POWER OF SUCCESS Annual report 2014
thanachart BANK public company limited
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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 Corporate Governance Internal Control and Risk Management Report of the Nomination and Remuneration Committee Management Structure Board of Directors and Management Team General Information Shareholders and Dividend Payment Policy 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 Branches of TBANK Summary of Specified Items per form 56-2 in 2014 Annual Report
“Investors can learn more on the issuing company’s annual statement (Form 56-1) shown in www.sec.or.th or the Bank’s website: www.thanachartbank.co.th”
Four Strategic Intents for the Business Operation in 2015
1. We intend to attract and retain customers by offering excellent services, innovative savings, insurance, and investment products. 2. We intend to ensure our customer succeed financially by helping them choose the right “Protection� services and products from across the entire Thanachart Group. 3. We intend to provide borrowing solutions to all customer segments that meet their current and future needs and help them to become financially better off. 4. We intend to provide digital banking solutions that permit customers to bank where they want, when they want, and how they want.
Vision of Thanachart Group To be the best at providing fully integrated solutions to our customers’ complete financial needs by offering the highest quality products, services, and advice.
Financial highlights As at and for the year ended December 31
2014
Consolidated 2013 2012 2011
2010
Separate financial statements 2014 2013 2012 2011
2010
Operating results (THB Million) 52,445 24,884 27,561 11,750 39,311 19,515
53,879 27,290 26,589 24,948 51,537 20,408
48,736 25,556 23,180 12,098 35,277 21,660
44,052 19,636 24,416 9,465 33,881 20,747
34,781 11,566 23,216 8,695 31,911 16,062
49,102 23,920 25,182 8,643 33,825 17,029
50,542 26,489 24,053 22,079 46,132 17,692
46,331 25,371 20,959 10,902 31,861 19,522
29,386 14,797 14,589 6,454 21,042 12,953
21,397 7,375 14,022 3,322 17,344 8,053
7,122 9,922
11,497 15,385
2,980 8,354
2,504 7,671
2,149 8,777
7,181 7,918
11,110 14,113
4,680 6,855
1,422 6,668
1,280 5,719
1.80
2.79
1.52
1.39
1.92
1.44
2.56
1.24
1.21
1.25
0.98
1.51
0.90
0.89
1.23
0.82
1.46
0.78
1.13
1.31
9.92 2.68
16.99 2.62
10.72 2.48
10.61 2.92
15.52 3.33
8.60 2.61
16.91 2.55
9.55 2.58
9.42 2.99
10.70 3.63
49.64
39.60
61.40
61.24
50.33
50.34
38.35
61.27
61.56
46.43
754,370 790,017 754,063 1,008,890 1,038,349 1,018,620 787,189 811,308 776,521 902,726 941,109 934,435 104,977 96,218 83,330
635,220 886,060 690,336 810,526 74,848
606,851 873,203 707,605 800,809 72,183
714,436 967,216 773,578 871,614 95,602
750,494 990,724 799,186 901,572 89,152
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
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)
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)
Definition and Formula (1) Total income = Net interest income + Non-interest income (2) Including loss on debt restructuring (3) Excluding 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 non-controlling interest
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Annual Report 2014
As at and for the year ended December 31
2014
Consolidated 2013 2012 2011
2010
Separate financial statements 2014 2013 2012 2011
2010
95.83
97.38
97.11
92.02
85.76
92.35
93.91
93.94
84.58
87.11
4.09
4.36
4.17
5.68
5.63
2.97
3.07
2.65
2.74
2.26
2.07 85.52
2.25 83.36
2.05 73.65
2.62 69.10
2.45 71.28
1.59 90.64
1.66 89.18
1.35 108.46
1.44 72.61
0.56 97.66
133.38
127.87
124.50
106.10
111.14
138.16
138.38
134.94
113.07
107.02
32,761
36,377
33,047
38,311
37,054
22,595
24,394
20,036
17,989
7,648
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)
Capital measures Tier I capital ratio (Percent) 10.70 9.47 8.49 9.28 11.71 Total capital ratio (Percent) 15.83 14.80 13.99 13.72 14.75 Risk weighted assets (THB Million) 724,209 747,992 724,801 664,103 609,277
Common share information Common shares outstanding (Million shares) - Average-basic 5,514 5,514 5,514 5,514 4,563 - End of period 5,514 5,514 5,514 5,514 5,514 Book value (THB) 19.04 17.45 15.11 13.58 13.09 Dividends per share (THB)
5,514 5,514 17.34 0.45
5,514 5,514 16.17 0.45
5,514 5,514 14.06 0.37
5,514 5,514 12.86 0.35
4,563 5,514 12.10 0.40
12,675 617 51
13,286 621 54
13,642 630 55
14,152 676 79
7,871 256 89
Other information Employees 14,806 15,358 15,765 16,298 16,846 Branches Exchange booth
Thanachart Bank Public Company Limited
003
Message from the Board of Directors
(Mr. Banterng Tantivit) Chairman of the Board of Directors
Dear Shareholders, In the midst of plunging oil prices, intensifying geopolitical tensions, and volatile capital flows, the global economic recovery in 2014 was somewhat muted. The vigorous expansion of the US economy, with its surge in economic activity and improved labor market, was the primary positive force impacting global growth. The Federal Reserve was able to end its quantitative easing program and begin to move toward policy normalization. Among the world’s developed economies, the European Union experienced subdued growth with high unemployment rates and, despite the easing of monetary policy, there were signs of recession and deflation risks. Japan, likewise, adopted a massive emergency stimulus package under the Abenomics strategy in a bid to rekindle its technical recessionhit economy. In the emerging and developing economies, growth was slower than originally forecasted, due primarily to the more restrained performance of China’s economy, coupled with the Russian economic crisis spurred by plummeting oil prices and sanctions on Russia over the Ukraine crisis. On the domestic front, despite the challenges of protracted political unrest in the first half of the year, reduced farm income, and concerns over swelling household debt, the Thai economy recovered at a slow pace, due to the moderate growth in private consumption and investment. Also contributing to Thailand’s weak growth were lower-thanexpected government spending and weak exports as a result of tepid global demand. 010
Annual Report 2014
The aforementioned sluggish economic growth took a toll on banks’ ability to grow loan assets in 2014. Hire Purchase (auto) loans, in particular, were very negatively impacted both by the limited economic growth and by the expiry of the firsttime car buyer incentive program. While non-performing loans (“NPL”) increased, primarily in the consumer Hire Purchase segment, the increases were manageable due to the overall financial health of the banks and because of strong loan-loss provisioning practices. During the year, bank deposits continued to grow amid fierce pricing competition (especially in the latter half of the year), and many banks issued Basel III-compliant instruments to meet their replenishment of Tier 2 capital. Additionally, beginning 1 July 2014, all banks in Thailand were required to comply with the Foreign Account Tax Compliance Act (“FATCA”); these new requirements significantly increased the compliance related activities of all banks. For Thanachart Bank in 2014, we were honored to receive many awards and recognitions including: the Certified Companies Award under the Private Sector Collective Action Coalition against Corruption (CAC) Program, Award for Good Cooperation in compliance with the Anti-Money Laundering Act, the ICT Best Practice Awards 2014, the Most Innovative Prepaid Program 2014, and the Organization Excellence Award on Drug Assets Seizure.
(Mr. Suphadej Poonpipat) Chairman of the Executive Committee
2014 was our year to “Execute and Deliver”. With the support of our strategic shareholder, the Bank of Nova Scotia, we made good progress on our strategic priorities and continued to deliver Optimization initiatives throughout the year. For example, we launched a new Loan Origination System contributing to improved response times for Retail loan applications. Additionally the Credit Scoring System and Phase 1 FATCA System have gone live, and the automatic telephone dialing system called “Predictive Dialer” was successfully launched in both the Bank and subsidiary business units. We continued to reengineer processes for key business lines and operating units including Auto Hire Purchase, Appraisal, Custodian and Credit Filing System, Legal Services, and others to improve both our competitiveness and the quality of the customer experience. In light of the slowdown in economic growth, and the resulting potential for increases in the probability of loan defaults, we further enhanced our strong Risk practices by improving underwriting policy, closely monitoring debtors’ records, strengthening our debt collection team, and ensuring proper divestment of distressed debts; all practices aimed at reducing and preventing NPL formations. We are focused on liquidity management and welcome the implementation of Basel III Liquidity Coverage Ratio (LCR) in January 2016. We also continued to move forward with numerous Strategic Sourcing initiatives to enhance our procurement capability in all areas,
leading to improvements in both quality and cost of services and products acquired by our Bank. During this year, we launched several new innovative products and services including: “Free Ver Savings Account”, “‘Negotiable Certificate Of Deposit (“NCD”): 5 Hai Campaign”, “Debit Sure”, “Thanachart OnGuard”, and “Smile Card by Prudential”; all designed to meet the financial needs of our customers. Achievement of both our customer service and financial goals would not have been possible without a welltrained and highly motivated work force. As such, we invested significant management and financial resources to ensure our staff were well prepared to meet our goal of providing fully integrated solutions to meet our customers’ needs. Our best performing branches and staff members were formally recognized through our “Thanachart Top Star Award” program. In terms of our 2014 performance, growth in our Retail loan portfolio was negatively impacted by the continued contraction of both new and used car sales. In response, we compensated for the decline in our Hire Purchase portfolio through loan growth strategies in other Retail segments such as housing loans, as well as in our Corporate and Commercial portfolios. We also focused on continued improvement of the management of reserves and NPLs. We successfully improved the ratio of current and savings accounts as a percentage of overall deposits, as well as improved interest spreads. The Thanachart Bank Public Company Limited
011
(Mr. Somjate Moosirilert) Chief Executive Officer and President
continued focus on cost control led to a reduction in operating expenses and improved our productivity ratio. Consequently, pre-provision operating profit of the Bank and our subsidiaries in 2014 was THB 19,796 million, an increase of THB 884 million or 4.67 percent from last year, not including 2013 extraordinary income. Our Bank and its subsidiaries achieved a net profit of THB 9,922 million, slightly down 1.77 percent from last year, not including 2013 extraordinary items.
MBK Public Company Limited. Additionally, we were the first Thai commercial bank to successfully issue Basel III-compliant Tier II capital subordinated unsecured instruments domestically totaling THB 13,000 million, further reinforcing our financial stability and providing a strong base for future growth.
Furthermore, the reserves to required reserves ratio improved and the coverage ratio increased to 85.52 percent, attributable to lower NPLs and proper provisioning. Also, the BIS ratio improved significantly, reflecting the strong capital position and the sound financial fundamentals of the Bank.
In 2015, the Thai banking sector is expected to show slightly improved year over year loan growth, mainly stimulated by Government spending on infrastructure projects. However, cumulative household debt continues to be a source of concern for the banking industry. The overall banking industry will be confronted with a multitude of changes, such as: the Government’s policy on Thai digital-based economic development, the launch of the Asean Economic Community (“AEC”) on 31 December 2015, and the reduction in the amount of the deposit guarantee ceiling to THB 25 million per depositor (per commercial bank) which may tighten liquidity and deepen competition among banks as well as other investment alternatives. We also expect that the enforcement of the Act of Civil and Commercial Code regarding Guarantee and Mortgage will significantly impact the operational processes of the banking sector and lead to debate with respect to the liability of guarantors.
The Bank’s two key events occurred in June 2014. Firstly, with the consent of the Bank of Thailand, we sold Siam City Life Insurance Public Company Limited for THB 900 million, to Thanachart Capital Public Company Limited and
In preparation for the challenges that lie ahead, Thanachart Bank has established clear strategies and policies to ensure our continued growth. The needs of our customer will be met by offering a full range of competitive products and
With cost of funds being efficiently managed, net interest income increased by 3.66 percent from last year. On the other hand, non-interest income decreased by 7.71 percent, primarily due to a reduction in dividend income caused by the maturity of our investment in the Vayupak fund. NPLs dropped significantly by around THB 3,600 million from last year, and the NPL ratio improved from 4.36 percent to 4.09 percent, in contrast to the upward trend across the industry.
012
Annual Report 2014
(Mr. Peter Bessey)
Vice Chairman of the Executive Committee and Deputy Chief Executive Officer
services, both at the Bank and through our various subsidiaries and business alliances. The entire Thanachart Bank team is committed to the following four Strategic Intents: (i) Attract and retain customers by offering excellent services, innovative savings, insurance, and investment products, (ii) Ensure our customers succeed financially by helping them choose the right “Protection� services and products from across the entire Thanachart Group, (iii) Provide borrowing solutions to all customer segments that meet their current and future needs and help them to become financially better off, and (iv) Provide digital banking solutions that permit customers to bank where they want, when they want, and how they want. To ensure our success in delivering on these Strategic Intents, we have restructured our organization to enhance our leadership and management focus in the important business segments of Automotive Lending and in Retail and Small Business Banking. We are also determined to continually enhance asset quality management and strengthen the coverage ratio. Additionally, we continue to adhere to our Business Philosophy consisting of: Belief in Our Employees, Dedication to Excellence, and Concern for Social Responsibility. With respect to changes at the Director and Executive level in 2014, the Board of Directors was pleased to welcome Mr. Peter Bessey succeeding Mr. Brendan King as Vice Chairman of the Executive Committee and Deputy Chief Executive Officer. The Board of Directors is truly confident that Mr. Bessey will
play a key part in ensuring the achievement of our goals, and thereby enhancing returns to all stakeholders. Our subsidiaries posted strong performances in 2014. The 2014 net profit of Thanachart Insurance Public Company Limited amounted to THB 1,047 million, up 9.88 percent from the previous year, with a 4.28 percent increase in total premium from 2013. In contrast, the overall insurance industry grew only 1 percent. As for Thanachart Broker Company Limited, a net profit of THB 121 million was achieved in 2014; higher than the registered capital of THB 100 million. In addition, Thanachart Securities Public Company Limited and Thanachart Fund Management Company Limited reported a net profit of THB 561 million and THB 290 million respectively. On behalf of the Board of Directors, we extend our heartfelt gratitude to you, our customers, for your enduring trust and confidence in Thanachart Bank. Thank you also to our staff for your commitment and integrity and, lastly, thank you to all shareholders for your confidence in, and contributions to, the success of our Bank. We are proud of the stability and strength of Thanachart Bank, and are confident that our Bank’s strategies and actions, along with our professional management and adherence to the principles of Good Corporate Governance, will result in the continued growth and prosperity of all of our stakeholders.
Thanachart Bank Public Company Limited
013
Board of directors thanachart bank public company limited
1. Mr. Banterng Tantivit
Chairman
2. Mr. Suphadej Poonpipat
Vice Chairman, Chairman of the Executive Committee
3. Mr. Somjate Moosirilert
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Annual Report 2014
Director, Member of the Executive Committee, Chief Executive Officer and President
4. Mr. Peter Clifford Bessey
Director, Vice Chairman of the Executive Committee, Deputy Chief Executive Officer
7. Mr. Narong Chivangkur
Independent Director, Chairman of the Nomination and Remuneration Committee
10. Mr. Rod Michael Reynolds
Director, Member of the Nomination and Remuneration 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
Director
11. Mr. Kobsak Duangdee
Independent Director, Chairman of the Audit Committee
Independent Director, Member of the Audit Committee
12. Mr. Alberto Jaramillo
Director
Thanachart Bank Public Company Limited
015
Management Discussion and Analysis
Economics Outlook and Competition in Banking Industry In the first half of 2014, Thai economy faced unfavorable impacts from global economic slowdown, domestic political uncertainty, high household debt, and budget disbursement of government sector. However, Thai economy in the second half of the year was on an improving trend from more investments and consumption in private sector, despite the idleness in export. As a result, Thai economy in 2014 slightly grew by 0.70 percent, decreased from 2.90 percent in 2013. Private consumption grew by 0.30 percent while private investment declined by 1.90 percent, due to a delay investment as investors waited for more certainty in political situations. Exports also declined by 0.30 percent as trade value of agricultural products regressed from weak signal of economic recovery in trade partners. Headline inflation was at 1.89 percent, slowed down from the past year, as the retail oil price in Thailand has been declining following the crude oil price in the global market. Core inflation was at 1.59 percent. With reference to high volatility in key economic drivers, the Monetary Policy Committee resolved to reduce a policy interest rate by 0.25 percent, from 2.25 percent to 2.00 percent during the first quarter of 2014, and thereafter maintain at 2.00 percent to promote the recovery of Thai economy. Loans in the commercial banking system grew at a slower rate in 2014 comparing to last year. Diminished growth was present to corporate and consumer loans. This was a direct impact of slow growth of Thai economy, political uncertainty, high household debts, and stricter credit policies implemented by commercial banks. Competition in deposits in 2014, however, subsided due to a slowdown in loan growth in the first half of the year. In the second half, deposit acquisition had become more intensified in response to loan growth recovery.
Major events in 2014 • Thanachart Bank Public Company Limited (“TBANK” or “the Bank”) sold Siam City Life Insurance Public Company Limited (“SCILIFE”) to Thanachart Capital Public Company Limited (“TCAP”) and MBK Public Company Limited (“MBK”) in an amount of THB 900 million, as approved by the Bank of Thailand (“BOT”). TCAP and MBK paid for and received ordinary shares of SCILIFE on 2 June 2014. • On 19 June 2014, the Bank issued subordinated instruments to be counted as the Bank’s Tier II capital, in accordance with the Basel III criteria, No. 1/2014, matured in 2024, with redemption right, amounting THB 13,000 million, offered at a fixed-rate of 6.00 percent per annum. The instruments were rated “A” by TRIS Rating and could be counted entirely as the Bank’s Tier II capital, according to the BOT’s requirement, that the Bank’s capital funds were strengthened. The Bank was the first bank in Thailand that could successfully issue and offer for sale subordinated instruments under the Basel III guideline. This instrument reinforces the financial stability and prepares the Bank for a strong future expansion.
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 Fund Management Company Limited 016
Annual Report 2014
Thanachart Broker Company Limited Thanachart Group Leasing Company Limited Thanachart Management and Services Company Limited Thanachart Training and Development Company Limited TS Asset Management Company Limited Siam City Life Assurance Public Company Limited (divested during the year) 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 2013 and 2014 based on financial statements) (Unit: THB Million)
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 (THB) Weighted average number of ordinary shares (million shares)
2014
2013(3)
Variance Increase/ (Decrease)
Percentage
52,445 24,884 27,561 5,927 5,823 19,515
53,879 27,290 26,589 6,115 6,262 20,408
(1,434) (2,406) 972 (188) (439) (893)
(2.66) (8.82) 3.66 (3.07) (7.01) (4.38)
19,796 7,122 12,674 2,479 10,195 0 10,195 9,922 273 1.80
18,558 6,117 12,441 2,478 9,963 354 10,317 10,101 216 1.83
1,238 1,005 233 1 232 (354) (122) (179) 57
6.67 16.43 1.87 0.04 2.33 (100.00) (1.19) (1.78) 26.39
5,513.66
5,513.66
Remark: (1) Operating income deducted by underwriting expenses (2) Excluding underwriting expenses (3) Excluding extraordinary items
Thanachart Bank Public Company Limited
017
During the second quarter of 2013 the Bank has sold Thanachart Life Assurance Public Company Limited to Prudential Life Insurance (Thailand) Public Company Limited and realized THB 12,216 million gains on sale. Also, the Bank has set aside THB 5,380 million in special provision. These 2 activities which occurred in the 2nd quarter of 2013 are considered key extraordinary items, and therefore, will be excluded in the operating results of 2013 for a fair and true comparison to the operating results of 2014. The Bank and its subsidiaries generated a net profit in 2014 of THB 10,195 million. A portion of THB 9,922 million was of the Bank, decreased by THB 179 million or 1.77 percent comparing to the previous. Changes in key drivers of the business were as follows: • Interest spread increased to 2.68 percent from 2.62 percent in the previous year. Yield on earning asset was at 5.57 percent, decreased from 5.79 percent as a result of policy interest rate was reduced from 2.25 percent to 2.00 percent during the first quarter of 2014. Cost of fund was at 2.89 percent, decreased from 3.17 percent as a result of efficient cost and liquidity management that aimed to enhance loan growth and competitiveness. The decrease in cost of fund was also partly because of policy rate adjustments as previously mentioned. • Non-interest revenue (excluding extraordinary items) decreased by 7.71 percent as a result of decrease in securities brokerage fee, share of profit from investments in associated companies, and dividends income. Noninterest revenue gained from ordinary transactions was on an improving trend as the non-interest income ratio was at 29.89 percent. The ratio of non-interest income to average asset was at 1.17 percent, considered to mitigate impact of interest spread.
018
Annual Report 2014
• Control and management of operating expenses: With effective cost management policy, other operating expenses decreased by THB 894 million or 4.38 percent from the previous year to THB 19,515 million. Cost to income ratio in 2014 was at 49.64 percent, decreased from 51.90 percent and the ratio of operating expense to average asset was at 1.94 percent. • Credit cost in 2014 was at 0.94 percent, increased from end of the previous year by 0.77 percent due to loss on sales incurred by less demand in the used-car market and non-performing assets management process. As of 31 December 2014, non-performing assets of the Bank and its subsidiaries totaled THB 32,761 million, decreased from the previous year of THB 36,377 million on account of effective NPL management, despite the economic slowdown and rise of non-performing loan in the industry. The Bank and its subsidiaries formulated a systematic and effective NPL management plan that brought the ratio of NPL to total loan down to 4.09 percent from 4.36 percent at the end of the previous year. • Capital adequacy: the Bank’s total capital, in accordance with the Basel III guidelines as of 31 December 2014, amounted to THB 114,636 million, comprised of Tier I capital (Common Equity Tier I and Additional Tier I) of THB 77,510 million and Tier II capital of THB 37,126 million. Capital adequacy ratio was 15.83 percent, consisted of Tier I capital of 10.70 percent and Tier II capital of 5.13 percent, against 14.80 percent as of the end of 2013. In 2014, the Bank redeemed subordinated debentures of THB 17,000 million and reissued a new lot of subordinated instruments of THB 13,000 million at a rate of 6.00 percent per annum for 10.5-year maturity.
Net interest income (Unit: THB Million)
Net Interest Income
Interest Income Interbank and Money Market Items Investments for trading Investments for debts securities Loans Hire Purchase and Financial Leases Interest Expenses Deposits Interbank and Money Market Items Fund Contributed to FIDF and DPA Debts Issued Borrowing Fee Net Interest Income
2014
2013
Change
Change percentage
52,445
53,879
(1,434)
(2.66)
1,894 238 4,106 20,320 25,887
1,870 457 3,861 21,239 26,452
24 (219) 245 (919) (565)
1.28 (47.92) 6.35 (4.33) (2.14)
24,884
27,290
(2,406)
(8.82)
16,224 1,092 3,556 4,003 9
17,862 1,519 3,598 4,302 9
(1,638) (427) (42) (229) -
(9.17) (28.11) (1.17) (6.95) -
27,561
26,589
972
3.66
In 2014, the Bank and its subsidiaries had a net interest income of THB 27,561 million, increased by THB 972 million or 3.66 percent comparing to the previous year. Total interest income was of THB 52,445 million, decreased by THB 1,434 million or 2.66 percent. Interest expense was THB 24,884 million, decrease by THB 2,406 million or 8.82 percent. These caused the interest spread of 2014 to increase to 2.68 percent from the previous year of 2.62 percent.
Thanachart Bank Public Company Limited
019
Non-interest Income (Unit: THB Million)
Non-interest Income
2014
2013**
Change
Change percentage
Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments Share of Profit from Investments in Associated Companies Accounted for under Equity Method Gains on Properties Foreclose and Other Assets Net Insurance Premium/Life Insurance Premium Income Dividend Income Other Income***
5,927 859 769
6,115 531 865
(188) 328 (96)
(3.07) 61.77 (11.10)
151 240
415 79
(264) 161
(63.61) 203.80
2,091 305 1,408
2,282 562 1,882
(191) (257) (474)
(8.37) (45.73) (25.19)
Other Operating Income
5,823
6,616
(793)
(11.99)
11,750
12,731
(981)
(7.71)
Non-interest Income
* Excluding Thanachart Life Assurance ** Excluding gain from selling Thanachart Life Assurance *** Including profit from the discontinued business in 2013 of THB 354 million
Non-interest income comprised net fees and service income, net underwriting income, and other operating income, totaling THB 11,750 million, decreased from the previous year by THB 981 million or 7.71 percent. Non-interest income ratio in 2014 was at 29.89 percent. The ratio of Non-interest income to average asset was 1.17 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 5,927 million, decreased by THB 188 million or 3.07 percent due to less securities brokerage fee as trading volume shrank, in line with the down trend of securities market in the first half of 2014. Total fee and service income was THB 8,693 million, decreased by THB 100 million or 1.14 percent, whereas total fee and service expense was THB 2,766 million, increased by THB 88 million or 3.29 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 2014, other operating income totaled THB 5,823 million, decreased from the previous year by THB 793 million or 11.99 percent mainly due to a decrease of THB 257 million or 45.73 percent in dividend income as the Bank received dividend income in 2013 from Vayupak fund matured in the previous year, and a decrease in shares of profit from investments in associated companies of THB 264 million or 63.61 percent on account of the realized gain on extra income from associated companies and other incomes decreasing by THB 474 million or 25.19 percent as a result of profit from discontinued business in 2013 (from disposal of investment in Thanachart Insurance Plc.) 020
Annual Report 2014
Other Operating Expense (Unit: THB Million)
2014
2013
Change
Change percentage
Personnel Expenses Premises and Equipment Expenses Taxes and Duties Directors’ Remuneration Other Expenses
10,780 2,928 849 43 4,915
10,466 3,013 889 38 6,003
314 (85) (40) 5 (1,088)
3.00 (2.82) (4.50) 13.16 (18.12)
Total Other Operating Expenses
19,515
20,409
(894)
(4.38)
Other Operating Expenses
In 2014, other operating expense totaled THB 19,515 million, decreased by THB 894 million or 4.38 percent from the previous year, mainly due to a drop in sales promotion and marketing expense as business volume contracted as well as a success in continuous and effective cost management under the Bank’s policy. As a result, cost to Income ratio decreased to 49.64 percent from the previous year at 51.90 percent. The ratio of operating expense to average asset into consideration was at 1.94 percent, decreased from 2.00 percent in the previous year.
Impairment Loss on Loans and Debt Securities
Under the condition of economic slowdown and sluggish used car market in 2014, the Bank focused on NPL management, which caused expense of doubtful debt and doubtful of loss to increase by THB 1,005 million to THB 7,122 million. Credit cost in 2014 was at 0.94 percent, increased by 0.77 percent from the previous year partly due to an impact from loss on sales as there was less demand in the used-car market.
Financial Position of the Bank and Its Subsidiaries’ (Unit: THB Million)
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
31 December 2014
31 December 2013
16,605 65,433 149,609 755,150 6,507 7,934 17,951 (10,299) 1,008,890
Variance Increase/ (Decrease)
Percentage
17,940 69,697 138,825
(1,335) (4,264) 10,784
(7.44) (6.12) 7.77
791,026 6,291 8,037 17,951 (11,418) 1,038,349
(35,876) 216 (103) 0 1,119 (29,459)
(4.54) 3.43 (1.28) 0.00 (9.80) (2.84)
Thanachart Bank Public Company Limited
021
The Bank and its subsidiaries’ total assets, as of 31 December 2014, was THB 1,008,890 million, decreased from end of 2013 by THB 29,459 million or 2.84 percent, mainly attributed to reduction in loan to customers and net interest receivables of THB 35,876 million or 4.54 percent as a result of a contraction in hire purchase business. Nevertheless, the Bank increased its concentration in other types of credit such as corporate loan and housing loan that the ratio of retail to corporate and commercial lending 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
31 December 2014
31 December 2013
696,992 80,270 1,655 90,198 2,800 4,698 26,113 902,726 104,977 1,187 1,008,890
719,079 81,082 3,219 92,229 3,146 15,019 27,335 941,109 96,218 1,022 1,038,349
Variance Increase/ (Decrease)
Percentage
(22,087) (812) (1,564) (2,031) (346) (10,321) (1,222) (38,383) 8,759 165 (29,459)
(3.07) (1.00) (48.59) (2.20) (11.00) (68.72) (4.47) (4.08) 9.10 16.14 (2.84)
Total liabilities of the Bank and its subsidiaries as of 31 December 2014 were THB 902,726 million, decreased from end of 2013 by THB 38,383 million or 4.08 percent, mainly due to the followings: • Deposits of THB 696,992 million, decreased by THB 22,087 million or 3.07 percent from end of 2013 as a result of deposit restructuring and cost of fund management, to be in line with liquidity management strategy. • Net interbank and money market items of THB 80,270 million, decreased by THB 812 million or 1.00 percent as a result of liquidity management. • Debt issued and borrowings of THB 90,198 million, decreased by THB 2,031 million or 2.20 percent due to redemption of subordinated debenture of THB issuance of 17,000 million and reissuance of subordinated instruments of THB 13,000 million. Shareholders’ equity of the Bank and its subsidiaries as of 31 December 2014 totaled THB 104,977 million, increased by THB 8,759 million or 9.10 percent from end of 2013 mainly due to profit from operations in 2014. Whereas, dividend payment was made out of the 2013 net profit at a rate of THB 0.45 per share, amounting to a total dividend payment of THB 2,481 million.
022
Annual Report 2014
Asset Quality The asset quality was considered based on consolidated financial statements.
1. Net loan to customers and accrued interest receivable As of 31 December 2014, the Bank and its subsidiaries’ net loan to customers and accrued interest receivables totaled THB 755,150 million, decreased from the previous year by THB 35,876 million or 4.54 percent mainly due to a decrease in hire purchase lending, in line with the contracting hire purchase market. Hire purchase loan outstanding dropped by 9.27 percent, while corporate and commercial loan and housing loan increased by 2.66 percent as a result of higher volume in other types of credit as seen in the ratio of retail to corporate and commercial lending was 69 : 31 as well as NPL management. During the year 2014, the Bank and its subsidiaries had made debt restructuring agreements with 3,825 debtors using various approaches such as amending terms and conditions of repayment, transferring assets and/or shares and/or amending terms of repayment, of which outstanding before restructuring was approximately THB 6,752 million. By the end of 2014, 32,848 debtors joined the debt restructuring program, out of the Bank’s total debtors of 1,814,792, of which their principal and accrued interest receivable amounted to THB 23,220 million.
Loan diversification At the end of 2014, hire purchase loans accounted for 52.94 percent, followed by corporate and commercial loans of 30.92 percent, housing loans of 11.55 percent, and others of 4.58 percent.
Loan Breakdown 31 December 2014
31 December 2013
4.58%
4.80%
11.55%
10.74% 30.92%
52.94%
Hire Purchase Housing Loans Others Corporate & Commercial Loans
28.77%
55.69%
Hire Purchase Housing Loans Others Corporate & Commercial Loans
Thanachart Bank Public Company Limited
023
2. Loans to customers classified in accordance with the BOT’s regulation of the Bank and its financial institution subsidiary As of 31 December 2014, the Bank and its subsidiaries that are financial institutions had an amount of loan to customers and accrued interest receivables classified in accordance with the BOT’s guidelines of THB 722,911 million, decreased from the previous year by THB 36,852 million or 4.85 percent. Allowance for doubtful accounts recorded as of 31 December 2014, was of THB 25,704 million and total allowance for doubtful accounts to total loans and accrued interest receivable was 3.56 percent.
Borrowers classified by the BOT’s regulations (Unit: THB Million)
Loans to customers and accrued interest receivables
Debt balance(1)
Allowance for doubtful accounts
31 December 2014
31 December 2013
31 December 2014
31 December 2013
Normal Special mentioned Substandard Doubtful Doubtful of loss
657,326 34,484 5,722 4,124 21,255
689,679 34,903 6,133 9,324 19,724
5,832 4,342 2,392 1,703 11,141
7,163 4,217 2,705 5,125 9,022
Total
722,911
759,763
25,410
28,232
Additional allowance for doubtful accounts
294
8
Total allowance for doubtful accounts
25,704
28,240
3.56
3.72
Ratio of total allowance for doubtful accounts to loans to customers and accrued interest receivables (percent) Note:
(1)
Debt balance/book value of normal and special mentioned accounts excluded accrued interest receivables.
3. Non-performing Loans To cope with sluggish market condition and economic slowdown, as well as the rising trend of NPL in the industry, the Bank and its subsidiaries systematically and efficiently constructed NPL management plan and could reduce NPL to THB 32,761 million, by THB 3,616 million or 9.94 percent from end of the previous year. The Bank’s NPL ratio was at 2.97 percent, a decrease from 3.07 percent due to a management effort amidst decrease in loan volume. The Bank and its subsidiaries’ NPL ratio were at 4.09 percent, a decrease from 4.36 percent last year. Coverage ratio of the Bank as of the end of December 2014 was at 90.64 percent, an increase from 89.18 percent as at the end of December 2013. Excess to required reserve was in the amount of THB 5,657 million, reserve to required reserve was 138.16 percent similar to 138.38 percent last year.
024
Annual Report 2014
Coverage ratio of the Bank and its subsidiaries as of the end of December 2014 was at 85.52 percent, an increase from 83.36 percent as at the end of December 2013. Excess to required reserve was in the amount of THB 7,012 million, reserve to required reserve was 133.38 percent, an increase from 127.87 percent as at the end of December 2013.
Non-performing Loans TBANK
NPL-gross Total Allowance* NPL-gross to Total Loans NPL-net to Total Loans Reserve to Required Reserve Coverage Ratio
(THB Million) (THB Million) (Percentage) (Percentage) (Percentage) (Percentage)
TBANK Consolidated
31 December 2014
31 December 2013
31 December 2014
31 December 2013
22,595 20,480 2.97 1.59 138.16 90.64
24,394 21,755 3.07 1.66 138.38 89.18
32,761 28,017 4.09 2.07 133.38 85.52
36,377 30,323 4.36 2.25 127.87 83.36
* Including revaluation allowance for debt restructuring
NPL (MB) and NPL Ratio (%)
Coverage Ratio (%)
Bank Only
Bank Only 90.64% 25,552
25,329 24,394
3.25%
89.18%
3.22%
3.24%
2Q14
3Q14
3.07%
4Q13
1Q14 NPL
NPL ratio
87.47%
87.12%
24,793
85.69% 22,595 2.97% 4Q14
4Q13
1Q14
2Q14
3Q14
4Q14
Coverage ratio
Thanachart Bank Public Company Limited
025
NPL (MB) and NPL Ratio (%)
Coverage Ratio (%)
Bank and Its Subsidiaries 36,377
Bank and Its Subsidiaries 85.52%
37,290
37.210 4.55%
36,371
83.36%
4.53%
4.48%
4.36%
82.54%
82.19%
82.32%
1Q14
2Q14
3Q14
32,761 4.09%
4Q13
1Q14
2Q14 NPL
3Q14
4Q14
4Q13
NPL ratio
4Q14
Coverage ratio
4. Investment in securities In 2014, the Bank and its subsidiaries had a total amount of investment in securities of THB 149,609 million. A major portion of approximately 57.48 percent was in government and state enterprises securities, followed by 29.82 percent in corporate debt securities. After adding (deducting) allowance for change in values and impairment, net investment increased from 2013 of THB 138,825 million. Details of 2014 securities investment were as follows: Securities Investment classified by types of instruments (Unit: THB million)
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 026
Annual Report 2014
31 December 2014
Percent
31 December 2013
Percent
5,978 67,685 10,983
4.06 45.96 7.46
5,150 71,398 10,986
3.73 51.64 7.95
2 43,598 311
0.00 29.60 0.21
5,266 25,480 352
3.81 18.43 0.25
0 11,766 0
0.00 7.99 0.00
0 14,691 0
0.00 10.63 0.00
198 2,850
0.13 1.94
17 987
0.01 0.71
1 3,895 147,267 2,423 (81)
0.00 2.64 100.00
2 3,925 138,254 594 (23)
0.00 2.84 100.00
149,609
138,825
Liquidity At the end of 2014, the Bank and its subsidiaries had a net cash flow from financing activities of THB 16,158 million, used in investing activities of THB 8,689 million, and used in operating activities of THB 8,803 million, attributed to a net decrease in cash of THB 1,335 million. At the end of 2014, the Bank had an amount of THB 16,605 million in cash and cash equivalents. Key items consisted of the followings: - Cash flows from financing activities were largely on account of deposits decrease of THB 22,088 million offset by loans contraction of THB 18,107 million. - Cash flows used in investing activities were largely on account of more investments in securities of THB 13,326 million. Cash flows increased as a result of cash receipt from dividend gained from investment of 4,400 million. - Cash flows used in operating activities were spent on repayment of borrowing of THB 98,627 million and cash received from borrowings was of THB 96,596 million. (Unit: THB million)
Major changes items
2014
2013
Net cash flows from (used in) financing activities Net cash flows from (used in) investing activities Net cash flows from (used in) operating activities
16,158 (8,689) (8,803)
(9,526) 4,495 7,790
Net increase (decrease) in cash Cash at beginning of the year
(1,335) 17,940
2,759 15,181
Cash at end of the year
16,605
17,940
Relations between sources and uses of funds In 2014, the Bank and its subsidiaries’ sources of fund from deposits and borrowings was of THB 696,992 million and THB 90,198 million, respectively. Use of fund in giving credits was THB 754,370 million and investments before adjustment was of THB 147,267 million. List of sources and uses of major fund by remaining tenor to 31 December 2014, the record date of the financial statement, are as follows: Type
At call
Less than 1 year
Over 1 year
Unspecified
Total
THB Million Percent THB Million Percent THB Million Percent THB Million Percent THB Million Percent
Sources of fund Deposits 249,440 Borrowing 1,052
31.69 0.13
413,679 36,717
52.55 4.67
33,873 45,299
4.30 5.76
0 7,130
0.00 0.90
696,992 90,198
Total sources of fund 250,492
31.82 450,396
57.22
79,172
10.06
7,130
0.90
787,190 100.00
88.54 11.46
Uses of fund 58,105 Loans(1) Investment 1
6.45 0.00
228,452 37,281
25.34 467,813 4.13 103,098
51.88 11.44
0 6,887
0.00 0.76
754,370 147,267
Total uses of fund
6.45 265,733
29.47 570,911
63.32
6,887
0.76
901,637 100.00
Note:
(1)
58,106
83.67 16.33
Loan at call includes stop-accrued loans Thanachart Bank Public Company Limited
027
From the breakdown of sources and uses of fund by remaining tenor of the financial instruments as of 31 December 2014, sources of funds consisted of a major portion of deposits reaching maturity in less than 1 year of 52.55 percent and deposits at call of 31.69 percent of total sources of fund. Whereas the uses of fund consisted of a major portion of loans with remaining tenors of over 1 year of 51.88 percent and loans with remaining tenors of less than 1 year of 31.79 percent of total uses of fund. However, this incongruence between the sources and uses of fund was commonly found in the industry of commercial banks and financial institutions as most depositors tend to keep the matured cash deposited after the due date. Furthermore, the Bank had formulated policies to minimize such discrepancy between the sources and uses of fund using financial instruments to efficiently manage risk that the Bank would receive warning signals in advance in case of the possible impact on the sources and uses of fund. Commitments and Contingent Liabilities As of 31December 2014, the Bank and its subsidiaries’ total commitments and contingent liabilities totaled THB 56,681 million, increased by THB 9 million (0.02 percent) from THB 56,672 million at the end of December 2013. The rise was largely on account of an increase in letter of credits as shown in the table below. (Unit: THB Million)
31 December 2014
31 December 2013
Variance Variance Increase/ Percentage (Decrease)
Aval to bills Liability under unmatured import bills Letter of credits Other obligations Committed (but not draw) overdraft Others
256 509 4,796
665 646 4,067
(409) (137) 729
(61.50) (21.21) 17.92
28,170 22,950
27,984 23,310
186 (360)
0.66 (1.54)
Total
56,681
56,672
9
0.02
Capital Adequacy As of 31 December 2014, the Bank’s capital funds totaled THB 114,636 million, of which an amount of THB 77,510 million was Tier I capital and THB 37,126 million was Tier II capital. The capital adequacy ratio was at 15.83 percent, increased from 14.80 percent at end of 2013, comprising of 10.70 percent of Tier I capital and 5.13 percent of the Tier II capital. An increase in total capital funds was due to an inclusion of profit gained from operating result in the first 6 months of 2014, while the capital funds status was also affected by dividend payment in April 2014. However, the capital adequacy ratio was well over the minimum requirement of BOT of not below 8.50 percent. Details were as follows:
Capital Adequacy Ratio 31 December 2014 THB million Percent
Tier I Total capital funds
028
Annual Report 2014
77,510 114,636
10.70 15.83
31 December 2013 THB million Percent
70,818 110,683
9.47 14.80
Thanachart Securities Public Company Limited Average daily trading volume of Thanachart Securities in 2014 was THB 3,745 million, a decrease from THB 4,074 million per day in 2013. Market share in this year was 4.51 percent. The decrease in daily trading was in line with the slowdown in overall stock market condition. The trading volume could be divided into 72.38 percent of retails, 15.25 percent of institutions, and 12.37 percent of foreign investors. Net profit for the year 2014 was THB 561 million, a decrease of THB 240 million or 29.95 percent from the previous year. Total income was THB 2,047 million, a decrease of 14.81 percent. Main sources of income comprised of THB 1,574 million in brokerage income, THB 110 million in fees and service income, and THB 187 million in interest income on margin loans. Financial costs and operating expenses were THB 1,354 million, a decrease from the previous year in line with the decrease in business volume and revenue. As of 31 December 2014, Thanachart Securities maintained its liquidity ratio at 64.79 percent, higher than the minimum requirement of 7.00 percent regulated by the Securities and Exchange Commissions.
Thanachart Fund Management Company Limited At the end of 2014, Thanachart Fund Management had asset under management of THB 164,128 million, an increase of THB 29,725 million or 22.12 percent from the end of 2013. The increase was mainly from money market funds and fixed income funds. Assets under management comprised of 83.13 percent mutual fund, 9.69 percent private fund, and 7.18 percent provident fund. At the end of 2014, mutual fund business of the company ranked 8 with market share of 3.58 percent, an increase from the end of 2013, due to an increase in the AUM of fixed income fund. Private fund business ranked 10 with market share of 2.76 percent while provident fund business ranked 13 with market share of 1.40 percent. For operating results of 2014, the company had a net profit of THB 290 million, an increase of THB 5 million or 1.69 percent from the previous year. This was due to an increase in fees and service income of THB 33 million or 4.15 percent.
Thanachart Insurance Public Company Limited
Thanachart Insurance had a net profit of THB 1,047 million in 2014, a decrease of THB 94 million or 9.86 percent from the previous year. The key factors were given to
insurance premium income, which amounted to THB 5,641 million, an increase of THB 61 million or 1.11 percent. This was due to a focus on products that meet the needs of target customers such as 2 plus insurance and personal accident insurance. Moreover, in 2014, the company had income from investment amounting to THB 414 million, an increase of THB 42 million or 11.29 percent from the previous year. Claims THB 2,775 million, an increase of THB 19 million or 0.65 percent while operating expenses were THB 654 million, an increase of THB 41 million or 6.68 percent.
TS Asset Management Company Limited TS AMC has been restructuring debts in accordance with the policy and business plan of Thanachart Group. As of 31 December 2014, the company’s the total assets were THB 7,649 million, a decrease of THB 1,409 million or 15.56 percent from the end of previous year. This was a result of its effective management of non-performing loans and properties foreclosed. For the operating result of the year 2014, its net profit amounted to THB 320 million. Income from debt settlement amounted to THB 558 million and interest expenses were THB 118 million. At the same time, gains on properties foreclosed and other income amounted to THB 144 million while operating expenses and impairment loss of properties foreclosed were THB 164 million and THB 22 million, respectively. The company has restructured 175 loan accounts and had income from debt restructuring of THB 505 million.
Ratchthani Leasing Public Company Limited As of 31 December 2014, Ratchthani Leasing still had a strong financial structure during the economic slowdown. Its total assets amounted to THB 27,864 million, an increase of THB 571 million or 2.09 percent from the end of previous year. The company had hire purchase loans of THB 27,026 million or accounting for 96.99 percent of total assets. Total liabilities and shareholders’ equity were THB 23,985 million and THB 3,879 million, respectively. The company’s net profit for the year 2014 was THB 704 million, a decrease of THB 50 million or 6.65 percent from the previous year. Total income in 2014 was THB 2,754 million, an increase of THB 357 million or 14.88 percent, due to the fact that the company was trying to maintain its hire purchase loans base. Interest expenses were THB 1,072 million, an increase of THB 155 million or 16.86 percent from acquiring more funds to support loan growth in 2014. Provision expenses were THB 432 million, an increase of THB 163 million or 60.66 percent. Part of those provision expenses was additionally provided to protect against the economic slowdown.
Thanachart Bank Public Company Limited
029
Nature of Business Operations
An Overview of the Business Operation Thanachart Bank 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.
