon Chai Si Branch Tel. +66 (0) 3433-1350-1 Fax +66 (0) 3433-1349
Phra Pathom Chedi Branch Tel. +66 (0) 3425-4203-5, 3421-3541 Fax +66 (0) 3425-9131
Wang Sombun Branch Tel. +66 (0) 3744-9193-4 Fax +66 (0) 3744-9195
Nakhon Nayok Branch Tel. +66 (0) 3731-1131, 3731-2608-9 Fax +66 (0) 3731-2610
Phutthamonthon Sai 4 Branch Tel. +66 (0) 2420-0444, 2420-5964 Fax +66 (0) 2813-1116
Wat Thian Dat Branch Tel. +66 (0) 2429-0216, 2429-0813 Fax +66 (0) 2429-0847
Nakhon Pathom Branch Tel. +66 (0) 3421-9131 Fax +66 (0) 3421-9160
Phetchaburi Branch Tel. +66 (0) 3242-7023-5 Fax +66 (0) 3241-5455
Wiset Chai Chan Branch Tel. +66 (0) 3563-2801-4 Fax +66 (0) 3563-2805
Bang Sai Branch Tel. +66 (0) 3528-2118-20, 3537-5226 Fax +66 (0) 3537-5144
Photharam Branch Tel. +66 (0) 3223-1089, 3223-1255 Fax +66 (0) 3223-1090
Si Prachan Branch Tel. +66 (0) 3558-1150, 3558-1160 Fax +66 (0) 3558-1140
Bang Pahan Branch Tel. +66 (0) 3538-1023-5 Fax +66 (0) 3538-1026
Pho Hak Branch Tel. +66 (0) 3238-7021-2 Fax +66 (0) 3238-7023
Salaya Branch Tel. +66 (0) 2441-4557-9 Fax +66 (0) 2441-4560
Bang Len Branch Tel. +66 (0) 3439-1026-9 Fax +66 (0) 3439-1030
Mahachai Mueang Mai Branch Tel. +66 (0) 3481-2620-4 Fax +66 (0) 3442-6989
Samut Songkhram Branch Tel. +66 (0) 3471-1361, 3471-1444 Fax +66 (0) 3471-5555
Ban Pong Branch Tel. +66 (0) 3220-0429-31, 3221-1993 Fax +66 (0) 3221-1035
Ratchaburi Branch Tel. +66 (0) 3231-1203-5 Fax +66 (0) 3231-1207
Samut Sakhon Branch Tel. +66 (0) 3482-0359-60 Fax +66 (0) 3482-0445
Ban Phaeo Branch Tel. +66 (0) 3448-1088, 3448-1099 Fax +66 (0) 3448-1606
Phetcharat Hospital (Phetchaburi) Branch Tel. +66 (0) 3241-0505-6, 3241-0514 Fax +66 (0) 3240-0618
Sa Kaeo Branch Tel. +66 (0) 3724-1061, 3724-1585-6 Fax +66 (0) 3724-1062
Ban Mo Branch Tel. +66 (0) 3620-1141, 3620-1391-2 Fax +66 (0) 3620-1142 BigC Lop Buri 2 Branch Tel. +66 (0) 3678-0731-4 Fax +66 (0) 3678-0736
Rojana Branch Tel. +66 (0) 3521-3892-4, 3524-4381 Fax +66 (0) 3524-2136 Robinson Ratchaburi Branch Tel. +66 (0) 3232-7711-3 Fax +66 (0) 3232-7714
Saraburi Branch Tel. +66 (0) 3621-8500 Fax +66 (0) 3631-6601 Rojana Industrial Park Ayutthaya Branch Tel. +66 (0) 3571-9710-2 Fax +66 (0) 3533-1651
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Song Phi Nong Branch Tel. +66 (0) 3553-2890-3 Fax +66 (0) 3553-2894
Kabin Buri Industrial (Nongki) Branch Tel. +66 (0) 3745-5428-9 Fax +66 (0) 3745-5439
Sam Chuk Branch Tel. +66 (0) 3557-1644, 3557-1655 Fax +66 (0) 3557-1099
U Thong Branch Tel. +66 (0) 3555-1299, 3555-1618 Fax +66 (0) 3555-1868
