ANNUAL REPORT 2016
THANACHART BANK PUBLIC COMPANY LIMITED
LONG LIVE THE KING The management and staff of Thanachart Bank Public Company Limited and its subsidiaries
CONTENTS 005 006 018 022 024 039 058 070 082 094 096 097 105 130 137 140 141 143 145 291 306
Vision and 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 Note to Financial Statements Branches of TBANK Summary of Specified Items per Form 56-2 in 2016 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
2016 1
To attract and retain customers by offering excellent services, innovative savings and investment products. products
2
To ensure our customers succeed financially by helping them choose the right insurance and protection 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 want, when they want want, and how they want.
VISION OF THANACHART GROUP To be the best at providing fully integrated solution 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
2016
2015
2014
2013
2012
2016
2015
2014
2013
2012
44,886 16,174 28,712 11,694 40,406 20,626
48,217 20,536 27,681 11,957 39,638 19,721
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
41,843 15,295 26,548 8,960 35,508 17,843
45,125 19,572 25,553 10,441 35,994 17,096
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
6,251 12,434
8,592 10,743
7,122 9,922
11,497 15,385
2,980 8,354
5,808 11,962
8,007 11,452
7,181 7,918
11,110 14,113
4,680 6,855
2.05
1.90
1.80
2.79
1.52
1.97
2.03
1.44
2.56
1.24
1.29
1.11
0.98
1.51
0.90
1.31
1.24
0.82
1.46
0.78
10.27 3.03
9.83 2.84
9.93 2.68
16.99 2.62
10.72 2.48
10.64 3.02
11.39 2.83
8.60 2.66
16.91 2.66
9.55 2.58
51.05
49.75
49.64
39.60
61.40
50.25
47.50
50.34
38.35
61.27
713,446 754,370 790,017 754,063 980,972 1,008,890 1,038,349 1,018,620 741,145 787,189 811,308 776,521 863,281 902,726 941,109 934,435 116,226 104,977 96,218 83,330
651,613 906,868 712,329 791,283 115,585
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
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)
Operating performance Basic earnings per share (THB) Return on average assets (ROAA) (Percent) Return on average equity (ROAE) (Percent) Interest spread(4) (Percent) Cost to income ratio net insurance premium income(5) (Percent)
Statement of financial position (THB million) Loans Total assets Deposits and borrowings Total liabilities Shareholders’ equity(6)
Definition and Formula
(1) (2) (3) (4)
(5) (6)
006
690,907 950,511 725,966 824,391 124,488
Total income = Net interest income + Non-interest income Including loss on debt restructuring Excluding non-controlling interest 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 Cost to income ratio = Non-interest expenses / Total income Excluding non-controlling interest
ANNUAL REPORT 2016
As at and for the year ended 31 December
Consolidated Financial Statements
Separate Financial Statements
2016
2015
2014
2013
2012
2016
2015
2014
2013
2012
95.17
96.27
95.83
97.38
97.11
91.48
93.11
92.35
93.91
93.94
2.29 1.07 151.16
2.84 1.26 119.42
4.09 2.02 85.52
4.36 2.25 83.36
4.17 2.05 73.65
1.90 1.05 151.64
2.20 1.15 127.41
2.97 1.61 90.64
3.07 1.66 89.18
2.65 1.35 78.02
192.38
159.33
133.38
127.87
124.50
202.23
171.94
138.16
138.38
134.94
16,434
21,681
32,761
36,377
33,047
12,893
15,986
22,595
24,394
20,036
13.27 19.15
12.04 17.92
10.70 15.83
9.47 14.80
8.49 13.99
682,373 682,245
724,209
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)
Capital measures Tier I capital ratio (Percent) Total capital ratio (Percent) Risk weighted assets (THB million)
747,992 724,801
Common share information Common shares outstanding (Million shares) - Average-basic - End of period Book value (THB) Dividends per share (THB)
6,065 6,065 20.80
5,641 6,065 19.41
5,514 5,514 19.25
5,514 5,514 17.64
5,514 5,514 15.11
6,065 6,065 19.06 0.35
5,641 6,065 17.82 0.62
5,514 5,514 17.34 0.45
5,514 5,514 16.17 0.45
5,514 5,514 14.06 0.37
14,553
14,719
14,806
15,358
15,765
12,305 592 45
12,468 614 49
12,676 617 51
13,286 621 54
13,642 630 55
Other information Employees Branches Exchange booth
THANACHART BANK PUBLIC COMPANY LIMITED
007
Deliver the highest possible level of customer experience, with a touch of digital, and always be available to assist customers as their professional financial advisor.
Offer a comprehensive line of products and services to customers that can be accessed and tracked quickly and easily on their mobile devices anywhere and anytime.
Equip our people with the tools to be more skilled and effective, through maximizing our understanding of customer expectations and needs, and strengthening our capabilities to provide the highest level of professional financial advice.
Continuously innovate and stay ahead of the competition by leveraging visionary and fully integrated technology that is convenient, easily accessible, and highly secure.
Promote economic security to individuals, groups, organizations and society at large, where smart spending and saving habits with a sense of sharing and sustainability are instilled in individual’s minds while preserving and enriching Thai culture and national identity.