030
Annual Report 2014
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. 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 2015, 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 be the best at providing fully integrated solutions to our customers’ complete financial 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. Moreover, under the business partnership, Thanachart Group has adopted the expertise and innovation of Scotiabank in the continuous development and modernization of its own operating systems. CRM Tools for Sales and Service is considered to be a significant tool to increase advisory capacity, and introduce products that match customers’ needs. LEAP for Internet Banking and Mobile Banking is a system that will drive TBANK forward becoming a Digital Bank in order to gain access and respond to the current lifestyles of the customers. LOS (Loan Origination System) is a modern loan approval system. It uplifts the quality of the Bank’s loan approvals to be more accurate and quicker to reduce risks of becoming bad loans by using reliable Credit Scoring to meet and satisfy the customers’ demands. The systems also increase the capacity of customer relationship management that delivers satisfaction and good experiences to customers, as well as more product holdings and revenue boost to the Bank.
Thanachart Bank Public Company Limited
031
Besides, Thanachart Group has communicated its business strategy to employees at all levels so that every employee in every business unit has the same intention in line with the vision and seriously takes actions to accomplish the established strategic goals. In 2015, Thanachart Group has 4 Strategic Intents to meet demands of the customers, in parallel with being the financial group that delivers products and services for every life stage. The intents are as follows: 1. To attract and retain customers by offering excellent services, innovative savings, insurance, and investment products. 2. To ensure our customer succeed financially by helping them choose the right “Protection” services and products from across the entire Thanachart Group. 3. To provide borrowing solutions to all customer segments that meet their current and future needs and help them to become financially better off. 4. To provide digital banking solutions that permit customers to bank where they want, when they want, and how they want. In addition, Thanachart Group came up with the CEO’s Focus Agenda comprising 6 items as a tool to successfully achieve its goal efficiently and systematically. The CEO’s Focus Agenda is as follows: 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.
032
Annual Report 2014
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. For every Strategic Intent, every target, and operations to go on efficiently to drive the organization in the same direction, Thanachart Group has communicated its Business Philosophy comprising 3 items as follows: 1. Belief in our employees: Thanachart Group believes that employees are the most valuable assets. Thanachart Group owes its growth to the contribution of its employees through competence and integrity. 2. Dedicate to excellence: Thanachart Group earnestly focuses on excellence. We are constantly evolving and adapting to the rapid pace of technological change through innovation. 3. Concern for social responsibility: Thanachart Group has a strong sense of responsibility towards the society.
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 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, etc.
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.
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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 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.
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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 Holdings 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.
Chart of Shareholding Structure of Thanachart Group As of December 31, 2014 Thanachart Capital Public Company Limited Scotia Netherlands Holdings B.V. Commercial Banking Business
48.99%
50.96%
Insurance Business
Asset Management Business
53.50% Siam City Life Assurance Public Company Limited
Thanachart Bank Public Company Limited
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% Thanachart Broker Company Limited
100.00% Thanachart Insurance Public Company Limited
Insurance Business
100.00%
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 Holdings B.V., the registered juristic person in Netherlands.
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Income Structures of TBANK and its subsidiaries Income structures of TBANK and its subsidiaries based on the consolidated financial statements as of December 31, 2014, 2013, and 2012 are as follows: Table of income structures of TBANK and its subsidiaries As of December 31 2014 2013 2012 THB Million Percent THB Million Percent THB Million Percent
Interest Income Interbank and money market items Investment for trading Investment for debts securities Loans Hire Purchase and Financial Leases
1,894 238 4,106 20,320 25,887
1,870 457 3,861 21,239 26,452
3.65 2,294 0.89 480 7.55 3,606 41.50 21,200 51.68 21,156
6.73 1.41 10.58 62.23 62.11
Total Interest Income Interest Expenses
52,445 133.41 53,879 24,884 63.30 27,290
105.27 48,736 53.32 25,556
143.06 75.02
Net Interest Income
27,561
70.11 26,589
51.95 23,180
68.04
5,927 859 769
15.08 2.18 1.96
6,115 531 13,081
11.95 1.04 25.55
5,070 664 312
14.88 1.95 0.92
152
0.38
415
0.81
150
0.44
2,091 305 1,647
5.32 0.78 4.19
2,282 562 1,607
4.46 1.10 3.14
2,147 397 2,146
6.30 1.17 6.30
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
4.82 0.60 10.45 51.69 65.85
Total Non-interest Income
11,750
29.89 24,593
48.05 10,886
31.96
Net Operating Income
39,311 100.00 51,182
100.00 34,066
100.00
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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, 2014, TBANK had a total of 617 branches, 51 foreign exchange booths (27 in-branches, and 24 stand-alone), 2,100 ATMs (Automatic Teller Machines), 2 Recycling Machines, 44 CDMs (Cash Deposit Machine), and 122 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, negotiable certificate of deposit, tax free deposit, current deposit, and foreign currency deposit. Competitive Strategies In 2014, 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.
This year TBANK offers Free-Ver Savings account. This product allows customers to withdraw, transfer, and make bill payments free of charge so that transactions are more convenient at ATMs nationwide.
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) Commercial Banking: For Commercial Banking, TBANK concentrates on providing flexible and diverse loans based on the requirements of each customer. Such loans are Top up facilities, which are special loan limits, overdrafts (O/D) to meet working capital requirements, letters of guarantee for enterprises or individual customers wishing to obtain a guarantee limit to secure their performance in favor of public and private entities, etc. Moreover, TBANK offers cash management service as well. 3) SME S Group is a product for small and medium-sized enterprises with the maximum limit of THB 10 million. SME Group focuses on fast approval. Products are mainly offered through TBANK’s channels.
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Competitive Strategies TBANK concentrates on expanding its business to small enterprises with maximum limit of THB 10 million because this customer base requires special financial support from TBANK. At present, TBANK has “SME-S loan” for enterprises with maximum limit of THB 10 million. This product highlights fast approval and meets the demands for working capital or revolving capital. Moreover, TBANK has joined the Thai Credit Guarantee Corporation (“TCG”) in guaranteeing credits to support potential entrepreneurs who face collateral limitations to have more access to loans and enhance their business liquidity. In addition, public relations and sales promotions are held continuously to boost loan volumes and expand the customer base. For Corporate Banking and Commercial Banking, TBANK still keeps its focus on retaining good relationships and offering integrated financial products, e.g. loans, trade finance, and cash management to suit the demands of each customer. 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 038
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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 The domestic auto sales shrank by more than 35 percent from the competition in the market where OEM Captive Finance were playing more roles. The economic situation and household debts directly affected the debt quality. Therefore, financial institutions that operated hire purchase business were required to adjust their operational strategies to maintain their competitiveness and hire purchase operations. In 2014, TBANK launched Hire Purchase End-to-End project, which covered the development of systems and working processes starting from sales, hire purchase product development, pricing strategy, policy and risk control, credit approval, etc. to after-sales service and debt collections. The program allowed adjustments on sales and services, control on operating cost, and debt quality. Moreover, TBANK highlighted nationwide services through relationships with auto dealers and branch services. TBANK also had a policy to promote relationships and participated in sales promotions with car manufacturers with an objective to obtain higher market share in hire purchase and enhance the image of hire purchase leader. 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 focuses on fast, integrated services that cover every need of the customer. Marketing promotions are conducted based on the situation and competition with Retail Banking as a unit responsible for product development, conditions, and interest rates. Target customers are customers looking for houses and those who need multi-purposed loans using their house as collateral. In addition, TBANK provides service channels where personal sales and marketing teams are responsible for the sales target set in the Business Plan. Moreover, new products are advertised through the branch network.
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) FLASH Loan is a multi-purposed loan for general customers who need a certain amount of money. The customers can repay in equal amount by monthly installments during the designated period. The maximum installment period is 60 months with maximum exposure of THB 1 million. 2) Wish-List Loan is an additional multipurposed loans offered to hire purchase customers with good payment record. The customers can repay in equal amount by monthly installments during the designated period. 3) Welfare 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. 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 revolving personal loan in a form of personal loan card under the brand “FLASH Card”. The product highlights convenience and fast cash withdrawals from ATMs worldwide. Customers can choose to pay the minimum amount (3 percent) in each cycle. The product is suitable for customers with short-term financial needs. 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:
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- 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.
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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 High-volume 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 upselling 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, 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.
Factors Influencing Opportunities or Constraints to Business Operations In 2014, Thai economy grew at a slow rate of 0.7 percent as a result of extended political uncertainties during the first 5 months. Consequently, the Thai economy in the first half of the year did not change compared with the same period of the previous year. However, the Thai economy recovered in the second half as it expanded by 1.4 percent. In the 4th quarter of 2014, the economy grew 2.3 percent, a significant improvement from the shrinkage of 0.5 percent in the 1st quarter, and the expansion of 0.4 percent in the 2nd quarter, and 0.6 percent in the 3rd quarter. In the last quarter of 2014, private investments saw continuous recovery despite a low level of 4.1 percent, a slight increase from 3.9 percent in the 3rd quarter. Public spending improved continuously from 0.4 percent in the 3rd quarter to 5.5 percent in the 4th quarter. Private consumption recovered at a slower rate due to the decreased revenue from the agricultural sector as a result of the ongoing declination of agricultural produce prices in the global market. The declination was seen in the prices of rice, palm oil, and rubber, to name a few. The export sector faced structural problems as well as limitations of production technology, resulting in limited competitiveness and reduced ability to meet the changing global demands. Therefore, exports in 2014 shrank by 0.2 percent per year from the previous expansion of 0.1 percent in 2013. A similar situation was reflected in the import sector in the previous year, which saw a shrinkage of 9.5 percent from a previous expansion of 1.4 percent in 2013. The shrinkage was from every structure of the imports, whether from raw materials, capital goods, commodities, etc. Both domestic and international economic stability remained at a healthy level. Unemployment rates were continuously at a low rate. The plummeting global oil prices resulted in decreased inflation rates and ongoing surplus of the balance on current accounts. The capital and finance account faced deficit from the repayment of short-term international borrowings of depository institutions, and the direct overseas investments of Thai investors. Overall, the repayment was almost balanced while the international reserves to short-term borrowings remained stable.
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In terms of overall inflations in 2014, the average inflation rates for the whole year remained low at 1.9 percent and expanded at a more sluggish pace because the domestic fuel price dropped continuously following the global decline. Meanwhile the core inflation surged by 1.59 percent compared with the same period in 2013, which was still under the inflation limits of the Bank of Thailand (“BOT”). However, the Monetary Policy Committee (MPC) of BOT has adjusted the inflation targets from core inflation to headline inflation, starting in 2015. The average movement of headline inflation is targeted at 2.5±1.5 percent. BOT estimated Thailand’s average inflation in 2015 at 1.2 percent, a low level of expansion. At the MPC meeting on 28 January 2015, the Committee voted 5 against 2 to keep the policy interest rate at 2.00 percent per year. 2 voted to reduce the policy interest rate by 0.25 percent per year with a comment that the current monetary policy had relaxation sufficient to the economic recovery. Nevertheless, 2 directors commented that the monetary policy should provide additional support to the economic recovery. As risks from the economy and the global money markets increase, the stimulus from the financial sector would take time to see concrete results. The inflation rates would remain at a substantially low level for a while, resulting in the increase in the actual interest rates. The MPC still agreed on the necessity of the continuously lenient monetary policy to support concrete economic recovery. Thailand’s economic and financial development would be closely monitored. The MPC would further issue appropriate monetary policies. In 2015, the Thai economy is forecasted to see continued recovery with mid-level expansion at 3.5-4.0 percent. The governments delayed disbursement stimulus measures caused the private investment to be behind schedule because most of the business sectors still awaited the clarity of the public investments. However, the 2015 growth forecast shows that the government expenditures are considered a key factor to better drive the economic expansion. The export sector is recovering slowly in line with the global economic trends where the expansion is lower than expected. In addition, the global economy poses greater risks from higher volatility. The tourism industry is expected to gradually improve but at a slower pace than usual. The household consumption of durable goods tends to recover slowly, partly from the decelerated agricultural revenue and high household debts. However, consumption 042
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is still supported by revenue outside the agricultural sector, higher government salary, and decreasing fuel price. Due to uncertain economic conditions, the Bank is conducting plans to closely monitor and review the landscape of the economy and various types of industries. Under supervision are domestic economic recovery, time frame for government’s budget disbursement, public and private investment projects, private expenditures affected by high household debts, and external changes. These changes include the recovery of the US economy, the increase in interest rates expected in 2015, and the easing of special monetary policies of the European Central Bank to solve the deflation and stimulate the economic recovery in the Eurozone. The same method was applied by Japan where special easing monetary measures were used to prevent domestic deflation. The changes are also inclusive of China’s sluggish economic expansion due to the internal revolution. These external factors could affect the economic stability and the local demands, which are the key booster of the economic drive. Such risk factors will directly impact the amount of money in the market, the liquidity of the commercial banking industry, the volatility of exchange rates, and BOT’s adjustment on policy interest rates. ervices. These factors will need to be focused on a continuous basis. 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). As a result, 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 implemented in 2015. There is a business opportunity arisen from the access and the offer of financial transactions to consumers and business owners in the border areas, whether in liquidity management, financial services and financial advisory. In accordance with the Financial Sector Master Plan Phase 3, which will begin in 2015 together with Payment System Roadmap plan in year 2012-2016, financial service system and electronic channel must be ready in order to reduce risks in payment transactions. Furthermore, apart from following up on the progress of the opportunity, financial institution is strengthened by effective cost management, infrastructure development, people development, and innovation in products and services. These factors will need to be focused on a continuous basis.
Industry and Competition Outlook Operating results of commercial banking industry1 in 2014 showed a net profit of THB 223,875 million, a growth of 4.20 percent from 2013. Commercial banks registered in Thailand had a net profit growth of 5.38 percent and 10.29 percent while foreign branches saw a contracted growth at 7.79 percent. The contraction reflected the ability of commercial banks to adapt to the changes arising from the volatile economic and political situations. In 2014, key competitive strategies of large commercial banks registered in Thailand were universal banking and customer centricity, as especially seen in the move forward Digital Banking. The latest technology development is used to enhance the efficiency of customer service and access through Digital Banking offered on internet and mobile platforms for thorough services anywhere, anytime for any demands. An emphasis is also placed on the expansion of the branch network and the currency exchange booths to readily provide services to the general public and businesspeople to accommodate the ASEAN Economic Community (AEC) covering every target area. The expansion is the provinces in the Specialized Economic Zone (SEZ) in particular. Full-service branches or representative offices in ASEAN member countries (Cambodia, Laos, Myanmar, Vietnam: CLMV) are another way to support the business expansion of AEC customers. Total loans of the commercial banking industry at the end of 2014 were THB 12,872,862, an increase of 4.30 percent or equivalent to THB 530,769 million from 2013. The locally registered commercial banks saw a loan growth of 4.94 percent while foreign bank branches saw a decline of 2.04 percent respectively. However, total loans grew slightly as a result of the slow economic recovery, high household debts, commercial banks’ careful expansion of corporate and SME customer bases coupled with strict loan approvals, especially home and car loans. The strictness reflected the ongoing caution of financial institutions.
1 Banking
TBANK Accomplishment in 2014 In 2014, TBANK put emphasis on a well-balanced loan portfolio and diversified loan growth in other products besides hire purchase, e.g. corporate loans, SME loans, housing loans, and retail loans. TBANK has shifted its focus to high yield products through the development of SME-S loans, credit card loans and personal loans. In 2014, TBANK also succeeded in expanding corporate and retail loan portfolios with the intention to increase the fee-based income and revamp its income structure efficiently. The Bank saw the importance and focused on sales and product development in cooperation with the subsidiaries by offering the Bank’s innovative products bundled with those of the subsidiaries, e.g. life insurance, non-life insurance, securities, and mutual funds. Partnership with Prudential has resulted in product innovation, accurate response to customers’ diverse needs, and product improvement by world-class financial institutions. In 2014, the Bank proved its product development capacity to its customers, external entities, and the public with “The Most Innovative Prepaid Program 2014” award from MasterCard. The honorable award reaffirms its leading position of supporting Prepaid card issuance in collaboration with the subsidiaries of all 3 giant mobile network operators (Advanced mPAY, PAYSBUY, and TrueMoney). The award was also an evidence of the Bank’s expertise in issuing Prepaid cards in both virtual forms on applications in smartphones and tablets, and the plastic form to serve the needs of online shoppers and general stores with the most secured service. The Bank continuously develops its infrastructure in order to enhance its operations, e.g. faster processes and improved collections system to control non-performing loans and provisions. Customer Relationship Management is a tool to support the staff in customer service for both retail and corporate customers so that they are offered the right products that are most suitable to their demands. Moreover, under the partnership, Thanachart Group has adopted Scotiabank’s expertise and innovations to develop its systems continuously. Such adoptions include Loan Origination System, a modern loan approval system, to upgrade the quality of all retail loan approvals, e.g. housing
industry means commercial banks registered in Thailand and branches of foreigh bnaks, totaling 30 banks. Thanachart Bank Public Company Limited
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loans, personal loans, credit card loans, and cash cards. This will allow fast and accurate processes, reduction of NPL risks based on reliable Scoring information. These qualities will ensure that the customers’ demands are met and satisfied. The relationship management efficiency will be improved, leading to satisfaction and excellent experiences to the customers, as well as higher product holdings and increased revenue. In 2014, the Bank demonstrated its capacity in technology development to the customers, external entities, and the public in its reception of “ICT Best Practice Awards 2014” from CAT Telecom Plc., Assumption University and ARIP Plc. The award was given for the Bank’s outstanding maintenance of balance in its technology usage. The Bank was able to maintain balance between security and convenience to service users at its maximum capacity, and successfully adopt ICT in its business. Moreover, the Bank recognizes the importance of people, which are the organization’s valuable assets. Therefore, it enhances the knowledge of its staff through local and overseas training sessions, coaching, and leadership development so that they are knowledgeable and competent in their operations with proper leadership. This is to create expertise and job rotation for a faster and more efficient operation. The Bank aims to become a successful leading business organization and create long-term values to its shareholders and stakeholders. To achieve the goals, the Bank is committed to Good Corporate Governance in its operations and stresses business ethics. The Bank continuously announces its policies of corporate governance and code of conducts through e-Learning to set a behavioral guideline that reflects the corporate values. The core objective of this is to enable self-development among employees of all levels and recognition of their own responsibilities with thorough practice of morals and ethics. The directors, executives, and employees of the Bank should be able to adopt the guideline appropriately and adhere to morals, honesty, integrity, and compliance to related laws. The Bank firmly believes that good corporate governance and business codes of conduct are the key factors to the highest success in its businesses, resulting in social confidence and reflection of the Bank’s good image. In 2014, the Bank’s works in corporate governance and business codes of conduct were evident to the customers, external entities and the public as follows: 044
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- In 2014, 11 companies under Thanachart Group received a membership certificate of the Private Sector Collective Action Coalition Against Corruption (CAC). The project originated from a cooperation of 8 significant organizations; the Thai Chamber of Commerce, the Joint Foreign Chambers of Commerce, the Listed Companies Association, the Thai Bankers’ Association, the Federation of the Thai Capital Market Organizations, the Federation of Thai Industries, the Tourism Council, and the Thai Institute of Directors (IOD). - A plaque from the Anti-Money Laundering Office (AMLO) for the Bank’s cooperation in complying with the anti-money laundering laws as the investigation of an irregular transaction led to the prevention of loss to the customers. - An honorary plaque for “Outstanding Achievement in Drug Cases” from the Office of the Narcotics Control Board (ONCB), which displays the potential of the leading bank equipped with innovative products and services that well respond to various needs of the customers with recognition of the financial security and corporate governance. Furthermore, the Bank reminds its executives in every sector to be aware of the internal communication channels so that employees at all levels understand the Bank’s goals. The understanding should be reflected in professional customer service. In the past year, external communication created brand awareness and impression through various channels to gain access to the current customer lifestyles. The channels included Social Media and ongoing CSR activities.
Competitive advantage and competitors TBANK has the competency and capability to sustain its long-term growth as compared with other commercial banks. In 2014, TBANK’s total assets were THB 1,008,890 million, equivalent to 6.02 percent of the commercial banking industry. Asset growth was mainly driven by loan growth. Total loans were THB 754,370 million, equivalent to 5.86 percent. The total loans of the Bank decreased slightly from the previous year due to the hire purchase restructuring. Hire purchase saw a decline of 10 percent while other loan types grew gradually. Corporate loans, housing loans, and credit card loans expanded by 7.7 percent, 2.8 percent, and 2.3 percent respectively. The growth would be beneficial for loan diversification and balance, thus strengthening the Bank’s loan portfolios in the long run. Moreover, in 2014, TBANK’s deposit and borrowing portfolio ended at THB 787,189 million,
due to the expansion in the retail deposit customer base. TBANK’s deposit accounted for 6.55 percent of the locally registered commercial banks. TBANK intended to provide convenience and easy access to financial products and services for its customers. TBANK had a total of 617 branches, including head office, ranked number five of the industry, accounted for 8.89 percent of all commercial banking branches. The Bank has entered Digital Banking by providing electronic financial services through 2,100 ATMs, online banking or “Thanachart i-Net”, telephone banking or Interactive Voice Response (IVR), and by enhancing expertise and capabilities of its employees to be equipped to offer the best financial services to the customers efficiently. Furthermore, under its partnership with Scotiabank, the Bank has planned to adopt and apply innovative technology, financial products, internationally recognized new services, and linkages between the network of Scotiabank’s offices and branches in ASEAN and Asia. The adoption and application will lead to services that cover the ASEAN Economic Community and enhance the competitiveness in order to create sustainable superiority to competitors.
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. Characteristics TNS operates two key areas of business, brokerage business and investment banking and advisory business. As of December 31, 2014, the company had a total of 38 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 began providing a brokerage service for offshore securities in 2009. In addition, the Company plans to provide investment opportunities to individual, juristic and institutional investors, granting them various investment options and efficient risk diversification. The Company provides Direct Market Access (DMA) for almost worldwide securities trading as follows: Asia: Australia, Hong Kong, Singapore, Malaysia, Japan, the Philippines, Indonesia, South Korea, Taiwan, and China. The service was expanded into Vietnam in 2014. America: United States of America, Canada. Europe: Netherlands, Belgium, Portugal, France, German, England, Italy, Denmark, Finland, Sweden, Norway, Spain, Switzerland, Poland, Austria and Czech Republic. 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).
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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. 2014 was a challenging year for the overall market in terms of both sales volumes and the SET Index. The first half of 2014 was pressured by both internal and external factors. External factors were an ongoing effect from late 2013 where investors were concerned about capital outflow from the emerging markets, especially Asia, back to the United States of America (“the US”). However, such concerns were subdued because the US had gradually implemented its measures. Thus, the emerging markets were not as affected as investors’ concerns. The emerging markets were able to maintain their stability in the first half of the year. Most investors were still of view that the emerging markets already hit their lowest point in the beginning of the year, but faced volatility in the second half. The important additional factor was the significant and continuous increase of oil prices affecting Russia, which was one of the world’s largest oil exporters. The Russian currency depreciated substantially. The plummeting oil prices caused negative impact to the Thai bourse which had considerable weight of the Energy Group. The SET Index experienced a huge drop due to the selling of energy stocks at the end of the year. Internal factors that most affected transactions in the capital market were the political tensions arising from anti-government protests by political groups that had been going on since late 2013. This caused investors to delay their securities trading until the National Council for Peace and Order (“NCPO”) took control of the situation in May and brought political certainty. The positive impact was the regained confidence among investors. Then NCPO established a caretaker government in August and announced policies that would help stimulate the economy. The policies included a remedial policy for farmers and infrastructure investments, positively boosting purchasing power of institutional investors and securities accounts during the end of the second quarter. Due to internal factors and improving economic recovery, the securities market received positive
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outcome continuously in the third and fourth quarters. The political stability, ongoing economic stimulus packages, and the government’s investments helped strengthen investors’ confidence. SET’s market capitalization increased by 20.94 percent at THB 13.86 trillion from the end of 2013, similar to MAI, which increased by 215 percent at THB 383,075 million. In terms of fundraising, total funds raised in both primary and secondary markets were THB 276,538 million, down from 2013 by 18.87 percent. Total funds raised can be divided into funds from the primary market of THB 131,131 million and from the secondary market of THB 145,047 million. The funds were from 36 listed companies, 9 property and trust funds. The SET Index closed at 1,497.67 points at the end of the year, increased by 15.2 percent from 2013 at 1,298.71 points by 198.96 points. Average daily trading values were THB 45,466 million, down from 2013 by 9.66 percent. TNS ranked 6 from 33 securities companies and market share accounted for 4.51 percent. In 2014, there was an aggressive competition especially in retail investor due to three new emerging securities business namely AEC Securities (AEC), Apple Wealth Securities (Apple Wealth), and LH Securities (LHSEC). Securities companies competed for Investment Consultants to expand customer bases. Foreign securities companies were able to cap higher market shares. Business cooperation in various forms was still seen among banks and their securities affiliates. 2. There are a total of 42 members in the Thailand Future Exchange (TFEX). In 2014, total trading volume was 36,021,150 contracts, or a daily average of 147,025 contracts, an increase of 116 percent from a daily average of 68,017 contracts in 2013. The key contributing factor was from Single Stock Futures (54 percent), SET50 Index Futures (40 percent), Gold Futures (4 percent), and USD Futures (2 percent) respectively. TFEX saw an all-time high trading volume at 864,479 contracts in December 2014. At the end of 2014, the total investors’ accounts were 100,650, an increase of 15 percent from the accounts in 2013. Thanachart Securities’ market share was 2.40 percent, or the 17th among all TFEX members.
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 Thanachart Fund Management Company Limit (“TFUND”) operates in a business of fund for investment including fund management, private fund, provident fund, and investment advisory business. Characteristics 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. Competition and Market Outlook At the end of December 2014, there were a total of 21 fund management companies, with total assets under management of THB 3,368,609.66 million (excluding Vayupak Fund, Foreign Funds, Property Fund for Resolving Financial Institution Problem and Property and Loan Fund), an increase of 25.98 percent from 2013. During 2014, there were 888 newly issued funds, accounting for THB 1,813,637.19 million of net assets. Among the newly issued funds, 697 were debt securities with both domestic and foreign investments, which accounted for THB 1,678,997.59 million of net assets or 92.58 percent of total net assets of the newly issued funds during 2014. Newly issued funds by the TFUND in 2014, 96.17 percent were debt securities in accordance with the mutual fund industry.
As of December 30, 2014, TFUND had THB 164,128.42 million assets under management from which retail mutual funds accounted for THB 136,443.05 million, private funds accounted for THB 15,905.18 million, and provident funds accounted for THB 11,780.19 million.
Insurance Business 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 During January – September 2014, the Thai non-life insurance business saw less growth in direct premiums compared with the same period of 2013 at -0.06 percent. Total direct premiums are THB 149,274 million. The non-life insurance market structure during January – September 2014 showed that the automobile insurance dominated up to 59 percent of the total market value, followed by the miscellaneous insurance with the market share of 33 percent. Fire and marine insurance gained market shares of 5 percent and 3 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.
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Customers with sum insured of over THB 5 million are private organizations that operate many areas of business, both commercial and industrial. Key products offered to this group of customers are miscellaneous and fire insurance. Based on the characteristics of the aforementioned customer base, it can be concluded that since TNI began its nonlife insurance business, it has not relied solely on a single customer by more than 30 percent of TNI’s total revenue. Moreover, TNI provides insurance services to domestic customers only. Based on the Thai General Insurance Association’s 2015 direct premium forecast, the Thai non-life insurance industry is expected to grow at 12 percent in 2015 with total premiums of THB 236,823 million.
Assets Management Business Characteristics 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 nonperforming 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 nonperforming 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 each company and the other channels to reach the target customers as much as possible.
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Leasing Business Characteristics
Ratchthani Leasing Public Company Limited (“THANI”) operates high purchase business and financial leasing. THANI focuses on both new and used car markets, especially commercial cars such as pickups, taxis, tail trailers and large trucks, and personal cars. Moreover, the company also offers credit for both new and used cars at 60 percent and 40 percent of the total credit respectively, and credit for trucks and other car types at 75 percent and 25 percent respectively. Compared with providing credit for new cars, used car credit is exposed to greater risk. Therefore, the company must consider many aspects of risk factors in granting credit approval. Such factors are car conditions, used car price in the market, evidence investigation and car registration. Consequently, the company needs experienced team to survey the conditions and prices of the used car market. Moreover, the company also provides after-sale services, e.g. annual renewal of the motor-vehicle tax, insurance policy renewal, and car check-up to renew the motor-vehicle tax. This will not only provide a convenience to the customers, but also generates income to the company. In addition, this approach is beneficial to the company as it protects the customers’ properties. Competition and Market Outlook In 2014, the global economy was constantly volatile. Although the economy of the US had relaxed inflation and the economic trends improved, the economy in Europe, Japan, and China was still sluggish. The same situation also applied to Thailand where the slow economy was caused by internal factors in 2014, resulting in the overall fierce competition of the domestic leasing and hire purchase industry by financial institutions such as commercial banks. Leasing and hire purchase of car manufacturers and dealers, which focused
on credit for new personal cars, were adjusted and expanded to used car market, both personal and commercial in order to retain growth and market shares. However, the company still had a plan to retain its commercial portfolio, which was its expertise, especially trucks, both new and used trucks in accordance with the company’s business strategy. This was to accommodate the fierce competition in the market. The company still maintained the target of 70-75 percent of the company’s hire purchase portfolio because this customer group was expected to grow continuously and generate higher profitability with lower risk than personal cars. This would allow the company to avoid the competition with large financial institutions with lower cost of fund and to increase business opportunities. With high experiences, business expertise, fast services, combined with relationship retention and high yield to used car dealers, the company was able to compete and maintain its market share under the intense competition at present.
Products and Services Management Sources of fund
1. Deposits as at the end of 2014 were in the amount of THB 696,992 million. 2. Borrowings were in the amount of THB 90,198 million, of which THB 7,130 million were hybrid tier 1, THB 36,516 million were tier 2 subordinated debentures, THB 15,271 million were non-subordinated debentures, THB 30,180 million were short-term debentures, THB 1,052 million were promissory notes, and THB 49 million were others.
Funding or lending to related parties TBANK extended loans to large companies, subsidiaries, and related companies in Thanachart Group. At the end of 2014, it extended loans to TS AMC for non-performing asset management business, in line with the business policy of Thanachart Group. In 2014, loan outstanding balance was THB 2,902 million, decreased from THB 4,555 million at the end of 2013. The aforementioned loan outstanding balance accounted for 0.41 percent of total loans at the end of 2014. All lending and borrowing transactions were conducted under the permission of the BOT.
The source of TBANK’s and its subsidiaries’ fund comprises of issued and paid-up capital, whereby in 2014, 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:
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Risk Factors
An overview of the Risk Management In 2014, Thai economy was faced with various risk factors such as global economic slowdown, domestic political uncertainty, high household debt, budget disbursement issues of government sector. These resulted in a slower growth rate comparing to 2013. Concerning the above mentioned factors, commercial banks have become more cautious in running the business tightening their underwriting policy. In addition, more and more of large corporate are interested in raising fund through debenture issuance. These had caused loan outstanding of commercial banks in 2014 to grow slower comparing to the previous year, in corporate lending as well as personal consumption, while competition for deposits tended to cool down, in line with the decline in the loan side. In 2015, although Thai economy tended to start recovering having the government sector’s budget disbursement and investment as key drivers, the overall remains fragile that the Bank and its subsidiaries need to closely monitor the risks in various areas, including market risk, credit risk, liquidity risk, for example. The Bank and its subsidiaries realize the importance of continuous risk management that the Internal Capital Adequacy Assessment Process (ICCAP) was employed to manage risks in compliance with the Bank of Thailand (“BOT”)’s capital supervisory measures of Basel III framework. This allows the Bank and its subsidiaries to efficiently manage the capital and have a strong capital status to firmly support the business growth. Nevertheless, the directors and executives of the Bank remain active in monitoring and developing the risk management system regularly to ensure that the measures are updated and responding to the changing internal and external risk factors. The Bank established an organization structure to enhance the risk management in accordance with the policy outline through various committees’ supervisions as follows:
The Board and Committees of the Policy Making Level: Board of Directors and the Executive Committee play crucial role in formulating policies and establishing guidelines
for an efficient enterprise-wide risk management, which align with the Bank’s operation, by taking into consideration the impact of risks on the Bank’s operational targets and financial position.
Risk Management Committee is responsible for 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.
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.
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The Committees of the Operational Level: Asset and Liability Management Committee has a role in supervising the structure of the Bank’s assets and liabilities to be in line with characteristic of the business as well as 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, 2014 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
Asset and Liability Management Committee
Investment Portfolio Committee
Credit Risk Management 2
Risk Control
Credit Committee
Deputy Chief Executive Officer 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
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.
1. Credit Risk
Important credit risk factors
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.
1.1 Credit concentration risk
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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, 2014 and December 31, 2013 classified by business types was as follows: 2014 Business type
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 Total loans and accrued interest receivables
Debt balance (THB Million)
2013 Percent
Debt balance (THB Million)
Percent
12,068 82,429 51,879 67,454
1.60 10.93 6.88 8.94
11,991 80,969 50,638 68,224
1.52 10.25 6.41 8.64
85,664 3,835 399,285 27,742 24,014
11.36 0.51 52.93 3.68 3.17
83,673 3,317 440,097 28,209 22,899
10.59 0.42 55.71 3.57 2.89
754,370
100.00
790,017
100.00
The overall credit data showed that the portion of hire purchase lending granted by the Bank and its subsidiaries decreased from 55.71 percent as of 31 December 2013 to 52.93 percent of total loan outstanding as of 31 December 2014. Most of the hire purchase credits were granted to retail customers, whose credit lines were relatively small and the customers were 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 Bank and subsidiaries that were financial institution
As of December 31, 2014 and December 31, 2013 were as follows: 2014 Loan classification
Debt balance (THB Million)
2013 Percent
Debt balance (THB Million)
Percent
Substandard Doubtful Doubtful of loss
5,720 4,124 21,228
18.41 13.27 68.32
6,131 9,316 19,695
17.45 26.51 56.04
Total
31,072
100.00
35,142
100.00
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The non-performing loans of the Bank and subsidiaries decreased from THB 35,142 million, as of 31 December 2013 to THB 31,072 million as of 31 December 2014. As for the overview, the non-performing loans accounted for 4.12 percent of total loan outstanding, decreased from 4.45 percent as of 31 December 2013. The Non-Performing Loans Classified by Business Types (excluding accrued interest receivables) 2014 Business type
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 Total loans
Debt balance (THB Million)
2013 Percent
Debt balance (THB Million)
Percent
518 8,620 2,230 4,641
1.67 27.74 7.18 14.94
777 10,383 2,736 6,432
2.21 29.55 7.79 18.30
3,429 0 9,667 1,583 384
11.04 0.00 31.11 5.09 1.23
4,426 0 8,232 1,716 440
12.59 0.00 23.42 4.88 1.26
31,072
100.00
35,142
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)
2014
2013
32,848 23,220 11,485 103
44,471 30,377 15,895 301
755,150
791,026
3.07
3.84
The risk on debt restructuring arises from the re-entry of the NPL debtors that is, after the debt restructuring, the debtors default on their repayments again and resume the non-performing status, having adverse effects on the Bank and its subsidiaries. The numbers of debtors agreed to enter the debt restructuring program, as of 31 December 2014, accounted for the amount of principal and the accrued interest totaling THB 23,220 million or 3.07 percent of total loan outstanding and interest receivables. The total value of the restructured debt based on net collaterals would amount to THB 11,485 million, approximately.
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1.3 Risks from Collaterals For collateralized loans, the Bank has established a procedure of quality analysis and classification for each type of collateral by taking into account the liquidity and risk of the collateral type. The analysis result is one of the key factors used to classify credit risk level. The value of collaterals, either immovable or movable, will be appraised in accordance with the BOT’s guideline. The main types of collaterals of the Bank consisted of deposits and bills of exchange, marketable equity securities, non-listed equity securities, immovable commercial property, immovable housing property, vehicles, machinery, etc. The Bank has determined the price appraisal guidelines, standards, and frequency for each type of collateral. Furthermore, the Bank required that the appraisal price report is prepared to ensure clear and adequate data/ information as well as analysis required for reasonable price setting. In case the collateral is devalued or impaired by aging or usage, its impairment costs must be considered by the concerned unit. With reference to the BOT’s notification regarding the valueless and non-callable assets in December 2006 stipulating that the provision setting was to be in line with the IAS39, cars could be counted as collaterals and their ownership belongs to the Bank and its subsidiaries. In case the debtor is unable to service the debt, the Bank and its subsidiaries can immediately repossess and sell the asset in used car market. Consequently, the Bank and its subsidiaries are exposed to the risk from unsuccessful cars repossession as well as from the sale that does not cover the incurred loss. The risk factors involve, for instance, the used car market condition and repossessed car condition. Basing on the Bank’s statistical data, Loss Given Default (LGD) was identified at 38 percent and the Bank’s provision was set at a higher portion to ensure full coverage of the possible loss.
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, 2014, the Bank and its subsidiaries’ obligations in the form of avals and guarantees for loans amounted to THB 28,511 million or 2.83 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
055
As of December 31, 2014, the Bank and its subsidiaries’ trading investments and available-for-sale securities classified by type of investment were as follows: Fair Value (THB Million) 2014
2013
Trading investments Government and state-owned enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
5,990 2 0 194
4,975 5,214 0 16
Total trading investments
6,186
10,205
68,504 44,454 11,827 3,529
71,805 25,686 14,543 1,344
Total available-for-sale investments
128,314
113,378
Total trading and available-for-sale investments
134,500
123,583
Available-for-sale investments Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
The Bank’s value of trading and available-for-sale investments increased from the previous year mainly because of additional investment in corporate debentures. As a result, the overall Price Risk of the Bank and its subsidiaries increased.
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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Details of financial assets and liabilities as of December 31, 2014, 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
Financial assets Cash Interbank and money market items Derivatives Investments Loans Receivables from purchase and sale securities Receivables from clearing house Total financial assets Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivative liabilities Debt issued and borrowing Payable from purchase and sale securities Payable from clearing house Total financial liabilities
Interest rate 0-3 adjusted in accordance with months market interest rate
- 164 - 1 335,209
- 54,368 - 13,726 19,530
- -
- -
335,374
87,624
246,986 13,181 - - 1,052 - - 261,219
3-12 Over months 1-5 years 5 years
No interest
- - 2,707 500 - - 21,891 100,194 13,008 303,983
16,605 16,605 7,885 65,624 4,389 4,389 8,863 149,186 958 754,370
- -
- - - 4,511 81,682
- -
- -
37,606 404,677
86,193
40,555 992,029
32,659 4,919 - - 13,780
- - - - 25,516
6,662 696,992 2,603 80,270 1,655 1,655 5,200 5,200 - 90,198
- -
- -
- -
224,384 295,718
51,358
25,516
152,695 257,990 46,094 13,473 - - - - 25,595 24,255 - -
1,837 18
Total
1,520 480
1,837 18
1,520 480
18,120 876,315
With reference to the financial structure of assets and liabilities, should the market interest rate increase, the Bank’s net interest income of the next year would decrease. This was mainly because the Bank’s hire purchase business used the fixed interest rate as reference.
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
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As of 31 December 2014, the Bank and its subsidiaries had assets and liabilities in foreign currencies of THB 43,782 million and THB 17,360 million, respectively, equaled to net assets of THB 26,422 million. And as most of the assets in foreign currencies were hedged against the exchange rate risk by forward contracts, the Bank and its subsidiaries were exposed to low risks. The total non-hedged assets in foreign currencies amounted to THB 447 million or 0.04 percent of total assets.
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)
2014
Percent
2013
Percent
Deposits Interbank and money market items Debt issued and Borrowings
696,992 80,270 90,198
80.35 9.25 10.40
719,079 81,082 92,229
80.58 9.09 10.33
Total
867,460
100.00
892,390
100.00
Capital Fund Classified by Maturities (Unit: THB Million)
2014
Percent
2013
Percent
Less than 1 year More than 1 year
776,239 91,221
89.48 10.52
798,311 94,079
89.46 10.54
Total
867,460
100.00
892,390
100.00
As of 31 December 2014, deposits and borrowings of the Bank and its subsidiaries amounted to THB 867,460 million. The major source of fund was the public, of which the maturity was less than one year; a common structure of the commercial banks. Nevertheless, the Bank and its subsidiaries issued other products such as NCD and debentures as saving alternatives for customers. 058
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The financial assets and liabilities as of December 31, 2014 classified by maturity date were as follows: (Unit: THB Million)
The maturity date of financial instruments Items
At call
Less than 1 year
More than 1 year
Not specified
Total
16,605 8,049 - 1 58,105 - -
- 57,075 4,389 37,281 228,452 1,837 18
- 500 - 103,098 467,813 - -
- - - 8,806 - - -
16,605 65,624 4,389 149,186 754,370 1,837 18
82,760
329,052
571,411
8,806
992,029
Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Debt issued and Borrowings Payables from purchase and sale securities Payables to clearing house
249,440 15,672 1,655 - 1,052 - -
413,679 59,679 - 5,200 36,717 1,520 480
33,873 4,919 - - 45,299 - -
- - - - 7,130 - -
696,992 80,270 1,655 5,200 90,198 1,520 480
Total financial liabilities
267,819
517,275
84,091
7,130
876,315
35 39 63 44,276
201 470 4,733 6,213
20 - - 631
- - - -
256 509 4,796 51,120
44,413
11,617
651
-
56,681
Financial assets Cash Interbank and money market items Derivatives Investments Loans Receivables from purchase and sale securities Receivables from clearing house Total financial assets
Off-balance sheet items Avals to bills and guarantees of loans Obligation under unmatured import bills Letter of credits Other commitments Total off-balance sheets
Thanachart Bank Public Company Limited
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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. 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: • 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. • 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.
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• 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 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. 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. 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.
6. Regulatory Risk The regulatory risk arises from non-compliance of laws, regulations, requirements, standards, and practice guidelines regulated the Bank’s transactions, which could cause serious financial loss, reputational damage, or state of being intervened. Any amendment or change in regulations, laws, or requirements made by the authorities such as the Bank of Thailand, the Securities and Exchange Commission, the Stock Exchange of Thailand, the Office of Insurance Commission, the Anti-Money Laundering Office, and others may affect the business strategies and operations of the Bank and its subsidiaries. The Bank established the team of Compliance, reporting directly to both the Audit Committee and the CEO and President, to monitor and ensure compliance of Bank and its subsidiaries under the financial group with the laws and requirements of the regulators and business ethics; provide consultations; educate executives and staff; and enable the executives to perform and manage regulatory risks efficiently,
without redundancy with other internal units or special task forces such as the anti-money laundering, coordination and monitoring, official regulators. To manage regulatory risks, the Compliance would evaluate the risks in activities taking into account the internal and external factors that may impact the Bank and its subsidiaries, including direction of regulatory supervision, official audit result, business policy, inquiries, complaints, internal control and systems involved the matter. The Risk Based Approach (RBA) was employed to determine impact and probability of incident and used as a guideline for the Control and Monitor process to ensure compliance. The Compliance’s duties also include following up with the found issues and propose recommendations on corrective actions.
7. Risk from Capital Inadequacy
The Bank’s capital adequacy was calculated basing on the supervisory guideline of Basel III, 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 31 December 2014, the Bank’s capital totaled THB 114,636 million, of which THB 71,806 million was common equity Tier I capital. Once included the Hybrid Tier I, which could be counted as capital, of THB 5,704 million, the Bank’s Tier I capital totaled THB 77,510 million, while Tier II capital was THB 37,126 million. Thus, the ratios of Total Common Equity Tier 1 to risk-weighted assets, Total Tier I to risk-weighted assets, and Total capital to risk-weighted assets were 9.92 percent, 10.70 percent, and 15.83 percent, respectively, higher than the Bank of Thailand’s minimum requirements at 4.50 percent, 6.00 percent, and 8.50 percent, respectively.
Thanachart Bank Public Company Limited
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Corporate Social Responsibility Thanachart Group’s Corporate Social Responsibility Activities Thanachart Group is a business organization committed to integrated financial solutions to fulfill every success and respond to every demand in each life cycle of customers. Thanachart Group does not only focus on business with the key target of profitability. However, corporate social responsibility in building and developing society is another business principle of focus alongside operations under morality, good corporate governance, and transparency open for investigation. This resulted in Thanachart Group’s sustainable business development coupled with balance of the economy, the society, and the environment. With the aforementioned commitment, Thanachart Group has established the Corporate Social Responsibility (CSR) Committee as a key mechanism driving corporate social responsibility. Members of the CSR Committee are selected from qualified and experienced experts, both internally and externally with the intent to promote efficient, transparent, and accountable procedures. The Committee shall consider guidelines and directions, and provide comments to CSR-related projects. Moreover, Thanachart Group underscores social gap fulfillment and participates in building a sustainable society in every aspect under the staff’s collaboration through CSR implementations, both in its business and social activities. Inclusive are promotion of Thai culture, maintenance of Buddhism, educational development, and environmental preservation. For its CSR guidelines, Thanachart Group underlines key implementations that relate most to its operations as follows: 1. Anti-fraud and corruptions 2. Fair labor practices 3. Righteous operations 4. Responsibility towards consumers 5. Participation in social and environmental development Apart from focusing on the above areas, Thanachart Group also takes into consideration the interests of all stakeholder groups in relations to its CSR activities, regardless of whether they are shareholders, lenders, directors, executives, employees, customers, trade partners, competitors, the government, or even the society and the environment. It is the Group’s intent to treat them appropriately and fairly. Although Thanachart Group has not yet included the stakeholder engagement in the implementation of its CSR activities in order to establish linkages between the shareholders and its performance, the Group clearly recognizes the importance of such engagement. To ensure that CSR activities can meet and align with the needs of all the stakeholder groups, the Group is committed to developing practice guidelines for implementing stakeholder engagement activities in the future.