Sam Phran Branch Tel. +66 (0) 3432-2781, 3432-2783 Fax +66 (0) 3432-2782 Sing Buri Branch Tel. +66 (0) 3653-0410, 3653-0413 Fax +66 (0) 3651-2021 Sena Branch Tel. +66 (0) 3520-1035, 3520-1291 Fax +66 (0) 3520-1749 Nong Khae Branch Tel. +66 (0) 3637-1504, 3637-1517 Fax +66 (0) 3637-1516 Hua Hin Branch Tel. +66 (0) 3251-1098, 3251-2218 Fax +66 (0) 3251-2219 Ayutthaya Branch Tel. +66 (0) 3525-2431-6, 3525-2359 Fax +66 (0) 3525-2437 Ayutthaya Park Branch Tel. +66 (0) 3522-9560-1 Fax +66 (0) 3522-9554 Aranyapraphet Branch Tel. +66 (0) 3722-3505-7 Fax +66 (0) 3722-3511 Om Noi Branch Tel. +66 (0) 2420-1450, 2420-1811 Fax +66 (0) 2420-1132 Om Yai Branch Tel. +66 (0) 2420-4920, 2420-4930 Fax +66 (0) 2811-6538 Amphawa Branch Tel. +66 (0) 3475-1177-8, 3475-1640-1 Fax +66 (0) 3475-1642 Ang Thong Branch Tel. +66 (0) 3561-1099, 3561-2301-3 Fax +66 (0) 3561-1100
274
Annual Report 2013
NORTHERN REGION
Thanon Chang Chlan (Chiang Mai) Branch Tel. +66 (0) 5382-0538-41 Fax +66 (0) 5382-0543 Thanon Nimmanhemin Branch Tel. +66 (0) 5322-5483, 5340-0672-4 Fax +66 (0) 5340-0675
Kamphaeng Phet Branch Tel. +66 (0) 5571-3325-6 Fax +66 (0) 5571-3368
Thanon Barom Trai Lokanart 2 (Phitsanulok) Branch Tel. +66 (0) 5521-8645-9 Fax +66 (0) 5521-8648
Khuang Sing Branch Tel. +66 (0) 5321-0826-8, 5321-6586 Fax +66 (0) 5322-2718
Thanon Bunyawat Branch Tel. +66 (0) 5421-7444, 5421-7666 Fax +66 (0) 5422-4667
Bhumibol Dam Branch Tel. +66 (0) 5554-9598-9, 5559-9004-5 Fax +66 (0) 5559-9021
Thanon Wet Suwan (Nakhon Sawan) Branch Tel. +66 (0) 5622-2998, 5622-7835 Fax +66 (0) 5623-1462
Chong Khae Branch Tel. +66 (0) 5626-9163, 5626-9128-30 Fax +66 (0) 5626-9127 Chai Nat Branch Tel. +66 (0) 5641-6650-3 Fax +66 (0) 5641-6654 Central Plaza Phitsanulok Branch Tel. +66 (0) 5533-8412-4 Fax +66 (0) 5521-6612 Central Airport Chiang Mai Branch Tel. +66 (0) 5320-1234 Fax +66 (0) 5320-1900 Central Plaza Chiang Rai Branch Tel. +66 (0) 5317-9928-30 Fax +66 (0) 5375-4496 Talat Varorot Branch Tel. +66 (0) 5387-4018-9, 5387-4002 Fax +66 (0) 5387-4006 Tak Branch Tel. +66 (0) 5551-1275, 5551-1360 Fax +66 (0) 5551-3486 Takhli Branch Tel. +66 (0) 5626-1093, 5626-1133 Fax +66 (0) 5626-2383
Thanon Sueksa Charoen (Phetchabun) Branch Tel. +66 (0) 5674-4076-8 Fax +66 (0) 5672-2415 Thanon Ekathossaros (Phitsanulok) Branch Tel. +66 (0) 5524-3871-2, 5525-9322 Fax +66 (0) 5524-4268 Tha Phae Branch Tel. +66 (0) 5323-5755 Fax +66 (0) 5323-5757 Tesco Lotus Phitsanulok Branch Tel. +66 (0) 5525-3701-3 Fax +66 (0) 5525-3705 Nakhon Sawan Branch Tel. +66 (0) 5631-3848 Fax +66 (0) 5631-3850 Nan Branch Tel. +66 (0) 5471-1095-9 Fax +66 (0) 5471-1098 Lamphun Industrial Estate Branch Tel. +66 (0) 5358-1662-3 Fax +66 (0) 5358-1664 Bo Sang Branch Tel. +66 (0) 5333-7004-6 Fax +66 (0) 5333-7007
BigC Kamphaeng Phet Branch Tel. +66 (0) 5585-3928-30 Fax +66 (0) 5585-3932 BigC Chiang Mai Branch Tel. +66 (0) 5324-1248-9, 5324-1336 Fax +66 (0) 5324-1337 BigC Hang Dong Branch Tel. +66 (0) 5380-4094, 5380-4092 Fax +66 (0) 5380-4086 Pak Nam Pho Branch Tel. +66 (0) 5621-2082, 5621-3388 Fax +66 (0) 5621-3516 Phran Kratai Branch Tel. +66 (0) 5576-2111-2 Fax +66 (0) 5576-2113 Phayao Branch Tel. +66 (0) 5443-1124, 5448-2386-8 Fax +66 (0) 5443-1272 Phichit Branch Tel. +66 (0) 5661-1033, 5661-1651 Fax +66 (0) 5661-1127 Phitsanulok Branch Tel. +66 (0) 5530-4313 Fax +66 (0) 5530-4279 Phetchabun Branch Tel. +66 (0) 5672-3103 Fax +66 (0) 5672-3104 Phrae Branch Tel. +66 (0) 5452-2004, 5452-2006 Fax +66 (0) 5452-2005 Phaisali Branch Tel. +66 (0) 5625-9721-2 Fax +66 (0) 5625-9723 Mae Sot Branch Tel. +66 (0) 5553-3311-3, 5553-3319 Fax +66 (0) 5553-3320 Mae Sai Branch Tel. +66 (0) 5373-1675, 5373-1879 Fax +66 (0) 5373-1905 Mae Hong Son Branch Tel. +66 (0) 5361-4441-2, 5361-4444-5 Fax +66 (0) 5361-4443
