CONTENTS 001 002 012 016 018 034 054 066 078 090 092 093 100 124 131 134 135 137 138 276 290
Vision & Mission Financial Highlights Message from the Board of Directors Board of Directors Thanachart Bank Public Company Limited Management Discussion and Analysis Nature of Business Operations Risk Factors Corporate Social Responsibility (CSR) Corporate Governance Internal Control and Risk Management Report of the Nomination and Remuneration Committee Management Structures 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 Notes to Financial Statements Branches of TBANK Summary of Specified Items per form 56-2 in 2015 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
To attract and retain customers by offering excellent services, innovative savings, insurance, and investment products.
To ensure our customers succeed financially by helping them choose the right “Protection” services and products from across the entire Thanachart Group. To provide borrowing solutions to all customer segments that meet their current and future needs and help them to become financially better off.
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.
THREE ITEMS FOR THE BUSINESS PHILOSOPHY 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.
FINANCIAL HIGHLIGHTS As at and for the year ended 31 December
Consolidated financial statements
Separate financial statements
2015
2014
2013
2012
2011
2015
2014
2013
2012
2011
48,217 20,536 27,681 12,200 39,881 19,964
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
45,125 19,572 25,553 10,639 36,192 17,293
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
7,122 11,497 9,922 15,385
2,980 8,354
2,504 7,671
8,007 11,452
7,181 11,110 7,918 14,113
4,680 6,855
1,422 6,668
Operating results (THB million) 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)
8,592 10,743
Operating performance 1.90
1.80
2.79
1.52
1.39
2.03
1.44
2.56
1.24
1.21
1.11
0.98
1.51
0.90
0.89
1.24
0.82
1.46
0.78
1.13
9.83 2.84
9.93 2.68
16.99 2.62
10.72 2.48
10.61 2.92
11.39 2.77
8.60 2.61
16.91 2.55
9.55 2.58
9.42 2.99
50.06
49.64
39.60
61.40
61.24
47.78
50.34
38.35
61.27
61.56
713,466 754,370 790,017 754,063 980,972 1,008,890 1,038,349 1,018,620 741,145 787,189 811,308 776,521 863,282 902,726 941,109 934,435 116,226 104,977 96,218 83,330
635,220 886,060 690,336 810,526 74,848
676,001 938,834 726,002 830,784 108,050
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
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
002
(1)
Total income = Net interest income + Non-interest income 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 (2)
ANNUAL REPORT 2015
As at and for the year ended 31 December
Consolidated financial statements
Separate financial statements
2015
2014
2013
2012
2011
2015
2014
2013
2012
2011
96.27
95.83
97.38
97.11
92.02
93.11
92.35
93.91
93.94
84.58
2.84
4.09
4.36
4.17
5.68
2.20
2.97
3.07
2.65
2.74
1.26 119.42
2.02 85.52
2.25 83.36
2.05 73.65
2.62 1.15 69.10 127.41
1.61 90.64
1.66 89.18
1.35
1.44 72.61
Asset quality Loans to deposits and borrowings ratio (Percent) NPL-gross to total loans (Percent) NPL-net to total loans (Percent) Coverage ratio (Percent) Total allowance to BOT regulation (Percent) Non-performing loans (NPL) (THB million)
78.02
159.33
133.38
127.87
124.50
106.10
171.94
138.16
138.38
134.94
113.07
21,681
32,761
36,377
33,047
38,311
15,986
22,595
24,394
20,036
17,989
Capital measures Tier I capital ratio (Percent) 12.04 10.70 9.47 8.49 9.28 Total capital ratio (Percent) 17.92 15.83 14.80 13.99 13.72 Risk weighted assets (THB million) 682,245 724,209 747,992 724,801 664,103
Common share information Common shares outstanding (Million shares) - Average-basic 5,641 5,514 5,514 5,514 5,514 - End of period 6,065 5,514 5,514 5,514 5,514 Book value (THB) 19.41 19.25 17.64 15.11 13.58 Dividends per share (THB)
5,641 6,065 17.82 0.22
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
Other information Employees 14,652 14,806 15,358 15,765 16,298 Branches Exchange booth
12,415 12,675 13,286 13,642 14,152 614 617 621 630 676 49 51 54 55 79
THANACHART BANK PUBLIC COMPANY LIMITED
003
THE ONE We will strive for performance excellence within the world of financial transactions, with a goal of being the financial advisor everyone thinks of first.
POWER OF THE TEAM Every success results from the power of collaboration combined with a strong service orientation, leading to the common goal of offering the highest customer satisfaction.
SOLUTION EXCELLENCE Fulfilling all financial transaction needs conveniently, swiftly, and securely with the support of creative digital technology.
Deposit & Investment
Protection
Borrowing
Day to day Banking
FOR THE FUTURE The definition of sustainable success is mutually beneficial growth among businesses, society, and the environment. The value of giving will contribute endlessly to a better society.
MESSAGE FROM THE BOARD OF DIRECTORS
(Mr. Banterng Tantivit) Chairman of the Board of Directors
Dear Shareholders, Amid the pressing challenges of weakening oil and commodity prices, falling global trade growth, volatile capital flows, and persistent geopolitical tensions, global economic growth has remained sluggish. A positive highlight in the global environment has been the promising US economic recovery, underpinned by stronger domestic demand and solid increases in employment. This recovery led to the Federal Reserve’s decision to raise interest rates for the first time in nearly a decade. Among the world’s developed economies, the European Union, which benefited from euro depreciation and expansion of monetary stimulus from the European Central Bank, showed a modest growth, largely driven by healthy domestic demand. Japan’s economy grew at a gradual pace, on the back of continued stimulus packages and rising wages, as well as improving consumer confidence and corporate profits. However, the greater-than-expected slowdown in the Chinese economy exerted a spillover effect to the global economy. These headwinds inevitably resulted in a more protracted deceleration of the emerging and developing economies. On the domestic front, we faced a number of difficulties ranging from anemic global economic recovery, contracted merchandise exports, muted business sentiment, to swelling household debt. Despite these challenges the Thai economy showed signs of improvement, recovering gradually thanks
012
ANNUAL REPORT 2015
to high Government budget disbursements and an economic stimulus package, along with the higher-than-expected number of tourists. To rev up economic activities and restore private sector confidence, the economic stimulus package contained various measures, including: the soft-loan program to small and medium enterprises (SMEs), the reduction of real estate transfer fees and mortgage fees, the corporate income tax reduction, the money injection into the Village Fund, and so on. Moreover, the Monetary Policy Committee reduced the policy rate from 2.00 percent per annum to 1.50 percent per annum, in two consecutive cuts, to support economic growth. As a consequence of both domestic and international factors, the 2015 operating environment remained challenging for the Thai banking industry. Loan growth continued to show lackluster momentum contributing to increased liquidity which, in turn, placed downward pressure on deposit rates. The overall banking industry continued to demonstrate strong reserve coverage and capital positions. Non-performing loans (NPL), however, trended upwards due to both the deterioration in asset quality and the declining ability to service debt. All the banks, therefore, adopted more prudent policies, and focused on maintaining relationships with their existing customers. During the year, the amount of the deposit guarantee ceiling was reduced to THB 25 million per depositor (per commercial
(Mr. Suphadej Poonpipat) Chairman of the Executive Committee
bank). Additionally, a number of laws and regulations were introduced, namely, the Civil and Commercial Code Amendment Act regarding the guarantee and mortgage provisions, and the Debt Collection Act, together with amendments to the Anti-Money Laundering Act, the Counter-Terrorism Financing Act, and the Anti-Corruption Act. Despite causing some impacts on operational processes, these new regulations and amendments have resulted in enhanced customer due diligence by the banking sector. Through-out 2015, we maintained a strong focus on effective asset management and on strengthening our coverage ratio, resulting in significant improvements in asset quality by year end. Our actions contributed to a 10.47 percent reduction in loan loss expenses as compared to the prior year. NPLs of our Bank and subsidiaries declined by THB 11,080 million, and the NPL ratio significantly reduced from 4.09 percent to 2.84 percent. The coverage ratio, based on the consolidated financial statements, also significantly improved from 85.52 percent to 119.42 percent, which was close to the industry average. Moreover, the Bank’s capital position strengthened to the industry leading level, increasing from 15.83 percent to 17.92 percent. This positions us well for sustaining business growth in the future.
In terms of our 2015 performance, this was a year of accomplishments across our various business lines. Due to our success in generating profitability increases in four consecutive quarters our Bank and its subsidiaries achieved a net profit in 2015 of THB 10,743 million, an increase of THB 821 million or 8.27 percent over the previous year. Total income increased as a result of year over year improvement in both net interest income and non-interest income. Net interest income grew 0.44 percent year on year due to widening interest spreads while non-interest income grew 3.83 percent, mainly from gains on investments. Meanwhile, operating expenses increased by 2.30 percent. Thanachart Bank is also pleased to inform the shareholders that we have already achieved a Liquidity Coverage Ratio (LCR) of more than 100 percent in the first year of the implementation of this standard prescribed by the Bank of Thailand. Specifically, all commercial banks must maintain a minimum LCR at 60 percent in 2016 and gradually increase the minimum by 10 percent each year until it meets 100 percent in 2020. Consequently, this demonstrates our ability to generate high liquidity levels and gives a strong sense of confidence in our Bank to all of our customers.
THANACHART BANK PUBLIC COMPANY LIMITED
013
(Mr. Somjate Moosirilert) Chief Executive Officer and President
Three key events occurred at our Bank in 2015. Firstly, we increased capital through the rights offering of common shares to existing shareholders, for the purpose of replacing the redemption of the Hybrid Tier I and strengthening the Bank’s capital. The transaction concluded with an additional THB 5,512 million in paid-up share capital, resulting in a total issued and paid-up share capital of THB 60,649 million. This has strengthened our Tier I capital. Secondly, we successfully issued Basel III-compliant Tier II capital subordinated unsecured instruments totaling THB 7,000 million, further reinforcing our financial stability and providing a strong base for future growth. Last but not least, SCIB Public Company Limited, a subsidiary of our Bank, successfully completed a liquidation process. Due to the tax losses arising from investment in this subsidiary, the Bank had no income tax expenses for the year 2015, and mostly utilized the benefit as special provision in order to enhance the financial position. In 2015 we were proud and honored to receive many awards and recognitions including: the Ministry of Culture Award for Contribution to the Preservation of Thai Culture (for the distinguished “Thanachart Initiates and Fulfills Thai Identity Project”), the Best Co-Branded Prepaid Card Award, the Best Mobile Payments Program Award 2015, and the STP
014
ANNUAL REPORT 2015
(Straight-Through-Processing) Award for efficient and accurate international money transfers. Most importantly, a total of 12 companies in the Thanachart Group were granted the Coalition against Corruption (CAC) logo by the Private Sector Collective Action Coalition against Corruption in recognition of our strong commitment to preventing all forms of corruption. During this past year, we dedicated ourselves to improving the service to our customers, and also created various innovative products and services. Examples include, bringing digital technology to our Corporate and Commercial customers with the launch of “Thanachart ibiz”, satisfying the day to day banking needs of our Retail customers with our highly competitive “Freever-Lite Savings Account”, and enhancing the security of our e-Banking customers through the introduction of the “EMV-Chipped Debit Card”. Moreover, we initiated many corporate social responsibility projects, like the “Rethink Project” designed to enhance the financial knowledge of Thai people and develop their financial discipline for both spending and savings management. In 2016, the Thai banking sector is expected to show a slight improvement in loan growth year over year. This will come mainly from commercial loan growth stimulated by
(Mr. Peter Bessey) Vice Chairman of the Executive Committee and Deputy Chief Executive Officer
Government budget disbursements, partially offset by stagnant retail loan growth resulting from more stringent measures to mitigate risk. The overall banking industry will be confronted with a multitude of changes due to rapid technological advancements. For example, with growing internet access, the increasing consumer trend towards online transactions is expected to accelerate. Other factors impacting the banking sector include: the rising role of non-banks, the change in the amount of the deposit guarantee ceiling, and especially, the National e-Payment Master Plan, which will lead to payment infrastructure development, e-Tax System, social welfare registration, financial inclusion, and a cashless society. We also anticipate the enforcement of the Business Security Act and Digital Economy-Related Laws. In preparation for the challenges that lie ahead, Thanachart Bank tirelessly endeavors to develop ourselves in all facets to enhance our competitiveness. We focus on key business transformation initiatives that enhance efficiency and collaboration. One such initiative is the redesign of our Retail Lending Services group to stream line processes and take full advantage of the automation provided by our upgraded “Loan Origination System�. In the second half of 2016,
Thanachart Bank’s Retail borrowing customers will realize the benefits of this initiative in terms of faster approval and loan disbursement times. We are also transforming our service platform to enhance our digital banking services. For instance, our new Mobile Banking application is expected to be launched in the second quarter of 2016. This application will include the features necessary for our Retail customers to bank where they want, when they want, and how they want. Furthermore, we continue to develop our human resources by cultivating the right mindset and enhancing the capabilities and productivity of staff at all levels, in order to deliver the most appropriate products and services to meet the needs of our customers. These actions will enable us to differentiate ourselves from our competitors and ensure the delivery of a great customer experience. The achievements by our Bank in 2015 would not have been possible without the contributions of our staff, partners, and shareholders. The Board of Directors would like to express our gratitude for your continued support. We are also deeply grateful for the trust and loyalty of our customers and look forward to growing together towards a prosperous future.
THANACHART BANK PUBLIC COMPANY LIMITED
015
BOARD OF DIRECTORS THANACHART BANK PUBLIC COMPANY LIMITED
2
3
1
1. Mr. Banterng Tantivit Chairman
016
ANNUAL REPORT 2015
2. Mr. Suphadej Poonpipat
Vice Chairman, Chairman of the Executive Committee
3. Mr. Somjate Moosirilert
Director, Member of the Executive Committee, Chief Executive Officer and President
4
5
6
7
8
9
10
11
12
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 6. Mr. Kiettisak Meecharoen Director, Independent Director,
Vice Chairperson of the Executive Committee
8. Mr. Sataporn Jinachitra
Independent Director, Member of the Audit Committee, Member of the Nomination and Remuneration Committee
Director
11. Mr. Alberto Jaramillo
Chairman of the Audit Committee
9. Assoc. Prof. Dr. Somjai Phagaphasvivat
Independent Director, Member of the Audit Committee
12. Mr. Wallter Tas
Director
THANACHART BANK PUBLIC COMPANY LIMITED
017
MANAGEMENT DISCUSSION AND ANALYSIS
Economics Outlook and Competition in Banking Industry In the year 2015, the Thai economy grew 2.80 percent surpassing a 0.80 percent growth in 2014. The key drivers were increases in government spending and private consumption which improved particularly in the last quarter of 2015 as a result of the government’s economic stimulus package. In contrast, private investment declined from last year, as well as, export which continued to face negative headwind from weak economies of counter trade parties, especially China. Tourism has maintained a consistent growth. In summary, the Thai economy, although improved from last year, was still feeble. Consequently, the Monetary Policy Committee of the Bank of Thailand (“the BOT”) issued a resolution to reduce the policy rate twice during the year 2015 from 2.00 percent per annum to 1.50 percent per annum to help stimulate the economy. For year 2016, government budget disbursement and investment in mega infrastructure projects will be the key driver to the Thai economic growth. The Office of the National Economic and Social Development Board forecasted GDP to grow 2.80 - 3.80 percent in 2016. Loan growth in commercial bank system had declined in 2015 once compared to last year in line with an economic slowdown as aforementioned. Financial institutions continue to be cautious with credit approval and competition to acquire deposits continue to be modest. In 2016, however, the outlook predicts better growth as the consumers’ confidence had improved at the end of 2015 and as fiscal stimulus measures continued to enhance the economy.
Major events in 2015 • On 2 April 2015, the Annual General Meeting of Shareholders of 2015 issued a resolution to approve dividend payments for shareholders of Thanachart Bank Public Company Limited (“the Bank”) at THB 0.45 per share, equivalent to THB 2,481 million or 31.34 percent of 2014 net profit in the bank only financial statements and 25.01 percent of 2014 net profit in consolidated financial statements. This is in accordance with the dividend payout policy and dividends were paid on 23 April 2015. • On 2 April 2015, the Bank has early redeemed THB 6,000 million of unsecured subordinated debentures which will mature in 2020. On 11 May 2015, unsecured subordinated debentures of THB 5,000 million have matured and the Bank has issued THB 7,000 million of Basel III compliance Tier II capital subordinated unsecured instruments No. 1/2015. The instrument has fixed rate of 4.65 percent per annum and mature in 2025. The Bank has a call option to early redeem these instruments. The instrument is rated “A” by TRIS Rating. The BOT has granted the approval to count the instruments as Tier II capital. This instrument reinforces the financial stability and prepares the Bank for a strong future expansion.
018
ANNUAL REPORT 2015
• On 20 April 2015, the Bank has completed a liquidation process of a subsidiary company, SCIB Public Company Limited. The Bank has had tax losses arising from investment in such subsidiary company, which did not have impact on the profit and loss statements. Consequently, the Bank had no income tax expenses for the year 2015, and has partially utilized the benefit as special provision in order to enhance the Bank’s financial position going forward. This transaction however did not incur any impact on the Bank’s normal operating profit. • The Bank has increased its capital through the rights offering of common share to the existing shareholders. The offering period was during 28 September - 5 October 2015. The transaction concluded with additional THB 5,512 million paid-up share capital resulting in a total issued and paid-up share capital of THB 60,649 million. The registration of the new paid-up share capital has been completed on 9 October 2015 and had been approved by the BOT to account the additional paid-up share capital as Tier 1 capital. The paid-up share capital increase was intended to be counted as Tier 1 capital in replacement of the THB 7,130 million perpetual and non-cumulative Hybrid Tier 1 of the Bank No. 1/2010 (“Subordinate Debenture Hybrid Tier 1”). This tranche of Hybrid Tier 1 has been redeemed at its 5-year tenure on the interest payment date. Hybrid Tier 1 has been phasing out in the amount accountable as Tier 1 capital based on Basel III regulations as stipulated by the BOT. • The Bank’s Board of Directors No. 13/2015 dated 17 December 2015 issued a resolution for an interim dividend payment from the operating results in the first six-month period of 2015 at THB 0.22 per share, an equivalent of THB 1,334 million or 23.88 percent of first half of 2015 net profit in the bank only financial statements and 25.35 percent of consolidated financial statements. This is in accordance with the dividend payout policy and dividends were paid on 15 January 2016.
Consolidated Financial Statements were of the Bank 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 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 SCIB Services Company Limited Ratchthani Leasing Public Company Limited Subsidiary by mean of indirect share-holding National Leasing Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
019
Overall Operating Result (Analysis comparing performance of 2014 and 2015 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 - From Normal Business Operation Impairment loss of loans - Special Provision Profit (loss) before income tax Income Tax Net profit The Bank’s Non-controlling interests’ Earnings per share (THB) Weighted average number of ordinary shares (million shares) Notes:
020
(1) (2)
Operating income deducted by underwriting expenses Excluding underwriting expenses
ANNUAL REPORT 2015
Variance Increase/ Percentage (Decrease)
2015
2014
48,217 20,536 27,681 5,475 6,725 19,964
52,445 24,884 27,561 5,927 5,823 19,515
(4,228) (4,348) 120 (452) 902 449
(8.06) (17.47) 0.44 (7.63) 15.49 2.30
19,917
19,796
121
0.61
6,376 2,216 11,325 198 11,127 10,743 384 1.90
7,122 0 12,674 2,479 10,195 9,922 273 1.80
(746) 2,216 (1,349) (2,281) 932 821 111
(10.47) N.A. (10.64) (92.01) 9.14 8.27 40.66
5,640.52
5,513.66
Operating Results for the Year 2015
Amid challenging economic environment this year, the Bank and its subsidiaries were able to achieve continuous growth of net profit for every quarter this year. Net profit for the year 2015 totaled THB 10,743 million, an increase of THB 821 million or 8.27 percent from last year. The success was due to a strategic conformance suitable with economic slowdown with primary focuses on the cost of deposit and effective management in impairment loss of loan expense. Furthermore, the Bank and its subsidiaries were able to significantly strengthen the asset quality and capital adequacy position, as well as, put in place a solid liquidity coverage (LCR) ratio in preparation to meet Basel III regulation. An all-round improvement in profitability, financial ratios and positions had undoubtedly validated the potential and capability of the organization. Asset size of the Bank and its subsidiaries experienced growth for the second consecutive quarter after a decline since the end of last year with loan decline at much slower rate. Asset quality continued to improve from an effective non-performing loan management and prudent credit risk policy. Total liabilities and deposit increased from the previous quarter, in line with asset growth. Total income increased from the previous year from both net interest income and non-interest income. Net interest income grew 0.44 percent year on year with widening interest spread while non-interest income grew 3.83 percent, mainly from gains on investments. Operating expenses increased by 2.30 percent. Consequently, the Bank and its subsidiaries’ pre-provision operating profit (PPOP) in 2015 totaled THB 19,917 million, an increase of THB 121 million or 0.61 percent from last year.
On a Bank Only basis, NPL ratio declined to 2.20 percent with coverage ratio up to 127.41 percent. As for the Bank’s capital adequacy, BIS ratio ended at 17.92 percent, a remarkable increase from 15.83 percent in the previous year. The Bank and its subsidiaries’ operating results in the year 2015 comparing with that of 2014 can be summarized as follows: • Net interest income grew by 0.44 percent due to effective management in the cost of fund with widened interest spread to 2.84 percent. • Non-interest income increased by 3.83 percent mainly from successful efforts in sale of securities and net insurance premium income contributed by Thanachart Insurance Public Company Limited. • Operating expenses increased by 2.30 percent from provision expense for legal cases set aside in the first quarter of 2015. • Impairment loss of loans and debt securities from normal business operation decreased by 10.47 percent from efficient management. • Net profit increased 8.27 percent from an increase in total income and a decrease in impairment loss of loans and debt securities from normal business operation. • NPLs decreased by THB 11,080 million with NPL ratio decreased to 2.84 percent and coverage ratio increased to 119.42 percent.
Year 2015 was clouded with a circumstance of weak economy and dampened automotive industry. The Bank focused on NPL management and prudent credit policy which resulted in a 10.47 percent reduction in impairment loss of loan expense as compared to last year. NPLs of the Bank and its subsidiaries declined a staggering THB 11,080 million from last year, resulting in NPL ratio of 2.84 percent. Furthermore, coverage ratio strengthened significantly and increased to 119.42 percent.
THANACHART BANK PUBLIC COMPANY LIMITED
021
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 and Borrowing Borrowing Fee Net Interest Income
2015
2014
Change
Change Percentage
48,217
52,445
(4,228)
(8.06)
1,580 73 3,761 19,474 23,329
1,894 238 4,106 20,320 25,887
(314) (165) (345) (846) (2,558)
(16.58) (69.33) (8.40) (4.16) (9.88)
20,536
24,884
(4,348)
(17.47)
12,832 957 3,405 3,336 6
16,224 1,092 3,556 4,003 9
(3,392) (135) (151) (667) (3)
(20.91) (12.36) (4.25) (16.66) (33.33)
27,681
27,561
120
0.44
For the year 2015, the Bank and its subsidiaries’ net interest income totaled THB 27,681 million, an increase of THB 120 million or 0.44 percent from last year. • Interest income decreased by THB 4,228 million or 8.06 percent, mainly due to a shrinking loan portfolio together with a declining yield on earning asset following the market rate. • Interest expenses decreased by THB 4,348 million or 17.47 percent, a result of strategically management on the cost of deposit to enhance liquidity and policy rate reduction. Consequently, interest spread in 2015 was at 2.84 percent, an increase from 2.68 percent in the previous year. The details are shown in the table below. 4Q14
1Q15
2Q15
3Q15
4Q15
2014
2015
Average Policy Interest Rate
2.00
1.94
1.58
1.50
1.50
2.06
1.63
Yield Cost of Fund Interest Spread
5.48 2.83 2.65
5.50 2.76 2.74
5.47 2.61 2.86
5.31 2.43 2.88
5.16 2.29 2.87
5.57 2.89 2.68
5.36 2.52 2.84
022
ANNUAL REPORT 2015
Non-interest Income Non-interest Income
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 Other Operating Income Non-interest Income
(Unit: THB million)
Change
Change Percentage
2015
2014
5,475
5,927
(452)
(7.63)
658 1,533
859 769
(201) 764
(23.40) 99.35
169 265
151 240
17 25
11.18 10.42
2,552 295 1,253
2,091 305 1,407
461 (10) (154)
22.05 (3.28) (10.95)
6,725
5,823
902
15.49
12,200
11,750
450
3.83
Non-interest income of the Bank and its subsidiaries in the year 2015 totaled THB 12,200 million, an increase of THB 450 million or 3.83 percent from last year. This was particularly due to gains on investments and net insurance premium income. • Net fee and service income totaled THB 5,475 million, a decrease of THB 452 million or 7.63 percent. This was mainly due to lower brokerage fee income and other banking fees. • Operating income totaled THB 6,725 million, an increase of THB 902 million or 15.49 percent from last year. This was mainly due to gains on investments which increased by THB 764 million or 99.35 percent and net insurance premium which increased by THB 461 million or 22.05 percent. Consequently, non-interest income ratio in the year 2015 was 30.59 percent, an increase from 29.89 percent in the previous year. The non-interest income to average asset in the year 2015 was 1.26 percent, an increase from 1.17 percent in the previous year.
THANACHART BANK PUBLIC COMPANY LIMITED
023
Other Operating Expenses Other Operating Expenses
(Unit: THB million)
Change
Change Percentage
2015
2014
Employee’s Expenses Premises and Equipment Expenses Taxes and Duties Directors’ Remuneration Other Expenses
10,952 2,970 837 44 5,1061
10,780 2,928 849 43 4,915
172 42 (12) 1 246
1.60 1.43 (1.41) 2.33 5.01
Total Other Operating Expenses
19,964
19,515
449
2.30
For the year 2015, operating expenses of the Bank and its subsidiaries totaled 19,964 million baht, an increase of 449 million baht or 2.30 percent from last year, mainly due to the follwings: • Employee’s expenses increased by THB 172 million or 1.60 percent as a result of annual salary increase. • Other expenses increased by THB 246 million or 5.01 percent as a result of provision expenses set aside for legal cases. Consequently, cost to income ratio in the 2015 was 50.06 percent, a slight increase from 49.64 percent in the previous year while the operating expense to average asset ratio in 2015 was at 2.06 percent, an increase from 1.94 percent last year. The increase was mainly due to provision expenses set aside for legal cases. Cost to income ratio of 2015 if exclude such provision expenses would be 49.40, a slight decrease from last year.
Impairment Losses of Loans and Debt Securities Impairment Losses of Loans and Debt Securities
(Unit: THB million)
Change
Change Percentage
2015
2014
Impairment Losses of Loans - From Normal Business Operation Impairment Losses of Loans - Special Provision
6,376 2,216
7,122 -
(746) 2,216
(10.47) N.A.
Total Impairment Losses of Loans and Debt Securities
8,592
7,122
1,470
20.64
Credit Cost (Percent) Credit Cost (From Normal Business Operation) (Percent)
1.13 0.84
0.89 0.89
0.24 (0.05)
26.75 (5.94)
In the year 2015, the Bank and its subsidiaries had THB 6,376 million in impairment losses of loans and debt securities from normal business operation, a decrease of THB 746 million or 10.47 percent from last year. Credit cost was at 0.84 percent, a decrease from 0.89 percent last year. In addition, the Bank has utilized its tax benefit to put in THB 2,216 million of special provision to be vigilant against volatile economic conditions and in anticipation for future regulation implementation. Furthermore, there was a substantial reduction in NPL ratio, and thus, the coverage ratio improved significantly. The details are included in the non-performing loans section.
024
ANNUAL REPORT 2015
Income Tax For the year 2015, the Bank had no income tax expenses due to tax losses resulting from the liquidation of SCIB Public Company Limited which was completed in the second quarter. The financial statements of subsidiary companies incurred normal income tax expenses. As at 31 December 2015, the Bank has tax losses totaling THB 25,326 million, equivalent to a tax benefit of THB 5,065 million, based on a 20 percent corporate income tax rate.
Financial Position of the Bank and Its Subsidiaries’ Statement of Financial Position
Assets Cash Interbank and money market items - net Investments - net Loans to customers and accrued interest receivables - net Allowance for doubtful accounts and Revaluation allowance for debt restructuring Properties foreclosed - net Land, premises and equipment - net Goodwill and intangible assets - net Other assets Total Assets
(Unit: THB million)
Variance Increase/ Percentage (Decrease)
31 December 2015
31 December 2014
13,337 57,583 171,782 714,124
16,605 65,433 149,609 755,150
(3,268) (7,850) 22,173 (41,025)
(19.68) (12.00) 14.82 (5.43)
(25,680) 4,093 8,005 20,954 16,774 980,972
(27,800) 6,507 7,934 21,368 14,085 1,008,890
2,120 (2,414) 71 (414) 2,689 (27,918)
(7.63) (37.10) 0.89 (1.94) 19.09 (2.77)
Assets As of 31 December 2015, the Bank and its subsidiaries’ total assets totaled THB 980,972 million, a decrease of THB 27,918 million or 2.77 percent from the end of 2014. The key changes are as follows: • Net interbank and money market items were in the amount of THB 57,583 million, a decrease of THB 7,850 million or 12.00 percent from the end of last year, mainly due to liquidity management. • Net investments totaled THB 171,782 million, an increase of THB 22,173 million or 14.82 percent from the end of last year, mainly due to financial assets management based on opportunistic timing in the market. • Loans and accrued interest receivables totaled THB 714,124 million, a decrease of THB 41,025 million or 5.43 percent from the end of last year. This was mainly due to hire purchase loans which decreased by 8.57 percent following a slow automotive vehicles market. The Bank put focus on NPL reduction. The proportion of retail to corporate and SME loans was 68 to 32 percent. • Net property foreclosed totaled THB 4,093 million, a decrease of THB 2,414 million or 37.10 percent from the end of last year. This was mainly due to effective strategy in foreclosed assets management. THANACHART BANK PUBLIC COMPANY LIMITED
025
(Unit: THB million)
Statement of Financial Position
Liabilities and Equity Deposits Interbank and money market items Liability payable on demand Debt issued and borrowing Provisions Insurance contracts liabilities Other liabilities Total liabilities Equity attributable to owner of the Bank Non-controlling interests of the subsidiaries Total Liabilities and Equity
31 December 2015
669,504 85,688 2,202 71,641 3,294 4,793 26,159 863,281 116,226 1,465 980,972
31 December 2014
696,992 80,270 1,655 90,198 2,800 4,698 26,113 902,726 104,977 1,187 1,008,890
Variance Increase/ Percentage (Decrease)
(27,488) 5,418 547 (18,557) 494 95 46 (39,445) 11,249 278 (27,918)
(3.94) 6.75 33.05 (20.57) 17.64 2.02 0.18 (4.37) 10.72 23.42 (2.77)
The Bank and its subsidiaries’ total liabilities as of 31 December 2015 totaled THB 863,281 million, a decrease of THB 39,445 million or 4.37 percent from the end of 2014. The key changes are as follows: • Deposits and debt issued and borrowings totaled THB 741,145 million, a decrease of THB 46,045 million or 5.85 percent from the end of last year. This was due to deposit restructuring and cost of fund management following a strategic liquidity management and redemption of Subordinated Debentures Hybrid Tier 1 in the amount of THB 7,130 million. CASA to total deposits portion was 40.14 percent, an increase from 35.76 percent at the end of last year. Shareholders’ equity as of 31 December 2015 was in the amount of THB 117,691 million, an increase of THB 11,527 million or 10.86 percent from the end of 2014. The details are as follows: • The Bank’s shareholders’ equity was in the amount of THB 116,226 million, an increase of THB 11,249 million or 10.72 percent. This was mainly due to an increase in paid-up ordinary shares in the amount of THB 5,512 million to replace Subordinated Debentures Hybrid Tier 1 and the profitable operating results of the Bank and its subsidiaries in the year of 2015 which totaled THB 10,743 million, partially offset with a dividend payout of THB 3,815 million. • Equity attributable to non-controlling interests was in the amount of THB 1,465 million, an increase of THB 278 million or 23.42 percent, a result of profitable operating results of subsidiaries.
026
ANNUAL REPORT 2015
Asset Quality The asset quality was considered based on consolidated financial statements.
1. Loans 1.1 Net Loans to customers and accrued interest receivables As of 31 December 2015, the Bank and its subsidiaries’ net loan to customers and accrued interest receivables totaled THB 714,124 million, decreased from the previous year by THB 41,025 million or 5.43 percent mainly due to a decrease in hire purchase lending, in line with the contracting hire purchase market. Hire purchase loan outstanding dropped by 8.57 percent, while housing loan increased by 5.34 percent, corporate and commercial loan decreased by 2.70 percent and as a result of higher volume in other types of credit as seen in the ratio of retail to corporate and commercial lending was 68 : 32 as well as NPL management. During the year 2015, the Bank and its subsidiaries had made debt restructuring agreements with 2,266 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 3,901 million. By the end of 2015, 21,321 debtors joined the debt restructuring program, out of the Bank’s total debtors of 1,617,136 of which their principal and accrued interest receivable amounted to THB 16,519 million.
Loan diversification
At the end of 2015, hire purchase loans accounted for 51.18 percent, followed by corporate and commercial loans of 31.81 percent, housing loans of 12.87 percent, and others of 4.14 percent. Structure Loans THB million
1,000,000 800,000 600,000
4.80%
4.70%
4.65%
4.72%
4.58%
4.46%
4.56%
4.34%
4.14%
10.74% 9.91%
10.86% 9.74%
11.20% 10.13%
11.43% 10.02%
11.55% 9.92%
11.73% 9.87%
18.86%
19.35%
19.46%
20.13%
21.01%
20.79%
12.03% 10.17% 20.60%
12.42% 9.99% 21.52%
12.87% 10.40% 21.41%
55.69%
55.35%
54.56%
53.70%
52.94%
53.14%
52.65%
51.74%
51.18%
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
400,000 200,000 0
HP
Corporate
SME
Housing
Other
1.2 Loans to customers’ classified in accordance with the BOT’s regulation of the Bank and its financial institution subsidiary As of 31 December 2015, 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 680,627 million, decreased from the previous year by THB 42,284 million or 5.85 percent. Allowance for doubtful accounts recorded as of 31 December 2015, was of THB 23,832 million and total allowance for doubtful accounts to total loans and accrued interest receivable was 3.50 percent. THANACHART BANK PUBLIC COMPANY LIMITED
027
Borrowers classified by the BOT’s regulations
(Unit: THB million)
Loans and accrued interest receivables(1)
Allowance for doubtful accounts
31 December 2015
31 December 2014
Normal Special mention Substandard Doubtful Doubtful of loss
629,475 30,993 4,039 3,332 12,788
657,326 34,484 5,722 4,124 21,255
8,101 3,525 1,798 1,351 7,555
5,832 4,342 2,392 1,703 11,141
Total
680,627
722,911
22,330
25,410
1,502
294
Total allowance for doubtful accounts
23,832
25,704
3.50
3.56
Additional allowance for doubtful accounts
Ratio of total allowance for doubtful accounts to loans and accrued interest receivables (percentage) Note:
(1)
31 December 2015
31 December 2014
Book value of normal and special mentioned accounts exclude accrued interest receivables.
1.3 Non-performing Loans Despite the sluggish market and economic conditions and rising trend of NPL across the industry, the Bank and its subsidiaries managed to efficiently and systematically reduce NPL, resulting in a continuous reduction of NPL. As of 31 December 2015, NPL, based on the consolidated financial statements, stood at THB 21,681 million, a decrease of THB 11,080 million or 33.82 percent from the end of last year. The NPL ratio of the Bank and its subsidiaries significantly reduced from 4.09 percent at the end of last year to 2.84 percent. For the Bank-only NPL, the amount declined by THB 6,609 million from the end of last year, thus its NPL ratio reduced from 2.97 percent at the end of last year to 2.20 percent. As of 31 December 2015, the coverage ratio of the Bank and its subsidiaries significantly improved from 85.52 percent at the end of December 2014 to 119.42 percent, and there was an excess reserve, according to the BOT’s criteria, of THB 9,641 million, with an increase of the reserve to required reserve ratio from 133.38 percent at the end of December 2014 to 159.33 percent. For the Bank-only coverage ratio, it also improved from 90.64 percent at the end of December 2014 to 127.41 percent, and there was an excess reserve, according to the BOT’s criteria, of THB 8,522 million, with an increase of the reserve to required reserve ratio from 138.16 percent at the end of December 2014 to 171.94 percent.
028
ANNUAL REPORT 2015
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 2015
31 December 2014
31 December 2015
31 December 2014
15,986 20,367 2.20 1.15 171.94 127.41
22,595 20,480 2.97 1.61 138.16 90.64
21,681 25,893 2.84 1.26 159.33 119.42
32,761 28,017 4.09 2.02 133.38 85.52
* Including revaluation allowance for debt restructuring
Consolidated Financial Statement Non-performing Loans (THB million) and NPL Ratio (%) of TBANK and Its Subsidiaries
Coverage Ratio (%) and Reserve to Required Reserve (%) of TBANK and Its Subsidiaries
32,761
154.69%
30,741
144.64%
28,352 4.09%
4Q14
133.38%
25,653 3.95%
1Q15
3.65%
2Q15
159.33%
3.42%
3Q15
Non-performing Loans
135.73% 111.58%
21,681
119.42%
100.12%
2.84%
85.52%
4Q15
4Q14
89.76% 1Q15
2Q15
3Q15
4Q15
Coverage Ratio Reserve to Required Reserve
NPL Ratio
Separate Financial Statement Non-performing Loans (THB million) and NPL Ratio (%) of TBANK 22,595
168.44%
22,043
2.76%
4Q14
1Q15
138.16%
18,293
2.98%
2Q15
Non-performing Loans
171.94%
154.15%
20,404 2.97%
Coverage Ratio (%) and Reserve to Required Reserve (%) of TBANK
141.6% 121.05% 105.92%
2.57%
15,986 2.20%
90.64%
93.33%
3Q15
4Q15
4Q14
1Q15
NPL Ratio
127.41%
2Q15
3Q15
4Q15
Coverage Ratio Reserve to Required Reserve
THANACHART BANK PUBLIC COMPANY LIMITED
029
2. Investments in securities In 2015, the Bank and its subsidiaries had a total amount of investment in securities of THB 171,782 million. A major portion of approximately 75.41 percent was in government and state enterprises securities, followed by 14.48 percent in corporate debt securities. After adding (deducting) allowance for change in values and impairment, net investment increased from 2014 of THB 149,609 million. Details of securities investment were as follows: Securities Investment classified by types of instruments (Unit: THB million)
Type of investment
Debt securities Government and state enterprises 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 purchased • Held-to-maturity General Investment Total debt securities Add (less) Allowance for change in value Allowance for impairment Total investment - net
31 December 2015
Percentage
31 December 2014
Percentage
3,063 117,141 8,448
1.80 68.66 4.95
5,978 67,685 10,983
4.06 45.96 7.46
0 24,492 205
0.00 14.36 0.12
2 43,598 311
0.00 29.60 0.21
0 10,006 0
0.00 5.86 0.00
0 11,766 0
0.00 7.99 0.00
110 3,069
0.06 1.80
198 2,850
0.13 1.94
0 4,079 170,613 1,246 (77)
0.00 2.39 100.00
1 3,895 147,267 2,423 (81)
0.00 2.64 100.00
171,782
149,609
Liquidity As of 31 December 2015, the loans to deposits and borrowings ratio of the Bank and its subsidiaries increased from 95.83 percent at the end of 2014 to 96.27 percent, due to an appropriate liquidity management in coherence with market condition. The Bank maintained its strong liquidity with high proportion of low-risk liquid assets. As of 31 December 2015, the proportion of liquid assets, including cash, interbank and money market items, and short-term investments equaled to 12.79 percent of total assets, increasing from 11.85 percent as at the end of 2014. Due to the Bank’s focus on liquidity management, it followed the Liquidity Coverage Ratio (LCR) Standard pursuant to Basel III criteria, and could achieve the LCR ratio of more than 100 percent, higher than the criteria prescribed by the BOT.
030
ANNUAL REPORT 2015
At the end of 2015, the Bank and its subsidiaries had a net cash flow from financing activities of THB 38,450 million, used in investing activities of THB 22,412 million, and used in operating activities of THB 19,306 million, attributed to a net decrease in cash of THB 3,268 million. At the end of 2015, the Bank had an amount of THB 13,337 million in cash and cash equivalents. Key items consisted of the followings: - Cash flows from operating activities mainly stemmed from the decreases of loans, properties foreclosed, as well as interbank and money market items amounting to THB 25,668 million, THB 8,534 million, and THB 7,846 million respectively, offset by a reduction of THB 27,487 million deposits. - Cash flows used in investing activities were largely on account of more investments in securities of THB 25,470 million. Cash flows increased as a result of cash receipt from dividend gained from investment of THB 3,679 million. - Cash flows used in operating activities were spent on repayment of borrowing of THB 80,140 million and cash received from borrowings was of THB 61,583 million. (Unit: THB million)
Major changes items
2015
2014
Net cash flows from operating activities Net cash flows used in investing activities Net cash flows used in financing activities
38,450 (22,412) (19,306)
16,157 (8,689) (8,803)
Net decrease in cash Cash at beginning of the year
(3,268) 16,605
(1,335) 17,940
Cash at end of the year
13,337
16,605
Relations between sources and uses of funds In 2015, the Bank and its subsidiaries’ sources of fund from deposits and borrowings was of THB 669,504 million and THB 71,641 million, respectively. Use of fund in giving credits was THB 713,466 million and investments before adjustment was of THB 170,613 million. List of sources and uses of major fund by remaining tenor to 31 December 2015, the record date of the financial statement, are as follows: Type
At call THB million
Less than 1 year Percent
Over 1 year
Percent
THB million
THB million
Percent
Sources of fund Deposits 268,869 Borrowing 1,149
36.28 0.16
391,705 28,400
52.85 3.83
8,930 42,092
1.20 5.68
Total sources of fund 270,018
36.43 420,105
56.68
51,022
Unspecified THB million
Total
Percent
THB million
Percent
0 0
0.00 0.00
669,504 71,641
90.33 9.67
6.88
0
0.00
741,145 100.00
Uses of fund Loans(1) Investment
42,142 263
4.77 0.03
115,432 54,075
13.06 555,892 6.12 109,041
62.88 12.33
0 7,234
0.00 0.82
713,466 170,613
Total uses of fund
42,405
4.80 169,507
19.17 664,933
75.21
7,234
0.82
884,079 100.00
Note:
(1)
80.70 19.30
Loan at call includes stop-accrued loans THANACHART BANK PUBLIC COMPANY LIMITED
031
From the breakdown of sources and uses of fund by remaining tenor of the financial instruments as of 31 December 2015, sources of funds consisted of a major portion of deposits reaching maturity in less than 1 year of 52.85 percent and deposits at call of 36.28 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 62.88 percent and loans with remaining tenors of less than 1 year of 17.83 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 31 December 2015, the Bank and its subsidiaries’ total commitments and contingent liabilities totaled THB 81,785 million, decreased by THB 6,442 million (7.30 percent) from THB 88,227 million at the end of December 2014. The rise was largely on account of a decrease in letter of credits and other obligations as shown in the table below.
(Unit: THB million)
31 December 2015
31 December 2014
Variance Increase/ Percentage (Decrease)
Aval to bills Liability under unmatured import bills Letter of credits Other obligations Committed (but not drawn) overdraft Others
1,270 497 2,310
256 509 4,796
1,014 (12) (2,486)
396.09 (2.36) (51.83)
24,506 53,202
27,400 55,266
(2,894) (2,064)
(10.56) (3.73)
Total
81,785
88,227
(6,442)
(7.30)
Capital Adequacy As of 31 December 2015, the Bank’s capital funds totaled THB 122,242 million, of which an amount of THB 82,124 million was Tier I capital and THB 40,118 million was Tier II capital. The capital adequacy ratio was at 17.92 percent, increased from 15.83 percent at end of 2014, comprising of 12.04 percent of Tier I capital and 5.88 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 2015. 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 2015 THB million Percentage
Tier I capital Total capital funds
032
ANNUAL REPORT 2015
82,124 122,242
12.04 17.92
31 December 2014 THB million Percentage
77,510 114,636
10.70 15.83
Thanachart Securities Public Company Limited In 2015, Thanachart Securities had a market share of securities trading at 4.07 percent. Average daily trading volume in 2015 was THB 3,275 million, a decrease from THB 3,745 million in 2014. The average daily trading of the company was in line with the overall stock market condition. The trading volume could be divided into 64.48 percent of retails, 22.45 percent of institutions, and 13.07 percent of foreign investors. Net profit for the year ended 31 December 2015 amounted to THB 488 million, a decrease of THB 73 million or 13.00 percent comparing with the last year. Total income was THB 1,886 million, a decrease of 7.90 percent from the previous year. Main sources of income comprised of THB 1,438 million in brokerage fees, decreased by 8.62 percent and THB 219 million in interest income on margin loans, increased by 17.25 percent. Fees and service income amounted to THB 31 million, a decrease from THB 110 million in the previous year. This was a result of a decrease in financial advisory fees and service. Financial costs and securities expenses were THB 246 million, close to that of the last year while operating expenses were THB 1,061 million, a decrease of 4.08 percent in line with the decrease in total income. As of 31 December 2015, the company maintained its liquidity ratio (Net Liquid Capital Rules: NCR) at 63.59 percent, higher than the minimum requirement regulated by the Securities and Exchange Commission (SEC) of 7.00 percent of general indebtedness and securities pledged.
Thanachart Fund Management Company Limited As of 31 December 2015, Thanachart Fund Management had asset under management of THB 166,354 million, an increase of THB 2,226 million or 1.36 percent from the end of 2014. The increase was mainly from an increase of money market funds by THB 3,387 million or 5.68 percent. Assets under management comprised of 84.72 percent mutual funds, 7.72 percent private funds, and 7.56 percent provident funds. At the end of December 2015, mutual fund business of the company ranked 9 with market share of 3.49 percent. Private fund business ranked 10 with market share of 2.17 percent while provident fund business ranked 13 with market share of 1.42 percent. For operating results of 2015, the company had a net profit of THB 320 million, an increase of THB 30 million or 10.34 percent from that of 2014. This was due to an increase in fund management fees.
Thanachart Insurance Public Company Limited Thanachart Insurance had a net profit of THB 1,117 million in 2015, an increase of THB 70 million or 6.68 percent from 2014. This was due to an increase in insurance premium
income which raised from THB 5,895 million in 2014 to THB 6,088 million in 2015 or 3.27 percent. Most of the increase in insurance premium was from car insurance. At the same time, return on investment increased from THB 414 million in 2014 to THB 541 million in 2015, representing an increase of 30.67 percent. The increase was from investments in government bonds, debentures, and equity securities.