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Annual Report 2014
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. Adoption of the SET’s approach represents a good start for the Group in developing its reports and in preparing itself for sustainable reports in the future to cover every necessary issue, both at the national and international levels.
Key Areas in Implementation of CSR Activities Having analyzed the impacts on the stakeholders and the business operations, Thanachart Group has prioritized key areas in relation to the CSR activities. There were 5 areas in 2014 altogether. The practice guidelines for each area could be summarized as follows:
1. Anti-frauds and corruptions Explanation is given in “Disclosure of Prevention of Corruption Involvement”.
2. Fair labor practices Focus Areas
Practice Guideline
Employment
- Ensure strict adherence to the Labor Protection Act B.E. 2541. - Draw up recruitment clear, transparent, and accountable guidelines and rules. - 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 discussions, supervision and comments regarding staff welfare. - Develop clear personnel regulations and a staff manual, with a focus to prevent discrimination. Also clearly specify 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 efficient, transparent, fair and accountable employee performance.
Encouragement of employee participation
- Encourage employees to participate in the planning and implementation of CSR activities. - Provide employees with opportunities to give their opinions or suggestions appropriately thoroughly through various channels.
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3. Righteous Operations Focus Areas
Practice Guideline
Code of Conduct
- Establish a Code of Conduct for Thanachart Group’s directors, executives and employees. The Code will serve as practice guidelines and examples to shape how one should carry out duties and responsibilities in a fair manner and how one should take responsibility for one’s self, colleagues, supervisors, subordinates, as well as all the stakeholder groups. - Establish a Code of Conduct for directors, executives, and employees clearly in the Bank’s practice guidelines for Code of Conduct. - Ensure observance of the Code of Conduct, which also includes prevention of conflict of interest and money-laundering. - In 2014, Thanachart Group’s implementations on the Code of Conduct were as follows: 1) Revision of the Code of Conduct manual to be in line with Thanachart Group’s anti-corruption policy. 2) Requirement of companies under Thanachart Group to revise the manual to be consistent. 3) Provision of trainings of the Code of Conduct to new employees at all levels and ensure continuous written recognition of the Code of Conduct manual. 4) Development of CG E-learning distributed on Intranet to enable self-learning for the staff. 5) Obligation of executives and employees at all levels to provide written compliance to the Code of Conduct manual and written abstention from any action seeking interests that create conflict of interest to Thanachart Group. 6) Bi-annual group-wide evaluation of employees at all levels to test and measure knowledge and understanding of good corporate governance and code of conduct.
Support to socially responsible trade partners
- Adopt a clear policy not to do business with any trade partners with social irresponsibility, such as violation of human rights by using child labor or engagement in illegal or immoral business activities.
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4. Responsibility towards consumers Focus Areas
Practice Guideline
Provision of clear information of goods and products to consumers
- Publication of details of goods and products and issuance of clear manuals available to customers and consumers in general.
Protection of consumer rights
- Deliver services that meet professional standards and keep customers’ confidentiality. - Require employees to strictly safeguard the confidentiality of customers to not disclose customer information to any third party. - Maintain the customers’ confidentiality and refrain from inappropriate use of the information for the advantages 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. Participation in social and environmental development Focus Areas
Practice Guideline
Support and promotion of social development with organizations concerned, both public, private as well as non-profit.
- Participate in the planning and implementation of activities related to social and community development in collaboration with public, private, and non-profitable organizations in various aspects. These activities include educational promotion, promotion and preservation of Thai culture, environmental preservation, and society strengthening.
Promotion of energy conservation and environmental preservation.
- Establish clear policies on energy conservation. - Establish measures for energy conservation. - Support, encourage, and promote participation of employees in energy and environment conservation enthusiastically and sustainably.
Thanachart Bank Public Company Limited
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CSR-after-Process This type of corporate social responsibility covers any activities other than those undertaken in the ordinary course of its business. Thanachart Group has been involved in this type of activities 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 regional HUBs participated in the CSR activities under the cooperation of Thanachart Group’s employees. Customers, trade partners, and locals are invited to participate. In 2014, activities held for the society and the environment as the engagement in various aspects of social development are as follows: 1. Campaign and promotion of Thai culture and religion: to promote activities related to Thai culture, local cultures and religions under the encouraged participation of communities, employees and the general public. 2. Promotion and support of charitable work: to display good citizenship, engagement in social development through the support of CSR activities held by charitable organizations aimed at strengthening the society to be sustainable. All target groups were covered; whether they are patients, children, youth, women, or other underprivileged people. 3. Promotion and development of education: to improve and develop the Thai educational system to be more efficient so that the potential of the young Thais meets the international standards and the competitiveness is increased. This will help set a significant foundation for a strong nation.
4. Environmental management: To express the dedication to reduce indirect environmental impacts, which could result from the Group’s operations. This is expressed through the promotion of knowledge and understanding of maximizing the use of energy as well as creating awareness of energy conservation among the executives and employees. Moreover, Thanachart Foundation for the Thai Society has been founded as a key drive of the Group’s CSR activities. Most of the foundation’s activities are focused on building and developing the society. The main objective of creating a model for community and social development in various forms so that they are independently capable of developing, improving, and changing. They will be equipped with knowledge, ideas, and practical skills. The communities will be confident and able to make decisions on their own, with the right attitudes and values appropriate to the lifestyle and betterment. This is in line with His Majesty the King’s concept of “Sufficiency Economy”, which includes creating a network of cooperation for social assistance in many situations.
1. Campaign and promotion of Thai culture and religion Presentation of Royal Krathin Robes in 2014
Thanachart Bank has been hosting the presentation of Royal Krahin robes continuously. The presentation of Royal Krahin robes first began in 2006 at Wat Keaw Kro Wararam Temple in Krabi. Since then, the Bank has been organizing the activity on an annual basis. This activity promotes maintenance of Buddhism, the royal temples and sacred places to remain with the Thai nation.
1
2
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Annual Report 2014
1 - 2 Presentation of Royal Krathin Robes in 2014 at Wat Panan Choeng, Ayutthaya.
In 2014, Thanachart Bank was graciously bestowed by His Majesty the King to offer the Royal robes at Wat Phanan Choeng Temple, Ayutthaya. In this occasion, member companies, customers, trade partners, executives, employees, the general public jointly donated THB 10,817,466.93 in good faith to the temple as part of the funds to be used for constructing a teak wood museum. In addition, scholarships were awarded to students in need with good academic records and good behaviors. Donations were also made to local schools. Total scholarships given were 51.
“Thanachart Initiates and Fulfills Thai Identity” Project
The main objective of the “Thanachart Initiates and Fulfills Thai Identity” project was to maintain and preserve the Thai identity including reading aloud in Thai and Thai manners in daily life. The project helps preserve the unique identity and prevent their dissolution over time. The project also brings balance to social values as foreign culture has more influences. Moreover, the project helps inculcate in Thai youth the love of Thai culture. This 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. The project consists of two main activities, which are reading aloud contests and Thai manners contests. Students from grade 1 to university levels are eligible to participate in the contests on behalf of their institutions to compete for Her Royal Highness Maha Chakri Sirindhorn’s Cups, honorary plaques, certificates of honor, as well as scholarships. 2014 marked the 43th anniversary of the project. More than 3,000 contestants from every region participated in the contests.
Moreover, in the previous year, one more project for Thai identity was added under cooperation with the National Identity Office, the Office of the Permanent Secretary, the Office of His Majesty’s Principal Private Secretary, and the Office of the Royal Development Projects Board. The cooperative project was under the name “Plook Thai Nai Bab Por” with the main objective of integrating the national identity network for concrete, continuous results, as well as the creation of the youth network to pass on the Thai identity. The Bank was the only private organization honored to participate in the association.
Garuda Museum by Thanachart Bank
“The Garuda Museum by Thanachart Bank” is considered the first and only Garuda Museum in ASEAN. Its establishment is traced back to the event on 1 October 2011 when 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 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 Thais had great faith in and a strong relationship with. The Emblem also represented Kings 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. This was followed by the founding of the Garuda Museum to
3
4
3 - 4 “Thanachart Initiates and Fulfills Thai Identity” Project
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compose stories related to Garuda with multimedia based on the Thai understanding of Garuda with strong beliefs in Buddhism. The museum was created and designed so that visitors could learn about the origin of Garuda in the history from the viewpoints of both Buddhism and Brahmanism. An area in the museum had been set to display the Garuda Emblems respectfully relocated from the branches of Siam City Bank to reflect the relationship between Garuda with 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 history.
“Continuation and Conservation of Local Traditions” activities It is recognized that the values of Thai identity, customs, and traditions in regions countrywide reflect the inherited lifestyle, wisdom, and cultural prosperity, representing an identity unmatched by any country. These values are worth preserving. Therefore, the “Continuation and Conservation of Local Traditions” activities originated. The Bank’s nationwide branch network is responsible for hosting the activities and being part of the communities as one of the members. The activities resulted in participation among employees, customers, the general public, and both local public and private organizations. Regional tourism was also promoted and publicized. In 2014, the Continuation and Conservation of Local Traditions activities were held in 14 HUBs as follows:
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1. Chinese New Year in China Town, Bangkok, by Bangkok HUB 2 (Maboonkrong) 2. Chinese New Year in Pak Nam Po, Nakhon Sawan, by Northern HUB 3 (Nakhon Sawan) 3. Water sprinkling on Angkiros Buddha image in Rayong, by Eastern HUB 2 (Rayong) 4. 2014 Buddhist lent candle procession, Ubon Ratchathani, Northeastern HUB 4 (Ubon Ratchathani) 5. 2014 Traditional long boat contest, Phitsanulok, Northern HUB 2 (Phitsanulok) 6. Lotus Reception Tradition (14th day of the 11th month), Samut Prakan, by Bangkok HUB 4 (Bangna) 7. Buffalo Racing Festival, Chonburi, by Eastern HUB 1 (Pattaya) 8. The end of Buddhist Lent, Wat Praputthachai Temple, by Central HUB 2 (Saraburi) 9. Vegetarian Festival, Songkhla, by Southern HUB 4 (Hat Yai) 10. Religious festival on the 10th month, Nakhon Si Thammarat, by Southern HUB 3 (Nakhon Si Thammarat) 11. Vegetarian Festival, Phuket, by Southern HUB 1 (Phuket) 12. Vegetarian Festival, Surat Thani, by Southern HUB 2 (Surat Thani) 13. Lantern Festival, Chiang Mai, by Northern HUB 1 (Chiang Mai) 14. 2014 Ayutthaya World Heritage Festival, Ayutthaya, Central HUB 1 (Ayutthaya)
5 - 8 Winners of the read aloud contests receive the first prize from H.R.H. Maha Chakri Sirindhorn.
2. Promotion and support of charitable programs
Merit Bridge Project
“Annual Red Cross Fair” The Bank participates in issuing Red Cross lottery tickets and sets up a booth at the Annual Red Cross Fair every year. This began in 1976 when Bangkok Metropolitan Bank Plc. (“Bangkok Metropolitan Bank”) was the only commercial bank invited to participated in the Red Cross Fair under the name “Bangkok Metropolitan Bank Red Cross Booth”. Later in 2002, Bangkok Metropolitan Bank merged with Siam City Bank. The booth at the Red Cross Fair was then named “Siam City Bank Red Cross Booth”. In 2011, when the Bank acquired Siam City Bank, the booth was set under the name of “Thanachart Bank”. At present, the Bank is still the only commercial bank invited to set up a booth at the Red Cross Fair every year at Suan Amporn. Although the Thai Red Cross Fair Administration of the Thai Red Cross Society called off the Fair in 2014 due to political unrest, the Bank still issued the Red Cross lottery tickets. Proceeds from selling the Red Cross lottery tickets were offered to H.R.H. Princess Maha Chakri Sirindhorn, the Executive Vice President of the Thai Red Cross Society. The Princess then donated THB 6,000,000 for the maintenance of the Thai Red Cross Society.
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The Bank intended to partake in supporting charitable organizations sustainably. This originated from the “Thanachart Initiates and Fulfills: Merit Savings Expo” in 2009. Charitable organizations were invited to set up booths and publicized their works to be more widely known. The project received good feedback from customers, the general public, and charitable organizations. Therefore, the project was continued in 2011 to maintain the intention to provide sustainable support to charitable organizations. The main objective of Merit Bridge was to fill the gap between the givers and the receivers, and to connect the givers and the receivers. The customers and the general public could donate to charitable organizations through ATMs, bank counters, cash deposit machines, and online free of charge. Charitable organizations eligible for joining the project must have a core purpose of helping the underprivileged groups, truly solving social problems, and must be well accepted by the general public. At present, there are 18 charitable organizations joining the Merit Bridge project as follows: 1. The Association for the Promotion of the Status of Women 2. Baan Nokkamin Foundation 3. The Cardiac Children Foundation of Thailand under the Royal Patronage of the Princess of Naradhivas
9 - 10 Garuda Museum by Thanachart Bank 11 - 12 “Annual Red Cross Fair”
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4. The Foundation for Children with Disability 5. The Foundation for Slum Child Care under the Royal Patronage of the Princess of Naradhivas under the Royal Patronage of the Princess of Naradhivas 6. Ramathibodi Foundation 7. Thammasat University 8. Princess Mother’s Medical Volunteer - PMMV 9. Foundation for Veterans’ Family Aid under the Royal Patronage of Princess Mother 10. Saijaithai Foundation under the Royal Patronage 11. Srithanya Hospital Foundation 12. Pradabos Foundation 13. Phrakhruba Noi Khemmapunyo Foundation 14. Khumklao Foundation under the Royal Patronage 15. Sokka Gakkai Thailand 16. Foundation of Phra Mahathat Nopmethaneedon Nopponphumsiri 17. The King’s Scholarships for Thai Monks 18. Queen Sirikit Centre for Breast Cancer Foundation
“Blood Donation in Unity for the King and the Queen” This activity has been held for 10 years by Northeastern HUB 2 (Khon Kaen). The main objective is to urge residents and employees in Khon Kaen, Roi Et, Kalasin, and Maha Sarakham to do a good deeds for His Majesty the King and Queen Sirikit through blood donation to help
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emergency patients and reduce blood shortage in hospitals. The Faculty of Medicine, Khon Kaen University, has always cooperated and facilitated the blood donation. Moreover, a financial checkup is provided for participants. In 2014, there were 908 participants who donated a total of 367,050 cc of blood to the Thai Red Cross Society.
Support for Chakri Narubodin Medical Institution project, Ramathibodi Foundation Realizing the importance of joining the development of healthcare system and providing access to nursing service and disease prevention for the general public, Thanachart Capital Plc., Thanachart Bank Plc., Thanachart Insurance Plc., and Thanachart for the Thai Society Foundation, jointly donated THB 1,750,000 to support the Chakri Narubodin Medical Institution project of Ramathibodi Foundation. The project is to serve as a medical school and a hospital of 400 beds for integrated medical services for all patients. The project aims to promote and recover health, prevent diseases, provide standard public health services. It will also serve as a medical learning center aimed at creating a learning network and academic services to promote health of residents in the eastern region.
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13 - 14 Queen Sirikit Centre for Breast Cancer Foundation 15 - 16 Chakri Narubodin Medical Institution project, Ramathibodi Foundation
Support for construction of Baan Pak Ping, Queen Sirikit Centre for Breast Cancer Foundation October of 2014 was a month of campaigning against breast cancer. Thanachart Bank joined the support of Queen Sirikit Centre for Breast Cancer Foundation in constructing Baan Pak Ping, Thailand’s first integrated center for breast cancer patients by distributing “Get Pink Pin” and publicized the project through its internal channels and branches. Those interested in making merit could choose from 3 options of the “Get Pink Pin” for THB 100 each. Proceeds would be for the center’s construction. The pin pads could be used as a discount of THB 500 from the regular price for mammogram or ultrasound at over 20 participating hospitals. The Bank was able to distribute pins and raised funds of more than THB 7,400,000 for the center construction.
3. Promotion and Development of Education “Reuse” project This project was initiated from the intention to promote and develop the quality of Thai education under the concept of reusing. Office supplies that are no longer in use but still in good conditions from the Bank’s renovation at its head office and branches are given to government organizations, associations, foundations and schools. In 2014, 2,184 items of desks, cabinets, chairs and computers were given to 25 government organizations, associations, foundations and schools nationwide.
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4. Environmental management “Thanachart Reduces Global Warming” Although the Bank’s operations do not directly impact the environment, it realizes the importance of conserving the environment, which could be indirectly affected by the use of energy. Consequently, Thanachart Bank’s Petchburi and Suan Mali offices were registered as energy-conserving buildings, in line with the Energy Conservation Promotion Act B.E. 2535. The Act serves as a background of energy conservation policies to promote the most efficient use of resources, participation and awareness of energy conservation among employees and business units. “Thanachart Reduces Global Warming” project first began in 2012 with an objective to respond to the Bank’s energy conservation policy. The Energy Management Committee was established with representatives from the Bank’s business units as members. The Committee considers and issues policies and measures related to efficient energy management so that the energy management and conservation give concrete results. The Committee urges continuous energy conservation. WorkingCommittee has been established for both offices. The Energy Management Committee and the Working Committee hold monthly meetings to report on the progress. In 2014, 5 measures for energy conservation were issued as follows:
17 - 18 “Reuse” project 19 - 20 “Blood Donaton in Unity for the King and the Queen”
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1. Setting the air-conditioner at 25 Celsius (air-conditioners were turned on only in necessary areas) 2. Turning off computer screens and computers when not in use, under the slogan of “Turn off the screen when not in use and shut it down when you leave” 3. Turning off lights in unused areas during lunch and after work as necessary 4. Taking 1-2 flights of stairs instead of elevators 5. Not leaving the doors and windows open, and shutting the curtains to prevent heat and the sunray from entering the buildings The energy conservation was implemented at the head offices and branches in Bangkok and upcountry during January 2012 - November 2014. The implementation resulted in savings of THB 18.1 million for electricity charges. Therefore, in 2014, Petchburi Building received a symbol from the Metropolitan Electricity Authority representing the most efficient energy conservation due to its dedication and strict implementation of energy conservation. The Bank promoted efficient use of energy as well as understanding and participation of employees in conserving energy. Therefore, employees were sent to attend seminars related to energy conservation. Such seminars included the public relation activities promoting energy conservation, the research evaluating SOS Office Energy project held by the Center for Academic Services, Srinakharinwirot University, in cooperation with the Department of Alternative Energy Development and Efficiency, basic training of preliminary energy management to promote energy conservation with Mahidol University.
Apart from activities held to conserve and maximize the efficiency of energy, employees are encouraged to make use of paper and reduce the use of paper to indirectly conserve energy. Related activities were held in various ways, e.g. using electronic system in operations and meetings, promoting the importance of less use of paper to minimize the use of paper and paper reuse within the units. Thanachart Group’s CSR activities are not limited to these 4 areas; promotion of Thai culture and religions, promotion and support of charitable work, promotion and development of education, and environment management as mentioned above. The Group’s executives and employees also volunteered in CSR activities for many underprivileged groups as follows: 1. Donations to support charitable organizations and educational institutions. 2. Scholarships, school supplies, computers, buildings for schools in need in Surin, Prachinburi, Kanchanaburi, and Mahidol University. 3. Donations of blankets to students and victims of the cold weather in Nan, Phetchabun, Nong Khai, and Lao PDR, under the cooperation with the Department of Public Relations and Thai PBS. 4. Support Pan Kan Project. Executives and employees were invited to share their unused items for resale at “Pan Kan Shop”. Proceeds were to be given as scholarships to students in need in Yuvabhadana Foundation.
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21 - 23 “Thanachart Reduces Global Warming”
5. Meals and donations to Baan Nokkamin Foundation in Bangkok, Ban Banglamung Nursing Home, Boonchoo Home, and Karunyawet Place of Persons With Disability Welfare in Chonburi. 6. Books and bookshelves for Computer Learning Center, the 3rd Infantry Battalion, the 11th Infantry Regiment King’s Own Bodyguards, Petchaburi Raj Sirindhorn, Petchaburi, and computers for Computer Learning Center, the 1st Battalion Bodyguard.
Disclosure of Prevention of Corruption Involvement Thanachart Group realizes that corruptions are harmful and impede the nation’s social and economic development and it also creates business unfairness. Therefore, the Group cooperates with the public and private sector under the “Private Sector Collective Action Coalition Against Corruption (CAC)” by signing the declaration to join. In 2014, Thanachart Group issued “Anti-corruption policy”, measures, procedures, and related working processes to ensure every employee’s compliance. Hence, 11 companies under Thanachart Group became certified members of the Private Sector Collective Action Coalition Against Corruption. Thanachart Group’s implementations related to fraud and corruption prevention are as follows:
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1. Anti-corruption policy was approved by the directors of all 11 companies under Thanachart Group. The definition of “corruption” and types of corruptions were clearly given. The essence was that directors, executives, and employees must not demand, execute, or accept any form of corruptions, whether directly or indirectly, for the interest of the organization, self, families, friends, and acquaintances. They must be a good role model in complying with the anti-corruption policy. Thanachart Group’s executives shall bear the responsibility of monitoring and supporting the practice, as well as reviewing the appropriateness of the measures to be in line with the changes in business, regulations, and laws. 2. Anti-corruption policy shall be a part of the corporate Core Values or C3SIP for compliance of every employee under Thanachart Group. The summary is as follows: 2.1 Customer Focus: responding to customers’ needs 2.2 Collaboration: working as a team 2.3 Commitment: achieving the targets 2.4 Spirit: dedicating to work 2.5 Integrity: adhering to honesty, integrity, and anti-corruption 2.6 Professional: sufficient knowledge and capability in performing duties 3. Thanachart Group’s corruption risk assessment is based on risk and control self assessment (RCSA), which is a tool for operational risk management. Risks are reviewed annually. Progress of action plans and execution of risk control is followed up at least once a year, or any time
24 - 27 “Private Sector Collective Action Coalition Against Corruption”
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significant changes in risk factors to the operations occur. The review will be presented to the Risk Management Committee for acknowledgement and for further risk management information. 4. Anti-corruption policy is established for compliance of Thanachart Group’s employees under the internal control consistent with corruption risks and anti-corruption policy. Practice guidelines are reviewed annually to ensure appropriateness and accordance with risks. Penalty is prescribed for employees involved in corruptions. 5. Thanachart Group gives emphasis to recognizing any form of corruptions, especially in “offering and receiving gifts, presents, parties, or other benefits”. Thanachart Group highly emphasizes these issues because they might easily lead to corruptions. Therefore, these matters are prescribed in the code of conduct and regulations that cover the procedures and control. Supervisors are to be informed of gift giving and receiving, violation of noncompliance with anti-corruption measures, any act supporting, aiding, or participating in corruptions, which are wrongdoing and regulatory punishment will ensue. 6. For more efficient anti-corruption, Thanachart Group requires each company to set regulations and suggestions for whistle-blowing and complaints regarding corruptions specifically. A safe channel for whistle-blowing is required for both third parties and employees under Thanachart Group who has witnessed suspicious actions prone to corruption. The information of the whistleblower will be submitted to the highest level executive of the internal audit unit. The information will be kept confidential and delivered to the Audit Committee and reported to the Board of Directors respectively. Moreover, Thanachart Group has a polity to give fairness and protection to employees who refuse any involvement in corruptions, even though such refusal may lead to a loss of business opportunities.
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7. Every director, executive, and employee is strictly obligated to provide a written compliance to the anti-corruption policy, measures, and other related regulations. 8. Employees must acknowledge and understand practice guidelines in line with the policy, measures, and important steps related to anti-corruptions through the Group’s communication channels. Among the channels are the CEO’s Message regarding anti-corruption and “Anti-Corruption for Executives” training for directors and senior executives. Anti-corruption is included in the topics of the staff orientation. Every 6 months, self-assessments are conducted for executives and every employee on E-learning and Intranet. Easily accessible presentations are used. Among others are VTR and short films communicating understanding regarding ant-corruption and money laundering in collaboration with the Office of the National Anti-Corruption Commission and the Anti-Money Laundering Office. 9. Thanachart Group sends emails to trade partners and business agents to ask for cooperation and support of the anti-corruption project by not giving gifts to executives or employees of Thanachart Group, either during festivals or special occasions. Cooperation from customers are asked on printed material, e.g. invoices, receipts, payments, tax invoices, and on the Bank’s website; www.thanachartbank.co.th. 10. To evaluate compliance with the anti-corruption policy and measures, the Audit Committee will review and ensure sufficient internal control in the Group, and ensure that the operations are in line with the anti-corruption policy by including it in the annual plan. For the public to acknowledge the intention of Thanachart Group against corruption, the Group has publicized anti-corruption policy on the website of each company. For the Bank, the policy is announced on www.thanachartbank.co.th.
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 2014, 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 Bank’s anti-corruption policy; • Requirement to companies under Thanachart Group to revise their policies and codes of conduct in alignment with the Bank; • 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 twice a year in total; • 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 create their awareness of the working principles of various business units in accordance with good corporate governance. This is executed through various internal channels under the “Thanachart Tam-Dai, Tam-Dee... CG Ri-Rerm Term-Tham” program to promote understanding of policies and code of conduct for operations based on moral principles, ethics, and professional code of conduct. The internal channels allow easily accessible presentations, such as VTRs and short movies, 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. 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, 2014 is as per the table of the Bank’s Board of Directors structure in page 90 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 law and criteria of the securities and stock exchange laws, declarations of the stock exchange, and other related laws.
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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, 2014, 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. Peter Clifford Bessey 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, 2014, the members of the Audit Committee were as follows:
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 the Bank 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 the Bank’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
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
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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, sufficient anti-corruption measures, 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;
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• To review any findings by the Compliance Group and the authorities, as well as to follow up on the implementation of their recommendations. 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, corruptions 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, corruptions, 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, 2014, 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 directors, 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 directors, 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, 2014, the members of the Risk Management Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Mr. Peter Clifford Bessey 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. Head of Compliance Member 11. 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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Annual Report 2014
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 delegate 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, 2014, 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. Peter Clifford Bessey 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 interest rates 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, 2014, 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. Peter Clifford Bessey 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, 2014, the members of the Credit Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson 3. Mr. Peter Clifford Bessey Vice Chairman Thanachart Bank Public Company Limited
081
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
Remarks *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 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. 082
Annual Report 2014
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
083
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.
084
Annual Report 2014
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 to the Bank’s operations to be nominated for the position of the CEO 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 The Bank monitors and controls its subsidiaries to protect the interest in its investments. The Bank’s executives are assigned to be the directors in the subsidiaries consistent with the shareholding portions in order to monitor and ensure that the performances of the subsidiaries are appropriate, smooth, in line with the Bank’s policies and operations. After the consideration and consent of the Board of Directors for the Bank’s executives to be the directors in the subsidiaries, the CEO, representing the Bank, will make a written announcement to the Chairman of the subsidiaries to accept the appointment of directors pursuant to the related criteria, conditions of laws, and regulations. Managing Directors of the subsidiaries are obliged by the Bank to report on their monthly operating performance compared with the estimation in the Business Plan to the Bank’s Executive Committee every month. The report shall also include business strategies. The CEO will present the report to the Board of Directors within the same month.
Scopes of responsibilities of directors and executives representing the Bank in the subsidiaries must be as prescribed in the regulations of the subsidiaries. The directors and executives must ensure that the operating performances of the subsidiaries is in line with the resolution of the shareholders’ meeting and related laws. Moreover, since the Bank’s business is under a financial group, the directors and executives representing the Bank in the subsidiaries must ascertain that the strategic plans of the subsidiaries go as planned and in line with Thanachart Group’s risk management policy. For related transactions with the subsidiaries, the Bank has established authority level for transaction approval based on types, volumes, and counterparties. Disclosure of transactions is controlled and monitored. Every 6 months, related transactions with the subsidiaries are required to be reported to the Bank’s Executive Committee and the Board of Directors respectively. Moreover, units performing transactions are obligated to submit the information to Compliance for further gathering of information of internal and related transactions. The gathered information will be then reported to related committees. Public disclosure of transactions is also required in accordance with the regulator’s principles as well as the accounting standard. For the establishment of internal control and mechanism for monitoring subsidiaries, the Bank has set authority levels for significant transactions and types of counterparties, e.g. loan grants, investments, obligations or transactions similar to loan grants to subsidiaries or related parties. If a subsidiary wishes to participate in the transaction, it must seek approval from an authorized person in consistency with the established approval levels. In addition, the Board of Directors has assigned the Bank’s Audit Committee and Audit team to cover the operations of the subsidiaries to ensure alignment to the Bank’s policies. The Audit team must summarize the overall auditing of the subsidiaries for acknowledgement of the Audit Committee and further report to the Board of Directors. Significant issues, i.e. conflicts of interest, frauds, corruptions, and violations of laws, must be reported to the Board of Directors in detail for improvement within a period of time deemed appropriate by the Audit Committee. (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.
Thanachart Bank Public Company Limited
085
Auditors’ Fee The Audit Committee considers the appointment of auditors and compensation to propose for the Board of Directors’ approval, and determines auditors’ fee to propose to the Board of Directors and the shareholders for approval during the Annual General Meeting of Shareholders. According to the 21st Annual General Meeting of Shareholders held on April 3, 2014, the shareholders considered and approved the appointment of EY 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 The 2014 auditors’ fee charged by EY 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 10,540,000.00. 1.2 Audit Fee of 14 Subsidiaries of THB 5,970,000.00.
086
Annual Report 2014
(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 2014 in an amount of THB 1,125,000.00.
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. 41: Related parties transactions.
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 from possible operational errors and executives and employees’ exploitation. 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 benefit the development of the internal control system. The internal control system is summarized as follows:
1. Organization and Environment
The Bank established its organizational structure and authority of staff and executives in a clear written form, isolated duties of the operation staff, approver, controller and evaluator to prevent conflicts of interests as well as to balance the power between each party. To ensure the Bank’s appropriate business operations and good governance, the Bank formulated policies, procedures and operation manuals and made available in written form, established the Audit Committee to consider the adequacy of internal control system, and formed subcommittees to consider and decide on the matters efficiently. The Board of Directors determines clear and measurable targets for business operations and follows up to ensure the progress and achievement. In addition, the Bank has established Corporate Governance Policies, Guide to Business Conduct, Anti-Corruption Policy, measures, as well as related rules and regulations to be the practice guidelines for the directors, executives, and employees. The self-evaluation is also conducted annually to raise awareness and recognition of good governance among all employees. Communication system and channels are established for customers and staff to express their opinions, make complaint regarding the Bank’s services, and blow the whistle, along with the protection measure for the whistle-blower and fair treatment for the accused. Regarding personnel, the Bank organizes staff training to increase employees’ capability and knowledge. Remuneration and benefits are offered at a proper level to attract and retain quality employees. Succession plan is also constructed to ensure smooth operation onwards.
2. Risk management The Board of Directors delegates its authority to the Risk Management Committee and the Risk Management unit to consider and ensure that the Bank has effective risk management for all areas, in line with the purpose of the business operations. Corruption risks assessment for the Bank’s transactions were also conducted and the documented policies and guidelines for risk management were established and published on the Intranet, which all directors, executives, and employees were to comply with. Evaluation procedures for external factor changes that may impact business operations, internal controls, and financial report, as well as measures to cope with changes, were well established. The report from the Risk Management Committee and significant issues were to be submitted to the Audit Committee and the Board of Directors on a quarterly and monthly basis respectively.
Thanachart Bank Public Company Limited
087
3. The Operational control of the management
The Bank has established appropriate limit and level of approval authority by separating duties of the operator, the approver, accounting and IT data recording officer, and custodian, to enable the mechanism of check and balance against fraud. Policies were also established to prohibit all directors, executives, and staff to request, undertake, or accept any form of corruptions, either directly or indirectly. Staff must not tolerate or ignore if witnesses or knows of any act/ transaction that could be considered as corruption and must inform the responsible unit through the provided channels. As for the related transactions, the Bank has established in Corporate Governance Policies the practice guidelines to prevent conflicts of interests prohibiting the related persons to partake in the approving process. Regarding the Bank’s core business of giving credits or investment, policies were formulated to regulate lending to major shareholders or related parties, and investing in certain businesses with related interest, in accordance with the BOT’s criteria. As for IT controlling system, the formulation of IT procedures, security policy as well as development and maintenance, were established as standards for controlling and protecting IT operations of the Bank.
4. Information and Communication System The Bank provides quality and relevant information to ensure effectiveness of internal control. Necessary information is provided sufficiently to directors to perform their tasks and make quality decisions. The Bank and the financial business group continuously develop their information system focusing on enhancing efficiency to enable the system to properly support business growth. Communication channel (Whistle-blower hotline) is also provided for internal as well as the public to report information concerning fraud or corruption.
5. Monitoring and tracking System The Bank established the performance monitoring and reporting process for the business units to report their performance to the Board of Directors on a monthly basis and review goals every six months.
088
Annual Report 2014
The Audit, directly reports to the Audit Committee, is responsible for monitoring and reviewing units and processes, evaluating the effectiveness and efficiency of internal control systems and risk management system of the Bank as well as the financial business group, and reporting on issues as well as progress of corrective actions to the Audit Committee on a monthly basis. End-to-end monitoring process and integrated audit are employed in the controlling and monitoring the issues. The Bank has set up the Compliance unit to monitor the compliance of practices in accordance with the codes of conduct and prohibitions that prevent conflicts of interest. The Compliance reports to the Audit Committee, Executive Committee, and Board of Directors every six months. With reference to the Board of Directors Meeting No. 2/2015 on 19 February 2015, the Board agreed that the Bank’s internal control system is adequate and appropriate in all 5 areas, consisting of 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 to be responsible for the Bank’s internal audit as she has been working in the area of internal audit of commercial banking for over 10 years. She also possesses the knowledge and expertise in banking operations. Thus, she should be suitable to perform as Head of Internal Audit. To appoint, evaluate, dismiss, transfer, or discharge the Head of Internal Audit, an approval must be obtained from the Audit Committee. Head of Compliance The Bank assigned Ms. Kavita Boonpochanasoontorn as Head of Compliance to be responsible for compliance of rules and regulations, in line with the operating business.
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, 2014 were as follows: 1. 2. 3.
Mr. Narong Chivangkur Mr. Rod Michael Reynolds Mr. Sataporn Jinachitra Mr. Thaneit Khantikaroon
Chairman (Independent Director) Member (Non-Executive Director) Member (Independent Director) Secretary
In 2014, the Nomination and Remuneration Committee convened eight 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 2014 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 2015 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 2014 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 2014. 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
Thanachart Bank Public Company Limited
089
Management Structure The Board of Directors The Bank’s Board of Directors consists of highly competent persons who posses expertise and experience in finance & accounting, management, and others that enable the Bank to effectively managed business. The Bank has established the number of directors to be in accordance with the rule of law as well as the type and size of the business so that the Board of Directors could perform effectively. Of the total Board’s members, the number of executive directors shall not exceed one half and the number of independent directors, who are independent from the management and neither benefit from or associate with the Bank’s businesses, shall account at least one-third and be proportional to each shareholder’s investment amount. Members of the Bank’s Board of Directors as of December 31, 2014 were as follows: Position
Executive Director
Chairman
-
✓
-
2. Mr. Suphadej Poonpipat
Vice Chairman
✓
-
-
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. Peter Clifford Bessey
Director
✓
-
-
12. Mr. Somjate Moosirilert
Director
✓
-
-
Directors resigned in 2014 1. Mr. Brendan George John King
Director
✓
-
-
Name
1. Mr. Banterng Tantivit
Notes:
090
Non-Executive Director
Independent Director
1) Mr. Brendan George John King resigned from his directorship on 1 September 2014. 2) Mr. Peter Clifford Bessey has assumed his directorship since 1 September 2014. 3) The Bank’s directors who are authorized signatories representing the Bank include Mr. Suphadej Poonpipat, Ms. Suvarnapha Suvarnaprathip, Mr. Peter Clifford Bessey, and Mr. Somjate Moosirilert. Any two out of the four can jointly sign and stamp the Bank’s seal.
Annual Report 2014
Board of Directors Meetings Each year, The Bank schedules meetings and their agendas for the key panels in advance and informs directors of the schedules to allow each of them to plan and arrange their time for the following key meetings: 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 a quarter. 4. The Nomination and Remuneration Committee meeting is held at least twice a year. 5. For all other committees, the decision on schedules rests with the Chairman of each committee. The Bank’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’s agendas are to be clearly established in advance including regular agendas such as performance reports, approval of operating transactions, and risk management. The Office of the Chairman of Executive Committee and the CEO is responsible for sending meeting invitations to the directors along with the agendas as well as supporting documents in advance to allow the directors to have sufficient time to study data and information before attending the meetings. In 2014, the Board of Directors convened 12 general meetings. In the Board of Directors meeting, all directors are encouraged to express their opinions freely and vote independently. The Chairman of the Board of Directors shall provide opportunities to all directors to express their opinions before adopting any resolution. The observations and comments from directors made at the venue are documented. The minutes are to be certified by the Board of Directors and made available for inspection by the Board and related parties. Table of directors’ meeting attendance in 2014 Board of Directors
Executive Committee
Audit Committee
Nomination and Remuneration Committee
Risk Management Committee
(12 Meetings)
(64 Meetings)
(12 Meetings)
(8 Meetings)
(12 Meetings)
1. Mr. Banterng Tantivit
12/12
-
-
-
-
2. Mr. Suphadej Poonpipat
12/12
61/64
-
-
-
3. Mr. Kiettisak Meecharoen
12/12
-
11/12
-
-
4. Mr. Narong Chivangkur
12/12
-
-
8/8
-
5. Mr. Sataporn Jinachitra
12/12
-
12/12
8/8
-
6. Assoc. Prof. Dr. Somjai Phagaphasvivat 12/12
-
12/12
-
-
7. Mr. Alberto Jaramillo
11/12
-
-
-
-
8. Mr. Rod Michael Reynolds2)
10/12
-
-
5/8
-
9. Mr. Kobsak Duangdee3)
12/12
-
-
-
-
12/12
61/64
-
-
-
4/4
21/21
-
-
4/4
11/12
60/64
-
-
12/12
8/8
39/43
-
-
6/8
List of TBANK’s Directors
10. Ms. Suvarnapha Suvarnaprathip 11. Mr. Peter Clifford Bessey2) 12. Mr. Somjate Moosirilert Directors resigned in 2013 1. Mr. Brendan George John King1)
Notes: 1) Mr. Brendan George John King resigned from his directorship on September 1, 2014. 2) Mr. Peter Clifford Bessey has assumed his directorship since September 1, 2014. Thanachart Bank Public Company Limited
091
Executives As of 31 December 2014, there were executive officers and executives as defined by the Securities and Exchange Commission (“SEC”)’s criteria, and the persons of managing authority as defined by section 4 and 25 of the 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. Peter Clifford Bessey 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. Sanong Kumnuch Executive Vice President – Retail Sales 11. Mr. Praphan Anupongongarch Executive Vice President – Secured Lending and Deposits 12. Mrs. Sasima Taweeskulchai Executive Vice President – Credit Risk Management 1 13. Mr. Kalyanaraman Sivaramakrishnan Executive Vice President – Retail Risk Management & Business Infrastructure 14. Mr. Ricky Jon Yakabowich Executive Vice President – Shared Services 15. Mrs. Kjitphan Chunharit Executive Vice President – Information Technology 16. Ms. Angkana Swasdipoon Executive Vice President – Office of Executive Committee Chairman and CEO 17. Mr. Wutthichai Suraratchai Executive Vice President – Credit Risk Management 2 18. Ms. Kanoksri Rojmeta Executive Vice President – Sales & Branch Network Team 3 19. Mrs. Vijitra Thumpothong Executive Vice President – Chief Audit 20. Mr. Kriangkrai Phurivitvattana Executive Vice President – Banking Operations 21. Mr. Wichak Praditavanij Executive Vice President – Strategy & Retail Customer 22. Ms. Abhiradee Sukhajoti Executive Vice President – Human Resources 23. Mr. Vivek Chandra Executive Vice President – Business Transformation 24. Mr. Ziad El-Hoss Executive Vice President – Chief Risk Officer 25. Dr. Sutut Chitmongkongsuk Executive Vice President – SME Banking 26. Ms. Wisarnsri Nilodom Executive Vice President – Corporate Banking Team 2 27. Mr. Noel Singh Senior Vice President – Corporate & SME Products 28. Mr. Watchara Permphithak Senior Vice President – Asset Development 29. Mrs. Pittimart Sanguansook Senior Vice President – Accounting 30. Mrs. Teranuj Koomsap Senior Vice President – Finance Notes:
092
1. Number 3-9 are executive officers and number 29-30 are those in the top four levels after the President as defined by the SEC. 2. Number 1-28 are those with managing authority under section 4 and 25 of the Financial Institution Business Act B.E. 2551. 3. The changes during 2014 were as follows: 3.1 Mr. Brendan George John King resigned from his directorship, which became effective on 1 September 2014. 3.2 Mr. Peter Clifford Bessey was appointed a director, which became effective on 1 September 2014.
Annual Report 2014
On 1 January 2015, the Bank had changed the organization structure affecting the executive officers and executives as defined by the SEC and the persons of managing authority under the definition of section 4 and 25 of the Financial Institution Business Act B.E. 2551. Those persons are as follows: Name
TBANK’s Organization Previous
New
1. Mr. Praphan Anupongongarch
Executive Vice President (Assistant Managing Director) - Secured Lending and Deposits
Executive Vice President (Assistant Managing Director) Automotive Lending
2. Mr. Kalyanaraman Sivaramakrishnan
Executive Vice President (Assistant Managing Director) - Retail Risk Management & Business Infrastructure
Executive Vice President (Assistant Managing Director) Retail Risk Management
3. Ms. Kanoksri Rojmeta
Executive Vice President (Assistant Managing Director) - Sales & Branch Network Team 3
Executive Vice President (Assistant Managing Director) Retail & Small Business Distribution 3 (North)
4. Mr. Wichak Praditavanij
Executive Vice President (Assistant Managing Director) - Strategy & Retail Customer
Executive Vice President (Assistant Managing Director) Retail & Small Strategic Management
Thanachart Bank Public Company Limited
093
In addition, on the 12 February 2015, the Bank appointed managing officers and executives, with reference to the SEC’s definition, including the persons of managing authority under the definition of section 4 and 25 of the Financial Institution Business Act B.E. 2551. The persons are as follows: Name
Position (Previous)
Appointed Position
1. Mr. Sanong Kumnuch
Executive Vice President (Assistant Managing Director) - Retail Sales
Executive Vice President (Deputy Managing Director) Retail & Small Business Distribution
2. Mr. Ziad El-Hoss
Executive Vice President (Assistant Managing Director) - Chief Risk Officer
Executive Vice President (Deputy Managing Director) Chief Risk Officer
3. Ms. Wisarnsri Nilodom
Executive Vice President (Assistant Managing Director) - Corporate Banking Team 2
Executive Vice President (Deputy Managing Director) Corporate Banking Team 2
4. Mr. Songwut Chaowalit
Senior Vice President - Sales & Branch Network Team 1
Executive Vice President (Assistant Managing Director) Retail & Small Business Distribution 1 (BKK 1)
5. Mr. Pompet Rasanon
Senior Vice President - Sales & Branch Network Team 2
Executive Vice President (Assistant Managing Director) Sales Network - Automotive Lending
6. Mr. Lalit Dodampe Gamage Dharmaseri Senior Vice President - Treasury
Executive Vice President (Assistant Managing Director) Head Treasury
7. Mr. Wisoot Tangadulrat
Senior Vice President - Corporate Banking Sales 1
Executive Vice President (Assistant Managing Director) Corporate Banking Sales 1
8. Mr. Wathanyu Nithyayon
Senior Vice President - Corporate Banking Underwriting 1
Executive Vice President (Assistant Managing Director) Corporate Banking Underwriting 1
094
Annual Report 2014
Management structure of the Bank as at December 31, 2014 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
Thanachart Bank Public Company Limited
2
1
Chief Executive Officer and President Executive Vice President, Office of Executive Committee Chairman and CEO
Executive Vice President, Business Transformation
Executive Vice President, Chief Audit
Senior Vice President, Compliance
Deputy Chief Executive Officer
095
3 Executive Vice President, Corporate Banking Team 1
4 Executive Vice President, Treasury & Debt Capital Markets
5 Executive Vice President, Retail Banking
6 Executive Vice President, Investment Management
7 Executive Vice President, Chief Financial Officer
Executive Vice President, Corporate Banking Team 2
Executive Vice President, Share Services
Executive Vice President, Retail Sales
Executive Vice President, Business Support
8 Senior Vice President, Accounting
Executive Vice President, SME Banking
Executive Vice President, Information Technology
Senior Vice President, Asset Development
Executive Vice President, Human Resources
9 Senior Vice President, Finance
Senior Vice President, Corporate & SME Products
Senior Vice President, Investment Banking
Senior Vice President, Communication & Brand Management
First Vice President, Compensation & Payroll Management
Remark: 1 - 9 means executives according to SEC’s definition.