McCormick Hospital (Chiang Mai) Branch Tel. +66 (0) 5326-1218-9, 5330-0421 Fax +66 (0) 5326-1123
Ha Yaek Phokhun Mengrai (Chiang Rai) Branch Tel. +66 (0) 5374-5244-5 Fax +66 (0) 5374-5247
Lampang Branch Tel. +66 (0) 5431-8927-9, 5431-8930 Fax +66 (0) 5431-8960
Uttaradit Branch Tel. +66 (0) 5544-1777, 5544-2240 Fax +66 (0) 5541-4096
Lamphun Branch Tel. +66 (0) 5351-0371, 5351-2060-1 Fax +66 (0) 5351-0372
Uthai Thani Branch Tel. +66 (0) 5657-1616-9 Fax +66 (0) 5657-1620
Wang Chao Branch Tel. +66 (0) 5555-6059, 5555-6061 Fax +66 (0) 5555-6063
Happy Plaza (Phichit) Branch Tel. +66 (0) 5661-6471-4 Fax +66 (0) 5665-0987
Sawankhalok Branch Tel. +66 (0) 5564-1478-9, 5564-2512 Fax +66 (0) 5564-1480 San Sai Branch Tel. +66 (0) 5349-1457, 5349-1928 Fax +66 (0) 5349-1728 San Pa Khoi Branch Tel. +66 (0) 5324-4157, 5324-9167-8 Fax +66 (0) 5324-1157 Sukhothai Branch Tel. +66 (0) 5561-6022, 5562-2465-6 Fax +66 (0) 5562-2469 Nong Ben Branch Tel. +66 (0) 5629-6163-5 Fax +66 (0) 5629-6166
Lom Sak Branch Tel. +66 (0) 5670-1540, 5670-1878 Fax +66 (0) 5670-4513 Hankha Branch Tel. +66 (0) 5645-1040, 5645-1042 Fax +66 (0) 5645-1499
Hang Nam Sakorn Branch Tel. +66 (0) 5643-1232-3 Fax +66 (0) 5643-1234
Kalasin Branch Tel. +66 (0) 4382-1080-1 Fax +66 (0) 4381-6584 Khon Kaen Branch Tel. +66 (0) 4332-4321, 4322-6888 Fax +66 (0) 4332-5919 Chaiyaphum Branch Tel. +66 (0) 4481-3251-5 Fax +66 (0) 4481-3253 Chum Phae Branch Tel. +66 (0) 4331-1684, 4331-2292 Fax +66 (0) 4331-2395 Central Plaza Khon Kaen Branch Tel. +66 (0) 4328-8361-3 Fax +66 (0) 4328-8365
Lom Kao Branch Tel. +66 (0) 5670-8492-3 Fax +66 (0) 5670-8494
Hang Dong Branch Tel. +66 (0) 5343-4035-7 Fax +66 (0) 5343-4038
NORTH EASTERN REGION
Central Plaza Udon Thani Branch Tel. +66 (0) 4292-1346-7 Fax +66 (0) 4292-1369 The Mall Nakhon Ratchasima Branch Tel. +66 (0) 4439-3931-3 Fax +66 (0) 4439-3934 Talat Thetsaban Maha Sarakham Branch Tel. +66 (0) 4372-5485, 4372-5661 Fax +66 (0) 4372-3692 Talat Pak Chong Branch Tel. +66 (0) 4431-3798-9, 4431-3855-6 Fax +66 (0) 4431-3255
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Thanon Klang Mueang (Khon Kaen) Branch Tel. +66 (0) 4322-8266, 4332-2630 Fax +66 (0) 4332-2386 Thanon Kuang Heng (Si Sa Ket) Branch Tel. +66 (0) 4561-7861-4 Fax +66 (0) 4561-7860 Thanon Prachak (Nong Khai) Branch Tel. +66 (0) 4241-2890-4 Fax +66 (0) 4241-2895 Thanon Mittraphap (Nakhon Ratchasima) Branch Tel. +66 (0) 4425-9003-4, 4425-1376 Fax +66 (0) 4425-9002 Thanon Si Chan Branch Tel. +66 (0) 4322-7275-8 Fax +66 (0) 4322-7279 Thanon Sappasit Branch