MESSAGE FROM THE BOARD OF DIRECTORS
(Mr. Banterng Tantivit) Chairman of the Board of Directors
Dear Shareholders, In the past year, the Thai economy confronted both global and domestic headwinds ranging from slow global economic recovery, sluggish growth of the Chinese economy, financial risk and political uncertainty in Europe, falling global trade growth, weakening commodity prices to domestic risk factors in terms of household and SMEs debts and the impact of drought. Nonetheless, the Thai economy still showed stability and achieved a continuous expansion, mainly underpinned by the tourism sector, Government budget disbursements relating to the local mega transportation and water management infrastructure projects, and monetary and fiscal stimuli. Meanwhile, the profound influence of Digital Disruption in terms of changed business platforms and economic activities of various countries has become evident, with increasing numbers of Technology and Fintech startups emerging as the key driving force to propel businesses and value-added services. Uber, Airbnb, SamsungPay, and PayPal are good examples. As a consequence of the aforementioned risk factors, the Thai commercial banks’ operations in 2016 focused on asset quality management and financial stability to accommodate loan expansion. All the banks also prepared to comply with the capital requirements pursuant to Basel III criteria and the international financial reporting standard for 018
ANNUAL REPORT 2016
financial instruments (IFRS 9). Accordingly, the overall Thai banking industry continued to demonstrate strong financial stability with high levels of capital adequacy and strong coverage ratios. However, loan growth continued to show lackluster momentum, placing downward pressure on the profitability of Thai commercial banks. In response to the gradual economic recovery, we continued our strategy of focusing on maintaining strong asset quality, efficiently managing cost of funds, and increasing fee income from banking, securities, and fund management businesses. Hence, our Bank and its subsidiaries achieved a net profit in 2016 of THB 12,434 million, an increase of THB 1,691 million, or 15.74 percent from last year. The Bank’s total income went up from last year while operating expenses increased as a result of investments in IT systems, infrastructure and personnel to boost operational efficiency. Concurrently, loan loss impairment expense (excluding additional provision) decreased, attributable to effective management and materially stronger asset quality as NPLs, based on the consolidated financial statements, decreased by THB 5,247 million from the previous year. Consequently, the NPL ratio reduced to 2.29 percent and the coverage ratio improved to 151.16 percent. We further strengthened our capital adequacy position,
(Mr. Suphadej Poonpipat) Chairman of the Executive Committee
which ended at 19.15 percent, while putting in place a solid Liquidity Coverage Ratio (LCR) pursuant to Basel III criteria. The all-round improvement in our profitability, asset quality, capital position, and liquidity demonstrates the Bank’s potential and capabilities. Pertaining to the statement of financial position for the year 2016, despite a decline in the total asset size, we remained committed to securing our market-leading position in auto loans, while still succeeding in achieving a continuous reduction in NPLs, as a result of our prudent risk management policies. During the preceding year, we successfully restructured the composition of our deposit base through a new financial product concept we call “Thanachart Smart Solution”. It consists of the “Thanachart e-Savings Account” (providing flexibility with a high interest rate), and the “Freever Savings Account” (designed to lessen the burden of transaction fees). The “Thanachart Smart Solution” provides customers with an innovative alternative to maximizing savings and minimizing banking costs. To provide our customers with easy access to all banking services, we launched “Thanachart Connect”, our highly secure, competitive and easy to use mobile banking application. Moreover, realizing the growth potential in the e-payment business (as promoted by the Government), the Bank, in cooperation with leading business
partners, developed a number of convenient and secure e-payment innovations including virtual and physical prepaid cards to suit “new generation” lifestyles. Examples of this development were “True You MasterCard”, jointly developed with True Money, and “AirPay Card”, jointly developed with AirPay. The auto loan business, a traditional core segment for our Bank, showed an upward trend. In connection with our subsidiaries, a variety of new products and services were initiated. Thanachart Securities Public Company Limited launched “Think Application” to facilitate customers’ securities trading via mobile phone with offers of research of the last 2 years, user-friendly stock picks in terms of technical and valuation analyses, and comprehensive fundamental data for stock scanning. Thanachart Fund Management Company Limited enhanced its system in order for customers to trade their investment units and access their portfolio via Thanachart Connect on a daily basis. It also offered T-PrimeLowBeta for sale. This fund benefits customers by carefully managing the risks from fluctuation of securities’ prices, while providing access to market returns. Thanachart Insurance Public Company Limited launched “Motor Type 2+” and “Happy PA for Child” insurance policies, providing protection designed to meet the specific needs of our customers. Additionally, the insurance arm focused on the quality of after-sale service by enhancing the capabilities of THANACHART BANK PUBLIC COMPANY LIMITED
019
(Mr. Somjate Moosirilert) Chief Executive Officer and President
surveyors and employing state-of-the-art tools and systems, (e.g. Tablet, CRM mobile application), allowing for the delivery of services in a more expedient and rapid manner. The Bank also placed emphasis on the National e-Payment Master Plan, and supported the Bank of Thailand in driving the implementation, by communicating with customers to ensure both their understanding of the importance of PromptPay and to educate them in how to use this payment system.
Company Limited received the Best Fund House Award for Domestic Fixed Income 2016 and the Morning Star Award in the Short-Term Bond Fund category from Morningstar Research (Thailand) Limited. Thanachart Insurance Public Company Limited received the Most Outstanding Non-Life Insurance Company Award 2015 from the Office of Insurance Commission and the Best Surveyor Award 2015 from Thai General Insurance Association.
In 2016 our Bank and its subsidiaries were proud and honored to receive many awards and recognitions including: the No.1 Brand Thailand 2015 - 2016 for Auto Hire Purchase Loan from Marketeer Magazine, the Thailand Energy Awards 2016, the Suriyasasithorn’s Best Desk Calendar Design Award and the First Runner up Award in the Best Hanging Calendar under category of “Commemorating the Royal Institution”, to name a few. With respect to awards for subsidiaries, Thanachart Securities Public Company Limited, with support from the Bank, received the Thailand Capital Markets Deal of the Year Award from IFR ASIA Magazine for being the co-lead underwriter of Banpu Power Public Company Limited on its initial public offering (IPO). This was also Thailand’s largest initial market capitalization in 2016. In addition, it was awarded second place in the Best Local Brokerage from Asiamoney Brokers Poll 2016. Thanachart Fund Management
Aside from the commitment to performance, our Bank and its subsidiaries continue to realize the importance of Corporate Social Responsibility (CSR), and have implemented strong Anti-Corruption measures. Thanachart Group’s organization culture and human resources development are based on our stated principle of being “a Moral and Transparent Organization against Corruption.” A total of 12 companies in the Thanachart Group were granted the Certified Companies Award under the Private Sector Collective Action Coalition against Corruption (CAC) Program. Significant actions taken during the past year included: completing the self-assessment form for executives and staff via E-Learning program; organizing training courses regarding policies, measures and regulations for new staff’s acknowledgement and acceptance of compliance; organizing the training course “Power Synergy towards Transparency
020
ANNUAL REPORT 2016
(Mr. Peter Bessey) Vice Chairman of the Executive Committee and Deputy Chief Executive Officer