Company Secretary The Bank’s Board of Directors does not appoint a corporate secretariat. However, to be incompliant with the principles of good corporate governance as well as to ensure continuity and effectiveness of the Bank’s operation, the Board of Directors has assigned the Office of the Chairman of Executive Committee and the CEO to administer company secretary tasks.
The Remuneration of Directors and Executives (1) Financial remuneration (a) Remuneration of the Board of Directors each year As of 31 December 2014, the Bank has remunerated 3 panels of the Board of Directors, the Audit Committee, and the Nomination and Remuneration Committee totaling THB 34,044,193.65. The remuneration was paid in the forms of monthly compensation, meeting stipend, and bonus (based on the performance in 2013), which can be summarized as follows: Table of the remuneration of the Board of Directors Type of remuneration (Baht per year) List of Directors
Monthly compensation
Meeting stipends
Performance allowance
Total
1. Mr. Banterng Tantivit
1,200,000.00
600,000.00
3,053,722.10
4,853,722.10
2. Mr. Suphadej Poonpipat
600,000.00
300,000.00
1,526,861.05
2,426,861.05
3. Mr. Kiettisak Meecharoen
600,000.00
300,000.00
1,526,861.05
2,426,861.05
4. Mr. Narong Chivangkur
600,000.00
300,000.00
1,526,861.05
2,426,861.05
5. Mr. Sataporn Jinachitra
600,000.00
300,000.00
1,526,861.05
2,426,861.05
6. Assoc. Prof. Dr. Somjai Phagaphasvivat
600,000.00
300,000.00
1,526,861.05
2,426,861.05
7. Mr. Alberto Jaramillo
600,000.00
275,000.00
1,526,861.05
2,401,861.05
8. Mr. Rod Michael Reynolds
600,000.00
250,000.00
1,468,296.52
2,318,296.52
9. Mr. Kobsak Duangdee
600,000.00
300,000.00
1,526,861.05
2,426,861.05
10. Ms. Suvarnapha Suvarnaprathip
600,000.00
300,000.00
1,526,861.05
2,426,861.05
11. Mr. Peter Clifford Bessey
200,000.00
100,000.00
0.00
300,000.00
12. Mr. Somjate Moosirilert
600,000.00
275,000.00
1,526,861.05
2,401,861.05
Directors resigned in 2013 1. Mr. Claude David Morin
0.00
0.00
58,564.53
58,564.53
400,000.00
200,000.00
1,526,861.05
2,126,861.05
7,800,000.00
3,800,000.00
19,849,193.65
31,449,193.65
2. Mr. Brendan George John King Total Remarks:
1) Mr. Claude David Morin resigned from his directorship on 15 January 2013. 2) Mr. Rod Michael Reynolds has assumed his directorship since 15 January 2013. 3) Mr. Brendan George John King resigned from his directorship on 1 September 2014. 4) Mr. Peter Clifford Bessey has assumed his directorship since 1 September 2014.
096
Annual Report 2014
Table of the remuneration of the Audit Committee Type of remuneration (Baht per year) Monthly compensation Meeting stipend
Directors
Total
1. Mr. Kiettisak Meecharoen
540,000.00
330,000.00
870,000.00
2. Mr. Sataporn Jinachitra
360,000.00
180,000.00
540,000.00
3. Assoc. Prof. Dr. Somjai Phagaphasvivat
360,000.00
180,000.00
540,000.00
1,260,000.00
690,000.00
1,950,000.00
Total
Table of the remuneration of the Nomination and Remuneration Committee Directors
Type of remuneration (baht per year) Meeting stipend
1. Mr. Narong Chivangkur
320,000.00
2. Mr. Sataporn Jinachitra
200,000.00
3. Mr. Rod Michael Reynolds
125,000.00
Total
645,000.00 The remuneration of independent director of the subsidiaries None of the Bank’s independent director sits as an independent director of the subsidiaries. (b) 2014 total remuneration, number of executive directors and executives, and forms of remuneration
In 2014, remuneration was paid in the form of salary, allowances, provident fund, etc. to executive directors and executives in accordance with the regulations as follows: • By the SEC’s definition, there were 10 executive directors and executives (including 1 executive director resigned during the past year) that a total remuneration paid amounted to THB 78,898,500.00. • With reference to the Bank of Thailand’s guideline, which as in accordance with section 4 and 25 of the Financial Institution Business Act B.E. 2551, there are 29 of those with managing authority (including 1 executive director resigned during the past year) that a total remuneration paid amounted to THB 189,191,911.00.
(2) Other remuneration (if any) Other remuneration of Directors There is no other compensation paid to the directors. Other remuneration of executive directors and executives The Bank provides provident fund to executives in a rate of 3 or 5 or 7 or 10 percent of the salary depending on years of service of the person. In 2014, provident fund was paid in compliance with the regulations as follows: • By the SEC’s definition, there were 10 executive directors and executives (including 1 executive director resigned during the past year) that a total provident fund paid amounted to THB 3,556,254.00. • With reference to the Bank of Thailand’s guideline, which as in accordance with section 4 and 25 of the Financial Institution Business Act B.E. 2551, there are 29 of those with managing authority (including 1 executive director resigned during the past year) that a total provident fund paid amounted to THB 7,196,300.00. Thanachart Bank Public Company Limited
097
Board of Directors and Management Team
Mr. Banterng Tantivit Chairman (Non-Executive Director) Date of Appointment
22 April 2002
Age
70 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 • Certificate, 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 - 2014 2006 - 2012 2005 - 2013 2010 - 2011 Position(s) in Other Listed Companies 2006 - Present 2001 - Present 1989 - Present Position(s) in Other Legal Entities 2006 - Present 2003 - Present 1987 - Present
098
Annual Report 2014
• Chairman, Thanachart Insurance Public Company Limited • Vice Chairman, Thanachart Insurance Public Company Limited • Chairman, Thanachart Life Assurance Public Company Limited • Chairman, Siam City Bank Public Company Limited • Chairman, Thanachart Capital Public Company Limited • Chairman, MBK Public Company Limited • Advisor, Dusit Thani Public Company Limited • Advisor, Patum Rice Mill and Granary Public Company Limited • Chairman of the Executive Committee, MBK Public Company Limited • Director, Siam Piwat Holding Company Limited • Chairman, MBK Resort Public Company Limited • Chairman, Plan Estate Company Limited • Director, Siam Piwat Company Limited • Director, B.V. Holding Company Limited • Director, Deebuk Company Limited • Director, Thai Farming Company Limited
Mr. Suphadej Poonpipat
Vice Chairman and Chairman of the Executive Committee (Executive Director) Date of Appointment
1 September 2005
Age
64 years
Education(s)
• Master of Science in Agricultural Economics, University of Wisconsin, U.S.A. • Bachelor of Business Administration and Accounting, Chulalongkorn University
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Role of the Chairman Program (RCP), Class 28/2012 • Certificate, Role of the Compensation Committee (RCC), Class 15/2012 • Certificate, Financial Institutions Governance Program (FGP), Class 4/2012 • Certificate, Director Accreditation Program (DAP), Class 8/2004 Capital Market Academy, the Stock Exchange of Thailand • Leadership Program, Class 8/2009 Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2012 - 2014 • Vice Chairman, Thanachart Insurance Public Company Limited 2011 - 2012 • Vice Chairman, Patum Rice Mill and Granary 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 Position(s) in Other Listed Companies 2012 - Present • Chairman, Patum Rice Mill and Granary Public Company Limited 2011 - Present • Chairman of the Executive Committee, Patum Rice Mill and Granary Public Company 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 2006 - Present • Vice Chairman, MBK Public Company Limited 2003 - Present • Vice Chairman of the Executive Committee, MBK Public Company Limited 2002 - Present • Member of the Compensation and Nomination Committee, MBK Public Company Limited Position(s) in Other Legal Entities 2014 - Present • Chairman, Siam City Life Assurance Public Company Limited • Chairman, Thanachart Insurance Public Company Limited 2011 - Present • Director, DMS Property Investment Private Limited 2007 - Present • 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 Thanachart Bank Public Company Limited
099
Mr. Kiettisak Meecharoen
Chairman of the Audit Committee (Independent Director) Date of Appointment
22 April 2002
Age
68 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 • Certificate, Director Accreditation Program (DAP), Class 40/2005 • Certificate, Audit Committee Program (ACP), Class 10/2005 World Bank • Futures Exchange (1995) Merrill Lynch, New York • Portfolio Investment (1994) Harvard Institute for International Development, Harvard University • Banking and Monetary Policy in Developing Countries (1998) Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 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 Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2005 - Present • Independent Director, Tararom Enterprise Public Company Limited 2000 - Present • Independent Director and Chairman of the Audit Committee, Safety Insurance Public Company Limited
100
Annual Report 2014
Mr. Narong Chivangkur
Chairman of the Nomination and Remuneration Committee (Independent Director) Date of Appointment
22 April 2002
Age
70 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 • Certificate, Anti-Corruption for Executive Program (ACEP), Class 3/2011 • Certificate, Role of the Nomination and Governance Committee (RNG), Class 1/2011 • Certificate, Financial Institutions Governance Program (FGP), Class 2/2011 • Certificate, Audit Committee Program (ACP), Class 32/2010 • Certificate, Financial Statement for Director (FSD), Class 4/2009 • Certificate, Successful Formulation and Execution of Strategy (SFE), Class 2/2008 • Certificate, Role of the Compensation Committee (RCC), Class 4/2007 • Certificate, Chartered Director Class (CDC), Class 1/2007 • Certificate, Corporate Social Responsibility (CSR), Class 1/2007 • Certificate, Director Certification Program (DCP), Class 34/2003 • Certificate, Director Examination, Class 11/2003 Asian Institute of Management, Philippines • Management Development Program Rochester Institute of Technology, U.S.A. • Financial Management Program Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2010 - 2011 2004 - 2011 Position(s) in Other Listed Companies Position(s) in Other Legal Entities 2005 - Present 2003 - Present 2000 - Present
• Independent Director and Chairman of the Nomination and Remuneration Committee, Siam City Bank Public Company Limited • Director, Momentum Sale and Distribution Company Limited None • Director, the Antique Boat Hotel Company Limited (The former name was Momchailai Development Company Limited) • Director, Momentum IM Company Limited • Director, Momentum BBS Company Limited
Thanachart Bank Public Company Limited
101
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
67 years
Education(s)
• Master of Science (Econometrics), The London School of Economics and Political Science (University of London), England • Bachelor of Science (Economics) (Upper Second Class Honours), University College London, England • Bachelor of Art (Law), Sukhothai Thammathiraj Open University
Training Program Related to Roles, Thai Institute of Directors Association Duties and Skills of Directorship • Certificate, Anti-Corruption for Executive Program (ACEP), Class 4/2012 • Certificate, the Executive Director Course (EDC), Class 1/2012 • Certificate, Role of the Chairman Program (RCP), Class 24/2010 • Certificate, Role of the Compensation Committee (RCC), Class 10/2010 • Certificate, Successful Formulation and Execution of Strategy (SFE), Class 4/2009 • Certificate, Corporate Social Responsibility (CSR), Class 1/2007 • Certificate, Chartered Director Class (CDC), Class 1/2007 • Certificate, DCP Refresher Course, Class 2/2006 • Certificate, Director Certification Program (DCP), Class 0/2000 • The Thailand’s 5th National Conference on Collective Action against Corruption, under the theme of “Tackling Corruption through Public-Private Collaboration Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014 Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2010 - 2011 2006 - 2011 1999 - 2011 Position(s) in Other Listed Companies Position(s) in Other Legal Entities
102
Annual Report 2014
• Independent Director, Member of the Audit Committee and Member of the Nomination and Remuneration Committee, Siam City Bank Public Company Limited • Dispute Resolution Committee, Interconnection Institution, NTC • Director, Thai Institute of Directors Association None None
Assoc. Prof. Dr. Somjai Phagaphasvivat Member of the Audit Committee (Independent Director) Date of Appointment
26 March 2009
Age
69 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 • Certificate, 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 2006 - 2014 • Independent Director and Chairman of the Audit Committee, SEAFCO Public Company Limited 1993 - 2014 • 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 Position(s) in Other Listed Companies 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 Position(s) in Other Legal Entities 1997 - Present • Director and Chairman of the Audit Committee, Krungthep Thanakom Company Limited • Director and Chairman of the Audit Committee, Thai Hua Rubber Public Company Limited
Thanachart Bank Public Company Limited
103
Mr. Alberto Jaramillo
Director (Non-Executive Director) Date of Appointment
27 September 2011
Age
43 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 2011 2005 - 2011 Position(s) in Other Listed Companies Position(s) in Other Legal Entities 2013 - Present 2011 - Present
104
Annual Report 2014
• Director, Siam City Bank Public Company Limited • Treasurer, the Bank of Nova Scotia Inverlat, Mexico None • Manager, Cga Arkad Investments Limited Liability Company • Director, The Bank of Nova Scotia Asia Limited, Singapore • Director, Scotiabank (Hong Kong) Limited, Hong Kong • Vice President and Regional Treasurer, The Bank of Nova Scotia, Pacific Regional Office, Hong Kong
Mr. Rod Michael Reynolds
Member of the Nomination and Remuneration Committee (Non-Executive Director) Date of Appointment
15 January 2013
Age
57 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 2009 - 2013 Position(s) in Other Listed Companies Position(s) in Other Legal Entities 2012 - Present 2009 - Present 1983 - Present
• Director, Tulsa Inspection Resources Limited Liability Company None • Director, C.H. Bailey Public Limited Company • Director, Logarithmics Limited • President, Asia Pacific, The Bank of Nova Scotia
Thanachart Bank Public Company Limited
105
Mr. Kobsak Duangdee Director (Non-Executive Director) Date of Appointment
1 April 2009
Age
58 years
Education(s)
• Master of Business Administration, 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 • Certificate, Chartered Director Class (CDC), Class 7/2013 • Certificate, Successful Formulation and Execution of Strategy (SFE), Class 19/2013 • Certificate, Director Certification Program (DCP), Class 155/2012 • Certificate, Financial Institutions Governance Program (FGP), Class 2/2011 • Certificate, 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 2012 - 2013 • Member of the Audit Committee, Thanachart Securities Public Company Limited 2009 - 2013 • Member of the Executive Committee, Thanachart Bank Public Company Limited 2008 - 2013 • Executive Vice President, Head of Financial Institutions, Thanachart Bank 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 Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2014 - Present • Secretary General of the Thai Bankers’ Association 2011 - Present • Liquidator, SCIB Public Company Limited
106
Annual Report 2014
Ms. Suvarnapha Suvarnaprathip
Vice Chairperson of the Executive Committee (Executive Director) Date of Appointment
22 April 2002
Age
69 years
Education(s)
• Bachelor of Economics, Monash University, Australia
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, 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 - 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 Position(s) in Other Listed Companies 2006 - Present • Director and Vice Chairperson of the Executive Committee, Thanachart Capital Public Company Limited Position(s) in Other Legal Entities 1991 - Present • Director, Seacon Development Public Company Limited
Thanachart Bank Public Company Limited
107
Mr. Peter Clifford Bessey
Vice Chairman of the Executive Committee and Deputy Chief Executive Officer (Executive Director) Date of Appointment
1 September 2014
Age
54 years
Education(s) • Bachelor of Business Administration, University of New Brunswick, Canada Training Program Related to Roles, Duties, and Skills of Directorship
Ivey Executive Program • Richard Ivey School of Business Investment Funds in Canada • Institute of Canadian Bankers Associate of the Institute of Canadian Bankers • Institute of Canadian Bankers
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2011 - 2014 2008 - 2011 Position(s) in Other Listed Companies Position(s) in Other Legal Entities 2014 - Present
• President and Chief Executive Officer, Scotiabank de Puerto Rico • Senior Vice President, Retail and Small Business Banking Atlantic Region, Halifax, Nova Scotia, Canada None • Director, Thanachart Insurance Public Company Limited
Notes:
The Board of Directors Meeting No. 6/2014 resolved to approve the appointment of Mr. Peter Clifford Bessey as the Bank’s Director (Executive Director) and Deputy Chief Executive Officer, in replacement of Mr. Brendan George John King who resigned from his directorship and executive of the Bank with effect from 1 September 2014. In this regard, the Bank of Thailand has already granted an approval for this matter.
108
Annual Report 2014
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
51 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
• The Fundamentals of Coaching Excellence • Moody’s Risk Analysis • Merchant Banking Introductory Course • Introduction to Investment Banking and Bond Structuring Queen’s University • Marketing Certificate, Executive Management Program The Institute of Canadian Bankers • Honours Diploma, General Management Scotiabank • Commercial Sales Leadership Program • International Commercial Banker Development Program • Leader-Coach Program • Strategic Selling Skills Course
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2013 - 2014 2012 - 2014 2012 - 2013 2011 - 2013 2010 - 2011 2004 - 2011 Position(s) in Other Listed Companies Position(s) in Other Legal Entities Notes:
• Director, Thanachart Securities Public Company Limited • Director, Thanachart Insurance Public Company Limited • Director, The Bank of Nova Scotia Asia Limited, Singapore • Director, Thanachart Life Assurance Public Company Limited • Director, Scotia Netherlands Holdings B.V. • Director and Vice Chairman of the Executive Committee, Siam City Bank Public Company Limited • Director, Scotiabank (Hong Kong) Limited, Hong Kong • Director, Scotiabank Nominees (Hong Kong) Limited, Hong Kong None None
Mr. Brendan George John King resigned from his directorship and executive of the Bank with effect from 1 September 2014. The Board of Directors in the Meeting No. 6/2014, therefore, resolved to approve the appointment of Mr. Peter Clifford Bessey as the Bank’s Director (Executive Director) and Deputy Chief Executive Officer, in replacement of Mr. Brendan George John King. In this regard, the Bank of Thailand has already granted an approval for this matter. Thanachart Bank Public Company Limited
109
Mr. Somjate Moosirilert
Member of the Executive Committee and Chief Executive Officer and President (Executive Director) Date of Appointment
29 October 2009
Age
58 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, Duties, and Skills of Directorship
Thai Institute of Directors Association • 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 Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2010 - 2014 • Chairman and Chairman of the Executive Committee, Siam City Life Assurance Public Company Limited 2009 - 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 Position(s) in Other Listed Companies 2010 - Present • Senior Executive Vice President, Thanachart Capital Public Company Limited 2009 - Present • Director and Member of the Executive Committee, Thanachart Capital Public Company Limited Position(s) in Other Legal Entities 2014 - Present • Vice Chairman, Thanachart Insurance Public Company Limited • Member of the Steering Committee, Sasin Graduate Institute of Business Administration of Chulalongkorn University 2013 - Present • Chairman, Thanachart Fund Management Company Limited • Chairman of the Executive Committee, Thanachart Securities Public Company Limited • Vice Chairman of the Executive Committee, Thanachart Insurance Public Company Limited 2011 - Present • 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 • Director, Thanachart Fund Management Company Limited • Director and Member of the Executive Committee, Thanachart Insurance Public Company Limited • Advisor, Association of Securities Companies 2009 - Present • Chairman, Thanachart Securities Public Company Limited 110
Annual Report 2014
Mrs. Noossara Roonsamrarn
Executive Vice President, Corporate Banking Team 1 Date of Appointment
22 April 2002
Age
57 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 (NDC 22) Capital Market Academy, The Stock Exchange of Thailand • Leadership Program, Class 7 (CMA 7) Thai Institute of Directors Association • Certificate, DCP Refresher Course, Class 4/2007 • Certificate, 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 - 2014 • Member of the Audit Committee, Thanachart Insurance Public Company Limited Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 1997 - Present • Director, Thanachart Insurance Public Company Limited Notes:
Mrs. Noossara Roonsamrarn resigned from TNI’s Member of the Audit Committee, effective on October 1, 2014.
Thanachart Bank Public Company Limited
111
Mr. Piyaphong Artmangkorn
Executive Vice President, Investment Management Date of Appointment
1 September 2005
Age
57 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 - Certificate, Director Accreditation Program (DAP), Class 8/2004 Thanachart Bank Public Company Limited - Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years Position(s) in Other Listed Companies 2006 - Present 1998 - Present Position(s) in Other Legal Entities
112
Annual Report 2014
None - Executive Committee, MBK Public Company Limited - Director, MBK Public Company Limited None
Mr. Anuwat Luengtaweekul
Executive Vice President, Chief Financial Officer Date of Appointment
1 June 2009
Age
51 years
Education(s)
• Master of Business Administration, Rangsit University • Bachelor of Science (Accounting), Kasetsart University
Training Program
Thai Institute of Directors Association • How to Measure the Success of Corporate Strategy (HMS), Class 4/2014 • Certificate, Successful Formulation and Execution of Strategy (SFE), Class 3/2009 • Certificate, Director Certification Program (DCP), Class 24/2002 • Certificate, Board and Performance Evaluation Program Association of Finance Companies • Financers’ Executive Development Program, Class 9/1994 Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years None Position(s) in Other Listed Companies 2012 - Present • Member of the Nomination and Remuneration Committee, Ratchthani Leasing Public Company Limited 2010 - Present • Director, Ratchthani Leasing Public Company Limited Position(s) in Other Legal Entities None
Thanachart Bank Public Company Limited
113
Mr. Ajay Pratap Mundkur
Executive Vice President, Retail Banking Date of Appointment
23 June 2009
Age
50 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 2005 - 2012 Position(s) in Other Listed Companies Position(s) in Other Legal Entities 2012 - Present
114
Annual Report 2014
• Vice President, Retail Banking, Asia - Pacific Region, the Bank of Nova Scotia None • Senior Vice President, International Banking, the Bank of Nova Scotia
Mr. Enghug Nontikarn
Executive Vice President, Treasury and Debt Capital Markets
Date of Appointment
1 June 2011
Age
58 years
Education(s)
• Master of Business Administration, Thammasat University • Bachelor of Economics, Thammasat University
Training Program
Thai Institute of Directors Association • Certificate, Director Accreditation Program (DAP), Class 25/2004 Thanachart Bank Public Company Limited • Anti Corruption for Executive, Class 1/2014
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2006 - 2011 • Senior Executive Vice President, Siam City Bank Public Company Limited Position(s) in Other Listed Companies 1995 - Present • Independent Director, Member of the Audit Committee, and Member of the Nomination Committee, Srithai Superware Public Company Limited Position(s) in Other Legal Entities 2013 - Present • Director, TRIS Corporation Limited 2014 - Present • Director and Chairman of the Risk Management Committee, Thanachart Fund Management Company Limited • Member of the Nomination Committee, TRIS Corporation Limited
Thanachart Bank Public Company Limited
115
Mrs. Pittimart Sanguansook
Senior Vice President, Accounting Date of Appointment
1 January 2014
Age
50 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 Position(s) in Other Listed Companies Position(s) in Other Legal Entities
• Vice President, Citibank None None
Mrs. Teranuj Koomsap
Senior Vice President, Finance Date of Appointment
14 November 2012
Age
41 years
Education(s)
• Master of Business Administration, Smeal College of Business, Pennsylvania State University, University Park, U.S.A. • Bachelor of Science (Accounting-1st class honor), Thammasat University
Training Program
Thai Institute of Directors Association • Certificate, 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 Position(s) in Other Listed Companies Position(s) in Other Legal Entities
116
Annual Report 2014
• Senior Vice President, Siam Commercial Bank Public Company Limited None None
The information of the Executives and Authorized persons’ position in subsidiary, associated, and related companies As of December 31, 2014 Parent Company
TBANK
Subsidiary Companies
Name Mr. Banterng Tantivit
XXX
Mr. Suphadej Poonpipat
XX /// XX /// A
1
2
3
4
5
6
7
8
XXX XXX ///
Associated Company
Related Companies
9
10 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 43 44 45 46
XXX /// X XXX XXX X XX // X
X
X
X
X
X
X XXX /// X XXX X
X
Mr. Kiettisak Meecharoen
X
Mr. Narong Chivangkur
X
Mr. Sataporn Jinachitra
X
Assoc. Prof. Dr. Somjai Phagaphasvivat
X
XXX X
Mr. Alberto Jaramillo
X
Mr. Rod Michael Reynolds
X
Mr. Kobsak Duangdee
X
Ms. Suvarnapha Suvarnaprathip
X // X //
X
X X
X
X
X
X
X X
X
X
F X
X
X F H
Mr. Peter Clifford Bessey
X // C
Mr. Somjate Moosirilert
X / B X / D XXX /// XXX /// XX // XXX
X
X
Thanachart Bank Public Company Limited
Mrs. Noossara Roonsamrarn
E
Mr. Piyaphong Artmangkorn
E
Mr. Anuwat Luengtaweekul
E
Mr. Ajay Pratap Mundkur
E
Mr. Enghug Nontikarn
E
Mrs. Pittimart Sanguansook
G
Mrs. Teranuj Koomsap
G
X
X
X
X X/
X
Notes: XXX = Chairman /// = Chairman of the Executive Committee A = Chief Executive Officer D = Senior Executive Vice President่ G = Senior Vice President
X
XX = Vice Chairman // = Vice Chairman/Chairperson of the Executive Committee B = Chief Executive Officer and President E = Executive Vice President H = Liquidator
X = Director / = Member of the Executive Committee C = Deputy Chief Executive Officer F = Authorized Person Management Power
F
X
X
X
117
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. TS Assets Management Company Limited
6. Ratchthani Leasing Public Company Limited 7. Thanachart Management and Services Company Limited 8. Thanachart Training and Development Company Limited
Associated Company 9. MBK Public Company Limited
Related Companies 10. Siam Piwat Holding Company Limited 11. MBK Resort Public Company Limited 12. Plan Estate Company Limited 13. Siam Piwat Company Limited 14. B.V. Holding Company Limited 15. Deebuk Company Limited 16. Thai Farming Company Limited 17. Patum Rice Mill and Granary Public Company Limited 18. Royal Orchid Hotel (Thailand) Public Company Limited 19. Siam City Life Assurance Public Company Limited 20. DMS Property Investment Private 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 26. Momentum BBS Company Limited 27. SEAFCO Public Company Limited
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28. Amarin Printing & Publishing Public Company Limited 29. Lee Feed Mill Public Company Limited 30. Krungthep Thanakorn Company Limited 31. Thai Hua Rubber Public Company Limited 32. Cga Arkad Investments Limited Liability Company 33. The Bank of Nova Scotia Asia Limited, Singapore 34. Scotiabank (Hong Kong) Limited, Hong Kong 35. The Bank of Nova Scotia, Pacific Regional Office, Hong Kong 36. C.H. Bailey Public Company Limited 37. Logarithmics Limited 38. Asia Pacific, The Bank of Nova Scotia 39. The Thai Bankers’ Association 40. SCIB Public Company Limited 41. Seacon Development Public Company Limited 42. Sasin Graduate Institute of Business Administration of Chulalongkorn University 43. Thai Listed Companies Association 44. The Bank of Nova Scotia 45. Srithai Superware Public Company Limited 46. TRIS Corporation Limited
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 1,500,000,000 1,499,999,930 444 MBK Tower, 14th, 18th and 19th Floor, Share Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8888, +66 (0) 2217-9595
100.00
2.
Thanachart Insurance PCL. 999/1 the Nine Tower, Rama 9 Road, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9300 Fax +66 (0) 2308-9333
3.
Thanachart Management and Services Co., Ltd. Services 2 Suan Mali Building, 2nd Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1210 Fax +66 (0) 2220-2520
4.
Thanachart Training and Development Co., Ltd. 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
Non-life Ordinary Insurance share
74,000,000
73,999,434
100.00
Ordinary share
600,000
599,993
100.00
Training
Ordinary share
500,000
499,993
100.00
5.
Thanachart Group Leasing Co., Ltd. Leasing th 444 MBK Tower, 9 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000, +66 (0) 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
Thanachart Bank Public Company Limited
119
No.
Company/Location
7.
SCIB Services Co., Ltd. 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5787 Fax +66 (0) 2253-4748
8.
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
9.
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
10. SCIB PCL.3 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 11.
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) 2253-8455
12.
Ratchthani Leasing PCL. 77/35-36 Sinn Sathorn Tower, 11 Up Floor, Krung Thonburi Road, Klong Ton Sai, Klong San, Bangkok 10600 Tel. +66 (0) 2440-0844 Fax +66 (0) 2440-0848
13. Thoon Ruam Kan Co., Ltd.3 133/2 Soi Sukhumvit 21, Sukhumvit Road, Klongtoey, Bangkok 10110 14. 120
Siam Media and Communication Co., Ltd.3 18 Building 2 West SCB Park Plaza, 17th-22nd Floor, Ratchadapisek Road, Ladyao, Chatuchak, Bangkok 10990
Annual Report 2014
Type of Business Services
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding Ordinary Share
100,000
99,998
100.00
Non-performing Ordinary asset Share management
200,000,000
199,999,997
100.00
10,000,000
Life and Non-life Insurance Broker
Ordinary Share
9,999,000
99.99
Sale of company assets
Ordinary 2,112,810,676 2,112,375,422 Share
99.98
Mutual Ordinary fund Share management
10,000,000
7,499,993
75.00
Leasing
Ordinary 2,013,522,778 1,312,459,500 Share
65.18
Others
Ordinary Share
240,000
80,000
33.33
Communication Ordinary Share
7,000,000
1,633,800
23.34
No.
Company/Location
Type of Business
15. 16. 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.
Metropolitan Industrial Leasing Co., Ltd.3 81/42 Moo 5, Surasak, Sriracha, Chonburi 20110 Tel. +66 (0) 3804-8052 Fax +66 (0) 3804-8053
Leasing
19. 20. 21. 22.
Sahakol Chassis Co., Ltd. 1418/6-8 Phaholyotin Road, Lad Yao, Chatuchak, Bangkok 10900
Vehicle
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
Industrial Ordinary pipe Share Manufacturing
500,001
70,470
14.09
Medical Clinic Ordinary Puen Pob Paet Co., Ltd.3 Share 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2220-2222
100,000
9,998
10.00
Crystal City Development Co., Ltd.3 419 Sathupradit Road, Chong Nonsi, Yannawa, Bangkok 10120
750,000
75,000
10.00
Ordinary Share
5,000,000
500,000
10.00
Ordinary Share
45,000,000
4,500,000
10.00
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
Textiles Ordinary and apparel Share
20,000
2,000
10.00
Soonvijai Development Co., Ltd.3 1740 New Petchburi Road, Bangkapi, Huay Klang, Bangkok 10310
Construction Ordinary Share
13,000
1,300
10.00
Modular Samko Co., Ltd.3 155 Moo 14, Sukhumvit Sai Kao Road, Bangpakong, Chachoengsao 24130
Household Ordinary Share
3,500,000
350,000
10.00
Finances Ordinary and Securities Share
13,000,000
1,300,000
10.00
Construction Ordinary 24. Siam City Real Estate Services Co., Ltd.3 st Share 62 Thaniya Building, 1 Floor, Silom Road, Suriyawong, Bangrak, Bangkok 10500
1,000,000
100,000
10.00
23. Siam Euro Leasing Co., Ltd.3 20/22 Soi Prommitr, Sukhumvit Road, Klong Tan Nuea, Watthana, Bangkok 10110
Construction Ordinary Share
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. Thanachart Bank Public Company Limited
121
TBANK’s References Location of Head Office
: 444 MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand
Registration No.
: 0107536001401
Type of Business
: Commercial Banking
Registered Capital
: THB 99,136,649,030, consist of common shares of 9,913,664,903 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) 2217-8000
Fax
: +66 (0) 2217-8333
Thanachart Contact Center : 1770
Other References Registrar: Ordinary shares
Debenture TBANK155A
Debenture TBANK204A
122
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Thailand Securities Depository Company Limited 62 The Stock Exchange of Thailand Building, Ratchadaphisek Road, Klongtoey, Bangkok 10110 Tel. +66 (0) 2229-2800 Call Center +66 (0) 2229-2888 Fax +66 (0) 2359-1259 Website: www.tsd.co.th Thai Military Bank Public Company Limited 3000 Phahonyothin Road, Chom Phon, Chatuchak, Bangkok 10900 Tel. +66 (0) 2299-1111 Fax +66 (0) 2273-7806 Website: www.tmbbank.co.th CIMB Thai Public Company Limited 44 Langsuan Building, 15th Floor, Langsuan Road, Lumpini, Patumwan, Bangkok 10330 Tel. +66 (0) 2626-7503 Fax +66 (0) 2633-9026 Website: www.cimbthai.com
Debenture TBANK227A, TBANK22OA, and TBANK24DA
Debenture Hybrid Tier I
Thanachart Bank Public Company Limited Registrar and Paying Agent Department 1101 Petchburi Building, 2nd Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5000 ext. 5017, 4519 Fax +66 (0) 2651-7899, +66 (0) 2651-7915 Website: www.thanachartbank.co.th Thanachart Bank Public Company Limited Securities Operation Section 444 MBK Tower, 20th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 ext. 3833 Fax +66 (0) 2611-4839 Website: www.thanachartbank.co.th
Bondholders’ Representative: Debenture TBANK155A, TBANK227A, and TBANK22OA
Thai Military Bank Public Company Limited 3000 Phahonyothin Road, Chom Phon, Chatuchak, Bangkok 10900 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, Patumwan, Bangkok 10330 Tel. +66 (0) 2626-7503 Fax +66 (0) 2633-9026 Website: www.cimbthai.com
Debenture Hybrid Tier
- None -
Auditor:
Miss Ratana Jala Certified Public Accountant (Thailand) No. 3734 EY Office Limited 193/136-137, Lake Rajada Office Complex, 33rd Floor, New Ratchadaphisek Road, Klongtoey, Bangkok 10110 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
123
Companies in Thanachart Financial Group Thanachart Capital Public Company Limited
Thanachart Insurance 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
999/1 The Nine Tower, Rama 9 Road, Suanluang, Suanluang, Bangkok 10250, Thailand Tel. +66 (0) 2308-9300 Fax +66 (0) 2308-9333 www.thanachartinsurance.co.th Registration No. 0107555000473
Thanachart Bank Public Company Limited
Siam City Life Assurance Public Company Limited
16th-17th
444 MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax +66 (0) 2217-8333 www.thanachartbank.co.th Registration No. 0107536001401
231 Thanachart Park Place Building, 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. 0107555000481
Thanachart Securities Public Company Limited
Ratchthani Leasing Public Company Limited
444 MBK Tower, and Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8888, 2611-9222, 2217-9595 Fax +66 (0) 2217-9642 www.tnsitrade.com Registration No. 0107557000591
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
Thanachart Fund Management Company Limited
Thanachart Group Leasing Company Limited
14th,
18th
19th
231 Thanachart Park Place, 5th-7th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2126-8300 Fax +66 (0) 2253-8483 www.thanachartfund.co.th Registration No. 0105535049696
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Annual Report 2014
444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000, 2613-6000 Fax +66 (0) 2217-8098 Website: None Registration No. 0105538045861
National Leasing Company Limited
Thanachart Management and Services Company Limited
9th
444 MBK Tower, Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax None Website: None Registration No. 0105532078407
2 Suan Mali Building, 2nd Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10100, Thailand Tel. +66 (0) 2220-2222 Fax +66 (0) 2220-2520 Website: None Registration No. 0105533119077
TS Asset Management Company Limited
Thanachart Training and Development Company Limited
1101 Petchburi Building, 9th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400, Thailand Tel. +66 (0) 2208-5555 Fax +66 (0) 2253-6130 www.thanachartnpa.com Registration No. 0105554031624
2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10100, Thailand Tel. +66 (0) 2220-2222 Fax +66 (0) 2220-2300 Website: None Registration No. 0105550042966
Thanachart Broker Company Limited
SCIB Services Company Limited
333 Thanachart Wongsawang Building, Floor, Ratchadaphisek Road, Wongsawang, Bang Sue, Bangkok 10800, Thailand Tel. +66 (0) 2685-0200 Fax +66 (0) 2685-0333 Website: None Registration No. 0105540075314
1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400, Thailand Tel. +66 (0) 2208-5091-2 Fax +66 (0) 2651-6611 Website: None Registration No. 0105534009895
3rd
Thanachart Bank Public Company Limited
125
Shareholders and Dividend Payment Policy Shareholders (1) List of major shareholders (a) Top ten major shareholders with number of shares and percentage of shareholders as of 14 March 2014 (the latest closing date of the suspended share-transfer register) as follows: Rank
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
List of Shareholders
Thanachart Capital Public Company Limited1 Scotia Netherlands Holdings B.V.2 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 receivership 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
Source: Report of the Bank’s major shareholders as of March 14, 2014 prepared by Thailand Securities Depository Co., Ltd. Remark: 1. The number 1 shareholder (Thanachart Capital Public Company Limited), which operates an investment business (a holding company), was granted approval to undertake transactions as follows: 1) investing and giving credit to the subsidiaries under Thanachart Financial Group and 2) any investment made in other company that cause the holding company to have controlling power, such other company must be a financial institution, or that of supporting financial business, and the holding company must obtain approval from the Bank of Thailand (“BOT�).
126
Annual Report 2014
Name list of 10 holders with the largest amount of ordinary and preferable shares as of 7 October 2014 (the latest closing date of the suspended share-transfer register) as follows:
List of Shareholders
Number of ordinary shares (shares)
1. Thai NVDR Company Limited 2. MBK Public Company Limited 3. Thanachart Capital Public Company Limited 4. State Street Bank Europe Limited 5. Chase Nominees Limited 42 6. Nortrust Nominees Limited 7. State Street Bank and Trust Company 8. Krungsri Dividend Stock LTF (KFLTFDIV) 9. The Bank of New York Mellon 10. Miss Atinuj Tantivit Total Paid-up Shares
Number of preferred shares (shares)
Total shares (shares)
Shareholding proportion (percent)
190,241,750 129,914,400 71,350,000
- - -
190,241,750 129,914,400 71,350,000
14.888 10.167 5.584
53,977,682 46,974,200 39,680,200
- - -
53,977,682 46,974,200 39,680,200
4.224 3.676 3.105
34,877,269 22,522,900
- -
34,877,269 22,522,900
2.729 1.763
17,998,555 15,866,272
- -
17,998,555 15,866,272
1.409 1.242
1,277,816,427
13,276
1,277,829,703
100.000
2. The number 2 shareholder (Scotia Netherlands Holdings B.V.) is a juristic person registered in Netherlands. BOT granted approval to Scotiabank to make changes to the Bank’s shareholding structure by holding 48.99 percent of the Bank’s total paid-up shares via Scotia Netherlands Holdings B.V. on 9 May 2012.
(b) The groups of major shareholders who in fact have influence over the formulation of the Bank’s management policies and operation include Thanachart Capital Public Company Limited (“TCAP”) holding 50.959 percent and the Scotia Netherlands Holdings B.V. holding 48.999 percent of the total paid-up shares. TCAP does not have any major shareholder with significant influence over its management policies or operation.
(2) Shareholders’ Agreement TCAP and Scotiabank mutually established the Shareholders’ Agreement with the key condition requiring each party’s representatives to contribute to the Bank’s management as directors and executives of the Bank as well as directors of the Bank’s key subsidiaries. Moreover, any resolution made by the Board of Directors and the Shareholders Meeting on significant issues shall be compliant with the Bank’s Articles of Association aiming to achieve the common goal of both shareholders via the Bank’s management.
Dividend Payment Policy Dividend Payment Policy of TBANK
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.
Thanachart Bank Public Company Limited
127
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. 21/2014 on April 3, 2014, 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 0.45 per share, totaling THB 2,481,149,206.35 or 17.58 percent of the net profit of the separate financial statements (in case of excluding profit from extraordinary item, the dividend payout ratio represents 32.17 percent) 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)
0.75
1.91
1.25
1.21
1.24
Dividend per share (THB)
0.56
0.56
0.40
0.35
0.37
74.47
30.54
38.57
28.94
29.76
Dividend Payout Ratio (Percent)
128
Annual Report 2014
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 judgements 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 EY 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, 2014 which is in compliance with financial reporting standards and relevant rules and regulations.
(Mr. Banterng Tantivit) Chairman of the Board of Director
(Mr. Somjate Moosirilert) Chief Executive Officer and President
Thanachart Bank Public Company Limited
129
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 2014, the Audit Committee convened twelve 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, 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.
130
Annual Report 2014
• 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 Consider and make recommendations on the appointment 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
Thanachart Bank Public Company Limited
131
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 2014, 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. 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 2014, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.
Ratana Jala Certified Public Accountant (Thailand) No. 3734
EY Office Limited Bangkok: 19 February 2015 132
Annual Report 2014
Statement of financial position Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2014 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Assets Cash
16,605,352
17,940,109
16,597,864
17,938,627
Interbank and money market items - net
7
65,433,187
69,697,056
65,337,960
66,094,560
Derivatives assets
8
4,389,463
3,913,805
4,389,151
3,913,805
Investments - net
9
149,609,222
138,825,014
141,201,680
125,874,271
Investments in subsidiary and associated companies - net
10
1,918,613
1,834,705
8,744,086
9,505,400
Loans to customers and accrued interest receivables
11 810,155,154
852,017,050
766,482,713
808,369,873
779,184
1,009,123
768,957
984,900
Total loans to customers and accrued interest receivables
810,934,338
853,026,173
767,251,670
809,354,773
Less: Deferred revenue
(55,784,767)
(61,999,696)
(52,046,434)
(57,875,923)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
12
(27,697,055)
(29,782,135)
(20,150,090)
(21,208,072)
Revaluation allowance for debt restructuring
13
(103,222)
(301,192)
(103,222)
(301,192)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
727,349,294
760,943,150
694,951,924
729,969,586
48,217
30,330
48,217
30,330
Properties foreclosed - net
15
6,506,713
6,291,062
3,303,563
2,996,742
Land, premises and equipment - net
16
7,933,859
8,037,212
7,716,145
7,787,388
Intangible assets - net
17
3,416,723
3,843,023
3,345,112
3,782,061
17,951,311
17,951,311
17,941,195
17,941,195
669,724
641,319
-
-
1,837,410
1,645,667
-
-
5,220,685
6,755,155
3,639,544
4,890,485
1,008,889,773
1,038,348,918
967,216,441
990,724,450
Goodwill Deferred tax assets
18
Receivables from purchase and sale of securities Other assets - net Total assets
19
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
133
Statement of financial position (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2014 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Liabilities and equity Deposits
20
696,991,623
719,079,168
699,734,913
722,262,165
Interbank and money market items
21
80,269,859
81,082,186
73,147,491
74,449,007
1,655,382
3,218,667
1,655,382
3,218,667
Liability payable on demand Derivatives liabilities
8
5,200,037
5,701,330
5,196,987
5,697,046
Debt issued and borrowings
22
90,197,820
92,228,946
73,843,320
76,923,346
48,217
30,330
48,217
30,330
Banks' liability under acceptances Provisions
23
2,799,773
3,145,644
2,602,932
2,960,190
Deferred tax liabilities
18
1,648,912
1,719,634
1,619,517
1,594,806
Payables from purchase and sale of securities
1,519,696
1,294,515
100,286
1,426
Accrued interest payables
4,044,708
4,405,614
3,953,424
4,317,213
Accrued expenses
5,132,140
5,312,605
4,441,714
4,645,020
Insurance contracts liabilities
24
4,697,524
15,019,053
-
-
Other liabilities
25
8,519,773
8,871,596
5,269,917
5,472,579
902,725,464
941,109,288
871,614,100
901,571,795
99,136,649
75,266,649
99,136,649
75,266,649
55,136,649
55,136,649
55,136,649
55,136,649
2,100,694
2,100,694
2,100,694
2,100,694
27
2,119,277
801,131
1,358,085
345,109
28
2,431,076
2,035,183
2,431,076
2,035,183
43,189,338
36,144,439
34,575,837
29,535,020
104,977,034
96,218,096
95,602,341
89,152,655
1,187,275
1,021,534
-
-
106,164,309
97,239,630
95,602,341
89,152,655
1,008,889,773
1,038,348,918
967,216,441
990,724,450
-
-
-
-
Total liabilities Equity Share capital
26
Registered 9,913,664,903 ordinary shares of Baht 10 each (2013 : 7,526,664,903 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.