Tel. +66 (0) 4524-4315, 4524-4729 Fax +66 (0) 4524-3193 Thanon Suranari Branch Tel. +66 (0) 4424-2560, 4424-2904 Fax +66 (0) 4425-6706 Thanon Na Mueang (Khon Kaen) Branch Tel. +66 (0) 4322-1163, 4322-3234 Fax +66 (0) 4322-1822 Thanon Hai Srok (Roi Et) Branch Tel. +66 (0) 4352-3335-7 Fax +66 (0) 4352-3339 Thanon Udon Dutsadi Branch Tel. +66 (0) 4224-7574, 4224-7732 Fax +66 (0) 4224-7510 Tesco Lotus Khorat Branch Tel. +66 (0) 4426-3564, 4426-3567 Fax +66 (0) 4426-3565 Tesco Lotus Chaiyaphum Branch Tel. +66 (0) 4483-8324-6 Fax +66 (0) 4481-3352 Nakhon Phanom Branch Tel. +66 (0) 4251-6125-8 Fax +66 (0) 4251-6129 Nakhon Ratchasima Branch Tel. +66 (0) 4426-9797 Fax +66 (0) 4426-9790
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Annual Report 2013
Nang Rong Branch Tel. +66 (0) 4463-1049, 4463-1586-8 Fax +66 (0) 4463-1050
Sakon Nakhon Branch Tel. +66 (0) 4271-6446-50 Fax +66 (0) 4271-6451
Ban Phai Branch Tel. +66 (0) 4327-4038-40 Fax +66 (0) 4327-4043
Sang Khom Branch Tel. +66 (0) 4227-6222-4 Fax +66 (0) 4227-6225
BigC Buri Ram Branch Tel. +66 (0) 4469-0450, 4469-0458 Fax +66 (0) 4469-0469
Sam Yaek Pak Thong Chai Branch Tel. +66 (0) 4421-3993-5, 4428-1815-6 Fax +66 (0) 4421-3994
BigC Yasothon Branch Tel. +66 (0) 4572-4361, 4572-4376 Fax +66 (0) 4572-5067
Surin Branch Tel. +66 (0) 4451-4455-8 Fax +66 (0) 4451-4459
BigC Udon Thani Branch Tel. +66 (0) 4212-8551-3 Fax +66 (0) 4212-8548
Surin Plaza Branch Tel. +66 (0) 4453-8517-20 Fax +66 (0) 4453-8521
Buri Ram Branch Tel. +66 (0) 4460-1555, 4460-2000 Fax +66 (0) 4460-2123
Suwannakhuha Branch Tel. +66 (0) 4237-2515-6 Fax +66 (0) 4237-2517
Pak Chong Branch Tel. +66 (0) 4431-6866-9 Fax +66 (0) 4431-6859
Nong Khai Branch Tel. +66 (0) 4246-0119-22 Fax +66 (0) 4246-0199
Maha Sarakham Branch Tel. +66 (0) 4374-0681-3 Fax +66 (0) 4372-2958
Nong Bua Lam Phu Branch Tel. +66 (0) 4231-1107, 4231-1166 Fax +66 (0) 4231-1657
Mukdahan Branch Tel. +66 (0) 4263-1367-70 Fax +66 (0) 4263-1374
Ha Yaek Nampu (Udon Thani) Branch Tel. +66 (0) 4222-1703, 4224-7211-2 Fax +66 (0) 4224-7209
Yasothon Branch Tel. +66 (0) 4571-4051-6 Fax +66 (0) 4571-4054
Thao Suranari Monument Branch Tel. +66 (0) 4424-1774-5 Fax +66 (0) 4424-1776
Loei Branch Tel. +66 (0) 4283-0851-3 Fax +66 (0) 4281-4472
Amnat Charoen Branch Tel. +66 (0) 4551-1721-4 Fax +66 (0) 4551-1726
Wang Sam Mo Branch Tel. +66 (0) 4238-7486-7 Fax +66 (0) 4238-7488
Udon Thani Branch Tel. +66 (0) 4234-2550 Fax +66 (0) 4234-2398
Warin Chamrap Branch Tel. +66 (0) 4532-2788, 4532-2791-3 Fax +66 (0) 4532-2790
Ubon Ratchathani Branch Tel. +66 (0) 4531-9401-3 Fax +66 (0) 4531-9405
Si Sa Ket Branch Tel. +66 (0) 4562-0500-2 Fax +66 (0) 4564-4197