and No Corruption” for existing staff; organizing a lecture entitled “Join Thanachart to Promote Anti-Corruption” for our business partners and representatives; and so on. In 2017, the Thai banking sector is expected to continue facing a multitude of challenges due to stagnant economic growth of trade partner countries, household and business debts, upward trends in interest rates, increasing Fintech competition, the launch of PromptPay, the Government’s policy to drive Digital Economy and the National e-Payment Master Plan, together with enforcement of new rules and regulations. Nevertheless, commercial loan growth is anticipated to be higher than that of 2016, following the Thai economic recovery, which will be stimulated by Government budget disbursements and economic stimulus packages, as well as private investment to accommodate the mega infrastructure and transportation projects. In this regard, it will still be necessary for all commercial banks to follow prudent policies on credit underwriting to maintain sound asset quality, and to efficiently manage costs so that they are poised to cope with challenging factors affecting both fee and interest income. In preparation for the challenges that lie ahead, as well as to ensure we retain existing customers and continue acquiring new customers, Thanachart Bank tirelessly
endeavors to deliver continuously improving customer experiences in the delivery of our financial services. We do this through all channels, including through digital platforms such as enhanced internet and mobile banking systems, which are designed to accommodate all kinds of customers’ transactions while fully ensuring the security and privacy of all of our customers’ information. This is definitely in line with our strategy of being the “Main Bank” for our customers. Furthermore, we continue to develop the knowledge and capabilities of our human resources in order to deliver the most suitable products and services, as conveniently as possible, to meet the needs of our customers. We have also continued to improve our infrastructure related to key business operations by adopting Digital Technology to boost process efficiency and productivity of staff. On behalf of the Board of Directors, we extend our heartfelt gratitude to you, our partners, customers, and staff for the advancements we achieved in 2016, as well as for your unyielding support and for your trust and confidence in Thanachart Bank. Your continued support has provided the solid foundation on which our Bank is built. We will continue to draw on this strength in delivering great customer experiences as we embrace the challenges and opportunities of our emerging Digital Society. THANACHART BANK PUBLIC COMPANY LIMITED
021
BOARD OF DIRECTORS THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Banterng Tantivit Chairman
Mr. Suphadej Poonpipat
Vice Chairman Chairman of the Executive Committee Member of the Succession Committee
Mr. Somjate Moosirilert
Director Member of the Executive Committee Chairman of the Risk Management Committee Chief Executive Officer and President
022
ANNUAL REPORT 2016
Mr. Peter Clifford Bessey
Ms. Suvarnapha Suvarnaprathip
Mr. Kiettisak Meecharoen
Mr. Narong Chivangkur
Mr. Sataporn Jinachitra
Assoc. Prof. Dr. Somjai Phagaphasvivat
Mr. Rod Michael Reynolds
Mr. Walter Tas
Mr. Adil Aziz Chaudhry
Director Vice Chairman of the Executive Committee Vice Chairman of the Risk Management Committee Deputy Chief Executive Officer Independent Director Chairman of the Nomination and Remuneration Committee Chairman of the Succession Committee Director Member of the Nomination and Remuneration Committee Member of the Succession Committee
Director Vice Chairperson of the Executive Committee
Independent Director Member of the Audit Committee Member of the Nomination and Remuneration Committee Member of the Succession Committee Director
Independent Director Chairman of the Audit Committee
Independent Director Member of the Audit Committee
Director
THANACHART BANK PUBLIC COMPANY LIMITED
023
MANAGEMENT DISCUSSION AND ANALYSIS
Economics Outlook and Competition in Banking Industry The National Economic and Social Development Board reported a 3.20 percent GDP growth for the Thai economy in 2016, an increase from 2.90 percent in the previous year. The key contributing factor was an on-going government investment. Tourism experienced a consistent growth while private consumption was slowly recovered from stimulus measures issued by the government. Export sector showed sign of an upturn once compared to last year while private investment remained low. Overall, the Thai economy in 2016 has picked up from last year, and thus, the Monetary Policy Committee of the Bank of Thailand (“BOT�) issued resolutions to maintain a policy interest rate at 1.50 percent throughout 2016 in order to further stimulate the economy. From a gradually recovering Thai economy, loan volume in 2016 grew at a slower rate when compared to last year. Many corporations turned to raise funds through debt securities issuance to leverage from the low rate environment. In line with loan volume, deposit volume also grew at a slower rate. In 2017, the National Economic and Social Development Board estimated 3.00 - 4.00 percent GDP growth with government spending and tourism as key drivers. Export sector is expected to improve while private consumption will continue to increase. Loan volume in 2017 is estimated to grow gradually following the economic recovery and cautious credit policies of the commercial banks, as a result of concern over asset quality deterioration in 2016.
Major Events in 2016 Ç .M OQHK SGD MMT@K &DMDQ@K ,DDSHMF NE 2G@QDGNKCDQR NE HRRTDC @ QDRNKTSHNM SN @OOQNUD CHUHCDMC payments for shareholders of Thanachart Bank Public Company Limited (“the Bankâ€?) at THB 0.40 per share, equivalent to THB 2,426 million. Together with the interim dividend payment of THB 0.22 per share equivalent to THB 1,334 million, the dividend payment of the year 2015 totaled to THB 0.62 per share equivalent to THB 3,760 million, or 32.83 percent of 2015 net profit in the Bank only financial statements or 35.00 percent of 2015 net profit in consolidated financial statements. 3GHR HR HM @BBNQC@MBD VHSG SGD CHUHCDMC O@XNTS ONKHBX @MC CHUHCDMCR VDQD O@HC NM OQHK Ç 3GD !@MJĂ„R !N@QC NE #HQDBSNQR -N C@SDC TFTRS HRRTDC @ QDRNKTSHNM ENQ @M HMSDQHL CHUHCDMC O@XLDMS from the operating results in the first six-month period of 2016 at THB 0.35 per share, an equivalent of THB 2,123 million or 34.07 percent of first half of 2016 net profit in the Bank only financial statements or 35.37 percent in consolidated financial statements. This is in accordance with the dividend payout policy and dividends were paid on 15 September 2016.
Consolidated Financial Statements were of the Bank and its subsidiaries as follows: Subsidiaries directly held by the Bank Thanachart Securities Public Company Limited Thanachart Insurance Public Company Limited Thanachart Fund Management Company Limited Thanachart Broker Company Limited Thanachart Group Leasing Company Limited 024
ANNUAL REPORT 2016
Thanachart Management and Services Company Limited Thanachart Training and Development Company Limited 32 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC Security SCIB Services Company Limited (Formerly known as “SCIB Services Company Limited�) Ratchthani Leasing Public Company Limited Subsidiary indirectly held by the Bank National Leasing Company Limited
Overall Operating Result M@KXRHR BNLO@QHMF ODQENQL@MBD NE @MC A@RDC NM BNMRNKHC@SDC EHM@MBH@K RS@SDLDMSR (Unit: THB million)
Statement of Comprehensive Income
Variance Increase / Percentage (Decrease)
2016
2015
Interest income Interest expenses Net interest income Net fees and service income Other operating income (1) Net operating income Other operating expenses (2)
44,886 16,174 28,712 5,904 5,790 40,406 20,626
48,217 20,536 27,681 5,475 6,482 39,638 19,721
(3,331) (4,362) 1,031 429 (692) 768 905
(6.91) (21.24) 3.72 7.84 (10.68) 1.94 4.59
Profit before impairment loss of loans and debt securities
19,780
19,917
(137)
(0.69)
5,141 1,110
6,376 2,216
(1,235) (1,106)
(19.37) (49.91)
13,529
11,325
2,204
19.46
691
198
493
248.99
12,838 12,434 404
11,127 10,743 384
1,711 1,691 20
15.38 15.74 5.21
2.05
1.90
6,064.86
5,640.52
Impairment loss of loans and debt securities from Normal Business Operation Impairment loss of loans - Special Provision Profit 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:
(1) (2)
Operating income deducted by insurance expense. Excluding insurance expense.