134
Annual Report 2014
Statement of comprehensive income Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2014 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Profit or loss Continuing operations Interest income
31
52,445,053
53,879,419
49,101,807
50,541,614
Interest expenses
32
(24,883,731)
(27,290,412)
(23,919,715)
(26,488,525)
27,561,322
26,589,007
25,182,092
24,053,089
8,692,928
8,792,593
6,525,537
6,431,696
(2,766,261)
(2,677,616)
(2,533,214)
(2,460,219)
Net interest income Fees and service income Fees and service expenses Net fees and service income
33
5,926,667
6,114,977
3,992,323
3,971,477
Gains on trading and foreign exchange transactions
34
859,064
530,998
641,399
685,131
Gains on investments
35
768,817
13,081,096
755,350
13,884,505
151,673
414,865
-
-
5,942,135
6,723,971
-
-
305,093
562,493
1,579,407
1,856,613
19,192
41,958
303,566
314,217
Other operating income
1,628,601
1,564,494
1,370,634
1,367,144
Total operating income
43,162,564
55,623,859
33,824,771
46,132,176
Insurance/Life insurance expenses
(3,851,623)
(4,441,553)
-
-
Net operating income
39,310,941
51,182,306
33,824,771
46,132,176
10,779,620
10,465,936
9,074,437
8,767,883
42,968
37,612
34,044
28,942
2,928,154
3,012,758
2,619,721
2,698,223
849,429
888,789
812,424
839,475
4,915,120
6,002,804
4,488,006
5,357,593
19,515,291
20,407,899
17,028,632
17,692,116
7,121,698
11,496,664
7,180,931
11,110,018
12,673,952
19,277,743
9,615,208
17,330,042
(2,478,681)
(4,030,938)
(1,697,349)
(3,216,709)
10,195,271
15,246,805
7,917,859
14,113,333
-
354,241
-
-
10,195,271
15,601,046
7,917,859
14,113,333
Share of profit from investments accounted for under equity method Insurance/Life insurance income Dividend income Income on supporting service
Other operating expenses Employee's expenses Directors' remuneration
36
Premises and equipment expenses Taxes and duties Other expenses Total other operating expenses Impairment losses of loans and debt securities
37
Profit before income tax Income tax
18.2
Profit for the year from continuing operations Discontinued operations Profit for the year from discontinued operations
47
Profit for the year
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
135
Statement of comprehensive income (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2014 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Other comprehensive income Continuing operations
38
Gains (losses) on changes in value of available-for-sale investments Share of other comprehensive income of associate (loss)
1,596,881
(394,390)
1,266,220
44,322
(53,490)
-
(323,057)
110,077
(528,033) -
Income tax relating to components of other comprehensive income
18.2
(253,244)
106,455
Total other comprehensive income from continuing operations (loss)
1,318,146
(337,803)
1,012,976
-
(118,862)
-
1,318,146
(456,665)
1,012,976
(421,578)
Discontinued operations Other comprehensive income from discontinued operations (loss)
47
Total other comprehensive income (loss)
(421,578)
Total comprehensive income Total comprehensive income from continuing operations Total comprehensive income from discontinued operations Total comprehensive income
11,513,417
14,909,002
8,930,835
13,691,755
-
235,379
-
-
11,513,417
15,144,381
8,930,835
13,691,755
9,921,941
15,030,648
7,917,859
14,113,333
-
354,241
-
-
9,921,941
15,384,889
7,917,859
14,113,333
273,330
216,157
-
-
273,330
216,157
10,195,271
15,601,046
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 Profit for the year attributable to non-controlling interests
The accompanying notes are an integral part of the financial statements.
136
Annual Report 2014
Statement of comprehensive income (continued) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2014 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Total comprehensive income attributable to: The Bank Total comprehensive income from continuing operations
11,240,087
14,692,845
8,930,835
13,691,755
-
235,379
-
-
11,240,087
14,928,224
8,930,835
13,691,755
273,330
216,157
-
-
273,330
216,157
11,513,417
15,144,381
1.80
2.73
1.44
2.56
-
0.06
-
-
1.80
2.79
1.44
2.56
Total comprehensive income from discontinued operations Total comprehensive income attributable to the Bank 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
39
Basic earnings per share (Baht per share) Profit attributable to the Bank Profit from continuing operations Profit from discontinued operations
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
137
138
Statements of changes in equity
Annual Report 2014
Thanachart Bank Public Company Limited and its subsidiaries Statements of changes in equity For the year ended 31 December 2014 (Unit: Thousand Baht) Consolidated financial statements Other components of equity Surplus from
Share of
Amounts recognised in
Issued and
business
Surplus on
other comprehensive
other comprehensive income
fully paid-up
combination under
changes in value
income of
and accumulated in equity
Appropriated -
common control
of investments - net
associates (loss)
relating to assets held for sale
statutory reserve
share capital
Balance as at 1 January 2013
Share premium
55,136,649
2,100,694
1,040,192
222,121
118,862
1,329,516
Dividend paid (Note 30)
-
-
-
-
-
-
-
Decrease in non-controlling interests of the subsidiaries
-
-
-
-
-
-
-
Transfer of retained earnings to statutory reserve (Note 28)
-
-
-
-
-
-
705,667
Total comprehensive income for the year (loss)
(123,379)
Retained earnings
-
(118,862)
Non-controlling Unappropriated
23,505,273 (2,040,056) (705,667)
interests
Total
855,757 (50,380) -
84,185,685 (2,040,056) (50,380) -
-
-
(289,634)
(48,169)
-
15,384,889
216,157
15,144,381
Balance as at 31 December 2013
55,136,649
2,100,694
(123,379)
750,558
173,952
-
2,035,183
36,144,439
1,021,534
97,239,630
Balance as at 1 January 2014
(123,379)
36,144,439
1,021,534
97,239,630
55,136,649
2,100,694
750,558
173,952
-
2,035,183
Dividend paid (Note 30)
-
-
-
-
-
-
-
Decrease in non-controlling interests of the subsidiaries
-
-
-
-
-
-
-
Transfer of retained earnings to statutory reserve (Note 28)
-
-
-
-
-
-
395,893
-
1,278,256
39,890
-
-
9,921,941
273,330
11,513,417
2,028,814
213,842
-
2,431,076
43,189,338
1,187,275
106,164,309
Total comprehensive income for the year Balance as at 31 December 2014
-
-
55,136,649
2,100,694
The accompanying notes are an integral part of the financial statements.
(123,379)
(2,481,149) (395,893)
(107,589) -
(2,481,149) (107,589) -
Statements of changes in equity (continued) Thanachart Bank Public Company Limited and its subsidiaries Statements of changes in equity (continued) For the year ended 31 December 2014 (Unit: Thousand Baht) Separate financial statements Other components of equity surplus on changes
fully paid-up
in value of
Appropriated -
investments - net
statutory reserve
share capital
Balance as at 1 January 2013
Retained earnings
Issued and
Share premium
Unappropriated
Thanachart Bank Public Company Limited
55,136,649
2,100,694
766,687
1,329,516
Dividend paid (Note 30)
-
-
-
Transfer of retained earnings to statutory reserve (Note 28)
-
-
-
Total comprehensive income for the year (loss)
-
-
Balance as at 31 December 2013
55,136,649
2,100,694
Balance as at 1 January 2014
55,136,649
Dividend paid (Note 30)
18,167,410
77,500,956
-
(2,040,056)
(2,040,056)
705,667
(705,667)
-
-
14,113,333
13,691,755
345,109
2,035,183
29,535,020
89,152,655
2,100,694
345,109
2,035,183
29,535,020
89,152,655
-
-
-
-
(2,481,149)
(2,481,149)
Transfer of retained earnings to statutory reserve (Note 28)
-
-
-
395,893
(395,893)
Total comprehensive income for the year
-
-
1,012,976
-
7,917,859
8,930,835
55,136,649
2,100,694
1,358,085
2,431,076
34,575,837
95,602,341
Balance as at 31 December 2014
The accompanying notes are an integral part of the financial statements.
(421,578)
Total
-
139
Statements of cash flows Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows For the year ended 31 December 2014 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Cash flows from operating activities Profit before income tax from continuing operations Profit before income tax from discontinued operations Profit before income tax
12,673,952
19,277,743
9,615,208
17,330,042
-
443,187
-
-
12,673,952
19,720,930
9,615,208
17,330,042
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
-
-
Depreciation and amortisation
1,434,956
1,473,165
1,356,211
1,396,170
Impairment losses of loans and debt securities
7,121,698
11,496,664
7,180,931
11,110,018
319,358
762,764
290,255
740,650
23,859
(23,912)
13,018
Increase in provisions Amortisation of premiums (discounts) on investment in debt securities 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 investment
(151,673)
58,308 (65,250)
(414,865)
(32,424) (12,216,258)
58,294 (125,855)
(3,517) (32,467) (13,127,841)
(5,350)
186,482
(7,884)
5,242
(23,321)
127,294
(63,911)
111,257
Increase (decrease) in allowance for impairment of properties foreclosed Increase in allowance for impairment of land, premises and equipment
-
336
-
336
Increase in allowance for impairment of intangible assets
-
2,800
-
2,800
Interest income and other income from the assets (8,417)
(19,517)
(8,417)
(19,517)
Loss (gain) from disposal of equipment
transferred for debt repayment
1,883
(28,054)
5,077
(23,478)
Loss from disposal of intangible assets
-
31,105
-
31,105
Unrealised gain on exchange
(84,656)
(316,185)
(84,656)
(316,185)
Increase (decrease) in allowance for impairment of other assets
(95,918)
185,381
19,358
41,015
Decrease (increase) in other income receivable
(51,822)
(101,431)
43,971
(310,147)
Decrease in fees and rental received in advance
(419,474)
(84,471)
(419,474)
(84,471)
(49,853)
(65,943)
(49,853)
(65,943)
(141,102)
312,380
(163,942)
126,861
Decrease in deferred income Increase (decrease) in accrued expenses Amortisation of discounts on borrowings
Net interest income Dividend income Cash received from interest income Cash paid for interest expenses Cash paid for corporate income tax Cash received from corporate income tax refundable
-
136
-
136
20,537,178
20,996,377
17,658,331
16,912,066
(27,602,022)
(26,664,934)
(25,195,110)
(24,056,691)
(305,093)
(562,494)
(1,579,407)
(1,856,613)
48,248,280
51,488,456
45,275,994
47,067,033
(21,107,521)
(22,539,380)
(20,924,398)
(22,369,507)
(2,853,054)
(3,948,945)
(1,917,694)
(3,001,193)
-
1,013,929
-
1,012,539
16,917,768
19,783,009
13,317,716
13,707,634
Income from operating activities before changes in operating assets and liabilities The accompanying notes are an integral part of the financial statements.
140
Annual Report 2014
Statements of cash flows (continued) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2014 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Cash flows from operating activities (continued) Decrease (increase) in operating assets Interbank and money market items Investments in trading securities Derivatives assets Loans to customers Properties foreclosed Receivables from purchase and sale of securities Other assets
4,187,096
103,663
750,798
136,317
(6,570,502)
1,631,837
(4,330,243)
642,729
(335,954)
231,539
(335,642)
231,542
18,107,063
(49,924,503)
20,213,818
(38,951,075)
8,087,994
8,259,441
7,479,072
8,040,643
457,046
-
3,069
1,430,678
2,515,979
1,085,275
1,812,330
(22,087,545)
20,706,976
(22,527,252)
20,980,434
(962,575)
(7,830,778)
(1,451,764)
(8,284,957)
(1,563,285)
(1,770,547)
(1,563,285)
(1,770,547)
(191,743)
Increase (decrease) in operating liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Payables from purchase and sale of securities
(603,470)
668,870
(602,236)
225,181
(1,579,019)
98,860
Insurance contract liabilities
(208,845)
(1,976,692)
-
Other liabilities
(274,222)
(802,845)
Net cash flows from (used in) operating activities
668,801 (9,839) -
(261,191)
(1,786,472)
16,157,639
(9,526,024)
11,873,926
(4,579,391)
(13,325,918)
(17,843,236)
(9,783,090)
(19,019,449)
Cash flows from investing activities Increase in investments in securities held for investment Cash received from disposal of a subsidiary company
898,164
18,366,774
887,170
18,351,714
-
-
-
528,094
4,400,034
4,118,650
4,031,922
3,555,877
416,492
665,984
1,579,407
1,857,417
(829,353)
(559,490)
Cash received from disposal of equipment
19,398
48,663
Cash paid for purchase of intangible assets
(267,948)
(302,407)
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
Net cash flows from (used in) investing activities
(8,689,131)
4,494,938
(748,327) 9,185 (222,618) (4,246,351)
(512,192) 36,952 (290,615) 4,507,798
The accompanying notes are an integral part of the financial statements.
Thanachart Bank Public Company Limited
141
Statements of cash flows (continued) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2014 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Cash flows from financing activities Cash received from borrowings
96,595,899
91,100,065
93,245,000
84,420,465
(98,627,025)
(77,019,814)
(96,325,026)
(75,892,814)
Cash paid for interest from borrowings
(4,183,402)
(4,200,033)
(3,407,163)
(3,657,603)
Cash paid for dividend
(2,481,149)
(2,040,056)
(2,481,149)
(2,040,056)
(107,588)
(50,260)
-
-
(109)
-
-
Cash paid for borrowings
Cash paid for dividend to non-controlling interests Cash paid for capital refunded to non-controlling interests
-
Net cash flows from (used in) financing activities
(8,803,265)
7,789,793
(8,968,338)
2,829,992
Net increase (decrease) in cash
(1,334,757)
2,758,707
(1,340,763)
2,758,399
Cash at beginning of the year
17,940,109
15,181,402
17,938,627
15,180,228
Cash at end of the year
16,605,352
17,940,109
16,597,864
17,938,627
-
-
-
-
8,235,478
8,113,273
7,678,058
7,875,336
2,654
-
-
-
98,757
285,919
93,148
229,737
7,547,159
5,370,212
7,432,118
5,032,987
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.
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Annual Report 2014
Statements of cash flows Thanachart Bank Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2014 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 Holdings B.V., a company registered in Netherland, holds 49.00 percent of the Bank issued shares. The Bank’s registered address is 444, MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok. The Bank has 617 operational branches (2013: 621 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, non-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.
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143
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
2014
2013
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
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
-
100.00
broker Thanachart Group Leasing Co., Ltd.
asset management Siam City Life Assurance Plc.
Life insurance
SCIB Service Co., Ltd.
Services
100.00
100.00
Ratchthani Leasing Plc.
Hire-purchase and
65.18
65.18
100.00
100.00
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 2014 and 2013 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 2014 Ratchthani Leasing Plc.
2014
2013
27,051
26,654
1,626
1,468
-
10,216
82
40
8,180
9,054
595
631
Thanachart Insurance Plc.
10,387
8,823
2,813
2,950
Thanachart Securities Plc.
7,445
6,541
1,784
2,130
Siam City Life Assurance Plc. TS Asset Management Co., Ltd.
* Presented as part of continuing operations
144
2013
Annual Report 2014
c)
The consolidated statement of comprehensive income for the 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)
The consolidated statement of comprehensive income for the year ended 31 December 2014 included the operating results of Siam City Life Assurance Plc. from 1 January 2014 until the date of disposal of the investment. Such subsidiary had total income of Baht 712 million and net income of Baht 49 million.
e)
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.
f)
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.
g)
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.
h)
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.
Financial reporting standards that became effective in the current accounting year Below is a summary of financial reporting standards that became effective in the current accounting year. Conceptual Framework for Financial Reporting (revised 2014) Accounting Standards: TAS 1 (revised 2012)
Presentation of Financial Statements
TAS 7 (revised 2012)
Statement of Cash Flows
TAS 12 (revised 2012)
Income Taxes
TAS 17 (revised 2012)
Leases
TAS 18 (revised 2012)
Revenue
TAS 19 (revised 2012)
Employee Benefits
Thanachart Bank Public Company Limited
145
Accounting Standards: (continued) TAS 21 (revised 2012)
The Effects of Changes in Foreign Exchange Rates
TAS 24 (revised 2012)
Related Party Disclosures
TAS 28 (revised 2012)
Investments in Associates
TAS 31 (revised 2012)
Interests in Joint Ventures
TAS 34 (revised 2012)
Interim Financial Reporting
TAS 36 (revised 2012)
Impairment of Assets
TAS 38 (revised 2012)
Intangible Assets
Financial Reporting Standards: TFRS 2 (revised 2012)
Share-based Payment
TFRS 3 (revised 2012)
Business Combinations
TFRS 5 (revised 2012)
Non-current Assets Held for Sale and Discontinued Operations
TFRS 8 (revised 2012)
Operating Segments
Accounting Standard Interpretations: TSIC 15
Operating Leases - Incentives
TSIC 27
Evaluating the Substance of Transactions Involving the Legal Form of a Lease
TSIC 29
Service Concession Arrangements: Disclosures
TSIC 32
Intangible Assets - Web Site Costs
Financial Reporting Standard Interpretations: TFRIC 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities
TFRIC 4
Determining whether an Arrangement contains a Lease
TFRIC 5
Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
TFRIC 7
Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies
TFRIC 10
Interim Financial Reporting and Impairment
TFRIC 12
Service Concession Arrangements
TFRIC 13
Customer Loyalty Programmes
TFRIC 17
Distributions of Non-cash Assets to Owners
TFRIC 18
Transfers of Assets from Customers
Accounting Treatment Guidance for Stock Dividend
146
Annual Report 2014
All above financial reporting standards have been revised or prepared such that their content is substantially equivalent to International Financial Reporting Standards. The revisions are mainly to the wording, terminology, interpretation and to provide guidance on their application to users. The management of the Bank and its subsidiaries has assessed the effects of the above financial reporting standards and believes that they are not relevant to the business of the Bank and its subsidiaries or that their application do not have a significant impact, except for TFRIC 13. Financial Reporting Standard Interpretation 13: Customer Loyalty Programmes This financial reporting standard interpretation requires the Bank and its subsidiaries to record and measure the Bank’s and its subsidiaries commitments to provide goods, services or discounts on goods or services in the future, by apportioning compensation received or receivable from sales to accumulated reward points, and realising the apportioned amount as deferred revenue. Such amounts are then realised as revenue through the statement of comprehensive income when customers claim the rewards and the Bank and its subsidiaries have fulfilled their commitment. The Bank and its subsidiaries have changed accounting policy in the current year, but did not restate the prior year’s financial statements presented as comparative information, since the managements of the Bank and its subsidiaries consider that the change did not have a significant impact to the financial statements. 4.
Financial reporting standards that will become effective in the future The Federation of Accounting Professions has issued many revised and new financial reporting standards that are effective for fiscal years beginning on or after 1 January 2015. Such accounting standards have been revised or prepared such that they are substantially equivalent to International Financial Reporting Standards. The revisions are mainly to the wording, terminology, interpretation and to provide guidance on their application to users. The management of the Bank and its subsidiaries believes that their application will not have a significant impact to the financial statements for the year in which they are initially applied. However, significant principles of some of the financial reporting standards that are relevant to the business of the Bank and its subsidiaries, as mentioned above, have been changed, as follows. Thai Accounting Standard 19 (revised 2014): Employee Benefits The revised standard requires the entity to recognise actuarial gains and losses immediately in other comprehensive income. The existing standard permits the entities to elect to recognise such gains and losses immediately in profit or loss or in other comprehensive income, or to recognise them gradually in profit or loss.
Thanachart Bank Public Company Limited
147
At present, the Bank and its subsidiaries immediately recognise actuarial gains and losses in profit or loss in the year in which they occur. The assessment of the management of the Bank and its subsidiaries is that when the revised standard is applied in 2015 and the method of recognising those gains and losses is changed to immediately recognise them in other comprehensive income, there will be no significant impact on the financial statements of the Bank and its subsidiaries. Financial Reporting Standard 10 : Consolidated Financial Statements Financial Reporting Standard No. 10 provides guidelines on the preparation of the consolidated financial statements to be used instead of the content relating to accounting for consolidation in Accounting Standard No. 27 Consolidated and Separate Financial Statements. This standard changes the guidelines relating to the consideration of control, whereby an investor controls an investee when it has the right to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee, even though its shareholding or voting rights are less than 50 percent. This important change requires the management to exercise a lot of judgement when reviewing whether the Bank and its subsidiaries have control over investees and determining which entities have to be included in the preparation of the consolidated financial statements. The management of the Bank and its subsidiaries believe that such standard will have no significant impact on the financial statements of the Bank and its subsidiaries. Thai Financial Reporting Standard 12 : Disclosure of Interests in Other Entities This standard defines the disclosure of information relating to interests in a subsidiary, joint arrangements, associates and structured entities. This standard has no impact on the financial statements of the Bank and its subsidiaries. Thai Financial Reporting Standard 13 : Fair Value Measurement This standard provides guidance on fair value measurement and related disclosures. If an entity is required to measure the fair value of assets or liabilities by another, relevant standard, fair value is to be measured in accordance with the principles stipulated under this standard. The impact of the standard is to be recognised prospectively. The management of the Bank and its subsidiaries has preliminary assessed the effect of the above accounting standards and believes that this standard will not have any significant impact on the financial statements of the Bank and its subsidiaries.
148
Annual Report 2014
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. 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 using 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.
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149
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 on an accrual basis. When the Bank and its subsidiaries provide loyalty programmes to customers, they apportion compensation received from such services based on the fair value of accumulated reward points and realise it as deferred revenue. This deferred revenue is recorded under “other liabilities� in the statement of financial position. The Bank and its subsidiaries then realise it as revenue through the statement of comprehensive income when the customers claim a reward and the Bank and its subsidiaries have fulfilled their commitment to provide such reward.
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.
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Annual Report 2014
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 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.
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).
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151
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 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. 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 debt restructuring agreements, they are transferred to loans to customers 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.
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Annual Report 2014
5.6
Loans to customers Loans to customers are stated at the principal balances, excluding accrued interest receivables, except for overdrafts which are presented at the principal balances plus accrued interest receivables. 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�.
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 Bank, 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, nonperforming hire purchase receivables and financial lease receivables are treated as uncollateralised.
Thanachart Bank Public Company Limited
153
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.
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 the 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.
154
Annual Report 2014
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 loan rate for credit to large customers prevailing at the restructuring date. The differences between the fair values of receivables as of the restructuring date and their previous book values is recorded as “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.
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 eliminates 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.
Thanachart Bank Public Company Limited
155
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.
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.
156
Annual Report 2014
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 Receivable from/payable to Clearing House Receivable 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. 5.16 Securities purchased under resale agreements/ securities sold under repurchase 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 to customers, 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 the collection of the premium due, on the basis of collection experience and a review of current status of the premium receivable as at the end of reporting period.
Thanachart Bank Public Company Limited
157
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.
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.
158
Annual Report 2014
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.
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 insurance premium reserve represents the accumulated total liabilities for estimated future claims under all policies in force as at the financial statement date. Subsidiaries determine life insurance premium 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 insurance premium 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 insurance premium 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.
Thanachart Bank Public Company Limited
159
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 losses incurred but not reported (IBNR) 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. 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 off-balance 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 market factors.
160
Annual Report 2014
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. 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.
Thanachart Bank Public Company Limited
161
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. 5.26 Structured notes Structured notes are debentures which a subsidiary offered to customers, who are institutional investors or high net worth investors. The notes are issued under conditions approved by the Office of the Securities and Exchange Commission, and the underlying assets are securities listed on the Stock Exchange of Thailand. The notes are recorded at amortised cost, adjusted by the discount on the notes. The discount is amortised by the effective rate method with the amortised amount presented as interest expenses in profit or loss. Embedded derivatives are recorded as derivative assets at fair value and the changes in fair value are recorded in profit or loss. In determining the fair value, the subsidiary uses a valuation technique and theoretical model. The input to the model is derived from observable market conditions that include liquidity, dividend, interest rate, and the price and the volatility of the underlying asset. 5.27 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.
162
Annual Report 2014
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.
5.28 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. 5.29 Income tax Income tax expense represents the sum of current income tax and deferred tax. Current income 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 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 to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences can be utilised.
Thanachart Bank Public Company Limited
163
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. 5.30 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:
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.
164
Annual Report 2014
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 properties foreclosed The Bank and its subsidiaries assess allowance for impairment of properties 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.
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 to the extent that it is probable that future taxable profit will be available against which the temporary differences 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.
Thanachart Bank Public Company Limited
165
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.
6.10 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 insurance premium 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. 6.11 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 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. 6.12 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. 6.13 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 such transactions, and in case where they believe that there will be no losses, no provisions are recorded as at the end of the reporting period.
166
Annual Report 2014
7.
Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2013
2014 At call
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
6,189
7,500
13,689
8,251
1,500
9,751
469
25,090
25,559
601
23,047
23,648
Specialised financial institutions
46
90
136
71
99
170
Other financial institutions
94
21,179
21,273
369
23,803
24,172
6,798
53,859
60,657
9,292
48,449
57,741
Add: Accrued interest receivables
-
20
20
1
43
44
Less: Allowance for doubtful accounts
-
(207)
(207)
-
(231)
(231)
Commercial banks
Total
Total domestic items
6,798
53,672
60,470
9,293
48,261
57,554
940
3,716
4,656
719
10,663
11,382
61
1
62
34
-
34
250
-
250
165
541
706
1,251
3,717
4,968
918
11,204
12,122
Add: Accrued interest receivables
-
5
5
-
32
32
Less: Deferred revenues
-
(1)
(1)
-
(2)
(2)
Less: Allowance for doubtful accounts
-
(9)
(9)
-
(9)
(9)
Foreign US Dollar Euro Others Total
Total foreign items
1,251
3,712
4,963
918
11,225
12,143
Total
8,049
57,384
65,433
10,211
59,486
69,697
Thanachart Bank Public Company Limited
167
(Unit: Million Baht) Separate financial statements 2013
2014 At call
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
6,188
7,500
13,688
8,251
1,500
9,751
324
24,200
24,524
378
19,250
19,628
44
-
44
64
-
64
Other financial institutions
1,144
21,179
22,323
919
23,804
24,723
Total
7,700
52,879
60,579
9,612
44,554
54,166
-
14
14
1
22
23
(207)
(218)
(6)
(231)
(237)
Commercial banks Specialised financial institutions
Add: Accrued interest receivables Less: Allowance for doubtful accounts Total domestic items
(11) 7,689
52,686
60,375
9,607
44,345
53,952
940
3,716
4,656
719
10,663
11,382
61
1
62
34
-
34
250
-
250
165
541
706
1,251
3,717
4,968
918
11,204
12,122
Add: Accrued interest receivables
-
5
5
-
32
32
Less: Deferred revenues
-
(1)
(1)
-
(2)
(2)
Less: Allowance for doubtful accounts
-
(9)
(9)
-
(9)
(9)
Foreign US Dollar Euro Others Total
Total foreign items
1,251
3,712
4,963
918
11,225
12,143
Total
8,940
56,398
65,338
10,525
55,570
66,095
As at 31 December 2014, the Bank had loan to a subsidiary company, which was a financial institution, of Baht 1,050 million in the separate financial statements (2013: Baht 550 million).
168
Annual Report 2014
8.
Derivatives As at 31 December 2014 and 2013, 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 2014
2013
Fair value/Adjustments
Fair value/Adjustments
on an accrual basis Assets
Notional
Liabilities
amount*
411
319
72,468
9
87
3,896
on an accrual basis Assets
Notional
Liabilities
amount*
1,260
1,356
73,700
7,796
12
878
23,142
3,856
352,184
2,569
2,534
280,730
-
-
16,100
-
-
26,100
Derivatives for trading
19
6
2,792
24
18
1,640
Derivatives for banking book
54
930
12,770
49
914
12,754
-
2
299
-
1
281
4,389
5,200
464,409
3,914
5,701
418,347
Types of risk Foreign exchange rate Derivatives for trading 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 2014
2013 Fair value/Adjustments
Fair value/Adjustments on an accrual basis Assets
Notional
Liabilities
amount*
411
318
72,468
9
87
3,896
on an accrual basis Assets
Notional
Liabilities
amount*
1,260
1,353
73,700
7,796
12
878
23,142
3,856
352,184
2,569
2,534
280,730
-
-
16,100
-
-
26,100
Derivatives for trading
19
6
2,792
24
18
1,640
Derivatives for banking book
54
930
12,770
49
914
12,754
4,389
5,197
464,110
3,914
5,697
418,066
Types of risk Foreign exchange rate Derivatives for trading 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
Thanachart Bank Public Company Limited
169
Derivatives for hedging (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 2014 and 2013. Consolidated financial statements Counterparties
Financial institutions
2014
2013
2014
2013
Percent
Percent
Percent
Percent
95.03
95.83
95.09
95.83
-
-
0.01
0.07
4.97
4.17
4.90
4.10
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) Separate financial statements
Consolidated financial statements 2013
2014
2014
2013
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
Fair value
cost
cost
Fair value
Fair value
cost
Fair value
cost
Trading securities Government and state enterprises securities Private debt securities
5,978
5,990
5,150
4,975
5,978
5,990
1,614
1,618
2
2
5,266
5,214
2
2
36
36
198
194
17
16
-
-
-
-
6,178
6,186
10,433
10,205
5,980
5,992
1,650
1,654
Domestic marketable equity securities Add (less): Allowance for change (228)
8
in value Net
6,186
10,205
12
4
5,992
1,654
Available-for-sale securities Government and state enterprises securities
67,685
68,504
71,398
71,805
65,699
66,479
70,619
71,027
Private debt securities
43,598
44,454
25,480
25,686
39,881
40,593
22,481
22,661
Foreign debt securities
11,766
11,827
14,691
14,543
11,766
11,827
14,691
14,543
2,850
3,529
987
1,344
1,279
1,423
868
859
125,899
128,314
112,556
113,378
118,625
120,322
108,659
109,090
Domestic marketable equity securities Add: Allowance for change in value Net
170
Annual Report 2014
2,415
822
1,697
431
128,314
113,378
120,322
109,090
(Unit: Million Baht) Separate financial statements
Consolidated financial statements 2014
2013
2014
2013
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
Fair value
cost
Fair value
cost
Fair value
cost
Fair value
10,983
11,298
10,986
11,286
10,941
11,255
10,944
11,244
311
346
352
369
150
185
300
317
Held-to-maturity debt securities Government and state enterprises securities Private debt securities Investment in receivables purchased Less: Allowance for impairment Net
1
-
2
1
1
-
2
1
11,295
11,644
11,340
11,656
11,092
11,440
11,246
11,562
(1)
(1)
(1)
(1)
11,294
11,339
11,091
11,245
57
87
57
87
3,799
3,799
3,781
3,781
39
39
39
39
3,895
3,925
3,877
3,907
General investment Unit trusts Domestic non-marketable equity securities Foreign non-marketable equity securities Less: Allowance for impairment Net Total investments - net
9.2
(80)
(22)
(80)
(22)
3,815
3,903
3,797
3,885
149,609
138,825
141,202
125,874
Classified by remaining period of debt securities (Unit: Million Baht) Consolidated financial statements 2014
2013
Due within
Due within
Less than
Over
1 year
1 - 5 years
13,782
53,413
Private debt securities
14,875
Foreign debt securities
28,657
Less than
Over
Total
1 year
1 - 5 years
5 years
Total
490
67,685
21,384
42,482
7,532
71,398
25,226
3,497
43,598
2,894
19,173
3,413
25,480
11,434
332
11,766
2,921
11,439
331
14,691
90,073
4,319
123,049
27,199
73,094
11,276
111,569
5 years
Available-for-sale securities Government and state enterprises securities
Total Add (less): Allowance for change in value Total
78
1,456
202
1,736
84
401
28,735
91,529
4,521
124,785
27,283
73,495
11,256
(20)
112,034
465
2,522
8,419
42
10,983
-
10,944
42
10,986
106
55
150
311
25
150
352
1
-
-
1
-
-
2
2,629
8,474
192
11,295
10,969
192
11,340
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
(1)
(1)
177 2 179
-
-
-
-
2,628
8,474
192
11,294
178
(1)
10,969
192
11,339
31,363
100,003
4,713
136,079
27,461
84,464
11,448
123,373
Thanachart Bank Public Company Limited
(1)
171
(Unit: Million Baht) Separate financial statements 2014
2013
Due within
Due within
Less than
Over
1 year
1 - 5 years
5 years
Less than Total
1 year
Over 1 - 5 years
5 years
Total
Available-for-sale securities Government and state enterprises 13,782
51,917
-
65,699
20,933
42,368
7,318
70,619
Private debt securities
securities
14,560
22,992
2,329
39,881
2,370
17,706
2,405
22,481
Foreign debt securities
-
11,434
332
11,766
2,921
11,439
331
14,691
28,342
86,343
2,661
117,346
26,224
71,513
10,054
107,791
76
1,363
114
1,553
80
384
28,418
87,706
2,775
118,899
26,304
71,897
10,030
108,231
2,522
8,419
-
10,941
-
10,944
-
10,944
Private debt securities
-
-
150
150
150
-
150
300
Investment in receivables purchased
1
-
-
1
2
-
-
2
2,523
8,419
150
11,092
152
10,944
150
11,246
-
-
-
-
2,522
8,419
150
11,091
151
10,944
150
11,245
30,940
96,125
2,925
129,990
26,455
82,841
10,180
119,476
Total Add (less): Allowance for change in value Total
(24)
440
Held-to-maturity debt securities Government and state enterprises securities
Total Less: Allowance for impairment Total Total debt securities
9.3
(1)
(1)
(1)
(1)
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 2014 and 2013, investments in securities in which the Bank and its subsidiaries hold not less than 10 percent of the equity of the investee, but which are not treated as subsidiary or associated companies, separated by industry as follows: (Unit: Million Baht) Consolidated financial statements 2014 Banking and finance sector
172
Annual Report 2014
2013 4
142
Separate financial statements 2014
2013 4
142
10.
Investments in subsidiary and associated companies
10.1 Separate financial statements As at 31 December 2014 and 2013, 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 Paid-up share
Percentage of
under the
Dividend income
capital
holding
cost method
for the years
Company’s name 2014
2013
21,128
21,128
99.98
TS Asset Management Co., Ltd.
2,000
2,000
Thanachart Securities Plc.
1,500
Ratchthani Leasing Plc.
2014
2013
2014
2013
2014
2013
99.98
1,385
1,385
-
-
100
100
2,000
2,000
-
-
1,500
100
100
1,858
1,858
786
431
2,014
1,611
65.18
65.18
1,201
1,201
31
26
740
740
100
100
867
867
-
500
-
700
-
100
-
761
-
-
Thanachart Group Leasing Co., Ltd.
360
360
100
100
400
400
46
104
Thanachart Broker Co., Ltd.
100
100
100
100
104
104
125
110
Thanachart Fund Management Co., Ltd.
100
100
75
75
97
97
272
109
10
10
100
100
5
5
-
-
6
6
100
100
6
6
-
-
5
5
100
100
5
5
17
20
7,928
8,689
1,277
1,300
Subsidiary companies SCIB Plc.
Thanachart Insurance Plc. Siam City Life Assurance Plc.
SCIB Service Co., Ltd. Thanachart Management and Services Co., Ltd. Thanachart Training and Development Co., Ltd. Total investments in subsidiary companies
(5)
Less: Allowance for impairment
(5)
Total investments in subsidiary companies - net
7,923
8,684
821
821
46
42
821
821
46
42
8,744
9,505
1,323
1,342
Associated company MBK Plc.
1,886
1,886
4.07
4.07
Total investment in an associated company Total investments in subsidiary and associated companies - net
Thanachart Bank Public Company Limited
173
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 ordinary shares of Thanachart Life Assurance Plc. amounting to Baht 18,440 million, with gain on disposal of Baht 13,128 million. On 2 June 2014, the Bank disposed of investments in ordinary shares of Siam City Life Assurance Plc. amounting to Baht 900 million, with gain on disposal of Baht 126 million. 10.2 Consolidated financial statements As at 31 December 2014 and 2013, investment in an associated company, which presented under the equity method, in the consolidated financial statements consists of investment in ordinary shares of the following company which operates in Thailand: (Unit: Million Baht) Dividend Paid-up share
Percentage
capital
of holding
Company’s name
2013
2014 MBK Plc. (operating in
1,886
1,886
2014 9.90
Value of investment Cost method
2013
2014
9.90
Equity method
2013
984
984
income
Share of profit
for the years
for the years
2014
2013
2014
2013
2014
2013
1,919
1,835
112
103
152
415
1,919
1,835
112
103
152
415
property rental, hotel and services business) 984
Total investment in an associated company
984
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. 10.3 Summarised financial information of an associated company a)
Summarised financial information of MBK Plc. as at 30 September 2014 and 2013 and for the years then ended are as follows: (Unit: Million Baht)
174
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
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
1,886
1,886
37,835
39,584
20,567
23,617
10,001
12,923
1,531
4,195
Annual Report 2014
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 2014 was determined based on financial statements that were prepared with reference to financial statements for the year ended 30 September 2014 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 2014 is not materially different from the income for the year ended 31 December 2014. b)
The fair value of investment in an associated company As at 31 December 2014 and 2013, the fair value of investment in an associated company which is listed on the Stock Exchange of Thailand is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
MBK Plc.
2,709
2013
2,606
2014
1,114
Thanachart Bank Public Company Limited
2013
1,072
175
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 2014 and 2013 is as follows: (Unit: Million Baht) 2013
2014 Cash flows from operating activities Profit before income tax
960
541
(645)
(290)
24
17
2
1
Adjustments to reconcile profit 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
(355)
(351)
482
540
Cash paid for interest expense
(119)
(179)
Cash paid for corporate income tax
(153)
(148)
196
131
1,079
980
428
284
Cash received from interest income
Income from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Loans to customers Properties foreclosed Other assets
(6)
(13)
(1,653)
(1,505)
(1)
(3)
(50)
69
Net cash flows used in operating activities
(7)
(57)
Net decrease in cash and cash equivalents
(7)
(57)
Cash and cash equivalents at beginning of the year
61
118
Cash and cash equivalents at end of the year
54
61
Increase (decrease) in operating liabilities Interbank and money market items Provisions Other liabilities
176
Annual Report 2014
11.
Loans to customers and accrued interest receivables
11.1 Classified by loan type (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Loans to customers Overdrafts Loans Notes receivables Hire purchase receivables Financial lease receivables Others
20,773
22,104
20,773
22,104
280,967
273,398
270,392
260,429
48,147
49,535
51,048
54,090
454,922
501,914
423,084
470,286
1,210
1,548
884
1,260
301
201
301
201
(55,785)
(62,000)
(52,046)
(57,876)
750,535
786,700
714,436
750,494
779
1,009
769
985
751,314
787,709
715,205
751,479
- Individual Approach
(18,298)
(20,955)
(10,922)
(12,565)
- Collective Approach
(8,934)
(8,635)
(8,934)
(8,635)
(294)
(20)
(294)
(8)
(103)
(301)
(103)
(301)
Less: Deferred revenues Total loans to customers net of deferred revenues Add: Accrued interest receivables Total loans to customers and accrued interest receivables net of deferred revenues 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
723,685
757,798
694,952
729,970
3,633
3,144
-
-
202
173
-
-
3,835
3,317
-
-
-
-
Securities business receivables Credit balances receivables Other receivables Total securities business receivables Less: Allowance for doubtful accounts Securities business receivables - net
(171)
(172)
3,664
3,145
-
-
727,349
760,943
694,952
729,970
Loans to customers and accrued interest receivables - net
Thanachart Bank Public Company Limited
177
11.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2014
2013
Domestic
Foreign
730,307
Baht US Dollar
Total
Domestic
Foreign
100
730,407
767,017
-
767,017
15,521
8,299
23,820
17,384
5,318
22,702
143
-
143
298
-
298
745,971
8,399
754,370
784,699
5,318
790,017
Other currencies Total*
Total
* Total loans net of deferred revenues (Unit: Million Baht) Separate financial statements 2014
2013
Domestic
Foreign
690,373
Baht US Dollar
Total
Domestic
Foreign
100
690,473
727,494
-
727,494
15,521
8,299
23,820
17,384
5,318
22,702
143
-
143
298
-
298
706,037
8,399
714,436
745,176
5,318
750,494
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 2014 The Bank and a subsidiary company which is a financial institution Other
Normal
Special
Sub-
mention
standard
Doubtful
subsidiary
Doubtful Total
of loss
companies
Consolidated
Agricultural and mining
11,540
9
4
6
508
12,067
1
12,068
Manufacturing and commerce
72,116
1,524
1,508
430
6,682
82,260
169
82,429
Real estate and construction
49,289
339
221
175
1,834
51,858
21
51,879
Public utilities and services
61,225
1,499
352
374
3,915
67,365
89
67,454
81,045
1,171
557
534
2,338
85,645
19
85,664
-
-
-
-
-
-
3,835
3,835
332,452
29,113
2,304
2,297
5,066
371,232
28,053
399,285
25,329
787
668
244
671
27,699
43
27,742
Others
23,609
13
106
64
214
24,006
8
24,014
Total*
656,605
34,455
5,720
4,124
21,228
722,132
32,238
754,370
Personal consuming Housing loans Securities business Hire purchase Others
*
178
Total loans net of deferred revenues
Annual Report 2014
(Unit: Million Baht) Consolidated financial statements 2013 The Bank and a subsidiary company which is a financial institution Other
Normal Agricultural and mining
11,180
Special
Sub-
Doubtful
mention
standard
Doubtful
32
21
577
179
11,989
2
11,991
of loss
subsidiary companies
Total
Consolidated
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
Personal consuming Housing loans Securities business Hire purchase Others
*
Total loans net of deferred revenues
(Unit: Million Baht) Separate financial statements 2014 Special Normal
Doubtful
mention
Substandard
Doubtful
of loss
Total
Agricultural and mining
11,465
8
4
5
411
11,893
Manufacturing and commerce
71,992
1,316
451
259
3,173
77,191
Real estate and construction
49,223
304
204
174
1,077
50,982
Public utilities and services
59,967
1,482
243
134
2,845
64,671
Housing loans
80,884
1,120
526
515
1,609
84,654
Hire purchase
332,381
29,102
2,303
2,297
5,065
371,148
25,302
781
658
239
360
27,340
Others
26,509
6
3
-
39
26,557
Total*
657,723
34,119
4,392
3,623
14,579
714,436
Personal consuming
Others
* Total loans net of deferred revenues
Thanachart Bank Public Company Limited
179
(Unit: Million Baht) Separate financial statements 2013 Special Normal
mention
Doubtful Substandard
Doubtful
of loss
Total
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
Personal consuming
Others
* Total loans net of deferred revenues
11.4 Non-performing loans As at 31 December 2014 and 2013, the Bank and its subsidiaries (securities and asset management businesses) 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
2014
2013
2014
2013
22,597
24,395
22,595
24,394
172
173
-
-
8,475
10,747
-
-
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.
180
Annual Report 2014
Additionally, the Bank and its subsidiary 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
2014
2013
2014
2013
23,031
24,417
23,028
24,417
172
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 2014 and 2013, the Bank and its subsidiaries, asset management and securities businesses, 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
3,770
6,182
6,158
55
570
513
Fair value of Type of assets
assets to be
to be
transferred under
transferred
agreement Million Baht
2014 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land, land and
447
building
repayment conditions Total
6,752
6,671
21
21
4,762
10,162
10,130
26
1,120
886
3,825
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 shares and/or modification of
building and
repayment conditions Total
movable assets 4,789
11,303
11,037
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivable)
Thanachart Bank Public Company Limited
181
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
3,587
4,456
4,456
27
140
140
Million Baht
2014 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
146
building
repayment conditions Total
3,614
4,596
4,596
4,499
6,570
6,570
19
270
270
2013 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
149
building
repayment conditions Total
6,840
4,518
6,840
(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 2014 and 2013, are summarised below. Consolidated financial statements 2014
2013 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht Past due after restructuring
1,543
1,976
2,111
4,064
Due within the year
497
2,279
454
2,723
Less than 5 years
869
1,345
701
1,081
5 - 10 years
795
731
1,300
2,564
10 - 15 years
47
195
77
304
Over 15 years
74
145
146
301
3,825
6,671
4,789
11,037
Total
182
Million Baht
Annual Report 2014
Separate financial statements 2013
2014 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht Past due after restructuring
Million Baht
1,517
1,931
2,076
2,869
Due within the year
419
1,549
397
2,043
Less than 5 years
845
283
660
787
5 - 10 years
736
584
1,204
768
10 - 15 years
31
115
53
121
Over 15 years
66
134
128
252
3,614
4,596
4,518
6,840
Total
Supplemental information for the years 2014 and 2013 relating to restructured loans is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2014
2014
2013
Interest income recognised in the statements of comprehensive income Cash repayment from receivables
1,457
2,067
1,143
1,651
9,479
11,227
8,312
9,661
551
Properties foreclosed received for debts settlement
762
829
456
12
5
12
57
-
57
Loss on debt restructuring (net of allowance for doubtful accounts as previously recorded) Hair cut loss per agreement
5 -
As at 31 December 2014 and 2013, the Bank and its subsidiaries have the following restructured receivables balances (principal and accrued interest receivable): Restructured receivables Total number of
Outstanding balances,
outstanding receivables 2014
Thanachart Bank Plc. Thanachart Securities Plc.