EASTERN REGION Ko Chang Branch Tel. +66 (0) 3955-1026-9 Fax +66 (0) 3955-1030 Klaeng Branch Tel. +66 (0) 3888-7003-9 Fax +66 (0) 3867-8002 Chanthaburi Branch Tel. +66 (0) 3934-4323-6 Fax +66 (0) 3934-4327 Chachoengsao Branch Tel. +66 (0) 3851-5835-7 Fax +66 (0) 3851-5838 Chon Buri Branch Tel. +66 (0) 3827-6930-7 Fax +66 (0) 3827-6935 Central Chon Buri Branch Tel. +66 (0) 3805-3531-3 Fax +66 (0) 3805-3535 Central Center Pattaya Branch Tel. +66 (0) 3841-4852-5 Fax +66 (0) 3841-4846 Central Festival Pattaya Beach Branch Tel. +66 (0) 3800-3571-3 Fax +66 (0) 3804-3194 Trat Branch Tel. +66 (0) 3953-1641-3 Fax +66 (0) 3952-2662 Thanon Khwang (Chanthaburi) Branch Tel. +66 (0) 3932-5925, 3932-2048 Fax +66 (0) 3932-5926 Thanon Chetchamnong (Chon Buri) Branch Tel. +66 (0) 3879-2203-5 Fax +66 (0) 3879-2178 Thanon Phraya Satcha (Chon Buri) Branch Tel. +66 (0) 3879-2214-5 Fax +66 (0) 3879-2216 Thanon Sukhumwit (Chon Buri) Branch Tel. +66 (0) 3879-6066, 3879-5639 Fax +66 (0) 3827-7841
Thanon Sukhumwit (Rayong) Branch Tel. +66 (0) 3861-4913-4 Fax +66 (0) 3861-2342
BigC Sa Kaeo Branch Tel. +66 (0) 3742-1761-3 Fax +66 (0) 3742-1765
Thanon Sukhumwit (Si Racha) Branch Tel. +66 (0) 3877-3415-20 Fax +66 (0) 3877-3421
Pluak Daeng Branch Tel. +66 (0) 3865-9768-9 Fax +66 (0) 3865-9770
Thanon Surasak 1 (Si Racha) Branch Tel. +66 (0) 3831-1872-3, 3831-2206-7 Fax +66 (0) 3831-1871
Pacific Park (Si Racha) Branch Tel. +66 (0) 3831-3226, 3831-3236 Fax +66 (0) 3831-3245
Tesco Lotus Bo Win Branch Tel. +66 (0) 3811-7133-5 Fax +66 (0) 3811-7136
Pranom Sarakham Branch Tel. +66 (0) 3855-1005, 3855-1824-6 Fax +66 (0) 3855-1659
Tesco Lotus Pattaya Nuea Branch Tel. +66 (0) 3841-1410, 3841-1316 Fax +66 (0) 3841-1423
Pattaya Branch Tel. +66 (0) 3872-0334, 3872-0339 Fax +66 (0) 3842-9973
Na Kluea (Pattaya) Branch Tel. +66 (0) 3822-6060-61 Fax +66 (0) 3822-6117
Pattaya Nuea Branch Tel. +66 (0) 3842-8901-2, 3842-8905 Fax +66 (0) 3842-8963
Nikhom Phatthana Branch Tel. +66 (0) 3863-6090-1 Fax +66 (0) 3863-6092
Map Ta Phut Branch Tel. +66 (0) 3868-2531-3 Fax +66 (0) 3868-1995
Bang Pla Soi Branch Tel. +66 (0) 3827-1819, 3827-6651 Fax +66 (0) 3827-6652
Rayong Branch Tel. +66 (0) 3886-4123, 3886-4114 Fax +66 (0) 3886-4115
Ban Bueng Branch Tel. +66 (0) 3844-3060-1, 3844-4015-6 Fax +66 (0) 3844-3713
Si Racha Branch Tel. +66 (0) 3877-1686-9 Fax +66 (0) 3877-1690
Ban Phe Branch Tel. +66 (0) 3865-1995, 3865-1997 Fax +66 (0) 3865-1993
Saha Pathana Industrial Park (Si Racha) Branch Tel. +66 (0) 3848-1826-8 Fax +66 (0) 3848-1829
BigC Chachoengsao 2 Branch Tel. +66 (0) 3851-5188, 3851-5190 Fax +66 (0) 3851-5219 BigC Chon Buri 2 Branch Tel. +66 (0) 3878-3032-4 Fax +66 (0) 3838-7923 BigC Pattaya Tai Branch Tel. +66 (0) 3837-4270, 3837-4273 Fax +66 (0) 3837-4463 BigC Rayong Branch Tel. +66 (0) 3887-3094, 3887-3301 Fax +66 (0) 3862-2659
Sattahip Branch Tel. +66 (0) 3843-7321, 3843-7986 Fax +66 (0) 3843-7717 Sam Yaek Klaeng Branch Tel. +66 (0) 3888-4503-5 Fax +66 (0) 3888-4506 Nong Mon Branch Tel. +66 (0) 3839-2302, 3839-2125 Fax +66 (0) 3839-2501 Nong Mon (Chon Buri) Branch Tel. +66 (0) 3874-5233, 3874-5239 Fax +66 (0) 3874-6349
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Huai Sathon Branch Tel. +66 (0) 3939-5381-3 Fax +66 (0) 3939-5384