TS Asset Management Company Limited In 2015, TS AMC has been restructuring debts in accordance with the policy and business plan of Thanachart Group continuously. As a result, on 31 December 2015, the company’s the total assets were THB 3,864 million, a decrease of THB 3,785 million or 49.48 percent from 2014. This was due to the effective management of the company’s non-performing loans and assets for sale. For the operating result of 2015, the company had a net loss of THB 18 million. Net interest income was THB 525 million; gains on property foreclosed was THB 173 million; non-interest income was THB 45 million; operating expenses were THB 170 million; provision expenses provided for loans, assets for sale, and losses from debts sale amounted to THB 563 million. When comparing operating results of 2014 which the company had a net profit of THB 320 million, net profit of the company in 2015 decreased by THB 338 million. However, in 2015, the company has restructured 68 loan accounts and had income from debt restructuring of THB 514 million.
Ratchthani Leasing Public Company Limited As of 31 December 2015, Ratchthani Leasing still had a strong financial structure by having total assets of THB 29,505 million, an increase of THB 1,640 million or 5.89 percent from the end of last year. Moreover, it had hire purchase loans and financial leases of THB 28,920 million, an increase of THB 1,895 million or 7.01 percent. Hire purchase loans and financial leases accounted from 98.02 percent of the total assets. Total liabilities and shareholders’ equity were THB 24,940 million and THB 4,564 million, respectively. The company’s net profit for the year 2015 was THB 749 million, an increase of THB 45 million or 6.33 percent from the previous year. Total income in 2015 amounted to THB 2,782 million, an increase of THB 28 million or 1.02 percent, due to its ability to continue maintaining its market share. Interest expenses were THB 1,016 million, a decrease from the previous year of THB 56 million or 5.18 percent, which was a result of acquiring lower costs of borrowings to support the loan growth during 2015. Provision expenses amounted to THB 412 million, a decrease of THB 20 million or 4.72 percent as a result of the overall economic slowdown which led to delayed payments of some customers.
THANACHART BANK PUBLIC COMPANY LIMITED
033
NATURE OF BUSINESS OPERATIONS
An Overview of the Business Operation Thanachart Bank Company Limited (“TBANK” or “the Bank”) commenced its operation on 22 April 2002 with Thanachart Capital Public Company Limited (“TCAP”) as the major shareholder. On 21 December 2006, the Bank of Thailand (“BOT”) granted approval for TBANK and TCAP to form financial business group in consolidation and having TCAP as a parent company. In 2007, the Bank of Nova Scotia (“Scotiabank”) became our strategic partner by holding 24.98 percent of TBANK shares, which later increased to 48.99 percent. The current major shareholders are TCAP and Scotiabank, and in 2011, the Bank merged with Siam City Bank Public Company Limited (“SCIB”). TBANK business structure, TCAP as a parent company, consists of two groups: 1) Financial Group and 2) Supporting Group, which serves a full range of financial services through TBANK branch network and service outlet. It is strongly committed to the good corporate governance principles.
Financial Group 1. Thanachart Capital Public Company Limited (“TCAP”) operates as the holding company being a parent company of Thanachart Financial Conglomerate. 2. Thanachart Bank Public Company Limited (“TBANK”) operates commercial banking business and other businesses permitted by the BOT, such as life and non-life insurance broker, a provider of services relating to unit trust and securities such as securities brokerage, proprietary trading, unit trust underwriting, mutual fund trustee service, provident fund custodian service, debt instrument underwriting and trading, securities registrar, and gold derivative trading. 3. Thanachart Securities Public Company Limited (“TNS”) was permitted by the Ministry of Finance and the Office of the Securities and Exchange Commission of Thailand (“SEC”) to operate the following activities: 3.1 TNS was granted a Full-Service License to operate securities businesses and related businesses such as securities brokerage (domestically and internationally), securities underwriting, investment advisory service, securities borrowing and lending, financial advisory service, unit trust underwriting and repurchasing, and securities registrar. 3.2 TNS was granted a Derivative Business Sor 1 License to engage in a full range of derivative businesses and related businesses such as derivative brokerage and proprietary trading. 4. Thanachart Fund Management Company Limited (“TFUND”), which is a joint venture between TBANK (holding 75 percent of the total shares) and the Government Saving Bank (holding 25 percent shares), operates a full range of investment management services in mutual fund management business, private fund and provident fund management business, and investment advisory business. 5. Thanachart Insurance Public Company Limited (“TNI”) operates a non-life insurance business and a disaster insurance business such as fire insurances, automobile insurances, marine and transportation insurances miscellaneous insurance, and investment business. 6. Siam City Life Assurance Public Company Limited (“SCILIFE”) operates a life insurance business focusing on middle and higher income customers who are interested in saving and health products. The Company’s sales channel includes telesales 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.
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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 2016, 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 the Bank 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. 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 2016, 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 customers 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. THANACHART BANK PUBLIC COMPANY LIMITED
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In addition, Thanachart Group came up with the CEO’s Focus Agenda comprising 4 items as a tool to successfully achieve its goal efficiently and systematically. The CEO’s Focus Agenda is as follows:
Shareholding Structure of Thanachart Group
1. Financial Targets: Meet or exceed our key financial targets of Net Income, Loan, and NIR growth and Cost to Income Ratio. 2. Customers: 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.
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:
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.
Policy on Division of Operational Functions among Member Companies of Thanachart Group
Business policies TCAP and the Bank 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 the Bank are assigned to be the members of the Board of Directors of the subsidiaries. The arrangement not only enables TCAP and the Bank 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 Bank’s Board of Directors.
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
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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 the Bank 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.
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
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 the Bank 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 the Bank services abroad through the network of Scotiabank. Moreover, it sends representatives to participate in the management in the director and executive level.
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Chart of Shareholding Structure of Thanachart Group As of 31 December 2015 Thanachart Capital Public Company Limited Scotia Netherlands Holdings B.V.
Commercial Banking Business
48.99%
50.96%
Insurance Business
Asset Management Business
51.00% 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 Service Company Limited
75.00% Thanachart Fund Management Company Limited
100.00% Thanachart Broker Company Limited
100.00% Insurance Business
Thanachart Insurance Public Company Limited
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
Notes: 1. The above shareholdings include shares held by the related parties. 2. On 9 May 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 the Bank and its subsidiaries Income structures of the Bank and its subsidiaries based on the consolidated financial statements as of 31 December 2015, 2014, and 2013 are as follows: Table of income structures of the Bank and its subsidiaries As of 31 December 2015 2014 THB THB Million Percent Million Percent
2013 THB Million
Percent
Interest Income Interbank and money market items Investment for trading Investment for debts securities Loans Hire Purchase and Financial Leases
1,580 73 3,761 19,474 23,329
1,894 238 4,106 20,320 25,887
4.82 1,870 0.60 457 10.45 3,861 51.69 21,239 65.85 26,452
3.65 0.89 7.55 41.50 51.68
Total Interest Income Interest Expenses
48,217 120.90 52,445 20,536 51.49 24,884
133.41 53,879 63.30 27,290
105.27 53.32
Net Interest Income
27,681
69.41 27,561
70.11 26,589
51.95
5,475 658 1,533
13.73 1.65 3.84
5,927 859 769
15.08 6,115 2.18 531 1.96 13,081
11.95 1.04 25.55
169
0.42
152
0.38
415
0.81
2,552 295 1,518
6.40 0.74 3.81
2,091 305 1,647
5.32 0.78 4.19
2,282 562 1,607
4.46 1.10 3.14
Non-interest Income Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments Shares of Profit from Investments in Associated Companies Accounted for Equity Method Insurance Premium/Life Insurance Premium Income - Net Dividend Income Other Income
3.96 0.18 9.43 48.83 58.50
Total Non-interest Income
12,200
30.59 11,750
29.89 24,593
48.05
Net Operating Income
39,881 100.00 39,311
100.00 51,182
100.00
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Business Operations of Each Business Group Commercial Banking Business The Bank 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 fund, securities brokerage, securities trading, debt instrument trading, securities registrar, and a selling agent for gold derivatives. As of 31 December 2015, the Bank had a total of 614 branches, 49 foreign exchange booths (25 in-branches, and 24 stand-alone), 2,128 ATMs (Automatic Teller Machines), 2 Recycling Machines, 42 CDMs (Cash Deposit Machine), and 120 PUMs (Passbook Update Machine).
Group of Products and Services The Bank improves and develops 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 six 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 2015, the Bank continued to focus on expanding small and medium sized customer base providing diverse products through convenient, fast, and efficient sale channels. This year, the Bank emphasizes the importance of transaction account with an aim to increase number of customers who use the Bank as their main bank, while remains determined to develop new products continuously.
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In the beginning of this year, the Bank introduced a current account that offers interest, which are the Premium Current Plus and the Freever-more Current Accounts, to serve to needs of juristic entities of medium-size business as well as individual owners of small business. In addition, in July 2015, the Bank launched a new product called “Freever-lite Savings Account�. The product offers convenience to customers allowing them to make a variety of transactions via branches, ATMs, and internet banking (Thanachart i-Net or Thanachart iBiz) with privilege of fee waiving for unlimited times. In addition, during the second half of the year, the Bank introduced a fixed deposit, which is Dok Sadung with a term of 5 months or 10 months to expand its retail customer base. 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, the Bank 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 insurance of debentures for the purposes of funds mobilization and listing on the Stock Exchange of Thailand as well as management tools, particularly Interest Rate SWAP (IRS) such as Forward Contract and Foreign currency SWAP, the Bank also provides cash management facility to these customers through a range of products that meet their individual requirements. 2) Commercial Banking: For Commercial Banking, the Bank 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, overdraft (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, the Bank offers cash management service as well.
3) SMEs Group is a product for small and medium-sized enterprises with the maximum limit of THB 10 million. SMEs Group focuses on fast approval. Products are mainly offered through the Bank’s channels. Competitive Strategies The Bank concentrates on expanding its business to small enterprises with maximum limit of THB 10 million because this customer base requires special financial support from the Bank. At present, the Bank has “SMEs 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, the Bank 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, the Bank 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 The Bank 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 The Bank concentrates on providing loan services to its long lasting business partners in automobile hire purchase sector. Database has been used to develop the tools for considering and screening credit extension and ensuring appropriate risk control (credit scoring). Emphasis is also placed on development of products and processes
that suit the respective groups of customers and their credit access channels, for example, customers via automobile manufacturers, new and used automobile customers via automobile hire purchase businesses, or used automobile business operators via automobile auction companies. For the fleet finance and financial lease sector, the Bank focuses on providing services through its long lasting high potential and financially sound customer, as well as developing information system to expand the capabilities of its sale channels countrywide. 2.3 Trade Finance Characteristics The Bank 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. The Bank took into consideration the customers’ needs and the promotion of business transactions as the main concerns. For the corporate clients, the Bank has the target to expand customer base to large scale businesses and SMEs. The Bank provides trade finance credit limit, liquidity supports, and specialist advices on trade finance documents for customers. The Bank 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 the Bank’s products and services. 2.4 Automobile Hire Purchase Loans Characteristics The Bank offers three types of automotive hire purchase loans. The new car and used car loans are offered through dealers and the loan of sale and lease back or “Thanachart’s Cash Your Car” is offered through branch channel. Cash Your Car product can serve customers’ need THANACHART BANK PUBLIC COMPANY LIMITED
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for cash with higher limit and longer installment period than the normal personal loans. The product also allows customers to choose the installment period and amount to suit their debt service ability. Competitive Strategies As the domestic automotive sale in the first half of 2015 slumped by 16 percent intensifying the price competition among the hire purchase players, the Bank adjusted its marketing strategy forging cooperation with car manufacturers of various brands to launch sale promotion campaigns. This resulted in a rise in the Bank’s new car market share. As for the used car lending, the Bank improved its underwriting policy and process and enhanced efficiency of its debt quality control. The Bank also continues to focus on offering Cash Your Car to the existing customers via over 600 branches nation-wide. Furthermore, a “Cash back for disciplined installment payment” campaign is launched aiming to provide advices to customers on borrowing needs as well as to offer benefit to customers who pay on time throughout the installment period that they will regain an entire amount of the interest paid during the last year of installment period. 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 The Bank focuses on fast, integrated services that cover every need of the customer. Marketing promotions are conducted based on the situation and competition with Retail and Small Business 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, the Bank 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.
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2.6 Unsecured Personal Loan Characteristics The Bank 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. The Bank’s personal loans are serves under the product names as follows: 1) Credit Card, this product provides the line of credit to purchase products/services as cash or allows cardholders to withdraw cash. The Bank collaborates with VISA and MasterCard to provide credit card in multiple types suitable to customers’ qualifications and needs under the following names: - Thanachart Drive Card: for customers who want a credit card with a key feature of cash back up to 3.5 percent for every payment made at any gas station. - Thanachart MAX Platinum Card: for customers who are looking for privilege and benefits of a luxurious and convenient lifestyle. Customers also receive cash back up to 0.8 percent for every spending made via MAX Platinum card. - Thanachart LIVE Platinum Card: for new generation customers who are interested in key features of installment payment and lower interest rate (15 percent) comparing to other credit cards, while still receive privilege of a platinum card holder. 2) FLASH Plus is a revolving personal loan offered in a form of card product under the name “FLASH Plus”. The product highlights convenient and fast cash withdrawal, transfer, and payment by installment accommodating customers’ need of the services any time with the following features: 2.1 Sabai Cash: cash transferred to the customer’s account on the card, with a maximum installment period up to 60 months. 2.2 Cash Transfer: cash transferred to the customer’s account on call, with a minimum repayment of 3 percent for each bill cycle. 2.3 Cash Advance: cash withdrawal via ATMs worldwide, 24 hours, and free of charge, with a minimum repayment of 3 percent for each bill cycle. 2.4 Smile Plan: customers can make installment payment for goods and services purchased at participating stores, with a maximum installment period up to 60 months.
3) 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. 4) Wish-List Loan is a multi-purposed loans offered on top to hire purchase customers with good payment record. The customers can repay equally by monthly installments up to a maximum period of 60 months for an amount of not exceeding THB 1 million. 5) Welfare Loan, the Bank provides this loan specifically to customers whose companies have a campaign with the Bank. 6) Scholar Loan is a loan for payment of tuition or any expenses for obtaining a master’s or doctorate degree. 7) Pension Secured Loan, this is a special multi-purpose loan for government employees who receive monthly pension payment from the Comptroller General’s Department. 8) Unsecured FLASH O/D is an overdraft amount with no collateral. The Bank provides the service to important customers with the investment purpose. 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 the Bank 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. Group 3 Electronic Products and Services Characteristics The Bank 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, the Bank 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 / Debit Sure Card Competitive Strategies The Bank aims to accommodate needs of both small and large-scale companies as well as individual customers who demand convenience and speed for transactions. The strategy focuses on cross-selling and up-selling to individual customers via branches with a plan to increase channels of services to attract more customers with emphasis on easy access, ease of use, convenience and security, while the money can be received on the same day the transfer order is made. Moreover, customers can make inquiries at branches or through call center (1770). Services offered are 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. deposits, withdrawn and money transfer via SMS to the customers’ mobile phone number registered with the Bank. 3. Exclusive cash-back debit cards offer cash-back directly transferred to customers’ accounts for every spending. The EMV chip technology used for every card also provides the card holders with an ultimate protection against data stealing. In addition, the Bank introduced the Debit Sure Card under the slogan “No worries about injuries, Debit Sure pays”, which apart from the accidents up to THB 100,000 for 24 hours. Group 4 Other Products 4.1 Foreign Exchange Service Characteristics The Bank’s services include foreign exchange services in forms of: bank notes and traveler’s cheques, money changers, forward foreign exchange for international THANACHART BANK PUBLIC COMPANY LIMITED
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business transaction, inward and outward foreign currency transfer for goods and services, transfer for personal accounts, account opening for Foreign Currency Deposit (FCD), etc. Competitive Strategies The Bank has expanded its branch network and currency exchange booths to serve all business sectors and tourists nationwide. The Bank 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, the Bank’s custodian and trustee services offer supplementary products that enhance financial and investment management flexibilities to investment funds, such as cash management products. The Bank 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 2015, the growth of the Thai economy was sluggish in line with the slowdown of the global economy. The Thai economy grew 2.8 percent, thanks to the coherence between the BOT’s monetary policy, aiming at maintaining price stability which helped support appropriate expansion of the economy, and the Finance Ministry’s fiscal policy through disbursements and public sector investments, which served as the key mechanism for injecting cash into the economy. In the past year, the public sector came up with stimulus measures for boosting investments in the economic system at the grassroots, both village and sub-district
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levels. Other highlights were credit assistance scheme and tax measures to support SMEs, tax measures to support new startups and ventures in order to stimulate domestic investments and employment, as well as communications and transportation infrastructure projects to support economic expansion and linkages with ASEAN’s communications network. On the other hand, the private sector lost confidence and postponed their investments, as the public sector’s disbursements were slow and investments in infrastructure projects had to be postponed due to a number of factors including unpreparedness and problems with procurement process. However, the key factors that drove economic growth in 2015 were accelerated disbursements of public expenditure and strong support from the tourism sector which gradually improved. The headline inflation in 2015 stood at minus 0.9 percent, down when compared with 1.89 percent in 2014, mainly due to a marked fall in energy prices, demand-side pressure and a deeper slump in global oil prices which put further downward pressure on domestic demand continuously. However, the external factors including changes in production structures through development of new oil drilling technologies, shale oil discovery, the potential position of OPEC members to maintain oil production levels as well as the lifting of the sanctions against Iran by the United States and the European Union in line with the nuclear deal will have significant impacts on energy supply in 2016. The oil market is expected to drown in oversupply. On the other hand, the internal factors including the declining fuel tariff (Ft) charges as a result of falling natural gas prices across the world and the public sector’s measures to reduce people’s cost of living will cause the inflation rate to fall continuously. Overall, the inflation rate throughout the year will remain low, being still within the relaxing framework based on the BOT’s target for this year, in which the medium-term inflation target was at 2.5 percent, with a range of 1.5 percentage points either way. In this connection, at the meetings of the BOT’s monetary policy committee since the beginning of the year 2015, the committee adopted resolutions to cut its policy rate twice in the first and the second quarters. The cuts followed the decline of the global economy and the monetary policies adopted by central banks of major industrial economies. Consequently, the policy rate was reduced from 2.00 percent per annum to 1.75 percent per annum
at its meeting on 11 March 2015 and was further cut to 1.50 percent per annum at its meeting on 29 April 2015. Most recently at its meeting on 3 February 2016, the committee unanimously adopted a resolution maintaining the policy rate at 1.50 percent per annum. In light of Thai economic condition during the last two quarters of the year 2015, the growth remained sluggish and the whole-year recovery was rather fragile. However, the main factors that drove economic growth included state budget disbursements and continuous public investment in small construction projects. Household spending on durable goods still recovered slowly and was limited to necessity goods, partly due to low income of the agricultural sector, particularly rubber and also rice production as a result of drought, as well as the high level of household debt. However, the consumption was supported by income outside the agricultural sector, which remained stable while the inflation rate and the crude oil prices continued to stay at the low levels. The tourism sector slowed down, due to the bombings in Bangkok during the period from 17-18 August 2015, but recovered in the fourth quarter. Overall for the whole year, travelers from China and Malaysia accounted for as high as 26.55 percent and 11.46 percent of total foreign visitors to Thailand respectively. Meanwhile, the private consumption expanded especially in necessity goods and services. On the other hand, usage of the Internet for access to information was on a rising trend while the sales of commercial vehicles grew before the anticipated introduction of a new excise tax on vehicles in 2016. Private investment grew slowly only in some businesses. On production side, this sector faced with massive excess capacity and the investment in machinery was rather subdued. Export sector contracted as a result of declining prices and softening demand of trading partners, especially China and Asia. However, the number of risk factors, both external and internal, increased. The external factors included China’s slowing consumption, mainly due to the country’s economic restructuring as well as its revolution in monetary and fiscal policies, which affected global production and export sectors. Other important external factors were the cut of the European Union’s generalized scheme of preferences (GSP) and the revision of country sovereign ranking as Thailand was involved in illegal fishing according to the EU regulation. On the other hand, the internal factors included declining purchasing power and investment slowdown as well as drought which hard hit agricultural products and agriculture.
In view of the economic uncertainties, the Bank worked out a plan for closely monitoring and reviewing the economic and industrial landscape, especially changes in prices of commodities, gold, crude oil, and agricultural products, changes in consumer behavior, trend growth of G20 economies, the contracting export sector as a result of the economic slowdown of China which was Thailand’s main trading partner, as well as geopolitical risks which affected confidence and consumption of Eurozone countries through the above risk factors. These factors had a direct impact on money supply in the market, liquidity of the commercial banking industry, exchange rate volatility, and the policy rate adjustment by the BOT. In 2016, the Thai economy is expected to recover. In this connection, the BOT forecasts that the economy will grow about 3.5 percent, thanks to measures on accelerated state budget disbursements and public sector investments as well as stimulus measures to be additionally implemented. The economic expansion is expected to be close to the previous year with domestic demand being a key supportive factor. On the other hand, the external factors still pose a risk. These include the economic recovery of the country’s main trading partners, the changing structure of world trade, prices of commodities which remain low, and the directions of the major industrialized countries’ monetary policies which will have impact on capital flows and exchange rate. The Commerce Ministry forecasts that the inflation will be 1.00-2.00 percent. The forecast is based on the assumption that the economy recovers and global crude oil prices rise gradually. The domestic factors that drive economic growth in 2016 will be private consumption and investment as well as public sector investment which will continue boosting the economic growth from the previous year. As well, the tourism sector is expected to grow further, thanks to visitors from China, while the export of capital goods is expected to be stable. However, the Commerce Ministry has adjusted its plan to boost export in 2016 by 5 percent, taking into account the income from six service businesses including health services, entertainment and content, logistics, education, hospitality and professional services, in consideration of risk factors arising from the global export trends.
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In monitoring the rising business opportunities in 2016, the official establishment of the ASEAN Economic Community (AEC) gives rise to free flows of capital and labor. In addition, border trade with neighboring countries including Cambodia, Laos, Myanmar and Vietnam (CLMV) in particular will grow continuously. The enhanced political stability in the region will also boost this border trade. Moreover, the Government continues its policy on making Thailand as logistics hub for ASEAN and the implementation of Special Economic Zones at six locations along the border, including Mukdahan Province, Tak Province, Trat Province, Songkhla Province, Sa Kaeo Province and Nong Khai Province, by offering trade and investment incentives to build investor confidence and investments in those provinces. As a result, the neighboring countries represent strong potential markets for the country’s export sector. Importantly, the proposed road and railroad network project namely the East-West Economic Corridor has become more concrete, giving rise to new business opportunities including access to and introduction of financial services to consumers and entrepreneurs at locations where cross-border trade is promoted. The consumers and entrepreneurs could be provided with support in the areas of capital requirements, services and financial advisory services. In addition, Thailand’s economic structure is being transformed into a digital economy. The transformation arises from changes in communication behavior, consumption of goods and services, as well as increased usage of Internet to access to information. The country’s recent fourth-generation (4G) spectrum auction organized in the latter part of the year 2015 provides small, medium-sized and large businesses with opportunities to expand their distribution channels through the internet and mobile phones. The recent wave of the financial innovation related to financial technology (also known as Fin Tech) is particularly notable. It uses internet technology to attract consumers into the financial market or financial services in an efficient manner. The technology supports developments of new business models as well as developments of financial products related to investment, fund mobilization and payments. The innovation which represents both opportunities and threats to the financial sector needs to be monitored closely.
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Industry and Competition Outlook In view of the financial performance of the commercial banking industry1 in 2015, it was found that the net profit of commercial banks amounted to THB 192,325 million, down 14.09 percent from the year 2014. Net profit of the commercial banks registered in Thailand declined by 12.46 percent while net profit of the foreign banks’ branch offices declined by 33.0 percent. This reflected the ability of the commercial banking group in dealing with changes caused by economic turbulence and political volatility. In 2015, one of key competitive strategies adopted by large commercial banks registered in Thailand was to place emphasis on becoming a universal bank. Other key strategies were to focus on customer centricity and to become a leader in digital banking by using modern technology to reach customers through internet banking and mobile banking so that their services were made available at any place at any time for any financial need. Emphasis was also placed on expansion of branches and currency exchange booths which were well prepared to give services to members of the general public and business persons in the response to the establishment of the ASEAN Economic Community (AEC). These new branches and currency exchange booths would be located in all target areas, particularly those places which had strong potential for cross-border trade. In addition, thanks to the state’s stimulus measures to boost private sector investments, special attention should be paid to border Special Economic Zones as well as cluster-based special economic zones. There was the establishment of the banks’ full service branches or branch offices in CLMV countries which included Cambodia, Laos, Myanmar and Vietnam. Another key strategy was to support customers who expanded their businesses and investments in the ASEAN Economic Community Plus Three (AEC+3), which included China, Japan and South Korea as well. The total loans of the commercial banking system as at the end of 2015 amounted to THB 13,218,274 million, up 2.68 percent or about THB 345,411 million from the year 2014. In this connection, the loans of the commercial banks registered in Thailand increased by 5.22 percent while the loans of foreign banks’ branch offices decreased by 24.33 percent. However, the overall loans grew slightly,
The commercial banking system means 30 banks which incloude commercial banks registered banks registered in Thailand and foreign banks’ branch offices.
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mainly due to the slow economic recovery and household debt which remained high. Commercial banks expanded the customer base related to commercial loans, SME loans and retail loans in a cautious manner. Strict standards were used in approving loans, particularly home mortgage and auto hire purchase loans. This reflected the fact that financial institutions were always careful in giving loans. TBANK Accomplishment in 2015 • The Bank recognized the importance of restructuring its loan portfolio in order to strike a right balance by adopting a strategy aiming at expanding loans other than auto hire purchase loans through offering of a diverse array of loan products including loans for large corporations, SME loans, home mortgage and retail loans. In particular, the Bank adjusted its strategy to focus on loans that generate a high yield by continuously developing new SME loans, credit card loans and consumer loans. In this connection, in 2015, the Bank was successful in establishing relationships with its customers. As a result, the cross-sell ratio as well as the number of customers, both corporate and individual, using mainly services of the Bank, increased from the prior-year period. The Bank placed strong emphasis on offering and developing its products together with those of its subsidiaries. Customers were introduced to the Bank’s innovative new products together with the products of its subsidiaries, such as life insurance, non-life insurance, securities products, and unit trusts, among others. As regards life insurance, the Bank entered into a business alliance with Prudential Life Assurance (Thailand) Public Company Limited. The alliance brought about innovative new products that effectively satisfied diverse customer needs. Customers also felt assured that they received the products that fully answered their needs. Importantly, the products were developed by the world-class leading financial institution. • The Bank developed its infrastructure systems continuously, ensuring that its operations were more efficient. These included, among others, streamlining work processes so that they were more efficient and more accurate, debt collection systems used for controlling non-performing loans and making loan loss provision, customer relationship management systems used as a tool for supporting staff not only in looking after customers, both corporate and individual, but also in offering products and services that matched
the actual customer needs as much as possible. Taking advantage of business alliance between Thanachart Group and Scotiabank, Thanachart Group made use of Scotiabank’s expertise and innovations in modernizing its work processes on a continuous basis. These included, among others, Loan Origination System which was a modern loan approval system. The Bank made use of the system in raising the quality of approving all types of the Bank’s retail loans such as home mortgage, consumer loans, credit card loans and debit cards. The system brought about accuracy and efficiency and helped reduce the risk of non-performing loans by using reliable scoring information, apart from giving quick responses and providing customers with satisfaction. The system also enhanced efficiency in customer relationship management, which in turn led to customer satisfaction and good experience as well as increase in the purchase of the products and higher income for the Bank. • The Bank fully recognized that its human resources were the organization’s most important assets. In the past year, the Bank initiated a staff segmentation program for all its work units. The program enabled executives to truly understand capabilities, weaknesses and strengths of their own staff. The knowledge and the acquired information would be used for designing appropriate training courses for enhancing knowledge and skills of the staff. These included, among others, coaching through various training activities and leadership development. The objective was to ensure that the staff acquired knowledge and skills in carrying out their duties and that they possessed appropriate leadership. Moreover, in enhancing their expertise, staffs were subject to job rotation, the purpose of which was to streamline operations and enhance efficiency. • The Bank aims to become a leading business organization which is successful in creating long-term value for its shareholders and stakeholders. In order to achieve the aim, the Bank is determined to operate its business by adhering to the principles of good corporate governance and by paying close attention to the code of business ethics. In this connection, the Bank has been publicizing its code of ethical policy through e-learning systems. The policy serves as a behavior framework that reflects the organization’s values. The key objective is not only to enable staff at all levels to develop themselves and to become well aware of their own responsibilities in performing their duties in
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a manner that shows high moral and ethical standards, but also to enable directors, executives and staff of the Bank to properly put the framework into practice by adhering to virtue, honesty, integrity and by complying with all the laws concerned. The Bank is confident that good corporate governance and the code of business ethics are key factors that will help the Bank reach its highest business potential possible, which will in turn earn the confidence of society and reflect the Bank’s positive image. • The Bank strongly urged their executives in all areas to recognize the importance of internal communication through various channels, ensuring that staff at all levels understand the targets which the Bank is determined to go for and that the understanding is transformed into delivery of customer services in a professional manner. In this connection, in 2015 there were communications to persons or entities outside the Bank, aiming at creating memories and impressions via various media such as social media in order to access to current lifestyles of customers through the implementation of corporate social responsibility (CSR) activities in a continuous manner. In 2015, the Bank as well as Thanachart Group were successful not only in developing products and achieving technological developments but also in implementing activities related to corporate governance and the code of business ethics, as witnessed and well recognized by customers, external organizations and members of the general public, in the form of various awards received in 2015.
Competitive advantage and competitors The Bank has the competency and capability to sustain its long-term growth as compared with other commercial banks. In 2015, the Bank’s total assets were THB 980,972 million, equivalent to 5.67 percent of the commercial banking industry. Total loans were THB 713,466 million, equivalent to 5.40 percent of the commercial banking industry. The total loans of the Bank decreased slightly from the previous year due to the hire purchase restructuring. Hire purchase saw a decline of 9.7 percent while other loan types grew gradually. Housing loans expanded by 5.34 percent. The growth would be beneficial for loan diversification and balance,
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thus strengthening the Bank’s loan portfolios in the long run. Moreover, in 2015, the Bank’s deposit and borrowing portfolio ended at THB 741,145 million, due to the expansion in the retail deposit customer base. The Bank’s deposit accounted for 5.44 percent of the locally registered commercial banks. Moreover, the Bank still paid close attention to debt management continuously, as witnessed by the decrease of non-performing loans from 4.09 percent to 2.84 percent. At the same time, the coverage ratio increased from 84.86 percent to 118.44 percent at the end of 2015. In addition, the Bank made preparations for the implementation of Liquidity Coverage Ratio (LCR) standard, and complying with Basel III capital requirements. The Bank’s Capital Adequacy Ratio (CAR) rose to 17.92 percent, not only ranking 2nd among the commercial banking industry and higher than the industry’s average of 17.28 percent, but also well above the minimum requirement of 8.50 percent imposed by the BOT. This reflected Thanachart Bank’s potential that it was well prepared and strong enough for operation and business expansion. The Bank intended to provide excellent financial products and services to customers, and also provide convenience and easy access to financial products and services through various service channels. The Bank had a total of 614 branches, ranked number six of the industry, accounted for 8.70 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 Mobile Banking which will be ready for service in the third quarter of 2016, 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 of business, brokerage business and investment banking business. As of 31 December 2015, the company had a total of 40 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). 8. Structure Notes are issued and sold for customers in order to increase an opportunity of investment and spread of risks. Competition and Market Outlook 1. In 2015, the state of economics and politics, both domestic and overseas, was a challenging year for the overall market in terms of both sales volumes and the SET Index. There are three external factors that have material impacts on the SET. They are as follows: 1) The U.S. Federal Reserve Bank (Fed) sent out a signal that the process of raising interest rates was likely to proceed gradually, thanks to an index of key U.S. economic indicators which advanced by more than expected and also to its strengthening labor market. 2) Concern about the overall economy of China which is Thailand’s key trading partner. Flagging demand dragged China’s manufacturing sector into its sharpest contraction in 6-1/2 years. In response to the domestic economic troubles, China announced the implementation of quantitative easing measures in a continuous manner, which included, among others, cuts of its policy interest rate and reduction in banks’ reserve-requirement ratios. Most recently, China disclosed that the overall profit of companies listed on its stock market in 2015 fell by 9.5 percent when compared with the same period in 2014. 3) The EU economy gradually recovers. In this connection, the European Union has shown that, based on the economic indicators of the eurozone in 2015, the necessity to introduce more QE measures is less pressing. The above factors as well as the one related energy prices have significant impacts on Thailand’s imports and exports. In particular, the country’s export sector in November 2015 THANACHART BANK PUBLIC COMPANY LIMITED
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fell by 6.6 percent after China and ASEAN were hit by economic downturn. The prices of products for export, which were related to oil prices also fell. As well, the import value contracted by 8.5 percent, mainly due to falling energy prices. Overall, since the beginning of 2015, there were signals showing that the Thai economy gradually recovered, thanks to the tourism sector that helped drive economic growth, improved state disbursements of public sector investment expenditure as well as private consumption after the government’s announcement that the car tax would be raised in 2016. According to the information disclosed by the BOT through its Notification 63/2015, the country’s tourism recovered in a continuous manner after the bomb blasts in Bangkok. The central bank indicated that the number of foreign travelers visiting Thailand was continuously on the rise. As regards public sector disbursements and private consumption, the state disbursements increased by 17 percent when compared with the year 2014, mainly due to investment in transportation and irrigation. There was also a positive factor contributed by the private sector, as witnessed by the increase in the income outside farm sector, which had a continuous positive impact on purchasing power of household. As a bird eye’s view of the country’s domestic economy, the Stock Exchange of Thailand is faced with a pressing challenge as a result of slower economic recovery than expected. Investors keep monitoring the various stimulus measures which include stimulus package aiming at encouraging spending to increase domestic consumption and investment as well as restoring investor confidence. According to the SET, the funds mobilized by companies listed on the SET during the period from January 2015 to September 2015 (end of the 3rd quarter) amounted to THB 214,069 million, up 22.90 percent when compared to the same period in 2014. Most of the funds were mobilized in the primary market. As of the end of September 2015, the market capitalization of the SET amounted to 12.76 trillion baht, down 7.90 percent from the end of 2014. On the other hand, the market capitalization on the Market for Alternative Investment (MAI) amounted to THB 346,316 million, down 9.60 percent from the end of 2014.
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TNS’ share accounted for 4.07 percent of the market, ranking 7th among 36 securities company. In 2015, the competition became more intensified with retail investors as main target of securities companies which were newly established in 2014. These companies included AEC Securities Public Company Limited (AEC), Apple Wealth Securities Company Limited (Apple Wealth) and Land and Houses Securities Public Company Limited (LHSEC). They had been actively vying for more customers, as witnessed by an increasingly larger market share won by them. As well, there were two more securities companies which were newly established in 2015, namely ASL Securities Company Limited (ASL) and SBI Thai Online Securities Company Limited (SBITO). Noteworthy was the fact that, in the securities brokerage industry, investment consultants constantly changed their employers. In addition, competition placed emphasis on new innovations which were offered to investors. These included, among others, software package which provided customers with information related to both fundamental and technical factors as well as introduction of new trading systems such as Algo Trading and other trading platforms which gave additional channels to investors for placing their orders. Apart from internal competition among Thai securities brokerage houses, the industry faced stiff foreign competition with foreign securities firms snatching a larger market share. There was also more cooperation in various forms between banks and securities brokerage houses which were the banks’ subsidiaries. 2. There are a total of 42 members in the Thailand Futures Exchange (TFEX). In 2015, total trading volume was 48.2 million contracts, or a daily average of 199,749 contracts. TNS’ market share was 2.80 percent, or the 13th 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 the Bank’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 As of 31 December 2015, there were a total of 20 fund management companies, with total assets under management of THB 166,354 million (excluding Vayupak Fund, Foreign Funds, Property Fund for Resolving Financial Institution Problem and Property and Loan Fund), an increase of 11.3 percent from 2014. During 2015, there were 646 newly issued funds, accounting for THB 1,169,798 million of net assets. Among the newly issued funds, 428 were debt securities with both domestic and foreign investment, which accounted for THB 1,052,695 million of net assets or 89.99 percent of total net assets of the newly issued funds during 2015. Newly issued funds by the TFUND in 2015, 72.91 percent were debt securities in accordance with the mutual fund industry. As of 31 December 2015, TFUND had THB 166,354 million assets under management, an increase of THB 2,226 million or 1.36 percent from 2014. The increase of assets under management was mainly from a total of THB 4,484 million or 3.2 percent mutual fund for public offering. Asset under management comprised of 84.72 percent mutual funds, 7.72 percent private funds, and 7.56 percent provident funds.
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 – October 2015, the Thai non-life insurance business saw growth in direct premiums compares with the same period of 2014 at 0.92 percent. Total direct premiums are THB 171,894 million. The non-life insurance market structure during January – October 2015 showed that the automobile insurance dominated up to 57 percent of the total market value, followed by the miscellaneous insurance with the market share of 35 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 98 percent of all customers are those with a policy claim limit not exceeding THB 5 million. The customers mostly select automobile, personal accident, and fire insurance and these customers mainly are the Bank’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 non-life 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 2016 direct premium forecast, the Thai non-life insurance industry is expected to grow at 2 percent in 2016 with total premiums of THB 200,350 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 non-performing assets back to becoming the performing ones. Competition and Market Outlook TS AMC operates its business with a primary objective to manage and restructure the non-performing assets received from SCIB. To manage, divest, or sell those non-performing assets (NPAs) to third parties who are interested in real estate market, TS AMC hires a professional advisory in assets sales to determine the selling price and manage the assets in such a way that creates the highest value. It also appoints a professional asset selling agent to develop value-added asset packages as well as collaborates with the related group of companies to expand sales channels, such as brokers or auction agents as well as cross selling and through website of TNS and the other channels to reach the target customers as much as possible.
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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 55 percent and 45 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 from customers are commercial vehicles, which are sensitive to overall domestic economy. 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 2015, the global economy was constantly volatile. Although the economy of the US had relaxed inflation and the economic trends improved to previous years, the economy in Europe, Japan, and especially China was still sluggish. The same situation also applied to Thailand was still in a slowdown from the pressures of the partner countries, the slowing down of the foregoing, 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.
Funding or lending to related parties
The Bank extended loans to parent companies, subsidiaries, and related companies in Thanachart Group. At the end of 2015, it extended loans to TS AMC (subsidiary of the Bank) for non-performing asset management business amounting to THB 691 million and Ratchthani Leasing Public Company Limited (subsidiary of the Bank) in line with the business policy of Thanachart Group, amounting to THB 1,210 million. The loan outstanding balance was THB 1,901 million, a decrease of THB 1,001 million from THB 2,902 million at the end of last year. The aforementioned loan outstanding balance accounted for 0.28 percent of total loans at the end of 2015. All lending and borrowing transactions were conducted under the permission of the BOT.
Products and Services Management
Sources of fund
The source of the Bank’s and its subsidiaries’ fund comprises of issued and paid-up capital, whereby as of 31 December 2015, was in the amount of THB 60,648.62 million, in which the statutory reserve and retained earnings were included. Another two key sources of fund were: 1. Deposits as at the end of 2015 were in the amount of THB 669,504 million. 2. Borrowings were in the amount of THB 71,641 million, of which THB 32,516 million were tier 2 subordinated debentures, THB 15,071 million were non-subordinated debentures, THB 22,900 million were short-term debentures, THB 1,149 million were promissory notes, and THB 5 million were borrowing others.
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RISK FACTORS
An overview of the Risk Management
In 2015, the Thai economy, although improved from last year, as a result of the government’s economic stimulus package and tourism has maintained a consistent growth, but also is affected by factors outside from weak economies of counter trade parties, especially China. In contrast, private investment declined from last year, as well as, export which continued to face negative headwind and high household debt. In 2015, total loans of commercial banks continued to expand at slowdown compared to last year, in line with of the slow economic recovery. However, commercial banks continue to be cautious with credit approval, especially loans for housing and hire purchase. In 2016, although Thai economy tended to start recovering having the government sector’s budget disbursement and investment as key drivers, the overall remains fragile that need to closely monitor the risks in various areas, which may impact 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 Board of Directors and executives of the Bank closely oversee, monitor and develop the risk management system regularly to ensure that the measures are updated and in line with the ever-changing internal and external risk factors. The Bank strategically establishes an organization structure to support the risk management under the policy outline via various committees’ supervisions as follows:
The Board and Committees at the Policy Level: The Bank’s Board of Directors and the Executive Committee have a role in policy making and establish guidelines for an efficient enterprise-wide risk management by taking into consideration the impact of risks on the Bank’s operational goal and financial position that have to be in line with its normal operation. Risk Management Committee has a role in establishing strategic plans and developing the risk management procedure as well as considering appropriate risk management policies and guidelines to be proposed to the Executive Committee and the Bank’s Board of Directors for consideration and approval. 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 at the Operation Level: Asset and Liability Management Committee has a role in supervising the structure of the Bank’s assets and liabilities to be appropriate for characteristics of the business and in line with the Bank’s risk management policy. Investment Portfolio Committee has a role in overseeing the credit transaction related to the credit 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 31 December 2015 Board of Directors Audit Committee
Risk Management Committee Chief Risk Officer
Executive Committee
Compliance
Risk Policy and Capital Markets
Credit Risk Management
Risk Control
Chief Executive Officer and President
Retail Risk Management
Special Risk Management
Chief Audit
Asset and Liability Management Committee
Investment Portfolio Committee
Credit Committee
Deputy Chief Executive Officer
IT Security Management Committee
Officer of Executive Committee Chairman and CEO
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• The conduct of business affairs is under the system of check and balance with the Middle Office, comprising the Risk Control Unit and the Back Office, being separated from the Front Office. • The Bank puts in writing all the established policies and guidelines regarding the risk management that specify responsibilities of related units as the operational guidelines for the employees. Moreover, the Bank has established a four-step guideline for risk management comprising: 1) identification of the characteristics of risks as well as risk factors, 2) development of appropriate tools and models for risk measurement, 3) control of risks within acceptable limits and 4) monitoring of risk status in order to properly manage any possible risks in a timely manner. • The determination of size and proportion of different risk values by the use of risk calculation tools and models allows the Bank to perceive the degree of severity from possible risks. These risk variables could also be used as the ceiling to control risk under the acceptable level as well as to provide warning signals before severe losses occur. The aforementioned risk management systems are developed based on prudent principles, and will be reviewed regularly to suit prevailing situations. The systems are designed to be transparent, examinable, and to take into consideration the interests of shareholders, customers and employees of the Bank.
Key Risk Categories 1. Credit Risk Credit risk arises from a situation in which the debtors or counterparties fail to repay or fulfill their agreed obligations. This might be contributed by the fact that the debtor’s financial position is under distress due to volatilities of economic conditions that pose adverse impact on businesses or the debtors’ mismanagement, which as a result, may adversely affect the Bank and the subsidiaries’ earnings and capital. The credit risk may arise from ordinary financial transactions such as credit lending, financial obligations in the form of avals or guarantees, other transactions related to credit lending, as well as investment in debt instruments issued by state agencies or state enterprises with neither guarantee from government nor the BOT and private debt instruments such as debentures.
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Under its credit risk management policies and guidelines, the Bank has successfully established a credit culture. To start with, the credit risk of the borrowers, counterparties or issuers of debt instruments will be independently assessed by the model developed specifically to each type of borrowers or counterparties by the Credit Risk Management Unit. At this juncture, authorized Credit Committee would then consider and determine the level of credit risk of borrowers or counterparties, appropriate credit lines and investment budget, as well as terms and conditions on loans or other obligations. The Committee also controls the overall risk status by appropriately diversifying credit risk into various business sectors and groups of customers within the established risk ceilings. In addition, the Committee closely monitors the quality of loans to ensure proper and vigilant management by emphasizing business capability and repayment ability under the supervision of an independent risk control unit. Apart from the aforementioned units, there is also an Internal Audit Division to verify that the credit transactions are in compliance with the BOT’s guidelines. To ensure optimal returns under acceptable risk, the Bank has employed measuring tool called RAROC (Risk Adjusted Return on Capital) to reflect the appropriate level of capital. Moreover, the Bank also performed stress tests to estimate any damage that may occur during the crisis. Under this condition, the borrower’s ability to repay could erode or they could fail to make a repayment under terms and conditions stated in the hypothesized contract. The risk factors in the tests were assumed to affect the industry that the debtors’ business belonged to.
Important credit risk factors 1.1 Credit concentration risk The Bank aims to appropriately diversify its loans to various groups of customers, focusing on high potential customers and attempt to prevent concentration of loans to a particular group of customers. Under such goal, the Bank pursues proper risk management on overall credit portfolios with close monitoring and comprehensive assessment to report to the assigned committees on a regular basis. The purpose is to mitigate exogenous risks that may adversely affect any particular group of business excessively financed by the Bank.
Credit status, as of 31 December 2015 and 31 December 2014 classified by business types was as follows: Business type
2015 Debt balance Percent (THB Million)
2014 Debt balance Percent (THB Million)
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
14,993 78,608 49,677 65,550
2.10 11.02 6.96 9.19
12,035 83,884 51,879 66,032
1.60 11.12 6.88 8.75
89,005 3,458 364,929 26,631 20,615
12.48 0.48 51.15 3.73 2.89
85,664 3,835 399,285 27,742 24,014
11.36 0.51 52.93 3.68 3.17
Total loans and accrued interest receivables
713,466
100.00
754,370
100.00
The overall credit data showed that the portion of hire purchase lending granted by the Bank and its subsidiaries decreased from 52.93 percent as of 31 December 2014 to 51.15 percent of total loan outstanding as of 31 December 2015. 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 31 December 2015 and 31 December 2014 were as follows: Loan classification
2015 Debt balance Percent (THB Million)
2014 Debt balance Percent (THB Million)
Substandard Doubtful Doubtful of loss
4,038 3,332 12,788
20.03 16.53 63.44
5,720 4,124 21,228
18.41 13.27 68.32
Total
20,158
100.00
31,072
100.00
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The non-performing loans of the Bank and subsidiaries decreased from THB 31,072 million, as of 31 December 2014 to THB 20,158 million as of 31 December 2015. As for the overview, the non-performing loans accounted for 2.58 percent of total loan outstanding, decreased from 4.12 percent as of 31 December 2014. The Non-Performing Loans Classified by Business Types (excluding accrued interest receivables) 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
2015 Debt balance Percent (THB Million)
2014 Debt balance Percent (THB Million)
404 5,614 1,352 1,322
2.00 27.85 6.71 6.56
485 10,075 2,230 3,219
1.56 32.42 7.18 10.36
2,075 - 7,907 1,279 205
10.29 0.00 39.23 6.34 1.02
3,429 - 9,667 1,583 384
11.04 0.00 31.11 5.09 1.24
20,158
100.00
31,072
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)
2015
2014
21,321 16,519 7,924 4
32,848 23,220 11,485 103
714,124
755,150
2.31
3.07
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 2015, accounted for the amount of principal and the accrued interest totaling THB 16,519 million or 2.31 percent of total loan outstanding and interest receivables. The total value of the restructured debt based on net collaterals would amount to THB 7,924 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 31 December 2015, the Bank and its subsidiaries’ obligations in the form of avals and guarantees for loans amounted to THB 23,167 million or 2.36 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.