2013
Number of receivables 2014
2013
Outstanding balances
net of collateral
2014
2013
2014
2013
Million Baht
Million Baht
Million Baht
Million Baht
1,811,913
1,861,434
31,690
43,138
14,465
20,222
7,260
10,983
1,411
538
3
3
35
35
35
35
1,468
1,804
1,155
1,330
8,720
10,120
4,190
4,877
TS Asset Management Co., Ltd.
Thanachart Bank Public Company Limited
183
11.6 Hire purchase/Financial lease receivables As at 31 December 2014 and 2013, hire purchase /financial lease receivables of the Bank and its subsidiaries, which are engaged in the hire purchase and financial lease businesses, 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 2014 Amounts due under lease agreements Less than 1 - 5 years
1 year*
Over 5 years
Total
Gross investment in the lease
135,926
300,553
19,653
456,132
Less: Unearned finance income
(21,026)
(33,586)
(1,127)
(55,739)
114,900
266,967
18,526
400,393
Present value of minimum lease payments receivables Allowance for doubtful accounts
(11,307) 389,086
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(Unit: Million Baht) Consolidated financial statement as at 31 December 2013 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Gross investment in the lease
141,793
341,001
Less: Unearned finance income
(22,924)
(38,057)
118,869
302,944
Over 5 years 20,668 (962)
Total 503,462 (61,943)
Present value of minimum lease payments receivables
441,519
Allowance for doubtful accounts
(10,366)
Hire purchase/Financial lease receivables - net
431,153
* Included non-performing receivables
184
19,706
Annual Report 2014
(Unit: Million Baht) Separate financial statement as at 31 December 2014 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Over 5 years
Total
Gross investment in the lease
134,102
270,317
19,549
423,968
Less: Unearned finance income
(20,972)
(29,917)
(1,111)
(52,000)
113,130
240,400
18,438
371,968
Present value of minimum lease payments receivables Allowance for doubtful accounts
(9,485) 362,483
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(Unit: Million Baht) Separate financial statement as at 31 December 2013 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Gross investment in the lease
140,289
310,724
Less: Unearned finance income
(22,871)
(34,008)
117,418
276,716
Over 5 years 20,533
Total 471,546
(941)
(57,820)
Present value of minimum lease payments receivables
19,592
413,726
Allowance for doubtful accounts Hire purchase/Financial lease receivables - net
(8,995) 404,731
* Included non-performing receivables
Thanachart Bank Public Company Limited
185
11.7 Classified by classification As at 31 December 2014 and 2013, 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 making Loans and accrued interest
allowance for doubtful
receivables
accounts
Allowance for doubtful accounts
(2)
2014
2013
2014
2013
657,326
689,679
454,665
492,418
5,832
7,163
34,484
34,903
30,177
31,413
4,342
4,217
Substandard
5,722
6,133
3,335
3,888
2,392
2,705
Doubtful
4,124
9,324
2,823
5,566
1,703
5,125
21,255
19,724
12,599
10,300
11,141
9,022
722,911
759,763
503,599
543,585
25,410
28,232
294
8
25,704
28,240
Normal Special mention
Doubtful of loss Total
Additional allowance for possible uncollectability debts Total
2014
2013
(1)
Only the Bank and a subsidiary company subject to BOT’s regulations; and after deducting intragroup transactions.
(2)
As at 31 December 2014, the provisions set aside by the Bank and a subsidiary company exceeded the minimum requirement per the BOT’s notification No. Sor Nor Sor 31/2551 by a total of Baht 7,012 million (2013: Baht 6,610 million). The Bank and a subsidiary company allocated Baht 6,718 million (2013: Baht 6,602 million) of the excess provision to a specific provision for an individual debtor and so combined with the minimum provision requirement of Baht 18,692 million (2013: Baht 21,630 million), the total provision set aside in accordance with BOT requirements is Baht 25,410 million (2013: Baht 28,232 million).
186
Annual Report 2014
(Unit: Million Baht) Separate financial statements Net balance used in making Loans and accrued interest
allowance for doubtful
receivables
accounts
Allowance for doubtful accounts
(3)
2014
2013
2014
2013
658,444
692,285
456,263
495,610
5,088
5,845
34,149
34,782
30,153
31,382
4,305
4,186
Substandard
4,394
4,565
3,113
3,265
2,052
2,082
Doubtful
3,623
6,865
2,653
3,576
1,502
3,135
14,595
12,982
8,776
7,230
6,909
5,952
715,205
751,479
500,958
541,063
19,856
21,200
294
8
20,150
21,208
Normal Special mention
Doubtful of loss Total
2014
Additional allowance for possible uncollectability debts Total (3)
2013
As at 31 December 2014, the provisions set aside by the Bank exceeded the minimum requirement per the BOT’s notification No. Sor Nor Sor 31/2551 by a total of Baht 5,657 million (2013: Baht 6,034 million). The Bank allocated Baht 5,363 million (2013: Baht 6,026 million) of the excess provision to a specific provision for an individual debtor and so combined with the minimum provision requirement of Baht 14,493 million (2013: Baht 15,174 million), the total provision set aside in accordance with BOT requirements is Baht 19,856 million (2013: Baht 21,200 million).
Percentage of allowance for doubtful account The Banks’ hire purchase receivablespersonal consumer 2014
(4)
Other loans
2013
2014
2013
Normal
0.52
0.58
1
1
Special mention
8.47
8.49
2
2
Substandard
52.63
47.13
100
100
Doubtful
48.56
41.73
100
100
Doubtful of loss
51.73
57.91
100
100
(4) These percentages are average rates used in setting up allowance for doubtful accounts
Thanachart Bank Public Company Limited
187
11.8
Loans to companies which have settlement problems As at 31 December 2014 and 2013, loans of the Bank and its subsidiaries (which engaged in asset management and hire purchase and financial lease businesses) 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
2014
1. Listed companies possible to
Debt balances
Collateral value
in the accounts
2014
2013
2014
2013
2014
2013
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
6
7
713
823
67
85
681
768
45
41
898
1,011
585
521
312
490
995
1,179
14,419
17,976
7,897
10,249
6,754
8,519
delisting from the SET 2. Non - listed companies with similar operating results and financial position to listed companies possible to delisting from the SET 3. Companies which have loan settlement problems or have defaulted on the repayment
Separate financial statements Allowance for doubtful accounts provided Number of debtors 2013
2014
1. Listed companies possible to
Debt balances
Collateral value
in the accounts
2014
2013
2014
2013
2014
2013
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
3
4
76
180
22
40
54
140
45
41
898
1,011
585
521
312
490
724
856
6,821
9,084
3,957
5,789
2,864
3,295
delisting from the SET 2. Non - listed companies with similar operating results and financial position to listed companies possible to delisting from the SET 3. Companies which have loan settlement problems or have defaulted on the repayment
188
Annual Report 2014
11.9 Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission As at 31 December 2014 and 2013, 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 Allowance for doubtful accounts
Debt balances 2013
2014 Normal
2013
2014
2013
3,663
3,144
-
-
3,663
3,144
5
3
4
2
1
1
167
170
167
170
-
-
3,835
3,317
171
172
3,664
3,145
Substandard Doubtful Total
2014
for doubtful accounts
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. 11.10 Hire purchase/financial lease receivables of subsidiaries classified by aging As at 31 December 2014 and 2013, 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) 2014
2013
26,824
26,657
1,018
712
Overdue more than 1 year
131
62
Debtors under legal actions
367
288
28,340
27,719
1,822
1,370
Current or overdue not over 90 days Overdue 91 - 365 days
Total Allowance for doubtful accounts provided in the accounts
Thanachart Bank Public Company Limited
189
12.
Allowance for doubtful accounts (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014 The Bank and a subsidiary company which is a financial institution Other subsidiary
Special
Sub-
mention
standard
Doubtful
7,163
4,217
2,705
5,125
9,022
8
28,240
1,542
29,782
(1,331)
125
(3,420)
11,354
286
6,701
574
7,275
Bad debts recovery
-
-
-
-
941
-
941
8
949
Bad debts written-off
-
-
-
-
(7,432)
-
(7,432)
Reversal from hair cut
-
-
-
-
(94)
-
(94)
Reversal from disposal of loans
-
-
-
(2)
(2,650)
-
(2,652)
5,832
4,342
2,392
Normal Balance - beginning of the year
Doubtful
General
of loss
provision
Total
companies Consolidated
Increase (decrease) during the year
Balance - end of the year
(313)
1,703
11,141
294
25,704
(115) (16) 1,993
(7,547) (94) (2,668) 27,697
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 The Bank and a subsidiary company which is a financial institution Other Sub-
mention
standard
Doubtful
4,834
1,475
3,535
2,393
10,109
499
22,845
930
23,775
(491)
10,850
664
11,514
654
13
667
Normal Balance - beginning of the year
subsidiary
Special
Doubtful
General
of loss
provision
Total
companies Consolidated
Increase (decrease) during 2,329
2,742
2,732
4,368
Bad debts recovery
the year
-
-
(830) -
-
654
Bad debts written-off
-
-
-
-
-
(5,033)
-
(5,033)
Reversal from hair cut
-
-
-
-
(378)
-
(378)
Reversal from disposal of loans
-
-
-
-
(698)
-
(698)
7,163
4,217
2,705
5,125
Balance - end of the year
9,022
8
28,240
(35) (30) 1,542
(5,068) (378) (728) 29,782
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Special
Balance - beginning of the year
Normal
mention
5,845
4,186
Substandard 2,082
Doubtful
Doubtful
General
of loss
provision
Total
3,135
5,952
8
21,208
(1,633)
9,344
286
7,329
941
-
941
Increase (decrease) during the year
119
(30)
-
-
-
-
Bad debts written-off
-
-
-
-
(7,432)
-
(7,432)
Reversal from disposal of loans
-
-
-
-
(1,896)
-
(1,896)
5,088
4,305
2,052
1,502
Balance - end of the year
190
(757)
Bad debts recovery
Annual Report 2014
6,909
294
20,150
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2013 Special Normal Balance - beginning of the year
mention
Substandard
Doubtful
Doubtful
General
of loss
provision
Total
3,260
1,465
1,790
2,102
5,952
499
15,068
2,585
2,721
292
1,033
4,984
(491)
11,124
-
-
-
-
654
Increase (decrease) during the year Bad debts recovery
654
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
Balance - end of the year
13.
-
5,952
8
21,208
Revaluation allowance for debt restructuring (Unit: Million Baht) Consolidated financial statements 2014 Balance - beginning of the year
14.
Separate financial statements
2013
2014
2013
301
344
301
344
Amortised during the year
(198)
(43)
(198)
(43)
Balance - end of the year
103
301
103
301
Classification of assets As at 31 December 2014 and 2013, 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 2014 Loans to Interbank and
customers and Properties
money market accrued interest items Normal
receivables
Investments
foreclosed
Other assets
Total
46,399
657,326
-
-
276
704,001
Special mention
-
34,484
-
-
133
34,617
Substandard
-
5,722
-
-
19
5,741
Doubtful
-
4,124
-
-
17
4,141
Doubtful of loss
-
21,255
128
259
279
21,921
46,399
722,911
128
259
724
770,421
Total
Thanachart Bank Public Company Limited
191
(Unit: Million Baht) Consolidated financial statements 2013 Loans to Interbank and
customers and Properties
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) Separate financial statements 2014 Loans to Interbank and
customers and Properties
money market accrued interest items Normal
receivables
Investments
foreclosed
Other assets
Total
47,449
658,444
-
-
276
706,169
Special mention
-
34,149
-
-
133
34,282
Substandard
-
4,394
-
-
19
4,413
Doubtful
-
3,623
-
-
17
3,640
Doubtful of loss
-
14,595
132
200
264
15,191
47,449
715,205
132
200
709
763,695
Total
(Unit: Million Baht) Separate financial statements 2013 Loans to Interbank and
customers and
money market accrued interest items Normal
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
192
receivables
Properties
Annual Report 2014
15.
Properties foreclosed (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014 Balance beginning
Balance - end Additions
Disposals
4,552
545
(688)
4,409
1,283
8,025
(7,764)
1,544
530
136
(62)
604
241
14
(13)
242
6,606
8,720
(8,527)
6,799
of the year
of the year
Assets transferred for settlement of debts Immovable assets External appraiser Movable assets Assets from purchase by bid on the open market Immovable assets External appraiser Non-used branches External appraiser Total properties foreclosed
(315)
Less: Allowance for impairment
(798)
6,291
Properties foreclosed - net
821
7,922
(292)
(7,706)
6,507
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 Balance -
Balance beginning of the year
Additions
Disposals
Change
end
appraiser
of the year
30
4,552
Assets transferred for settlement of debts Immovable assets External appraiser Internal appraiser Movable assets
5,199
293
(970)
30
4
(4)
674
8,058
(7,449)
-
1,283
443
167
(84)
4
530
3
1
300
87
(146)
-
241
6,649
8,610
(8,653)
-
6,606
(30)
-
Assets from purchase by bid on the open market Immovable assets External appraiser Internal appraiser
-
(4)
-
Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
(188) 6,461
(851) 7,759
724 (7,929)
-
Thanachart Bank Public Company Limited
(315) 6,291
193
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Balance beginning of the year
Balance - end Additions
Disposals
of the year
Assets transferred for settlement of debts Immovable assets External appraiser Movable assets
1,449
223
(256)
1,416
1,143
7,465
(7,180)
1,428
428
39
(49)
418
241
14
(13)
242
3,261
7,741
(7,498)
3,504
Assets from purchase by bid on the open market Immovable assets External appraiser Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
(264)
(729)
2,997
793
7,012
(200)
(6,705)
3,304 (Unit: Million Baht)
Separate financial statements For the year ended 31 December 2013 Balance -
Balance -
beginning of the year
Additions
Disposals
Change
end
appraiser
of the year
11
1,449
Assets transferred for settlement of debts Immovable assets External appraiser Internal appraiser Movable assets
1,904
98
(564)
7
5
(1)
641
7,726
(7,224)
-
1,143
464
41
(79)
2
428
2
-
300
87
(146)
-
241
3,318
7,957
(8,014)
-
3,261
(11)
-
Assets from purchase by bid on the open market Immovable assets External appraiser Internal appraiser
-
(2)
-
Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
194
Annual Report 2014
(152) 3,166
(811) 7,146
699 (7,315)
-
(264) 2,997
16.
Land, premises and equipment (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014
Land
Buildings
Furniture,
Assets
and building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 31 December 2013 Additions
4,455
2,359
5,771
128
163
12,876
-
2
512
6
136
656
-
-
(14)
-
-
Decrease from disposal of a subsidiary company Transfers/disposals
(11)
(46)
(300)
(43)
(209)
(14) (609)
4,444
2,315
5,969
91
90
12,909
31 December 2013
-
409
4,233
97
-
4,739
Transfers/disposals
-
(36)
(41)
-
(576)
-
-
(10)
31 December 2014 Accumulated depreciation
(499)
Decrease from disposal of a subsidiary company
-
-
(10)
Depreciation for the year
-
124
586
12
-
722
31 December 2014
-
497
4,310
68
-
4,875
31 December 2013
68
26
6
-
-
100
31 December 2014
68
26
6
-
-
100
4,376
1,792
1,653
23
90
7,934
Allowance for impairment
Net book value 31 December 2014
722
Depreciation charge for the year
Thanachart Bank Public Company Limited
195
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013
Land
Buildings
Furniture,
Assets
and building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 31 December 2012 Additions
4,514
2,444
5,586
-
-
501
184
112
12,840
9
189
699
-
Decrease from disposal of a subsidiary company Transfers/disposals
(59)
(60)
(230)
(3)
(25)
(86)
(62)
(138)
(293) (370)
4,455
2,359
5,771
128
163
12,876
31 December 2012
-
308
3,997
143
-
4,448
Transfers/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
31 December 2013 Accumulated depreciation
Decrease from disposal of a subsidiary company
Allowance for impairment
Net book value 31 December 2013 Depreciation charge for the year
196
Annual Report 2014
740
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014
Land
Buildings and
Furniture,
Assets
buildings
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 31 December 2013 Additions Transfers/disposals 31 December 2014
4,370
2,242
4,449
54
162
11,277
-
-
479
-
131
610
(20)
(203)
(193)
(11)
(15)
56
4,359
2,227
4,984
34
90
11,694
31 December 2013
-
353
3,089
43
-
3,485
Transfers/disposals
-
(143)
(19)
-
(166)
Depreciation for the year
-
121
528
5
-
654
31 December 2014
-
470
3,474
29
-
3,973
31 December 2013
-
-
5
-
-
5
31 December 2014
-
-
5
-
-
5
4,359
1,757
1,505
5
90
7,716
Accumulated depreciation
(4)
Allowance for impairment
Net book value 31 December 2014
654
Depreciation charge for the year
Thanachart Bank Public Company Limited
197
(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
(34)
(26)
(126)
(270)
Land
Vehicles
installation
Total
Cost 31 December 2012 Additions Transfers/disposals
(59)
(25)
4,370
2,242
4,449
54
162
11,277
31 December 2012
-
229
2,709
58
-
2,996
Transfer/disposals
-
(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
31 December 2013 Accumulated depreciation
(2)
Allowance for impairment
Net book value 31 December 2013 Depreciation charge for the year
662
As at 31 December 2014 and 2013, the Bank and its subsidiaries have vehicles acquired under financial lease agreements with net book values amounting to approximately Baht 7 million and Baht 15 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 amounting to approximately Baht 3,636 million and Baht 2,439 million, respectively (separate financial statements: the Bank have vehicles acquired under financial lease agreements with net book values amounting to approximately Baht 5 million and Baht 12 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 amounting to approximately Baht 3,306 million and Baht 2,107 million, respectively).
198
Annual Report 2014
17.
Intangible assets (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014 Membership fees for Intangible
Thailand
assets from
Futures
Computer
business
Computer
Exchange and
software under
combination
software
others
development
4,100
1,915
7
240
6,262
-
149
-
105
254
-
(14)
-
-
Transfers/disposals
-
117
-
(117)
31 December 2014
4,100
2,167
7
228
6,502
1,655
694
7
-
2,356
-
-
Total
Cost 31 December 2013 Additions Decrease from disposal of a subsidiary company
(14) -
Accumulated amortisation 31 December 2013 Decrease from disposal of a subsidiary company
-
Amortisation for the year
472
200
-
-
672
2,127
888
7
-
3,022
31 December 2013
-
63
-
-
63
31 December 2014
-
63
-
-
63
1,973
1,216
-
228
3,417
31 December 2014
(6)
(6)
Allowance for impairment
Net book value 31 December 2014
672
Amortisation expenses for the year Remaining amortisation (years)
5.25 years
0 – 9.9 years
-
-
Thanachart Bank Public Company Limited
199
(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
a subsidiary company
-
(22)
-
-
(22)
Amortisation for the year
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
31 December 2013 Allowance for impairment
Net book value 31 December 2013 Amortisation expenses for the year
200
Annual Report 2014
700
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Computer
Intangible assets from business
Computer
software under
combination
software
development
Total
Cost 31 December 2013
3,613
1,658
229
5,500
Additions
-
133
92
225
Transfers/disposals
-
104
(104)
31 December 2014
3,613
1,895
217
5,725
1,168
487
-
1,655
472
190
-
662
1,640
677
-
2,317
31 December 2013
-
63
-
63
31 December 2014
-
63
-
63
1,973
1,155
217
3,345
-
Accumulated amortisation 31 December 2013 Amortisation for the year 31 December 2014 Allowance for impairment
Net book value 31 December 2014
662
Amortisation expenses for the year Remaining amortisation (years)
5.25 years
0 - 9.9 years
-
Thanachart Bank Public Company Limited
201
(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 Amortisation expenses for the year
689
As at 31 December 2014 and 2013, the Bank and its subsidiaries have computer software which have been fully amortised but are still in use with the gross carrying amount before deducting accumulated amortisation and allowance for impairment, amounting to approximately Baht 86 million and Baht 70 million, respectively (separate financial statements: Baht 18 million and Baht 7 million, respectively).
202
Annual Report 2014
18.
Deferred tax assets/ liabilities and income tax
18.1 Deferred tax assets/ liabilities As at 31 December 2014 and 2013, deferred tax assets and liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2014
Deferred tax assets Deferred tax liabilities
Separate financial statements
2013
670
2014
641
2013
-
-
(1,649)
(1,719)
(1,620)
(1,595)
(979)
(1,078)
(1,620)
(1,595)
Net
The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2014
2013
Deferred tax assets Non-accrued interest income
101
108
Allowance for doubtful accounts - general provision/other assets
492
350
Provisions for employee benefits
375
372
Provisions
180
252
Accrued interest payables/accrued expenses
110
149
Fees income received in advance
382
388
Late payment fee income
147
136
Insurance contract liabilities
290
272
Others
418
376
2,495
2,403
(1,108)
(1,110)
(1,370)
(1,546)
Intangible assets
(395)
(489)
Others
(601)
(336)
(3,474)
(3,481)
(979)
(1,078)
Deferred tax assets Deferred tax liabilities Assets transferred as a result of business combination Deferred commission fee and direct expenses charged on hire purchase
Deferred tax liabilities Net
Thanachart Bank Public Company Limited
203
(Unit: Million Baht) Separate financial statements 2014
2013
Deferred tax assets Non-accrued interest income
99
105
Allowance for doubtful accounts - general provision/other assets
121
60
Provisions for employee benefits
341
338
Provisions
180
252
95
136
Fees income received in advance
382
388
Late payment fee income
147
136
Others
167
150
1,532
1,565
(1,108)
(1,110)
(1,304)
(1,471)
Intangible assets
(395)
(489)
Others
(345)
(90)
Deferred tax liabilities
(3,152)
(3,160)
Net
(1,620)
(1,595)
Accrued interest payables/accrued expenses
Deferred tax assets Deferred tax liabilities Assets transferred as a result of business combination Deferred commission fee and direct expenses charged on hire purchase
204
Annual Report 2014
18.2 Income tax Income tax expenses for the years ended 31 December 2014 and 2013 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2014
2013
2013
Continuing operations Current income tax: Corporate income tax charge
2,798
4,320
1,902
3,371
29
63
24
69
(348)
(352)
(229)
(223)
Adjustment in respect of income tax from previous year Deferred tax: Relating to origination and reversal of temporary differences Income tax expense reported in statements of comprehensive income
2,479
4,031
1,697
3,217
-
119
-
-
-
(30)
-
-
-
89
-
-
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
Thanachart Bank Public Company Limited
205
The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2014 and 2013 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2014
2013
2013
Continuing operations Deferred tax relating to gain(loss) on changes in value of available-for-sale investments
318
(105)
253
(106)
5
(5)
-
323
(110)
253
-
(28)
-
-
-
(28)
-
-
Deferred tax relating to share of other comprehensive income of associates
(106)
Discontinued operations Deferred tax relating to loss 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 2014 and 2013 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
12,674
19,278
9,615
17,330
-
443
-
-
12,674
19,721
9,615
17,330
20%
20%
20%
20%
2,535
3,945
1,923
3,466
29
63
24
69
(85)
112
(250)
(318)
Accounting profit before tax - continuing operations Accounting profit before tax - discontinued operations
Applicable tax rate Accounting profit before tax multiplied by applicable tax rate Adjustment in respect of income tax from previous year Effects of non - taxable revenue and non-deductible expenses - net Income tax expenses reported in statements of comprehensive income Income tax expenses - continuing operations Income tax expenses - discontinued operations
206
Annual Report 2014
2,479
4,120
1,697
3,217
2,479
4,031
1,697
3,217
-
89
-
-
2,479
4,120
1,697
3,217
19.
Other assets (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Accrued premium insurance income
275
230
-
-
Other receivables
573
796
573
791
1,008
1,069
957
938
227
276
227
276
312
306
266
272
Deposits
305
327
288
300
Estimated insurance claims recoveries
301
312
-
-
18
170
-
-
Prepaid expenses
435
413
127
110
Deposits from derivative contracts
444
1,034
444
1,034
Reinsurance assets
147
401
-
-
Others
1,587
1,934
1,084
1,476
Total
5,632
7,268
3,966
5,197
Accrued interest and dividend income receivables Prepaid leasehold rights Other receivables - VAT paid in advance for customers
Receivable from clearing house
Less: Allowance for impairment Other assets - net
(411) 5,221
(513) 6,755
(326) 3,640
Thanachart Bank Public Company Limited
(307) 4,890
207
20.
Deposits
20.1 Classified by type of deposits (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Current
8,673
8,768
8,700
8,806
Saving
240,592
239,231
241,066
239,715
Certificates of deposit
228,654
6,241
228,654
6,241
- Less than 6 months
64,121
99,551
64,601
100,437
- 6 months and up to 1 year
22,583
167,756
24,177
169,505
132,369
197,532
132,537
197,558
696,992
719,079
699,735
722,262
Fixed deposits
- Over 1 year Total deposits
20.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2014 Domestic Baht
2013
Foreign
Total
Domestic
Foreign
Total
696,531
1
696,532
718,629
1
718,630
US Dollar
249
25
274
361
23
384
Other currencies
182
4
186
20
45
65
696,962
30
696,992
719,010
69
719,079
Total
(Unit: Million Baht) Separate financial statements 2014 Domestic Baht
Foreign
Total
Domestic
Foreign
Total
699,274
1
699,275
721,812
1
721,813
US Dollar
249
25
274
361
23
384
Other currencies
182
4
186
20
45
65
699,705
30
699,735
722,193
69
722,262
Total
208
2013
Annual Report 2014
21.
Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2014 At call
2013
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
710
3,980
4,690
731
17,573
18,304
35
10,101
10,136
598
8,074
8,672
Other financial institutions
10,781
16,636
27,417
8,931
17,736
26,667
Total domestic items
12,257
48,290
60,547
39
15,476
15,515
104
Euro
1
-
1
4
-
4
Baht
3,375
832
4,207
837
-
837
Total foreign items
3,415
16,308
19,723
945
15,672
64,598
80,270
Commercial banks Specialised financial institutions
708 940
7,500 17,012
11,177
50,322
8,208 17,952
61,499
Foreign US Dollar
Total
12,122
18,638
18,638 68,960
18,742
19,583 81,082
(Unit: Million Baht) Separate financial statements 2013
2014 At call
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
709
3,980
4,689
708
7,500
8,208
161
11,289
11,450
215
9,902
10,117
35
9,701
9,736
598
8,074
8,672
Other financial institutions
10,913
16,636
27,549
9,033
18,836
27,869
Total domestic items
11,818
41,606
53,424
10,554
44,312
54,866
39
15,476
15,515
104
18,638
18,742
Euro
1
-
1
4
-
4
Baht
3,375
832
4,207
837
-
837
Total foreign items
3,415
16,308
19,723
945
18,638
19,583
15,233
57,914
73,147
11,499
62,950
74,449
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
Thanachart Bank Public Company Limited
209
As at 31 December 2014, interbank and money market items in the consolidated financial statements included loans of a subsidiary company amounting to Baht 2,012 million, consisting of (i) 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, (ii) a loan of Baht 112 million, repayable in quarterly installments, carrying interest at MLR minus a fixed rate per annum, payable monthly, (iii) 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, (iv) a loan of Baht 250 million, repayable in quarterly installments, carrying interest at a fixed rate per annum, payable monthly, and (v) a loan of Baht 350 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 (2013: included loans of a subsidiary company amounting to Baht 2,794 million). 22.
Debt issued and borrowings As at 31 December 2014 and 2013, the balance of domestic debt issued and borrowings, which stated in Baht, are as follows: (Unit: Million Baht) Interest rate
Consolidated
Separate
per annum (as at
financial statements
financial statements
2014
2014
Types of borrowings
31 December 2014)
Maturity date
Perpetual subordinated hybrid
7.55 percent
Dissolution
-
-
4.70 - 6.00 percent
2013
2013
7,130
7,130
7,130
7,130
-
5,000
-
5,000
2015 - 2022
23,516
35,516
23,516
35,516
6.00 percent
2024
13,000
-
13,000
-
4.10 - 5.50 percent
2015 - 2018
15,271
14,246
-
-
bonds issued under Tier I (a) Subordinated hybrid bonds issued under Tier II (b) Subordinated debentures issued under Tier II (c - h) Subordinated instruments issued under Tier II (i) Unsubordinated debentures (j – s) Short-tem debentures
2.20 - 2.60 percent
2015
30,180
29,226
30,180
29,226
Structured notes
1.00 percent
2015
37
-
-
-
Promissory notes
0.50 - 2.50, 4.10
At call
1,052
1,065
5
5
12
46
12
46
90,198
92,229
73,843
76,923
percent Borrowings - Department of
0.50 percent
2015 - 2017
Alternative Energy Development and Efficiency Total debt issued and borrowings
210
Annual Report 2014
(a)
On 22 April 2010, the Bank issued 7,130,000 name registered of perpetual, non-cumulative, subordinated, hybrid Tier I 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 conditions 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 early redeemed these debentures in the third quarter of 2014.
(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 early redeemed these debentures in the second quarter of 2014.
(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 debentures 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.
Thanachart Bank Public Company Limited
211
(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 early redeemed these debentures in the second quarter of 2014.
(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 debentures 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 debentures 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.
(i)
On 19 June 2014, the Bank issued 13 million units of name registered Tier II capital subordinated unsecured instruments with no instrument holder’s representative, with a face value of Baht 1,000 each. The instruments will be fully converted to ordinary shares of the Bank in the event that a Point of Non-Viability is triggered requiring financial assistance from the regulators. The instruments mature in 2024 and bear interest at a fixed rate of 6 percent per annum, payable quarterly. The Bank has a call option to early redeem these instruments at par if conditions specified are met.
(j)
On 27 April 2012, a subsidiary company issued 6,000,000 name registered unsubordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each. Of these, 2 million units bear interest at fixed rates of 4.90 percent per annum and matured in the second quarter of 2014, and 1.5 million units bear interest at fixed rates of 5.20 percent per annum and mature in 2015, and another 2.5 million units bear interest at a 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 debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2016 and bear interest at a 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.
212
Annual Report 2014
(l)
On 14 June 2013, a subsidiary company issued 2,000,000 name registered unsubordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a 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 debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a 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 debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a 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.
(o)
On 30 April 2014, a subsidiary company issued 280,000 units of name registered unsubordinated, unsecured debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a fixed rate of 4.25 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.
(p)
On 2 May 2014, a subsidiary company issued 2,000,000 units of name registered unsubordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2018 and bear interest at a fixed rate of 4.75 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.
(q)
On 2 May 2014, a subsidiary company issued 210,000 units of name registered unsubordinated, unsecured debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a fixed rate of 4.25 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.
Thanachart Bank Public Company Limited
213
(r)
On 3 July 2014, a subsidiary company issued 150,000 units of name registered unsubordinated, unsecured debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a fixed rate of 4.22 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.
(s)
On 25 September 2014, a subsidiary company issued 300,000 units of name registered unsubordinated, unsecured debentures with no debenture holders’ representative, with a face value of Baht 1,000 each. The debentures mature in 2017 and bear interest at a fixed rate of 4.10 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
23.
Provisions (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014 Obligations from
Balance as at 1 January 2014 Increase during the year Utilised
Loss from
Employee
off-balance
litigation
benefits
items
145
1,878
579
544
3,146
33
185
19
269
506
(11)
(154)
(95)
(401)
(661)
-
(5)
-
-
(5)
(5)
(2)
(69)
(110)
(186)
162
1,902
434
302
2,800
Others
Total
Decrease from disposal of a subsidiary company Reversal of provisions Balance as at 31 December 2014
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2013 Obligations from
Balance as at 1 January 2013
Loss from
Employee
off-balance
litigation
benefits
items
186
1,922
222
Others 646
Total 2,976
54
73
357
329
813
(48)
(95)
-
(431)
(574)
-
(22)
-
-
(22)
Reversal of provisions
(47)
-
-
-
(47)
Balance as at 31 December 2013
145
1,878
579
544
3,146
Increase during the year Utilised Decrease from disposal of a subsidiary company
214
Annual Report 2014
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Obligations from
Balance as at 1 January 2014 Increase during the year Utilised Reversal of provisions Balance as at 31 December 2014
Loss from
Employee
off-balance
litigation
benefits
items
145
1,692
579
544
2,960
33
156
19
269
477
(11)
(141)
(95)
(401)
(648)
(5)
(2)
(69)
(110)
(186)
434
302
162
1,705
Others
Total
2,603
(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
Thanachart Bank Public Company Limited
(46) 2,960
215
Long-term employee benefits Provision for long-term employee benefits, which are compensations on employees’ retirement, was as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2014
2014
2013
Defined benefit obligation at the beginning of the year
1,787
1,902
1,602
1,714
-
-
-
2
(5)
(22)
-
-
130
147
112
127
83
87
74
79
-
(213)
(9)
(210)
Decrease from curtailment
(97)
(69)
(90)
(69)
Benefits paid
(49)
(45)
(37)
(41)
(2)
-
(2)
-
1,847
1,787
1,650
1,602
Employee benefits for staff transferred from TS AMC Decrease from disposal of a subsidiary company Current service cost Interest cost Actuarial gain
Reversal of provisions Defined benefit obligation at the end of the year
Long-term employee benefits which are recognised in profit or loss for the years ended 31 December 2014 and 2013 can be summarised as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014 Current service cost
2013
2014
2013
130
147
112
127
83
87
74
79
(5)
(221)
5
(204)
5
8
(14)
(6)
Decrease from curtailment
(97)
(69)
(90)
(69)
Total expense recognised in profit or loss
116
(48)
87
(73)
Interest cost Actuarial (gain) loss recognised during the year - Assumptions changing adjustments - Experience adjustments
216
Annual Report 2014
Amounts of defined benefit obligation for the current and previous four 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 2014
1,847
1,650
5
(14)
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
2014
2013
2014
2013
Discount rate
3.43 - 4.03
4.40 - 4.77
4.03
4.62
Future salary increase rate
5.00 - 7.10
5.11 - 7.84
5.00
5.11
0.00 - 71.43
0.00 - 59.57
0.32 - 19.86
0.17 - 14.11
Average staff turnover rate (depending on age)
24.
Insurance contract liabilities (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2013
2014 Life policy reserve
2014
2013
-
10,297
-
-
Loss reserve and outstanding claims
1,644
1,766
-
-
Unearned premium reserve
3,054
2,889
-
-
-
67
-
-
4,698
15,019
-
-
Other liabilities under insurance policies Total insurance contract liabilities
Thanachart Bank Public Company Limited
217
25.
Other liabilities (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014 Other payables
2013
2014
2013
1,295
1,510
1,080
1,136
355
334
267
276
Insurance premium payable
344
359
187
298
Income received in advance
1,946
1,980
1,906
1,977
Corporate income tax payable
1,155
1,264
720
717
480
509
-
-
Others
2,945
2,916
1,110
1,069
Total other liabilities
8,520
8,872
5,270
5,473
Suspense cash received from account receivables
Payable to clearing house
26.
Share capital On 3 April 2014, 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 75,266,649,030 (7,526,664,903 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 cancelling 2,013,000,000 unissued ordinary shares with a par value of Baht 10 each. The Bank registered the decrease in share capital with the Ministry of Commerce on 7 May 2014.
-
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 99,136,649,030 (9,913,664,903 shares with a par value of Baht 10 each) by issuing 4,400,000,000 ordinary shares with a par value of Baht 10 each. The Bank registered the increase in share capital with the Ministry of Commerce on 8 May 2014.
218
Annual Report 2014
27.
Other components of equity (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2014
2013
2013
Surplus from business combination under common control
(123)
(123)
-
-
1,790
719
1,595
676
770
484
148
25
2,560
1,203
1,743
701
Revaluation surplus (deficit) on investments Revaluation surplus on investments Available-for-sale investments Debt instruments Equity instruments Total Revaluation deficit on investments Available-for-sale investments Debt instruments Equity instruments Total Total revaluation surplus on investments Less: The effect of deferred tax liabilities Net revaluation surplus on investments
(48) (48) 2,512
(252)
(42)
(236)
(36)
(4)
(34)
(288)
(46)
(270)
915
(483)
(165)
1,697 (339)
431 (86)
2,029
750
1,358
345
237
193
-
-
(24)
(19)
-
-
213
174
-
-
2,119
801
1,358
345
Share of other comprehensive income of associate Less: The effect of deferred tax liabilities Net share of other comprehensive income of associate Total
28.
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. On 21 August 2014, the Bank’s Board of Director passed a resolution to allocate Baht 244 million of net income to statutory reserve, and on 31 December 2014, the Bank additional allocated Baht 152 million of net income for the year 2014 to the statutory reserve (2013: Baht 706 million).
Thanachart Bank Public Company Limited
219
29.
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 2014 and 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) 2014
2013
55,137
55,137
Share premium
2,101
2,101
Statutory reserve
2,279
1,837
30,457
23,274
Tier I capital Common Equity Tier I capital Issued and fully paid-up share capital
Retained earnings – unappropriated Other components of equity – Revaluation surplus (deficit) on investments in equity securities – net
115
(7)
248
-
90,337
82,342
(17,941)
(17,941)
Other components of equity – Revaluation surplus on investments in debt securities – net
Less: goodwill Less: intangible assets Total Common Equity Tier I capital
(590)
-
71,806
64,401
5,704
6,417
77,510
70,818
5,611
6,101
Subordinated debentures
31,515
33,764
Total Tier II capital
37,126
39,865
Total capital funds
114,636
110,683
Additional Tier I capital Perpetual subordinated hybrid bonds (Hybrid Tier I) Total Tier I capital Tier II capital Reserve for assets classified as normal
On 21 August 2014, the Board of Directors’ meeting of the Bank passed a resolution to allocate amounting Baht 244 million of net income for the six-month period ended 30 June 2014 to statutory reserve. The remaining net income of Baht 3,403 million were allocated as capital funds of the Bank.
220
Annual Report 2014
As at 31 December 2014 and 2013, the capital adequacy ratios of the Bank calculated in accordance with the BOT’s regulation regarding the calculation of capital fund, dated 8 November 2012, are as follows: 2014
2013 Minimum
Total capital to risk-weighted assets (percent) Total Common Equity Tier I to risk-weighted
Minimum
Capital ratio
requirement
Capital ratio
requirement
of the Bank
by BOT
of the Bank
by BOT
15.83
8.50
14.80
8.50
9.92
4.50
8.61
4.50
10.70
6.00
9.47
6.00
assets (percent) Total Tier I to risk-weighted assets (percent)
The Bank will disclose qualitative and quantitative information regarding capital maintenance as at 31 December 2014 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 2015. 30.
Dividends Dividends
Dividends on net income for the year 2013 Dividends on net income for the year 2012
31.
Approved by
Total dividends
Dividend per share
Million Baht
Baht
Annual General Meeting of the Shareholders on 3 April 2014
2,481
0.45
2,040
0.37
Annual General Meeting of the Shareholders on 4 April 2013
Interest income Interest income for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014 Interbank and money market items
2013
2014
2013
1,894
1,870
1,865
1,738
238
457
74
69
4,106
3,861
3,876
3,722
Loans to customers
20,320
21,239
19,776
20,690
Hire purchase and financial lease
25,887
26,452
23,511
24,323
Total interest income
52,445
53,879
49,102
50,542
Investments and trading transactions Investments in debt securities
Thanachart Bank Public Company Limited
221
32.
Interest expenses Interest expenses for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
16,224
17,862
16,277
17,915
1,092
1,519
858
1,261
3,556
3,598
3,556
3,598
- Subordinated debentures
2,013
2,784
2,013
2,784
- Unsubordinated debentures
1,527
1,418
793
869
419
-
419
-
44
100
-
61
9
9
4
1
24,884
27,290
23,920
26,489
Deposits Interbank and money market items Contribution fee to FIDF and the Deposit Protection Agency Debts issued and borrowings
- Subordinated instruments - Others Borrowing cost Total interest expenses
33.
Fees and service income Fees and service income for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Fees and service income Acceptance, aval and guarantees
275
317
275
317
1,568
1,823
-
-
855
834
855
834
Hire purchase fee income
1,465
1,340
1,348
1,260
Insurance brokerage fee income
1,172
1,513
1,432
1,815
692
676
-
-
Credit card fee
1,008
926
1,010
931
Others
1,658
1,364
1,605
1,275
8,693
8,793
6,525
6,432
Fees and service expenses
(2,766)
(2,678)
(2,533)
(2,461)
Net fees and service income
5,927
6,115
3,992
3,971
Brokerage fee from securities/ derivatives ATM and electronic banking services
Management fees
Total fees and service income
222
Annual Report 2014
34.
Gains on trading and foreign exchange transactions Gains (losses) on trading and foreign exchange transactions for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Foreign exchange and derivatives contract relating to foreign exchange
581
Derivatives contract relating to interest rate
(5)
587
628
20
(5)
20
(139)
59
35
Debt securities
259
Equity securities
(25)
(9)
-
-
49
50
-
2
859
531
641
685
Others Total
35.
609
Gains on investments Gains (losses) on investments for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Gains (losses) on disposal Available-for-sale securities General investments
752 11
350 (2)
677
242
11
(2)
Investments in subsidiary companies (Note 47)
65
12,216
126
13,128
Reversal of losses on impairment (losses on impairment) General investments
(58)
33
(58)
33
Gains (losses) on capital refunded Available-for-sale investments General investments Total
-
505
-
505
(1)
(21)
(1)
(21)
769
13,081
755
13,885
Thanachart Bank Public Company Limited
223
36.
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 22 million (separate financial statements: Baht 20 million) to the Bank’s and its subsidiaries’ directors, which were approved by the Annual General Meeting of Shareholders of the Bank and its subsidiaries.
37.
Impairment losses of loans and debt securities Impairment losses of loans and debt securities for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Bad debts and doubtful accounts (reversal) Loans to customers Interbank and money market items
7,275
11,514
7,329
11,124
(24)
20
(19)
24
(198)
(43)
(198)
(43)
Loss from debt restructuring
12
5
12
5
Hair cut loss per agreement
57
-
57
-
7,122
11,496
7,181
11,110
Amortisation of revaluation allowance for debts restructured during the year
Total
224
Annual Report 2014
38.
Components of other comprehensive income Components of other comprehensive income for the years ended 31 December 2014 and 2013 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Other comprehensive income Continuing operations Available-for-sale investments: Unrealised gains (losses) during the year
2,356
(44)
1,951
(286)
Less: Reclassification of adjustment for the realised gains that included in profit or loss
Share of other comprehensive income in associate (loss) Other comprehensive income for the year (loss)
(759)
(350)
(685)
1,597
(394)
1,266
44
(54)
-
1,641
(448)
1,266
(242) (528) (528)
Impact from related income tax: Income tax - gains (losses) on changes in value of available-for-sale investments
(318)
105
(5)
5
(323)
110
(253)
106
Income tax - share of other comprehensive income of associate Impact from related income tax Other comprehensive income for the year - net (loss)
39.
1,318
(338)
-
-
(253)
106
1,013
(422)
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 issued during the years.
Profit for the year from continuing operations (Million Baht)
Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
9,922
15,031
7,918
14,113
1.80
2.73
1.44
2.56
-
354
-
-
-
0.06
-
-
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)
Thanachart Bank Public Company Limited
225
40.
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 2014, the Bank and its subsidiaries contributed Baht 424 million to the fund (separate financial statements: Baht 373 million) (2013: Baht 422 million in the consolidated financial statements and Baht 374 million in the separate financial statements).
41.