Central Hat Yai Branch Tel. +66 (0) 7423-9010 Fax +66 (0) 7423-0414
Hat Pattaya (Nuea) Branch Tel. +66 (0) 3841-5772-4, 3841-5884 Fax +66 (0) 3841-5885
Diana Si Phuwanart Branch Tel. +66 (0) 7446-5316-8 Fax +66 (0) 7446-5319
Laem Chabang Branch Tel. +66 (0) 3840-0740-3 Fax +66 (0) 3840-0745
Trang Branch Tel. +66 (0) 7522-3240-3 Fax +66 (0) 7522-3244
Laem Thong Rayong Branch Tel. +66 (0) 3802-3405-7 Fax +66 (0) 3802-3409
Talat Tha Phae (Nakhon Si Thammarat) Branch Tel. +66 (0) 7538-3271, 7538-3316 Fax +66 (0) 7538-3110
Laem Thong Bang Saen Branch Tel. +66 (0) 3815-3930-1 Fax +66 (0) 3815-3994
Thanon Ramet (Phatthalung) Branch Tel. +66 (0) 7462-6952-4 Fax +66 (0) 7461-5451 Thanon Si Wichai (Surat Thani) Branch Tel. +66 (0) 7720-6488, 7726-4170-1 Fax +66 (0) 7720-6671 Thanon Sala Daeng (Chumphon) Branch Tel. +66 (0) 7750-5051-2 Fax +66 (0) 7750-5054 Thanon Sai Buri (Songkhla) Branch Tel. +66 (0) 7431-1638, 7432-3735-6 Fax +66 (0) 7431-3543
Takua Pa Branch Tel. +66 (0) 7642-5176, 7643-1503-5 Fax +66 (0) 7642-5177
Thalang Branch Tel. +66 (0) 7631-1020, 7631-1040 Fax +66 (0) 7631-1433
Thanon Chuti Uthit (Hat Yai) Branch Tel. +66 (0) 7434-6396-8 Fax +66 (0) 7434-6393
Thap Thiang (Trang) Branch Tel. +66 (0) 7521-8059, 7521-1321 Fax +66 (0) 7521-1320
Kantang Branch Tel. +66 (0) 7525-1250, 7525-1640 Fax +66 (0) 7525-1644
Thanon Chon Kasem (Surat Thani) Branch Tel. +66 (0) 7728-3627-30 Fax +66 (0) 7728-4080
Thai Mueang Branch Tel. +66 (0) 7657-1234-7 Fax +66 (0) 7657-1215
Ko Tao Branch Tel. +66 (0) 7745-6533-4 Fax +66 (0) 7745-6784
Thanon Thawi Wong (Hat Patong) Branch Tel. +66 (0) 7629-2116-8 Fax +66 (0) 7634-5687
SOUTHERN REGION Krabi Branch Tel. +66 (0) 7563-2838-41 Fax +66 (0) 7563-2835
Ko Pha-ngan Branch Tel. +66 (0) 7737-7051, 7723-8186-7 Fax +66 (0) 7737-7052 Ko Lanta Branch Tel. +66 (0) 7566-8152 Fax +66 (0) 7566-8151 Ko Samui Branch Tel. +66 (0) 7742-1110-1, 7742-0363 Fax +66 (0) 7742-1112 Khao Lak Branch Tel. +66 (0) 7648-5493-4 Fax +66 (0) 7648-5560 Khian Sa Branch Tel. +66 (0) 7738-7407-8 Fax +66 (0) 7738-7409 Central Festival Phuket Branch Tel. +66 (0) 7620-9290, 7620-9292 Fax +66 (0) 7620-9291
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Annual Report 2013
Thanon Thammanun Withi (Hat Yai) Branch Tel. +66 (0) 7423-5549, 7435-5396-7 Fax +66 (0) 7424-3648 Thanon Niphat Uthit 1 Branch Tel. +66 (0) 7424-4898-9 Fax +66 (0) 7423-2485 Thanon Montri Branch Tel. +66 (0) 7621-2993, 7621-2999 Fax +66 (0) 7621-3149 Thanon Ratthakan (Hat Yai) Branch Tel. +66 (0) 7434-9070-2, 7426-1751 Fax +66 (0) 7426-1752 Thanon Ratsada (Phuket) Branch Tel. +66 (0) 7621-9664, 7625-6873-5 Fax +66 (0) 7621-9731 Thanon Ratchadamnoen (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534-2779-80 Fax +66 (0) 7535-6741