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As of 31 December 2015, the Bank and its subsidiaries’ trading investments and available-for-sale securities classified by type of investment were as follows: Fair Value (THB Million) 2015
2014
Trading investments Government and state-owned enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
3,065 0 0 105
5,990 2 0 194
Total trading investments
3,170
6,186
Available-for-sale investments Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
117,669 25,181 10,068 3,039
68,504 44,454 11,827 3,529
Total available-for-sale investments
155,957
128,314
Total trading and available-for-sale investments
159,127
134,500
The Bank’s value of trading and available-for-sale investments increased from the previous year mainly because of additional investment in government and state enterprise securities. 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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ANNUAL REPORT 2015
Details of financial assets and liabilities as of 31 December 2015, 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 and derivatives Receivables from clearing house Total financial assets Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Borrowings Payables from purchase and sale securities and derivatives Payables to clearing house Total financial liabilities
Interest rate adjusted in accordance with market interest rate
0-3 months
- 501 - 263 246,474
- 52,068 - 15,670 46,255
- -
- -
247,238
113,993
267,504 17,454 - - 1,149 - - 286,107
3 - 12 months
Over 5 years
No interest
Total
- - - 13,337 13,337 511 500 - 4,198 57,778 - - - 5,447 5,447 37,706 106,116 3,600 7,258 170,613 23,858 289,450 107,014 415 713,466 - -
- -
- -
1,006 1,101
1,006 1,101
62,075 396,066 110,614 32,762 962,748
88,833 299,467 39,352 21,522 - - - - 10,100 18,300 - -
1-5 years
- -
7,182 5,107 - - 9,576
- 735 - - 32,516
- -
- -
6,518 669,504 1,518 85,688 2,202 2,202 6,758 6,758 - 71,641 2,073 -
2,073 -
138,285 339,289 21,865 33,251 19,069 837,866
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 2015, the Bank and its subsidiaries had assets and liabilities in foreign currencies of THB 35,392 million and THB 23,053 million, respectively, equaled to net assets of THB 12,339 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 487 million or 0.05 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 two 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)
2015
Percent
2014
Percent
Deposits Interbank and money market items Borrowings
669,504 85,688 71,641
80.97 10.36 8.67
696,992 80,270 90,198
80.35 9.25 10.40
Total
826,833
100.00
867,460
100.00
Capital Fund Classified by Maturities
(Unit: THB Million)
2015
Percent
2014
Percent
Less than 1 year More than 1 year
769,969 56,864
93.12 6.88
776,239 91,221
89.48 10.52
Total
826,833
100.00
867,460
100.00
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ANNUAL REPORT 2015
As of 31 December 2015, deposits and borrowings of the Bank and its subsidiaries amounted to THB 826,833 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. The financial assets and liabilities as of 31 December 2015 classified by maturity date were as follows: (Unit: THB Million)
Items
Financial assets Cash Interbank and money market items Derivatives Investments Loans Receivables from purchase and sale securities and derivatives Receivables from clearing house
At call
The maturity date of financial instruments Less than More than Not 1 year 1 year specified
Total
13,337 4,699 - 263 42,142
- 52,579 1,548 54,075 115,432
- 500 3,899 109,041 555,892
- - - 7,234 -
13,337 57,778 5,447 170,613 713,466
- -
1,006 1,101
- -
- -
1,006 1,101
60,441
225,741
669,332
7,234
962,748
268,869 18,972 2,202 - 1,149
391,705 60,874 - 1,639 28,400
8,930 5,842 - 5,119 42,092
- - - - -
669,504 85,688 2,202 6,758 71,641
- -
2,073 -
- -
- -
2,073 -
291,192
484,691
61,983
-
837,866
Off-balance sheet items Avals to bills and guarantees of loans Obligation under unmatured import bills Letter of credits Other commitments
278 19 615 36,967
868 478 1,690 39,165
124 - 5 1,576
- - - -
1,270 497 2,310 77,708
Total off-balance sheets
37,879
42,201
1,705
-
81,785
Total financial assets Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Borrowings Payables from purchase and sale securities and derivatives Payables to clearing house Total financial liabilities
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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 Unit 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. • 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.
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ANNUAL REPORT 2015
• 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 2015, the Bank’s capital totaled THB 122,242 million, of which THB 82,124 million was common equity Tier I capital. The Bank’s Tier I capital totaled THB 82,124 million, while Tier II capital was THB 40,118 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 12.04 percent, 12.04 percent, and 17.92 percent, respectively, higher than the BOT’s minimum requirements at 4.50 percent, 6.00 percent, and 8.50 percent, respectively.
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CORPORATE SOCIAL RESPONSIBILITY
Thanachart Group’s Corporate Social Responsibility Activities Thanachart Group is a business organization which is determined to offer a full range of integrated financial services, aiming at successfully fulfilling all customers’ needs at each stage of their life cycle. In this connection, the Group is committed to attain profit in its business operation, and adhere to the policy on Corporate Social Responsibility (CSR), along with the code of business ethics and corporate governance principles. All of these demonstrate the transparency of business operation, which leads to social development while achieving a sustainable balance between economy, society, and environment. In establishing a guideline on CSR of Thanachart Group, it encompasses both CSR in Process and CSR after Process, enabling the CSR practices to prevail in Thanachart Group’s operations. These include, among others, the followings: 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, regardless of whether they are shareholders, lenders, directors, executives, employees, customers, trade partners, competitors, the Government, or even the society and the environment, which are included in the CSR action plan, to ensure that they are treated in an appropriate and fair manner. Although Thanachart Group has not yet included the stakeholder engagement in the implementation of its CSR activities in order to establish linkages with all stakeholder groups, it clearly recognizes the importance of such engagement. Therefore, it endeavors to develop the stakeholder engagement in due course, to ensure coherence between its CSR activities and all stakeholders’ needs. In 2015, Thanachart Group has initiated more projects that demonstrate its consideration of all stakeholder groups as follows:
1. “Rethink” Campaign Recognizing the importance of enhancing the financial knowledge and developing financial discipline as a key foundation for living, Thanachart Group has initiated the “Rethink” Campaign with the slogan “Rethink, know how to use money, and find happiness.” The campaign is aimed at promoting awareness among people to change their spending habits, in order to manage their spending in line with income and develop financial-self discipline, which will, in turn, lead to a sustainable happy life. His Majesty’s “Sufficiency Economy” philosophy is to be adopted with personal financial management, by way of reasonable and careful spending and proper risk management via being disciplined with saving to create security in life. The beneficiaries include all stakeholder groups, ranging from staff, shareholders, executives, customers to members of society. The communication of this campaign is done through a 3-minute video clip titled “A rich man’s son”. It is about a story of a very ordinary family but full of happiness. He inculcated positive attitudes and perspective of self-sufficient lifestyle in his children by raising them with love, teaching them to apply positive thinking to things around them, teaching them not to be extravagant with money but to economize on and be reasonable in spending. As a result, the children do not feel that their family was inferior to others’. The campaign also publicized through infographic clips and articles, to share financial knowledge via social media including the Bank’s Facebook pages, youtube.com, and www.thanachartcsr.com. The financial knowledge is divided into four topics, consisting of 1. Know how to save and how to invest, 2. know how to borrow, 3. know how to plan, and 4. know how to spend money. In addition, the Bank has organized a number of activities for interested persons and mass media representatives related to discipline spending and saving. Currently, the video clip has gone viral with more than 1,400,000 views. As well, the Bank regularly shared the clip with its customers via its internal TVs networks which cover over 680 branches and offices nationwide.
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2. “Drive DD United” Campaign The “Drive DD United” Campaign is one of the activities implemented under the project called “Thanachart Insurance- Yes, We Safe”, which is organized with objectives to raise awareness on safe driving. This, in turn, leads to a reduction in rates of traffic accidents caused by drink driving and using cell phone while driving. The beneficiaries include all stakeholder groups, ranging from staff, shareholders, and customers to members of society. The main activity of this Campaign is a contest of video clips “Anti-drink driving and Refraining from Using Cell phone while Driving”. The contest provides students with an opportunity to use their ability to produce video clips that promote safe driving. The students are encouraged to submit their video clips for the contest via the Facebook fan page: Drive DD United, and required to form a team of not more than three members and submit video clips based on one of the two available topics, i.e. “Anti-drink driving” and “Refraining from Using Cell Phone while Driving.” The submitted videos must be at least one and a half minutes in length but not more than three minutes. The contest attracts a lot of viewers with the total number of likes amounting to 23,307 on the Facebook fan page: Drive DD United. Also, there are altogether over 100 teams participating in the contest.
3. “Thanachart Reduces Global Warming” Campaign
Thanachart Group recognizes the importance of protecting the environment which is more or less impacted by the business operations via consumption of energy and natural resources. This affects all stakeholder groups, consequently, the Bank has encouraged its Petchburi Building and Suan Mali Building to be registered as energy-control buildings, in line with the Energy Conservation Promotion Act B.E. 2535. Also, there is a formulation of energy-conservation policy, aiming at promoting the use of resources in the most efficient manner, as well as a promotion of employees’ participation and awareness on energy conservation. In 2012, “Thanachart Reduces Global Warming” Campaign was initiated. There was an establishment of a committee with representatives from several units within the Bank, which is in charge of devising various policies and measures related to efficient energy management. In this connection, the following five energy-conservation measures were laid down.
1. Setting the air-conditioner at 25 Celsius (air-conditioners must be 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; Turning on lights only in necessary areas 4. Taking the stairs instead of elevator, in case of only 1-2 floors 5. Not leaving the doors and windows open, and shutting the curtains to prevent heat and the sunray from entering into the buildings The efforts to implement energy conservation measures in the buildings of the headquarters and branches both in Bangkok and upcountry during the period from 2012 to 2015 are able to save electricity costs by THB 22.1 million. In order to promote efficient energy use as well as enhance employees’ knowledge and participation, the Bank additionally implemented the following activities in 2015: 1. Stimulating participations among the Bank’s office buildings, including Ratchada Building, Petchburi Building, Wongsawang Building, Rama VII Building, MBK Tower Building, The Nine Tower Building, and Bangpu Building, in energy conservation and follow practices of Petchburi Building and Suanmali Building, as prototypes for energy conservation. 2. Organizing 28 training courses for executives and staff at Suan Mali Building, aiming at providing them with knowledge and understanding about energy conservation. 3. Launching promotion campaigns aiming at urging staff to recognize the importance of energy saving. 4. Organizing energy-conservation field visits at Phayathai 2 Hospital and Mitsubishi Electric Kan Yong Watana Company Limited (prototype buildings). 5. Mangrove forest planting in Samut Songkram Province. Furthermore, the Bank has encouraged its staff to use paper in an appropriate manner, to reduce paper consumption in the operations. This represented an indirect way to protect the environment. There are also other related activities implemented, i.e. using electronic systems in operations and at meetings, launching promotion campaigns to reduce paper consumption so that they changed their behavior to minimize paper use, and encouraging employees to make use of recycled papers in their respective work units, and so on.
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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 2015 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
- Strict compliance with the Labor Protection Act B.E. 2541 (1998), Labor Relations B.E. 2518 (1975), and related laws. - Establish clear criteria with transparent, verifiable process for selection, employment, and working condition arrangement. - 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. - Conduct the survey called Voice of Employee (VOE) to allow the senior management to hear from employees their feedbacks, problems, or needs for improvement, which would be incorporated into improvement plan with an aim to promote employees well-being.
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 2015, 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) Arrangement of the Code of Conduct course for new employees of all levels, including signing for acknowledgment of the Code of Conduct on a regular basis, as well as courses for knowledge and mind development. 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. - Require employees to strictly safeguard the confidentiality of customers to not disclose customer information to any third party. - Prohibit inappropriate use of customers’ data/information for advantages of the Bank and related parties, unless it is obliged by law. - Establish systems or channels for customers’ opinions or complaints regarding services and take corrective actions accordingly, and revert to the customers in a timely manner either via www.thanachartbank.co.th, Thanachart Contact Center 1770, or www.facebook.com/thanachartbank.
Educate consumers for the knowledge and financial discipline
- As aforementioned of “Rethink” Campaign.
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.
- plan and organize activities to develop social and community, collaboratively with organizations from the public, private, and non-profitable sectors in various aspects such as financial literacy promotion, education, Thai culture promotion and preservation, 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.
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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 2015, 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 2015 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.
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1 - 2 Presentation of Royal Krathin Robes in 2015 THANACHART BANK PUBLIC COMPANY LIMITED
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In 2015, His Majesty the King graciously bestowed the Royal robes to Thanachart Bank to offer to the Machimawas Worawihan Royal Temple, Muang Songkla, Songkla Province. On this occasion, companies under Thanachart Group, customers, partners, executives, employees, and the public jointly donated an amount of THB 9,345,380.21 in good faith to the temple as part of the fund for the construction of Machimawas Worawihan National Museum, to preserve and pass on the community’s wisdom to the society. In addition, 30 scholarships were awarded to students in need, who showed good academic records and good behaviors. Funds were also granted to 3 non-profit organizations, including Songkla Children Foster Home, Songkla’s Home for Children and Family, and the Mentally Challenged Support Center of the Southern Region, Singkla Province.
“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. 2015 marked the 44th anniversary of the project. More than 3,000 contestants from every region participated in the contests. With awareness of the importance of involving children with hearing disability in the social activities and promote their ability to live equally with among others as well as to vale determination and recognize potential of these children in being a part of the Thai identity conservation, in 2015 the first contest with for the children with hearing disability was organized that the winners from the secondary and high school educational levels were to be bestowed with Her Royal Highness Maha Chakri Sirindhorn’s trophies. Moreover, in 2015, to show the determination to carry on and conserve Thai identity, the Bank participated in the “Auspicious Year’s Resolutions” project during the period of 2015 - 2017 recognized as the auspicious years of the royals, organized by the Deputy Permanent Secretaries to the Office of the Prime Minister allowing the public and organizations to express their allegiance to the His Majesty the King and Her Majesty Queen Sirikit, and the Royal Family. The project encouraged all to set resolutions to do good deeds for themselves and society. In this regard, the Bank’s resolution was “to take part in conserving and carrying on the proper use of Thai language and manners”. With strong determination of Thanachart Group to continue the “Thanachart Initiates and Fulfills Thai Identity” project, the Bank was awarded an Honor Award by the Ministry of Culture to recognize the Bank’s beneficial activities for the fiscal year 2015 for promoting religion, arts, and cultures.
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The winners of Thai manners contests and reading aloud contents under “Thanachart Initiates and Fulfills Thai Identity” Project received trophies from Her Royal Highness Princess Maha Chakri Sirindhorn’s
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 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.
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“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 2015, the Continuation and Conservation of Local Traditions activities were as follows: 1. Chinese New Year in China Town 2. Chinese New Year in Pak Nam Po 3. Water sprinkling on Angkiros Buddha image in Rayong 4. Songkran Festival, Prapadaeng, Samut Prakan 5. 2015 Buddhist lent candle procession, Ubon Ratchathani 6. 2015 Traditional long boat contest 7. Lotus Reception Tradition (14th day of the 11th month), Samut Prakan 8. The end of Buddhist Lent, Wat Praputthachai Temple, Saraburi 9. Pak Panang’s Festival of Buddha-Image Tugboat Racing in Nakon Si Thammarat 10. Vegetarian Festival, Phuket 11. Lantern Festival, Chiang Mai 12. 2015 Ayutthaya World Heritage Festival, Ayutthaya
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“Rethink” Campaign Program “Drive DD United” Project THANACHART BANK PUBLIC COMPANY LIMITED
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2. Promotion and support of charitable programs
“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 participate 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. In 2015, which marked the 39th Annual Red Cross Fair, the Bank set up its booth at the fair held at Suan Umporn during 30 March to 7 April 2015. The booth was set like a book town under the concept of “Power of Merit: the Thought Resources”. After the fair, bookshelves and over 600 books were donated to 2 schools that had been receiving aid from the Bank since the big floods in Phra Nakhon Si Ayutthaya: Wat Ruechai Wittayakarn School and Wat Takoo School. Net proceedings from the sale of 2015 Thanachart Bank Red Cross tickets and the Red Cross booth 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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Merit Bridge Project
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 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
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9 - 10 Thai manners contents and reading aloud contests under “Thanachart Initiates and Fulfills Thai Identity” Project 11 - 12 Blood Donation in Honor of the Royal Father and Mother
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
Assistance and rehabilitation to victims of the Nepal earthquake The Bank was one of the channels for raising donations from employees, customers, and the general public to assist and rehabilitate victims of the massive earthquake. The employees, the customers, and the general public could donate through the Bank’s various channels: ATMs, bank counters, Cash Deposit Machines, and internet free of charge. Donations of THB 2,500,000 were offered to the Thai Red Cross Society to assist and rehabilitate Nepalese victims.
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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.
“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 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 2015, there were 829 participants who donated a total of 331,600 cc of blood to the Thai Red Cross Society.
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Joining the Red Cross Fair under the name “Thanachart Bank’s Red Cross Booth” TBANK gave book cabinets and books to the two schools namely Wat Ruchaiwittayakarn School and Wat Tagoo School from opening Thanachart Bank’s Red Cross Booth in 2015
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3. Promotion and Development of Education
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 2015, 2,802 items of desks, cabinets, chairs and computers were given to 65 government organizations, associations, foundations and schools nationwide.
3. Donations of blankets to victims of the cold weather in Chiang Mai and Bueng Kan under the cooperation with the Department of Public Relations and TNN24 Live TV. 4. Donations of exercise equipment “healthy elastics” to patients in hospitals and impoverished seniors in slums. In the past year, donations were made to Veterans General Hospital and Phramongkutklao Hospital. 5. Provision of computers to the 2nd Frigate Squadron of the Royal Thai Fleet, Royal Thai Navy, in Sattahip, Chonburi. The computers were for studying, researching, enhancing potentials and increasing access to useful information through information technology. Schools that lacked computer equipment were also given computers.
4. Environmental management
Disclosure of Prevention of Corruption Involvement
“Thanachart Reduces Global Warming”
Thanachart Group realizes that corruptions are harmful and impede the nation’s social and economic development and they also create business unfairness. Therefore, the Group cooperates with the public and private sectors under the “Private Sector Collective Action Coalition Against Corruption (CAC)” by signing the declaration to join and became a certified member. In 2014, 10 companies under Thanachart Group became certified members of the Private Sector Collective Action Coalition Against Corruption. Anti-corruption policies and measures, including related regulations, were approved by Thanachart Group’s Boards of Directors. “Gift giving and receiving, presents, receptions, or other benefits” in particular were of great importance to Thanachart Group
“Reuse” project
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. Donation of drinking water in the government’s “Sharing Drinking Water to Fellow Thais Suffering from Drought” project to help drought victims in Phitsanulok.
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17 - 18 “Thanachart...power of ants in reducing global warming” Project
because they can easily lead to corruptions. The policies and measures cover practices and control, violation or noncompliance with anti-corruption measures, or actions deemed as supporting, assisting, or cooperating in corruptions, which are considered wrongful and will face regulatory penalty. Furthermore, anti-corruption is part of the Business Principles and the Core Values. For more efficient anti-corruption, Thanachart Group requires each company to specifically formulate regulations, practices, suggestions for whistle-blowing or complaints involving corruptions. A safe channel for whistle-blowing is also required for third parties and employees under Thanachart Group who find actions that might be corrupted. The information of whistle-blowers will be sent to Internal Audit’s highest executive with confidentiality. The information will then be passed on to the Audit Committee, to be reported to the Board of Directors respectively. Moreover, Thanachart Group has a policy to fairly treat and protect employees who refuse to be involved in corruption, although it might cause lost business opportunities. In 2015, Thanachart Group’s implementations related to fraud and corruption prevention are as follows: 1. Thanachart Training and Development Co., Ltd. and Thanachart Broker Co., Ltd. under Thanachart Group became certified members of the “Private Sector Collective Action Coalition Against Corruption: CAC” (“the project”), making a total of 12 companies under the group as the project’s certified members. A golden CAC was given to Thanachart Group as a symbol of the anti-corruption membership. Thanachart Group has formulated “the practice guideline for the usage of its golden CAC logo” in line with the project’s principles, and has distributed the CAC logo on its intranet and website. 2. 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 every 3 years. Progress of action plans and execution of risk control is followed up, or any time 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.
3. Every director, executive, and employee is strictly obligated to provide a written compliance to the anti-corruption policy, measures, and other related regulations. 4. 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 anti-corruption training as mandatory part of staff orientation and “Corruption-Free, Transparent Movement” course for existing staff. 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 anti-corruption and money laundering in collaboration with the Office of the National Anti-Corruption Commission and the Anti-Money Laundering Office. 5. The development of anti-corruption E-Learning distributed on intranet for staff’s self-learning. 6. 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. 7. 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. 8. Giving advice and lecturing involving “Membership Certification of the Private Sector Collective Action Coalition Against Corruption by the Private Sector Collective Action Coalition Against Corruption Council” to external organizations. 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.
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CORPORATE GOVERNANCE
Corporate Governance Policy 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 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 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 2015, 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 Course “the Driving Force Transparency not corrupt” for current employees; • 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.
In addition, Thanachart Group promotes good corporate governance and reinforces social corporate social responsibility (CG & CSR projects) through its policies and various activities among Thanachart Group’s employees consistently and continuously. The objective is to encourage practical learning in the units pursuant to the good corporate governance through internal communication channels under the “Thanachart Tam Dai Tam Dee…CG Ri-rerm Term Tam” project, advocating awareness and understanding of the policy and ethics, in compliance with the foundation of goodness, morality and professional ethics. This is communicated through easily accessible format i.e. short films. A cooperation has been made with the Office of the National Anti-Corruption Commission (“ONACC”) and the Anti-Money Laundering Office (“AMLO”) for assistance in the learning aid about anti-corruption and money laundering in Thamma Sawasdee and Governance Guru programs. Moreover, dharma practice activities were held in Bangkok, Bangkok’s perimeters and upcountry for spiritual management of the employees in their professional and daily lives. The Bank’s involvement in socially responsible activities includes lecturing about good corporate governance to external organizations and playing a part in the panel of judges in the “SME CG Contest” hosted by Puey Ungphakorn Institute, the Bank of Thailand (“BOT”), the Thai Bankers’ Association and the Institute for Small and Medium Enterprise Development (ISMED).
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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. As of 31 December 2015, the name list of the Bank’s Board of Directors was as follows: 1. Mr. Banterng Tantivit 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. Walter Tas Director 10. Ms. Suvarnapha Suvarnaprathip Director 11. Mr. Peter Clifford Bessey Director 12. Mr. Somjate Moosirilert Director Executive Vice President, Office of Executive Committee Chairman and CEO Secretary
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 Chief Executive Officer and 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. 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 THANACHART BANK PUBLIC COMPANY LIMITED
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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 Chief Executive Officer and President. 13. Conduct a performance evaluation and determine compensation and employment terms and conditions for the Chief Executive Officer and 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 The 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 31 December 2015, the name list of the Executive Committee was as follows: 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 Roles and Responsibilities of the Executive Committee 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 BOT; 2. Authorized to approve investments aimed at generating earnings for TBANK in compliance with the Financial Institutions Businesses Act as well as the rules and regulations of the BOT;
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3. To manage business operations in line with the Bank’s business objectives as well as managing liquidity, risks and the interest rate structures; 4. Authorized to make purchases, take transfers, and dispose of TBANK’s assets in an amount up to 5 percent of the Bank’s share capital; 5. To consider and screen matters which are beyond the authority of the Executive Committee and to present them to those having higher authority for consideration; 6. Authorized to restructure and manage the organization, to establish rules and regulations related to work process, to appoint and remove employees, to appoint advisors, as well as directing and governing the conduct of the Bank’s business affairs; 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. 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 consider agenda for approval proposed by Chief Executive Officer and 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. The Audit 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 31 December 2015, the members of the Audit Committee were as follows:
1. Mr. Kiettisak Meecharoen Chairman (Independent Director) 2. Mr. Sataporn Jinachitra Member (Independent Director) 3. Assoc. Prof. Dr. Somjai Phagaphasvivat Member (Independent Director) Mrs. Vijitra Thumpothong Secretary
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; • 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 SET; • To provide opinions in an annual compliance report submitted to the BOT; • 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; THANACHART BANK PUBLIC COMPANY LIMITED
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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 31 December 2015, 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
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Roles and Responsibilities of the Nomination and Remuneration Committee 1. To propose policy relating to nomination and remuneration of directors, Sub-Committee’s directors, Chief Executive Officer and President, and executives to the Bank’s Board of Directors; 2. To propose criteria relating to nomination and remuneration of directors and Sub-Committee’s directors, Chief Executive Officer and President, and executives to the Bank’s Board of Directors; 3. To propose performance appraisal criteria of Chief Executive Officer and President and Executives for annual consideration of remuneration package; 4. To select and examine the candidates with appropriate qualifications for appointment as director, Sub-Committee’s directors, or Chief Executive Officer and President and to propose qualified candidates to the Bank’s Board of Directors or Annual General Meeting of Shareholders (depending on the situation); 5. To consider annual remunerations of director, Sub-Committee’s directors, Chief Executive Officer and President, and executives which are in alignment of the criteria that have been set; 6. To review policy and principles of nomination and remuneration of directors, Chief Executive Officer and President, and executives to be appropriate with job descriptions and the market; 7. Ensuring that the Bank’s appropriate succession plans and continuity of management for senior executive positions and key positions are always up to date. 8. Ensuring that the remuneration policy is fair, competitive, and attractive in order to retain quality and potential staff. 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.
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 31 December 2015, 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. Anuwat Luengtaweekul Member 5. Mr. Enghug Nontikarn Member 6. Mr. Boonlerd Sinsombat Member 7. Mr. Ricky Jon Yakabowich Member 8. Ms. Kavita Boonpochanasoontorn Member Head of Risk and Capital Markets 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; 2. To formulate risk management strategies in accordance with the risk management policy and to ensure that the Bank’s risks are appropriately measured, monitored, and maintained at an appropriate level; 3. To review the adequacy of risk management policy, including the effectiveness of the risk management system and the adherence to the established policy;
4. To establish risk management measures which aims at preventing possible losses from occurring and at finding resolutions; 5. To assess both internal and external factors that might have material impact on the Bank’s financial positions. The assessment results will be taken into account in the adjustment of the Bank’s overall risk management policy; 6. To determine and instruct business units under the Risk Management Committee for the development of more efficient risk managing, controlling, and monitoring mechanisms; 7. To consider and appoint a committee or an officer, and delegating the authority to the appointed committee or officer under roles and responsibilities of the Risk Management Committee; 8. To monitor and control the risk management conduct of committees and/or business units to ensure that they adhere to the established policy; 9. To report the committee’s performance to the Audit Committee regularly on areas that need improvement, ensuring that the improvements are in line with the established risk management policy and strategies. The Asset and Liability Management Committee The Executive Committee has established the Asset and Liability Management Committee to manage the Bank’s liquidity, interest rates and exchange rates effectively. As of 31 December 2015, 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. Mrs. Noossara Roonsamrarn Member 6. Mr. Piyaphong Artmangkorn Member 7. Mr. Anuwat Luengtaweekul Member 8. Mr. Ajay Pratap Mundkur Member THANACHART BANK PUBLIC COMPANY LIMITED
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9. Mr. Enghug Nontikarn Member 10. Mr. Sanong Kumnuch Member 11. Mr. Ziad El-Hoss Member 12. Ms. Wisarnsri Nilodom Member 13. Mr. Lalit Dodampe Gamage Dharmaseri Member Representative of the Risk Control Department Secretary Roles and Responsibilities of the Asset and Liability Management Committee 1. To formulate the Bank’s liquidity, interest rate, and exchange rate risk management plans under the policy established by the Executive Committee; 2. To manage the Bank’s liquidity and exchange rate risks in accordance with the trends of the money market and capital market conditions; 3. To manage the Bank’s interest rate structure and determine the rate of interest both floating and fixed interest rates in order to prevent any adverse impacts from interest rate volatility; 4. To approve investments in bonds and private debt instruments within budget limits; 5. To authorize a person or a group of persons under the authority of the Asset and Liability Management Committee; 6. To report on the performance of liquidity, interest rate and exchange rate management to the Executive Committee. The Investment Portfolio Committee The Executive Committee has established the Investment Portfolio Committee in order to ensure efficient investments of the Bank. As of 31 December 2015, 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
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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 31 December 2015, 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 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.
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:
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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 to 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 Holdings B.V.
4
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Director Appointment Criteria and Methods According to the Bank’s Articles of Association and the good corporate governance policy, the director appointment criteria and methods are as follows: 1. In case of the appointment of a new director to replace the one who is retired by rotation, the approval from the shareholders’ meeting is required. According to Article 18 of the Bank’s Articles of Association which specifies the criteria and methods as follows: (1) A shareholder shall have one vote per share; (2) At the election of the directors, the shareholders’ meeting may vote for the directors, either one candidate at a time or candidates consisting in a group or by any other method as it deems expedient. However, at each voting time, a shareholder must exercise his right according to the number of votes specified under (1) and his votes may not be distributed howsoever to elect any other person; (3) At the election of the directors, the votes shall be decided by majority. In case of an equality of vote, the Chairman of the meeting shall have a casting vote. 2. In case of the appointment made during the directorship tenure due to a vacancy, the Board of Directors is able to approve the director’s appointment as selected and proposed by the Nomination and Remuneration Committee. According to Articles 21 and 23 of the Bank’s Articles of Association which states that if the office of director is vacant otherwise than by completion of a vacating director’s term of office, the Board of Directors, by votes of not less than three-fourths (3/4) of the remaining directors, may appoint a person who is qualified and is not of a forbidden nature under the laws, as a director in his or her place at the following meeting of the Board of Directors, except for the event that the vacating director’s term of office is less than the period stipulated by the law. Any person appointed or elected as a replacement director shall retain his or her office during such time only for the remaining tenure of his or her predecessor.
Nomination of Executives of the Highest Level The Nomination and Remuneration Committee conducts preliminary consideration and proposes for the Board of Directors’ approval of the qualified candidate(s) possessing the knowledge, competency, skills and experience of use to the Bank’s operations to be nominated for the position of the Chief Executive Officer and President. This position requires thorough understanding of the Bank’s business, and the ability to manage the business in a way that achieves objectives and goals set by the Bank’s Board of Directors.
Governance of the Business Conducts of Subsidiaries and Associated Companies (1) Governance of the business conducts of subsidiaries and associated companies 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 performance of the subsidiaries is appropriate, smooth, in line with the Bank’s policies and operations. After the consideration and consent of the Board of Director 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 Chief Executive Officer 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 performance 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. THANACHART BANK PUBLIC COMPANY LIMITED
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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 -
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ANNUAL REPORT 2015
The Controls of the Use of Internal Information The Bank has specified the controls of the use of internal information in the ethics and code of conduct which can be summarized as follows: • An appropriate oversight on the internal data maintenance system is required for all business units within the Bank; • In compliance with the SEC regulations, executives in manager position, the next four positions below manager position and the highest ranking position in the Accounting and Finance Department are required to report their holdings of the Bank’s shares on a quarterly basis; • Directors, executives, staffs, employees and advisors who have access to the confidential information are prohibited from seeking any benefit from such information for their own or other’s interest. This is indicated in Thanachart Group’s ethics and code of conduct; • According to the Bank’s notification on securities trading supervision and abusive internal data control, the Bank’s directors and executives are prohibited from engaging in any trading of the TCAP’s shares fifteen days before the end of each quarter until two days after the disclosure of the financial statements; • The use of internal data for the individual interest is considered as policy misconduct and will be subject to the penalties according to the judgment of the Disciplinary Committee.
Auditors’ Fee The Audit Committee considers the appointment of auditors and compensation to propose for the Board of Directors’ approval, and determines of auditors’ fee to propose to the Board of Directors and the shareholders for approval during the Annual General Meeting of Shareholders. According to the 22 Annual General Meeting of Shareholders held on 2 April 2015, 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. Ms. Ratana Jala Certified Auditor No. 3734 2. Ms. Rungnapa Lertsuwankul Certified Auditor No. 3516 3. Ms. Somjai Khunapasut Certified Auditor No. 4499
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. 40: Related parties transactions.
and/or and/or
The 2015 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 Ms. Ratana Jala, Certified Auditor No. 3734; details were as follows: (1) Audit Fee
5,905,000.
1.1 Audit Fee of the Bank of THB 10,740,000. 1.2 Audit Fee of 12 Subsidiaries of THB
(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 2015 in an amount of THB 2,150,000.
THANACHART BANK PUBLIC COMPANY LIMITED
089
INTERNAL CONTROL AND RISK MANAGEMENT
The Bank recognizes the importance of internal control by constantly emphasizing that a good internal control procedure will enable the bank to conduct business effectively, achieve goals and help prevent damage that may derive from the operation and exploitation of their executives and employees. In addition to the focus on internal control procedure, the Bank recognizes that recommendations from external auditors and inspectors from the Bank of Thailand (“BOT”) will help the development of the internal control system to be effective. The internal control system is summarized as follows:
1. Organization and Environment The Bank establishes organizational structure to support appropriate organization’s goals, determine, assign and authority level duty and responsibility of staff and executives in a clear written form. Internal control is in place, dividing duties of the worker, approver, controller and evaluator apart. In order to prevent conflicts of interests and to balance the influence of each other as well as to ensure the Bank’s in appropriate business operations and good governance, and to issue policies, procedures and operation manuals in writing, as well as the appointment of the Audit Committee to consider the adequacy of internal control system and subcommittees to consider and make decisions on banking matters effectively. The Board of Directors determines clear and measurable targets for business operations and follows up to ensure the progress and achievement. In addition, the Bank has established Corporate Governance Policy, Codes of 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 fraud and corruption whistle-blower via Bank’s channels and fair treatment for the accused.
2. Risk Assessment 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. 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 adequately, were well established. Significant risks related to Bank’s business operating were reported to the Audit Committee on a quarterly basis and Risk Management Committee will report meeting resolution to the Bank’s Executive Committee and Board of Directors on a monthly basis.
3. The Operational Control The Bank establishes appropriate internal control activities for all levels covering all processes. Explicit authorization and level of approval authority are in place. As for the related transactions, the Bank has established in Good Corporate Governance Policy the practice guidelines to prevent conflicts of interests prohibiting the related persons to partake in the approving process. Regarding giving credits or investment, recognized as the Bank’s core business, policies were formulated to regulate lending to major shareholders or related parties, and investing in certain businesses with related interest, according to the BOT’s criteria. As for IT controlling system, the formulation of IT procedures, security policy/standard, as well as general control standard, development and maintenance, are established as standards for controlling and protecting IT operations of the Bank.
090
ANNUAL REPORT 2015
4. Information and Communication System The Bank provides significant, complete, and necessary for Bank’s directors, executives, and supervisory business units for their operation and makes decisions adequately. The Bank continuously develops its information system and as well as its financial business group’s focusing on enhancing efficiency and enabling the system to properly support business growth. Communication channel (Whistle-blower Hotline) is also provided for internal as well as external persons/units to report information concerning fraud or corruption.
5. Monitoring and Tracking System The Bank provides the performance monitoring and reporting process to report on business units’ performance target to the Board of Directors on a monthly basis and review goals every six months. The Audit, reporting directly 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 significant issues as well as following up corrective actions to ensure such issues are corrected appropriately. End-to-end Process audit and Continuous Control and Monitoring audit are performing to control and monitor irregular transactions.
Head of Internal Audit and Head of Compliance of the Bank Head of Internal Audit The Bank assigned Mrs. Vijitra Thumpothong as Head of Internal Audit and responsible for Bank internal audit. As she has been working in internal audit area for commercial banking for over ten years, she possesses the knowledge and professionalism in banking operations. Thus, she is suitable to perform the task. When considering the appointment, evaluation, demotion, transfer, and layoff, the Head of Internal Audit must obtain the approval from the Audit Committee. Head of Compliance The Bank assigned Ms. Kavita Boonpochanasoontorn as Head of Compliance to be in charge of rules and regulations, which align with the operating business.
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. The Board of Directors Meeting No. 2/2016 on 18 February 2016, the Board of Directors agreed that the Bank’s internal control system is adequate and appropriate for its business operations which are in line with Bank’s external auditor opinion.
THANACHART BANK PUBLIC COMPANY LIMITED
091
REPORT OF THE NOMINATION AND REMUNERATION COMMITTEE On 26 March 2002, the Bank’s Board of Directors approved the establishment of the Nomination Committee and the Remuneration Committee. On 25 March 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 to “the Nomination and Remuneration Committee”. The Committees consisted of two independent directors and one non-executive director whose names as of 31 December 2015 were as follows: 1. 2. 3.
Mr. Narong Chivangkur Mr. Sataporn Jinachitra Mr. Rod Michael Reynolds Mr. Thaneit Khantikaroon
Chairman Member Member Secretary
(Independent Director) (Independent Director) (Non-Executive Director)
In 2015, the Nomination and Remuneration Committee convened ten 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 2015 to the Bank’s Board of Directors’ meeting and the Annual General Meeting of the Shareholders. 3. To select and nominate to the Board of Director the appropriate persons to be appointed as Executives. 4. To provide opportunities for shareholders to propose appropriate persons to be appointed as Bank’s directors in the 2016 Annual General Meeting of Shareholders of TBANK. 5. To review and recommend 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 2015 remuneration packages were proposed for approval at the Bank’s Board of Directors’ meeting and the Annual General Meeting of Shareholders for the year 2015. 6. To consider and recommend the performance evaluation, adjustment of annual salary and bonus of Chairman of the Executive Committee, Chief Executive Officer and President, and Executives. 7. To consider and recommend the remuneration of the Chairman of the Executive Committee and Chief Executive Officer and President. 8. To review and recommend the Thanachart Group’s Executives Succession Plan. 9. To review and recommend the salary structure based on salary survey results of other financial institutions and other dimensions.
(Mr. Narong Chivangkur) Chairman of the Nomination and Remuneration Committee
092
ANNUAL REPORT 2015
MANAGEMENT STRUCTURE
The Board of Directors The Bank’s Board of Directors consists of those with high competence who posses expertise and experience in finance & accounting, management, and other professional areas, which allows the Bank to benefit from the well-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 31 December 2015 were as follows: Name
Position
Executive Director
Non-Executive Director
Independent Director
Chairman
-
✓
-
Vice Chairman
✓
-
-
1. Mr. Banterng
Tantivit
2. Mr. Suphadej
Poonpipat
3. Mr. Kiettisak
Meecharoen
Director
-
-
✓
4. Mr. Narong
Chivangkur
Director
-
-
✓
5. Mr. Sataporn
Jinachitra
Director
-
-
✓
6. Assoc. Prof. Dr. Somjai Phagaphasvivat
Director
-
-
✓
7. Mr. Alberto
Jaramillo
Director
-
✓
-
8. Mr. Rod
Michael Reynolds
Director
-
✓
-
9. Mr. Walter
Tas
Director
-
✓
-
10. Ms. Suvarnapha
Suvarnaprathip
Director
✓
-
-
11. Mr. Peter
Clifford Bessey
Director
✓
-
-
12. Mr. Somjate
Moosirilert
Director
✓
-
-
Directors retired from position in 2015 1. Mr. Kobsak Duangdee
Director
-
✓
-
Notes: 1) Mr. Kobsak Duangdee resigned from his directorship on 1 March 2015. 2) Mr. Walter Tas has assumed his directorship since 1 March 2015. 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.
THANACHART BANK PUBLIC COMPANY LIMITED
093
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 2015 List of TBANK’s Directors
Board of Directors
Executive Committee
Audit Committee
(13 Meetings) (54 Meetings) (11 Meetings)
Nomination and Risk Management Remuneration Committee Committee (10 Meetings)
(12 Meetings)
1. Mr. Banterng
Tantivit
13/13
-
-
-
-
2. Mr. Suphadej
Poonpipat
13/13
51/54
-
-
-
3. Mr. Kiettisak
Meecharoen
13/13
-
11/11
-
-
4. Mr. Narong
Chivangkur
13/13
-
-
10/10
-
5. Mr. Sataporn
Jinachitra
13/13
-
11/11
10/10
-
6. Assoc. Prof. Dr. Somjai Phagaphasvivat
13/13
-
11/11
-
-
7. Mr. Alberto
Jaramillo
11/13
-
-
-
-
8. Mr. Rod
Michael Reynolds
6/13
-
-
6/10
-
9. Mr. Walter
Tas
8/11
-
-
-
-
10. Ms. Suvarnapha
Suvarnaprathip
12/13
52/54
-
-
-
11. Mr. Peter
Clifford Bessey
13/13
51/54
-
-
9/12
12. Mr. Somjate
Moosirilert
13/13
54/54
-
-
11/12
1/2
-
-
-
-
Directors retired from position in 2015 1. Mr. Kobsak
Duangdee
Notes: 1) Mr. Kobsak Duangdee resigned from his directorship on 1 March 2015. 2) Mr. Walter Tas has assumed his directorship since 1 March 2015.
094
ANNUAL REPORT 2015
Performance Evaluation of the Board of Directors The Bank arranges a self-evaluation of the Board of Directors at least once a year for the Board to jointly scrutinize their performance and issues for further improvement. The performance evaluation of the Board of directors is conducted in 2 manners i.e. the collective performance evaluation and the individual performance evaluation. The evaluation forms are in line with the corporate governance of the Stock Exchange of Thailand and the Bank.
Executives As of 31 December 2015, 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 and Small Business Banking 9. Mr. Enghug Nontikarn Executive Vice President - Treasury & Debt Capital Markets 10. Mr. Sanong Kumnuch Executive Vice President - Retail & Small Business Distribution 11. Mr. Ziad El-Hoss Executive Vice President - Chief Risk Officer 12. Ms. Wisarnsri Nilodom Executive Vice President - Corporate Banking Team 2 13. Mr. Boonlerd Sinsombat Executive Vice President - Information Technology 14. Mr. Praphan Anupongongarch Executive Vice President - Automotive Lending 15. Mrs. Sasima Taweeskulchai Executive Vice President - Special Asset Management 16. Mr. Ricky Jon Yakabowich Executive Vice President - Shared Services 17. Ms. Angkana Swasdipoon Executive Vice President - Office of Executive Committee Chairman and CEO 18. Mr. Wutthichai Suraratchai Executive Vice President - Credit Risk Management 19. Ms. Kanoksri Rojmeta Executive Vice President - Retail & Small Business Distribution 3 (North) 20. Mrs. Vijitra Thumpothong Executive Vice President - Chief Audit 21. Mr. Kriangkrai Phurivitvattana Executive Vice President - Business Transformation 22. Mr. Wichak Praditavanij Executive Vice President - Retail & Small Strategic Management 23. Dr. Sutut Chitmongkongsuk Executive Vice President - Commercial Banking 24. Mr. Songwut Chaowalit Executive Vice President - Retail & Small Business Distribution 1 (BKK 1) 25. Mr. Pompet Rasanon Executive Vice President - Sales Network - Automotive Lending 26. Mr. Lalit Dodampe Gamange Dharmaseri Executive Vice President - Head Treasury 27. Mr. Wisoot Tangadulrat Executive Vice President - Corporate Banking Sales 1 28. Mr. Wathanyu Nithyayon Executive Vice President - Corporate Banking Sales 2 29. Mr. Noel Singh Executive Vice President - Corporate & Commercial Products 30. Mrs. Anisa Choocharn Executive Vice President - Non-Branch Channels 31. Mrs. Pittimart Sanguansook Senior Vice President - Accounting 32. Mrs. Teranuj Koomsap Senior Vice President - Finance
THANACHART BANK PUBLIC COMPANY LIMITED
095
Notes: 1. Number 3 - 13 are executive officers and number 31 - 32 are those in the top four levels after the President as defined by the SEC. 2. Number 1 - 30 are those with managing authority under section 4 and 25 of the Financial Institution Business Act B.E. 2551. 3. The changes during 2015 were as follows: 3.1 Mr. Watchara Permphithak, Senior Vice President - Asset Development, has the obligation to work in the Bank with effect from 1 March 2015. 3.2 Mrs. Kjitphan Chunharit, Executive Vice President - Information Technology, retired early retirement with effect from 16 May 2015. 3.3 Mr. Boonlerd Sinsombat has been appointed as Executive Vice President - Information Technology with effect from 1 April 2015. (Appointed as Chief Information Technology in line to replace Mrs. Kjitphan Chunharit with effect from 16 May 2015) 3.4 Mr. Kalyanaraman Sivaramakrishnan, Executive Vice President - Retail Risk Management, resigned with effect from 20 May 2015. 3.5 Mr. Vivek Chandra, Executive Vice President, has the obligation to work in the Bank with effect from 17 June 2015. 3.6 Ms. Abhiradee Sukhajoti, Executive Vice President - Human Resources, retired early retirement with effect from 15 August 2015. 3.7 Mr. Noel Singh has been appointed as Executive Vice President - Corporate & Commercial Products with effect from 15 August 2015. 3.8 Mrs. Anisa Choocharn has been appointed as Executive Vice President - Non-Branch Channels with effect from 20 November 2015.