THANACHART BANK PUBLIC COMPANY LIMITED
025
Operating Results for the Year 2016 In 2016, the Bank and its subsidiaries’ net profit totaled THB 12,434 million, an increase of THB 1,691 million or 15.74 percent from last year. A success in maintaining operating results marks the 8th consecutive quarterly growth. This was due to successes in strategic direction amid apprehensive economic environment to focus on asset quality and to effectively manage cost of fund while increase banking fee income. Furthermore the Bank and its subsidiaries further strengthened their capital adequacy positioning while the Bank put in place a solid liquidity coverage (LCR) ratio in accordance to Basel III regulation implementation. M @KK QNTMC HLOQNUDLDMS HM OQNEHS@AHKHSX @MC EHM@MBH@K positions had undoubtedly validated the potential and capability of the organization. In this digital era, the Bank has launched a mobile banking application under the name Thanachart Connect. The Bank also offered PromptPay registration together with Freever Saving account or e-Saving account reaffirming the progress of digital banking and Main Bank strategy. This also was a response to the cashless society national agenda under a National e-Payment program rollout with PromptPay launched as first phase. In 2016, asset size declined following loan volume. However, loan outstanding has increased in the 4th quarter from all loan types while asset quality continued to strengthen, as a result of effective NPL and prudent risk management. %TQSGDQLNQD " 2 Q@SHN HLOQNUDC EQNL K@RS XD@Q EQNL CDONRHS structure management. Total income increased 1.94 percent from last year while operating expenses increase 4.59 percent. Impair loss of loan expense excluding additional provision decrease 19.37 percent from effective management and stronger asset quality as NPLs have been declining for the past 10th consecutive quarters. NPLs on consolidated basis declined THB 5,247 million from the previous year, resulting in NPL ratio at 2.29 percent and coverage ratio at 151.16 percent. Reserve to required reserve as of 31 December 2016 was at 192.38 percent.
026
ANNUAL REPORT 2016
On Bank Only basis, NPL ratio was at 1.90 percent with coverage ratio at 151.64 percent. Reserve to required reserve was at 202.23 percent. Capital adequacy ratio of the Bank ended at 19.15 percent, an increase from 17.92 percent at the end of last year. 3GD !@MJ @MC HSR RTARHCH@QHDRÄ NODQ@SHMF QDRTKSR in the year 2016 comparing with that of 2015 can be summarized as follows: Ç Net interest income increased 3.72 percent from cost of fund management and interest spread that widened to 3.03 percent. Ç -NM HMSDQDRS HMBNLD CDBQD@RDC ODQBDMS L@HMKX from decline in gains on investments while fee and service income increased. Ç 3NS@K HMBNLD HMBQD@RDC ODQBDMS EQNL improvement in net interest income and fee and service income. Ç .ODQ@SHMF DWODMRDR HMBQD@RDC ODQBDMS EQNL personnel expense and increase investment in IT system and infrastructures. Ç (LO@HQLDMS KNRR NE KN@M DWODMRD MNS HMBKTCHMF additional provision decreased 19.37 percent from effective asset quality management. Ç -DS OQNEHS HMBQD@RDC ODQBDMS EQNL @M HMBQD@RD in total income and a decrease in impairment loss of loans and debt securities. Ç -/+R CDBQD@RDC AX 3'! LHKKHNM VHSG -/+ ratio decreased to 2.29 percent and coverage ratio increased to 151.16 percent.
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 %TMC "NMSQHATSDC SN %(#% @MC #/ Debts Issued and Borrowing Borrowing Fee Net Interest Income
2016
2015
Change
Change Percentage
44,886
48,217
(3,331)
(6.91)
1,307 30 3,504 18,337 21,708
1,580 73 3,761 19,474 23,329
(273) (43) (257) (1,137) (1,621)
(17.28) (58.90) (6.83) (5.84) (6.95)
16,174
20,536
(4,362)
(21.24)
9,526 741 2,576 5
12,832 957 3,336 6
(3,306) (216) (760) (1)
(25.76) (22.57) (22.78) (16.67)
28,712
27,681
1,031
3.72
For the year 2016, the Bank and its subsidiaries’ net interest income totaled THB 28,712 million, an increase of THB 1,031 million or 3.72 percent from last year. Ç (MSDQDRS HMBNLD CDBQD@RDC AX 3'! LHKKHNM NQ ODQBDMS CTD SN @ RGQHMJHMF KN@M ONQSENKHN @MC CDBKHMD HM yield on earning assets following loan rate adjustment and the market rate trend. Ç (MSDQDRS DWODMRDR CDBQD@RDC AX 3'! LHKKHNM NQ ODQBDMS @ QDRTKS RSQ@SDFHB@KKX L@M@FDLDMS NM SGD BNRS of fund to enhance liquidity and deposit restructuring. Consequently, interest spread in 2016 was at 3.03 percent, an increase from 2.84 percent last year. The details are shown in the table below.
UDQ@FD /NKHBX (MSDQDRS 1@SD Yield Cost of Fund Interest Spread
4Q15
1Q16
2Q16
3Q16
4Q16
2015
2016
5.16 2.29 2.87
5.10 2.23 2.87
5.06 2.08 2.98
5.09 1.92 3.17
5.00 1.89 3.11
5.36 2.52 2.84
5.06 2.03 3.03
THANACHART BANK PUBLIC COMPANY LIMITED
027
Non-interest Income Non-interest Income
Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments 2G@QD NE /QNEHS EQNL (MUDRSLDMSR HM RRNBH@SDC "NLO@MHDR BBNTMSDC ENQ TMCDQ $PTHSX ,DSGNC &@HMR +NRRDR NM .SGDQ RRDSR Net Insurance Income Dividend Income Other Income
Total Other Operating Income Non-interest Income
(Unit: THB million)
Change percentage
2016
2015
Change
5,904
5,475
492
7.84
491 714
658 1,553
(167) (819)
(25.38) (53.42)
2,689 400 1,258
2,552 295 1,253
137 105 5
5.37 35.59 0.40
5,790
6,482
(692)
(10.68)
11,694
11,957
(263)
(2.20)
Non-interest income of the Bank and its subsidiaries in 2016 totaled THB 11,694 million, a decrease of THB 263 million or 2.20 percent from last year. This was mainly due to gains on investments and gains on trading and foreign exchange transactions. Ç -DS EDD @MC RDQUHBD HMBNLD SNS@KDC 3'! LHKKHNM @M HMBQD@RD NE 3'! LHKKHNM NQ ODQBDMS L@HMKX CTD to brokerage fee and insurance payment fee. Ç .SGDQ .ODQ@SHMF HMBNLD SNS@KDC 3'! LHKKHNM @ CDBQD@RD NE 3'! LHKKHNM NQ ODQBDMS EQNL K@RS XD@Q This was mainly due to gains on investments which decreased by THB 819 million or 53.42 percent and gain on trading and foreign exchange transactions which decreased by THB 167 million or 25.38 percent, partially offset by dividend income which increased THB 105 million. Consequently, non-interest income ratio in 2016 was 28.94 percent, a decrease from 30.17 percent in the previous year.