Tha Ruea Bang Rak (Ko Samui) Branch Tel. +66 (0) 7741-7184 Fax +66 (0) 7741-7185 Tha Wang (Nakhon Si Thammarat) Branch Tel. +66 (0) 7531-3144-6 Fax +66 (0) 7535-7067 Thung Song Branch Tel. +66 (0) 7541-1087, 7541-1287 Fax +66 (0) 7541-1054 Tesco Lotus Krabi Branch Tel. +66 (0) 7565-0833, 7565-0836-7 Fax +66 (0) 7565-0834 Tesco Lotus Chao Fa (Phuket) Branch Tel. +66 (0) 7626-8059-61 Fax +66 (0) 7621-9248 Tesco Lotus Choeng Thale (Phuket) Branch Tel. +66 (0) 7632-5919-21 Fax +66 (0) 7627-0572 Tesco Lotus Chumphon Branch Tel. +66 (0) 7765-9930-2 Fax +66 (0) 7765-9933
Tesco Lotus Thung Song Branch Tel. +66 (0) 7541-3003-5 Fax +66 (0) 7541-3007
Phang-nga Branch Tel. +66 (0) 7641-1295, 7641-1527-8 Fax +66 (0) 7641-1326
Su-ngai Kolok Branch Tel. +66 (0) 7361-1359, 7361-1002 Fax +66 (0) 7361-3632
Tesco Lotus Phuket Branch Tel. +66 (0) 7625-5472-4 Fax +66 (0) 7652-3400
Phatthalung Branch Tel. +66 (0) 7461-3082, 7461-3951-2 Fax +66 (0) 7461-1918
Lang Suan Branch Tel. +66 (0) 7754-1965, 7758-1417-8 Fax +66 (0) 7754-1987
Tesco Lotus Ranong Branch Tel. +66 (0) 7782-6636-8 Fax +66 (0) 7782-6640
Phunphin Branch Tel. +66 (0) 7731-1449, 7731-2368-70 Fax +66 (0) 7731-1537
Huai Yot Branch Tel. +66 (0) 7523-5033-5, 7527-1013 Fax +66 (0) 7527-1064
Nakhon Si Thammarat Branch Tel. +66 (0) 7532-2689-90 Fax +66 (0) 7532-2144
Phuket Branch Tel. +66 (0) 7626-1570-5 Fax +66 (0) 7626-1576
Hat Karon Branch Tel. +66 (0) 7639-6981, 7639-6485-6 Fax +66 (0) 7639-6980
Narathiwat Branch Tel. +66 (0) 7351-2013, 7351-1030 Fax +66 (0) 7351-2014
Mae Nam Branch Tel. +66 (0) 7724-8375, 7733-2259 Fax +66 (0) 7733-2260
Hat Chaweng Branch Tel. +66 (0) 7723-0405, 7723-1089-90 Fax +66 (0) 7742-2051
Ban Don Branch Tel. +66 (0) 7721-0365, 7727-2006 Fax +66 (0) 7721-0366
Yala Branch Tel. +66 (0) 7321-2592, 7321-3375 Fax +66 (0) 7321-1691
Hat Rin Branch Tel. +66 (0) 7737-5254, 7737-5477 Fax +66 (0) 7737-5476
Ban Na Doem Branch Tel. +66 (0) 7735-9013, 7735-9067 Fax +66 (0) 7735-9014
Yan Ta Khao Branch Tel. +66 (0) 7528-1003, 7528-1101 Fax +66 (0) 7528-1102
Hat Lamai Branch Tel. +66 (0) 7745-8159-60, 7745-8162-4 Fax +66 (0) 7745-8161
BigC Pattani Branch Tel. +66 (0) 7333-8004, 7331-3982-3 Fax +66 (0) 7333-8005
Ranong Branch Tel. +66 (0) 7781-1198, 7781-1299 Fax +66 (0) 7781-1751
Hat Yai Branch Tel. +66 (0) 7435-4690 Fax +66 (0) 7435-4696
BigC Satun Branch Tel. +66 (0) 7472-5251-3 Fax +66 (0) 7472-5254
Robinson Trang Branch Tel. +66 (0) 7559-0018-9, 7559-0120 Fax +66 (0) 7522-6157
Hat Yai Nai Branch Tel. +66 (0) 7436-1313-5 Fax +66 (0) 7425-9704
BigC Hat Yai 2 Branch Tel. +66 (0) 7446-9235-7 Fax +66 (0) 7455-5609
Robinson Ocean (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534-1875, 7534-1960-1 Fax +66 (0) 7534-1876
Ha Yaek Chalong (Phuket) Branch Tel. +66 (0) 7638-3222, 7638-3431 Fax +66 (0) 7638-3348
Betong Branch Tel. +66 (0) 7323-1120, 7323-1416 Fax +66 (0) 7323-0914 Pattani Branch Tel. +66 (0) 7333-5950-1, 7333-1851 Fax +66 (0) 7333-5949 Pak Phanang Branch Tel. +66 (0) 7551-7132, 7551-7298 Fax +66 (0) 7551-8021 Patong Branch Tel. +66 (0) 7629-0585-7 Fax +66 (0) 7629-0588