096
ANNUAL REPORT 2015
THANACHART BANK PUBLIC COMPANY LIMITED
097
7 Executive Vice President, Information Technology
Executive Vice President, Shared Services
5 Executive Vice President, Retail and Small Business Banking
Executive Vice President, Business Transformation
Remark: 1 - 13 means executives according to SEC’s definition
6 Executive Vice President, Treasury & Debt Capital Markets
Deputy Chief Executive Officer
Credit Committee
Investment Portfolio Committee
Asset and Liability Management Committee
8
1
Executive Vice President, Automotive Lending
Senior Vice President, Collections & Recoveries Senior Vice President, Investment Banking
Executive Vice President, Corporate Banking Team 2 Executive Vice President, Commercial Banking Executive Vice President, Corporate & Commercial Products
9
Senior Vice President, Finance 13 Senior Vice President, Communication & Brand Management Senior Vice President, Marketing Communication
Senior Vice President, Accounting 12
Executive Vice President, Chief Financial Officer 11
Senior Vice President, Compliance
Senior Vice President, Compensation & Payroll Management
Executive Vice President, Human Resources
Executive Vice President, Chief Audit
Audit Committee
Executive Vice President, Office of Executive Committee Chairman and CEO
Executive Vice President, Investment Management 10
Chief Executive Officer and President
Executive Committee
Board of Directors
Executive Vice President, Corporate Banking Team 1
Risk Management Committee
Nomination and Remuneration Committee
4 Executive Vice President, Retail & Small Business Distribution
2
3 Executive Vice President, Chief Risk Officer
as at 31 December 2015
Management Structure of the Bank
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 2015, the Bank has remunerated 3 panels of the Board of Directors, the Audit Committee, and the Nomination and Remuneration Committee totaling THB 34,244,193.65. The remuneration was paid in the forms of monthly compensation, meeting stipend, and bonus (based on the performance in 2014), which can be summarized as follows: Table of the remuneration of the Board of Directors List of Directors
1. Mr. Banterng Tantivit 2. Mr. Suphadej Poonpipat 3. Mr. Kiettisak Meecharoen 4. Mr. Narong Chivangkur 5. Mr. Sataporn Jinachitra 6. Assoc. Prof. Dr. Somjai Phagaphasvivat 7. Mr. Alberto Jaramillo 8. Mr. Rod Michael Reynolds 9. Mr. Walter Tas 10. Ms. Suvarnapha Suvarnaprathip 11. Mr. Peter Clifford Bessey 12. Mr. Somjate Moosirilert Directors retired from position in 2015 1. Mr. Kobsak Duangdee Directors retired from position in 2014 1. Mr. Brendan George John King Total Remarks:
Type of remuneration (Baht per year) Monthly Meeting Performance compensation stipends allowance
Total
1,200,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00 500,000.00 600,000.00 600,000.00 600,000.00
650,000.00 325,000.00 325,000.00 325,000.00 325,000.00 325,000.00 275,000.00 150,000.00 200,000.00 300,000.00 325,000.00 325,000.00
3,053,722.10 1,526,861.05 1,526,861.05 1,526,861.05 1,526,861.05 1,526,861.05 1,526,861.05 1,526,861.05 0.00 1,526,861.05 510,348.08 1,526,861.05
4,903,722.10 2,451,861.05 2,451,861.05 2,451,861.05 2,451,861.05 2,451,861.05 2,401,861.05 2,276,861.05 700,000.00 2,426,861.05 1,435,348.08 2,451,861.05
100,000.00
25,000.00
1,526,861.05
1,651,861.05
0.00 7,800,000.00
0.00 3,875,000.00
1,016,512.97 19,849,193.65
1,016,512.97 31,524,193.65
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) Mr. Kobsak Duangdee resigned from his directorship on 1 March 2015. 4) Mr. Walter Tas has assumed his directorship since 1 March 2015.
* The Bank is exempted from the enforcement of Division 3/1 of the Securities and Exchange Act B.E. 2535, amended by the Securities and Exchange Act (4th Edition) B.E. 2551 (in congruence with the Notification of the Securities and Exchange Commission No. TorJor. 22/2008 Re: Characteristics of companies exempted from the enforcement of Division 3/1 of the Securities and Exchange Act B.E. 2535, amended by the Securities and Exchange Act (4th Edition) B.E. 2551.
098
ANNUAL REPORT 2015
Table of the remuneration of the Audit Committee Directors
Type of remuneration (Baht per year) Monthly Meeting Total compensation stipend
1. Mr. Kiettisak
Meecharoen
540,000.00
330,000.00
870,000.00
2. Mr. Sataporn
Jinachitra
360,000.00
165,000.00
525,000.00
360,000.00
165,000.00
525,000.00
1,260,000.00
660,000.00
1,920,000.00
3. Assoc. Prof. Dr. Somjai Phagaphasvivat Total
Table of the remuneration of the Nomination and Remuneration Committee Directors
Type of remuneration (Baht per year) Meeting stipend
1. Mr. Narong
Chivangkur
400,000.00
2. Mr. Sataporn
Jinachitra
250,000.00
3. Mr. Rod
Michael Reynolds
150,000.00
Total
800,000.00
The remuneration of independent director of the subsidiaries None of the Bank’s independent director sits as an independent director of the subsidiaries. (b) 2015 total remuneration, number of executive directors and executives, and forms of remuneration
In 2015, 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 13 executive directors and executives that a total remuneration paid amounted to THB 94,901,672. • 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 35 of those with managing authority (including 5 executives changed during the past year) that a total remuneration paid amounted to THB 201,907,062.
(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 2015, provident fund was paid in compliance with the regulations as follows: • By the SEC’s definition, there were 13 executive directors and executives that a total provident fund paid amounted to THB 3,721,606. • 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 35 of those with managing authority (including 5 executives changed during the past year) that a total provident fund paid amounted to THB 8,278,435. THANACHART BANK PUBLIC COMPANY LIMITED
099
BOARD OF DIRECTORS AND MANAGEMENT TEAM
Mr. Banterng Tantivit
Chairman (Non-Executive Director) Date of Appointment
22 April 2002
Age
71 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 2003 - 2015 2001 - 2015 2012 - 2014 2005 - 2013 2006 - 2012 2010 - 2011 Position(s) in Other Listed Companies 2015 - Present 2006 - Present 1989 - Present Position(s) in Other Legal Entities 2006 - Present 2003 - Present 1987 - Present
100
ANNUAL REPORT 2015
• Chairman, Plan Estate Company Limited • Advisor, Patum Rice Mill and Granary Public Company Limited • Advisor, Dusit Thani Public Company Limited • Chairman, Thanachart Insurance Public Company Limited • Chairman, Thanachart Life Assurance Public Company Limited • Vice Chairman, Thanachart Insurance Public Company Limited • Chairman, Siam City Bank Public Company Limited • Director, Dusit Thani Public Company Limited • Chairman, Thanachart Capital Public Company Limited • Chairman, MBK Public Company Limited • Chairman of the Executive Committee, MBK Public Company Limited • Director, Siam Piwat Holding Company Limited • Chairman, MBK Resort Public 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 65 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, Thai Institute of Directors Association Duties, and Skills of Directorship • 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 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 Capital Market Academy, the Stock Exchange of Thailand • Certificate, Leadership Program, Class 8/2009 Ernst & Young Office Limited with Thanachart Training and Development Company Limited • Overview and Principles of International Accounting Standards No. 39 (IAS39) (2009) Thanachart Training and Development Company Limited with SASIN • Thailand in the New Global Landscape (2009) Percentage of Shareholding in TBANK None Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2011 - 2015 • Director, DMS Property Investment Private Limited 2003 - 2015 • Director, Plan Estate Company Limited 2012 - 2014 • Vice Chairman, Thanachart Insurance Public Company Limited 2003 - 2013 • Director and Chairman of the Executive Committee, Thanachart Life Assurance Public Company Limited 2011 - 2012 • Vice Chairman, Patum Rice Mill and Granary 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 1989 - Present • Director, MBK Public Company Limited Position(s) in Other Legal Entities 2015 - Present • Chairman, DMS Property Investment Private Limited 2014 - Present • Chairman, Siam City Life Assurance Public Company Limited • Chairman, Thanachart Insurance Public Company 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 • Chairman, MBK Resort Public Company Limited 2003 - Present • Director, Siam Piwat Company Limited THANACHART BANK PUBLIC COMPANY LIMITED
101
Mr. Kiettisak Meecharoen
Chairman of the Audit Committee (Independent Director) Date of Appointment
22 April 2002
Age
69 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 Percentage of Shareholding in TBANK
Thai Institute of Directors Association • Certificate, Director Accreditation Program (DAP), Class 40/2005 • Certificate, Audit Committee Program (ACP), Class 10/2005 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 World Bank • Futures Exchange (1995) Merrill Lynch, New York • Portfolio Investment (1994) JP Morgan, New York • Management Reserves (1993) Harvard Institute for International Development, Harvard University • Banking and Monetary Policy in Developing Countries (1988) 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
102
ANNUAL REPORT 2015
Mr. Narong Chivangkur
Chairman of the Nomination and Remuneration Committee (Independent Director) Date of Appointment
22 April 2002
Age
71 years
Education(s)
• Higher Diploma in Business and Marketing, Assumption Commercial College
Training Program Related to Roles, Thai Institute of Directors Association Duties, and Skills of Directorship • 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 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 Pennsylvania State University • Advanced Executive Development Program (1987) Rochester Institute of Technology, New York, U.S.A. • Financial Management Program (1986) Michigan State University, Ann ADOR • Management of Managers (1984) Asian Institute of Management, Philippines • Management Development Program (1982) Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2005 - 2014 • Director, Momchailai Development Company Limited 2003 - 2012 • Director, Momentum IM Company Limited 2010 - 2011 • Independent Director and Chairman of the Nomination and Remuneration Committee, Siam City Bank Public Company Limited 2004 - 2011 • Director, Momentum Sale and Distribution Company Limited Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2000 - Present • Director, Momentum BBS Company Limited THANACHART BANK PUBLIC COMPANY LIMITED
103
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 • The Thailand’s 5th National Conference on Collective Action against Corruption, under the theme of “Tackling Corruption through Public-Private Collaboration • 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 Thanachart Bank Public Company Limited • Anti Corruption for Executives, 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 • Independent Director, Member of the Audit Committee, and Member of the Nomination and Remuneration Committee, Siam City Bank Public Company Limited 2006 - 2011 • Dispute Resolution Committee, Interconnection Institution, NTC 1999 - 2011 • Director, Thai Institute of Directors Association Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2013 - Present • Managing Partner, Kulab Daeng Partnership
104
ANNUAL REPORT 2015
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 - 2013 • Chairman of the Audit Committee, SEAFCO Public Company Limited 1996 - 2013 • 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 2015 - Present • Director, Supalai Public Company Limited 2013 - Present • Chairman, SEAFCO Public Company Limited • Chairman of the Audit Committee, Amarin Printing and Publishing Public Company Limited 2007 - Present • Independent Director and Chairman of the Audit Committee, Lee Feed Mill Public Company Limited 2006 - Present • Independent Director, SEAFCO Public Company Limited 1996 - Present • Independent Director, Amarin Printing and Publishing Public Company Limited Position(s) in Other Legal Entities 2007 - Present • Director and Chairman of the Audit Committee, The Krungthep Thanakom Company Limited • Director and Chairman of the Audit Committee, Thai Hua Rubber Public Company Limited * Notes: * Assoc. Prof. Dr. Somjai Phagaphasvivat resigned from his directorship and Chairman of the Audit Committee of Thai Hua Rubber Public Company Limited, effective on 7 January 2016.
THANACHART BANK PUBLIC COMPANY LIMITED
105
Mr. Alberto Jaramillo
Director (Non-Executive Director) Date of Appointment
27 September 2011
Age
44 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 • Director, Siam City Bank Limited Liability Company 2005 - 2011 • Treasurer, The Bank of Nova Scotia Inverlat, Mexico Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2013 - Present • Manager, Cga Arkad Investments Limited Liability Company 2011 - Present • Director, The Bank of Nova Scotia Asia Limited, Singapore * • Director, Scotiabank (Hong Kong) Limited, Hong Kong * • Vice President and Regional Treasurer, Scotiabank Asia-Pacific, Hong Kong ** Notes: * Mr. Alberto Jaramillo resigned from his directorship of The Bank of Nova Scotia Asia Limited, Singapore and Scotiabank (Hong Kong) Limited, Hong Kong, with effect from 1 March 2016. ** Mr. Alberto Jaramillo has already been repatriated to take the position as Vice President, Structural Cost Transformation at The Bank of Nova Scotia, Toronto, in replacement of the former position as Vice President and Regional Treasurer at Scotiabank Asia-Pacific, Hong Kong, with effect from 8 February 2016.
106
ANNUAL REPORT 2015
Mr. Rod Michael Reynolds
Member of the Nomination and Remuneration Committee (Non-Executive Director) Date of Appointment
15 January 2013
Age
58 years
Education(s)
• Master of Business Administration, York University, Toronto, Canada • Bachelor of Science in Engineering, Queen’s University, Ontario, Canada
Training Program Related to Roles, Duties, and Skills of Directorship
Euromoney Training • Euromoney Asia corporate Governance program (2012)
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2012 - 2015 • Senior Independent Director, C.H. Bailey Public Limited Company 2009 - 2013 • Director, Tulsa Inspection Resources Limited Liability Company Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2009 - Present • Director, Logarithmics Limited 1983 - Present • Various positions currently President, Asia Pacific, The Bank of Nova Scotia
THANACHART BANK PUBLIC COMPANY LIMITED
107
Mr. Walter Tas
Director (Non-Executive Director) Date of Appointment
1 March 2015
Age
44 years
Education(s) • Master of Arts, Economics and Business Administration, Vrije Universiteit Amsterdam, The Netherlands • Bachelor of Commerce - Economics, Hogeschool voor Economische Studies, Amsterdam, The Netherlands Training Program Related to Roles, None Duties, and Skills of Directorship Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2011 - 2014 • Vice President, Bank of Nova Scotia - Strategic Transactions and Review 2007 - 2011 • Director, Bank of Nova Scotia - Strategic Transactions and Review Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2014 - Present • Vice President, Chief Financial Officer and Corporate Development, Bank of Nova Scotia - Asia Pacific • Director, Scotiabank (Hong Kong) Limited, Hong Kong
108
ANNUAL REPORT 2015
Ms. Suvarnapha Suvarnaprathip
Vice Chairperson of the Executive Committee (Executive Director) Date of Appointment
22 April 2002
Age
70 years
Education(s)
• Bachelor of Economics, Monash University, Australia
Training Program Related to Roles, Thai Institute of Directors Association Duties, and Skills of Directorship • Certificate, Director Accreditation Program (DAP), Class 20/2004 Ernst & Young Office Limited with Thanachart Training and Development Company Limited • Overview and Principles of International Accounting Standards No. 39 (IAS39) (2009) Thanachart Training and Development Company Limited with SASIN • Thailand in the New Global Landscape (2009) Banker Trust, New York, U.S.A. • Corporate Finance 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 2008 - Present • Vice Chairperson of the Executive Committee, Thanachart Capital Public Company Limited 2005 - Present • Director, Thanachart Capital Public Company Limited Position(s) in Other Legal Entities 1991 - Present • Director, Seacon Development Public Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
109
Mr. Peter Clifford Bessey
Vice Chairman of the Executive Committee and Deputy Chief Executive Officer (Executive Director) Date of Appointment
1 September 2014
Age
55 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 • President and Chief Executive Officer, Scotiabank de Puerto Rico 2008 - 2011 • Senior Vice President, Retail and Small Business Banking Atlantic Region, Halifax, Nova Scotia, Canada Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2014 - Present • Director, Thanachart Insurance Public Company Limited
110
ANNUAL REPORT 2015
Mr. Somjate Moosirilert
Member of the Executive Committee and Chief Executive Officer and President (Executive Director) Date of Appointment 29 October 2009 Age 59 years Education(s) • Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Business Administration, Thammasat University Training Program Related to Roles, Thai Institute of Directors Association Duties, and Skills of Directorship • Certificate, Role of the Chairman Program (RCP), Class 5/2001 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 Thai Listed Companies Association, the Stock Exchange of Thailand • Certificate, TLCA Leadership Development Program (LDP) (2012) Capital Market Academy, the Stock Exchange of Thailand • Certificate, Leadership Program, Class 5/2007 Judicial Training Institute • Certificate in the program for Senior Executives on Justice Administration, Class 9/2005 Percentage of Shareholding in TBANK None Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2011 - 2015 • Director and Vice Chairman, Thai Listed Companies Association 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 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 2015 - Present • Advisor, Thai Listed Companies Association 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 • 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 THANACHART BANK PUBLIC COMPANY LIMITED
111
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 Thai Institute of Directors Association • Certificate, DCP Refresher Course, Class 4/2007 • Certificate, Director Certification Program (DCP), Class 19/2002 Harvard Business School • Certificate in Advanced Management Program (AMP 168) Capital Market Academy, The Stock Exchange of Thailand • Certificate, Leadership Program, Class 7 (CMA 7) The National Defence College • Diploma, National Defence College, The Joint-State-Private Sectors Course, (Class 22) 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
112
ANNUAL REPORT 2015
Mr. Piyaphong Artmangkorn
Executive Vice President, Investment Management Date of Appointment
1 September 2005
Age
58 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 Executives, 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
None • Executive Committee, MBK Public Company Limited • Director, MBK Public Company Limited None
THANACHART BANK PUBLIC COMPANY LIMITED
113
Mr. Anuwat Luengtaweekul
Executive Vice President, Chief Financial Officer Date of Appointment
1 June 2009
Age
52 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 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 Association of Finance Companies • Financers’ Executive Development Program, Class 9/1994 Percentage of Shareholding in TBANK None Family Relationship with Director and Management None Experience(s) in the Past 5 Years 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
114
ANNUAL REPORT 2015
Mr. Ajay Pratap Mundkur
Executive Vice President, Retail and Small Business Banking Date of Appointment
23 June 2009
Age
51 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 • Vice President, Retail Banking, Asia-Pacific Region, The Bank of Nova Scotia Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2012 - Present • Senior Vice President, International Banking, The Bank of Nova Scotia
THANACHART BANK PUBLIC COMPANY LIMITED
115
Mr. Enghug Nontikarn
Executive Vice President, Treasury and Debt Capital Markets Date of Appointment
1 June 2011
Age
59 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 Executives, 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
116
ANNUAL REPORT 2015
Mr. Sanong Kumnuch
Executive Vice President, Retail and Small Business Distribution Date of Appointment
12 February 2015
Age
54 years
Education(s) • Master of Business Administration (Finance), University of the Thai Chamber of Commerce • Bachelor of Laws, Sukhothai Thammathirat Open University • Bachelor of Accountancy, Ramkhamhaeng University Training Program
Association of Investment Management Companies • Securities Investment Consultant Tutoring PacRim Group • Leadership Greatness The Bank of Thailand • Anti-Corruption for Executives Grid Business Solutions Limited • The Leadership Grid The Continuing Education Center Chulalongkorn University • Psychology of Leadership for Executives
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2010 - 2015 Position(s) in Other Listed Companies Position(s) in Other Legal Entities
• Executive Vice President, Thanachart Bank Public Company Limited None None
THANACHART BANK PUBLIC COMPANY LIMITED
117
Mr. Ziad El-Hoss
Executive Vice President, Chief Risk Officer Date of Appointment
12 February 2015
Age
60 years
Education(s) • Master of Business Administration, The American University of Beirut, U.S.A. Training Program
Canadian Securities Course The Bank of Nova Scotia • Advanced Anti-Corruption training • Anti-Corruption Doing Business The Right Way • Understand Global Sanctions
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2013 - 2015 • Executive Vice President, Chief Risk Officer, Thanachart Bank Public Company Limited 2008 - 2013 • Vice President, The Bank of Nova Scotia Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2015 - Present • Vice Chairman, TS Asset Management Company Limited
118
ANNUAL REPORT 2015
Ms. Wisarnsri Nilodom
Executive Vice President, Corporate Banking Team 2 Date of Appointment
12 February 2015
Age
52 years
Education(s) • Master of Business Administration, SASIN Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Accountancy, Chulalongkorn University Training Program Capital Market Academy, The Stock Exchange of Thailand • Certificate, Leadership Program, Class 21 (CMA 21) The National Defence College • Diploma, Advanced Security Management Program (ASMP 5) The Bank of Thailand • Anti-Corruption for Executives Thanachart Bank Public Company Limited • Security officials in the executive management Course, Class 2/2014 • Bank Guarantee and Stand by L/C and International Regulations, Class 3/2013 • Knowledge of the Money Laundering Act and the Terrorism Financing Act for Branch Executives Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 2013 - 2015 • Executive Vice President, Thanachart Bank Public Company Limited 1999 - 2013 • Executive Vice President, Standard Chartered Bank (Thai) Public Company Limited Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2015 - Present • Director, Partners CSR (Thailand) Company Limited • Director, Money M Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
119
Mr. Boonlerd Sinsombat
Executive Vice President, Information Technology Date of Appointment
1 April 2015
Age
48 years
Education(s) • Master of Science (Computer & Engineering Management), Assumption University • Bachelor of Science (Mathematics), King Mongkut’s Institute of Technology Thonburi Training Program
PacRim • Leadership Great Leader Great Team Great Result GE Capital • Executive Information Leadership Program - usa Thai Banking Association • Banker Managerial Training
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management None Experience(s) in the Past 5 Years 1998 - 2015 • Executive Vice President, KGCP Information Technology, Ayudhya Capital Services Company Limited Position(s) in Other Listed Companies None Position(s) in Other Legal Entities None
120
ANNUAL REPORT 2015
Mrs. Pittimart Sanguansook
Senior Vice President, Accounting Date of Appointment
1 January 2014
Age
51 years
Education(s)
• Bachelor of Accounting, Thammasat University • High Diploma in Auditing, Thammasat University
Training Program
• Seminar IFRS, Toronto, Canada • Seminar Fundamental Practice for CFO
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
42 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
• Senior Vice President, Siam Commercial Bank Public Company Limited None None
THANACHART BANK PUBLIC COMPANY LIMITED
121
ANNUAL REPORT 2015
E
E
E
G
G
Pratap Mundkur
Nontikarn
Kumnuch
El-Hoss
Nilodom
Sinsombat
Sanguansook
Koomsap
Mr. Ajay
Mr. Enghug
Mr. Sanong
Mr. Ziad
Ms. Wisarnsri
Mr. Boonlerd
Mrs. Pittimart
Mrs. Teranuj
X/
X
X X F
X
XX
X
X
X
X F
X
X
F A X
X
F X
X
X
X
X
X
X
// Vice Chairman D Senior Executive Vice President่
X XXX X
Notes: XXX Chairman XX Vice Chairman X Director /// Chairman of the Executive Committee / Chairperson of the Executive Committee A Chief Executive Officer B Chief Executive Officer and President C Deputy Chief Executive Officer E Executive Vice President F Authorized Person Management Power G Senior Vice President
E
E
E
E
Luengtaweekul
Mr. Anuwat
E
X
X / B X / D XXX /// XXX /// XX // XXX
Moosirilert
X
Mr. Somjate
Mr. Piyaphong Artmangkorn
X
X // C
E
X
Clifford Bessey
Mrs. Noossara Roonsamrarn
X
X XXX /// X XXX XXX X
Mr. Peter
Ms. Suvarnapha Suvarnaprathip
X
Tas
Mr. Walter
X
X // X //
X
Michael Reynolds
Mr. Rod
Assoc. Prof. Dr. Somjai Phagaphasvivat
X
X
Mr. Sataporn Jinachitra
Jaramillo
X
Chivangkur
Mr. Narong
Mr. Alberto
X
Meecharoen
X
X XXX X
X
Poonpipat
Mr. Kiettisak
XXX ///
Related Companies 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
Mr. Suphadej
9 XX //
8 XXX /// X
7
XX /// XX /// A
6
XXX XXX
5
Associated Company
Tantivit
4
3
1
2
Subsidiary Companies
Parent Company
Mr. Banterng
Name
As of 31 December 2015
The Information of the Executives and Authorized Persons’ Position in Subsidiary, Associated, and Related Companies
TBANK
122
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. Dusit Thaini Public Company Limited 29. Lee Feed Mill Public Company Limited 11. Siam Piwat Holding Company Limited 30. Krungthep Thanakorn Company Limited 12. MBK Resort Public Company Limited 31. Thai Hua Rubber Public Company Limited 13. Siam Piwat Company Limited 32. Cga Arkad Investments Limited Liability Company 14. B.V. Holding Company Limited 33. The Bank of Nova Scotia Asia Limited, Singapore 15. Deebuk Company Limited 34. Scotiabank (Hong Kong) Limited, Hong Kong 16. Thai Farming Company Limited 35. The Bank of Nova Scotia, Pacific Regional Office, Hong Kong 17. Patum Rice Mill and Granary Public Company Limited 36. The Bank of Nova Scotia 18. Royal Orchid Hotel (Thailand) Public Company Limited 37. Logarithmics Company Limited 19. DMS Property Investment Private Limited 38. The Bank of Nova Scotia - Asia Pacific 20. Siam City Life Assurance Public Company Limited 39. Seacon Development Public Company Limited 21. Thai Royal Orchid Real Estate Company Limited 40. Sasin Graduate Institute of Business Administration of 22. Tararom Enterprise Public Company Limited Chulalongkorn University 23. Safety Insurance Public Company Limited 41. The Thai Bankers’ Association 24. Momentum BBS Company Limited 42. Srithai Superware Public Company Limited 25. Kub Daeng Partnership 43. TRIS Corporation Limited 26. Supalai Public Company Limited 44. Partners CSR (Thailand) Company Limited 27. SEAFCO Public Company Limited 45. Money M Company Limited 28. Amarin Printing & Publishing Public Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
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GENERAL INFORMATION
Investment of the Bank 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 Total number of Total number Percent TBANK’s of 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, 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 nd 2 Suan Mali Building, 2 Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1569 Fax. +66 (0) 2220-2522
4.
74,000,000
73,999,434
100.00
Ordinary Share
600,000
599,993
100.00
Thanachart Training and Development Co., Ltd. Training 2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1018 Fax. +66 (0) 2220-2300
Ordinary Share
500,000
499,993
100.00
5.
Thanachart Group Leasing Co., Ltd. Leasing 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000, 2613-6000 Fax. +66 (0) 2217-8098
Ordinary Share
36,000,000
35,999,994
100.00
6.
National Leasing Co., Ltd.2 Leasing 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000
Ordinary Share
600,000
599,994
100.00
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ANNUAL REPORT 2015
Non-life Ordinary Insurance Share
No.
Company / Location
Type of Business
7.
SCIB Services Co., Ltd. Services 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5061-2 Fax. +66 (0) 2651-6611
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. 999/3, 999/4 The Nine Tower D, E, F, 4th Floor, Rama 9 Road, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9700 Ext. 2235 Fax. +66 (0) 2308-9775
10.
Thanachart Fund Management Co., Ltd. 231 SCI Life Building, 5th - 7th Floor, Ratchadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2126-8300 Fax. +66 (0) 2252-1733
11.
Ratchthani Leasing PCL. Leasing th 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
of Type Total number of Total number Percent TBANK’s of shares paid-up shares of share held shareholding1 Ordinary Share
100,000
99,998
100.00
Non-performing Ordinary asset Share management
200,000,000
199,999,997
100.00
Life and Ordinary Non-life Share Insurance Broker
10,000,000
9,999,000
99.99
Mutual fund Ordinary management Share
10,000,000
7,499,993
75.00
Ordinary 2,416,227,209 1,574,951,400 Share
65.18
Ordinary Share
240,000
80,000
33.33
13.
Siam Media and Communication Co., Ltd.3 Communication Ordinary th nd 18 Building 2 West SCB Park Plaza, 17 - 22 Floor, Share Ratchadapisek Road, Ladyao, Chatuchak, Bangkok 10990
7,000,000
1,633,800
23.34
14.
High Pressure Steal Pipe Industry Co., Ltd.3 36/4 Moo 2, Soi Wat Mahawong, Phuchaosmingprai Road, Samrong, Prapha Daeng, Samut Prakarn 10130
500,001
70,470
14.09
12. Thoon Ruam Kan Co., Ltd.3 Others 133/2 Soi Sukhumvit 21, Sukhumvit Road, Klongtoey, Bangkok 10110
Industrial pipe Ordinary Manufacturing Share
THANACHART BANK PUBLIC COMPANY LIMITED
125
No.
Company / Location
Type of Business
of Type Total number of Total number Percent TBANK’s of shares paid-up shares of share held shareholding1
15. 16.
Puen Pob Paet Co., Ltd.3 Medical Clinic Ordinary 444 MBK Tower, 9th Floor, Phayathai Road, Share Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2220-2222
100,000
9,998
10.00
Crystal City Development Co., Ltd.3 Construction Ordinary 419 Sathupradit Road, Chong Nonsi, Share Yannawa, Bangkok 10120
750,000
75,000
10.00
17.
Metropolitan Industrial Leasing Co., Ltd.3 Leasing 81/42 Moo 5, Surasak, Sriracha, Chonburi 20110 Tel. +66 (0) 3804-8052 Fax. +66 (0) 3804-8053
Ordinary Share
5,000,000
500,000
10.00
18. 19. 20. 21.
Sahakol Chassis Co., Ltd. Vehicle 1418/6-8 Phaholyotin Road, Lad Yao, Chatuchak, Bangkok 10900
Ordinary Share
45,000,000
4,500,000
10.00
Textiles Ordinary and apparel Share
20,000
2,000
10.00
Soonvijai Development Co., Ltd.3 Construction Ordinary 1740 New Petchburi Road, Share Bangkapi, Huay Klang, Bangkok 10310
13,000
1,300
10.00
Household Ordinary Share
3,500,000
350,000
10.00
22. Siam Euro Leasing Co., Ltd.3 20/22 Soi Prommitr, Sukhumvit Road, Klong Tan Nuea, Watthana, Bangkok 10110
Finances Ordinary and Share Securities
13,000,000
1,300,000
10.00
23. Siam City Real Estate Services Co., Ltd.3 62 Thaniya Building, 1st Floor, Silom Road, Suriyawong, Bangrak, Bangkok 10500
Construction Ordinary Share
1,000,000
100,000
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
Modular Samko Co., Ltd.3 155 Moo 14, Sukhumvit Sai Kao Road, Bangpakong, Chachoengsao 24130
Notes: 1 Shareholding percentage has shown included the shareholding of related companies. 2 The Bank indirectly held shares through TGL which was in line with the definition of subsidiary company announced by the SET. 3 Held by the Bank, which is in the process of liquidation, dissolution, bankruptcy, receivership or abandoned.
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ANNUAL REPORT 2015
The Bank’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 60,648,621,700 consist of common shares of 6,064,862,170 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
Thailand Securities Depository Company Limited 93 Ratchadaphisek Road, Din Dang, Bangkok 10400 Tel. +66 (0) 2009-9000 Call Center +66 (0) 2009-9999 Fax. +66 (0) 2009-9476 Website: www.set.or.th/tsd
Debenture TBANK227A, TBANK22OA, TBANK24DA, and TBANK25NA
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, 2651-7915 Website: www.thanachartbank.co.th
THANACHART BANK PUBLIC COMPANY LIMITED
127
Bondholders’ Representative: Debenture TBANK227A and TBANK22OA TMB 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 TBANK24DA and TBANK25NA - 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 -
Note: * The Debentureholders’ Representative for TBANK227A and TBANK22OA will be changed from TMB Bank Public Company Limited (“TMB”) to Bank of Ayudhya Public Company Limited with effect from 1 March 2016 onwards due to the changed strategic direction in business operation of TMB.
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ANNUAL REPORT 2015
Companies in Thanachart Financial Group Thanachart Capital Public Company Limited
Thanachart Insurance Public Company Limited
444 MBK Tower, 16th-17th 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
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
Thanachart Securities Public Company Limited 444 MBK Tower, 14th, 18th and 19th 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
Thanachart Fund Management Company Limited th
th
231 SCI Life Building, 5 -7 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
231 SCI Life Building, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2252 5070 Fax +66 (0) 2252-7155 www.scilife.co.th Registration No. 0107555000481
Ratchthani Leasing Public Company Limited
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 Group Leasing Company Limited
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
THANACHART BANK PUBLIC COMPANY LIMITED
129
National Leasing Company Limited th
444 MBK Tower, 9 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax None Website: None Registration No. 0105532078407
TS Asset Management 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
Thanachart Broker Company Limited
999/3, 999/4 The Nine Tower D, E, F 4th Floor, Rama 9 Road, Suanluang, Bangkok 10250, Thailand Tel. +66 (0) 2685-0200, 2685-0300 Fax +66 (0) 2716-7901-2 Website: None Registration No. 0105540075314
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ANNUAL REPORT 2015
Thanachart Management and Services Company Limited
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
Thanachart Training and Development Company Limited
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
SCIB Services Company Limited 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
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 4 January 2016 (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. Kobchai Chirathivat Mr. Thanawat Chareonthassanont Mr. Pinit Laosoontorn Mr. Somyos Jittipralangsri By redeivership of Legal Execution Department of Thai Finance and Securities PCL. Other Shareholders
Number of Shares
Percentage of Shareholding
3,090,699,234 2,971,739,163 460,309 173,278 121,360 96,665 84,809 70,000 69,926 60,000
50.961 48.999 0.008 0.003 0.002 0.002 0.001 0.001 0.001 0.001
1,287,426
0.021
Total Paid-up Capital
6,064,862,170
100.000
Thai Shareholders
3,093,079,707
51.000
Foreign Shareholders
2,971,782,463
49.000
Source: Report of the Bank’s major shareholders as of 4 January 2016 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”).
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131
Name list of 10 holders with the largest amount of ordinary and preferable shares as of 6 October 2015 (the latest closing date of the suspended share-transfer register) as follows:
Rank
Name of Shareholders
Ordinary Shares
Preferred Shares
Total Shares
Percentage of Shareholding
1. Thai NVDR Company Limited 2. MBK Public Company Limited 3. Thanachart Capital Public Company Limited 4. Chase Nominees Limited 5. State Street Bank Europe Limited 6. State Street Bank and Trust Company 7. Krungsri Dividend Stock LTF 8. Nortrust Nominees LTD-CL AC 9. Ms. Atinuj Tantivit 10. The Bank of New York Mellon
162,004,799 129,914,400 112,700,000
- - -
162,004,799 129,914,400 112,700,000
12.678 10.167 8.820
62,618,729 46,779,921
- -
62,618,729 46,779,921
4.900 3.661
26,948,439 26,673,300 25,268,700 18,254,972 13,780,400
- - - - -
26,948,439 26,673,300 25,268,700 18,254,972 13,780,400
2.109 2.087 1.977 1.429 1.078
Total Shares of the Company
624,943,660
-
624,943,660
48.906
Notes: 1) Ordinary shares of Thanachart Capital Public Company Limited total 1,277,816,427 shares 2) For Thanachart Capital Public Company Limited, holder No. 3, shares were obtained from the repurchase of shares under the Treasury Stock Program for financial management purposes.
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 50.961 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.
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ANNUAL REPORT 2015
Dividend Payment Policy Dividend Payment Policy of the Bank
The Bank has a policy to pay dividend out of its net profit after deduction of all reserve funds according to requirements of the relevant laws. Payment of dividends is subject to investment plans and other necessaries as seen appropriate by the Board of Directors. The Board, however, may approve to pay an interim dividend and will report to the shareholders at the next Shareholders Meeting.
Dividend Payment Policy of the Subsidiary Companies
The Bank 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 the Bank, 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 Performance of the year Paid in
2010 2011
2011 2012
2012* 2013
2013 2014
2014 2015
Earnings per share (THB)
1.25
1.21
1.24
2.56
1.44
Dividend per share (THB)
0.40
0.35
0.37
0.45
0.45
38.57
28.94
29.76
**17.58
31.34
Dividend Payout Ratio (Percent)
Notes: * Net profit from restated separate financial statements. ** The dividend payout ratio represented 17.58 percent of the net profit based on the Bank’s separate financial statements. (In case of excluding profit from extraordinary item, the dividend payout ratio represented 32.17 percent)
However, on 15 January 2016, the Bank paid an interim dividend for the year 2015 at the rate of THB 0.22 per share.
THANACHART BANK PUBLIC COMPANY LIMITED
133
RESPONSIBILITIES OF THE BOARD OF DIRECTORS FOR THE FINANCIAL REPORT TBANK’s Board of Directors is responsible for the separated and consolidated financial statements and for financial information presented in this annual report. The aforementioned financial statements were prepared in accordance with financial reporting standards, applying appropriate and consistent accounting policies along with careful judgments and reasonable estimates. Important information is fully disclosed to shareholders and other investors in the notes to financial statements reflecting the Bank’s accurate financial status and performance and its commitment to transparency. TBANK’s Board of Directors has established and maintained appropriate and effective risk management and internal control systems in order to rationally assure that the accounting information is correctly and completely recorded and adequate to sustain TBANK’s assets, as well as to prevent any significant irregular operations or frauds. TBANK’s Board of Directors has appointed the Audit Committee comprising independent directors who have knowledge and expertise in finance and accounting. They are responsible for revision of accounting policies and the quality of the Bank’s financial statements, internal control, and internal audit, as well as the disclosure of related party transactions. The committee’s comments on these issues were included in the Audit Committee Report in this annual report. TBANK and its subsidiaries’ separated and consolidated financial statements were audited by the certified public accountant of 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 31 December 2015 which is in compliance with financial reporting standards and relevant rules and regulations.
(Mr. Banterng Tantivit ) Chairman of the Board of Director
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ANNUAL REPORT 2015
(Mr. Somjate Moosirilert) Chief Executive Officer and President
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of Thanachart Bank Public Company Limited (“the Bank”) 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 2015, the Audit Committee convened eleven meetings in total with the management, top level executives of the related business units and auditors to acknowledge and consider numerous matters as of the following: • Financial Statement Reviewed the quarterly, year-end and consolidated financial statements of TBANK and its subsidiaries by consulting with the external audits and management of Chief Financial Officer (CFO) in order to ensure financial reporting standards, the accuracy of its significant matters, and the appropriate disclosure of information. In addition, the Audit Committee convened the meetings without the presence of TBANK management in order to ensure the independence of the auditors’ duties and comments. • Internal Control and Internal Audit Reviewing the Bank’s internal control system and internal audit are efficient, as well as sufficient anti-corruption measures, inclusive of whistle-blowing processes, independent scrutiny, and protection of the whistle-blowers to ensure they will not be in predicament and that the accused are treated fairly. Consulting with the internal auditors in planning and approving the annual audit plan, considering the adequacy and appropriateness of personnel in the performance and independence of internal audit by monitoring and evaluating the monthly performance, assessing the ability of officers in order to improve auditing knowledge and efficiency, and considering examination report of the BOT’s and the auditor in order to assess the adequacy of the internal control system. • Regulatory Compliance Reviewed the performance of the Bank to comply with laws and regulations, such as the SEC, SET, IOC and BOT and acknowledged changes of any rules or regulations that affected operation and ensured the adjustment of operations in response to those changes. THANACHART BANK PUBLIC COMPANY LIMITED
135
• 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
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ANNUAL REPORT 2015
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 2015, 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 judgement, 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 2015, 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: 18 February 2016 THANACHART BANK PUBLIC COMPANY LIMITED
137
STATEMENT OF FINANCIAL POSITION Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2015 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Assets Cash
13,337,280
16,605,352
13,336,176
16,597,864
Interbank and money market items - net
6
57,583,120
65,433,187
56,941,123
65,337,960
Derivatives assets
7
5,446,810
4,389,463
5,446,786
4,389,151
Investments - net
8
171,782,138
149,609,222
163,667,389
141,201,680
Investments in subsidiary and associated companies - net
9
1,899,982
1,918,613
7,359,391
8,744,086
Loans to customers and accrued interest receivables
10 764,002,978
810,155,154
722,792,730
766,482,713
657,621
779,184
657,840
768,957
Total loans to customers and accrued interest receivables
764,660,599
810,934,338
723,450,570
767,251,670
Less: Deferred revenue
(50,536,590)
(55,784,767)
(46,791,967)
(52,046,434)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
11
(25,676,138)
(27,697,055)
(20,141,589)
(20,150,090)
Revaluation allowance for debt restructuring
12
(4,080)
(103,222)
(4,080)
(103,222)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
688,443,791
727,349,294
656,512,934
694,951,924
9,944
48,217
9,944
48,217
Properties foreclosed - net
14
4,093,136
6,506,713
1,837,462
3,303,563
Land, premises and equipment - net
15
8,004,706
7,933,859
7,764,063
7,716,145
Goodwill and intangible assets - net
16
20,953,948
21,368,034
20,856,782
21,286,307
Deferred tax assets
17
740,976
669,724
-
-
1,006,278
1,837,410
-
-
7,670,312
5,220,685
5,102,392
3,639,544
980,972,421
1,008,889,773
938,834,442
967,216,441
Receivables from purchase and sale of securities Other assets - net
18
Total assets
The accompanying notes are an integral part of the financial statements.
138
ANNUAL REPORT 2015
STATEMENT OF FINANCIAL POSITION (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2015 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Liabilities and equity Deposits
19
669,504,133
696,991,623
670,575,221
699,734,913
Interbank and money market items
20
85,687,630
80,269,859
78,698,898
73,147,491
2,201,580
1,655,382
2,201,580
1,655,382
Liability payable on demand Derivatives liabilities
7
6,757,528
5,200,037
6,750,929
5,196,987
Debt issued and borrowings
21
71,641,089
90,197,820
55,426,489
73,843,320
9,944
48,217
9,944
48,217
Banks' liability under acceptances Provisions
22
3,293,614
2,799,773
3,046,619
2,602,932
Deferred tax liabilities
17
893,302
1,648,912
873,765
1,619,517
Accrued interest payables
2,962,116
4,044,708
2,859,200
3,953,424
Accrued expenses
4,960,675
5,132,140
4,298,048
4,441,714
Insurance contracts liabilities
23
4,793,269
4,697,524
-
-
Other liabilities
24
10,576,814
10,039,469
6,043,743
5,370,203
863,281,694
902,725,464
830,784,436
871,614,100
99,136,649
99,136,649
99,136,649
99,136,649
60,648,622
55,136,649
60,648,622
55,136,649
2,100,694
2,100,694
2,100,694
2,100,694
26
1,121,529
2,119,277
820,220
1,358,085
27
3,003,674
2,431,076
3,003,674
2,431,076
49,351,232
43,189,338
41,476,796
34,575,837
116,225,751
104,977,034
108,050,006
95,602,341
1,464,976
1,187,275
-
-
Total equity
117,690,727
106,164,309
108,050,006
95,602,341
Total liabilities and equity
980,972,421
1,008,889,773
938,834,442
967,216,441
Total liabilities Equity Share capital Registered 9,913,664,903 ordinary shares of Baht 10 each Issued and paid-up share capital
25
6,064,862,170 ordinary shares of Baht 10 each (2014 : 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
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
139
STATEMENT OF COMPREHENSIVE INCOME Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2015 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Profit or loss Interest income
30
48,217,216
52,445,053
45,124,869
49,101,807
Interest expenses
31
(20,536,160)
(24,883,731)
(19,572,064)
(23,919,715)
27,681,056
27,561,322
25,552,805
25,182,092
8,179,528
8,692,928
6,132,836
6,525,537
(2,704,730)
(2,766,261)
(2,488,314)
(2,533,214)
Net interest income Fees and service income Fees and service expenses Net fees and service income
32
5,474,798
5,926,667
3,644,522
3,992,323
Gains on trading and foreign exchange transactions
33
658,040
859,064
629,881
641,399
Gains on investments
34
1,532,714
768,817
1,491,635
755,350
169,095
151,673
-
-
5,961,637
5,942,135
-
-
295,456
305,093
3,346,744
1,579,407
Other operating income
1,517,642
1,647,793
1,525,817
1,674,200
Total operating income
43,290,438
43,162,564
36,191,404
33,824,771
Insurance/Life insurance expenses
(3,409,215)
(3,851,623)
-
-
Net operating income
39,881,223
39,310,941
36,191,404
33,824,771
10,952,116
10,779,620
9,269,982
9,074,437
43,967
42,968
32,809
34,044
2,969,738
2,928,154
2,646,065
2,619,721
837,225
849,429
785,683
812,424
5,161,413
4,915,120
4,558,941
4,488,006
19,964,459
19,515,291
17,293,480
17,028,632
8,591,933
7,121,698
8,007,369
7,180,931
11,324,831
12,673,952
10,890,555
9,615,208
Share of profit from investments accounted for under equity method Insurance/Life insurance income Dividend income
Other operating expenses Employee's expenses Directors' remuneration
35
Premises and equipment expenses Taxes and duties Other expenses Total other operating expenses Impairment losses of loans and debt securities
36
Profit before income tax 17.2
Income tax Profit for the year
The accompanying notes are an integral part of the financial statements.
140
ANNUAL REPORT 2015
(198,421) 11,126,410
(2,478,681) 10,195,271
561,413 11,451,968
(1,697,349) 7,917,859
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2015 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Other comprehensive income Transactions will be reclassified subsequently to profit or loss
37
Gains (losses) on changes in value of available-for-sale investments
(1,162,976)
1,596,881
Share of other comprehensive income of associate (loss)
(75,640)
44,322
Income tax relating to components of other comprehensive income
240,868
(323,057)
(672,332) 134,467
1,266,220 (253,244)
Transactions that will never be reclassified subsequently to profit or loss
37
Actuarial losses on defined benefit plan Income tax relating to components of other comprehensive income Total other comprehensive income (loss) Total comprehensive income
(214,270)
-
(177,661)
-
41,507
-
35,532
-
(1,170,511)
1,318,146
(679,994)
1,012,976
9,955,899
11,513,417
10,771,974
8,930,835
10,742,829
9,921,941
11,451,968
7,917,859
383,581
273,330
11,126,410
10,195,271
9,573,026
11,240,087
10,771,974
8,930,835
382,873
273,330
9,955,899
11,513,417
2.03
1.44
Total profit attributable to: The Bank Non-controlling interests
Total comprehensive income attributable to: The Bank Non-controlling interests
Earnings per share of the Bank
38
Basic earnings per share Profit attributable to the Bank (Baht per share)
1.90
1.80
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
141
142
ANNUAL REPORT 2015 -
29
Dividend paid
The accompanying notes are an integral part of the financial statements.