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
Transfer pricing policy (For the year 2014)
2014
2013
2014
2013
Purchase of debt securities
5,854
3,603
5,854
3,603
At market price
Sales of debt securities
1,035
29,189
1,035
29,189
At market price
-
1
-
1
482
-
482
-
Transactions occurred during the years Parent company
(Related gain) Sales of investments in a subsidiary company
At the contract rate agreed with reference to the opinion of an independent financial advisor
(Related gain)
35
-
67
-
Interest income
1
1
-
-
At interest rate of 7.52 - 8.15 percent per annum
Fee and service income
1
5
-
2
At the rate agreed under the service contract
Income on supporting service
10
11
10
11
At the rate agreed under the service contract
Other income Interest expenses
1
8
-
-
342
336
342
336
At interest rate of 0.50 - 1.90, 2.50 3.20, 5.00, 5.25, 7.55, 7.65 and 8.25 percent per annum
Rental expenses
8
7
6
6
At the rate agreed under the rental contract
Other expenses Dividend payment
226
Annual Report 2014
51
49
51
49
1,264
1,040
1,264
1,040
As declared
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Transfer pricing policy (For the year 2014)
Transactions occurred during the years (continued) Subsidiary companies Purchase of debt securities
-
-
5,332
8,781
At market price
Sales of debt securities
-
-
9,361
10,899
At market price
(Related gain)
-
-
10
2
Purchase/sales of forward
-
-
739
1,108
-
-
188
259
At market price
exchange contracts Interest income
At interest rate of 2.87 - 3.50, 3.75, 4.70, 4.80 and 7.78 percent per annum
Dividend income
-
-
1,277
1,300
As declared
Fee and service income
-
-
734
1,233
At the rate agreed under the service contract
Income on supporting service
-
-
292
294
At the rate agreed under the service contract
Other income
-
-
11
17
Interest expenses
-
-
148
156
At interest rate of 0.25 - 3.25 percent per annum
Rental expenses
-
-
2
6
At the rate agreed under the rental contract
Other expenses
-
-
182
193
418
-
418
-
Associated company Sales of investments in a subsidiary company
At the contract rate agreed with reference to the opinion of an independent financial advisor
(Related gain)
30
-
59
-
Dividend income
-
-
46
42
Other income
5
11
-
-
42
88
42
88
Interest expenses
As declared
At interest rate of 0.50 - 1.00, 5.25 and 5.50 percent per annum
Rental expenses
102
114
78
91
At the rate agreed under the rental contract
Other expenses
10
11
7
8
Thanachart Bank Public Company Limited
227
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Transfer pricing policy (For the year 2014)
Transactions occurred during the years (continued) Related parties (presented as part of continuing operations) Purchase of debt securities
4,507
229
3,830
Sales of debt securities
8,330
10,358
7,440
10,358
8
-
1
-
429,948
459,061
429,180
457,204
296
307
296
303
(Related gain) Purchase/sales of forward
229
At market price At market price
At market price
exchange contracts Interest income
At interest rate of 0.06 - 7.78 percent per annum
Dividend income Fee and service income
37
44
18
26
6
1
5
-
As declared At the rate agreed under the service contract
Insurance/Life insurance
-
27
-
-
7
9
7
9
income Income on supporting service
At the rate agreed under the service contract
Other income Interest expenses
11
11
-
-
355
390
355
390
At interest rate of 0.10 - 3.30, 5.25, 6.00, 7.55, 7.65 and 8.25 percent per annum
Rental expenses
106
101
60
65
At the rate agreed under the rental contract
Insurance/Life insurance
22
-
-
-
expense Other expense
contract 41
55
34
36
1,216
900
1,216
900
Life insurance income
-
2
-
-
Rental expenses
-
5
-
-
Dividend payment Related companies (presented as part of discontinued operations)
228
Annual Report 2014
At the rate agreed under the service
As declared
The outstanding balances of the above transactions during the years ended 31 December 2014 and 2013 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
2014
2014
2013
Parent company Loans to customers
10
14
-
-
Deposits
2,008
1,334
2,008
1,334
Debt issued and borrowings
3,644
3,637
3,642
3,637
Interbank and money market items (assets)
-
-
862
1,346
Loans to customers
-
-
4,093
5,901
Deposits
-
-
2,759
2,538
Interbank and money market items (liabilities)
-
-
398
572
Debt issued and borrowings
-
-
-
221
Deposits
297
991
297
991
Debt issued and borrowings
738
1,200
738
1,200
218
246
218
246
Loans to customers
7,658
8,068
7,527
7,616
Deposits
1,838
2,571
1,838
2,571
13,852
12,582
13,852
12,582
4,051
3,894
4,051
3,894
Subsidiary companies
Associated company
Related companies Interbank and money market items (assets)
Interbank and money market items (liabilities) Debt issued and borrowings
Thanachart Bank Public Company Limited
229
As at 31 December 2014 and 2013, the significant outstanding balances of the above transactions are as follows: (Unit: Million Baht) Consolidated financial statements 2014 Liabilities
Assets Loans to
Interbank
Investments
customers
and money
market
- debt
and interest
Other
items
securities
receivables
assets
Interbank and money
Deposits
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
8
-
19
-
3,638
76
-
-
-
-
36
116
-
-
-
-
348
-
-
-
-
12,842
3,494
74
3,566
-
-
27
-
-
-
-
-
-
Associated company MBK Plc. Related companies The Bank of Nova Scotia GMM Grammy Plc. Thai Reinsurance Plc.
-
-
-
-
100
-
-
13
-
Home Product Center Plc.
-
684
-
2
-
-
-
-
-
Krungthai Card Plc.
-
-
4,771
-
8
-
-
-
-
Srithai Superware Plc.
-
-
433
-
20
-
-
-
32
Synphaet Co., Ltd.
-
-
815
-
1
-
-
-
36
Other related companies
-
-
1,003
78
1,038
202
400
14
347
348
684
7,057
116
1,302
13,044
7,532
177
3,981
(Unit: Million Baht) Consolidated financial statements 2013 Liabilities
Assets Interbank
Loans to
and money
customers
market
and interest
items
receivables
Interbank
Other assets
Deposits
Debt issued
and money
and
Other
market items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
12
25
3,030
-
3,638
84
-
-
-
34
963
-
1,200
11
-
Associated company MBK Plc. Related companies The Bank of Nova Scotia
258
-
-
-
14,406
3,494
82
2,680
GMM Grammy Plc.
-
232
-
550
-
-
2
-
Thai Reinsurance Plc.
-
-
2
680
-
-
13
-
Krungthai Card Plc.
-
4,970
-
7
-
-
-
-
Srithai Superware Plc.
-
594
-
50
-
-
-
19
Synphaet Co., Ltd.
-
443
-
7
-
-
-
5
Other related companies
-
1,348
173
1,989
119
400
81
876
258
7,599
234
7,276
14,525
8,732
273
3,580
230
Annual Report 2014
(Unit: Million Baht) Separate financial statements 2014 Liabilities
Assets Interbank
Loans to
Interbank
and money
Investments
customers
market
- debt
and interest
Other
items
securities
receivables
assets
Deposits
-
-
-
19
and money
Debt
market
issued and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
3,638
76
-
Subsidiary companies SCIB Plc.
-
-
-
-
1,538
-
-
4
-
Thanachart Group Leasing Co., Ltd.
-
-
-
-
334
-
-
1
-
Thanachart Securities Plc.
1,050
-
-
2
-
115
-
27
556
Thanachart Insurance Plc.
-
-
-
39
288
-
-
128
50
Thanachart Broker Co., Ltd.
-
-
-
10
292
-
-
1
-
TS Asset Management Co., Ltd.
-
-
2,902
-
55
-
-
-
-
Ratchthani Leasing Plc.
-
-
-
-
153
-
-
-
30
Other subsidiary companies
-
-
-
34
101
18
-
18
-
-
-
-
29
116
-
-
-
-
348
-
-
-
-
12,842
3,494
74
3,566
Associated company MBK Plc. Related companies The Bank of Nova Scotia GMM Grammy Plc.
-
-
27
-
-
-
-
-
-
Thai Reinsurance Plc.
-
-
-
-
100
-
-
3
-
Home Product Center Plc.
-
684
-
2
-
-
-
-
-
Krungthai Card Plc.
-
-
4,771
-
8
-
-
-
-
Srithai Superware Plc.
-
-
433
-
20
-
-
-
32
Synphaet Co., Ltd.
-
-
815
-
1
-
-
-
36
Other related companies
-
-
661
66
1,038
202
400
106
291
1,398
684
9,609
182
4,063
13,177
7,532
438
4,561
Thanachart Bank Public Company Limited
231
(Unit: Million Baht) Separate financial statements 2013 Liabilities
Assets Interbank
Loans to
Interbank
and money
Investments
customers
market
- debt
and interest
Other
items
securities
receivables
assets
and money
Debt
market
issued and
Other
items
borrowings
liabilities
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
-
20
3,030
-
3,638
84
-
Subsidiary companies SCIB Plc.
-
-
-
-
1,516
-
-
4
-
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
-
Associated company MBK Plc. Related companies The Bank of Nova Scotia
258
-
-
-
-
14,406
3,494
82
2,680
GMM Grammy Plc.
-
-
232
-
550
-
-
2
-
Thai Reinsurance Plc.
-
-
-
-
680
-
-
13
-
Krungthai Card Plc.
-
-
4,970
-
7
-
-
-
-
Srithai Superware Plc.
-
-
594
-
50
-
-
-
19
Synphaet Co., Ltd.
-
-
443
-
7
-
-
-
5
Other related companies
-
-
832
161
1,989
118
400
75
612
808
514
11,628
347
10,490
15,727
8,732
521
4,120
As at 31 December 2014, the Bank has loans to TS Asset Management Co., Ltd. amounting to Baht 2,902 million, carrying interest at rates of 2.87 - 3.16 percent per annum (2013: Baht 4,555 million at interest rates of 3.15 - 3.36 percent per annum). As at 31 December 2014, the Bank and its subsidiaries have investments amounting to approximately Baht 825 million (Baht 350 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 (2013: Baht 809 million in the consolidated financial statements, and Baht 435 million in the separate financial statements).
232
Annual Report 2014
As at 31 December 2014 and 2013, the Bank and its subsidiaries have the following related parties transactions with executive employees of the Bank and companies within Thanachart Group from management level up, including related persons who together with these employees: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
91
82
85
75
712
906
712
906
Loans to customers Deposits
Directors and management’s remuneration During the years 2014 and 2013, the Bank and its subsidiaries paid the following benefits to their key management personnel, including directors, totaled 104 persons and 121 persons, respectively (the separate financial statements: 36 persons and 47 persons, respectively): (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014 Short-term employee benefits Post-employment benefits
2013
2014
2013
546
539
231
267
14
13
9
6
560
552
240
273
Thanachart Bank Public Company Limited
233
42.
Financial information classified by operating segment
42.1 Financial position and results of operations classified by business activity The financial position as at 31 December 2014 and 2013, and the operating results for the years then ended, classified by domestic and foreign operations, are as follows: (Unit: Million Baht) Consolidated financial statements 2014
Total assets
Domestic
Foreign
operations
operations
Eliminations
Total
1,008,820
19,773
(19,703)
1,008,890
70,073
15,063
(19,703)
65,433
144,944
4,665
-
149,609
1,919
-
-
1,919
727,349
-
-
727,349
696,992
-
-
696,992
Interbank and money market items (liabilities)
80,326
19,647
Debt issued and borrowings
90,198
-
Interbank and money market items (assets) Investments Investment in an associated company Loans to customers and accrued interest receivables Deposits
(19,703) -
80,270 90,198
(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 Investment in an associated company Loans to customers and accrued interest receivables Deposits
234
Annual Report 2014
(24,622) -
81,082 92,229
(Unit: Million Baht) Consolidated financial statements 2014
Interest income Interest expenses Net interest income
Domestic
Foreign
operations
operations
52,301 (24,884)
Eliminations
Total
260
(116)
52,445
(116)
116
(24,884)
27,417
144
-
27,561
Net fees and service income
5,927
-
-
5,927
Net insurance/life insurance income
2,091
-
-
2,091
Other operating income
3,732
-
-
3,732
(19,515)
-
-
(19,515)
Impairment losses of loans and debt securities
(7,122)
-
-
(7,122)
Profit before income tax
12,530
144
-
12,674
Income tax
(2,479)
-
-
(2,479)
Profit before non-controlling interests
10,051
144
-
10,195
Other operating expenses
(Unit: Million Baht) Consolidated financial statements 2013
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
53,805
168
(94)
53,879
(27,290)
(94)
94
(27,290)
26,515
74
-
26,589
Net fees and service income
6,115
-
-
6,115
Net insurance/life insurance income
2,282
-
-
2,282
-
16,196
Interest expenses Net interest income
Other operating income
16,218
(22)
Other operating expenses
(20,408)
-
-
(20,408)
Impairment losses of loans and debt securities
(11,496)
-
-
(11,496)
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 non-controlling interests Profit from discontinued operations before income tax Income tax Profit before non-controlling interests
15,549
Thanachart Bank Public Company Limited
15,601
235
(Unit: Million Baht) Separate financial statements 2014 Domestic
Foreign
operations
operations
967,146
Eliminations
Total
19,773
(19,703)
967,216
69,978
15,063
(19,703)
65,338
136,537
4,665
-
141,202
Investments in subsidiary and associated companies
8,744
-
-
8,744
Loans to customers and accrued interest receivables
694,952
-
-
694,952
Deposits
699,735
-
-
699,735
Interbank and money market items (liabilities)
73,203
19,647
Debt issued and borrowings
73,843
-
Total assets Interbank and money market items (assets) Investments
(19,703) -
73,147 73,843
(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 2014 Domestic
Foreign
operations
operations
48,958
260
(116)
49,102
(23,920)
(116)
116
(23,920)
25,038
144
-
25,182
Net fees and service income
3,992
-
-
3,992
Other operating income
4,651
-
-
4,651
(17,029)
-
-
(17,029)
Impairment losses of loans and debt securities
(7,181)
-
-
(7,181)
Income tax
(1,697)
-
-
(1,697)
144
-
7,918
Interest income Interest expenses Net interest income
Other operating expenses
Profit for the year
236
Annual Report 2014
7,774
Eliminations
Total
(Unit: Million Baht) Separate financial statements 2013
Interest income Interest expenses Net interest income Net fees and service income Other operating income
Domestic
Foreign
operations
operations
50,468
168
(94)
50,542
(26,489)
(94)
94
(26,489)
23,979
74
-
24,053
3,971
-
-
3,971
-
18,108
18,130
Eliminations
(22)
Total
Other operating expenses
(17,692)
-
-
(17,692)
Impairment losses of loans and debt securities
(11,110)
-
-
(11,110)
Income tax
(3,217)
-
-
(3,217)
Profit for the year
14,061
52
-
14,113
42.2 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 deals 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.
Thanachart Bank Public Company Limited
237
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 amortisation, are presented in other business segment. Operating segments: Thanachart Bank and its subsidiaries The Bank and its subsidiaries have four operating segments, which are 1) the banking segment, consisting of the three segments described above 2) the securities business segment 3) the non-life insurance segment and 4) the asset management segment. Financial information of the Bank and its subsidiaries presented by segment is as follow:
238
Annual Report 2014
(Unit: Million Baht) For the year ended 31 December 2014 Banking business Treasury &
Retail Net interest income Net insurance income Other operating income Other operating expenses Impairment losses of loans and debt securities Profit before income tax Income tax Profit before non-controlling interest
Non-life
Asset
Corporate
Investment
Securities
insurance
management
Other
and SME
and others
business
business
business
businesses
19,379
5,084
719
193
283
355
-
-
-
-
1,667
-
4,458
748
3,437
2,228
149
122
(1,365)
(779)
(14,003)
(1,675)
(1,351)
(6,296)
(309)
(576)
3,538 (708) 2,830
3,848 (769) 3,079
2,229 (220) 2,009
1,579 (294) 1,028
Eliminations
Consolidated
(31)
27,561
718
2,091
(2,511)
9,659
(161)
(704)
523
(19,515)
-
-
644
(418)
(167)
(7,122)
1,056
1,320
960
(205) 851
(274) 1,046
1,191
(79)
(254)
881
937
(1,468) 30 (1,438)
12,674 (2,479) 10,195
Thanachart Bank Public Company Limited
239
240 Annual Report 2014
(Unit: Million Baht) For the year ended 31 December 2013 Banking business Treasury &
Retail Net interest income
Other operating expenses Impairment loss of loans and debt securities Profit (loss) before income tax Income tax
Asset
Corporate
Investment
Securities
insurance
management
Other
and SME
and others
business
business
business
business
1,780
(1)
Eliminations
Consolidated
18,876
4,458
719
195
252
352
-
-
-
-
1,744
-
4,616
781
16,682
2,556
129
100
(1,401)
(933)
(202)
(686)
506
(20,408)
291
(248)
(429)
(11,496)
Net insurance income Other operating income
Non-life
(14,021)
(2,025)
(1,646)
(5,607)
(312)
(5,191)
3,864 (773)
2,902 (580)
10,564 (1,864)
-
-
1,350
1,192
(264)
541
(272) 630
1,204
(238)
(119)
(248)
954
422
956
(43)
26,589
810
2,282
(3,183)
(2,339) 55
22,311
19,278 (4,031)
Profit (loss) from continuing operations before non-controlling interests
3,091
2,322
Profit from discontinued operations before income tax
-
-
-
-
-
-
443
-
443
Income tax
-
-
-
-
-
-
(89)
-
(89)
3,091
2,322
8,700
1,086
954
422
Profit before non-controlling interest (1)
8,700
1,086
1,310
(2,284)
(2,284)
15,247
15,601
The operating results of Thanachart Life Assurance Plc. were presented under profit from discontinued operations.
Assets for segment of the Bank and its subsidiaries as at 31 December 2014 and 2013 are as follows: (Unit: Million Baht) Banking business Treasury &
Non-life
Asset
Corporate
Investment
Securities
insurance
management
Other
Retail
and SME
and others
business
business
businesses
businesses
Eliminations
As at 31 December 2013
521,044
249,730
219,950
7,121
9,896
9,116
41,420
(19,928)
1,038,349
As at 31 December 2014
479,803
253,912
233,501
8,060
11,234
8,235
30,655
(16,510)
1,008,890
Consolidated
Assets for segment
42.3 Major customers For the year 2014 and 2013, the Bank and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues. 43.
Encumbrance of assets As at 31 December 2014 and 2013, 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
2013
2014
2014
2013
Interbank and money market items (assets) Guarantee placed with the registrar
-
1,950
-
-
Placed with court for stay of execution
7
8
-
-
Guarantee placed with the registrar
691
1,783
-
-
Placed with court for stay of execution
422
384
293
297
288
352
209
259
389
629
16
147
1,797
5,106
518
703
Investments in securities
Properties 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
Thanachart Bank Public Company Limited
241
44.
Commitments and contingent liabilities As at 31 December 2014 and 2013, significant commitments and contingent liabilities consisted of:
44.1 Commitments (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2013
2014
2013
Aval to bills
256
665
256
665
Liability under unmatured import bills
509
646
509
646
4,796
4,067
4,796
4,067
Committed (but not drawn) overdraft
28,170
27,984
28,170
27,984
Others
22,950
23,310
22,878
23,256
56,681
56,672
56,609
56,618
Letter of credits Other obligations
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. 44.2 As at 31 December 2014, the Bank and its subsidiaries have commitments to pay the service fees in relation to properties foreclosed, computer system services and other services, including commitments in respect of office rental and related service fees under long-term contracts, as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
Other
Parent
Other
Parent
Subsidiary
Year
parties
company
parties
company
companies
2015
1,831
16
1,708
15
112
2016
1,708
-
1,597
-
-
2017 onward
1,592
-
1,144
-
-
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.
242
Annual Report 2014
44.3 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 2014, outstanding obligations are summarised below. a)
There was an outstanding difference of Baht 2 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, for which full allowance for doubtful debts has been set aside, are now being examined and/or negotiated among Thanachart Bank, SAM and the FIDF for final resolution.
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. As at 31 December 2014, the transferred assets which SAM is re-examining totaling Baht 38 million, which incurred by BMB. If losses arise, Thanachart Bank will receive compensation for those 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 38 million.
c)
Lawsuits in which SCIB is involved as a result of the transfer of business from BMB amounting to Baht 1,655 million, as disclosed under contingent liabilities in Note 45 to the financial statements.
Thanachart Bank Public Company Limited
243
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 2014, 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 lawsuit discussed in c), with claims totaling Baht 379 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 loss will be incurred, other than losses for which it has already set aside full allowance for doubtful debts and/or amount that will be compensated by FIDF. 45.
Litigation As at 31 December 2014, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 4,457 million (separate financial statements: Baht 4,143 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 loss will result and therefore no liabilities are currently recorded. Part of the contingent liabilities for litigation mentioned above, amounting to Baht 1,655 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.
46.
Letter of guarantees As at 31 December 2014, 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).
244
Annual Report 2014
47.
Disposal of investment in subsidiary companies / Discontinued operations
47.1 Disposal of investment in a subsidiary company - Investment in Siam City Life Assurance Plc. On 5 March 2014, the Bank signed a Share Purchase Agreement with Thanachart Capital Public Company Limited (“the Parent company”) and MBK Plc. (“the associated company”) to sell the ordinary shares of Siam City Life Assurance Plc. (“Siam City Life Assurance”) held by the Bank, which represented 100% of the total issued and paid-up capital. The value of the transaction was Baht 900 million. On 23 May 2014, the Bank received approval from the Bank of Thailand to sell the shares of Siam City Life Assurance to the Parent company and the associated company. Later, on 2 June 2014, the Bank transferred 69,999,994 shares of Siam City Life Assurance, representing 100% of shares, and received payment of Baht 900 million in accordance with the agreement. Gain on disposal of Baht 65 million in the consolidated financial statements and Baht 126 million in the separate financial statements were recognised in the statement of comprehensive income for the second quarter of the year 2014. 47.2 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 ordinary 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.
Thanachart Bank Public Company Limited
245
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 2013, 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. 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. 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 began amortising the amount to income over the term of the agreement in May 2013 and recognised all of the remaining amount in 2014 as Thanachart Life Assurance successfully transferred its business to Prudential Life Insurance (Thailand) Plc. and registered for dissolution in 2014. 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 (loss)” in the consolidated statement of comprehensive income for the year ended 31 December 2013 .The details are as follows:
246
Annual Report 2014
(Unit: Million Baht) For the year ended 31 December 2013(1) Consolidated statements of comprehensive income Profit or loss Interest income
358
Fees and service expenses
(1)
Gains on investments
17
Life insurance income
3,644
Dividend income
4
Other income
3
Total operating income
4,025 (3,452)
Insurance expenses Net operating income
573
Other operating expenses Employee's expenses
49
Premises and equipment expenses
21
Taxes and duties
11
Other expenses
49
Total other operating expenses
130
Profit before income tax
443
Income tax
(89)
Profit for the year from discontinued operations
354
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)
(147) 28 (119) 235
Total comprehensive income
(1) The operating results of Thanachart Life Assurance Plc. since 1 January 2013 to the date of disposal of the investment
Thanachart Bank Public Company Limited
247
Changes of operating assets and operating liabilities of Thanachart Life Assurance Plc. which included in consolidated cash flows statements for the year ended 31 December 2013 are as follows. (Unit: Million Baht) (1)
2013 Operating assets (increase) decrease -
Interbank and money market items
538
-
Investment - net
-
Other assets
16
-
Others
44
(2,862)
(2,264) Operating liabilities increase (decrease) -
Insurance contract liabilities
706
-
Income tax payable
115
-
Payable from purchase and sale of securities
959
-
Other liabilities
115
-
Others
(17) 1,878
(1) Cash flows information of Thanachart Life Assurance Plc. since 1 January 2013 to the date of disposal of the investment
Cash flow information of Thanachart Life Assurance Plc. for the year ended 31 December 2013 are as follows: (Unit: Million Baht) 2013(1) Cash flows from (used in) operating activities
2,819
Cash flows from (used in) investing activities
(2,819)
(1) Cash flows information of Thanachart Life Assurance Plc. since 1 January 2013 to the date of disposal of the investment
248
Annual Report 2014
48.
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.
48.1 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. 48.2 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.
Thanachart Bank Public Company Limited
249
As at 31 December 2014 and 2013, financial assets and liabilities classified by types of interest rate are as follows: (Unit: Million Baht) Consolidated financial statements 2014
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
16,605
16,605
164
57,575
7,885
65,624
Derivatives assets
-
-
4,389
4,389
Investments
1
140,322
6,944
147,267
-
-
1,919
1,919
329,497
423,915
958
754,370
Receivables from purchase and sale of securities
-
-
1,837
1,837
Other assets - receivable from clearing house
-
-
18
18
246,840
443,490
6,662
696,992
12,831
64,836
2,603
80,270
Liability payable on demand
-
-
1,655
1,655
Derivatives liabilities
-
-
5,200
5,200
Debt issued and borrowings
4
90,194
-
90,198
Payables from purchase and sale of securities
-
-
1,520
1,520
Other liabilities - payable to clearing house
-
-
480
480
Interbank and money market items
Investments in associated company 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
250
Annual Report 2014
(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
537
59,651
9,673
69,861
Derivatives assets
-
-
3,914
3,914
Investments
2
133,322
4,930
138,254
Investments in associated company
-
-
1,835
1,835
325,621
463,835
561
790,017
Receivables 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
Liability payable on demand
-
-
3,219
3,219
Derivatives liabilities
-
-
5,701
5,701
Debt issued and borrowings
4
92,225
-
92,229
Payables from purchase and sale of securities
-
-
1,295
1,295
Other liabilities - payable to clearing house
-
-
509
509
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
Thanachart Bank Public Company Limited
251
(Unit: Million Baht) Separate financial statements 2014
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
16,598
16,598
94
57,645
7,807
65,546
Derivatives assets
-
-
4,389
4,389
Investments
1
134,417
5,156
139,574
Investments in subsidiary and associated companies
-
-
8,749
8,749
317,989
395,515
932
714,436
247,314
445,732
6,689
699,735
12,620
57,914
2,613
73,147
Liability payable on demand
-
-
1,655
1,655
Derivatives liabilities
-
-
5,197
5,197
Debt issued and borrowings
4
73,839
-
73,843
Payables from purchase and sale of securities
-
-
100
100
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
252
Annual Report 2014
(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
369
56,305
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
Liability payable on demand
-
-
3,219
3,219
Derivatives liabilities
-
-
5,697
5,697
Debt issued and borrowings
4
76,919
-
76,923
Payables 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
Thanachart Bank Public Company Limited
253
With respect to financial instruments that carry fixed interest rates, the periods from the financial statements date to the repricing or maturity date (whichever is the earlier) are presented below: (Unit: Million Baht) Consolidated financial statements 2014 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
-
54,368
2,707
500
-
57,575
3.07 - 3.63
Investments
-
13,726
21,891
100,194
4,511
140,322
2.93 - 3.82
5,712
19,530
13,008
303,983
81,682
423,915
7.73 - 8.71
Deposits
146
152,695
257,990
32,659
-
443,490
2.76
Interbank and money market items
350
46,094
13,473
4,919
-
64,836
1.59 - 3.46
1,048
25,595
24,255
13,780
25,516
90,194
4.42 - 4.54
Loans to customers Financial liabilities
Debt issued and borrowings
(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
48,220
11,409
-
-
59,651
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
31
222,425
221,391
23,207
-
467,054
3.02
995
43,680
18,620
6,436
-
69,731
1.73 - 3.62
1,061
23,265
20,100
35,283
12,516
92,225
4.65 - 4.96
Financial liabilities Deposits Interbank and money market items Debt issued and borrowings
254
Annual Report 2014
(Unit: Million Baht) Separate financial statements 2014 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
1,050
54,139
2,456
-
-
57,645
3.07
-
13,676
21,521
96,409
2,811
134,417
2.93
5,241
19,250
11,889
277,592
81,543
395,515
7.73
146
153,145
259,782
32,659
-
445,732
2.76
Interbank and money market items
-
41,992
11,628
4,294
-
57,914
1.59
Debt issued and borrowings
1
25,558
22,755
9
25,516
73,839
4.42
Investments Loans to customers Financial liabilities Deposits
(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
46,956
8,777
-
-
56,305
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
Thanachart Bank Public Company Limited
255
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 2014 and 2013 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements For the years ended 31 December 2013
2014 Average
Average
Average balances
Average
balances
Interest
rate (%)
Interest
rate (%)
Interbank and money market items
83,437
1,894
2.27
50,316
1,870
3.72
Investments and trading operations
12,984
238
1.83
13,126
457
3.48
120,386
4,106
3.41
107,971
3,861
3.58
753,854
46,207
6.13
756,613
47,691
6.30
697,218
19,780
2.84
695,558
21,460
3.09
Interbank and money market items
68,699
1,092
1.59
76,464
1,519
1.99
Debt issued and borrowings
92,389
4,012
4.34
90,814
4,311
4.75
Interest bearings financial assets
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
2014 Average
Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
83,404
1,865
2.24
46,522
1,738
3.74
Investments and trading operations
3,454
74
2.14
3,858
69
1.79
114,411
3,876
3.39
104,006
3,722
3.58
714,096
43,287
6.06
720,855
45,013
6.24
698,958
19,833
2.84
698,073
21,513
3.08
Interbank and money market items
61,250
858
1.40
68,666
1,261
1.84
Debt issued and borrowings
76,596
3,229
4.21
78,938
3,715
4.71
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
256
Annual Report 2014
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 2014 and 2013 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements 2014 US Dollar
Euro
Yen
Yuan
Others
Foreign currency in the statement of financial position Cash
1,339
576
19
3
544
Interbank and money market items
4,660
62
79
17
154
Investments
10,667
1
-
-
1,137
Loans to customers
23,901
83
39
-
21
Other assets
478
-
-
-
2
Total assets
41,045
722
137
20
1,858
274
36
137
-
13
Interbank and money market items
16,899
1
-
-
-
Total liabilities
17,173
37
137
-
13
Net
23,872
685
-
20
1,845
378
19
71
-
2
4,418
48
215
8
5
873
26
5
-
28
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
Thanachart Bank Public Company Limited
257
(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
(Unit: Million Baht) Separate financial statements 2014 US Dollar
Euro
Yen
Yuan
Others
Foreign currency in the statement of financial position Cash
1,339
576
19
3
544
Interbank and money market items
4,660
62
79
17
154
Investments
10,667
1
-
-
1,137
Loans to customers
23,901
83
39
-
21
Other assets
478
-
-
-
2
Total assets
41,045
722
137
20
1,858
274
36
137
-
13
Interbank and money market items
16,899
1
-
-
-
Total liabilities
17,173
37
137
-
13
Net
23,872
685
-
20
1,845
378
19
71
-
2
4,418
48
215
8
5
873
26
5
-
28
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
258
Annual Report 2014
(Unit: Million Baht) Separate 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
-
Loans to customers
22,824
137
Other assets
1,121
-
Total assets
47,295
758
237
384
45
Interbank and money market items
22,319
Total liabilities Net
Deposits
2,921
1,170
-
50
13
1
3,482
1,797
-
-
20
4
-
-
-
22,703
49
-
-
20
24,592
709
237
3,482
1,777
466
29
102
-
7
3,605
39
292
-
53
901
52
1
-
47
112 -
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 follows:
Thanachart Bank Public Company Limited
259
(Unit: Million Baht) Consolidated financial statements 2014 US Dollar
Euro
Yen
Yuan
Others
Foreign exchange contracts - Bought
33,354
326
846
-
995
- Sold
46,211
1,015
832
6
1,687
2,463
-
-
-
-
13,077
-
-
-
1,103
- Bought
56,866
-
-
-
-
- Sold
56,866
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(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
(Unit: Million Baht) Separate financial statements 2014 US Dollar
Euro
Yen
Yuan
Others
Foreign exchange contracts - Bought
33,298
326
846
-
995
- Sold
46,267
1,015
832
6
1,687
2,463
-
-
-
-
13,077
-
-
-
1,103
- Bought
56,866
-
-
-
-
- Sold
56,866
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
260
Annual Report 2014
(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
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. 48.3 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.
Thanachart Bank Public Company Limited
261
Counting from the financial position date, the periods to maturity of financial instruments held as at 31 December 2014 and 2013 are as follows: (Unit: Million Baht) Consolidated financial statements 2014
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
16,605
-
-
-
16,605
8,049
57,075
500
-
65,624
Derivatives assets
-
4,389
-
-
4,389
Investments
1
37,281
103,098
6,887
147,267
-
-
-
1,919
1,919
58,105
228,452
467,813
-
754,370
-
1,837
-
-
1,837
-
18
-
-
18
249,440
413,679
33,873
-
696,992
15,672
59,679
4,919
-
80,270
1,655
-
-
-
1,655
-
5,200
-
-
5,200
1,052
36,717
45,299
7,130
90,198
Payables from purchase and sale of securities
-
1,520
-
-
1,520
Other liabilities - payable to clearing house
-
480
-
-
480
Aval to bill
35
201
20
-
256
Liability under unmatured import bills
39
470
-
-
509
Letter of credits
63
4,733
-
-
4,796
44,276
6,213
631
-
51,120
Interbank and money market items
Investment in an associated company Loans to customers
(1)
Receivables from purchase and sale of securities Other assets - receivable from clearing house Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings
Commitments
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
262
Annual Report 2014
(Unit: Million Baht) Consolidated financial statements 2013
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
17,940
-
-
-
17,940
Interbank and money market items
10,233
59,508
120
-
69,861
Derivatives assets
-
3,914
-
-
3,914
Investments
1
37,792
95,618
4,843
138,254
-
-
-
1,835
1,835
62,562
224,489
502,966
-
790,017
-
1,646
-
-
1,646
-
170
-
-
170
248,085
443,392
27,602
-
719,079
12,123
62,411
6,548
-
81,082
3,219
-
-
-
3,219
-
5,701
-
-
5,701
1,065
31,235
52,799
7,130
92,229
Payables 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
2,449
-
51,294
Investment in an associated company (1)
Loans to customers
Receivables from purchase and sale of securities Other assets - receivable from clearing house Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings
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.
Thanachart Bank Public Company Limited
263
(Unit: Million Baht) Separate financial statements 2014
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
16,598
-
-
-
16,598
8,951
56,595
-
-
65,546
Derivatives assets
-
4,389
-
-
4,389
Investments
1
36,861
97,613
5,099
139,574
-
-
-
8,749
8,749
48,217
226,970
439,249
-
714,436
249,941
415,921
33,873
-
699,735
15,233
53,620
4,294
-
73,147
1,655
-
-
-
1,655
Derivatives liabilities
-
5,197
-
-
5,197
Debt issued and borrowings
5
35,180
31,528
7,130
73,843
Payables from purchase and sale of securities
-
100
-
-
100
Aval to bill
35
201
20
-
256
Liability under unmatured import bills
39
470
-
-
509
Letter of credits
63
4,733
-
-
4,796
44,276
6,213
559
-
51,048
Interbank and money market items
Investments in subsidiary and associated companies Loans to customers(1) Financial liabilities Deposits Interbank and money market items Liability payable on demand
Commitments
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
264
Annual Report 2014
(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
Payables 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.
Thanachart Bank Public Company Limited
265
48.4 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, receivables from purchase and sale of securities, receivable from clearing house and loans to customers. 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, liability payable on demand, derivatives liabilities, debt issued and borrowings, payables 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.
266
Annual Report 2014
As at 31 December 2014 and 2013, the book value and fair value of financial instruments of the Bank and its subsidiaries are as follows: (Unit: Million Baht) Consolidated financial statements 2013
2014 Book value
Fair value
Book value
Fair value
Financial assets Cash
16,605
16,605
17,940
17,940
Interbank and money market items - net
65,433
65,433
69,697
69,697
4,389
4,389
3,914
3,914
149,609
149,959
138,825
139,142
1,919
1,919
1,835
1,835
727,349
727,349
760,943
760,943
1,837
1,837
1,646
1,646
18
18
170
170
696,992
696,992
719,079
719,079
80,270
80,270
81,082
81,082
Liability payable on demand
1,655
1,655
3,219
3,219
Derivatives liabilities
5,200
5,200
5,701
5,701
90,198
90,198
92,229
92,229
1,520
1,520
1,295
1,295
480
480
509
509
Derivatives assets Investments - net Investment in an associated company 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 Payables from purchase and sale of securities Other liabilities - payable to clearing house
Thanachart Bank Public Company Limited
267
(Unit: Million Baht) Separate financial statements 2014 Book value
2013 Fair value
Book value
Fair value
Financial assets Cash
16,598
16,598
17,939
17,939
Interbank and money market items - net
65,338
65,338
66,095
66,095
4,389
4,389
3,914
3,914
141,202
141,551
125,874
126,191
8,744
8,744
9,505
9,505
694,952
694,952
729,970
729,970
699,735
699,735
722,262
722,262
73,147
73,147
74,449
74,449
Liability payable on demand
1,655
1,655
3,219
3,219
Derivatives liabilities
5,197
5,197
5,697
5,697
73,843
73,843
76,923
76,923
100
100
1
1
Derivatives assets Investments - net Investments in subsidiary and associated companies - net Loans to customers Financial liabilities Deposits Interbank and money market items
Debt issued and borrowings Payables from purchase and sale of securities
48.5 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.
268
Annual Report 2014
As at 31 December 2014 and 2013, 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 2014 Less than
Over
1 year
1 year
2013
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
35,521
-
35,521
41,942
-
41,942
- Sold
49,751
-
49,751
59,046
-
59,046
- Bought
-
2,463
2,463
217
1,668
1,885
- Sold
-
14,180
14,180
217
13,374
13,591
- Paid fixed interest rate
62,552
130,625
193,177
26,434
140,977
167,411
- Paid floating interest rate
46,647
128,460
175,107
14,229
125,190
139,419
- Received fixed interest rate
46,647
127,460
174,107
14,229
125,190
139,419
- Received floating interest rate
62,552
131,625
194,177
26,434
140,977
167,411
8
-
8
-
-
-
237
-
237
272
-
272
-
-
-
9
-
9
17
-
17
-
-
-
37
-
37
-
-
-
Cross currency and interest rate swap contracts
Interest rate swap contracts
Future contracts - Bought - Sold Derivative warrants - Bought - Sold Other - Sold
Thanachart Bank Public Company Limited
269
(Unit: Million Baht) Separate financial statements 2013
2014 Less than
Over
1 year
1 year
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
35,465
-
35,465
41,678
-
41,678
- Sold
49,807
-
49,807
59,311
-
59,311
- Bought
-
2,463
2,463
217
1,668
1,885
- Sold
-
14,180
14,180
217
13,374
13,591
- Paid fixed interest rate
62,552
130,625
193,177
26,434
140,977
167,411
- Paid floating interest rate
46,647
128,460
175,107
14,229
125,190
139,419
- Received fixed interest rate
46,647
127,460
174,107
14,229
125,190
139,419
- Received floating interest rate
62,552
131,625
194,177
26,434
140,977
167,411
Cross currency and interest rate swap contracts
Interest rate swap contracts
49.
Events after the reporting period On 19 February 2015, 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 2014, or a total of Baht 2,481 million, to be considered by the Annual General Meeting of Shareholders.
50.
Approval of financial statements These financial statements were authorised for issue by the Bank’s Board of Directors on 19 February 2015.