Other Operating Expenses Other Operating Expenses
(Unit: THB million)
Change
Change percentage
2016
2015
$LOKNXDDÄR $WODMRDR Premises and Equipment Expenses Taxes and Duties #HQDBSNQRÄ 1DLTMDQ@SHNM Other Expenses
3,051 757 5,125
2,970 837 4,918
81 (80) 207
2.73 (9.56) 4.21
Total Other Operating Expenses
20,626
19,721
905
4.59
028
ANNUAL REPORT 2016
In 2016, other operating expenses totaled THB 20,626 million, an increase of THB 905 million or 4.59 percent from last year, mainly due to the followings: Ç $LOKNXDDÄR DWODMRDR HMBQD@RDC AX 3'! LHKKHNM NQ ODQBDMS @R @ QDRTKS NE @MMT@K R@K@QX HMBQD@RD ANMTR and incentive expense following the growing sale volume. Ç /QDLHRDR @MC DPTHOLDMS DWODMRD HMBQD@RDC AX 3'! LHKKHNM NQ ODQBDMS @R @ QDRTKS NE CDOQDBH@SHNM DWODMRD from branch renovation and decoration. Ç .SGDQ DWODMRDR HMBQD@RDC AX 3'! LHKKHNM NQ ODQBDMS EQNL (3 RXRSDL @MC HMEQ@RSQTBSTQD HMUDRSLDMS @MC advertising expenses. Consequently, cost to income ratio in 2016 was 51.05 percent, an increase from 49.75 percent in the previous year. However, operating expenses compared to net profit decreased from the previous year as there was more expenses related to asset quality management.
Impairment Losses of Loans and Debt Securities Impairment Losses of Loans and Debt Securities
(Unit: THB million)
Variance Increase / Percentage (Decrease)
2016
2015
Impairment Losses of Loans and Debt Securities Impairment Losses of Loans – Special Provision
5,141 1,110
6,376 2,216
(1,235) (1,106)
(19.37) (49.91)
Total Impairment Losses of Loans and Debt Securities
6,251
8,592
(2,341)
(27.25)
0.87 0.72
1.13 0.84
Credit Cost (Percent) Credit Cost excluding special provision (Percent)
(0.26) (0.12)
(23.01) (14.29)
In 2016, the Bank and its subsidiaries had THB 5,141 million in impairment loss of loans and debt securities excluding special provision, a decrease of THB 1,235 million or 19.37 percent from last year. Credit cost was at 0.72 percent, a decrease from 0.84 percent last year from an effective risk management. In addition, the Bank has utilized its tax benefit to put in THB 1,110 million of special provision to be vigilant against volatile economic conditions and to enhance a financial position. 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.
Income Tax R @S #DBDLADQ SGD !@MJ G@C S@W KNRRDR SNS@KHMF 3'! LHKKHNM DPTHU@KDMS SN @ S@W ADMDEHS NE 3'! 2,934 million, based on a 20 percent corporate income tax rate.
THANACHART BANK PUBLIC COMPANY LIMITED
029
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 KKNV@MBD ENQ CNTASETK @BBNTMSR @MC 1DU@KT@SHNM 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 2016
31 December 2015
12,077 47,476 175,081 691,527
13,337 57,583 171,782 714,124
(1,260) (10,107) 3,299 (22,597)
(9.45) (17.55) 1.92 (3.16)
(24,618) 3,112 9,546 20,649 15,661 950,511
(25,680) 4,093 8,005 20,954 16,774 980,972
1,062 (981) 1,541 (305) (1,113) (30,461)
(4.14) (23.97) 19.25 (1.46) (6.64) (3.11)
Assets R NE #DBDLADQ the Bank and its subsidiaries’ total assets totaled THB 950,511 million, a decrease of THB 30,461 million or 3.11 percent from the end of 2015. The key changes are as follows: Ç -DS HMSDQA@MJ @MC LNMDX L@QJDS HSDLR VDQD HM SGD @LNTMS NE 3'! LHKKHNM @ CDBQD@RD NE 3'! LHKKHNM or 17.55 percent from the end of last year, mainly due to liquidity management. Ç -DS HMUDRSLDMSR SNS@KDC 3'! LHKKHNM @M HMBQD@RD NE 3'! LHKKHNM NQ ODQBDMS EQNL SGD DMC NE last year, mainly due to financial assets management based on opportunistic timing in the market. Ç +N@MR @MC @BBQTDC HMSDQDRS QDBDHU@AKDR SNS@KDC 3'! LHKKHNM @ CDBQD@RD NE 3'! LHKKHNM NQ percent from the end of last year. This was mainly due to hire purchase loans which decreased by 5.39 percent following a slow automotive vehicles market while other retail loans grew 9.93 percent from the end of last year, especially housing loan which grew 10.65 percent. Corporate and commercial loans decreased 5.29 percent from last year. Furthermore, the Bank put focus on asset quality improvement and NPL reduction. The proportion of retail to corporate and SME loans was 69 to 31 percent.