60,648,622
-
Balance as at 31 December 2015
Other comprehensive income for the year (loss)
-
Profit for the year
Transfer of retained earnings to statutory reserve
Decrease in non-controlling interests of the subsidiaries 27
5,511,973
25
Increase in share capital
-
-
policy for fair value measurement
3
Cumulative effect of change in accounting
55,136,649
Balance as at 1 January 2015
55,136,649
Balance as at 31 December 2014
Other comprehensive income for the year
-
-
-
55,136,649
2,100,694
-
-
-
-
-
-
-
2,100,694
2,100,694
-
-
-
-
-
2,100,694
(123,379)
-
-
-
-
-
-
-
(123,379)
(123,379)
-
-
-
-
-
(123,379)
common control
combination under Share premium
fully paid-up share capital
-
27
29
Note
1,099,142
(929,672)
-
-
-
-
-
-
2,028,814
2,028,814
1,278,256
-
-
-
-
750,558
of investments - net
changes in value
Surplus on
145,766
(68,076)
-
-
-
-
-
-
213,842
213,842
39,890
-
-
-
-
173,952
associates (loss)
income of
other comprehensive
Share of Retained earnings
3,003,674
-
-
572,598
-
-
-
2,431,076
2,431,076
-
-
395,893
-
-
2,035,183
49,351,232
(172,055)
10,742,829
(572,598)
-
(3,815,419)
-
(20,863)
43,189,338
43,189,338
-
9,921,941
(395,893)
-
(2,481,149)
36,144,439
statutory reserve Unappropriated
Appropriated -
Consolidated financial statements Other components of equity
business
Surplus from Issued and
Profit for the year
Transfer of retained earnings to statutory reserve
Decrease in non-controlling interests of the subsidiaries
Dividend paid
Balance as at 1 January 2014
For the year ended 31 December 2015
Statements of changes in equity
Thanachart Bank Public Company Limited and its subsidiaries
STATEMENTS OF CHANGES IN EQUITY
1,464,976
(708)
383,581
-
(105,172)
-
-
-
1,187,275
1,187,275
-
273,330
-
(107,589)
-
1,021,534
interests
Non-controlling
117,690,727
(1,170,511)
11,126,410
-
(105,172)
(3,815,419)
5,511,973
(20,863)
106,164,309
106,164,309
1,318,146
10,195,271
-
(107,589)
(2,481,149)
97,239,630
Total
(Unit: Thousand Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
143
55,136,649
Balance as at 1 January 2015
Share premium
-
-
27
Transfer of retained earnings to statutory reserve
Profit for the year
Other comprehensive income for the year (loss)
The accompanying notes are an integral part of the financial statements.
Balance as at 31 December 2015
60,648,622
-
-
29
Dividend paid
2,100,694
-
-
-
5,511,973
25
Increase in share capital
policy for fair value measurement
-
-
2,100,694
2,100,694
-
-
-
-
2,100,694
3
Cumulative effect of change in accounting
55,136,649
-
Other comprehensive income for the year
Balance as at 31 December 2014
-
-
27
Transfer of retained earnings to statutory reserve
Profit for the year
-
55,136,649
share capital
820,220
(537,865)
-
-
-
-
-
1,358,085
1,358,085
1,012,976
-
-
-
345,109
investments - net
in value of
fully paid-up
29
Note
surplus on changes
of equity -
Other components
3,003,674
-
-
572,598
-
-
-
2,431,076
2,431,076
-
-
395,893
-
2,035,183
statutory reserve
41,476,796
(142,129)
11,451,968
(572,598)
(3,815,419)
-
(20,863)
34,575,837
34,575,837
-
7,917,859
(395,893)
(2,481,149)
29,535,020
Unappropriated
Retained earnings Appropriated -
Separate financial statements
Issued and
Dividend paid
Balance as at 1 January 2014
For the year ended 31 December 2015
Statements of changes in equity (continued)
Thanachart Bank Public Company Limited and its subsidiaries
STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
108,050,006
(679,994)
11,451,968
-
(3,815,419)
5,511,973
(20,863)
95,602,341
95,602,341
1,012,976
7,917,859
-
(2,481,149)
89,152,655
Total
(Unit: Thousand Baht)
STATEMENT OF CASH FLOWS Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows For the year ended 31 December 2015 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Cash flows from operating activities Profit before income tax
11,324,831
12,673,952
10,890,555
9,615,208
-
-
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
(169,095)
(151,673)
Depreciation and amortisation
1,478,967
1,434,956
1,392,780
1,356,211
Impairment losses of loans and debt securities
8,591,933
7,121,698
8,007,369
7,180,931
Increase in provisions
773,247
319,358
754,618
290,255
Amortisation of premiums (discounts) on investment in debt securities
(83,870)
23,859
(82,766)
13,018
(2,848)
58,308
(2,845)
58,294
-
-
(152,059)
-
12,771
-
Increase (decrease) in allowance for impairment of investments Gain on capital refunded from a subsidiary company Loss on liquidation from a subsidiary company Gain from disposal of investment in a subsidiary company Decrease (increase) in allowance for change in value of investment
-
-
-
(65,250)
-
(125,855)
10,847
(5,350)
10,284
(7,884)
239,658
(23,321)
112,150
(63,911)
Increase (decrease) in allowance for impairment of properties foreclosed Decrease in allowance for impairment of intangible assets
(14,316)
-
(14,316)
-
Interest income and other income from the assets transferred for debt repayment Loss (gain) from disposal of equipment Loss from disposal of intangible assets Unrealised gain on exchange
(4,574)
(8,417)
(4,574)
(8,417)
(19,754)
1,883
(16,038)
5,077
6,957
-
6,957
(84,656)
(9,497)
(95,918)
3,949
19,358
Decrease (increase) in other income receivable
(36,088)
(51,822)
(33,217)
43,971
Decrease in fees and rental received in advance
Increase (decrease) in allowance for impairment of other assets
(1,557,526)
-
(1,557,526)
(84,656)
(142,435)
(419,474)
(142,435)
(419,474)
Decrease in deferred income
(42,911)
(49,853)
(42,911)
(49,853)
Decrease in accrued expenses
(94,339)
(141,102)
(66,540)
(163,942)
Net interest income Dividend income Cash received from interest income Cash paid for interest expenses Cash paid for corporate income tax
20,261,958
20,537,178
19,063,435
17,658,331
(27,597,186)
(27,602,022)
(25,470,039)
(25,195,110)
(295,456)
(305,093)
(3,346,744)
(1,579,407)
44,455,095
48,248,280
41,528,985
45,275,994
(18,017,525)
(21,107,521)
(17,826,058)
(20,924,398)
(1,749,241)
(2,853,054)
(890,642)
(1,917,694)
17,057,645
16,917,768
Income from operating activities before changes in operating assets and liabilities
The accompanying notes are an integral part of the financial statements.
144
ANNUAL REPORT 2015
13,058,937
13,317,716
STATEMENT OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2015 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Cash flows from operating activities (continued) Decrease (increase) in operating assets Interbank and money market items
7,845,601
4,187,096
8,392,203
Investments in trading securities
3,005,882
(6,570,502)
2,917,063
(4,330,243)
906,728
(335,954)
906,439
(335,642)
Derivatives assets Loans to customers Properties foreclosed Receivables from purchase and sale of securities Other assets
750,798
25,667,631
18,107,063
26,347,436
20,213,818
8,533,524
8,087,994
7,105,248
7,479,072
-
-
831,132
(191,743)
(2,381,279)
1,430,678
(1,396,165)
1,085,275
(27,487,490)
(22,087,545)
(29,159,692)
(22,527,252)
Increase (decrease) in operating liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Payables from purchase and sale of securities Insurance/Life insurance contract liabilities Other liabilities Net cash flows from operating activities
5,218,650
(962,575)
5,352,287
(1,451,764)
546,198
(1,563,285)
546,198
(1,563,285)
(1,129,263)
(603,470)
552,817
225,181
95,745
(208,845)
(813,508)
(274,222)
(1,132,812) (100,286) (84,268)
(602,236) 98,860 (261,191)
38,450,013
16,157,639
32,752,588
11,873,926
(25,469,946)
(13,325,918)
(25,181,497)
(9,783,090)
Cash flows from investing activities Increase in investments in securities held for investment Cash received from disposal of a subsidiary company
-
898,164
-
887,170
Cash received from capital refunded from a subsidiary company
-
-
1,536,753
-
3,679,340
4,400,034
3,487,489
4,031,922
407,535
416,492
3,346,744
1,579,407
(763,163)
(829,353)
(673,109)
Cash received from disposal of equipment
25,105
19,398
21,187
Cash paid for purchase of intangible assets
(290,565)
(267,948)
(260,880)
(222,618)
(22,411,694)
(8,689,131)
(17,723,313)
(4,246,351)
Cash received from interest on investments Cash received from dividend Cash paid for purchase of equipment
Net cash flows used in investing activities
(748,327) 9,185
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
145
STATEMENT OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2015 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Cash flows from financing activities Cash received from issued additional share capital
5,511,973
-
5,511,973
-
61,582,824
96,595,899
58,703,000
93,245,000
(80,139,555)
(98,627,025)
(77,119,832)
(96,325,026)
Cash paid for interest from borrowings
(3,664,864)
(4,183,402)
(2,904,955)
(3,407,163)
Cash paid for dividend
(2,481,149)
(2,481,149)
(2,481,149)
(2,481,149)
(115,303)
(107,588)
Cash received from borrowings Cash paid for borrowings
Cash paid for dividend to non-controlling interests Cash paid for capital refunded to non-controlling interests Net cash flows used in financing activities
(317)
-
-
-
-
-
(19,306,391)
(8,803,265)
(18,290,963)
(8,968,338)
Net decrease in cash
(3,268,072)
(1,334,757)
(3,261,688)
(1,340,763)
Cash at beginning of the year
16,605,352
17,940,109
16,597,864
17,938,627
Cash at end of the year
13,337,280
16,605,352
13,336,176
16,597,864
6,280,107
8,238,132
5,671,800
7,678,058
154,281
98,757
143,698
93,148
Bad debt written-off/hair-cut loan from debt restructuring
7,850,747
7,547,159
7,624,117
7,432,118
Dividend payable
1,334,270
-
1,334,270
-
Supplemental cash flows information Non-cash transactions Transfer of properties foreclosed/securities from receivables for debt settlement Accounts payable for purchase of fixed assets
The accompanying notes are an integral part of the financial statements.
146
ANNUAL REPORT 2015
NOTES TO FINANCIAL STATEMENTS Thanachart Bank Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2015 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’s issued shares and Scotia Netherlands Holding BV, a company registered in Netherlands, holds 49.00 percent of the Bank’s issued shares. The Bank’s registered address is 444, MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok. The Bank has 614 operational branches (2014: 616 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 4 December 2015. The financial statements in Thai language are the official statutory financial statements of the Bank. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.
THANACHART BANK PUBLIC COMPANY LIMITED
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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 2015
Nature of business
2014
Subsidiaries directly held by the Bank SCIB Plc.
Liquidation
-
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
broker Thanachart Group Leasing Co., Ltd.
asset management SCIB Services 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 2015 and 2014 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 2015 Ratchthani Leasing Plc.
2015
2014
28,849
27,051
1,724
1,626
-
-
-
82
4,295
8,180
492
595
Thanachart Insurance Plc.
10,718
10,387
3,098
2,813
Thanachart Securities Plc.
7,233
7,445
1,640
1,784
Siam City Life Assurance Plc. TS Asset Management Co., Ltd.
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2014
ANNUAL REPORT 2015
c)
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.
d)
The Bank is deemed to have control over an investee or subsidiaries if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns.
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 present investments in subsidiary and associated companies under the cost method.
THANACHART BANK PUBLIC COMPANY LIMITED
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3.
New financial reporting standards
3.1
Financial reporting standards that became effective in the current accounting year The Bank and its subsidiaries have adopted the revised (revised 2014) and new financial reporting standards issued by the Federation of Accounting Professions which became effective for fiscal years beginning on or after 1 January 2015. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Bank’s and its subsidiaries’ financial statements. However, some of these standards involve changes to key principles, which are summarised below: TAS 19 (revised 2014) Employee Benefits This revised standard requires that the entity recognise actuarial gains and losses immediately in other comprehensive income while the former standard allowed the entity to recognise such gains and losses immediately in either profit or loss or other comprehensive income, or to recognise them gradually in profit or loss. The Bank and its subsidiaries have changed the recognition of actuarial gains and losses in the current year from an immediate recognition in profit or loss to an immediate recognition in other comprehensive income and adjusted the current year’s transactions 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. TFRS 10 Consolidated Financial Statements TFRS 10 prescribes requirements for the preparation of consolidated financial statements and replaces the content of TAS 27 Consolidated and Separate Financial Statements dealing with consolidated financial statements. This standard changes the principles used in considering whether control exists. Under this standard, an investor is deemed to have control over an investee if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns, even if it holds less than half of the shares or voting rights. 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 preparation of the consolidated financial statements. This standard does not have any impact on the Bank’s and its subsidiaries’ financial statements.
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ANNUAL REPORT 2015
TFRS 12 Disclosure of Interests in Other Entities This standard stipulates disclosures relating to an entity’s interests in subsidiaries, joint arrangements and associates, including structured entities. This standard therefore has no financial impact on the financial statements of the Bank and its subsidiaries. TFRS 13 Fair Value Measurement This standard provides guidance on how to measure fair value and stipulates disclosures related to fair value measurement. The Bank and its subsidiaries are to apply the guidance under this standard if they are required by other financial reporting standards to measure their assets or liabilities at fair value. The Bank and its subsidiaries are required to measure the fair value in accordance with the guidance of this standard and recognised prospectively, except for the effect of credit risk on the fair value measurement of derivatives, with the Bank and its subsidiaries electing to adjust the effect of credit risk on fair value against retained earnings as of 1 January 2015, as allowed in the transition provision under Thai Financial Reporting Standards. The change has the effect of decreasing the beginning balance of retained earnings for 2015 of the Bank and its subsidiaries by Baht 21 million (the separate financial statements: decreasing retained earnings by Baht 21 million). The cumulative effect of the changes in accounting policy has been separately presented in the statement of changes in equity. 3.2
Financial reporting standards that will become effective in the future During the current year, the Federation of Accounting Professions issued a number of the revised (revised 2015) and new financial reporting standards and accounting treatment guidance which are effective for fiscal years beginning on or after 1 January 2016. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards. The Bank's and its subsidiaries’ management believe that the revised and new financial reporting standards and accounting treatment guidance will not have any significant impact on the financial statements when it is initially applied, except for TFRS 4 Insurance Contracts, for which the management is still evaluating the first-year impact to the financial statements and has yet to reach a conclusion.
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4.
Significant accounting policies
4.1
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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ANNUAL REPORT 2015
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 premium income 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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153
4.2
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.
4.3
Investments Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss in the statements of comprehensive income. Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income in the statements of comprehensive income, and will be recognised in profit or loss when the securities are sold. Investments in held-to-maturity debt securities are stated at amortised cost. Premiums/ discounts on debt securities are amortised/accreted by the effective rate method with the amortised/accreted amount presented as an adjustment to the interest income. Investments in non-marketable equity securities, which are classified as general investments, are stated at cost net of allowance for impairment (if any). The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of debt securities is determined using the yield rates quoted by the Thai Bond Market Association, other markets, or yield rate of government bond adjusted by an appropriate risk factor, as the case may be. The fair value of unit trusts is determined from their net asset value.
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ANNUAL REPORT 2015
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. 4.4
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.
4.5
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.
THANACHART BANK PUBLIC COMPANY LIMITED
155
4.6
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�.
4.7
Allowances for doubtful accounts a)
Allowance for doubtful accounts for loans The Bank and its subsidiary 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 set provision for normal loans (including restructured receivables) and special mention loans at minimum rates of 1% and 2%, respectively, of the loan balances (excluding accrued interest receivable) net of collateral value. For non-performing loans, provision is set at a rate of 100% of the debt balance remaining after deducting the present value of expected future cash flows from debt collection or the present value of expected cash flows from collateral disposal, based on the use of a discount rate and assumptions as to the time needed to dispose of the collateral, in accordance with the BOT’s guideline. However, non-performing hire purchase receivables and financial lease receivables are treated as uncollateralised.
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ANNUAL REPORT 2015
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.
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4.8
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.
4.9
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.
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4.10 Property foreclosed Property foreclosed is stated at the lower of cost (fair value with reference to appraisal value, providing this does not exceed the legally claimable amount of debt) or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. Gains on disposal of property foreclosed are recognised as income in part of profit or loss in the statements of comprehensive income on the disposal date, unless the purchase is made with a loan from the Bank. In such cases, gains are recognised in accordance with the BOT’s guideline. Losses on disposal and impairment losses are recognised as expenses in part of profit or loss in the statement of comprehensive income. 4.11 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.
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4.12 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. 4.13 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. 4.14 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. 4.15 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.
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ANNUAL REPORT 2015
4.16 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 counterparty, 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. 4.17 Premium receivable and allowance for doubtful accounts Premium receivable from both direct and reinsurance is stated at its net realisable value. The subsidiary provides 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. 4.18 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.
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4.19 Premium reserve Premium insurance reserve comprises unearned premium reserve and unexpired risks reserve. a)
Unearned premium reserve Unearned premium reserve is calculated based on direct premium before deducting premium ceded as follows: Transportation (cargo), travelling
-
100% of premium as from the date policy
accident with coverage periods
is effective, throughout the period of
of not over six-months
insurance coverage
Others
-
Monthly average basis (the one-twenty fourth basis)
b)
Unexpired risks reserve Unexpired risks reserve is the reserve for the future claims that may be incurred in respect of in-force policies. Unexpired risks reserve is set aside using an actuarial method, at the best estimate of the claims that are expected to 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. 4.20 Loss reserve and outstanding claims 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 subsidiary 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.
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4.21 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 as expenses on a straight-line basis over the lease term. 4.22 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 and adjusted to reflect counterparty credit risk. 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.
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4.23 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. 4.24 Impairment of assets At the end of each reporting date, the Bank and its subsidiaries assess whether there is an indication that an asset may be impaired. The Bank and its subsidiaries perform impairment review whenever events or changes in circumstances indicate that an asset may be impaired. Loss on impairment is recognised when the asset’s recoverable amount is less than the book value. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. Fair value less costs to sell reflects the amount that the Bank and its subsidiaries could obtain at the financial reporting date from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Bank and its subsidiaries recognise impairment losses as expenses in part of profit or loss in the statement of comprehensive income. In assessing impairment of asset other than goodwill, if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Bank and its subsidiaries estimate the asset’s recoverable amount. A previously recognised impairment loss for assets other than goodwill is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined in case that 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.
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ANNUAL REPORT 2015
4.27 Foreign currencies The consolidated and separate financial statements are presented in Baht, which are also the Bank and its subsidiaries’ functional currency. Items of each entity included in the consolidated financial statements of each entity are measured using the functional currency of that entity. Foreign currency transactions are translated into Baht at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies and commitment outstanding on the financial reporting date have been translated into Baht at the rates ruling at the reporting date. Exchange gains and losses arising from trading or translation of foreign currencies are included in determining income. 4.28 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 included unused tax losses to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and unused tax losses can be utilised. At each reporting date, the Bank and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Bank and its subsidiaries record deferred tax directly to equity if the tax relates to items that are recorded directly to equity.
THANACHART BANK PUBLIC COMPANY LIMITED
165
4.27 Foreign currencies The consolidated and separate financial statements are presented in Baht, which are also the Bank and its subsidiaries’ functional currency. Items of each entity included in the consolidated financial statements of each entity are measured using the functional currency of that entity. Foreign currency transactions are translated into Baht at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies and commitment outstanding on the financial reporting date have been translated into Baht at the rates ruling at the reporting date. Exchange gains and losses arising from trading or translation of foreign currencies are included in determining income. 4.28 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 included unused tax losses to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and unused tax losses can be utilised. At each reporting date, the Bank and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Bank and its subsidiaries record deferred tax directly to equity if the tax relates to items that are recorded directly to equity.
166
ANNUAL REPORT 2015
4.29 Provisions Provisions are recognised when the Bank and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.30 Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Bank and its subsidiaries use the quoted price in an active market to measure the fair value of a financial asset and liability whenever such a price is available. If a quoted price in an active market is not available, the Bank and its subsidiaries measure fair value using a generally accepted valuation technique, which includes analysis of the present value of cash flows and use of a theoretical valuation model. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categorise of input to be used in fair value measurement as follows: Level 1 - Use of quoted market prices for the same assets or liabilities in an observable active market Level 2 - Use of other inputs that are the observable for the assets or liabilities, whether directly or indirectly Level 3 - Use of unobservable inputs such as estimates of future cash flows At the end of each reporting period, the Bank and its subsidiaries determine whether transfers have occurred between levels within the fair value hierarchy for assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis. 5.
Significant accounting judgements and estimates The preparation of financial statements in conformity with Thai Financial Reporting Standards at times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows:
THANACHART BANK PUBLIC COMPANY LIMITED
167
5.1
Recognition and derecognition of assets and liabilities In considering whether to recognise or to derecognise assets or liabilities, the management is required to make judgement 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.
5.2
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 judgements 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.
5.3
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 judgement.
5.4
Assessment of investment funds as structured entities In determining whether the funds to which a subsidiary provides asset management services are structured entities, the management is required to use judgement, taking into consideration the voting rights and other similar rights afforded to other parties, including the rights to remove the subsidiary as fund manager, liquidate the funds, or redeem holdings in the funds, and determining whether such rights are the dominant factor when deciding who controls the funds.
5.5
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 exercise judgement, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk of counterparty, liquidity, correlation and longer-term volatility of financial instruments. Change in assumptions about these factors could affect the fair value and disclosures of fair value hierarchy.
168
ANNUAL REPORT 2015
5.6
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 judgement to estimate impairment losses, taking into consideration the latest appraisal value, the type and the nature of the assets.
5.7
Land, premises and equipment and 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 year when it is determined that the recoverable amounts are lower than the carrying amounts. This requires judgements in terms of forecasting future revenues and expenses relating to the assets subject to the review.
5.8
Goodwill and intangible assets The initial recognition and measurement of goodwill and intangible assets, and subsequent impairment testing, require management to exercise judgement 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.
5.9
Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that future taxable profit will be available against which the temporary differences and unused tax losses can be utilised. Significant management judgement 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.
5.10 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 judgement regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement.
THANACHART BANK PUBLIC COMPANY LIMITED
169
5.11 Unearned 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. 5.12 Loss reserve and outstanding claims At the end of each reporting date, the subsidiary estimates 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 judgement in order to reflect the best estimates available at that time. 5.13 Post-employment benefits under defined benefit plans Obligations under the defined benefit plan are determined by using actuarial technique. Such determination is made based on various assumptions, including discount rate, future salary increase rate, staff turnover rate, and mortality rate, based on their best knowledge of current situation. 5.14 Litigation and contingent liabilities The Bank and its subsidiaries have contingent liabilities as a result of litigation and contingent liabilities as a result of transfer of business and transfer of non-performing assets. The management has used judgement 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.
170
ANNUAL REPORT 2015
6.
Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2014
2015 Term
Total
2,985
3,000
5,985
6,189
7,500
13,689
364
28,150
28,514
469
25,090
25,559
1
211
212
46
90
136
28
21,470
21,498
94
21,179
21,273
3,378
52,831
56,209
6,798
53,859
60,657
-
17
17
-
20
20
(1)
(209)
(210)
-
(207)
(207)
At call
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks Specialised financial institutions Other financial institutions Total Add: Accrued interest receivables Less: Allowance for doubtful accounts Total domestic items
3,377
52,639
56,016
6,798
53,672
60,470
1,066
246
1,312
940
3,716
4,656
53
3
56
61
1
62
202
-
202
250
-
250
1,321
249
1,570
1,251
3,717
4,968
Add: Accrued interest receivables
-
-
-
-
5
5
Less: Deferred revenues
-
(1)
(1)
-
(1)
(1)
Less: Allowance for doubtful accounts
-
(2)
(2)
-
(9)
(9)
Foreign US Dollar Euro Others Total
Total foreign items
1,321
246
1,567
1,251
3,712
4,963
Total
4,698
52,885
57,583
8,049
57,384
65,433
THANACHART BANK PUBLIC COMPANY LIMITED
171
(Unit: Million Baht) Separate financial statements 2014
2015 Term
Total
2,984
3,000
5,984
6,188
7,500
13,688
252
27,000
27,252
324
24,200
24,524
-
-
-
44
-
44
878
21,470
22,348
1,144
21,179
22,323
4,114
51,470
55,584
7,700
52,879
60,579
1
8
9
-
14
14
(207)
(218)
At call
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks Specialised financial institutions Other financial institutions Total Add: Accrued interest receivables Less: Allowance for doubtful accounts Total domestic items
(10)
(209)
(219)
(11)
4,105
51,269
55,374
7,689
52,686
60,375
1,066
246
1,312
940
3,716
4,656
53
3
56
61
1
62
202
-
202
250
-
250
1,321
249
1,570
1,251
3,717
4,968
Add: Accrued interest receivables
-
-
-
-
5
5
Less: Deferred revenues
-
(1)
(1)
-
(1)
(1)
Less: Allowance for doubtful accounts
-
(2)
(2)
-
(9)
(9)
Foreign US Dollar Euro Others Total
Total foreign items
1,321
246
1,567
1,251
3,712
4,963
Total
5,426
51,515
56,941
8,940
56,398
65,338
As at 31 December 2015, the Bank had loan to a subsidiary company, which was a financial institution, of Baht 850 million in the separate financial statements (2014: Baht 1,050 million).
172
ANNUAL REPORT 2015
7.
Derivatives As at 31 December 2015 and 2014, 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 2015
2014
Fair value/Adjustments
Fair value/Adjustments
on an accrual basis Assets
Notional
Liabilities
amount*
1,282
1,160
86,309
3
56
3,749
on an accrual basis Assets
Notional
Liabilities
amount*
411
319
72,468
4,661
9
87
7,796
3,712
345,178
3,896
3,856
352,184
-
-
3,000
-
-
16,100
395
342
8,570
19
6
2,792
18
1,484
11,129
54
930
12,770
-
4
432
-
2
299
5,447
6,758
459,279
4,389
5,200
464,409
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 Derivatives for trading Derivatives for banking book 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 2015
2014 Fair value/Adjustments
Fair value/Adjustments on an accrual basis Assets
Notional
Liabilities
amount*
1,282
1,157
86,308
3
56
3,749 -
on an accrual basis Assets
Notional
Liabilities
amount*
411
318
72,468
4,661
9
87
7,796
3,712
345,178
3,896
3,856
352,184
-
3,000
-
-
16,100
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 Derivatives for trading Derivatives for banking book Total
395
342
8,570
19
6
2,792
18
1,484
11,129
54
930
12,770
5,447
6,751
458,846
4,389
5,197
464,110
* Disclosed only in case that the Bank has an obligation to pay
THANACHART BANK PUBLIC COMPANY LIMITED
173
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 2015 and 2014. Consolidated financial statements Counterparties
Financial institutions Companies within Thanachart Group Third parties Total
8.
Investments
8.1
Classified by type of investments
Separate financial statements
2015
2014
2015
2014
Percent
Percent
Percent
Percent
94.42
95.03
94.48
95.09
-
-
0.03
0.01
5.58
4.97
5.49
4.90
100.00
100.00
100.00
100.00
(Unit: Million Baht) Consolidated financial statements 2015
Separate financial statements
2014
Cost/
2015
Cost/
Amortised cost
Cost/
Amortised Fair value
cost
2014 Cost/
Amortised Fair value
cost
Amortised Fair value
cost
Fair value
Trading securities Government and state enterprises securities Private debt securities
3,063
3,065
5,978
5,990
3,063
5,978
5,990
-
-
2
2
-
3,065 -
2
2
110
105
198
194
-
-
-
-
3,173
3,170
6,178
6,186
3,063
3,065
5,980
5,992
Domestic marketable equity securities Add (less): Allowance for change (3)
in value
3,170
Net
8
2
12
6,186
3,065
5,992
Available-for-sale securities Government and state enterprises securities
117,141
117,669
67,685
68,504
112,978
113,499
65,699
66,479
Private debt securities
24,492
25,181
43,598
44,454
22,593
23,193
39,881
40,593
Foreign debt securities
10,006
10,068
11,766
11,827
10,006
10,068
11,766
11,827
3,069
3,039
2,850
3,529
1,460
1,302
1,279
1,423
154,708
155,957
125,899
128,314
147,037
148,062
118,625
120,322
Domestic marketable equity securities Add: Allowance for change in value Net
174
ANNUAL REPORT 2015
1,249
2,415
1,025
1,697
155,957
128,314
148,062
120,322
(Unit: Million Baht) Consolidated financial statements 2015
Separate financial statements
2014
Cost/
2015
Cost/
Amortised
Amortised
cost
Fair value
2014
Cost/
Cost/
Amortised
cost
Fair value
Amortised
cost
Fair value
cost
Fair value
Held-to-maturity debt securities Government and state enterprises securities Private debt securities
8,448
8,634
10,983
11,298
8,406
8,586
10,941
11,255
205
247
311
346
150
190
150
185
Investment in receivables purchased Less: Allowance for impairment Net
-
-
1
-
-
-
1
-
8,653
8,881
11,295
11,644
8,556
8,776
11,092
11,440
(1)
-
(1)
-
8,653
11,294
8,556
11,091
254
57
254
57
3,786
3,799
3,768
3,781
General investment Unit trusts Domestic non-marketable equity securities Foreign non-marketable equity securities Less: Allowance for impairment Net Total investments - net
8.2
39
39
39
39
4,079
3,895
4,061
3,877
(77)
(80)
(77)
(80)
4,002
3,815
3,984
3,797
171,782
149,609
163,667
141,202
Classified by remaining period of debt securities (Unit: Million Baht) Consolidated financial statements 2015
2014
Due within Less than
Due within Over
At call
1 year
1 - 5 years
Less than
5 years
Total
1 year
Over 1 - 5 years
5 years
Total
Available-for-sale securities Government and state enterprises 263
37,361
78,928
589
117,141
13,782
53,413
490
67,685
Private debt securities
securities
-
3,917
18,120
2,455
24,492
14,875
25,226
3,497
43,598
Foreign debt securities
-
1,314
8,328
364
10,006
-
11,434
332
11,766
263
42,592
105,376
3,408
151,639
28,657
90,073
4,319
123,049
-
82
1,025
172
1,279
78
1,456
202
1,736
263
42,674
106,401
3,580
152,918
28,735
91,529
4,521
124,785
-
Total Add : Allowance for change in value Total Held-to-maturity debt securities Government and state enterprises
-
8,406
Private debt securities
securities
-
15
Investment in receivables purchased
-
-
Total
-
8,421
Less: Allowance for impairment
-
-
Total
-
8,421
263
51,095
Total debt securities
40 40 40 106,441
42
8,448
2,522
8,419
42
10,983
150
205
106
55
150
311
-
-
1
-
-
1
8,653
2,629
8,474
192
11,295
192 192 3,772
-
-
8,653
-
2,628
(1)
8,474
192
11,294
161,571
31,363
100,003
4,713
136,079
THANACHART BANK PUBLIC COMPANY LIMITED
(1)
175
(Unit: Million Baht) Separate financial statements 2015
2014
Due within
Due within
Less than
Over
At call
1 year
1 - 5 years
Less than
5 years
Total
1 year
Over 1 - 5 years
5 years
Total
Available-for-sale securities Government and state enterprises 263
34,204
78,081
430
112,978
13,782
51,917
-
65,699
Private debt securities
securities
-
3,787
17,266
1,540
22,593
14,560
22,992
2,329
39,881
Foreign debt securities
-
1,313
8,329
364
10,006
-
11,434
332
11,766
263
39,304
103,676
2,334
145,577
28,342
86,343
2,661
117,346
-
81
981
121
1,183
76
1,363
114
1,553
263
39,385
104,657
2,455
146,760
28,418
87,706
2,775
118,899
Total Add: Allowance for change in value Total Held-to-maturity debt securities Government and state enterprises
-
8,406
-
-
8,406
2,522
8,419
-
10,941
Private debt securities
securities
-
-
-
150
150
-
-
150
150
Investment in receivables purchased
-
-
-
-
-
1
-
-
1
2,523
8,419
150
11,092
-
-
Total
-
8,406
-
150
8,556
Less: Allowance for impairment
-
-
-
-
-
Total
-
8,406
-
150
8,556
2,522
8,419
150
11,091
263
47,791
104,657
2,605
155,316
30,940
96,125
2,925
129,990
Total debt securities
8.3
(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 2015 and 2014, 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 2015 Banking and finance sector
176
ANNUAL REPORT 2015
2014 4
Separate financial statements 2015
4
2014 4
4
(1)
9.
Investments in subsidiary and associated companies
9.1
Separate financial statements As at 31 December 2015 and 2014, 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 2015
2014
2015
2014
2015
2014
2015
2014
Subsidiary companies SCIB Plc.
-
21,128
-
99.98
-
1,385
-
-
TS Asset Management Co., Ltd.
2,000
2,000
100
100
2,000
2,000
1,500
-
Thanachart Securities Plc.
1,500
1,500
100
100
1,858
1,858
555
786
Ratchthani Leasing Plc.
2,416
2,014
65.18
65.18
1,201
1,201
39
31
Thanachart Insurance Plc.
740
740
100
100
867
867
500
-
Thanachart Group Leasing Co., Ltd.
360
360
100
100
400
400
26
46
Thanachart Broker Co., Ltd.
100
100
100
100
104
104
172
125
Thanachart Fund Management Co., Ltd.
100
100
75
75
97
97
283
272
10
10
100
100
5
5
-
-
6
6
100
100
6
6
-
-
5
100
100
5
5
15
17
6,543
7,928
3,090
1,277
SCIB Service Co., Ltd. Thanachart Management and Services Co., Ltd. Thanachart Training and Development
5
Co., Ltd. Total investments in subsidiary companies
(5)
Less: Allowance for impairment
(5)
Total investments in subsidiary companies - net
6,538
7,923
821
821
46
46
821
821
46
46
7,359
8,744
3,136
1,323
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
177
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. In January 2015, SCIB Plc. returned capital to its shareholders at a rate of Baht 0.7275 per share, totaling Baht 1,537 million. The Bank therefore recognised this amount by deducting it against the value of its investments amounting to Baht 1,385 million and recognised gain on capital refunded from a subsidiary company amounting to Baht 152 million. On 20 April 2015, SCIB Plc. registered the completion of its liquidation with the Ministry of Commerce. 9.2
Details of investments in subsidiaries that have non-controlling interests (Unit: Million Baht) Other comprehensive
Company’s name
Accumulated
Dividend paid to
Profit allocated to
income allocated to
Proportion of
balance of
non-controlling
non-controlling
non-controlling
equity interest held by
non-controlling
interests during
interests during
interests during
non-controlling interests
interests
the years
the years
the years
2015
2014
(%)
(%)
2015
2014
2015
2014
2015
2014
2015
2014
Ratchthani Leasing Plc.
34.82
34.82
1,396
1,115
21
17
304
201
1
-
Thanachart Fund
25.00
25.00
69
83
94
91
80
72
-
-
Management Co., Ltd.
9.3
Summarised financial information, before eliminating intercompany transactions, of subsidiaries that have non-controlling interests are as follows: Summarised information about financial position (Unit: Million Baht) Thanachart Fund Management Ratchthani Leasing Plc. 2015
178
2014
Co., Ltd. 2015
2014
Total assets
29,527
27,899
424
473
Total liabilities
24,963
24,020
149
142
ANNUAL REPORT 2015
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 31 December Thanachart Fund Management (1)
Ratchthani Leasing Plc. 2015 Net operating income Profit for the year
(1)
2014
2015
2014
1,697
1,613
671
622
874
579
320
290
(3)
-
871
579
Other comprehensive income (loss) Total comprehensive income
Co., Ltd.
1 321
290
Presents in the amount after adjustment for the effect of differences in accounting policies.
Summarised information about cash flow (Unit: Million Baht) For the years ended 31 December Thanachart Fund Management Ratchthani Leasing Plc. 2015 Cash flow from operating activities
Co., Ltd.
2014
3,845
2015
2014
173
329
283
Cash flow used in investing activities
(54)
(10)
(1)
(6)
Cash flow used in financing activities
(3,797)
(157)
(377)
(363)
(6)
6
(49)
(86)
Net increase (decrease) in cash
THANACHART BANK PUBLIC COMPANY LIMITED
179
9.4
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 2015 and 2014 is as follows: (Unit: Million Baht) 2014
2015 Cash flows from operating activities Profit (loss) before income tax
(83)
960
(811)
(645)
134
24
1
2
Adjustments to reconcile profit (loss) before income tax to net cash provided by (paid for) operating activities Reversal of bad debt and doubtful account Increase in allowance for impairment of property foreclosed and other assets Increase in provisions Interest income - net
(346)
(355)
Cash received from interest income
409
482
Cash paid for interest expense
(52)
(119)
Cash paid for corporate income tax
(73)
(153)
(821)
196
Income from operating activities before changes in operating assets and liabilities (loss) Decrease (increase) in operating assets Loans to customers Properties foreclosed Other assets
3,630
1,079
920
428
(4)
(6)
(2,211)
(1,653)
Provisions
(8)
(1)
Other liabilities
(5)
(50)
Decrease in operating liabilities Interbank and money market items
1,501
(7)
Dividend paid
(1,500)
-
Net cash flows used in financing activities
(1,500)
-
Net cash flows from (used in) operating activities Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
180
1
(7)
Cash and cash equivalents at beginning of the year
54
61
Cash and cash equivalents at end of the year
55
54
ANNUAL REPORT 2015
9.5
Investment in associated company in consolidated financial statements Investment in associated company in consolidated financial statements
9.5
As at 31 December 2015 and 2014, investment in an associated company, which presented As at 31 December 2015 and 2014, investment in an associated company, which presented under the equity method, in the consolidated financial statements consists of investment in under the equity method, in the consolidated financial statements consists of investment in ordinary shares of the company which operates in in Thailand: ordinary shares of following the following company which operates Thailand: (Unit: Million Baht) (Unit: Million Baht) Share Share of of other other Dividend Dividend
Paid-upPaid-up share share Company’s name name Company’s
capital capital
Value of investment Value of investment
Percentage Percentage of holding (%) (%) of holding
Cost Cost method method
Equity method Equity method
2015 2015 20152014 2014 2015 2015 2014 2014 20152015 20142014 2015 Plc. (operating1,886 1,8861,886 1,8869.90 9.90 9.90 9.90 984 984 MBK Plc.MBK (operating
Share Shareofofprofit profit
income income (loss) (loss)
during thethe during
during duringthe the
during during the the
years years
2014 2015 2015 2014 2014 2014
1,900 984 984 1,900
comprehensive comprehensive
income income
years years 2015 2015
years years
2014 2014
2015 2015
2014 2014
1,919 1,919
112 112
112 112
169 169
152 152
(76) (76)
44 44
1,919 1,919
112 112
112 112
169 169
152 152
(76) (76)
44 44
in property in property rental, rental, and services hotel andhotel services businesses) businesses) Total investment in an associated company Total investment in an associated company
984
984
984
984
1,900 1,900
The Bank and its subsidiaries classified investment in MBK Plc. as investment in an 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 associated company since the Parent company, the Bank and its subsidiaries had significant influence in that company. significant influence in that company. 9.6 Summarised financial information of an associated company 9.6 Summarised financial information of an associated company a) Summarised financial information of MBK Plc. as at 30 September 2015 and 2014 and a) Summarised financial information of MBK Plc. as at 30 September 2015 and 2014 and for the years then ended are as follows: for the years then ended are as follows: Summarised information about financial position Summarised information about financial position (Unit: Million Baht)
Baht) 30 September (Unit: 30Million September
Total assets
Total Total assets liabilities
30 September 2015
30 September 2014
2015 39,487
2014 37,799
39,487 (22,173)
Total Other liabilities equity items of an associated company assets OtherNet equity items of an associated company Shareholding percentage (%) Net assets Share ofpercentage net assets (%) Shareholding entries ShareElimination of net assets
37,799 (20,560)
1,810 (22,173)
1,743 (20,560)
1,810 19,124
1,743 18,982
9.90 19,124
9.90 18,982
1,893 9.90
1,879 9.90
(295) 1,893
Goodwill Elimination entries
302 (295)
(262) 1,879 302 (262)
Carrying amounts of associate based on equity method Goodwill
1,900 302
1,919 302
Carrying amounts of associate based on equity method
1,900
1,919
THANACHART BANK PUBLIC COMPANY LIMITED
181
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 30 September 2015 Revenue Profit for the year Other comprehensive income (loss)
2014
10,812
10,001
1,707
1,531
(795)
Total comprehensive income for the year (1)
(1)
459
912
1,990
Presents in the amount after adjustment for the effect of differences in accounting policies.
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 2015 was determined based on financial statements that were prepared with reference to financial statements for the year ended 30 September 2015 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 2015 is not materially different from the income for the year ended 31 December 2015. b)
The fair value of investment in an associated company As at 31 December 2015 and 2014, the fair value of investment in an associated company which is listed on the Stock Exchange of Thailand is as follows: (Unit: Million Baht)
MBK Plc.
182
ANNUAL REPORT 2015
Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
2,634
2,709
1,083
1,114
10.
Loans to customers and accrued interest receivables
10.1 Classified by loan type (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Loans to customers Overdrafts Loans Notes receivables Hire purchase receivables Financial lease receivables Others
18,294
20,773
18,294
20,773
270,272
280,967
264,468
270,392
54,885
48,147
56,786
51,048
415,278
454,922
381,893
423,084
1,465
1,210
1,001
884
351
301
351
301
(50,537)
(55,785)
(46,792)
(52,046)
710,008
750,535
676,001
714,436
658
779
658
769
710,666
751,314
676,659
715,205
- Individual Approach
(15,506)
(18,298)
(10,085)
(10,922)
- Collective Approach
(8,555)
(8,934)
(8,555)
(8,934)
(1,502)
(294)
(1,502)
(294)
(4)
(103)
(4)
(103)
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
685,099
723,685
656,513
694,952
3,336
3,633
-
-
122
202
-
-
3,458
3,835
-
-
-
-
Securities business receivables Credit balances receivables Other receivables Total securities business receivables Less: Allowance for doubtful accounts Securities business receivables - net
(113)
(171)
3,345
3,664
-
-
688,444
727,349
656,513
694,952
Loans to customers and accrued interest receivables - net
THANACHART BANK PUBLIC COMPANY LIMITED
183
10.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2015
2014
Domestic
Foreign
691,195
Baht US Dollar
Total
Domestic
Foreign
-
691,195
730,307
100
730,407
14,054
7,082
21,136
15,521
8,299
23,820
346
789
1,135
143
-
143
705,595
7,871
713,466
745,971
8,399
754,370
Other currencies Total*
Total
* Total loans net of deferred revenues (Unit: Million Baht) Separate financial statements 2015 Domestic
2014
Foreign
Domestic
Foreign
Total
653,730
690,373
100
690,473
Baht
653,730
US Dollar
14,054
7,082
21,136
15,521
8,299
23,820
346
789
1,135
143
-
143
7,871
676,001
706,037
8,399
714,436
Other currencies
-
Total
668,130
Total*
* Total loans net of deferred revenues
10.3 Classified by type of business and loan classification (Unit: Million Baht) Consolidated financial statements 2015 The Bank and a subsidiary company which is a financial institution Other Special
Sub-
Normal
mention
standard
Doubtful
Doubtful
Agricultural and mining
14,562
24
14
33
357
14,990
3
14,993
Manufacturing and commerce
72,181
552
507
303
4,804
78,347
261
78,608
Real estate and construction
47,943
350
170
163
1,019
49,645
32
49,677
Public utilities and services
62,803
1,317
181
271
870
65,442
108
65,550
85,730
1,170
598
487
990
88,975
30
89,005
-
-
-
-
-
-
3,458
3,458
300,555
26,914
1,804
1,917
4,186
335,376
29,553
364,929
24,678
624
592
157
530
26,581
50
26,631
Others
20,392
16
172
1
32
20,613
2
20,615
Total*
628,844
30,967
4,038
3,332
12,788
679,969
33,497
713,466
of loss
subsidiary Total
companies
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
184
ANNUAL REPORT 2015
(Unit: Million Baht) Consolidated financial statements 2014 The Bank and a subsidiary company which is a financial institution Other Special
Sub-
Doubtful
subsidiary
Normal
mention
standard
Doubtful
Agricultural and mining
11,540
9
4
6
475
12,034
1
12,035
Manufacturing and commerce
72,116
1,524
1,508
430
8,137
83,715
169
83,884
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
2,493
65,943
89
66,032
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
of loss
Total
companies
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
(Unit: Million Baht) Separate financial statements 2015 Special Normal
mention
Doubtful Substandard
Doubtful
of loss
Total
Agricultural and mining
14,522
5
13
18
326
14,884
Manufacturing and commerce
72,098
539
330
298
2,073
75,338
Real estate and construction
47,892
347
149
157
691
49,236
Public utilities and services
61,671
1,286
173
147
644
63,921
Personal consuming Housing loans
85,631
1,121
579
478
836
88,645
Hire purchase
300,424
26,903
1,803
1,917
4,184
335,231
24,658
617
574
153
405
26,407
Others
22,286
15
10
-
28
22,339
Total*
629,182
30,833
3,631
3,168
9,187
676,001
Others
* Total loans net of deferred revenues
THANACHART BANK PUBLIC COMPANY LIMITED
185
(Unit: Million Baht) Separate financial statements 2014 Special Normal
Doubtful
mention
Substandard
Doubtful
of loss
Total
Agricultural and mining
11,465
8
4
5
379
11,861
Manufacturing and commerce
71,992
1,316
451
259
4,627
78,645
Real estate and construction
49,223
304
204
174
1,077
50,982
Public utilities and services
59,967
1,482
243
134
1,423
63,249
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
10.4 Non-performing loans As at 31 December 2015 and 2014, 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
2015
2014
2015
2014
15,989
22,597
15,986
22,595
113
172
-
-
4,169
8,475
-
-
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.
186
ANNUAL REPORT 2015
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
2015
2014
2015
2014
16,972
23,031
16,968
23,028
113
172
-
-
The subsidiary company engaged in the asset management business recognises income from loan on a cash basis. 10.5 Debt restructuring During the years 2015 and 2014, 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 restructuring
after (1)
restructuring
(1)
Million Baht
Million Baht
2,232
3,592
3,475
34
309
308
2,266
3,901
3,783
3,770
6,182
6,158
55
570
513
3,825
6,752
6,671
Fair value of Type of assets
assets to be
to be
transferred under
transferred
agreement Million Baht
2015 Modification of repayment conditions Transfer of assets and/or ordinary
Land and building
310
shares and/or modification of repayment conditions Total 2014 Modification of repayment conditions Transfer of assets and/or ordinary
Land and building
447
shares and/or modification of repayment conditions Total
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivable)
THANACHART BANK PUBLIC COMPANY LIMITED
187
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
2,122
3,034
2,978
26
226
226
Million Baht
2015 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
214
building
repayment conditions Total
2,148
3,260
3,204
3,587
4,456
4,456
27
140
140
2014 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
146
building
repayment conditions Total
4,596
3,614
4,596
(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 2015 and 2014, are summarised below. Consolidated financial statements 2015
2014 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht Past due after restructuring
799
1,143
1,543
1,976
Due within the year
377
1,697
497
2,279
Less than 5 years
633
243
869
1,345
5 - 10 years
356
388
795
731
10 - 15 years
40
177
47
195
Over 15 years
61
135
74
145
2,266
3,789
3,825
6,671
Total
188
Million Baht
ANNUAL REPORT 2015
Separate financial statements 2014
2015 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
782
1,127
1,517
1,931
Due within the year
322
1,237
419
1,549
Less than 5 years
615
191
845
283
5 - 10 years
332
361
736
584
10 - 15 years
36
153
31
115
Over 15 years
61
135
66
134
2,148
3,204
3,614
4,596
Total
Supplemental information for the years 2015 and 2014 relating to restructured loans is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Interest income recognised in the statements of comprehensive income Cash repayment from receivables
1,205
1,457
858
1,143
5,121
9,479
4,155
8,312
336
762
240
456
-
1
-
1
-
57
-
57
Properties foreclosed received for debts settlement Loss on debt restructuring (net of allowance for doubtful accounts as previously recorded) Hair cut loss per agreement
As at 31 December 2015 and 2014, the Bank and its subsidiaries have the following restructured receivables balances (principal and accrued interest receivable): Restructured receivables Outstanding balances, Number of receivables 2015
Thanachart Bank Plc. Thanachart Securities Plc. TS Asset Management Co., Ltd.