Songkhla Branch Tel. +66 (0) 7444-1198-9, 7444-1232 Fax +66 (0) 7444-1233 Sam Kong (Phuket) Branch Tel. +66 (0) 7621-2077, 7622-2838-40 Fax +66 (0) 7622-2841 Sai Buri Branch Tel. +66 (0) 7341-1021, 7341-1314-5 Fax +66 (0) 7341-1138 Surat Thani Branch Tel. +66 (0) 7721-4581-7 Fax +66 (0) 7721-3560
Ao Nang Branch Tel. +66 (0) 7566-1434, 7566-1430-2 Fax +66 (0) 7566-1433 Ao Luek Branch Tel. +66 (0) 7561-0739, 7563-4335-7 Fax +66 (0) 7561-0755 Wiang Sa Branch Tel. +66 (0) 7736-1461-2, 7736-3550 Fax +66 (0) 7725-7268 Tesco Lotus Songkhla Branch Tel. +66 (0) 7430-7937-9 Fax +66 (0) 7435-2735
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279
Summary of Specified Items per form 56-2 in 2013 Annual Report Items
Page
1. Policy and Overall Business Operation
028
2. Nature of Business Operations
033
3. Risk Factors
046
4. General and Other Key Information
256
5. Shareholders
262
6. Dividend Payment Policy
263
7. Management Structures
227
8. Corporate Governance
213
9. Corporate Social Responsibility
058
10. Internal Control and Risk Management
224
11. Related Transactions
223
12. Financial Highlight
002
13. Management Discussion and Analysis
016
280
Annual Report 2013
002 010 014 016 028 046 058 068 069 071 073 213 224 226 227 236 256 280
Financial Highlights Message from the Board of Directors Board of Directors Thanachart Bank Public Company Limited Management Discussion and Analysis Nature of Business Operations Risk Factors Corporate Social Responsibility (CSR) Responsibilities of the Board of Directors for the Financial Report Report of the Audit Committee Independent Auditor’s Report Financial Statements and Note to Financial Statements Corporate Governance Internal Control and Risk Management Report of the Nomination and Remuneration Committee Supervision and Management Structure Board of Directors and Management Team General Information Investment of TBANK in Other Companies TBANK’s References Other References Structure of Major Shareholders Dividend Payment Policy Companies in Thanachart Financial Group Branches of TBANK Summary of Specified Items per form 56-2 in 2013 Annual Report “Investors can learn more on the issuing company’s annual statement (Form 56-2) shown in www.sec.or.th or the Bank’s website: www.thanachartbank.co.th”
Thanachart Group embraces its environmental responsibilities in the reduction of global warming and consumption of natural resources. The 2013 Annual Report used paper produced from farmed trees and was printed with soy-based ink. Designed by Plan Grafik Co., Ltd. Tel. 0 2277 2222
ANNUAL REPORT 2013 THANACHART BANK PUBLIC COMPANY LIMITED
SMART GROWTH
900 Tonson Tower, Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, THAILAND Tel. +66 (0) 2655 9000 Fax +66 (0) 2655 9001 Thanachart Contact Center 1770 Thanachart Smartcar Call Center +66 (0) 2217 5555 www.thanachartbank.co.th Registration No. 0107536001401
SMART GROWTH ANNUAL REPORT 2013
THANACHART BANK PUBLIC COMPANY LIMITED