030
ANNUAL REPORT 2016
(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 2016
676,557 65,834 1,986 49,409 3,579 4,937 22,089 824,391 124,488 1,632 950,511
31 December 2015
669,504 86,688 2,202 71,641 3,294 4,793 26,159 863,281 116,226 1,465 980,972
Variance Increase / Percentage (Decrease)
7,053 (19,854) (216) (22,232) 285 144 (4,070) (38,890) 8,262 167 (30,461)
1.05 (23.17) (9.81) (31.03) 8.65 3.00 (15.56) (4.50) 7.11 11.40 (3.11)
Liabilities and Equity The Bank and its subsidiaries’ total liabilities as of 31 December 2016 totaled THB 824,391 million, a decrease of THB 38,890 million or 4.50 percent from the end of 2015. The key changes are as follows: Ç #DONRHSR SNS@KDC 3'! LHKKHNM @M HMBQD@RD NE 3'! LHKKHNM NQ ODQBDMS EQNL SGD DMC NE K@RS XD@Q This was due to deposit restructuring and cost of fund management following a strategic liquidity management. " 2 SN SNS@K CDONRHSR ONQSHNM V@R ODQBDMS @M HMBQD@RD EQNL ODQBDMS @S SGD DMC NE K@RS XD@Q Ç #DAS HRRTDC @MC ANQQNVHMFR SNS@KDC 3'! LHKKHNM @ CDBQD@RD NE 3'! LHKKHNM NQ ODQBDMS which was mainly due to the decreasing of short-term debentures. Total equity as of 31 December 2016 was in the amount of THB 126,120 million, an increase of THB 8,429 million or 7.16 percent from the end of 2015. The details are as follows: Ç $PTHSX @SSQHATS@AKD SN NVMDQ NE SGD !@MJ V@R HM SGD @LNTMS NE 3'! LHKKHNM @M HMBQD@RD NE 3'! LHKKHNM or 7.11 percent. This was mainly due to a profitable operating results of the Bank and its subsidiaries in 2016 which totaled THB 12,434 million, the land asset revaluation of THB 1,281 million, share of other comprehensive income of associates which increased by THB 317 million, investment mark to market which decreased by THB 1,163 million and THB 4,549 million in dividend payment. Ç $PTHSX @SSQHATS@AKD SN MNM BNMSQNKKHMF HMSDQDRSR V@R HM SGD @LNTMS NE 3'! LHKKHNM @M HMBQD@RD NE 3'! million or 11.40 percent, a result of profitable operating results of subsidiaries.
THANACHART BANK PUBLIC COMPANY LIMITED
031
Asset Quality The asset quality was considered based on consolidated financial statements.
1. Loans 1.1 Net Loans to customers and accrued interest receivables R NE #DBDLADQ SGD !@MJ @MC HSR RTARHCH@QHDRÄ MDS KN@M SN BTRSNLDQR @MC @BBQTDC HMSDQDRS QDBDHU@AKDR totaled THB 691,527 million, decreased from the previous year by THB 22,597 million or 3.16 percent mainly due to a decrease in hire purchase lending, in line with the contracting hire purchase market. Hire purchase loan outstanding dropped by 5.39 percent, while retail loan and housing loan increased by 9.93 percent and 10.65 percent respectively, corporate and commercial loan decreased by 5.29 percent. Furthermore, the Bank put focus on asset quality improvement and NPL reduction. The ratio of retail to corporate and commercial lending was 69 : 31 as well as NPL management. During the year 2016, the Bank and its subsidiaries had made debt restructuring agreements with 1,951 debtors using various approaches such as amending terms @MC BNMCHSHNMR NE QDO@XLDMS SQ@MREDQQHMF @RRDSR @MC NQ RG@QDR @MC NQ @LDMCHMF SDQLR NE QDO@XLDMS NE VGHBG NTSRS@MCHMF before restructuring was approximately THB 5,618 million. By the end of 2016, 13,857 debtors joined the debt restructuring program, of which their principal and accrued interest receivable amounted to THB 14,354 million. Loan diversification S SGD DMC NE GHQD OTQBG@RD KN@MR @BBNTMSDC ENQ ODQBDMS ENKKNVDC AX BNQONQ@SD @MC BNLLDQBH@K loans of 31.11 percent, housing loans of 14.71 percent, and others of 4.18 percent.
Structure Loans (THB million)
800,000 600,000 400,000 200,000 0
4.47% 9.87%
4.56% 10.17%
4.34% 9.99%
4.14% 10.40%
4.03% 10.38%
4.10% 10.60%
4.20% 10.73%
4.18% 10.76%
20.79%
20.60%
21.52%
21.41%
21.18%
20.42%
19.82%
20.35%
11.73%
12.03%
12.42%
12.87%
13.44%
14.30%
14.76%
14.71%
53.14%
52.65%
51.74%
51.18%
50.97%
50.59%
50.49%
50.00%
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
HP
Housing
Corporate
Commercial
Other
1.2 Loans to customers’ classified in accordance with the BOT’s regulation of the Bank and its financial institution subsidiary R NE #DBDLADQ SGD !@MJ @MC HSR RTARHCH@QHDR SG@S @QD EHM@MBH@K HMRSHSTSHNMR RRDS ,@M@FDLDMS "NLO@MX G@C @M @LNTMS NE KN@M SN BTRSNLDQR @MC @BBQTDC HMSDQDRS QDBDHU@AKDR BK@RRHEHDC HM @BBNQC@MBD VHSG SGD !.3ÄR FTHCDKHMDR NE 3'! LHKKHNM @ CDBQD@RDC EQNL SGD OQDUHNTR XD@Q AX 3'! LHKKHNM NQ ODQBDMS KKNV@MBD ENQ doubtful accounts records as of 31 December 2016, was of 22,492 million and total allowance for doubtful accounts to total loans and accrued interest receivable was 3.44 percent. 032
ANNUAL REPORT 2016
Borrowers classified by the BOT’s regulations
(Unit: THB million)
Loans and accrued interest receivables 31 December 31 December 2016 2015
Allowance for doubtful accounts 31 December 31 December 2016 2015
Normal Special mention Substandard Doubtful Doubtful of loss
613,276 25,506 4,258 3,362 7,277
629,475 30,993 4,039 3,332 12,788
9,805 3,046 1,705 974 4,617
8,101 3,525 1,798 1,351 7,555
Total
653,679
680,627
20,147
22,330
22,492
23,832
3.44
3.50
CCHSHNM@K @KKNV@MBD ENQ CNTASETK @BBNTMSR Total allowance for doubtful accounts
Ratio of total allowance for doubtful accounts to loans and accrued interest receivables (percentage) 1.3 Non-performing Loans
KSGNTFG L@QJDS @MC DBNMNLHB BNMCHSHNMR HLOQNUDC FQ@CT@KKX SGD !@MJ @MC HSR RTARHCH@QHDR L@M@FDC SN QDCTBD NPLs through systematic and effective control. Consequently, NPLs had been a steady decline for the past 10th consecutive quarters. NPLs as of 31 December 2016 was at THB 16,434 million, a decrease of THB 5,247 million or 24.20 percent from the end of last year. NPL ratio of the Bank and its subsidiaries was at 2.29 percent, a reduction from 2.84 percent at the end of last year. For Bank only, NPLs was reduced by THB 3,093 million from the end of last year. Consequently, NPL ratio of the Bank was at 1.90 percent, a reduction from 2.20 percent at the end of last year. Coverage ratio of the Bank and its subsidiaries as of 31 December 2016 was at 151.16 percent, an increase from 119.42 percent at the end of December 2015. The Bank and its subsidiaries have an excess reserve of THB 11,928 million and a reserve to required reserve ratio of 192.38 percent as of 31 December 2016, an increase from 159.33 percent at the end of December 2015. Coverage ratio of the Bank as of 31 December 2016 was at 151.64 percent, an increase from 127.41 percent at the end of December 2015. The Bank has a excess reserve of THB 9,883 million and a reserve to required reserve ratio of 202.23 percent, an increase from 171.94 percent at the end of December 2015.