Outstanding balances
2014
net of collateral
2015
2014
2015
2014
Million Baht
Million Baht
Million Baht
Million Baht
20,756
31,690
11,196
14,465
4,668
7,260
1
3
7
35
7
35
564
1,155
5,316
8,720
3,249
4,190
THANACHART BANK PUBLIC COMPANY LIMITED
189
10.6 Hire purchase/Financial lease receivables As at 31 December 2015 and 2014, 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 2015 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Over 5 years
Total
Gross investment in the lease
126,730
270,797
19,216
416,743
Less: Unearned finance income
(19,134)
(30,287)
(1,073)
(50,494)
107,596
240,510
18,143
366,249
Present value of minimum lease payments receivables Allowance for doubtful accounts
(10,792)
Hire purchase/Financial lease receivables - net
355,457
* Included non-performing receivables (Unit: Million Baht) Consolidated 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
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)
Hire purchase/Financial lease receivables - net
389,086
* Included non-performing receivables
190
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statement as at 31 December 2015 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Over 5 years
Total
Gross investment in the lease
124,546
239,369
18,979
382,894
Less: Unearned finance income
(19,069)
(26,640)
(1,040)
(46,749)
105,477
212,729
17,939
336,145
Present value of minimum lease payments receivables Allowance for doubtful accounts
(9,061) 327,084
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(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
THANACHART BANK PUBLIC COMPANY LIMITED
191
10.7 Classified by classification As at 31 December 2015 and 2014, 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)
2015
2014
2015
2014
629,475
657,326
424,400
454,665
8,101
5,832
30,993
34,484
27,995
30,177
3,525
4,342
Substandard
4,039
5,722
2,703
3,335
1,798
2,392
Doubtful
3,332
4,124
2,440
2,823
1,351
1,703
12,788
21,255
8,472
12,599
7,555
11,141
680,627
722,911
466,010
503,599
22,330
25,410
1,502
294
23,832
25,704
Normal Special mention
Doubtful of loss Total
Additional allowance for possible uncollectability debts Total
2015
2014
(1)
Only the Bank and a subsidiary company subject to BOT’s regulations; and after deducting intragroup transactions.
(2)
As at 31 December 2015, 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 9,641 million (2014: Baht 7,012 million). The Bank and a subsidiary company allocated Baht 8,139 million (2014: Baht 6,718 million) of the excess provision to a specific provision for an individual debtor and so combined with the minimum provision requirement of Baht 14,191 million (2014: Baht 18,692 million), the total provision set aside in accordance with BOT requirements is Baht 22,330 million (2014: Baht 25,410 million).
192
ANNUAL REPORT 2015
(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)
2015
2014
2015
2014
629,814
658,444
425,117
456,263
7,395
5,088
30,858
34,149
27,965
30,153
3,484
4,305
Substandard
3,632
4,394
2,597
3,113
1,658
2,052
Doubtful
3,168
3,623
2,356
2,653
1,264
1,502
Doubtful of loss
9,187
14,595
6,085
8,776
4,839
6,909
676,659
715,205
464,120
500,958
18,640
19,856
1,502
294
20,142
20,150
Normal Special mention
Total
2015
Additional allowance for possible uncollectability debts Total (3)
2014
As at 31 December 2015, 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 8,522 million (2014: Baht 5,657 million). The Bank allocated Baht 7,020 million (2014: Baht 5,363 million) of the excess provision to a specific provision for an individual debtor and so combined with the minimum provision requirement of Baht 11,620 million (2014: Baht 14,493 million), the total provision set aside in accordance with BOT requirements is Baht 18,640 million (2014: Baht 19,856 million).
Percentage of allowance for doubtful account The Banks’ hire purchase receivablespersonal consumer 2015
(4)
Other loans
2014
2015
2014
Normal
0.76
0.52
1
1
Special mention
8.56
8.47
2
2
Substandard
46.40
52.63
100
100
Doubtful
41.47
48.56
100
100
Doubtful of loss
60.98
51.73
100
100
(4) These percentages are average rates used in setting up allowance for doubtful accounts
THANACHART BANK PUBLIC COMPANY LIMITED
193
10.8
Loans to companies which have settlement problems As at 31 December 2015 and 2014, 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 Debt balances
Number of debtors 2014
2015
1. Listed companies possible to
Collateral value
in the accounts
2015
2014
2015
2014
2015
2014
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
2
6
416
713
8
67
408
681
39
45
490
898
322
585
169
312
842
995
7,985
14,419
3,369
7,897
4,623
6,754
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 Debt balances
Number of debtors 2014
2015
1. Listed companies possible to
1
3
Collateral value
in the accounts
2015
2014
2015
2014
2015
2014
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
8
76
8
22
-
54
490
898
322
585
169
312
6,821
1,920
3,957
1,662
2,864
delisting from the SET 2. Non - listed companies with
39
45
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
194
ANNUAL REPORT 2015
694
724
3,583
10.9
Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission As at 31 December 2015 and 2014, 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 2014
2015 Normal
2014
2015
2014
3,345
3,663
-
-
3,345
3,663
1
5
1
4
-
1
112
167
112
167
-
-
3,458
3,835
113
171
3,345
3,664
Substandard Doubtful Total
2015
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. 10.10 Hire purchase/financial lease receivables of subsidiaries classified by aging As at 31 December 2015 and 2014, 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) 2015
2014
28,549
26,824
Overdue 91 - 365 days
922
1,018
Overdue more than 1 year
218
131
Debtors under legal actions
270
367
29,959
28,340
1,731
1,822
Current or overdue not over 90 days
Total Allowance for doubtful accounts provided in the accounts
THANACHART BANK PUBLIC COMPANY LIMITED
195
11.
Allowance for doubtful accounts (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2015 The Bank and a subsidiary company which is a financial institution Other
Balance - beginning of the year Increase (decrease) during the year
Special
Sub-
Normal
mention
standard
5,832
4,342
2,269
2,392
(817)
(594)
Doubtful
General
Doubtful
of loss
provision
1,703
11,141
294
25,704
1,993
27,697
2,430
1,208
4,144
63
4,207
(352)
subsidiary Total
companies Consolidated
Bad debts recovery
-
-
-
-
1,608
-
1,608
15
1,623
Bad debts written-off
-
-
-
-
(7,624)
-
(7,624)
(227)
(7,851)
8,101
3,525
1,798
1,351
Balance - end of the year
7,555
1,502
23,832
1,844
25,676
(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
Balance - beginning of the year
Special
Sub-
Normal
mention
standard
7,163
4,217
2,705
Doubtful
General
Doubtful
of loss
provision
subsidiary
5,125
9,022
8
28,240
1,542
29,782
(3,422)
8,610
286
3,955
558
4,513
941
-
Total
companies Consolidated
Increase (decrease) during the year
(1,331)
125
(313)
Bad debts recovery
-
-
-
-
Bad debts written-off
-
-
-
-
5,832
4,342
2,392
1,703
Balance - end of the year
(7,432)
941
-
11,141
(7,432)
294
25,704
8 (115) 1,993
949 (7,547) 27,697
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015 Special Normal Balance - beginning of the year
mention
5,088
4,305
Substandard 2,052
Doubtful 1,502
Doubtful
General
of loss
provision
Total
6,909
294
20,150
3,946
1,208
6,008
Increase (decrease) during the year
(821)
(394)
(238)
Bad debts recovery
-
-
-
-
1,608
-
1,608
Bad debts written-off
-
-
-
-
(7,624)
-
(7,624)
7,395
3,484
1,658
1,264
Balance - end of the year
196
2,307
ANNUAL REPORT 2015
4,839
1,502
20,142
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Special Normal
mention
5,845
4,186
Substandard
Doubtful
General
of loss
provision
Doubtful
Total
Balance - beginning of the year
2,082
3,135
5,952
8
21,208
(1,633)
7,448
286
5,433
941
-
941
Increase (decrease) during the year
(757)
Bad debts recovery
-
Bad debts written-off Balance - end of the year
12.
119
(30)
-
-
-
-
-
-
-
5,088
4,305
2,052
1,502
(7,432)
-
6,909
(7,432)
294
20,150
Revaluation allowance for debt restructuring (Unit: Million Baht) Separate financial statements
Consolidated financial statements 2015
13.
2014
2015
301
2014
Balance - beginning of the year
103
103
Decrease during the year
(97)
Amortised during the year
(2)
(198)
(2)
(198)
Balance - end of the year
4
103
4
103
-
301
(97)
-
Classification of assets As at 31 December 2015 and 2014, 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 2015 Loans to Interbank and
customers and Properties
money market accrued interest receivables
items
Investments
foreclosed
Other assets
Total
48,755
629,475
-
-
236
678,466
Special mention
-
30,993
-
-
127
31,120
Substandard
-
4,039
-
-
14
4,053
Doubtful
-
3,332
-
-
14
3,346
Doubtful of loss
-
12,788
397
496
288
13,969
48,755
680,627
397
496
679
730,954
Normal
Total
THANACHART BANK PUBLIC COMPANY LIMITED
197
(Unit: Million Baht) Consolidated financial statements 2014 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Properties 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
(Unit: Million Baht) Separate financial statements 2015 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Properties Investments
foreclosed
Other assets
Total
49,605
629,814
-
-
236
679,655
Special mention
-
30,858
-
-
127
30,985
Substandard
-
3,632
-
-
14
3,646
Doubtful
-
3,168
-
-
14
3,182
Doubtful of loss
-
9,187
402
312
282
10,183
49,605
676,659
402
312
673
727,651
Total
(Unit: Million Baht) Separate financial statements 2014 Loans to Interbank and
customers and Properties
money market accrued interest items Normal
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
198
receivables
ANNUAL REPORT 2015
14.
Properties foreclosed (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2015 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
4,409
325
(1,539)
3,195
1,544
6,066
(7,006)
604
604
204
(72)
736
242
11
(163)
(90)
6,799
6,606
(8,780)
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 Less: Allowance for impairment Properties foreclosed - net
(292) 6,507
(938) 5,668
4,625
698
(532)
(8,082)
4,093
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
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
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 Less: Allowance for impairment Properties foreclosed - net
(315) 6,291
(798) 7,922
821 (7,706)
THANACHART BANK PUBLIC COMPANY LIMITED
(292) 6,507
199
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015 Balance -
Balance -
beginning
end
of the year
Additions
Disposals
1,416
223
(527)
1,112
1,428
5,458
(6,403)
483
418
102
(56)
464
242
11
(163)
90
3,504
5,794
(7,149)
2,149
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 Less: Allowance for impairment Properties foreclosed - net
(200)
(731) 5,063
3,304
619
(312)
(6,530)
1,837
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Balance -
Balance -
beginning
end
of the year
Additions
Disposals
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
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 Less: Allowance for impairment Properties foreclosed - net
200
ANNUAL REPORT 2015
(264) 2,997
(729) 7,012
793 (6,705)
(200) 3,304
15.
Land, premises and equipment (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2015
Land
Buildings and
Furniture,
Assets
building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2015 Additions Transfers/disposals
4,444
2,330
6,272
105
90
13,241
-
49
519
4
268
840
(4)
93
(22)
(302)
(247)
(12) 4,432
2,375
6,884
87
56
13,834
1 January 2015
-
512
4,613
82
-
5,207
Transfers/disposals
-
(205)
(21)
-
(230)
Depreciation for the year
-
117
626
9
-
752
31 December 2015
-
625
5,034
70
-
5,729
1 January 2015
68
26
6
-
-
100
31 December 2015
68
26
6
-
-
100
4,364
1,724
1,844
17
56
8,005
31 December 2015 Accumulated depreciation
(4)
Allowance for impairment
Net book value 31 December 2015 Depreciation charge for the years 2014
722
2015
752
THANACHART BANK PUBLIC COMPANY LIMITED
201
(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 1 January 2014 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)
(31)
3
(29)
(209)
(14) (277)
4,444
2,330
6,272
105
90
13,241
1 January 2014
-
409
4,233
97
-
4,739
Transfers/disposals
-
(21)
(27)
-
(244)
-
-
(10)
31 December 2014 Accumulated depreciation
(196)
Decrease from disposal of a subsidiary company
-
-
(10)
Depreciation for the year
-
124
586
12
-
722
31 December 2014
-
512
4,613
82
-
5,207
1 January 2014
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
202
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015
Land
Buildings and
Furniture,
Assets
buildings
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2015 Additions Transfers/disposals 31 December 2015
4,359
2,227
4,984
34
90
11,694
-
-
474
4
267
745
(9)
(3)
166
(7)
(301)
(154)
4,350
2,224
5,624
31
56
12,285
1 January 2015
-
470
3,474
29
-
3,973
Transfers/disposals
-
(130)
(7)
-
(138)
Depreciation for the year
-
112
565
4
-
681
31 December 2015
-
581
3,909
26
-
4,516
1 January 2015
-
-
5
-
-
5
31 December 2015
-
-
5
-
-
5
4,350
1,643
1,710
5
56
7,764
Accumulated depreciation
(1)
Allowance for impairment
Net book value 31 December 2015 Depreciation charge for the year 2014
654
2015
681
THANACHART BANK PUBLIC COMPANY LIMITED
203
(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 1 January 2014 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
1 January 2014
-
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
1 January 2014
-
-
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
As at 31 December 2015 and 2014, the Bank and its subsidiaries have vehicles acquired under financial lease agreements with net book values amounting to approximately Baht 6 million and Baht 7 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 4,247 million and Baht 3,646 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 5 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 3,932 million and Baht 3,306 million, respectively).
204
ANNUAL REPORT 2015
16.
Intangible assets (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2015 Membership fees for
Goodwill
Intangible
Thailand
Computer
assets from
Futures
software
business
Computer
Exchange
under
combination
software
and others
development
Total
Cost 1 January 2015
17,951
4,100
2,167
7
228
24,453
Additions
-
-
115
1
154
270
Transfers/disposals
-
-
100
-
(112)
(12)
31 December 2015
17,951
4,100
2,382
8
270
24,711
1 January 2015
-
2,127
888
7
-
3,022
Transfers/disposals
-
-
-
-
Amortisation for the year
-
462
229
-
-
691
31 December 2015
-
2,589
1,112
7
-
3,708
1 January 2015
-
-
63
-
-
63
Decrease during the year
-
-
(14)
-
-
(14)
31 December 2015
-
-
49
-
-
49
17,951
1,511
1,221
1
270
20,954
-
4.25
0 - 9.98
-
-
Accumulated amortisation
(5)
(5)
Allowance for impairment
Net book value 31 December 2015 Remaining amortisation period (years) Amortisation expenses for the years 2014
672
2015
691
THANACHART BANK PUBLIC COMPANY LIMITED
205
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2014 Membership fees for
Goodwill
Intangible
Thailand
Computer
assets from
Futures
software
business
Computer
Exchange
under
combination
software
and others
development
Total
Cost 1 January 2014
17,951
4,100
1,915
7
240
24,213
-
-
149
-
105
254
-
-
(14)
-
-
Transfers/disposals
-
-
117
-
(117)
31 December 2014
17,951
4,100
2,167
7
228
24,453
-
1,655
694
7
-
2,356
a subsidiary company
-
-
-
-
Amortisation for the year
-
472
200
-
-
672
31 December 2014
-
2,127
888
7
-
3,022
1 January 2014
-
-
63
-
-
63
31 December 2014
-
-
63
-
-
63
17,951
1,973
1,216
-
228
21,368
Additions Decrease from disposal of a subsidiary company
(14) -
Accumulated amortisation 1 January 2014 Decrease from disposal of (6)
(6)
Allowance for impairment
Net book value 31 December 2014
206
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015 Intangible Computer
assets from
Goodwill
business
Computer
software under
combination
software
development
Total
Cost 1 January 2015
17,941
3,613
1,895
217
23,666
Additions
-
-
99
141
240
Transfers/disposals
-
-
86
(93)
31 December 2015
17,941
3,613
2,080
265
23,899
1 January 2015
-
1,640
677
-
2,317
Transfers/disposals
-
-
Amortisation for the year
-
462
215
-
677
31 December 2015
-
2,102
891
-
2,993
1 January 2015
-
-
63
-
63
Decrease during the year
-
-
(14)
-
(14)
31 December 2015
-
-
49
-
49
17,941
1,511
1,140
265
20,857
-
4.25
0-9.98
-
(7)
Accumulated amortisation
(1)
-
(1)
Allowance for impairment
Net book value 31 December 2015 Remaining amortisation period (years) Amortisation expenses for the years 2014
662
2015
677
THANACHART BANK PUBLIC COMPANY LIMITED
207
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2014 Intangible Computer
assets from
Goodwill
business
Computer
software under
combination
software
development
Total
Cost 1 January 2014
17,941
3,613
1,658
229
23,441
Additions
-
-
133
92
225
Transfers/disposals
-
-
104
(104)
31 December 2014
17,941
3,613
1,895
217
23,666
1 January 2014
-
1,168
487
-
1,655
Amortisation for the year
-
472
190
-
662
31 December 2014
-
1,640
677
-
2,317
1 January 2014
-
-
63
-
63
31 December 2014
-
-
63
-
63
17,941
1,973
1,155
217
21,286
-
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2014
As at 31 December 2015 and 2014, 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 84 million and Baht 86 million, respectively (separate financial statements: Baht 22 million and Baht 18 million, respectively).
208
ANNUAL REPORT 2015
17.
Deferred tax assets/ liabilities and income tax
17.1 Deferred tax assets/ liabilities As at 31 December 2015 and 2014, deferred tax assets and liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2015
Deferred tax assets
Separate financial statements
2014
741
2015
670
2014
-
-
Deferred tax liabilities
(893)
(1,649)
(874)
(1,620)
Net
(152)
(979)
(874)
(1,620)
The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2015
2014
Deferred tax assets Non-accrued interest income
81
101
Allowance for doubtful accounts - general provision/other assets
703
492
Provisions for employee benefits
417
375
Provisions
235
180
96
110
Fees income received in advance
381
382
Late payment fee income
176
147
Insurance contract liabilities
290
290
Others
592
418
2,971
2,495
(1,115)
(1,108)
(1,349)
(1,370)
Intangible assets
(302)
(395)
Others
(357)
(601)
(3,123)
(3,474)
(152)
(979)
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
Deferred tax liabilities Net
THANACHART BANK PUBLIC COMPANY LIMITED
209
(Unit: Million Baht) Separate financial statements 2015
2014
Deferred tax assets Non-accrued interest income
78
99
Allowance for doubtful accounts - general provision/other assets
364
121
Provisions for employee benefits
374
341
Provisions
235
180
80
95
Fees income received in advance
381
382
Late payment fee income
176
147
Others
337
167
2,025
1,532
(1,115)
(1,108)
(1,276)
(1,304)
Intangible assets
(302)
(395)
Others
(206)
(345)
(2,899)
(3,152)
(874)
(1,620)
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
Deferred tax liabilities Net
As at 31 December 2015, the Bank has tax losses totaling Baht 25,326 million arising from investment in a subsidiary company that has already completed the liquidation process, which will expire by 2020. The Bank has not recognised deferred tax assets in respect of these losses because management’s assessment is that there is uncertainty regarding their future benefit.
210
ANNUAL REPORT 2015
17.2 Income tax Income tax expenses for the years ended 31 December 2015 and 2014 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Current income tax: Corporate income tax charge
726
2,798
-
1,902
12
29
9
24
(540)
(348)
Adjustment in respect of income tax from previous year Deferred tax: Relating to origination and reversal of temporary differences
(570)
(229)
Income tax expense reported in statements of comprehensive income (income)
2,479
198
(561)
1,697
The Bank has no income tax expenses for the year ended 31 December 2015 because it has unused tax losses resulting from the liquidation of a subsidiary company during the year. The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2015 and 2014 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Deferred tax relating to gain (loss) on changes in value of available-for-sale investments
(233)
318
(134)
253
(41)
-
(36)
-
(8)
5
(282)
323
Deferred tax relating to actuarial losses on defined benefit plan Deferred tax relating to share of other comprehensive income of associated company
(170)
THANACHART BANK PUBLIC COMPANY LIMITED
253
211
Reconciliations between income tax expenses and the product of accounting profit multiplied by the applicable tax rates for the years ended 31 December 2015 and 2014 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015 Accounting profit before tax Applicable tax rate
2014
2015
2014
11,325
12,674
10,891
9,615
20%
20%
20%
20%
2,265
2,535
2,178
1,923
12
29
9
24
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
(85)
(2,079)
(2,748)
(250)
Income tax expenses reported in statements of comprehensive income (income)
18.
2,479
198
(561)
1,697
Other assets (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Accrued premium insurance income
265
275
-
-
Other receivables
602
573
597
573
1,001
1,008
964
957
VAT refundable
450
32
407
-
Prepaid leasehold rights
191
227
191
227
292
312
243
266
Deposits
289
305
268
288
Estimated insurance claims recoveries
285
301
-
-
1,101
18
-
-
440
435
148
127
1,226
444
1,226
444
178
147
-
-
Others
1,751
1,555
1,388
1,084
Total
8,071
5,632
5,432
3,966
Accrued interest and dividend income receivable
Other receivables - VAT paid in advance for customers
Receivable from clearing house Prepaid expenses Deposits from derivative contracts Reinsurance assets
Less: Allowance for impairment Other assets - net
212
ANNUAL REPORT 2015
(401) 7,670
(411) 5,221
(330) 5,102
(326) 3,640
19.
Deposits
19.1 Classified by type of deposits (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Current
9,786
8,673
9,822
8,700
Saving
258,930
240,592
259,343
241,066
Certificates of deposit
113,598
228,654
113,598
228,654
38,632
64,121
38,858
64,601
- 6 months and up to 1 year
122,076
22,583
122,385
24,177
- Over 1 year
126,482
132,369
126,569
132,537
669,504
696,992
670,575
699,735
Fixed deposits - Less than 6 months
Total deposits
19.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2015 Domestic Baht
2014
Foreign
Total
Domestic
Foreign
Total
668,613
1
668,614
696,531
1
696,532
US Dollar
738
24
762
249
25
274
Other currencies
111
17
128
182
4
186
669,462
42
669,504
696,962
30
696,992
Total
(Unit: Million Baht) Separate financial statements 2015 Domestic Baht
2014
Foreign
Total
Domestic
Foreign
Total
669,684
1
669,685
699,274
1
699,275
US Dollar
738
24
762
249
25
274
Other currencies
111
17
128
182
4
186
699,705
30
699,735
Total
670,533
42
670,575
THANACHART BANK PUBLIC COMPANY LIMITED
213
20.
Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2015 At call
2014
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
416
3,348
3,764
710
3,980
4,690
424
22,886
23,310
731
17,573
18,304
40
2,850
2,890
35
10,101
10,136
Other financial institutions
10,353
17,294
27,647
10,781
16,636
27,417
Total domestic items
11,233
46,378
57,611
12,257
48,290
60,547
85
19,546
19,631
39
15,476
15,515
Euro
3
-
3
1
-
1
Baht
7,650
793
8,443
3,375
832
4,207
Total foreign items
7,738
20,339
28,077
3,415
16,308
19,723
18,971
66,717
85,688
15,672
64,598
80,270
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
(Unit: Million Baht) Separate financial statements 2014
2015 Term
Total
Term
Total
416
3,348
3,764
709
3,980
4,689
123
16,526
16,649
161
11,289
11,450
40
2,450
2,490
35
9,701
9,736
Other financial institutions
10,385
17,334
27,719
10,913
16,636
27,549
Total domestic items
10,964
39,658
50,622
11,818
41,606
53,424
85
19,546
19,631
39
15,476
15,515
Euro
3
-
3
1
-
1
Baht
7,650
793
8,443
3,375
832
4,207
Total foreign items
7,738
20,339
28,077
3,415
16,308
19,723
18,702
59,997
78,699
15,233
57,914
73,147
At call
At call
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks Specialised financial institutions
Foreign US Dollar
Total
214
ANNUAL REPORT 2015
As at 31 December 2015, interbank and money market items in the consolidated financial statements included loans of a subsidiary company amounting to Baht 1,573 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 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, (iii) a loan of Baht 83 million, repayable in quarterly installments, carrying interest at a fixed rate per annum, payable monthly, (iv) a loan of Baht 100 million, repayable in full within 3 years from the date of the loan drawdown, and carrying interest at a fixed rate per annum, payable quarterly and (v) a loan of Baht 90 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 (2014: included loans of a subsidiary company amounting to Baht 2,012 million). 21.
Debt issued and borrowings As at 31 December 2015 and 2014, the balance of domestic debt issued and borrowings, which stated in Baht, are as follows: (Unit: Million Baht) Interest rate per annum (as at
Consolidated
Separate
31 December
financial statements
financial statements
Types of borrowings
2015)
Maturity date
Perpetual subordinated hybrid
-
-
4.70 percent
4.65, 6.00 percent
2015
2014
2015
2014
-
7,130
-
7,130
2022
12,516
23,516
12,516
23,516
2024 and
20,000
13,000
20,000
13,000
2016 - 2018
15,071
15,271
-
-
2016
22,900
30,180
22,900
30,180
-
bonds issued under Tier I (a) Subordinated debentures issued under Tier II (b- e) Subordinated instruments issued under Tier II (f - g)
2025
Unsubordinated debentures
3.00 - 5.50
(h – w)
percent
Short-term debentures
1.55 - 1.70 percent
Structured notes
-
2015
-
37
Promissory notes
0.40 - 2.50, 3.90
At call
1,149
1,052
5
5
-
5
12
5
12
71,641
90,198
55,426
73,843
percent Borrowings - Department of
0.50 percent
2016 - 2017
Alternative Energy Development and Efficiency Total debt issued and borrowings
THANACHART BANK PUBLIC COMPANY LIMITED
215
(a)
On 22 April 2010, the Bank issued 7,130,000 units of name registered of perpetual, noncumulative, 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 redeemed these debentures in the fourth quarter of 2015.
(b)
On 9 May 2008, the Bank issued 5,000,000 units of name registered subordinated, unsecured, unconvertible debentures with no debenture holders’ representative, with a face value of Baht 1,000 each and bear interest at a fixed rate of 5.10 percent per annum for the first three years, and 6.00 percent per annum for the fourth to seventh years, payable quarterly. The Bank redeemed these debentures in the second quarter of 2015.
(c)
On 2 April 2010, the Bank issued 6,000,000 units of 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 5.00 percent per annum for the first five years, and 5.50 percent per annum for the sixth to tenth years, payable quarterly. The Bank early redeemed these debentures in the second quarter of 2015.
(d)
On 20 July 2012, the Bank issued 8,497,000 units of 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.
(e)
On 19 October 2012, the Bank issued 4,018,500 units of 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.
(f)
On 19 June 2014, the Bank issued 13,000,000 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 6.00 percent per annum, payable quarterly. The Bank has a call option to early redeem these instruments at par if conditions specified are met.
216
ANNUAL REPORT 2015
(g)
On 11 May 2015, the Bank issued 7,000,000 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 2025 and bear interest at a fixed rate of 4.65 percent per annum, payable quarterly. The Bank has a call option to early redeem these instruments at par if conditions specified are met.
(h)
On 27 April 2012, a subsidiary company issued 4,000,000 units of name registered unsubordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each. Of these, 1,500,000 units bear interest at fixed rates of 5.20 percent per annum and the subsidiary redeemed these debentures in the second quarter of 2015. Another 2,500,000 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.
(i)
On 1 November 2012, 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 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.
(j)
On 14 June 2013, 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 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.
(k)
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.
THANACHART BANK PUBLIC COMPANY LIMITED
217
(l)
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.
(m) 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. (n)
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.
(o)
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.
(p)
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.
(q)
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.
218
ANNUAL REPORT 2015
(r)
On 28 April 2015, a subsidiary company issued 200,000 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 3.35 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 3 September 2015, 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 2018 and bear interest at a fixed rate of 3.10 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.
(t)
On 11 September 2015, a subsidiary company issued 350,000 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 2018 and bear interest at a fixed rate of 3.10 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.
(u)
On 23 September 2015, 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 2018 and bear interest at a fixed rate of 3.10 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.
(v)
On 2 October 2015, 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 2018 and bear interest at a fixed rate of 3.00 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.
(w)
On 9 October 2015, 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 2018 and bear interest at a fixed rate of 3.00 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
219
22.
Provisions (Unit: Million Baht) Consolidated financial statements 2015 Obligations from Loss from
Employee
off-balance
litigation
benefits
items
Balance as at 1 January 2015
162
1,902
434
302
2,800
Increase during the year
280
402
33
277
992
(102)
(186)
(20)
(186)
(494)
Utilised Reversal of provisions Balance as at 31 December 2015
(4) 336
Others
-
-
-
2,118
447
393
Total
(4) 3,294
(Unit: Million Baht) Consolidated financial statements 2014 Obligations from
Balance as at 1 January 2014 Increase during the year Utilised
Loss from
Employee
off-balance
litigation
benefits
items
Others
Total
145
1,878
579
544
3,146
33
185
19
269
506
(95)
(401)
(661)
(11)
(154)
Decrease from disposal of a subsidiary company Reversal of provisions Balance as at 31 December 2014
220
ANNUAL REPORT 2015
-
(5)
(5)
(2)
162
1,902
-
-
(69)
(110)
434
302
(5) (186) 2,800
(Unit: Million Baht) Separate financial statements 2015 Obligations from
Balance as at 1 January 2015
Loss from
Employee
off-balance
litigation
benefits
items
162
1,705
434
302
2,603
-
6
-
-
6
280
341
33
277
931
(102)
(181)
(20)
(186)
(489)
Others
Total
Employee benefits for staff transferred from TS AMC Increase during the year Utilised Reversal of provisions Balance as at 31 December 2015
(4) 336
-
-
-
1,871
447
393
(4) 3,047
(Unit: Million Baht) Separate financial statements 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
THANACHART BANK PUBLIC COMPANY LIMITED
Total
2,603
221
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
2014
2015
2015
2014
Defined benefit obligation at the beginning of the year Decrease from disposal of a subsidiary company
1,847
1,787
1,650
1,602
-
(5)
-
-
-
-
6
-
131
130
110
112
74
83
66
74
(137)
(97)
(129)
(90)
86
(12)
86
170
(91)
150
(81)
41
5
40
(14)
(44)
(49)
(43)
(37)
Employee benefits for staff transferred from TS AMC Current service cost Interest cost Past service cost and gains or losses arising from the payment of benefits Actuarial (gain) loss arising from -
Demographic assumptions changes
-
Financial assumptions changes
-
Experience adjustments
Benefits paid Reversal of provisions Defined benefit obligation at the end of the year
3
2,085
(2) 1,847
1,838
(2) 1,650
As at 31 December 2015 and 2014, the Bank and its subsidiaries expect to pay Baht 47 million and Baht 56 million, respectively in long-term employee benefits during the next one year (separate financial statements: Baht 43 million and Baht 53 million respectively).
222
ANNUAL REPORT 2015
Long-term employee benefits which are recognised in profit or loss for the years ended 31 December 2015 and 2014 can be summarised as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2015 Current service cost Interest cost
2015
2014
131
130
110
112
74
83
66
74
(137)
(97)
(129)
(90)
Past service cost and gains or losses arising from the payment of benefits Actuarial (gain) loss arising from -
Demographic assumptions changes
-
86
-
86
-
Financial assumptions changes
-
(91)
-
(81)
-
Experience adjustments
-
5
-
(14)
68
116
47
Total expense recognised in profit or loss
87
The principal actuarial assumptions used to calculate the defined benefit obligations are as follows: (Percent per annum) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Discount rate
2.71 - 3.83
3.43 - 4.03
3.21
4.03
Future salary increase rate
5.00 - 7.43
5.00 - 7.10
5.00
5.00
0.00 - 92.86
0.00 - 71.43
0.31 - 23.46
0.32 - 19.86
Average staff turnover rate (depending on age)
The result of sensitivity analysis for significant assumptions that affect the increasing in present value of long-term employee benefit obligation as at 31 December 2015 are summarised below: (Unit: Million Baht) Consolidated financial
Separate financial
statements
statements
Decrease 0.25%
74
49
Future salary increase rate
Increase 0.25%
73
48
Average staff turnover rate
Decrease 0.25%
75
52
Change Discount rate
(depending on age)
THANACHART BANK PUBLIC COMPANY LIMITED
223
As at 31 December 2015 and 2014, the weighted average durations of the liabilities for longterm employee benefit obligation of the Bank and its subsidiaries are 11, 16, 24 years and 14, 22, 24 years, respectively (separate financial statements: 16 years and 22 years, respectively). 23.
Insurance contract liabilities (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2014
2015
24.
2015
2014
Loss reserve and outstanding claims
1,707
1,644
-
-
Unearned premium reserve
3,086
3,054
-
-
Total insurance contract liabilities
4,793
4,698
-
-
Other liabilities (Unit: Million Baht)
Other payables
Separate
financial statements
financial statements
2015
2015
2014
2014
1,674
1,295
1,387
1,080
Suspense cash received from account receivables
468
355
389
267
Insurance premium payable
306
344
244
187
Income received in advance
1,899
1,946
1,886
1,906
306
1,155
-
720
-
480
-
-
Payable from purchase and sale of securities
2,073
1,520
-
100
Dividend payable
1,334
-
1,334
-
Others
2,517
2,944
804
1,110
10,577
10,039
6,044
5,370
Corporate income tax payable Payable to clearing house
Total other liabilities
25.
Consolidated
Share capital From 28 September 2015 to 5 October 2015, the Bank called up additional paid-up share capital of 551,197,267 shares with a par value of Baht 10, or a total of Baht 5,511,972,670, and registered the additional share capital on 9 October 2015. As a result its issued and paid-up share capital is equal to Baht 60,648,621,700. The increase in the Bank’s registered share capital was approved by the Annual General Meeting of the Bank’s shareholders on 2 April 2015.
224
ANNUAL REPORT 2015
26.
Other components of equity (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2015
2014
2014
Surplus from business combination under common control
(123)
(123)
-
-
Revaluation surplus (deficit) on investments Revaluation surplus on investments Available-for-sale investments Debt instruments Equity instruments Total
1,370
1,790
1,268
1,595
645
770
77
148
2,015
2,560
1,345
1,743
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
(87) (579) (666) 1,349 (250)
(48) (48) 2,512 (483)
(85)
(42)
(235)
(4)
(320)
(46)
1,025 (205)
1,697 (339)
1,099
2,029
820
1,358
162
237
-
-
(16)
(24)
-
-
146
213
-
-
1,122
2,119
820
1,358
Share of other comprehensive income of associate Less: The effect of deferred tax liabilities Net share of other comprehensive income of associate Total
27.
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 20 August 2015, the Bank’s Board of Director passed a resolution to allocate Baht 279 million of net income to statutory reserve, and on 31 December 2015, the Bank additional allocated Baht 294 million of net income for the year 2015 to the statutory reserve (2014: Baht 396 million).
THANACHART BANK PUBLIC COMPANY LIMITED
225
28.
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 2015 and 2014, capital funds of the Bank calculated in accordance with the BOT’s regulation regarding “Elements of Capital Funds’ for Commercial Bank Incorporate in Thailand”, consist of the following: (Unit: Million Baht) 2015
2014
60,649
55,137
Share premium
2,101
2,101
Statutory reserve
2,710
2,279
35,398
30,457
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
(127)
115
379
248
101,110
90,337
(17,941)
(17,941)
Less: intangible assets
(1,045)
(590)
Total Common Equity Tier I capital
82,124
71,806
-
5,704
82,124
77,510
7,602
5,611
Subordinated debentures
32,516
31,515
Total Tier II capital
40,118
37,126
Total capital funds
122,242
114,636
Other components of equity - Revaluation surplus on investments in debt securities - net
Less: goodwill
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 20 August 2015, the Bank’s Board of Director passed a resolution approving the allocation of Baht 279 million from net income for the six-month period ended 30 June 2015 to the statutory reserve. The remaining net income of Baht 3,467 million was allocated as capital funds of the Bank.
226
ANNUAL REPORT 2015
As at 31 December 2015 and 2014, 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: 2015
2014 Minimum
Minimum
Capital ratio
requirement
Capital ratio
requirement
of the Bank
by BOT
of the Bank
by BOT
Total capital to risk-weighted assets (percent)
17.92
8.50
15.83
8.50
Total Common Equity Tier I to risk-weighted
12.04
4.50
9.92
4.50
12.04
6.00
10.70
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 2015 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 2016. 29.
Dividends Dividends
Interim dividends on net income for the first haft of the year 2015 Dividends on net income for the year 2014
Approved by
Total dividends
Dividend per share
Million Baht
Baht
The Board of Directors of the Bank on 17 December 2015
year 2013
30.
0.22
2,481
0.45
Annual General Meeting of the Shareholders on 2 April 2015
Total Dividends on net income for the
1,334
3,815 Annual General Meeting of the 2,481
Shareholders on 3 April 2014
0.45
Interest income Interest income for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015 Interbank and money market items
2014
2015
2014
1,580
1,894
1,555
1,865
73
238
74
74
3,761
4,106
3,582
3,876
Loans to customers
19,474
20,320
18,908
19,776
Hire purchase and financial lease
23,329
25,887
21,006
23,511
Total interest income
48,217
52,445
45,125
49,102
Investments and trading transactions Investments in debt securities
THANACHART BANK PUBLIC COMPANY LIMITED
227
31.
Interest expenses Interest expenses for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
12,832
16,224
12,847
16,277
957
1,092
742
858
3,405
3,556
3,405
3,556
- Subordinated debentures
1,085
2,013
1,085
2,013
- Unsubordinated debentures
1,217
1,527
502
793
990
419
990
419
44
44
-
-
6
9
1
4
20,536
24,884
19,572
23,920
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
32.
Fees and service income Fees and service income for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Fees and service income Acceptance, aval and guarantees
255
275
255
275
1,431
1,568
-
-
878
855
878
855
Hire purchase fee income
1,506
1,465
1,369
1,348
Insurance brokerage fee income
1,239
1,172
1,476
1,432
Management fees
759
692
-
-
Credit card fee
938
1,008
938
1,010
1,174
1,658
1,217
1,605
8,180
8,693
6,133
6,525
Fees and service expenses
(2,705)
(2,766)
(2,488)
(2,533)
Net fees and service income
5,475
5,927
3,645
3,992
Brokerage fee from securities/ derivatives ATM and electronic banking services
Others Total fees and service income
228
ANNUAL REPORT 2015
33.
Gains on trading and foreign exchange transactions Gains (losses) on trading and foreign exchange transactions for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Foreign exchange and derivatives contract relating to foreign exchange
581
Derivatives contract relating to interest rate
31
Debt securities
26
259
(45)
Equity securities Others Total
34.
577
(5)
573
587
31
(5)
26
59
(25)
-
-
69
49
-
-
658
859
630
641
Gains on investments Gains (losses) on investments for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Gains (losses) on disposal Available-for-sale securities General investments
1,534
752
1,328
677
8
11
8
11
-
65
-
126
Investments in subsidiary companies (Note 46) Investment in receivables purchased
(1)
-
(1)
-
Reversal of losses on impairment (losses on impairment) General investments
3
(58)
3
(58)
Gains (losses) on capital refunded 2
(1)
General investments
2
(1)
Investment in a subsidiary company
-
-
152
-
-
-
-
769
1,492
755
Loss on liquidation from investment in a subsidiary company Total
(13) 1,533
THANACHART BANK PUBLIC COMPANY LIMITED
229
35.
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.
36.
Impairment losses of loans and debt securities Impairment losses of loans and debt securities for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
Bad debts and doubtful accounts (reversal) Loans to customers Interbank and money market items
8,599
7,287
8,016
7,341
(4)
(24)
(6)
(19)
(2)
(198)
(2)
(198)
Amortisation of revaluation allowance for debts restructured during the year Reversal of impairment loss on debt securities Hair cut loss per agreement Total
230
ANNUAL REPORT 2015
(1)
-
(1)
-
-
57
-
57
8,592
7,122
8,007
7,181
37.
Components of other comprehensive income Components of other comprehensive income for the years ended 31 December 2015 and 2014 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
371
2,349
656
1,943
Other comprehensive income Transactions will be reclassified subsequently to profit or loss Available-for-sale investments: Unrealised gains during the year 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)
(1,534)
(752)
(1,163)
1,597
(76)
44
(1,239)
1,641
(1,328) (672) (672)
(677) 1,266 1,266
Impact from related income tax: Income tax - gains (losses) on changes in value of available-for-sale investments
233
(318)
134
8
(5)
-
241
(323)
134
(253)
Income tax - share of other comprehensive income of associate Impact from related income tax
(998)
(253)
1,318
(538)
1,013
(214)
-
(178)
-
41
-
36
-
(173)
-
(142)
-
(1,171)
1,318
(680)
1,013
Transactions that will never be reclassified subsequently to profit or loss Actuarial losses on defined benefit plan Income tax - actuarial losses on defined benefit plan
Other comprehensive income for the year - net of related income tax (loss)
THANACHART BANK PUBLIC COMPANY LIMITED
231
38.
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 (Million Baht) Earnings per share (Baht/share)
Consolidated
Separate
financial statements
financial statements
2015
2014
2015
2014
10,743
9,922
11,452
7,918
1.90
1.80
2.03
1.44
5,641
5,514
5,641
5,514
Weighted average number of ordinary shares (Million shares)
39.
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 2015, the Bank and its subsidiaries contributed Baht 424 million to the fund (separate financial statements: Baht 370 million) (2014: Baht 424 million in the consolidated financial statements and Baht 373 million in the separate financial statements).
232
ANNUAL REPORT 2015
40.
Related party transactions During the years, the Bank and its subsidiaries have 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
2014
2015
2015
Transfer pricing policy (For the year 2015)
2014
Transactions occurred during the years Parent company Purchase of debt securities
477
5,854
477
5,854
At market price
Sales of debt securities
3,327
1,035
3,327
1,035
At market price
Sales of investments in
-
482
-
482
(Related gain)
-
35
-
67
Interest income
-
1
-
-
Fee and service income
1
1
-
-
a subsidiary company
At the rate agreed under the service contract
Income on supporting service
10
10
10
10
At the rate agreed under the service contract
Other income Interest expenses
3
1
-
-
201
342
201
342
At interest rate of 0.40 - 1.50, 5.00, 7.30 and 7.55 percent per annum
Rental expenses
8
8
7
6
At the rate agreed under the rental contract
Other expenses Dividend payment
40
51
40
51
1,944
1,264
1,944
1,264
As declared
THANACHART BANK PUBLIC COMPANY LIMITED
233
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
Transfer pricing policy (For the year 2015)
2015
2014
2015
2014
Purchase of debt securities
-
-
3,722
5,332
At market price
Sales of debt securities
-
-
2,744
9,361
At market price
(Related gain)
-
-
-
10
Purchase/sales of forward
-
-
1,471
739
At market price
-
-
124
188
At interest rate of 2.17 - 2.97, 3.75,
Transactions occurred during the years (continued) Subsidiary companies
exchange contracts Interest income
7.68 and 7.78 percent per annum Dividend income
-
-
3,090
1,277
Fee and service income
-
-
798
734
As declared At the rate agreed under the service contract
Income on supporting service
-
-
288
292
At the rate agreed under the service contract
Other income
-
-
23
11
Interest expenses
-
-
112
148
At interest rate of 0.25 - 2.80 percent per annum
Rental expenses
-
-
1
2
At the rate agreed under the rental contract
Other expenses
-
-
190
182
-
418
-
418
(Related gain)
-
30
-
59
Dividend income
-
-
46
46
Other income
5
5
-
-
Interest expenses
1
42
1
42
Associated company Sales of investments in a subsidiary company
As declared
At interest rate of 0.40 - 0.75 percent per annum
Rental expenses
103
102
79
78
At the rate agreed under the rental contract
Other expenses
234
ANNUAL REPORT 2015
6
10
4
7
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
Transfer pricing policy (For the year 2015)
2015
2014
2015
2014
Purchase of debt securities
2,514
4,507
2,514
3,830
At market price
Sales of debt securities
3,878
8,330
3,878
7,440
At market price
-
8
-
1
226,231
429,948
223,536
429,180
284
296
284
296
Transactions occurred during the years (continued) Related parties
(Related gain) Purchase/sales of forward
At market price
exchange contracts Interest income
At interest rate of 0.09 - 7.78 percent per annum
Dividend income Fee and service income
25
37
5
18
5
6
5
5
As declared At the rate agreed under the service contract
Income on supporting service
7
7
7
7
At the rate agreed under the service contract
Other income Interest expenses
8
11
-
-
307
355
307
355
At interest rate of 0.25 - 3.05, 6.00, 7.30 and 7.55 percent per annum
Rental expenses
116
106
60
60
At the rate agreed under the rental contract
Insurance/Life insurance
14
22
-
-
expense Other expense Dividend payment
At the rate agreed under the service contract
51
41
35
34
1,870
1,216
1,870
1,216
As declared
THANACHART BANK PUBLIC COMPANY LIMITED
235
The outstanding balances of the above transactions during the years ended 31 December 2015 and 2014 have been shown at the average balance at the end of each month as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015
2015
2014
2014
Parent company Loans to customers
5
10
-
-
Investment in debt securities
-
1
-
1
85
2,008
85
2,008
2,798
3,644
2,798
3,642
Interbank and money market items (assets)
-
-
958
862
Loans to customers
-
-
1,969
4,093
Investment in debt securities
-
-
4
186
Deposits
-
-
1,313
2,759
Interbank and money market items (liabilities)
-
-
706
398
119
297
119
297
-
738
-
738
241
218
241
218
7,339
7,658
6,998
7,527
194
81
194
81
1,403
1,838
1,403
1,838
12,578
13,852
12,578
13,852
3,314
4,051
3,314
4,051
Deposits Debt issued and borrowings Subsidiary companies
Associated company Deposits Debt issued and borrowings Related companies Interbank and money market items (assets) Loans to customers Investment in debt securities Deposits Interbank and money market items (liabilities) Debt issued and borrowings
236
ANNUAL REPORT 2015
As at 31 December 2015 and 2014, the significant outstanding balances of the above transactions are as follows: (Unit: Million Baht) Consolidated financial statements 2015 Assets
Liabilities
Interbank
Loans to
Interbank
and money
customers
and money
market
and interest
items
receivables
Other assets
Deposits
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
2
-
27
-
-
680
-
35
63
-
-
-
-
Associated company MBK Plc.