270
Annual Report 2014
BRANCHES OF TBANK Information as of December 31, 2014
HEAD OFFICE
Charan Sanitwong 13 Branch Tel. +66 (0) 2864 1560-3 Fax +66 (0) 2864 1566
Century the Movie Plaza Branch Tel. +66 (0) 2245 8500-2 Fax +66 (0) 2245 8504
BANGKOK
Charan Sanitwong 35 Branch Tel. +66 (0) 2411 0511, 2411 0605 Fax +66 (0) 2411 0607
Central Bang Na Branch Tel. +66 (0) 2398 9572-3 Fax +66 (0) 2398 9574
Chit Lom Branch Tel. +66 (0) 2251 5821-3, 2658 5503 Fax +66 (0) 2658 5504
Charan Sanitwong 86/2 Branch Tel. +66 (0) 2435 7205, 2435 6808-10 Fax +66 (0) 2435 6807
Central Pin Klao Branch Tel. +66 (0) 2884 9680-3 Fax +66 (0) 2884 9684
Phetburi Branch Tel. +66 (0) 2208 5000, 2253 0200-43 Fax +66 (0) 2253 6198
Chamchuri Square Branch Tel. +66 (0) 2160 5254-6 Fax +66 (0) 2160 5258
Central Rama II Branch Tel. +66 (0) 2872 4770 Fax +66 (0) 2872 4769
Suan Mali Branch Tel. +66 (0) 2220 2222 ext. 2106-7, 2112 Fax +66 (0) 2224 3810, 2226 2437
Cha Ru Mueang Branch Tel. +66 (0) 2214 1488, 2214 1739 Fax +66 (0) 2214 2038
Central Rama III Branch Tel. +66 (0) 2211 8260 Fax +66 (0) 2211 8190
Vichaiyut Medical Center Sub Branch Sub Branch of Vichaiyut Hospital Branch Tel. +66 (0) 2357 1916-7 Fax +66 (0) 2619 7043
Charoen Krung 17 Branch Tel. +66 (0) 2224 1839, 2225 7194 Fax +66 (0) 2224 2059
Central Plaza Grand Rama IX Branch Tel. +66 (0) 2160 2950-2 Fax +66 (0) 2160 2954
Charoen Nakhon Soi 36 Branch Tel. +66 (0) 2862 5010-6 Fax +66 (0) 2862 5017
Central Ram Inthra Branch Tel. +66 (0) 2552 7462, 2552 7467-8 Fax +66 (0) 2970 5518
Charoen Phon Branch Tel. +66 (0) 2215 6628-30 Fax +66 (0) 2215 6627
Central Lat Phrao Branch Tel. +66 (0) 2937 1279-80 Fax +66 (0) 2937 1283
Charn Issara Tower (Rama IV) Branch Tel. +66 (0) 2267 4296-98 Fax +66 (0) 2267 4299
Central World Branch Tel. +66 (0) 2646 1346-9 Fax +66 (0) 2646 1350
Charn Issara Tower II Branch Tel. +66 (0) 2308 2955-8, 2718 1834 Fax +66 (0) 2308 2950
Don Mueang Branch Tel. +66 (0) 2929 7004, 2566 1950-1 Fax +66 (0) 2566 3425
Chok Chai 4 Branch Tel. +66 (0) 2931 0895-7 Fax +66 (0) 2931 0798
The Avenue Chaengwattana Branch Tel. +66 (0) 2573 0673-5 Fax +66 (0) 2573 0677
Seacon Square Branch Tel. +66 (0) 2721 8548-50 Fax +66 (0) 2721 8551
The Nine (Thanon Rama IX) Branch Tel. +66 (0) 2319 1662-4 Fax +66 (0) 2718 7869
Seacon Square Srinagarindra Branch Tel. +66 (0) 2721 9955 Fax +66 (0) 2721 8321
The Paseo (Lat Krabang) Branch Tel. +66 (0) 2346 4103-4, 2346 4109 Fax +66 (0) 2346 4111
Tel. +66 (0) 2217 8000 Fax +66 (0) 2217 8333
BANGKOK AND VICNITIES
Department of Land Transport Branch Tel. +66 (0) 2272 6073-5 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 Kluai Nam Thai Branch Tel. +66 (0) 2258 6620-1 Fax +66 (0) 2258 5505 Crystal Design Center Branch Tel. +66 (0) 2102 2410-2 Fax +66 (0) 2102 2413 Khlong Chan Branch Tel. +66 (0) 2377 1364, 2377 1368-9 Fax +66 (0) 2377 3609 Khlong Toei Branch Tel. +66 (0) 2240 0161, 2249 2633 Fax +66 (0) 2249 4789 Khlong Thom Branch Tel. +66 (0) 2221 1677, 2221 1671 Fax +66 (0) 2221 1679
Thanachart Bank Public Company Limited
271
The Mall 2 Ramkhamhaeng Branch Tel. +66 (0) 2369 2486, 2369 2482 Fax +66 (0) 2369 2484 The Mall Tha Phra Branch Tel. +66 (0) 2477 7321-3 Fax +66 (0) 2477 7324 The Mall Bang Khae Branch Tel. +66 (0) 2803 8310 Fax +66 (0) 2803 8305 The Mall Bangkapi Branch Tel. +66 (0) 2375 1575 Fax +66 (0) 2375 1686 Trok Chan Branch Tel. +66 (0) 2211 1286, 2211 4511 Fax +66 (0) 2211 4653 Talat Bang Khae Branch Tel. +66 (0) 2801 1004-6 Fax +66 (0) 2801 1007 Talat Phlu Branch Tel. +66 (0) 2466 7404, 2466 7423 Fax +66 (0) 2465 1767 Talat Ying Charoen Branch Tel. +66 (0) 2552 8043, 2552 8045 Fax +66 (0) 2972 3161 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 0069-71 Fax +66 (0) 2561 0073
272
Annual Report 2014
Thanon Kanchanaphisek (Thawi Watthana) Branch Tel. +66 (0) 2447 9206-8 Fax +66 (0) 2447 9209 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 Fax +66 (0) 2860 4355
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
Thanon Borom Rat Chonnani Branch Tel. +66 (0) 2446 8061-4 Fax +66 (0) 2446 8065
Thanon Sathon Nuea Branch Tel. +66 (0) 2267 7512-4 Fax +66 (0) 2637 8975
Thanon Burapha (Phahurat) Branch Tel. +66 (0) 2221 2069, 2221 5239 Fax +66 (0) 2221 5128
Thanon Sathon Tai (Thai CC Tower) Branch Tel. +66 (0) 2675 5697-9, 2675 5700 Fax +66 (0) 2675 5701
Thanon Prajadhipok (Wongwian Yai) Branch Tel. +66 (0) 2437 0188, 2437 2596 Fax +66 (0) 2437 5784 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 Sirindhorn Branch Tel. +66 (0) 2434 5028-9 Fax +66 (0) 2434 5661 Thanon Suea Pa Branch Tel. +66 (0) 2221 4327-9 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 17 Branch Tel. +66 (0) 2185 2756, 2185 2758-61 Fax +66 (0) 2185 2757 Tops RCA Branch Tel. +66 (0) 2203 0267-9 Fax +66 (0) 2641 5121
Tha Din Daeng Branch Tel. +66 (0) 2863 1283-8 Fax +66 (0) 2863 1289
Nang Loeng Branch Tel. +66 (0) 2281 0842, 2281 2169 Fax +66 (0) 2281 2322
BigC Don Mueang Branch Tel. +66 (0) 2551 0638-39 Fax +66 (0) 2551 0642
Tha Phra Chan Branch Tel. +66 (0) 2221 7511, 2222 0686 Fax +66 (0) 2222 4794
Na Na Nuea Branch Tel. +66 (0) 2252 0709, 2252 6540 Fax +66 (0) 2253 5668
BigC Bang Na Branch Tel. +66 (0) 2396 0482, 2396 0484-5 Fax +66 (0) 2396 0500
Thewet Branch Tel. +66 (0) 2628 7240-4, 2628 7247 Fax +66 (0) 2282 8810
Bang Khun Non Branch Tel. +66 (0) 2424 9778-9, 2433 6028-9 Fax +66 (0) 2434 9772
BigC Bang Bon Branch Tel. +66 (0) 2416 9969-71 Fax +66 (0) 2416 9974
Tesco Lotus Phet Kasem 81 Branch Tel. +66 (0) 2489 2087-9 Fax +66 (0) 2812 4073
Bang Khae Branch Tel. +66 (0) 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 II Branch Tel. +66 (0) 2415 9130-2 Fax +66 (0) 2892 8004
Bang Khlo Branch Tel. +66 (0) 2289 4223, 2289 4236 Fax +66 (0) 2289 4159
Tesco Lotus Rama IV Branch Tel. +66 (0) 2249 7533-5 Fax +66 (0) 2249 7537
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 2841-3 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 Pakok Branch Tel. +66 (0) 2427 7527-9 Fax +66 (0) 2872 3245
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
BigC Sukhaphiban 5 Branch Tel. +66 (0) 2153 1513-4, 2153 1566 Fax +66 (0) 2153 1567 BigC Ekkamai Branch Tel. +66 (0) 2714 8274-7 Fax +66 (0) 2714 8268 Bo Bae Branch Tel. +66 (0) 2356 0755-8 Fax +66 (0) 2356 0759 Bobae Tower Branch Tel. +66 (0) 2628 1693-5, 2628 1690 Fax +66 (0) 2628 1696 Pracha Chuen Branch Tel. +66 (0) 2585 6811, 2585 9656-7 Fax +66 (0) 2585 2666
Bang Mod Branch Tel. +66 (0) 2428 6913-5 Fax +66 (0) 2428 6994
Pracha Uthit Branch Tel. +66 (0) 2873 4721-3, 2873 5848 Fax +66 (0) 2873 5849
Bang Rak Branch Tel. +66 (0) 2234 4227-9 Fax +66 (0) 2630 9027 Bang Lamphu Branch Tel. +66 (0) 2356 0783, 2356 0785 Fax +66 (0) 2356 0787 Bamrung Mueang Branch Tel. +66 (0) 2216 9794-7, 2214 0606-8 Fax +66 (0) 2216 9798
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
Thanachart Bank Public Company Limited
273
Pak Khlong Talat Branch Tel. +66 (0) 2221 7511, 2222 7467 Fax +66 (0) 2222 4794
Phloen Chit Center Branch Tel. +66 (0) 2656 8403-7 Fax +66 (0) 2656 8400
Ratchadamnoen Klang Branch Tel. +66 (0) 2226 3083-5, 2621 2185 Fax +66 (0) 2621 2186
Pin Klao Branch Tel. +66 (0) 2435 4273-4, 2435 7374 Fax +66 (0) 2435 4518
Platinum Pratu Nam Branch Tel. +66 (0) 2121 9683-5 Fax +66 (0) 2121 9687
Ratchadamri Branch Tel. +66 (0) 2251 3113, 2251 4314 Fax +66 (0) 2251 4316
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 3960-62 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 122 Branch Tel. +66 (0) 2372 2377-9 Fax +66 (0) 2728 2950
Phahon Yothin Soi 9 Branch Tel. +66 (0) 2270 1371-3 Fax +66 (0) 2619 6339
Union Mall Lat Phrao Branch Tel. +66 (0) 2511 0236, 2511 0246 Fax +66 (0) 2511 0268
Ramkhamhaeng Soi 129 Branch Tel. +66 (0) 2372 3318-20 Fax +66 (0) 2729 5832
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
Ram Inthra Branch Tel. +66 (0) 2943 5630-2, 2519 0824-5 Fax +66 (0) 2519 0826
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 (Km. 7) Branch Tel. +66 (0) 2510 9610, 2510 9882 Fax +66 (0) 2510 9197
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 Fax +66 (0) 2693 9820
Ram Inthra (Km. 8) Branch Tel. +66 (0) 2510 6900, 2510 2342 Fax +66 (0) 2510 9875
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
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Annual Report 2014
Ratchada Phisek-Tha Phra Branch Tel. +66 (0) 2878 8845-50 Fax +66 (0) 2878 8852
Paolo Memorial Hospital Chok Chai 4 Branch Tel. +66 (0) 2514 3277, 2514 3293-4 Fax +66 (0) 2933 2292
Ratchada-Huai Khwang Branch Tel. +66 (0) 2694 1489-91, 2694 1495 Fax +66 (0) 2694 1496
Navaminthra 9 Hospital Branch Tel. +66 (0) 2518 1100, 2518 2360-1 Fax +66 (0) 2518 2363
Ratchadamnoen Branch Tel. +66 (0) 2221 3391, 2223 6010 Fax +66 (0) 2222 9635
Phyathai 1 Hospital Branch Tel. +66 (0) 2246-7713-5 Fax +66 (0) 2246-7716
Ramkhamhaeng Hospital Branch Tel. +66 (0) 2374 1523-5 Fax +66 (0) 2374 1562
Wong Sawang Town Center Branch Tel. +66 (0) 2586 0420-2 Fax +66 (0) 2910 7949
Song Prapha Branch Tel. +66 (0) 2928 8542-5 Fax +66 (0) 2928 8546
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
Suan Phlu Branch Tel. +66 (0) 2287 3084-5, 2287 3074 Fax +66 (0) 2679 3028
Vibhavadi Hospital Branch Tel. +66 (0) 2561 5320-3 Fax +66 (0) 2941 3006
Wat Phra Ya Kai Branch Tel. +66 (0) 2289 3026-7, 2289 5033 Fax +66 (0) 2289 5032
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
Lat Phrao Branch Tel. +66 (0) 2512 2343-4, 2938 2433 Fax +66 (0) 2512 2342
The Government Complex Commemorating Chaengwattana (Building B) Branch Tel. +66 (0) 2143 9393-5, 2143 9396 Fax +66 (0) 2143 9397
Lat Phrao 53 Branch Tel. +66 (0) 2539 1167, 2539 1507 Fax +66 (0) 2539 2261 Lat Phrao 80 Branch Tel. +66 (0) 2933 9172, 2933 9174-5 Fax +66 (0) 2933 9178 Lat Phrao 118 Branch Tel. +66 (0) 2539 2925-7 Fax +66 (0) 2530 4348 Lat Phrao Soi 101 Branch Tel. +66 (0) 2187 0162-4 Fax +66 (0) 2187 0161 Lam Sa Li Branch Tel. +66 (0) 2735 2060-3 Fax +66 (0) 2735 2067 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 Fax +66 (0) 2834 9905
Sirirat Branch Tel. +66 (0) 2412 4515, 2412 4583-4 Fax +66 (0) 2866 3218 Siwara Branch Tel. +66 (0) 2538 8466, 2538 8986 Fax +66 (0) 2538 9378 Si Worachak Branch Tel. +66 (0) 2222 1912, 2222 1917 Fax +66 (0) 2622 9338 Appeal Court Branch Tel. +66 (0) 2938 3421-6 Fax +66 (0) 2938 3428
Saphan Khwai Branch Tel. +66 (0) 2279 6060-1 Fax +66 (0) 2616 6747 Rama VII Bridge (Bang Phlat) Branch Tel. +66 (0) 2423 9011-3 Fax +66 (0) 2423 9015 Sathu Pradit 49 Branch Tel. +66 (0) 2682 0610-8 Fax +66 (0) 2682 0619 Sam Yan Branch Tel. +66 (0) 2215 1549, 2215 4199 Fax +66 (0) 2216 6170 Sam Yaek Branch Tel. +66 (0) 2223 2706-8 Fax +66 (0) 2223 2705 Sam Yaek Fai Chai Branch Tel. +66 (0) 2411 3446, 2418 3575-6 Fax +66 (0) 2411 2321 Sam Pheng Branch Tel. +66 (0) 2222 7396, 2223 2898 Fax +66 (0) 2225 8468 Samrae Branch Tel. +66 (0) 2468 0609, 2468 1008-9 Fax +66 (0) 2476 5423
Sanam Pao Branch Tel. +66 (0) 2271 0026-8 Fax +66 (0) 2271 0030
Silom Branch Tel. +66 (0) 2266 7414, 2266 7417-8 Fax +66 (0) 2266 7416
Siam Discovery Branch Tel. +66 (0) 2658 0491-3 Fax +66 (0) 2658 0494
Silom (Thanon Pan) Branch Tel. +66 (0) 2237 9317-20, 2235 5800-2 Fax +66 (0) 2237 9321
Siam Paragon Branch Tel. +66 (0) 2129 4374-7 Fax +66 (0) 2129 4372 Siam Square Branch Tel. +66 (0) 2252 7363-5, 2252 7360 Fax +66 (0) 2252 7367
Silom Soi 15 Branch Tel. +66 (0) 2237 4192-4 Fax +66 (0) 2635 0270
Thanachart Bank Public Company Limited
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Silom Complex Branch Tel. +66 (0) 2231 3237, 2231 3663-65 Fax +66 (0) 2235 8833
Seri Thai 32 Branch Tel. +66 (0) 2376 1043-46 Fax +66 (0) 2376 1122
Siam Kit Building Branch Tel. +66 (0) 2251 6763, 2252 5252 Fax +66 (0) 2253 9429
Si Kak Phra Ya Si Branch Tel. +66 (0) 2222 4477-8, 2226 2267 Fax +66 (0) 2225 7036
Nong Khaem Branch Tel. +66 (0) 2445 4788, 2445 4790-2 Fax +66 (0) 2445 4789
Ekkamai 28 Branch Tel. +66 (0) 2392 2831, 2392 7278-9 Fax +66 (0) 2392 2832
Si Phra Ya Branch Tel. +66 (0) 2233 5305-7, 2267 2191-4 Fax +66 (0) 2233 4174
Hua Lam Phong Branch Tel. +66 (0) 2237 9710-4 Fax +66 (0) 2237 9713
MBK Center Branch Tel. +66 (0) 2611 4752-4 Fax +66 (0) 2611 4751
Si Yaek Kaset Branch Tel. +66 (0) 2579 1340, 2579 3483 Fax +66 (0) 2579 6794
Hua Mak Branch Tel. +66 (0) 2314 2627, 2314 0086-7 Fax +66 (0) 2314 7277
A-link Branch Tel +66 (0) 2111 0304-6 Fax +66 (0) 2111 0308
Si Yaek Chaloem Buri (Yaowarat) Branch Tel. +66 (0) 2221 1236, 2221 7194 Fax +66 (0) 2225 0580
Huai Khwang Branch Tel. +66 (0) 2692 0061, 2692 2098-100 Fax +66 (0) 2276 1134
Esplanade Ratchada Branch Tel. +66 (0) 2354 2052-4 Fax +66 (0) 2660 9250
Anu Wong Branch Tel. +66 (0) 2222 0161-3, 2222 0169 Fax +66 (0) 2225 8931
India Emporium Branch Tel. +66 (0) 2224 0133, 2224 0135-6 Fax +66 (0) 2623 9434
Victory Monument Branch Tel. +66 (0) 2644 7474-6 Fax +66 (0) 2354 9351
Udom Suk Branch Tel. +66 (0) 2398 4024-7 Fax +66 (0) 2398 4028
Asok Branch Tel. +66 (0) 2260 7831-3 Fax +66 (0) 2260 7839
Ocean Tower II Branch Tel. +66 (0) 2204 1695-7 Fax +66 (0) 2204 1698-9
Asok-Din Daeng Branch Tel. +66 (0) 2641 7547-9 Fax +66 (0) 2641 7566
IT Square Branch Tel. +66 (0) 2576 0104-5 Fax +66 (0) 2576 0106
On Nuch 52 Branch Tel. +66 (0) 2322 1557-9 Fax +66 (0) 2322 1556
VICNITIES
Si Yaek Ban Khaek Branch Tel. +66 (0) 2465 2115, 2465 5072 Fax +66 (0) 2465 5071 Si Yaek Prawet Branch Tel. +66 (0) 2328 8023-5 Fax +66 (0) 2328 8027 Sukhumwit 71 Branch Tel. +66 (0) 2391 6067, 2392 5944 Fax +66 (0) 2392 2534 Sukhumwit Soi 25 Branch Tel. +66 (0) 2259 4727-9 Fax +66 (0) 2259 4730 Sukhumwit Soi 47 Branch Tel. +66 (0) 2204 0307-9 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 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 2014
All Seasons Place Branch Tel. +66 (0) 2250 7611-3 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
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
Central Chaengwattana Branch Tel. +66 (0) 2193 8114-6 Fax +66 (0) 2101 0710
Tesco Lotus Navanakhon Branch Tel. +66 (0) 2529 6187-9 Fax +66 (0) 2909 7097
BigC Samut Prakan Branch Tel. +66 (0) 2702 1792-3, 2702 1859 Fax +66 (0) 2702 1982
Central Rattanathibet Branch Tel. +66 (0) 2525 4736-8 Fax +66 (0) 2969 7537
Tesco Lotus Rattana Thibet Branch Tel. +66 (0) 2950 1160, 2950 1297 Fax +66 (0) 2950 1157
BigC Samrong 2 Branch Tel. +66 (0) 2380 1100-2 Fax +66 (0) 2755 0240
Zeer-Rangsit Branch Tel. +66 (0) 2992 6807-9 Fax +66 (0) 2992 6810
Tesco Lotus Lam Luk Ka Khlong 6 Branch Tel. +66 (0) 2569 1694, 2569 1655 Fax +66 (0) 2998 8164
BigC Suk Sawat Branch Tel. +66 (0) 2463 0992-3 Fax +66 (0) 2463 0980
The Mall Ngamwongwan Branch Tel. +66 (0) 2550 1231-3 Fax +66 (0) 2550 1235 Talat Klang Bang Yai Branch Tel. +66 (0) 2595 0682-4 Fax +66 (0) 2595 0685 Talat Thai Branch Tel. +66 (0) 2529 6171-2 Fax +66 (0) 2529 6175 Talat Bang Bua Thong Branch Tel. +66 (0) 2571 3598-9, 2571 3373-5 Fax +66 (0) 2571 7845 Talat Pak Nam Branch Tel. +66 (0) 2702 8380-4 Fax +66 (0) 2702 8388 Talat Samrong Branch Tel. +66 (0) 2756 8411-4 Fax +66 (0) 2756 8419 Thanon Rangsit-Pathum Thani Branch Tel. +66 (0) 2567 2738-9 Fax +66 (0) 2567 5809 Thanon Samakkhi Branch Tel. +66 (0) 2574 2794-5 Fax +66 (0) 2574 2793 Tha Nam Nonthaburi Branch Tel. +66 (0) 2527 0255-60 Fax +66 (0) 2527 0254 Tha Nam Phra Pradaeng Branch Tel. +66 (0) 2463 0488, 2463 2228 Fax +66 (0) 2464 2156 Thepharak Branch Tel. +66 (0) 2759 6061-4, 2759 6066 Fax +66 (0) 2759 6067
Tesco Lotus Srinagarindra Branch Tel. +66 (0) 2175 7844-6 Fax +66 (0) 2759 9054 Nonthaburi Branch Tel. +66 (0) 2526 3453-6 Fax +66 (0) 2526 3457 Navanakhon Branch Tel. +66 (0) 2909 0620-3, 2909 0626 Fax +66 (0) 2909 0625 Bang Pu Industrial Estate Branch Tel. +66 (0) 2324 0360, 2324 0364 Fax +66 (0) 2324 0805 Bang Kruai Branch Tel. +66 (0) 2447 2897, 2447 5095 Fax +66 (0) 2883 8619
Pathum Thani Branch Tel. +66 (0) 2581 5766, 2581 6976 Fax +66 (0) 2581 6925 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 5116-8 Fax +66 (0) 2958 5121
Bang Khru Branch Tel. +66 (0) 2817 5417-19 Fax +66 (0) 2817 5423
Huachiew Chalermprakiet University Branch Tel. +66 (0) 2312 6600-5 Fax +66 (0) 2312 6603
Bang Bo Branch Tel. +66 (0) 2338 1248, 2338 1822-3 Fax +66 (0) 2708 3242
Megabangna Branch Tel. +66 (0) 2105 1681-3 Fax +66 (0) 2105 1684
Bang Bua Thong Branch Tel. +66 (0) 2571 7124, 2571 7142-3 Fax +66 (0) 2920 9603
Mueang Mai-Bang Phli Branch Tel. +66 (0) 2706 0322-6 Fax +66 (0) 2706 0329
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
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
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
Thanachart Bank Public Company Limited
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Paolo Memorial Hospital Samut Prakan Branch Tel. +66 (0) 2182 7239-41 Fax +66 (0) 2182 7243 Lam Luk Ka Branch Tel. +66 (0) 2994 5747-51 Fax +66 (0) 2994 5753 Samut Prakan Branch Tel. +66 (0) 2388 0099, 2395 0045 Fax +66 (0) 2395 2021 Bang Kadi Industrial Park Branch Tel. +66 (0) 2501 1254-6 Fax +66 (0) 2501 1257 Sam Yaek Phra Pradaeng Branch Tel. +66 (0) 2463 2156-7, 2462 6284 Fax +66 (0) 2462 5355 Samrong Branch Tel. +66 (0) 2396 0278-80, 2745 3482-3 Fax +66 (0) 2399 5103 Samrong Nuea Branch Tel. +66 (0) 2384 7141, 2384 7244 Fax +66 (0) 2384 7678 Si Mum Mueang-Rangsit Branch Tel. +66 (0) 2531 9774, 2531 3445 Fax +66 (0) 2531 9636 Nam Daeng Branch Tel. +66 (0) 2385 2511-2, 2385 2920 Fax +66 (0) 2385 2921 Ha Yaek Pak Kret Branch Tel. +66 (0) 2583 7574, 2583 9144 Fax +66 (0) 2584 3959 Imperial World Samrong Branch Tel. +66 (0) 2380 2943-5, 2756 9023 Fax +66 (0) 2756 9024 Homework Ratchaphruek Branch Tel. +66 (0) 2447 6690-92 Fax +66 (0) 2447 6693
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
278
Annual Report 2014
Kanchanaburi Branch Tel. +66 (0) 3451 5096-100 Fax +66 (0) 3451 5102 Kamphaeng Saen Branch Tel. +66 (0) 3435 1100, 3435 1614 Fax +66 (0) 3435 1094 Kaeng Khoi Branch Tel. +66 (0) 3624 4176, 3624 5127-8 Fax +66 (0) 3624 4178 304 Industrial Park Branch Tel. +66 (0) 3741 4378-80 Fax +66 (0) 3741 4381 Khao Wang Branch Tel. +66 (0) 3242 5350, 3242 8352 Fax +66 (0) 3242 8351 Khlong Khru Branch Tel. +66 (0) 3482 7086, 3482 7093 Fax +66 (0) 3482 7094 Cha-am Branch Tel. +66 (0) 3243 4130-1, 3247 1158 Fax +66 (0) 3247 1185 Dan Chang Branch Tel. +66 (0) 3559 5497-8 Fax +66 (0) 3559 5499 Damnoen Saduak Branch Tel. +66 (0) 3225 3810-2 Fax +66 (0) 3225 3813
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 1900 Fax +66 (0) 3220 0426 Thanon Bowon Branch Tel. +66 (0) 3451 1022, 3451 4205 Fax +66 (0) 3451 1597 Thanon Phahon Yothin (Saraburi) Branch Tel. +66 (0) 3621 1166, 3621 2420 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, 3631 4256-7 Fax +66 (0) 3631 5404 Thanon Amarin (Ratchaburi) Branch Tel. +66 (0) 3233 7142, 3232 5802-5 Fax +66 (0) 3232 5801
Talat Chao Prom Branch Tel. +66 (0) 3524 4768, 3524 5162-3 Fax +66 (0) 3524 5441
Thanon Ekkachai (Samut Sakhon) Branch Tel. +66 (0) 3441 1127, 3442 5205-8 Fax +66 (0) 3442 5204
Talat Tha Na (Nakhon Chai Si) Branch Tel. +66 (0) 3433 1107-9 Fax +66 (0) 3433 1151
Thong Pha Phum Branch Tel. +66 (0) 3459 9073, 3459 9352 Fax +66 (0) 3459 9613
Talat Mahachai Branch Tel. +66 (0) 3481 0287-8 Fax +66 (0) 3481 0467
Tha Ruea-Kanchanaburi Branch Tel. +66 (0) 3456 1130, 3456 2074 Fax +66 (0) 3456 2073
Talat Suphan Buri Branch Tel. +66 (0) 3551 1330, 3552 3882-3 Fax +66 (0) 3552 3881
Tha Ruea-Ayutthaya Branch Tel. +66 (0) 3534 1019, 3534 1029 Fax +66 (0) 3534 1795
Thanon Khun San (Sing Buri) Branch Tel. +66 (0) 3651 1199, 3652 1200-1 Fax +66 (0) 3652 1202
Tha Muang Branch Tel. +66 (0) 3461 1119, 3461 2417-8 Fax +66 (0) 3461 2419
Tha Yang Branch Tel. +66 (0) 3246 1445-6, 3246 1823-4 Fax +66 (0) 3246 1447
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
Thung Khok Branch Tel. +66 (0) 3556 8086-7 Fax +66 (0) 3556 8069
Pak Phriao Branch Tel. +66 (0) 3621 1833-4, 3622 1286 Fax +66 (0) 3622 1884
Wang Sombun Branch Tel. +66 (0) 3744 9193-4 Fax +66 (0) 3744 9195
Nakhon Chai Si Branch Tel. +66 (0) 3433 1350-1 Fax +66 (0) 3433 1349
Phra Nakhon Si Ayutthaya Branch Tel. +66 (0) 3521 3892-4, 3524 4381 Fax +66 (0) 3524 2136
Wang Nam Yen Branch Tel. +66 (0) 3725 1543-7 Fax +66 (0) 3725 1546
Nakhon Nayok Branch Tel. +66 (0) 3731 1131, 3731 2608-9 Fax +66 (0) 3731 2610
Phra Pathom Chedi Branch Tel. +66 (0) 3425 4203-5, 3421 3541 Fax +66 (0) 3425 9131
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
Phutthamonthon Sai 4 Branch Tel. +66 (0) 2420 0444, 2420 5964 Fax +66 (0) 2813 1116
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
Phetchaburi Branch Tel. +66 (0) 3242 7023-5 Fax +66 (0) 3241 5455
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
Photharam Branch Tel. +66 (0) 3223 1089, 3223 1255 Fax +66 (0) 3223 1090
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
Pho Hak Branch Tel. +66 (0) 3238 7021-2 Fax +66 (0) 3238 7023
Samut Songkhram Branch Tel. +66 (0) 3471 1361, 3471 1510 Fax +66 (0) 3471 5555
Ban Phaeo Branch Tel. +66 (0) 3448 1088, 3448 0111-2 Fax +66 (0) 3448 1606
Mahachai Mueang Mai Branch Tel. +66 (0) 3481 2620-4 Fax +66 (0) 3442 6989
Samut Sakhon Branch Tel. +66 (0) 3482 0359-60, 3482 0365-6 Fax +66 (0) 3482 0445
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
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
Phetcharat Hospital (Phetchaburi) Branch Tel. +66 (0) 3241 0505-6, 3241 0514 Fax +66 (0) 3240 0618
Saraburi Branch Tel. +66 (0) 3621 8500 Fax +66 (0) 3631 6601
BigC Lop Buri 2 Branch Tel. +66 (0) 3678 0731-4, 3678 0735 Fax +66 (0) 3678 0736 Prachuap Khiri Khan Branch Tel. +66 (0) 3260 4464-7 Fax +66 (0) 3260 4468 Prachin Buri Branch Tel. +66 (0) 3721 1300, 3721 3855-9 Fax +66 (0) 3721 3080
Robinson Ratchaburi Branch Tel. +66 (0) 3232 7711-13 Fax +66 (0) 3232 7714
Rojana Industrial Park Ayutthaya Branch Tel. +66 (0) 3571 9710-2 Fax +66 (0) 3533 1651
Robinson Suphan Buri Branch Tel. +66 (0) 3545 4360-62, 3545 4363 Fax +66 (0) 3545 4364
Song Phi Nong Branch Tel. +66 (0) 3553 2890-3 Fax +66 (0) 3553 2894
Lop Buri Branch Tel. +66 (0) 3641 1233, 3642 1020-2 Fax +66 (0) 3642 1023
Sam Chuk Branch Tel. +66 (0) 3557 1644, 3557 1666 Fax +66 (0) 3557 1099
Thanachart Bank Public Company Limited
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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 Suphan Buri Branch Tel. +66 (0) 3552 1575, 3552 1963 Fax +66 (0) 3552 1964 Sena Branch Tel. +66 (0) 3520 1035, 3520 1748 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 Yai Branch Tel. +66 (0) 2420 4920, 2420 4930 Fax +66 (0) 2811 6538 Om Noi Branch Tel. +66 (0) 2420 1450, 2420 2565-6 Fax +66 (0) 2420 1132 Amphawa Branch Tel. +66 (0) 3475 1177-8, 3475 1640-1 Fax +66 (0) 3475 1642
NORTHERN REGION Kamphaeng Phet Branch Tel. +66 (0) 5571 3325-6 Fax +66 (0) 5571 3368 Khuang Sing Branch Tel. +66 (0) 5321 0826-8, 5321 6586 Fax +66 (0) 5322 2718 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 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 Central Plaza Phitsanulok Branch Tel. +66 (0) 5533 8412-5 Fax +66 (0) 5521 6612 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 Chang Chlan (Chiang Mai) Branch Tel. +66 (0) 5382 0538-41 Fax +66 (0) 5382 0543
Thanon Wet Suwan (Nakhon Sawan) Branch Tel. +66 (0) 5622 2998, 5622 7835 Fax +66 (0) 5623 1462 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
Thanon Nimmanhemin Branch Tel. +66 (0) 5322 5483, 5340 0672-4 Fax +66 (0) 5340 0675
BigC Hang Dong Branch Tel. +66 (0) 5380 4092, 5380 4094 Fax +66 (0) 5380 4086
Kabin Buri Industrial (Nongki) Branch Tel. +66 (0) 3745 5428-29, 3745 5420-1 Fax +66 (0) 3745 5439
Thanon Barom Trai Lokanart 2 (Phitsanulok) Branch Tel. +66 (0) 5521 8645-9 Fax +66 (0) 5521 8648
Pak Nam Pho Branch Tel. +66 (0) 5621 2082, 5621 2847-8 Fax +66 (0) 5621 3516
U Thong Branch Tel. +66 (0) 3555 1299, 3555 1618 Fax +66 (0) 3555 1868
Thanon Bunyawat Branch Tel. +66 (0) 5421 7444, 5421 8790 Fax +66 (0) 5422 4667
Ang Thong Branch Tel. +66 (0) 3561 1099, 3561 2301-3 Fax +66 (0) 3561 1100
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Annual Report 2014
Fang Branch Tel. +66 (0) 5345 1007-9 Fax +66 (0) 5338 2041
Phran Kratai Branch Tel. +66 (0) 5576 2111-12 Fax +66 (0) 5576 2113
Sawankhalok Branch Tel. +66 (0) 5564 1478-9, 5564 2512 Fax +66 (0) 5564 1480
Phayao Branch Tel. +66 (0) 5443 1124, 5448 2386-8 Fax +66 (0) 5443 1272
San Sai Branch Tel. +66 (0) 5349 1457, 5349 1934 Fax +66 (0) 5349 1728
Phichit Branch Tel. +66 (0) 5661 1033, 5661 1651 Fax +66 (0) 5661 1127
San Pa Khoi Branch Tel. +66 (0) 5324 4157, 5324 9167-8 Fax +66 (0) 5324 1157
Phitsanulok Branch Tel. +66 (0) 5530 4313 Fax +66 (0) 5530 4279
Sukhothai Branch Tel. +66 (0) 5561 6022, 5562 2465-6 Fax +66 (0) 5562 2469
Phetchabun Branch Tel. +66 (0) 5672 3103 Fax +66 (0) 5672 3104
Nong Ben Branch Tel. +66 (0) 5629 6163-5 Fax +66 (0) 5629 6166
Phrae Branch Tel. +66 (0) 5452 2004, 5452 2006 Fax +66 (0) 5452 2005
Lom Kao Branch Tel. +66 (0) 5670 8492-93 Fax +66 (0) 5670 8494
Phaisali Branch Tel. +66 (0) 5625 9721-2 Fax +66 (0) 5625 9723
Lom Sak Branch Tel. +66 (0) 5670 1540, 5670 4207 Fax +66 (0) 5670 4513
Mae Sot Branch Tel. +66 (0) 5553 3311-3, 5553 3319 Fax +66 (0) 5553 3320
Hankha Branch Tel. +66 (0) 5645 1040, 5645 1500 Fax +66 (0) 5645 1499
Mae Sai Branch Tel. +66 (0) 5373 1675, 5373 1904 Fax +66 (0) 5373 1905
Ha Yaek Phokhun Mengrai (Chiang Rai) Branch Tel. +66 (0) 5374 5244-5 Fax +66 (0) 5374 5247
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
NORTH EASTERN REGION Kalasin Branch Tel. +66 (0) 4382 1080-1, 4382 1420 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 Central Plaza Udon Thani Branch Tel. +66 (0) 4292 1344, 4292 1346-47 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
Hang Dong Branch Tel. +66 (0) 5343 4035-7 Fax +66 (0) 5343 4038
Thanon Klang Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 8266, 4332 2630 Fax +66 (0) 4332 2386
Hang Nam Sakorn Branch Tel. +66 (0) 5643 1232-33 Fax +66 (0) 5643 1234
Lampang Branch Tel. +66 (0) 5431 8927-30 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 6471-73, 5661 6474 Fax +66 (0) 5665 0987
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
Thanachart Bank Public Company Limited
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Thanon Si Chan Branch Tel. +66 (0) 4322 7275-8 Fax +66 (0) 4322 7279
BigC Udon Thani Branch Tel. +66 (0) 4212 8551-3 Fax +66 (0) 4212 8548
Surin Branch Tel. +66 (0) 4451 4455-8 Fax +66 (0) 4451 4459
Thanon Sappasit Branch Tel. +66 (0) 4524 4315, 4524 4729 Fax +66 (0) 4524 3193
Bueng Kan Branch Tel. +66 (0) 4249 1779, 4249 1781 Fax +66 (0) 4240 3097
Surin Plaza Branch Tel. +66 (0) 4453 8517-20 Fax +66 (0) 4453 8521
Thanon Suranari Branch Tel. +66 (0) 4424 2560, 4424 2904 Fax +66 (0) 4425 6706
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
Thanon Na Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 1163, 4322 3234 Fax +66 (0) 4322 1822
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
Amnat Charoen Branch Tel. +66 (0) 4551 1721-4 Fax +66 (0) 4551 1726
Loei Branch Tel. +66 (0) 4283 0851-3 Fax +66 (0) 4281 4472
Udon Thani Branch Tel. +66 (0) 4234 2550 Fax +66 (0) 4234 2398
Wang Sam Mo Branch Tel. +66 (0) 4238 7486-7 Fax +66 (0) 4238 7488
Ubon Ratchathani Branch Tel. +66 (0) 4531 9401-3 Fax +66 (0) 4531 9405
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, 4483 8327 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, 4426 8336-8 Fax +66 (0) 4426 9790 Nang Rong Branch Tel. +66 (0) 4463 1049, 4463 1586-8 Fax +66 (0) 4463 1050 Ban Phai Branch Tel. +66 (0) 4327 4038-40 Fax +66 (0) 4327 4043 BigC Buri Ram Branch Tel. +66 (0) 4469 0450, 4469 0458 Fax +66 (0) 4469 0469 BigC Yasothon Branch Tel. +66 (0) 4572 4361, 4572 4376 Fax +66 (0) 4572 5067
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Warin Chamrap Branch Tel. +66 (0) 4532 2788, 4532 2791-3 Fax +66 (0) 4532 2790 Si Sa Ket Branch Tel. +66 (0) 4562 0500-2 Fax +66 (0) 4564 4197 Sakon Nakhon Branch Tel. +66 (0) 4271 6446-50 Fax +66 (0) 4271 6451 Sang Khom Branch Tel. +66 (0) 4227 6222-4 Fax +66 (0) 4227 6225 Sam Yaek Pak Thong Chai Branch Tel. +66 (0) 4421 3993-5, 4428 1815-6 Fax +66 (0) 4421 3994
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 Center Pattaya Branch Tel. +66 (0) 3841 4852-54, 3841 4855 Fax +66 (0) 3841 4846
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
Central Festival Pattaya Beach Branch Tel. +66 (0) 3300 3571-3 Fax +66 (0) 3804 3194
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
Central Chon Buri Branch Tel. +66 (0) 3805 3531-3 Fax +66 (0) 3805 3535
Ban Phe Branch Tel. +66 (0) 3865 1995, 3865 1997 Fax +66 (0) 3865 1993
Si Racha Branch Tel. +66 (0) 3877 1686-9 Fax +66 (0) 3877 1690
Trat Branch Tel. +66 (0) 3953 1641-3 Fax +66 (0) 3952 2662
Ban Bueng Branch Tel. +66 (0) 3844 3060-1, 3844 4015-6 Fax +66 (0) 3844 3713
Thanon Khwang (Chanthaburi) Branch Tel. +66 (0) 3932 5925, 3931 1079 Fax +66 (0) 3932 5926
BigC Chachoengsao 2 Branch Tel. +66 (0) 3851 5188, 3851 5190 Fax +66 (0) 3851 5219
Saha Pathana Industrial Park (Si Racha) Branch Tel. +66 (0) 3848 1826-8 Fax +66 (0) 3848 1829
Thanon Chetchamnong (Chon Buri) Branch Tel. +66 (0) 3879 2203-5 Fax +66 (0) 3879 2178
BigC Chon Buri 2 Branch Tel. +66 (0) 3878 3032-4 Fax +66 (0) 3838 7923
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 Thanon Sukhumwit (Si Racha) Branch Tel. +66 (0) 3877 3415-20 Fax +66 (0) 3877 3421 Thanon Surasak 1 (Si Racha) Branch Tel. +66 (0) 3831 1872-3, 3831 2206-7 Fax +66 (0) 3831 1871 Tesco Lotus Bo Win Branch Tel. +66 (0) 3811 7133-35 Fax +66 (0) 3811 7136 Tesco Lotus Pattaya Nuea Branch Tel. +66 (0) 3841 1410, 3841 1316 Fax +66 (0) 3841 1423 Na Kluea (Pattaya) Branch Tel. +66 (0) 3822 6060-1 Fax +66 (0) 3822 6117
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 BigC Sa Kaeo Branch Tel. +66 (0) 3742 1761-3 Fax +66 (0) 3742 1765
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 Huai Sathon Branch Tel. +66 (0) 3939 5381-3 Fax +66 (0) 3939 5384
Pluak Daeng Branch Tel. +66 (0) 3865 9768-9 Fax +66 (0) 3865 9770 Pacific Park (Si Racha) Branch Tel. +66 (0) 3831 3226, 3831 3236 Fax +66 (0) 3831 3245 Pranom Sarakham Branch Tel. +66 (0) 3855 1005, 3855 1824-6 Fax +66 (0) 3855 1659 Pattaya Branch Tel. +66 (0) 3872 0334, 3872 0339 Fax +66 (0) 3842 9973 Pattaya Nuea Branch Tel. +66 (0) 3842 8901-2, 3842 8905 Fax +66 (0) 3842 8963
Hat Pattaya (Nuea) Branch Tel. +66 (0) 3841 5772-4, 3841 5884 Fax +66 (0) 3841 5885 Laem Chabang Branch Tel. +66 (0) 3840 0740-3 Fax +66 (0) 3840 0745 Laem Thong Bang Saen Branch Tel. +66 (0) 3815 3930-1, 3815 3936 Fax +66 (0) 3815 3994 Laem Thong Rayong Branch Tel. +66 (0) 3802 3405-7 Fax +66 (0) 3802 3409
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SOUTHERN REGION Krabi Branch Tel. +66 (0) 7563 2838-41 Fax +66 (0) 7563 2835 Kantang Branch Tel. +66 (0) 7525 1250, 7525 1640 Fax +66 (0) 7525 1644 Ko Tao Branch Tel. +66 (0) 7745 6533-4 Fax +66 (0) 7745 6784 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 Central Hat Yai Branch Tel. +66 (0) 7423 9010 Fax +66 (0) 7423 0414 Diana Si Phuwanart Branch Tel. +66 (0) 7446 5316-8 Fax +66 (0) 7446 5319 Trang Branch Tel. +66 (0) 7522 3240-3 Fax +66 (0) 7522 3244 Talat Tha Phae (Nakhon Si Thammarat) Branch Tel. +66 (0) 7538 3271, 7538 3316 Fax +66 (0) 7538 3110
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Takua Pa Branch Tel. +66 (0) 7642 5176, 7643 1503-5 Fax +66 (0) 7642 5177
Thanon Sai Buri (Songkhla) Branch Tel. +66 (0) 7431 1638, 7432 3735-6 Fax +66 (0) 7431 3543
Thanon Chuti Uthit (Hat Yai) Branch Tel. +66 (0) 7434 6396-8 Fax +66 (0) 7434 6393
Thalang Branch Tel. +66 (0) 7631 1020, 7631 1432 Fax +66 (0) 7631 1433
Thanon Chon Kasem (Surat Thani) Branch Tel. +66 (0) 7728 3627-30 Fax +66 (0) 7728 4080
Thap Thiang (Trang) Branch Tel. +66 (0) 7521 8059, 7521 1321 Fax +66 (0) 7521 1320
Thanon Thawi Wong (Hat Patong) Branch Tel. +66 (0) 7629 2116-8 Fax +66 (0) 7634 5687 Thanon Thammanun Withi (Hat Yai) Branch Tel. +66 (0) 7423 5549, 7435 5396-7 Fax +66 (0) 7424 3648 Thanon Punnakan (Hat Yai) Branch Tel. +66 (0) 7450 0040, 7450 0044-5 Fax +66 (0) 7450 0089 Thanon Montri Branch Tel. +66 (0) 7621 2993, 7621 5393 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 Ramet (Phatthalung) Branch Tel. +66 (0) 7462 6952-4 Fax +66 (0) 7461 5451 Thanon Ratchadamnoen (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534 2779-80, 7535 6119 Fax +66 (0) 7535 6741 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
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 Thai Mueang Branch Tel. +66 (0) 7657 1234-7 Fax +66 (0) 7657 1215 Thung Song Branch Tel. +66 (0) 7541 1087, 7541 1956 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 Chumphon Branch Tel. +66 (0) 7765 9930-32 Fax +66 (0) 7765 9933 Tesco Lotus Choeng Thale (Phuket) Branch Tel. +66 (0) 7632 5919-21 Fax +66 (0) 7627 0572 Tesco Lotus Thung Song Branch Tel. +66 (0) 7541 3003-6 Fax +66 (0) 7541 3007 Tesco Lotus Phuket Branch Tel. +66 (0) 7625 5472-4 Fax +66 (0) 7652 3400 Tesco Lotus Ranong Branch Tel. +66 (0) 7782 6636-8, 7782 6639 Fax +66 (0) 7782 6640
Tesco Lotus Songkhla Branch Tel. +66 (0) 7430 7937-9 Fax +66 (0) 7435 2735
Phatthalung Branch Tel. +66 (0) 7461 3082, 7461 3951-2 Fax +66 (0) 7461 1918
Sai Buri Branch Tel. +66 (0) 7341 1021, 7341 1314-5 Fax +66 (0) 7341 1138
Nakhon Si Thammarat Branch Tel. +66 (0) 7532 2689-90 Fax +66 (0) 7532 2144
Phunphin Branch Tel. +66 (0) 7731 1449, 7731 2368-70 Fax +66 (0) 7731 1537
Surat Thani Branch Tel. +66 (0) 7721 4581-7 Fax +66 (0) 7721 3560
Narathiwat Branch Tel. +66 (0) 7351 2013, 7351 4463-5 Fax +66 (0) 7351 2014
Phuket Branch Tel. +66 (0) 7626 1570-5 Fax +66 (0) 7626 1576
Su-ngai Kolok Branch Tel. +66 (0) 7361 1359, 7361 1002 Fax +66 (0) 7361 3632
Ban Don Branch Tel. +66 (0) 7721 0365, 7728 1551-2 Fax +66 (0) 7721 0366
Mae Nam Branch Tel. +66 (0) 7724 8375, 7733 2259 Fax +66 (0) 7733 2260
Lang Suan Branch Tel. +66 (0) 7754 1965, 7758 1417-8 Fax +66 (0) 7754 1987
Ban Na Doem Branch Tel. +66 (0) 7735 9013, 7735 9015 Fax +66 (0) 7735 9014
Yala Branch Tel. +66 (0) 7321 2592, 7321 3375 Fax +66 (0) 7321 1691
Huai Yot Branch Tel. +66 (0) 7523 5033-5, 7527 1013 Fax +66 (0) 7527 1064
BigC Pattani Branch Tel. +66 (0) 7333 8004, 7331 3982-3 Fax +66 (0) 7333 8005
Yan Ta Khao Branch Tel. +66 (0) 7528 1003, 7528 1101 Fax +66 (0) 7528 1102
Ha Yaek Chalong (Phuket) Branch Tel. +66 (0) 7638 3222, 7638 3431 Fax +66 (0) 7638 3348
BigC Satun Branch Tel. +66 (0) 7472 5251-3 Fax +66 (0) 7472 5254
Ranong Branch Tel. +66 (0) 7781 1198, 7781 1752 Fax +66 (0) 7781 1751
Hat Chaweng Branch Tel. +66 (0) 7723 0405, 7723 1089-90 Fax +66 (0) 7742 2051
BigC Hat Yai 2 Branch Tel. +66 (0) 7446 9235-7, 7446 9238 Fax +66 (0) 7455 5609
Robinson Trang Branch Tel. +66 (0) 7559 0018-9, 7559 0120 Fax +66 (0) 7522 6157
Hat Yai Branch Tel. +66 (0) 7435 4690 Fax +66 (0) 7435 4696
Betong Branch Tel. +66 (0) 7323 1120, 7323 1416 Fax +66 (0) 7323 0914
Robinson Ocean Nakhon Si Thammarat Branch Tel. +66 (0) 7534 1875, 7534 1960-1 Fax +66 (0) 7534 1876
Hat Yai Nai Branch Tel. +66 (0) 7436 1313-5 Fax +66 (0) 7425 9704
Pattani Branch Tel. +66 (0) 7333 5950-1, 7333 1851 Fax +66 (0) 7333 5949 Pak Phanang Branch Tel. +66 (0) 7551 7132, 7551 8023 Fax +66 (0) 7551 8021 Patong Branch Tel. +66 (0) 7629 0585-7 Fax +66 (0) 7629 0588 Phang-nga Branch Tel. +66 (0) 7641 1295, 7641 1527-8 Fax +66 (0) 7641 1326
Wiang Sa Branch Tel. +66 (0) 7736 1461-2, 7736 3550 Fax +66 (0) 7725 7268 Songkhla Branch Tel. +66 (0) 7444 1198-9, 7444 1232 Fax +66 (0) 7444 1233 Sadao Branch Tel. +66 (0) 7441 4315-7 Fax +66 (0) 7446 0501 Sam Kong (Phuket) Branch Tel. +66 (0) 7621 2077, 7622 2838-40 Fax +66 (0) 7622 2841
Hat Karon Branch Tel. +66 (0) 7639 6981, 7639 6485-6 Fax +66 (0) 7639 6980 Hat Lamai Branch Tel. +66 (0) 7745 8159-60, 7745 8162-4 Fax +66 (0) 7745 8161 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
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Summary of Specified Items per form 56-2 in 2014 Annual Report Items
Page
1. Policy and Overall Business Operation
030-035
2. Nature of Business Operations
036-049
3. Risk Factors
050-061
4. General and Other Key Information
119-125
5. Shareholders
126-127
6. Dividend Payment Policy
127-120
7. Management Structures
090-118
8. Corporate Governance
075-086
9. Corporate Social Responsibility
062-074
10. Internal Control and Risk Management 11. Related Transactions
087-088 086
12. Financial Highlight
002-003
13. Management Discussion and Analysis
016-029
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Annual Report 2014
444 MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, THAILAND Tel. +66 (0) 2217 8000 Fax +66 (0) 2217 8333 Thanachart Contact Center 1770 Thanachart Smartcar Call Center +66 (0) 2217 5555 www.thanachartbank.co.th Registration No. 0107536001401