THANACHART BANK PUBLIC COMPANY LIMITED
033
Non-performing Loans TBANK Only
NPL-gross 3NS@K KKNV@MBD NPL-gross to Total Loans NPL-net to Total Loans Reserve to Required Reserve Coverage Ratio
(THB million) 3'! LHKKHNM (Percentage) (Percentage) (Percentage) (Percentage)
TBANK Consolidated
31 December 2016
31 December 2015
31 December 2016
31 December 2015
12,893 1.90 1.05 202.23 151.64
15,986 2.20 1.15 171.94 127.41
16,434 2.29 1.07 192.38 151.16
21,681 2.84 1.26 159.33 119.42
(MBKTCHMF QDU@KT@SHNM @KKNV@MBD ENQ CDAS QDRSQTBSTQHMF
Consolidated Financial Statements Non-performing Loans (THB million) and NPL Ratio (Percentage) 21,681
192.38% 20,573
172.39% 18,649
2.84%
4Q15
Coverage Ratio (Percentage) and Reserve to Required Reserve (Percentage)
2.70%
1Q16
2.59%
2Q16
159.33%
17,906 16,434 2.44% 3Q16
Non-performing Loans
2.29% 4Q16
119.42% 4Q15
162.92% 121.91%
1Q16
165.82%
151.16% 136.31%
129.01%
2Q16
3Q16
4Q16
Coverage Ratio Reserve to Required Reserve
NPL Ratio
Separated Financial Statements Non-performing Loans (THB million) and NPL Ratio (Percentage)
Coverage Ratio (Percentage) and Reserve to Required Reserve (Percentage)
15,986
195.57%
15,158 182.18% 13,555 2.20%
4Q15
2.09%
1Q16
1.99% 2Q16
Non-performing Loans
034
ANNUAL REPORT 2016
12,893
1.86%
1.90%
127.41%
3Q16
4Q16
4Q15
NPL Ratio
186.43%
171.94%
12,877
147.91% 130.10% 1Q16
202.23%
151.64%
139.24%
2Q16
Coverage Ratio Reserve to Required Reserve
3Q16
4Q16
2. Investments in securities In 2016, the Bank and its subsidiaries had a total amount of investment in securities of THB 175,081 million. L@INQ ONQSHNM NE @OOQNWHL@SDKX ODQBDMS V@R HM FNUDQMLDMS @MC RS@SD DMSDQOQHRDR RDBTQHSHDR ENKKNVDC AX ODQBDMS HM OQHU@SD CDAS RDBTQHSHDR ESDQ @CCHMF CDCTBSHMF @KKNV@MBD ENQ BG@MFD HM U@KTDR @MC HLO@HQLDMS MDS HMUDRSLDMS HMBQD@RDC from 2015 of THB 171,782 million. Details of securities investment were as follows: Securities Investment classified by types of instruments Type of investment
(Unit: THB million)
31 December 2016
Debt securities Government and state enterprises securities Ç 3Q@CHMF Ç U@HK@AKD ENQ R@KD Ç 'DKC SN L@STQHSX Private debt securities Ç 3Q@CHMF Ç U@HK@AKD ENQ R@KD Ç 'DKC SN L@STQHSX Foreign debt securities Ç 3Q@CHMF Ç U@HK@AKD ENQ R@KD Ç 'DKC SN L@STQHSX Equity securities Listed securities Ç 3Q@CHMF Ç U@HK@AKD ENQ R@KD Investment in receivables purchased Ç 'DKC SN L@STQHSX General Investment Total debt securities CC KDRR KKNV@MBD ENQ BG@MFD HM U@KTD KKNV@MBD ENQ HLO@HQLDMS Total investment – net
175,081
Percentage
31 December 2015
Percentage
3,843 175,373
2.19 100.00
4,079 170,613
2.39 100.00
171,782
Liquidity R NE #DBDLADQ KN@MR SN CDONRHSR @MC CDAS HRRTDC @MC ANQQNVHMFR Q@SHN NE SGD !@MJ @MC HSR RTARHCH@QHDR was 95.17 percent, a decrease from 96.27 percent at the end of 2015, due to liquidity management in coherent with market BNMCHSHNM 3GD !@MJ L@HMS@HMDC HSR RSQNMF KHPTHCHSX VHSG KHPTHC @MC KNV QHRJ @RRDSR ONQSHNM HM GHFG KDUDK R NE #DBDLADQ 2016 (Consolidated Financial Statements), liquid assets portion which includes cash, interbank and money market items, and short-term investments was 9.77 percent of total assets, an decreasing from 12.79 percent at the end of 2015. With a focus on liquidity management, the Bank followed the Liquidity Coverage Ratio (LCR) Standard pursuant to Basel III criteria, and could achieve the LCR ratio of more than 100 percent. The LCR ratio as of 31 December 2016 was higher than the 100-percent criteria prescribed by the BOT.