-
-
Related companies 244
-
-
-
15,063
-
666
625
Krungthai Card Plc.
The Bank of Nova Scotia
-
3,018
-
5
-
-
-
-
Srithai Superware Plc.
-
883
-
25
-
-
-
37
Synphaet Co., Ltd.
-
1,136
-
21
-
-
-
36
Iconsiam Co., Ltd.
-
1,897
-
39
-
-
-
30
Other related companies
-
1,516
127
1,278
267
610
17
1,263
244
8,452
162
1,458
15,330
610
1,363
1,991
(Unit: Million Baht) Consolidated financial statements 2014 Liabilities
Assets Loans to
Interbank
Interbank
and money
Investments
customers
market
- debt
and interest
Other
items
securities
receivables
assets
Deposits
and money
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
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
-
-
1,030
78
1,138
202
400
27
347
348
684
7,057
116
1,302
13,044
7,532
177
3,981
Associated company MBK Plc. Related companies The Bank of Nova Scotia
THANACHART BANK PUBLIC COMPANY LIMITED
237
(Unit: Million Baht) Separate financial statements 2015 Assets
Liabilities
Interbank
Loans to
Interbank
and money
customers
and money
market
and interest
items
receivables
Other assets
Deposits
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
-
27
-
-
680
-
-
-
-
388
-
-
2
-
Subsidiary companies Thanachart Group Leasing Co., Ltd. Thanachart Securities Plc.
850
-
2
-
186
-
19
642
Thanachart Insurance Plc.
-
-
51
209
-
-
140
50
Thanachart Broker Co., Ltd.
-
-
6
211
-
-
1
-
TS Asset Management Co., Ltd.
-
691
1
55
-
-
-
2
Ratchthani Leasing Plc.
-
1,210
-
115
-
-
-
30
Other subsidiary companies
-
1
42
103
41
-
23
-
-
-
27
63
-
-
-
-
Associated company MBK Plc. Related companies The Bank of Nova Scotia
238
244
-
-
-
15,063
-
666
625
Krungthai Card Plc.
-
3,018
-
5
-
-
-
-
Srithai Superware Plc.
-
883
-
25
-
-
-
37
Synphaet Co., Ltd.
-
1,136
-
21
-
-
-
36
Iconsiam Co., Ltd.
-
1,897
-
39
-
-
-
30
Other related companies
-
1,175
19
1,278
267
610
4
1,121
1,094
10,011
148
2,539
15,557
610
1,535
2,573
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2014 Assets Interbank and money
Liabilities
Loans to
Interbank
Investments
customers
and money Debt issued
market
- debt
and interest
Other
items
securities
receivables
assets
Deposits
-
19
market
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
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
-
-
688
66
1,138
202
400
109
291
1,398
684
9,609
182
4,063
13,177
7,532
438
4,561
Associated company MBK Plc. Related companies The Bank of Nova Scotia
As at 31 December 2015, the Bank has loans to TS Asset Management Co., Ltd. amounting to Baht 691 million, carrying interest at rates of 2.47 - 2.97 percent per annum and Ratchthani Leasing Plc. amounting to Baht 1,210 million, carrying interest at rates of 2.17 - 3.75 and 7.68 - 7.78 percent per annum (2014: loans to TS Asset Management Co., Ltd. amount to Baht 2,902 million at interest rates of 2.87 - 3.16 percent per annum). As at 31 December 2015, the Bank and its subsidiaries have investments amounting to approximately Baht 811 million (Baht 344 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 (2014: Baht 825 million in the consolidated financial statements, and Baht 350 million in the separate financial statements).
THANACHART BANK PUBLIC COMPANY LIMITED
239
As at 31 December 2015 and 2014, 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
2015 Loans to customers Deposits
2014
2015
2014
84
91
77
85
768
712
768
712
Directors and management’s remuneration During the years 2015 and 2014, the Bank and its subsidiaries paid the following benefits to their key management personnel, including directors, totaled 115 persons and 104 persons, respectively (the separate financial statements: 43 persons and 36 persons, respectively): (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015 Short-term employee benefits Post-employment benefits
240
ANNUAL REPORT 2015
2014
2015
2014
575
546
243
231
14
14
7
9
589
560
250
240
41.
Financial information classified by operating segment
41.1 Financial position and results of operations classified by business activity The financial position as at 31 December 2015 and 2014, and the operating results for the years then ended, classified by domestic and foreign operations, are as follows: (Unit: Million Baht) Consolidated financial statements 2015
Total assets
Domestic
Foreign
operations
operations
Eliminations
Total
980,765
22,837
(22,630)
980,972
60,640
19,573
(22,630)
57,583
168,544
3,238
-
171,782
1,900
-
-
1,900
688,444
-
-
688,444
669,504
-
-
669,504
Interbank and money market items (liabilities)
85,688
22,630
Debt issued and borrowings
71,641
-
Interbank and money market items (assets) Investments Investment in an associated company Loans to customers and accrued interest receivables Deposits
(22,630)
85,688
-
71,641
(Unit: Million Baht) Consolidated financial statements 2014 Domestic
Foreign
operations
operations
1,008,820
Eliminations
Total
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
-
Total assets Interbank and money market items (assets) Investments Investment in an associated company Loans to customers and accrued interest receivables Deposits
(19,703) -
THANACHART BANK PUBLIC COMPANY LIMITED
80,270 90,198
241
(Unit: Million Baht) Consolidated financial statements 2015
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
48,145
191
(119)
48,217
(20,538)
(117)
119
(20,536)
27,607
74
-
27,681
Net fees and service income
5,475
-
-
5,475
Net insurance income
2,552
-
-
2,552
Other operating income
4,159
14
-
4,173
(19,964)
-
-
(19,964)
Impairment losses of loans and debt securities
(8,592)
-
-
(8,592)
Profit before income tax
11,237
88
-
11,325
-
-
88
-
Interest expenses Net interest income
Other operating expenses
Income tax Profit before non-controlling interests
(198) 11,039
(198) 11,127 (Unit: Million Baht)
Consolidated financial statements 2014
Interest income
Foreign
operations
operations
Eliminations
Total
52,301
260
(116)
52,445
(24,884)
(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
Interest expenses Net interest income
Other operating expenses
242
Domestic
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2015 Domestic
Foreign
operations
operations
938,627
Eliminations
Total
22,837
(22,630)
938,834
59,998
19,573
(22,630)
56,941
160,429
3,238
-
163,667
Investments in subsidiary and associated companies
7,359
-
-
7,359
Loans to customers and accrued interest receivables
656,513
-
-
656,513
Deposits
670,575
-
-
670,575
Interbank and money market items (liabilities)
78,699
22,630
Debt issued and borrowings
55,426
-
Total assets Interbank and money market items (assets) Investments
(22,630) -
78,699 55,426
(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) -
THANACHART BANK PUBLIC COMPANY LIMITED
73,147 73,843
243
(Unit: Million Baht) Separate financial statements 2015 Domestic
Foreign
operations
operations
45,053
191
(119)
45,125
(19,574)
(117)
119
(19,572)
25,479
74
-
25,553
Net fees and service income
3,645
-
-
3,645
Other operating income
6,980
14
-
6,994
(17,294)
-
-
(17,294)
Impairment losses of loans and debt securities
(8,007)
-
-
(8,007)
Profit before income tax
10,803
88
-
10,891
561
-
-
561
11,364
88
-
11,452
Interest income Interest expenses Net interest income
Other operating expenses
Income tax Profit for the year
Eliminations
Total
(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)
(7,181)
-
-
(7,181)
144
-
9,615
-
-
(1,697)
144
-
7,918
Interest income Interest expenses Net interest income
Other operating expenses Impairment losses of loans and debt securities Profit before income tax Income tax Profit for the year
244
ANNUAL REPORT 2015
9,471 (1,697) 7,774
Eliminations
Total
41.2 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. 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:
THANACHART BANK PUBLIC COMPANY LIMITED
245
246
ANNUAL REPORT 2015 3,042 2,131 5,173
3,604 (721) 2,883
4,245 (849) 3,396
Profit (loss) before income tax
Profit (loss) before non-controlling interest
Income tax
(1,555)
(177)
(6,275)
Impairment losses of loans and debt securities
5,425
-
803
(1,631)
768
-
4,565
and others
(1,552)
4,446
-
20,185
and SME
Investment
Treasury &
(14,111)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Banking business
808
(193)
1,001
23
(1,332)
2,098
-
212
business
Securities
1,117
(277)
1,394
-
(920)
315
1,754
245
business
insurance
Non-life
(111)
(28)
(83)
(352)
(172)
94
-
347
business
management
Asset
For the year ended 31 December 2015
883
(227)
1,110
(400)
(792)
940
-
1,362
businesses
Other
(3,022)
(34)
(2,988)
144
546
(4,438)
798
(38)
11,127
(198)
11,325
(8,592)
(19,964)
9,648
2,552
27,681
Eliminations Consolidated
(Unit: Million Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
247
(219) 2,008
(698) 2,790
(780) 3,120
851
(205)
1,056
-
(1,365)
2,228
-
193
business
Securities
1,046
(274)
1,320
-
(779)
149
1,667
283
business
insurance
Non-life
881
(79)
960
644
(161)
122
-
355
business
management
Asset
937
(254)
1,191
(418)
(704)
1,028
(294)
1,579
businesses
Other
499,508
As at 31 December 2014
234,207
226,010
and SME
233,501
243,563
and others
Investment
Treasury &
8,060
7,862
business
Securities
11,234
11,532
business
insurance
Non-life
8,235
4,350
businesses
management
Asset
30,655
30,584
businesses
Other
(1) During the year 2015, the Bank changed the segment information for banking business, and has restated the prior year’s segment information, presented as comparative information.
469,261
As at 31 December 2015
Assets for segment
Retail
Corporate
Banking business
(1)
Assets for segment of the Bank and its subsidiaries as at 31 December 2015 and 2014 are as follows:
(1) During the year 2015, the Bank changed the segment information for banking business, and has restated the prior year’s segment information, presented as comparative information.
Profit before non-controlling interest
Income tax
3,488
3,900
Profit before income tax
2,227
(576)
(235)
(6,370)
Impairment losses of loans and debt securities
3,434
-
720
(1,351)
695
-
4,450
(1,422)
4,514
-
20,012
and others
and SME
(14,256)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Treasury & Investment
(1)
Corporate
Banking business
For the year ended 31 December 2014
10,195
(2,479)
12,674
(7,122)
(19,515)
9,659
2,091
27,561
Consolidated
(16,510)
(12,190)
Eliminations
1,008,890
980,972
Consolidated
(Unit: Million Baht)
(1,438)
30
(1,468)
(167)
523
(2,511)
718
(31)
Eliminations
(Unit: Million Baht)
41.3 Major customers For the years 2015 and 2014, the Bank and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues. 42.
Encumbrance of assets As at 31 December 2015 and 2014, 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
2014
2015
2015
2014
Interbank and money market items (assets) Guarantee placed with the registrar Placed with court for stay of execution
650
-
-
-
7
7
-
-
17
691
-
-
405
422
266
293
259
288
143
209
94
389
21
16
1,432
1,797
430
518
Investments in securities Guarantee placed with the registrar Placed with court for stay of execution 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
248
ANNUAL REPORT 2015
43.
Commitments and contingent liabilities As at 31 December 2015 and 2014, significant commitments and contingent liabilities consisted of:
43.1 Commitments (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2015 Aval to bills
2014
2015
2014
1,270
256
1,270
256
497
509
497
509
2,310
4,796
2,310
4,796
Committed (but not drawn) overdraft
24,506
27,400
24,506
27,400
Others
53,202
55,266
53,172
55,194
81,785
88,227
81,755
88,155
Liability under unmatured import bills 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 7 to the financial statements. 43.2 As at 31 December 2015, 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)
Year
Consolidated
Separate
financial statements
financial statements
Other
Parent
Other
Parent
Subsidiary
parties
company
parties
company
companies
2016
2,005
11
1,885
11
101
2017
1,561
6
1,469
5
-
2018 onward
1,228
-
860
-
-
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.
THANACHART BANK PUBLIC COMPANY LIMITED
249
43.3 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 2015, 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 amount relate to transfers of guarantee claims, for which there are pending issues with regard to proof of rights of claim or the qualification of the assets transferred under 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 2015, the transferred assets which SAM is re-examining totaling Baht 29 million of transactions 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 37 million.
c)
Lawsuits in which SCIB is involved as a result of the transfer of business from BMB amounting to Baht 1,034 million, as disclosed under contingent liabilities in Note 44 to the financial statements.
250
ANNUAL REPORT 2015
d)
Outstanding letters of guarantee
The FIDF deposited an amount equal to the loss compensation limit with Thanachart Bank in FIDF’s account. This deposit account is to compensate for losses incurred as a result of the transfer of business from BMB, if actual losses are incurred due to the outstanding issues described in a), b), c) and d) above. As at 31 December 2015, the deposit account of the FIDF with Thanachart Bank to fund the payment of compensation for losses has an outstanding balance of approximately Baht 413 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. 44.
Litigation As at 31 December 2015, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 3,262 million (separate financial statements: Baht 2,947 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 1,034 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.
45.
Letter of guarantees As at 31 December 2015, the Bank and its subsidiaries had letter of guarantees issued by banks on behalf of the Bank and its subsidiaries, amounting approximately Baht 30 million, placed for electricity usage of the branches (separate financial statements: Baht 30 million).
THANACHART BANK PUBLIC COMPANY LIMITED
251
46.
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. In the year 2014, the Bank did not separately present the operating results of Siam City Life Assurance as discontinued operations since the Bank’s management concluded that the operating result of such company are immaterial to the consolidated figures and that the company does not constitute a major business of the Group in the consolidated financial statements.
47.
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.
47.1 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.
252
ANNUAL REPORT 2015
47.2 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. As at 31 December 2015 and 2014, financial assets and liabilities classified by types of interest rate are as follows: (Unit: Million Baht) Consolidated financial statements 2015
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
13,337
13,337
500
53,080
4,198
57,778
-
-
5,447
5,447
-
163,355
7,258
170,613
241,289
471,762
415
713,466
Receivables from purchase and sale of securities
-
-
1,006
1,006
Other assets - receivable from clearing house
-
-
1,101
1,101
267,371
395,615
6,518
669,504
17,015
67,155
1,518
85,688
Liability payable on demand
-
-
2,202
2,202
Derivatives liabilities
-
-
6,758
6,758
Debt issued and borrowings
4
71,637
-
71,641
-
-
2,073
2,073
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
Other liabilities - payables from purchase and sale of securities
(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
(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
-
-
4,389
4,389
1
140,322
6,944
147,267
260,545
492,867
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
12,632
65,035
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
-
-
1,520
1,520
-
-
480
480
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
Other liabilities - payables from purchase and sale of securities Other liabilities - payable to clearing house
(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
254
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2015
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
13,336
13,336
446
52,568
4,139
57,153
-
-
5,447
5,447
-
157,196
5,521
162,717
232,026
443,577
398
676,001
267,784
396,237
6,554
670,575
17,178
59,997
1,524
78,699
Liability payable on demand
-
-
2,202
2,202
Derivatives liabilities
-
-
6,751
6,751
Debt issued and borrowings
4
55,422
-
55,426
Interbank and money market items Derivatives assets Investments 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
(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
-
-
4,389
4,389
1
134,417
5,156
139,574
249,037
464,467
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
-
-
100
100
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
Other liabilities - payables from purchase and sale of securities
(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
255
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 2015 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
1
52,068
511
500
-
53,080
2.63 - 3.04
263
15,670
37,706
106,116
3,600
163,355
2.20 - 2.41
5,185
46,255
23,858
289,450
107,014
471,762
6.52 - 8.13
Deposits
133
88,833
299,467
7,182
-
395,615
Interbank and money market items
439
39,352
21,522
5,107
735
67,155
1.08 - 2.71
1,145
10,100
18,300
9,576
32,516
71,637
3.74 - 4.69
Investments Loans to customers Financial liabilities
Debt issued and borrowings
2.13
(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
8,918
34,416
20,344
317,228
111,961
492,867
7.30 - 8.71
Deposits
146
152,695
257,990
32,659
-
443,490
2.76
Interbank and money market items
549
46,094
13,473
4,919
-
65,035
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
256
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2015 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
850
51,718
-
-
-
52,568
2.63
Investments
263
13,169
36,905
104,375
2,484
157,196
2.20
6,779
46,123
22,242
261,707
106,726
443,577
6.50
133
89,333
299,589
7,182
-
396,237
2.13
Interbank and money market items
-
38,993
16,562
3,707
735
59,997
1.13
Debt issued and borrowings
1
10,100
12,800
5
32,516
55,422
3.74
Loans to customers Financial liabilities Deposits
(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
8,448
34,136
19,225
290,836
111,822
464,467
7.30
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
THANACHART BANK PUBLIC COMPANY LIMITED
257
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 years, and the average interest rate for the years ended 31 December 2015 and 2014 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements For the years ended 31 December 2014
2015 Average balances
Interest
Average
Average
Average
rate (%)
balances
Interest
rate (%)
2.91
83,437
1,894
2.27
1.68
12,984
238
1.83
Interest bearings financial assets Interbank and money market items
54,207
Investments and trading operations
4,382
Investment in debt securities
1,580 73
135,136
3,761
2.78
120,386
4,106
3.41
702,381
42,803
6.09
753,854
46,207
6.13
664,895
16,237
2.44
697,218
19,780
2.84
Interbank and money market items
70,706
957
1.35
68,699
1,092
1.59
Debt issued and borrowings
80,541
3,342
4.15
92,389
4,012
4.34
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 2014
2015 Average
Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
53,699
1,555
2.90
83,404
1,865
2.24
Investments and trading operations
4,382
74
1.68
3,454
74
2.14
129,658
3,582
2.76
114,411
3,876
3.39
662,877
39,914
6.02
714,096
43,287
6.06
666,194
16,252
2.44
698,958
19,833
2.84
Interbank and money market items
62,514
742
1.19
61,250
858
1.40
Debt issued and borrowings
64,648
2,578
3.99
76,596
3,229
4.21
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
258
ANNUAL REPORT 2015
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 2015 and 2014 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements 2015 Australian US Dollar
Euro
Yen
Dollar
Others
Foreign currency in the statement of financial position Cash
95
79
10
11
39
Interbank and money market items
1,311
56
90
19
93
Investments
8,874
-
-
-
1,171
21,177
214
83
796
51
Other assets
1,221
-
-
-
2
Total assets
32,678
349
183
826
1,356
762
79
-
28
21
22,157
3
-
-
-
3
-
-
-
-
22,922
82
-
28
21
9,756
267
183
798
1,335
365
21
84
-
8
2,108
47
56
-
43
934
25
2
-
29
Loans to customers and accrued interest receivable
Deposits Interbank and money market items Derivatives liabilities Total liabilities Net Foreign currency commitments Liability under unmatured import bills Letter of credits Others
THANACHART BANK PUBLIC COMPANY LIMITED
259
(Unit: Million Baht) Consolidated financial statements 2014 Australian US Dollar
Euro
Yen
Others
Dollar
Foreign currency in the statement of financial position Cash
1,339
576
19
217
330
Interbank and money market items
4,660
62
79
15
156
Investments
10,667
1
-
-
1,137
Loans to customers and accrued interest receivable
23,901
83
39
2
19
Other assets
478
-
-
-
2
Total assets
41,045
722
137
234
1,644
274
36
137
Interbank and money market items
16,899
1
-
Total liabilities
17,173
37
137
6
7
Net
23,872
685
-
228
1,637
378
19
71
-
2
4,418
48
215
-
13
873
26
5
-
28
Deposits
6 -
7 -
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
260
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2015 Australian US Dollar
Euro
Yen
Others
Dollar
Foreign currency in the statement of financial position Cash
95
79
10
11
39
Interbank and money market items
1,311
56
90
19
93
Investments
8,874
-
-
-
1,171
21,177
214
83
796
51
Other assets
1,221
-
-
-
2
Total assets
32,678
349
183
826
1,356
762
79
-
28
21
Interbank and money market items
22,157
3
-
-
-
Total liabilities
22,919
82
-
28
21
9,759
267
183
798
1,335
365
21
84
-
8
2,108
47
56
-
43
934
25
2
-
29
Loans to customers and accrued interest receivable
Deposits
Net Foreign currency commitments Liability under unmatured import bills Letter of credits Others
THANACHART BANK PUBLIC COMPANY LIMITED
261
(Unit: Million Baht) Separate financial statements 2014 Australian US Dollar
Euro
Yen
Dollar
Others
Foreign currency in the statement of financial position Cash
1,339
576
19
217
330
Interbank and money market items
4,660
62
79
15
156
Investments
10,667
1
-
-
1,137
Loans to customers and accrued interest receivable
23,901
83
39
2
19
Other assets
478
-
-
-
2
Total assets
41,045
722
137
234
1,644
274
36
137
6
7
Interbank and money market items
16,899
1
-
-
-
Total liabilities
17,173
37
137
6
7
Net
23,872
685
-
228
1,637
378
19
71
-
2
4,418
48
215
-
13
873
26
5
-
28
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
In addition, the Bank and its subsidiaries have commitments from foreign currency exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts and other derivative contracts which have to pay or receive repayment in foreign currency that the Bank and its subsidiaries made for trading transactions or hedging transactions (banking book) as follows:
262
ANNUAL REPORT 2015
(Unit: Million Baht) Consolidated financial statements 2015 Australian US Dollar
Euro
Yen
Others
Dollar
Foreign exchange contracts - Bought
45,537
377
336
-
397
- Sold
45,634
679
521
796
593
5,513
-
-
-
-
14,553
-
-
-
1,134
- Bought
70,573
-
-
-
-
- Sold
70,573
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Consolidated financial statements 2014 Australian US Dollar
Euro
Yen
Others
Dollar
Foreign exchange contracts - Bought
33,354
326
846
126
869
- Sold
46,211
1,015
832
340
1,353
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
THANACHART BANK PUBLIC COMPANY LIMITED
263
(Unit: Million Baht) Separate financial statements 2015 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
45,400
377
336
-
397
- Sold
45,771
679
521
796
593
5,513
-
-
-
-
14,553
-
-
-
1,134
- Bought
70,573
-
-
-
-
- Sold
70,573
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Separate financial statements 2014 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
33,298
326
846
126
869
- Sold
46,267
1,015
832
340
1,353
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
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.
264
ANNUAL REPORT 2015
47.3 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. Counting from the financial position date, the periods to maturity of financial instruments held as at 31 December 2015 and 2014 are as follows: (Unit: Million Baht) Consolidated financial statements 2015
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash Interbank and money market items Derivatives assets Investments Loans to customers
(1)
13,337
-
-
-
13,337
4,699
52,579
500
-
57,778
-
1,548
3,899
-
5,447
263
54,075
109,041
7,234
170,613
42,142
115,432
555,892
-
713,466
-
1,006
-
-
1,006
-
1,101
-
-
1,101
268,869
391,705
8,930
-
669,504
18,972
60,874
5,842
-
85,688
2,202
-
-
-
2,202
-
1,639
5,119
-
6,758
1,149
28,400
42,092
-
71,641
-
2,073
-
-
2,073
278
868
124
-
1,270
19
478
-
-
497
615
1,690
5
-
2,310
36,967
39,165
1,576
-
77,708
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 Other payable - payables from purchase and sale of securities Commitments Aval to bill Liability under unmatured import bills 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
(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
-
705
3,684
-
4,389
1
37,281
103,098
6,887
147,267
58,105
198,276
497,989
-
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
-
701
4,499
-
5,200
1,052
36,717
45,299
7,130
90,198
-
1,520
-
-
1,520
-
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
43,506
38,529
631
-
82,666
Interbank and money market items Derivatives assets Investments 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 Other liabilities - payables from purchase and sale of securities Other liabilities - payable to clearing house Commitments
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
266
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2015
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
13,336
-
-
-
13,336
5,435
51,718
-
-
57,153
-
1,548
3,899
-
5,447
263
50,773
106,184
5,497
162,717
36,099
113,649
526,253
-
676,001
269,318
392,327
8,930
-
670,575
18,702
55,555
4,442
-
78,699
2,202
-
-
-
2,202
Derivatives liabilities
-
1,632
5,119
-
6,751
Debt issued and borrowings
5
22,900
32,521
-
55,426
278
868
124
-
1,270
19
478
-
-
497
615
1,690
5
-
2,310
36,967
39,165
1,546
-
77,678
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items Liability payable on demand
Commitments Aval to bill Liability under unmatured import bills 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
267
(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
-
705
3,684
-
4,389
1
36,861
97,613
5,099
139,574
48,217
196,794
469,425
-
714,436
249,941
415,921
33,873
-
699,735
15,233
53,620
4,294
-
73,147
1,655
-
-
-
1,655
Derivatives liabilities
-
698
4,499
-
5,197
Debt issued and borrowings
5
35,180
31,528
7,130
73,843
-
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
43,506
38,529
559
-
82,594
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items Liability payable on demand
Other liabilities - payables from purchase and sale of securities Commitments
Other commitments (1)
The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
268
ANNUAL REPORT 2015
47.4 Fair value As at 31 December 2015 and 2014, the Bank and its subsidiaries have the financial assets and financial liabilities which presented based on fair value hierarchy as follows: (Unit: Million Baht) Consolidated financial statements 2014
2015 Fair value
Book value
Level 1
Total
Book value
Level 2
Fair value
Level 3
Financial assets and liabilities measured at fair value Derivatives assets
5,426
5,426
-
5,426
-
4,326
4,326
159,127
159,127
3,142
155,985
-
134,500
134,500
5,218
5,218
4
5,214
-
4,183
4,183
Cash
13,337
13,337
13,337
-
-
16,605
16,605
Interbank and money market items
57,583
57,583
4,671
31,401
21,511
65,433
65,433
21
22
-
22
-
63
63
12,655
16,314
-
9,138
7,176
15,109
15,459
688,444
693,961
-
330,972
362,989
727,349
727,349
1,006
1,006
-
-
-
1,837
1,837
1,101
1,101
-
1,101
-
18
18
669,504
669,616
273,890
395,726
-
696,992
696,992
85,688
85,707
18,533
54,162
13,012
80,270
80,270
Liability payable on demand
2,202
2,202
2,202
-
-
1,655
1,655
Derivatives liabilities
1,540
1,427
-
1,427
-
1,017
1,017
71,641
72,953
-
72,953
-
90,198
90,198
2,073
2,073
-
2,073
-
1,520
1,520
-
-
-
-
-
480
480
Investments Derivatives liabilities Financial assets and liabilities for which fair value are disclosed
(assets) Derivatives assets Investments Loans to customers Receivables from purchase and sale of securities Other assets - receivable from clearing house Deposits Interbank and money market items (liabilities)
Debt issued and borrowings Other liabilities - payables from purchase and sale of securities Other liabilities - payable to clearing house
THANACHART BANK PUBLIC COMPANY LIMITED
269
(Unit: Million Baht) Separate financial statements 2014
2015 Fair value
Book value
Level 1
Total
Level 2
Book value
Fair value
Level 3
Financial assets and liabilities measured at fair value Derivatives assets
5,426
5,426
-
5,426
-
4,326
4,326
151,127
151,127
1,302
149,825
-
126,314
126,314
5,211
5,211
-
5,211
-
4,180
4,180
Cash
13,336
13,336
13,336
-
-
16,598
16,598
Interbank and money market items
56,941
56,941
4,557
30,031
22,353
65,338
65,338
21
22
-
22
-
63
63
12,540
16,154
-
9,033
7,121
14,888
15,237
Loans to customers
656,513
661,471
-
329,429
332,042
694,952
694,952
Deposits
670,575
670,687
274,338
396,349
-
699,735
699,735
78,699
78,702
18,702
54,203
5,797
73,147
73,147
Liability payable on demand
2,202
2,202
2,202
-
-
1,655
1,655
Derivatives liabilities
1,540
1,427
-
1,427
-
1,017
1,017
55,426
56,569
-
56,569
-
73,843
73,843
-
-
-
-
-
100
100
Investments Derivatives liabilities Financial assets and liabilities for which fair value are disclosed
(assets) Derivatives assets Investments
Interbank and money market items (liabilities)
Debt issued and borrowings Other liabilities - payables from purchase and sale of securities
270
ANNUAL REPORT 2015
Valuation techniques and inputs used for fair value measurement Cash
- The fair value is assumed to approximate its book value in the statement of financial position.
Interbank and money market items (asset)
- The fair value is assumed to approximate their book value in the statement of financial position due to their shortterm nature.
Derivatives
- The fair value is based on quoted market prices. When there is no observable market price, the fair value is measured
using
a
valuation
technique
that
uses
observable inputs such as interest rates and foreign exchange rates obtained from reliable sources and adjusted to reflect counterparty credit risk, as mentioned in Note 4.22 to the financial statements. Investments
- 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 or on other markets. - The fair value of unit trusts is determined from their net asset value, as mentioned in Note 4.3 to the financial statements. - The fair value of investments in non-marketable equity securities
is
determined
using
common
valuation
techniques such as the market approach, cost approach or income approach, as well as book value or adjusted book value. Loans to customers
- The fair value of floating rate loans is assumed to approximate their book value, net of allowance for doubtful debt and allowance for debt restructuring. - The fair value of fixed rate loans is determined by discounting the expected future cash flows at the interest rate of similar loans, net of allowance for doubtful debt and deferred revenue. - The fair value of fixed rate loans for which revenue recognition has discontinued is assumed to approximate their book value, net of allowance for doubtful debt or to approximate the amount expected to be derived from their sale.
THANACHART BANK PUBLIC COMPANY LIMITED
271
Receivables from purchase and sale of securities
- The fair value is assumed to approximate their book values in the statement of financial position due to their short-term nature.
Receivables from and payables to clearing house
- The fair value is assumed to approximate their book values in the statement of financial position due to their short-term nature.
Deposits
- The fair value of payable on demand deposits, floating rate deposits or fixed rate deposits with not more than 1 year from the statement of financial position date remaining to maturity is assumed to approximate their book values. - The fair value of fixed rate deposits with more than 1 year from the statements of financial position date remaining to maturity is determined by discounting the expected future cash flows at the Bank’s interest rate for similar deposits.
Interbank and money market items (liabilities)
- The fair value of interbank and money market items payable on demand or floating rate deposits, fixed rate deposits with not more than 1 year from the statement of financial position date remaining to maturity is assumed to approximate their book values. - The fair value of fixed rate interbank and money market items with more than 1 year from the statement of financial position date remaining to maturity is determined by discounting the expected future cash flows at the market interest rate of debt or the Bank’s announced interest rate for similar deposits.
Liability payable on demand
- The fair value is assumed to approximate its book value in the statement of financial position due to its short-term nature.
272
ANNUAL REPORT 2015
Debt issued and borrowings
- The fair value of floating rate or fixed rate debt issues and borrowings with not more than 1 year from the statement of financial position date remaining to maturity are assumed to approximate their book values. - The fair value of fixed rate debt issues and borrowings with more than 1 year from the statements of financial position date remaining to maturity is determined by discounting the expected future cash flows at the market interest rate for similar debt.
During the year, the Bank and its subsidiaries did not transfer any items among fair value hierarchy levels. 47.5 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, as a result the Bank and its subsidiaries are able to maintain overall risk at an acceptable level.
THANACHART BANK PUBLIC COMPANY LIMITED
273
As at 31 December 2015 and 2014, 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 2015
2014
Less than
Over
1 year
1 year
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
46,583
64
46,647
35,521
-
35,521
- Sold
48,159
64
48,223
49,751
-
49,751
- Bought
1,153
4,360
5,513
-
2,463
2,463
- Sold
2,468
13,219
15,687
-
14,180
14,180
- Paid fixed interest rate
37,466
137,655
175,121
62,552
130,625
193,177
- Paid floating interest rate
33,391
139,667
173,058
46,647
128,460
175,107
- Received fixed interest rate
33,391
138,667
172,058
46,647
127,460
174,107
- Received floating interest rate
37,466
138,655
176,121
62,552
131,625
194,177
- Bought
104
-
104
8
-
8
- Sold
239
-
239
237
-
237
89
-
89
17
-
17
-
-
-
37
-
37
Cross currency and interest rate swap contracts
Interest rate swap contracts
Future contracts
Derivative warrants - Sold Other - Sold
274
ANNUAL REPORT 2015
(Unit: Million Baht) Separate financial statements 2014
2015 Less than
Over
1 year
1 year
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
46,446
64
46,510
35,465
-
35,465
- Sold
48,296
64
48,360
49,807
-
49,807
- Bought
1,153
4,360
5,513
-
2,463
2,463
- Sold
2,468
13,219
15,687
-
14,180
14,180
- Paid fixed interest rate
37,466
137,655
175,121
62,552
130,625
193,177
- Paid floating interest rate
33,391
139,667
173,058
46,647
128,460
175,107
- Received fixed interest rate
33,391
138,667
172,058
46,647
127,460
174,107
- Received floating interest rate
37,466
138,655
176,121
62,552
131,625
194,177
Cross currency and interest rate swap contracts
Interest rate swap contracts
48.
Events after the reporting period On 18 February 2016, the Board of Directors of the Bank passed a resolution to propose the payment of a dividend of Baht 0.40 per share to the ordinary shareholders, or a total of Baht 2,426 million, to be considered by the Annual General Meeting of Shareholders.
49.
Approval of financial statements These financial statements were authorised for issue by the Bank’s Board of Directors on 18 February 2016.
THANACHART BANK PUBLIC COMPANY LIMITED
275
BRANCHES OF TBANK Information as of 31 December 2015
HEAD OFFICE
Charan Sanitwong 86/2 Branch Tel. +66 (0) 2435 7205, 2435 6808-10 Fax. +66 (0) 2435 6807
Central Rama II Branch Tel. +66 (0) 2872 4770 Fax. +66 (0) 2872 4769
BANGKOK
Chamchuri Square Branch Tel. +66 (0) 2160 5254-6 Fax. +66 (0) 2160 5258
Central Rama III Branch Tel. +66 (0) 2211 8260 Fax. +66 (0) 2211 8190
Chit Lom Branch Tel. +66 (0) 2251 5821-3 Fax. +66 (0) 2658 5504
Cha Ru Mueang Branch Tel. +66 (0) 2214 1488, 2214 1739 Fax. +66 (0) 2214 2038
Central Plaza Grand Rama IX Branch Tel. +66 (0) 2160 2950-2 Fax. +66 (0) 2160 2954
Phetburi Branch Tel. +66 (0) 2208 5000 ext. 5099, 5108 Fax. +66 (0) 2208 5118
Charoen Krung 17 Branch Tel. +66 (0) 2224 1839, 2225 7194 Fax. +66 (0) 2224 2059
Central Ram Inthra Branch Tel. +66 (0) 2552 7462, 2552 7467-8 Fax. +66 (0) 2970 5518
Suan Mali Branch Tel. +66 (0) 2220 2222 ext. 2106-7, 2112 Fax. +66 (0) 2224 3810, 2226-2437
Charoen Nakhon Soi 36 Branch Tel. +66 (0) 2862 5010-3, 2862 5016 Fax. +66 (0) 2862 5017
Central Lat Phrao Branch Tel. +66 (0) 2937 1280-2 Fax. +66 (0) 2937 1283
Department of Land Transport Branch Tel. +66 (0) 2272 6073-5 Fax. +66 (0) 2272 6077
Charoen Phon Branch Tel. +66 (0) 2215 6628-30 Fax. +66 (0) 2215 6627
Central World Branch Tel. +66 (0) 2646 1346-9 Fax. +66 (0) 2646 1350
Green Place (Soi Wat Phai Ngoen) Branch Tel. +66 (0) 2211 3515, 2211 3519-20 Fax. +66 (0) 2674 9704
Charn Issara Tower (Rama IV) Branch Tel. +66 (0) 2267 4296-98 Fax. +66 (0) 2267 4299
Don Mueang Branch Tel. +66 (0) 2929 7004, 2566 1950-1 Fax. +66 (0) 2566 3425
Charn Issara Tower II Branch Tel. +66 (0) 2308 2955-8, 2718 1834 Fax. +66 (0) 2308 2950
The Avenue Chaengwattana Branch Tel. +66 (0) 2573 0673-5 Fax. +66 (0) 2573 0677
Chok Chai 4 Branch Tel. +66 (0) 2931 0895-7 Fax. +66 (0) 2931 0798
The Nine (Thanon Rama IX) Branch Tel. +66 (0) 2319 1662-4 Fax. +66 (0) 2718 7869
Seacon Square Branch Tel. +66 (0) 2721 8548-50 Fax. +66 (0) 2721 8551
The Paseo (Lat Krabang) Branch Tel. +66 (0) 2346 4103-4, 2346 4109 Fax. +66 (0) 2346 4111
Seacon Square Srinagarindra Branch Tel. +66 (0) 2721 9955 Fax. +66 (0) 2721 8321
The Mall 2 Ramkhamhaeng Branch Tel. +66 (0) 2369 2482, 2369 2486 Fax. +66 (0) 2369 2484
Century the Movie Plaza Branch Tel. +66 (0) 2245 8500-2 Fax. +66 (0) 2245 8504
The Mall Tha Phra Branch Tel. +66 (0) 2477 7321-3 Fax. +66 (0) 2477 7324
Central Bang Na Branch Tel. +66 (0) 2398 9572-3 Fax. +66 (0) 2398 9574
The Mall Bang Khae Branch Tel. +66 (0) 2803 8310 Fax. +66 (0) 2803 8305
Central Pin Klao Branch Tel. +66 (0) 2884 9680-3 Fax. +66 (0) 2884 9684
The Mall Bangkapi Branch Tel. +66 (0) 2375 1575 Fax. +66 (0) 2375 1686
Tel. +66 (0) 2217 8000 Fax +66 (0) 2217 8333
BANGKOK AND VICNITIES
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 Charan Sanitwong 13 Branch Tel. +66 (0) 2864 1560-3 Fax. +66 (0) 2864 1566 Charan Sanitwong 35 Branch Tel. +66 (0) 2411 0511, 2411 0605 Fax. +66 (0) 2411 0607
276
ANNUAL REPORT 2015
Trok Chan Branch Tel. +66 (0) 2211 1286, 2211 4511 Fax. +66 (0) 2211 4653
Thanon Borom Rat Chonnani Branch Tel. +66 (0) 2446 8061-4 Fax. +66 (0) 2446 8065
Thanon Suea Pa Branch Tel. +66 (0) 2221 4327-9 Fax. +66 (0) 2623 0579
Talat Bang Khae Branch Tel. +66 (0) 2801 1004-6 Fax. +66 (0) 2801 1007
Thanon Burapha (Phahurat) Branch Tel. +66 (0) 2221 2069, 2221 5239 Fax. +66 (0) 2221 5128
Thanon Ekkachai (Bang Bon 5) Branch Tel. +66 (0) 2450 3741-3 Fax. +66 (0) 2450 3744
Talat Phlu Branch Tel. +66 (0) 2466 7404, 2466 7423 Fax. +66 (0) 2465 1767
Thanon Prajadhipok (Wongwian Yai) Branch Tel. +66 (0) 2437 0188, 2437 2596 Fax. +66 (0) 2437 5784
Thong Lo Branch Tel. +66 (0) 2381 8421-2, 2381 8364-5 Fax. +66 (0) 2381 8423
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 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 Chalong Krung Branch Tel. +66 (0) 2327 8111-3 Fax. +66 (0) 2327 8114 Thanon Nang Linchi Branch Tel. +66 (0) 2286 1971, 2286 1898 Fax. +66 (0) 2286 1939
Thanon Rama II (Thon Buri Housing 3) Branch Tel. +66 (0) 2451 4402, 2451 4409 Fax. +66 (0) 2451 4882 Thanon Rama II (Soi 3) Branch Tel. +66 (0) 2427 1552-3 Fax. +66 (0) 2427 1551 Thanon Rama IX Branch Tel. +66 (0) 2246 7829-30 Fax. +66 (0) 2246 8473 Thanon Phrasumen (Bang Lamphu) Branch Tel. +66 (0) 2281 6821, 2281 6332 Fax. +66 (0) 2281 7457 Thanon Phatthanakan Branch Tel. +66 (0) 2369 2814-7 Fax. +66 (0) 2369 2818 Thanon Phatthanakan 22 Branch Tel. +66 (0) 2318 7241-2, 2318 7620 Fax. +66 (0) 2318 7393 Thanon Petchaburi Soi 20 Branch Tel. +66 (0) 2251 6018-19, 2251 6852 Fax. +66 (0) 2252 6935 Thanon Petchaburi Tat Mai Branch Tel. +66 (0) 2254 0252-4 Fax. +66 (0) 2254 0255 Thanon Mangkon Branch Tel. +66 (0) 2225 3331, 2225 3863 Fax. +66 (0) 2225 8364 Thanon Sathon Nuea Branch Tel. +66 (0) 2267 7512-4 Fax. +66 (0) 2637 8975 Thanon Sathon Tai (Thai CC Tower) Branch Tel. +66 (0) 2675 5697-9, 2675 5700 Fax. +66 (0) 2675 5701 Thanon Sirindhorn Branch Tel. +66 (0) 2434 5028-9 Fax. +66 (0) 2434 5661
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 1283-5 Fax. +66 (0) 2863 1289 Tha Phra Chan Branch Tel. +66 (0) 2221 7511, 2222 0686 Fax. +66 (0) 2222 4794 Thewet Branch Tel. +66 (0) 2628 7240-4, 2628 7247 Fax. +66 (0) 2282 8810 Tesco Lotus Phet Kasem 81 Branch Tel. +66 (0) 2489 2087-9 Fax. +66 (0) 2812 4073 Tesco Lotus Rama II Branch Tel. +66 (0) 2415 9130-2 Fax. +66 (0) 2892 8004 Tesco Lotus Rama IV Branch Tel. +66 (0) 2249 7533-5 Fax. +66 (0) 2249 7537 Tesco Lotus Lat Phrao Branch Tel. +66 (0) 2512 1955, 2512 1963 Fax. +66 (0) 2939 3043 Tesco Lotus Wang Hin Branch Tel. +66 (0) 2578 6194-6 Fax. +66 (0) 2578 6197 Thian Kua Thian Branch Tel. +66 (0) 2221 3575-6, 2622 9063 Fax. +66 (0) 2221 3575 Thai Summit Tower (Thanon Petchaburi Tat Mai) Branch Tel. +66 (0) 2252 6458, 2251 1327 Fax. +66 (0) 2251 1357 Thaniya Branch Tel. +66 (0) 2236 3520-1, 2236 9129 Fax. +66 (0) 2236 9119
THANACHART BANK PUBLIC COMPANY LIMITED
277
Nawamin 42 Branch Tel. +66 (0) 2375 1281-2, 2375 1284 Fax. +66 (0) 2375 1285
Bamrung Mueang Branch Tel. +66 (0) 2216 9794-7, 2214 0606-8 Fax. +66 (0) 2216 9798
Rama III Branch Tel. +66 (0) 2682 7322-6, 2682 7328-9 Fax. +66 (0) 2682 7327
Nawamin 66 Branch Tel. +66 (0) 2519 5724, 2519 4616 Fax. +66 (0) 2519 4627
BigC Don Mueang Branch Tel. +66 (0) 2551 0638-39 Fax. +66 (0) 2551 0642
Rama IV Branch Tel. +66 (0) 2249 4201-3, 2671 0260 Fax. +66 (0) 2249 4204
Nawamin Market Place Branch Tel. +66 (0) 2519 1142, 2519 1154 Fax. +66 (0) 2946 7432
BigC Bang Na Branch Tel. +66 (0) 2396 0482, 2396 0484-5 Fax. +66 (0) 2396 0500
Phran Nok Branch Tel. +66 (0) 2418 0785, 2418 0787 Fax. +66 (0) 2418 0786
Nang Loeng Branch Tel. +66 (0) 2281 0842, 2281 2169 Fax. +66 (0) 2281 2322
BigC Bang Bon Branch Tel. +66 (0) 2416 9969-71 Fax. +66 (0) 2416 9974
Phlapphlachai Branch Tel. +66 (0) 2224 6922-3, 2224 6930 Fax. +66 (0) 2224 6947
Na Na Nuea Branch Tel. +66 (0) 2252 0709, 2252 6540 Fax. +66 (0) 2253 5668
BigC Phet Kasem Branch Tel. +66 (0) 2444 2927, 2444 2904 Fax. +66 (0) 2444 2909
Phahon Yothin Soi 6 Branch Tel. +66 (0) 2279 9874-5 Fax. +66 (0) 2279 9895
Bang Khun Non Branch Tel. +66 (0) 2424 9778-9, 2433 6028-9 Fax. +66 (0) 2434 9772
BigC Sukhaphiban 3 (Ramkhamhaeng) Branch Tel. +66 (0) 2916 3584-5, 2916 3603 Fax. +66 (0) 2916 3607
Phahon Yothin Soi 9 Branch Tel. +66 (0) 2270 1371-3 Fax. +66 (0) 2619 6339
Bang Khae Branch Tel. +66 (0) 2454 2790-2 Fax. +66 (0) 2413 1329 Bang Khlo Branch Tel. +66 (0) 2289 4223, 2289 4236 Fax. +66 (0) 2289 4159 Bang Sue Branch Tel. +66 (0) 2587 0616, 2587 0686 Fax. +66 (0) 2585 9659 Bang Na Branch Tel. +66 (0) 2398 0182-4 Fax. +66 (0) 2398 0185 Bang Na-Trat km. 4 Branch Tel. +66 (0) 2399 2841-3 Fax. +66 (0) 2399 2845 Bang Bon Branch Tel. +66 (0) 2899 8533-5 Fax. +66 (0) 2899 8540 Bang Pakok Branch Tel. +66 (0) 2427 7527-9 Fax. +66 (0) 2872 3245 Bang Mod Branch Tel. +66 (0) 2428 6913-5 Fax. +66 (0) 2428 6994 Bang Rak Branch Tel. +66 (0) 2234 4227-9 Fax. +66 (0) 2630 9027 Bang Lamphu Branch Tel. +66 (0) 2356 0783-6 Fax. +66 (0) 2356 0787
278
ANNUAL REPORT 2015
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 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 Pracha Uthit Branch Tel. +66 (0) 2873 4721-3, 2873 5848 Fax. +66 (0) 2873 5849 Pracha Uthit (Huai Khwang) Branch Tel. +66 (0) 2934 4181-3 Fax. +66 (0) 2934 4184 Pratu Nam Branch Tel. +66 (0) 2208 0072, 2208 0074-5 Fax. +66 (0) 2208 0076 Prawet Branch Tel. +66 (0) 2322 2223, 2722 1371-2 Fax. +66 (0) 2322 8943 Pak Khlong Talat Branch Tel. +66 (0) 2221 7511, 2222 7467 Fax. +66 (0) 2222 4794 Pin Klao Branch Tel. +66 (0) 2435 4273-4, 2435 7374 Fax. +66 (0) 2435 4518
Phatthanakan Branch Tel. +66 (0) 2719 4580-3 Fax. +66 (0) 2719 4591 Paradise Park Branch Tel. +66 (0) 2325 9072-4 Fax. +66 (0) 2325 9075 Phahurat Branch Tel. +66 (0) 2221 4409, 2221 4419-20 Fax. +66 (0) 2623 8098 P.B. Tower (Khlong Tan) Branch Tel. +66 (0) 2381 3114-5, 2381 3121-2 Fax. +66 (0) 2381 3124 Phet Kasem Branch Tel. +66 (0) 2456 0337-42 Fax. +66 (0) 2454 4116 Phet Kasem 69 Branch Tel. +66 (0) 2809 3034-8 Fax. +66 (0) 2809 3041 Phloen Chit Center Branch Tel. +66 (0) 2656 8403-7 Fax. +66 (0) 2656 8400 Platinum Pratu Nam Branch Tel. +66 (0) 2121 9683-5 Fax. +66 (0) 2121 9687 Fashion Island Branch Tel. +66 (0) 2947 6402-5 Fax. +66 (0) 2947 6410 Money Park Branch Tel. +66 (0) 2686 3960-62 Fax. +66 (0) 2686 3959
Mah Boon Krong Branch Tel. +66 (0) 2611 5710-4 Fax. +66 (0) 2611 5717
Ramkhamhaeng Soi 122 Branch Tel. +66 (0) 2372 2377-9 Fax. +66 (0) 2728 2950
Lat Phrao 118 Branch Tel. +66 (0) 2539 2925-7 Fax. +66 (0) 2530 4348
Min Buri Branch Tel. +66 (0) 2517 8014-5, 2517 9321 Fax. +66 (0) 2517 8016
Ramkhamhaeng Soi 129 Branch Tel. +66 (0) 2372 3318-20 Fax. +66 (0) 2729 5832
Lat Phrao Soi 101 Branch Tel. +66 (0) 2187 0162-4 Fax. +66 (0) 2187 0161
Major Ratchayothin Branch Tel. +66 (0) 2512 1082, 2512 1102 Fax. +66 (0) 2939 5372
Ram Inthra Branch Tel. +66 (0) 2943 5630-1, 2519 0824-5 Fax. +66 (0) 2519 0826
Lam Sa Li Branch Tel. +66 (0) 2735 2060-3 Fax. +66 (0) 2735 2067
Union Mall Lat Phrao Branch Tel. +66 (0) 2511 0236, 2511 0246 Fax. +66 (0) 2511 0268
Ram Inthra (Km. 7) Branch Tel. +66 (0) 2510 9610, 2510 9882 Fax. +66 (0) 2510 9197
Leng Noei Yi Branch Tel. +66 (0) 2221 1248, 2221 3501 Fax. +66 (0) 2223 3211
Yaowarat Branch Tel. +66 (0) 2221 1868, 2221 1845-7 Fax. +66 (0) 2221 1869
Ram Inthra (Km. 8) Branch Tel. +66 (0) 2510 6900, 2510 2342 Fax. +66 (0) 2510 9875
Wongwian Yai Branch Tel. +66 (0) 2438 2486, 2438 2562 Fax. +66 (0) 2438 2568
Ratchada Phisek Branch Tel. +66 (0) 2641 2225-7 Fax. +66 (0) 2641 3233
Paolo Memorial Hospital Chok Chai 4 Branch Tel. +66 (0) 2514 3277, 2514 3293-4 Fax. +66 (0) 2933 2292
Wong Sawang Branch Tel. +66 (0) 2834 9999 Fax. +66 (0) 2834 9905
Ratchada Phisek (Glas Haus Building) Branch Tel. +66 (0) 2693 9811 Fax. +66 (0) 2693 9820
Navaminthra 9 Hospital Branch Tel. +66 (0) 2518 1100, 2518 2360-1 Fax. +66 (0) 2518 2363
Ratchada Phisek-Tha Phra Branch Tel. +66 (0) 2878 88450 Fax. +66 (0) 2878 8852
Phyathai 1 Hospital Branch Tel. +66 (0) 2246-7713-5 Fax. +66 (0) 2246-7716
Ratchada-Huai Khwang Branch Tel. +66 (0) 2694 1489-91, 2694 1495 Fax. +66 (0) 2694 1496
Ramkhamhaeng Hospital Branch Tel. +66 (0) 2374 1523-5 Fax. +66 (0) 2374 1562
Ratchadamnoen Branch Tel. +66 (0) 2221 3391, 2223 6010 Fax. +66 (0) 2222 9635
Vichaiyut Hospital Branch Tel. +66 (0) 2278 2194-6 Fax. +66 (0) 2278 2606
Ratchadamnoen Klang Branch Tel. +66 (0) 2226 3083-5, 2621 2185 Fax. +66 (0) 2621 2186
Vibhavadi Hospital Branch Tel. +66 (0) 2561 5320-2 Fax. +66 (0) 2941 3006
Ratchadamri Branch Tel. +66 (0) 2251 4314, 2251 4348-9 Fax. +66 (0) 2251 4316
Samitivej Hospital Sukhumwit 49 Branch Tel. +66 (0) 2712 7013-4 Fax. +66 (0) 2712 7016
Ratchawong Branch Tel. +66 (0) 2224 5705, 2224 5870 Fax. +66 (0) 2224 5792
Lat Krabang Branch Tel. +66 (0) 2327 2754-6 Fax. +66 (0) 2327 2706
Ratcha Wat Branch Tel. +66 (0) 2241 0868, 2243 6183 Fax. +66 (0) 2241 1483
Lat Phrao Branch Tel. +66 (0) 2512 2343-4, 2938 2433 Fax. +66 (0) 2512 2342
Ramkhamhaeng 73 Branch Tel. +66 (0) 2375 2126-7, 2374 9644 Fax. +66 (0) 2375 2452
Lat Phrao 53 Branch Tel. +66 (0) 2539 1167, 2539 2857 Fax. +66 (0) 2539 2261
Ramkhamhaeng 160 Branch Tel. +66 (0) 2540 3132-4 Fax. +66 (0) 2917 0047
Lat Phrao 80 Branch Tel. +66 (0) 2933 9172, 2933 9174-5 Fax. +66 (0) 2933 9178
Wong Sawang Town Center Branch Tel. +66 (0) 2586 0420-2 Fax. +66 (0) 2910 7949 Watcharaphon Branch Tel. +66 (0) 2508 2185-7 Fax. +66 (0) 2508 2207 Wat Phra Ya Kai Branch Tel. +66 (0) 2289 3026-7, 2289 5033 Fax. +66 (0) 2289 5032 Wutthakat Branch Tel. +66 (0) 2466 9981-2, 2466 6160 Fax. +66 (0) 2472 5838 Woeng Nakhon Khasem Branch Tel. +66 (0) 2222 2430, 2221 7201-4 Fax. +66 (0) 2222 6475 Si Worachak Branch Tel. +66 (0) 2222 1912, 2222 1917 Fax. +66 (0) 2622 9338 Siwara Branch Tel. +66 (0) 2538 8466, 2538 8986 Fax. +66 (0) 2538 9378 Appeal Court Branch Tel. +66 (0) 2938 3421-3 Fax. +66 (0) 2938 3428 Sirirat Branch Tel. +66 (0) 2412 4515, 2412 4583-4 Fax. +66 (0) 2866 3218 The Government Complex Commemorating Chaengwattana (Building B) Branch Tel. +66 (0) 2143 9393-5 Fax. +66 (0) 2143 9397
THANACHART BANK PUBLIC COMPANY LIMITED
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Sanam Pao Branch Tel. +66 (0) 2271 0026-8 Fax. +66 (0) 2271 0030
Si Yaek Kaset Branch Tel. +66 (0) 2579 1340, 2579 3483 Fax. +66 (0) 2579 6794
Nong Khaem Branch Tel. +66 (0) 2445 4790-2 Fax. +66 (0) 2445 4789
Siam Paragon Branch Tel. +66 (0) 2129 4374-7 Fax. +66 (0) 2129 4372
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
Siam Square Branch Tel. +66 (0) 2252 7363-5, 2252 7360 Fax. +66 (0) 2252 7367 Song Prapha Branch Tel. +66 (0) 2928 8542-5 Fax. +66 (0) 2928 8546 Suan Phlu Branch Tel. +66 (0) 2287 3084-5, 2287 3074 Fax. +66 (0) 2679 3028 Suan Lumphini (Thanon Sarasin) Branch Tel. +66 (0) 2252 2677-8, 2651 9037 Fax. +66 (0) 2252 2679 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 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 Yan Branch Tel. +66 (0) 2215 1549, 2215 4199 Fax. +66 (0) 2216 6170 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 Si Kak Phra Ya Si Branch Tel. +66 (0) 2222 4477-8, 2226 2267 Fax. +66 (0) 2225 7036 Si Phra Ya Branch Tel. +66 (0) 2233 5305-7, 2267 2191-4 Fax. +66 (0) 2233 4174
280
ANNUAL REPORT 2015
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 Silom Branch Tel. +66 (0) 2266 7414, 2266 7417 Fax. +66 (0) 2266 7416 Silom (Thanon Pan) Branch Tel. +66 (0) 2237 9317-20, 2235 5800-2 Fax. +66 (0) 2237 9321 Silom Soi 15 Branch Tel. +66 (0) 2237 4192-4 Fax. +66 (0) 2635 0270 Silom Complex Branch Tel. +66 (0) 2231 3237, 2231 3663-5 Fax. +66 (0) 2235 8833 Sukhumwit 71 Branch Tel. +66 (0) 2391 6067, 2392 5944 Fax. +66 (0) 2392 2534 Sukhumwit Soi 25 Branch Tel. +66 (0) 2259 4727-9 Fax. +66 (0) 2259 4730
Hua Lam Phong Branch Tel. +66 (0) 2237 9710-4 Fax. +66 (0) 2237 9713 Hua Mak Branch Tel. +66 (0) 2314 2627, 2314 0086-7 Fax. +66 (0) 2314 7277 Anu Wong Branch Tel. +66 (0) 2222 0161-3 Fax. +66 (0) 2225 8931 Victory Monument Branch Tel. +66 (0) 2644 7474-6 Fax. +66 (0) 2354 9351 Asok Branch Tel. +66 (0) 2260 7831-3 Fax. +66 (0) 2260 7839 Asok-Din Daeng Branch Tel. +66 (0) 2641 7547-9 Fax. +66 (0) 2641 7566 On Nuch 52 Branch Tel. +66 (0) 2322 1557-9 Fax. +66 (0) 2322 1556 All Seasons Place Branch Tel. +66 (0) 2250 7611-3 Fax. +66 (0) 2250 7615
Sukhumwit Soi 47 Branch Tel. +66 (0) 2204 0307-9 Fax. +66 (0) 2662 5632
Berli Jucker House (Kluai Nam Thai) Branch Tel. +66 (0) 2381 5065-7 Fax. +66 (0) 2381 5068
Sukhumwit Soi 66 Branch Tel. +66 (0) 2393 5782 Fax. +66 (0) 2399 2399
Vorawat Building Silom Branch Tel. +66 (0) 2635 1150-2 Fax. +66 (0) 2635 1157
Sukhumwit Soi 101/1 (Piyarom Place) Branch Tel. +66 (0) 2332 7060-2 Fax. +66 (0) 2741 8017
Vibulthani Tower (Rama IV) Branch Tel. +66 (0) 2661 5534-7 Fax. +66 (0) 2661 5539
Sutthi San Branch Tel. +66 (0) 2616 3553-5 Fax. +66 (0) 2616 3561 Surawong Branch Tel. +66 (0) 2234 5964-6, Fax. +66 (0) 2631 7031 Seri Thai 32 Branch Tel. +66 (0) 2376 1043-6 Fax. +66 (0) 2376 1122
Siam Kit Building Branch Tel. +66 (0) 2251 6763, 2252 5252 Fax. +66 (0) 2253 9429 A-link Branch Tel +66 (0) 2111 0304-6 Fax. +66 (0) 2111 0308 Ekkamai 28 Branch Tel. +66 (0) 2392 2831, 2392 7278-9 Fax. +66 (0) 2392 2832
MBK Center Branch Tel. +66 (0) 2611 4752-4 Fax. +66 (0) 2611 4751
Talat Klang Bang Yai Branch Tel. +66 (0) 2595 0682-4 Fax. +66 (0) 2595 0685
Bang Pu Industrial Estate Branch Tel. +66 (0) 2324 0360, 2324 0364 Fax. +66 (0) 2324 0805
Esplanade Ratchada Branch Tel. +66 (0) 2354 2052-4 Fax. +66 (0) 2660 9250
Talat Thai Branch Tel. +66 (0) 2529 6171-2 Fax. +66 (0) 2529 6175
Bang Kruai Branch Tel. +66 (0) 2447 2897, 2447 5095 Fax. +66 (0) 2883 8619
India Emporium Branch Tel. +66 (0) 2224 0133, 2224 0135-6 Fax. +66 (0) 2623 9434
Talat Bang Bua Thong Branch Tel. +66 (0) 2571 3598-9, 2571 3373-5 Fax. +66 (0) 2571 7845
Bang Khru Branch Tel. +66 (0) 2817 5417-19 Fax. +66 (0) 2817 5423
Udom Suk Branch Tel. +66 (0) 2398 4024-7 Fax. +66 (0) 2398 4028
Talat Pak Nam Branch Tel. +66 (0) 2702 8380-4 Fax. +66 (0) 2702 8388
Bang Bo Branch Tel. +66 (0) 2338 1248, 2338 1822-3 Fax. +66 (0) 2708 3242
Ocean Tower II Branch Tel. +66 (0) 2204 1695-6 Fax. +66 (0) 2204 1698-9
Talat Samrong Branch Tel. +66 (0) 2756 8411-4 Fax. +66 (0) 2756 8419
Bang Bua Thong Branch Tel. +66 (0) 2571 7124, 2571 7142-3 Fax. +66 (0) 2920 9603
IT Square Branch Tel. +66 (0) 2576 0104-5 Fax. +66 (0) 2576 0106
Thanon Rangsit-Pathum Thani Branch Tel. +66 (0) 2567 2738-9 Fax. +66 (0) 2567 5809
Bang Pu Branch Tel. +66 (0) 2323 2960-3 Fax. +66 (0) 2323 2964
VICNITIES
Thanon Samakkhi Branch Tel. +66 (0) 2574 2794-5 Fax. +66 (0) 2574 2793
Bang Yai Branch Tel. +66 (0) 2594 1143, 2594 1152 Fax. +66 (0) 2594 1161
Tha Nam Nonthaburi Branch Tel. +66 (0) 2527 0255-60 Fax. +66 (0) 2527 0254
BigC Bang Phli Branch Tel. +66 (0) 2312 2284, 2312 2300 Fax. +66 (0) 2312 2321
Tha Nam Phra Pradaeng Branch Tel. +66 (0) 2463 0488, 2463 2228 Fax. +66 (0) 2464 2156
BigC Samut Prakan Branch Tel. +66 (0) 2702 1792-3, 2702 1859 Fax. +66 (0) 2702 1982
Thepharak Branch Tel. +66 (0) 2759 6061-4, 2759 6066 Fax. +66 (0) 2759 6067
BigC Samrong 2 Branch Tel. +66 (0) 2380 1100-2 Fax. +66 (0) 2755 0240
Tesco Lotus Navanakhon Branch Tel. +66 (0) 2529 6187-9 Fax. +66 (0) 2909 7097
BigC Suk Sawat Branch Tel. +66 (0) 2463 0992-3 Fax. +66 (0) 2463 0980
Tesco Lotus Rattana Thibet Branch Tel. +66 (0) 2950 1160, 2950 1297 Fax. +66 (0) 2950 1157
Pathum Thani Branch Tel. +66 (0) 2581 5766, 2581 6976 Fax. +66 (0) 2581 6925
Tesco Lotus Lam Luk Ka Khlong 6 Branch Tel. +66 (0) 2569 1694, 2569 1655 Fax. +66 (0) 2998 8164
Pak Kret Branch Tel. +66 (0) 2960 9928-9, 2583 7246 Fax. +66 (0) 2583 7562
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 1230-2, 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 Central Rattanathibet Branch Tel. +66 (0) 2525 4736-8 Fax. +66 (0) 2969 7537 Zeer-Rangsit Branch Tel. +66 (0) 2992 6807-9 Fax. +66 (0) 2992 6810 The Mall Ngamwongwan Branch Tel. +66 (0) 2550 1231-3 Fax. +66 (0) 2550 1235
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
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
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Huachiew Chalermprakiet University Branch Tel. +66 (0) 2312 6600-5 Fax. +66 (0) 2312 6603 Megabangna Branch Tel. +66 (0) 2105 1681-3 Fax. +66 (0) 2105 1684 Mueang Mai-Bang Phli Branch Tel. +66 (0) 2706 0322-6 Fax. +66 (0) 2706 0329 Rangsit Branch Tel. +66 (0) 2567 1117, 2567 5586 Fax. +66 (0) 2567 6694 Rangsit-Khlong 3 Branch Tel. +66 (0) 2990 8806-8 Fax. +66 (0) 2533 1659 Rattanathibet Branch Tel. +66 (0) 2969 9040-1, 2969 9043 Fax. +66 (0) 2969 9048 Paolo Memorial Hospital Samut Prakan Branch Tel. +66 (0) 2182 7239-41 Fax. +66 (0) 2182 7243
Nam Daeng Branch Tel. +66 (0) 2385 2511-2, 2385 2920 Fax. +66 (0) 2385 2921
Talat Tha Na (Nakhon Chai Si) Branch Tel. +66 (0) 3433 1107-9 Fax. +66 (0) 3433 1151
Ha Yaek Pak Kret Branch Tel. +66 (0) 2583 7574, 2583 9144 Fax. +66 (0) 2584 3959
Talat Mahachai Branch Tel. +66 (0) 3481 0287-8 Fax. +66 (0) 3481 0467
Imperial World Samrong Branch Tel. +66 (0) 2380 2943-5, 2756 9023 Fax. +66 (0) 2756 9024
Talat Suphan Buri Branch Tel. +66 (0) 3551 1330, 3552 3882 Fax. +66 (0) 3552 3881
Homework Ratchaphruek Branch Tel. +66 (0) 2447 6690-2 Fax. +66 (0) 2447 6693
Thanon Khun San (Sing Buri) Branch Tel. +66 (0) 3651 1199, 3652 1200-1 Fax. +66 (0) 3652 1202
CENTRAL REGION Krathum Baen Branch Tel. +66 (0) 3447 2422, 3447 2651-2 Fax. +66 (0) 3447 1511 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
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 2420-1 Fax. +66 (0) 3621 2421
Lam Luk Ka Branch Tel. +66 (0) 2994 5747-9 Fax. +66 (0) 2994 5753
Kaeng Khoi Branch Tel. +66 (0) 3624 4176, 3624 5127-8 Fax. +66 (0) 3624 4178
Samut Prakan Branch Tel. +66 (0) 2395 0045, 2702 8086 Fax. +66 (0) 2395 2021
Khao Wang Branch Tel. +66 (0) 3242 5622, 3242 8352 Fax. +66 (0) 3242 8351
Thanon Ratchawithi (Nakhon Pathom) Branch Tel. +66 (0) 3424 2348, 3425 1080 Fax. +66 (0) 3425 1081
Bang Kadi Industrial Park Branch Tel. +66 (0) 2501 1254-6 Fax. +66 (0) 2501 1257
Khlong Khru Branch Tel. +66 (0) 3482 7086, 3482 7093 Fax. +66 (0) 3482 7094
Thanon Setthakit 1 (Om Noi) Branch Tel. +66 (0) 2810 4596-8 Fax. +66 (0) 2810 4605
Sam Yaek Phra Pradaeng Branch Tel. +66 (0) 2463 2156-7, 2462 6284 Fax. +66 (0) 2462 5355
Cha-am Branch Tel. +66 (0) 3243 4130-1, 3247 1158 Fax. +66 (0) 3247 1185
Thanon Sut Banthat (Saraburi) Branch Tel. +66 (0) 3631 4512, 3631 4256-7 Fax. +66 (0) 3631 5404
Samrong Branch Tel. +66 (0) 2396 0278-80 Fax. +66 (0) 2399 5103
Dan Chang Branch Tel. +66 (0) 3559 5497-8 Fax. +66 (0) 3559 5499
Thanon Amarin (Ratchaburi) Branch Tel. +66 (0) 3233 7142, 3232 5802-5 Fax. +66 (0) 3232 5801
Samrong Nuea Branch Tel. +66 (0) 2384 7141, 2384 7244 Fax. +66 (0) 2384 7678
Damnoen Saduak Branch Tel. +66 (0) 3225 3810-2 Fax. +66 (0) 3225 3813
Si Mum Mueang-Rangsit Branch Tel. +66 (0) 2531 9774, 2531 3445 Fax. +66 (0) 2531 9636
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
282
ANNUAL REPORT 2015
Thong Pha Phum Branch Tel. +66 (0) 3459 9073, 3459 9352 Fax. +66 (0) 3459 9613
Tha Ruea-Kanchanaburi Branch Tel. +66 (0) 3456 1130, 3456 2074 Fax. +66 (0) 3456 2073
Prachuap Khiri Khan Branch Tel. +66 (0) 3260 4464-7 Fax. +66 (0) 3260 4468
Lop Buri Branch Tel. +66 (0) 3642 1020-2 Fax. +66 (0) 3642 1023
Tha Ruea-Ayutthaya Branch Tel. +66 (0) 3534 1019, 3534 1029 Fax. +66 (0) 3534 1795
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
Tha Muang Branch Tel. +66 (0) 3461 1119, 3461 2417-8 Fax. +66 (0) 3461 2419
Pak Phriao Branch Tel. +66 (0) 3621 1833-4, 3622 1286 Fax. +66 (0) 3622 1884
Wat Thian Dat Branch Tel. +66 (0) 2429 0216, 2429 0813 Fax. +66 (0) 2429 0847
Tha Yang Branch Tel. +66 (0) 3246 1445-6 Fax. +66 (0) 3246 1447
Phra Nakhon Si Ayutthaya Branch Tel. +66 (0) 3521 3892-4, 3524 4381 Fax. +66 (0) 3524 2136
Wiset Chai Chan Branch Tel. +66 (0) 3563 2801-4 Fax. +66 (0) 3563 2805
Thung Khok Branch Tel. +66 (0) 3556 8086-7 Fax. +66 (0) 3556 8069
Phra Pathom Chedi Branch Tel. +66 (0) 3425 4203-5, 3421 3541 Fax. +66 (0) 3425 9131
Si Prachan Branch Tel. +66 (0) 3558 1150, 3558 1160 Fax. +66 (0) 3558 1140
Nakhon Chai Si Branch Tel. +66 (0) 3433 1350-1 Fax. +66 (0) 3433 1349
Phutthamonthon Sai 4 Branch Tel. +66 (0) 2420 0444, 2420 5964 Fax. +66 (0) 2813 1116
Salaya Branch Tel. +66 (0) 2441 4557-9 Fax. +66 (0) 2441 4560
Nakhon Nayok Branch Tel. +66 (0) 3731 1131, 3731 2609 Fax. +66 (0) 3731 2610
Phetchaburi Branch Tel. +66 (0) 3242 7023-5 Fax. +66 (0) 3241 5455
Samut Songkhram Branch Tel. +66 (0) 3471 1361, 3471 1510 Fax. +66 (0) 3471 5555
Nakhon Pathom Branch Tel. +66 (0) 3421 9131 Fax. +66 (0) 3421 9160
Photharam Branch Tel. +66 (0) 3223 1089, 3223 1255 Fax. +66 (0) 3223 1090
Samut Sakhon Branch Tel. +66 (0) 3482 0359-60, 3482 0365-6 Fax. +66 (0) 3482 0445
Bang Sai Branch Tel. +66 (0) 3528 2118-20, 3537 5226 Fax. +66 (0) 3537 5144
Pho Hak Branch Tel. +66 (0) 3238 7021-2 Fax. +66 (0) 3238 7023
Saraburi Branch Tel. +66 (0) 3621 8500 Fax. +66 (0) 3631 6601
Bang Pahan Branch Tel. +66 (0) 3538 1023-5 Fax. +66 (0) 3538 1026
Mahachai Mueang Mai Branch Tel. +66 (0) 3481 2620-2 Fax. -
Rojana Industrial Park Ayutthaya Branch Tel. +66 (0) 3571 9710-2 Fax. +66 (0) 3533 1651
Bang Len Branch Tel. +66 (0) 3439 1026-9 Fax. +66 (0) 3439 1030
Ratchaburi Branch Tel. +66 (0) 3231 1203-5 Fax. +66 (0) 3231 1207
Song Phi Nong Branch Tel. +66 (0) 3553 2890-3 Fax. +66 (0) 3553 2894
Ban Phaeo Branch Tel. +66 (0) 3448 1088, 3448 0111-2 Fax. +66 (0) 3448 1606
Phetcharat Hospital (Phetchaburi) Branch Tel. +66 (0) 3241 0505-6, 3241 0514 Fax. +66 (0) 3240 0618
Sam Chuk Branch Tel. +66 (0) 3557 1644, 3557 1666 Fax. +66 (0) 3557 1099
Ban Pong Branch Tel. +66 (0) 3220 0429-31, 3221 1993 Fax. +66 (0) 3221 1035 Ban Mo Branch Tel. +66 (0) 3620 1141, 3620 1391-2 Fax. +66 (0) 3620 1142 BigC Lop Buri 2 Branch Tel. +66 (0) 3678 0731-4 Fax. +66 (0) 3678 0736
Robinson Ratchaburi Branch Tel. +66 (0) 3232 7711-13 Fax. +66 (0) 3232 7714 Robinson Suphan Buri Branch Tel. +66 (0) 3545 4360-62 Fax. +66 (0) 3545 4364
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
THANACHART BANK PUBLIC COMPANY LIMITED
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Sena Branch Tel. +66 (0) 3520 1035, 3520 1748 Fax. +66 (0) 3520 1749
Central Airport Chiang Mai Branch Tel. +66 (0) 5320 1234 Fax. +66 (0) 5320 1900
Tha Phae Branch Tel. +66 (0) 5323 5755 Fax. +66 (0) 5323 5757
Nong Khae Branch Tel. +66 (0) 3637 1504, 3637 1517 Fax. +66 (0) 3637 1516
Central Plaza Chiang Rai Branch Tel. +66 (0) 5317 9928-30 Fax. +66 (0) 5375 4496
Tesco Lotus Phitsanulok Branch Tel. +66 (0) 5525 3701-3 Fax. +66 (0) 5525 3705
Hua Hin Branch Tel. +66 (0) 3251 1098, 3251 2218 Fax. +66 (0) 3251 2219
Central Plaza Phitsanulok Branch Tel. +66 (0) 5533 8412-4 Fax. +66 (0) 5521 6612
Nakhon Sawan Branch Tel. +66 (0) 5631 3848 Fax. +66 (0) 5631 3850
Ayutthaya Branch Tel. +66 (0) 3525 2431-4, 3525 2359 Fax. +66 (0) 3525 2437
Talat Varorot Branch Tel. +66 (0) 5387 4018-9, 5387 4002 Fax. +66 (0) 5387 4006
Nan Branch Tel. +66 (0) 5471 1095-9 Fax. +66 (0) 5471 1098
Ayutthaya Park Branch Tel. +66 (0) 3522 9560-1 Fax. +66 (0) 3522 9554
Tak Branch Tel. +66 (0) 5551 1275, 5551 1360 Fax. +66 (0) 5551 3486
Lamphun Industrial Estate Branch Tel. +66 (0) 5358 1662-3 Fax. +66 (0) 5358 1664
Om Yai Branch Tel. +66 (0) 2420 4920, 2420 4930 Fax. +66 (0) 2811 6538
Ta Khli Branch Tel. +66 (0) 5626 1093, 5626 1133 Fax. +66 (0) 5626 2383
Bo Sang Branch Tel. +66 (0) 5333 7004-6 Fax. +66 (0) 5333 7007
Om Noi Branch Tel. +66 (0) 2420 1450, 2420 2565-6 Fax. +66 (0) 2420 1132
Thanon Chang Chlan (Chiang Mai) Branch Tel. +66 (0) 5382 0538-41 Fax. +66 (0) 5382 0543
BigC Kamphaeng Phet Branch Tel. +66 (0) 5585 3928-30 Fax. +66 (0) 5585 3932
Amphawa Branch Tel. +66 (0) 3475 1177-8, 3475 1640-1 Fax. +66 (0) 3475 1642 Ang Thong Branch Tel. +66 (0) 3561 1099, 3561 2301-3 Fax. +66 (0) 3561 1100 U Thong Branch Tel. +66 (0) 3555 1299, 3555 1618 Fax. +66 (0) 3555 1868
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
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ANNUAL REPORT 2015
Thanon Nimmanhemin Branch Tel. +66 (0) 5322 5483, 5340 0672-4 Fax. +66 (0) 5340 0675 Thanon Barom Trai Lokanart 2 (Phitsanulok) Branch Tel. +66 (0) 5521 8645-9 Fax. +66 (0) 5521 8648 Thanon Bunyawat Branch Tel. +66 (0) 5421 7444, 5421 8790 Fax. +66 (0) 5422 4667 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
BigC Chiang Mai Branch Tel. +66 (0) 5324 1248-9, 5324 1336 Fax. +66 (0) 5324 1337 BigC Hang Dong Branch Tel. +66 (0) 5380 4092, 5380 4094 Fax. +66 (0) 5380 4086 Pak Nam Pho Branch Tel. +66 (0) 5621 2082, 5621 3388 Fax. +66 (0) 5621 3516 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 Phayao Branch Tel. +66 (0) 5443 1124, 5448 2386-8 Fax. +66 (0) 5443 1272 Phichit Branch Tel. +66 (0) 5661 1033, 5661 1651 Fax. +66 (0) 5661 1127 Phitsanulok Branch Tel. +66 (0) 5530 4313 Fax. +66 (0) 5530 4279
Phetchabun Branch Tel. +66 (0) 5672 3103 Fax. +66 (0) 5672 3104
Lom Kao Branch Tel. +66 (0) 5670 8492-3 Fax. +66 (0) 5670 8494
Central Plaza Udon Thani Branch Tel. +66 (0) 4292 1344, 4292 1346-7 Fax. +66 (0) 4292 1369
Phrae Branch Tel. +66 (0) 5452 2004, 5452 2006 Fax. +66 (0) 5452 2005
Lom Sak Branch Tel. +66 (0) 5670 1540, 5670 4207 Fax. +66 (0) 5670 4513
The Mall Nakhon Ratchasima Branch Tel. +66 (0) 4439 3931-3 Fax. +66 (0) 4439 3934
Phaisali Branch Tel. +66 (0) 5625 9721-2 Fax. +66 (0) 5625 9723
Hankha Branch Tel. +66 (0) 5645 1040, 5645 1500 Fax. +66 (0) 5645 1499
Talat Thetsaban Maha Sarakham Branch Tel. +66 (0) 4372 5485, 4372 5661 Fax. +66 (0) 4372 3692
Mae Sot Branch Tel. +66 (0) 5553 3311-3, 5553 3319 Fax. +66 (0) 5553 3320
Ha Yaek Phokhun Mengrai (Chiang Rai) Branch Tel. +66 (0) 5374 5244-5 Fax. +66 (0) 5374 5247
Talat Pak Chong Branch Tel. +66 (0) 4431 3798-9, 4431 3855-6 Fax. +66 (0) 4431 3255
Mae Sai Branch Tel. +66 (0) 5373 1675, 5373 1904 Fax. +66 (0) 5373 1905 Mae Hong Son Branch Tel. +66 (0) 5361 4441-2, 5361 4444-5 Fax. +66 (0) 5361 4443 McCormick Hospital (Chiang Mai) Branch Tel. +66 (0) 5326 1218-9, 5330 0421 Fax. +66 (0) 5326 1123 Lampang Branch Tel. +66 (0) 5431 8927-9 Fax. +66 (0) 5431 8960 Lamphun Branch Tel. +66 (0) 5351 0371, 5351 2060 Fax. +66 (0) 5351 0372 Wang Chao Branch Tel. +66 (0) 5555 6059, 5555 6061 Fax. +66 (0) 5555 6063 Sawankhalok Branch Tel. +66 (0) 5564 1478-9, 5564 2512 Fax. +66 (0) 5564 1480 San Sai Branch Tel. +66 (0) 5349 1457, 5349 1934 Fax. +66 (0) 5349 1728 San Pa Khoi Branch Tel. +66 (0) 5324 4157, 5324 9167-8 Fax. +66 (0) 5324 1157 Sukhothai Branch Tel. +66 (0) 5561 6022, 5562 2465-6 Fax. +66 (0) 5562 2469 Nong Ben Branch Tel. +66 (0) 5629 6163-5 Fax. +66 (0) 5629 6166
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 1232-3 Fax. +66 (0) 5643 1234
Thanon Kuang Heng (Si Sa Ket) Branch Tel. +66 (0) 4561 7861-3 Fax. +66 (0) 4561 7860
Uttaradit Branch Tel. +66 (0) 5544 1777, 5544 2240 Fax. +66 (0) 5541 4096
Thanon Prachak (Nong Khai) Branch Tel. +66 (0) 4241 2890-4 Fax. +66 (0) 4241 2895
Uthai Thani Branch Tel. +66 (0) 5657 1616-9 Fax. +66 (0) 5657 1620
Thanon Mittraphap (Nakhon Ratchasima) Branch Tel. +66 (0) 4425 9003-4, 4425 1376 Fax. +66 (0) 4425 9002
Happy Plaza (Phichit) Branch Tel. +66 (0) 5661 6471-3 Fax. +66 (0) 5665 0987
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
Thanon Si Chan Branch Tel. +66 (0) 4322 7275-8 Fax. +66 (0) 4322 7279 Thanon Sappasit Branch Tel. +66 (0) 4524 4315, 4524 4729 Fax. +66 (0) 4524 3193 Thanon Suranari Branch Tel. +66 (0) 4424 2560, 4424 2904 Fax. +66 (0) 4425 6706 Thanon Na Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 1163, 4322 3234 Fax. +66 (0) 4322 1822 Thanon Hai Srok (Roi Et) Branch Tel. +66 (0) 4352 3335-7 Fax. +66 (0) 4352 3339 Thanon Udon Dutsadi Branch Tel. +66 (0) 4224 7574, 4224 7732 Fax. +66 (0) 4224 7510
THANACHART BANK PUBLIC COMPANY LIMITED
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Tesco Lotus Khorat Branch Tel. +66 (0) 4426 3564, 4426 3567 Fax. +66 (0) 4426 3565
Roi Et Branch Tel. +66 (0) 4303 3213-5 Fax. +66 (0) 4351 8644
Udon Thani Branch Tel. +66 (0) 4234 2550 Fax. +66 (0) 4234 2398
Tesco Lotus Chaiyaphum Branch Tel. +66 (0) 4483 8324-6, Fax. +66 (0) 4481 3352
Loei Branch Tel. +66 (0) 4283 0851-3 Fax. +66 (0) 4281 4472
Ubon Ratchathani Branch Tel. +66 (0) 4531 9401-3 Fax. +66 (0) 4531 9405
Nakhon Phanom Branch Tel. +66 (0) 4251 6125-8 Fax. +66 (0) 4251 6129
Wang Sam Mo Branch Tel. +66 (0) 4238 7486-7 Fax. +66 (0) 4238 7488
Nakhon Ratchasima Branch Tel. +66 (0) 4426 9797, Fax. +66 (0) 4426 9790
Warin Chamrap Branch Tel. +66 (0) 4532 2788, 4532 2791-3 Fax. +66 (0) 4532 2790
Nang Rong Branch Tel. +66 (0) 4463 1049, 4463 1586-8 Fax. +66 (0) 4463 1050
Si Sa Ket Branch Tel. +66 (0) 4562 0500-2 Fax. +66 (0) 4564 4197
Ban Phai Branch Tel. +66 (0) 4327 4038-40 Fax. +66 (0) 4327 4043
Sakon Nakhon Branch Tel. +66 (0) 4271 6446-50 Fax. +66 (0) 4271 6451
BigC Buri Ram Branch Tel. +66 (0) 4469 0450, 4469 0458 Fax. +66 (0) 4469 0469
Sang Khom Branch Tel. +66 (0) 4227 6222-4 Fax. +66 (0) 4227 6225
BigC Yasothon Branch Tel. +66 (0) 4572 4361, 4572 4376 Fax. +66 (0) 4572 5067
Sam Yaek Pak Thong Chai Branch Tel. +66 (0) 4421 3993-5, 4428 1815-6 Fax. +66 (0) 4421 3994
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
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
Buri Ram Branch Tel. +66 (0) 4460 1555, 4460 2000 Fax. +66 (0) 4460 2123
Suwannakhuha Branch Tel. +66 (0) 4237 2515-6 Fax. +66 (0) 4237 2517
Pak Chong Branch Tel. +66 (0) 4431 6866-9 Fax. +66 (0) 4431 6859
Nong Khai Branch Tel. +66 (0) 4246 0119-22 Fax. +66 (0) 4246 0199
Maha Sarakham Branch Tel. +66 (0) 4374 0681-3 Fax. +66 (0) 4372 2958
Nong Bua Lam Phu Branch Tel. +66 (0) 4231 1107, 4231 1166 Fax. +66 (0) 4231 1657
Mukdahan Branch Tel. +66 (0) 4263 1367-70 Fax. +66 (0) 4263 1374
Ha Yaek Nampu (Udon Thani) Branch Tel. +66 (0) 4222 1703, 4224 7211-2 Fax. +66 (0) 4224 7209
Yasothon Branch Tel. +66 (0) 4571 4051-6 Fax. +66 (0) 4571 4054
Amnat Charoen Branch Tel. +66 (0) 4551 1721-4 Fax. +66 (0) 4551 1726
286
ANNUAL REPORT 2015
EASTERN REGION Kabin Buri Branch Tel. +66 (0) 3728 0796, 3728 0798 Fax. +66 (0) 3728 0799 Ko Chang Branch Tel. +66 (0) 3955 1026-9 Fax. +66 (0) 3955 1030 Klaeng Branch Tel. +66 (0) 3888 7003-5 Fax. +66 (0) 3867 8002 304 Industrial Park Branch Tel. +66 (0) 3741 4378-80 Fax. +66 (0) 3741 4381 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 6930-6 Fax. +66 (0) 3827 6935 Central Festival Pattaya Beach Branch Tel. +66 (0) 3300 3571-3 Fax. +66 (0) 3804 3194 Central Chon Buri Branch Tel. +66 (0) 3805 3531-3 Fax. +66 (0) 3805 3535 Trat Branch Tel. +66 (0) 3953 1641-3 Fax. +66 (0) 3952 2662 Thanon Khwang (Chanthaburi) Branch Tel. +66 (0) 3932 5925, 3931 1079 Fax. +66 (0) 3932 5926 Thanon Chetchamnong (Chon Buri) Branch Tel. +66 (0) 3879 2203-4 Fax. +66 (0) 3879 2178
Thanon Phraya Satcha (Chon Buri) Branch Tel. +66 (0) 3879 2214-5 Fax. +66 (0) 3879 2216 Thanon Sukhumwit (Chon Buri) Branch Tel. +66 (0) 3879 6066, 3879 5639 Fax. +66 (0) 3827 7841 Thanon Sukhumwit (Rayong) Branch Tel. +66 (0) 3861 4913-4 Fax. +66 (0) 3861 2342 Thanon Sukhumwit (Si Racha) Branch Tel. +66 (0) 3877 3415-8 Fax. +66 (0) 3877 3421 Thanon Surasak 1 (Si Racha) Branch Tel. +66 (0) 3831 1872, 3831 2206-7 Fax. +66 (0) 3831 1871 Tesco Lotus Bo Win Branch Tel. +66 (0) 3811 7133-5 Fax. +66 (0) 3811 7136 Tesco Lotus Pattaya Nuea Branch Tel. +66 (0) 3841 1410, 3841 1316 Fax. +66 (0) 3841 1423 Tesco Lotus Amata Nakhon Branch Tel. +66 (0) 3845 7485-7 Fax. +66 (0) 3845 7489 Na Kluea (Pattaya) Branch Tel. +66 (0) 3822 6060-1 Fax. +66 (0) 3822 6117 Nikhom Phatthana Branch Tel. +66 (0) 3863 6090-1 Fax. +66 (0) 3863 6092 Bang Pla Soi Branch Tel. +66 (0) 3827 1819, 3827 6651 Fax. +66 (0) 3827 6652 Ban Phe Branch Tel. +66 (0) 3865 1995, 3865 1997 Fax. +66 (0) 3865 1993 Ban Bueng Branch Tel. +66 (0) 3844 3060-1, 3844 4015-6 Fax. +66 (0) 3844 3713 BigC Chachoengsao 2 Branch Tel. +66 (0) 3851 5188, 3851 5190 Fax. +66 (0) 3851 5219
BigC Chon Buri 2 Branch Tel. +66 (0) 3878 3032-4 Fax. +66 (0) 3838 7923
Sa Kaeo Branch Tel. +66 (0) 3724 1061, 3724 1585-6 Fax. +66 (0) 3724 1062
BigC Pattaya Tai Branch Tel. +66 (0) 3837 4270, 3837 4273 Fax. +66 (0) 3837 4463
Saha Pathana Industrial Park (Si Racha) Branch Tel. +66 (0) 3848 1826-8 Fax. +66 (0) 3848 1829
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 Prachin Buri Branch Tel. +66 (0) 3721 1300, 3721 3855-9 Fax. +66 (0) 3721 3080 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 1824-5 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 Map Ta Phut Branch Tel. +66 (0) 3868 2531-3 Fax. +66 (0) 3868 1995 Rayong Branch Tel. +66 (0) 3886 4114 Fax. +66 (0) 3886 4115 Wang Nam Yen Branch Tel. +66 (0) 3725 1543-7 Fax. +66 (0) 3725 1546 Wang Sombun Branch Tel. +66 (0) 3744 9193-4 Fax. +66 (0) 3744 9195 Si Racha Branch Tel. +66 (0) 3877 1686-9 Fax. +66 (0) 3877 1690
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 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 Aranyapraphet Branch Tel. +66 (0) 3722 3505-7 Fax. +66 (0) 3722 3511 Kabin Buri Industrial (Nongki) Branch Tel. +66 (0) 3745 5428-29, 3745 5420-1 Fax. +66 (0) 3745 5439
SOUTHERN REGION Krabi Branch Tel. +66 (0) 7563 2838-41 Fax. +66 (0) 7563 2835
THANACHART BANK PUBLIC COMPANY LIMITED
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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
Thanon Chon Kasem (Surat Thani) Branch Tel. +66 (0) 7728 3627-30 Fax. +66 (0) 7728 4080 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
Diana Si Phuwanart Branch Tel. +66 (0) 7446 5316-8 Fax. +66 (0) 7446 5319
Thanon Ratchadamnoen (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534 2779-80, 7535 6119 Fax. +66 (0) 7535 6741
Trang Branch Tel. +66 (0) 7522 3240-3 Fax. +66 (0) 7522 3244
Thanon Si Wichai (Surat Thani) Branch Tel. +66 (0) 7720 6488, 7726 4170-1 Fax. +66 (0) 7720 6671
Talat Tha Phae (Nakhon Si Thammarat) Branch Tel. +66 (0) 7538 3271, 7538 3316 Fax. +66 (0) 7538 3110
Thanon Sala Daeng (Chumphon) Branch Tel. +66 (0) 7750 5051-2 Fax. +66 (0) 7750 5054
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
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ANNUAL REPORT 2015
Thap Thiang (Trang) Branch Tel. +66 (0) 7521 8059, 7521 1321 Fax. +66 (0) 7521 1320 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 3003-5 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, Fax. +66 (0) 7782 6640 Tesco Lotus Songkhla Branch Tel. +66 (0) 7430 7937-9 Fax. +66 (0) 7435 2735
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
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
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
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
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
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
BigC Hat Yai 2 Branch Tel. +66 (0) 7446 9235-7, Fax. +66 (0) 7455 5609
Robinson Trang Branch Tel. +66 (0) 7559 0128-9, 7559 0120 Fax. +66 (0) 7522 6157
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
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 Phatthalung Branch Tel. +66 (0) 7461 3082, 7461 3951-2 Fax. +66 (0) 7461 1918
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
Surat Thani Branch Tel. +66 (0) 7721 4581-7 Fax. +66 (0) 7721 3560 Su-ngai Kolok Branch Tel. +66 (0) 7361 1359, 7361 1002 Fax. +66 (0) 7361 3632 Lang Suan Branch Tel. +66 (0) 7754 1965, 7758 1417-8 Fax. +66 (0) 7754 1987 Huai Yot Branch Tel. +66 (0) 7523 5033-5, 7527 1013 Fax. +66 (0) 7527 1064 Ha Yaek Chalong (Phuket) Branch Tel. +66 (0) 7638 3222, 7638 3431 Fax. +66 (0) 7638 3348 Hat Chaweng Branch Tel. +66 (0) 7723 0405, 7723 1089-90 Fax. +66 (0) 7742 2051 Hat Yai Branch Tel. +66 (0) 7435 4690 Fax. +66 (0) 7435 4696 Hat Yai Nai Branch Tel. +66 (0) 7436 1313-5 Fax. +66 (0) 7425 9704 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
Sam Kong (Phuket) Branch Tel. +66 (0) 7622 2838-40 Fax. +66 (0) 7622 2841 Sai Buri Branch Tel. +66 (0) 7341 1021, 7341 1314-5 Fax. +66 (0) 7341 1138
THANACHART BANK PUBLIC COMPANY LIMITED
289
SUMMARY OF SPECIFIED ITEMS PER FORM 56-2 IN 2015 ANNUAL REPORT Items
Page
1. Policy and Overall Business Operation
034
2. Nature of Business Operations
039
3. Risk Factors
054
4. General and Other Key Information
124
5. Shareholders
131
6. Dividend Payment Policy
133
7. Management Structures
093
8. Corporate Governance
078
9. Corporate Social Responsibility
066
10. Internal Control and Risk Management
090
11. Related Transactions
089
12. Financial Highlight
002
13. Management Discussion and Analysis
018
290
ANNUAL REPORT 2015
Thanachart Group embraces its environmental responsibilities in the reduction of global warming and consumption of natural resources. The 2015 Annual Report used paper produced from farmed trees and was printed with soy-based ink. Designed by Plan Grafik Co., Ltd.  Tel. 0 2277 2222
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