THANACHART BANK PUBLIC COMPANY LIMITED
035
S SGD DMC NE SGD !@MJ @MC HSR RTARHCH@QHDR G@C @ MDS B@RG EKNV EQNL NODQ@SHMF @BSHUHSHDR NE 3'! LHKKHNM from investing activities of THB 3,657 million, and used in financing activities of THB 31,099 million, attributed to a net CDBQD@RD HM B@RG NE 3'! LHKKHNM S SGD DMC NE SGD !@MJ G@C @M @LNTMS NE 3'! LHKKHNM HM B@RG @MC B@RG equivalents. Key items consisted of the followings: - Cash flows from operating activities mainly stemmed from the decreases of loans, interbank and money market items @RRDSR @MC SGD HMBQD@RDR NE " 2 @LNTMSHMF SN 3'! LHKKHNM 3'! LHKKHNM @MC 3'! LHKKHNM QDRODBSHUDKX offset by a reduction of THB 20,032 million interbank and money market items (liabilities). - Cash flows from investing activities were largely a result of cash receipt from interest on investment of THB 3,876 million. - Cash flows used in financing activities were spent on repayment of borrowing of THB 35,921 million and cash received from borrowings was of THB 13,689 million. (Unit: THB million)
Major changes items
2016
2015
Net cash flows from operating activities Net cash flows from (used in) investing activities Net cash flows used in financing activities
26,182 3,657 (31,099)
38,450 (22,412) (19,306)
Net decrease in cash Cash at beginning of the year
(1,260) 13,337
(3,268) 16,605
Cash at end of the year
12,077
13,337
Relations between sources and uses of funds (M SGD !@MJ @MC HSR RTARHCH@QHDRÄ RNTQBDR NE ETMC EQNL CDONRHSR @MC ANQQNVHMFR V@R NE 3'! LHKKHNM @MC THB 49,409 million, respectively. Use of fund in giving credits was THB 690,907 million and investments before adjustment was of THB 175,373 million. List of sources and uses of major fund by remaining tenor to 31 December 2016, the record date of the financial statement, are as follows: At call
Type
Less than 1 year
Over 1 year
Unspecified
Total
THB million Percent THB million Percent THB million Percent THB million Percent THB million Percent
Sources of fund Deposits 308,515 Borrowing 937
42.50 0.13
335,686 9,721
46.24 1.34
32,356 38,751
4.46 5.34
0 0
0.00 0.00
676,557 49,409
Total sources of fund 309,452
42.63
345,407
47.58
71,107
9.79
0
0.00
725,966 100.00
93.19 6.81
Uses of fund Loans(1) Investment
38,343 261
4.43 0.03
204,421 31,355
23.60 3.62
448,143 134,416
51.73 15.52
0 9,341
0.00 1.08
690,907 175,373
Total uses of fund
38,604
4.46
235,776
27.22
582,559
67.25
9,341
1.08
866,280 100.00
Note: 036
(1)
Loan at call includes stop-accrued loans ANNUAL REPORT 2016
79.76 20.24
From the breakdown of sources and uses of fund by remaining tenor of the financial instruments as of 31 December 2016, sources of funds consisted of a major portion of deposits reaching maturity in less than 1 year of 46.24 percent and deposits at call of 42.50 percent of total sources of fund. Whereas the uses of fund consisted of a major portion of loans with remaining tenors of over 1 year of 51.73 percent and loans with remaining tenors of less than 1 year of 23.60 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 R NE #DBDLADQ SGD !@MJ @MC HSR RTARHCH@QHDRĂ„ SNS@K BNLLHSLDMSR @MC BNMSHMFDMS KH@AHKHSHDR SNS@KDC 3'! million, increased by THB 1,663 million (2.03 percent) from THB 81,785 million at the end of December 2015. The rise was largely on account of an increase in letter of credits and other obligations as shown in the table below. (Unit: THB million)
31 December 2016
31 December 2015
Variance Increase / Percentage (Decrease)
U@K SN AHKKR Liability under unmatured import bills Letter of credits Other obligations Committed (but not drawn) overdraft Others
637 2,667
497 2,310
140 357
28.17 15.45
24,244 55,271
24,506 53,202
(262) 2,069
(1.07) 3.89
Total
83,448
81,785
1,663
2.03
Capital Adequacy R NE #DBDLADQ SGD !@MJĂ„R B@OHS@K ETMCR SNS@KDC 3'! LHKKHNM NE VGHBG @M @LNTMS NE 3'! million was Tier I capital and THB 40,112 million was Tier II capital. The capital adequacy ratio was at 19.15 percent, increased from 17.92 percent at end of 2015, comprising of 13.27 percent of Tier I capital and 5.88 percent of the Tier II capital. M HMBQD@RD HM SNS@K B@OHS@K ETMCR V@R CTD SN @M HMBKTRHNM NE OQNEHS F@HMDC EQNL NODQ@SHMF QDRTKS HM SGD EHQRS LNMSGR NE However, the capital adequacy ratio was well over the minimum requirement of BOT of not below 9.125 percent. Details were as follows:
Capital Adequacy Ratio 31 December 2016 THB million Percentage
Tier I capital Total capital funds
90,561 130,673
13.27 19.15
31 December 2015 THB million Percentage
82,124 122,242
THANACHART BANK PUBLIC COMPANY LIMITED
12.04 17.92
037
Operating Results of Subsidiaries Thanachart Securities Public Company Limited UDQ@FD C@HKX SQ@CHMF UNKTLD NE 3G@M@BG@QS 2DBTQHSHDR Public Company Limited in 2016 was THB 3,921 million, an increase from THB 3,275 million in a year earlier. The average daily trading of the company was in line with the overall stock market condition. Market share of securities trading in 2016 was at 4.17 percent, an increase from 4.07 percent of the previous year. The trading volume could be divided into 59.85 percent of retails, 30.31 percent of institutions, and 9.84 percent of foreign investors. Net profit for the year ended 31 December 2016 amounted to THB 662 million, an increase of 35.66 percent comparing with the previous year. Total income was THB 2,157 million, an increase of 14.37 percent. Main sources of income comprised of THB 1,604 million in income brokerage fees and THB 207 million in interest income on margin loans. Fees and service income amounted to THB 131 million, an increased of THB 100 million from the previous year from investment banking fees. Financial costs and securities expenses were THB 255 million, showing a slight increase from the previous year. Operating expenses amounted to THB 1,085 million, a decrease of 2.26 percent. R NE #DBDLADQ SGD BNLO@MX L@HMS@HMDC its liquidity ratio (Net Liquid Capital Rules: NCR) at 47.92 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 R NE #DBDLADQ 3G@M@BG@QS %TMC Management Company Limited had asset under management of THB 189,008 million, an increase of THB 22,654 million NQ ODQBDMS EQNL SGD DMC NE RRDSR TMCDQ management comprised of 84.59 percent mutual funds, 8.00 percent private funds, and 7.41 percent provident funds. Mutual fund business of the company ranked 8 with market share of 3.44 percent. Private fund business ranked 10 with market share of 2.04 percent while provident fund business ranked 13 with market share of 1.45 percent. For operating results of 2016, the company had a net profit of THB 355 million, an increase of THB 35 million or 10.94 percent from the previous year. This was due to increases in fund management fees.
Thanachart Insurance Public Company Limited In 2016, Thanachart Insurance Public Company Limited had total insurance premium of THB 6,420 million, an 038
ANNUAL REPORT 2016
increase of THB 332 million or 5.45 percent when compared with that of 2015. The increase in total insurance premium was higher than that of the Thai insurance industry which is expected to grow by 2.5 - 3.0 percent. For operating results of 2016, the company had a net profit of THB 1,005 million, a decrease of THB 112 million or 10.03 percent comparing to that of the year 2015. This was due to a reduction in gains on investments. 3GD L@HM E@BSNQR @EEDBSHMF SGD BNLO@MXĂ„R ODQENQL@MBD @MC BNMSQHATSHMF SN SGD BNLO@MXĂ„R MDS OQNEHS VDQD @ ENBTR NM the profitable products as well as efficient management of claim expenses.
TS Asset Management Company Limited (M 32 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC has been restructuring and selling non-performing debts in accordance with the policy and business plan of Thanachart &QNTO BNMSHMTNTRKX R @ QDRTKS NM #DBDLADQ the company’s the total assets were THB 2,651 million, a decrease of THB 1,213 million or 31.39 percent from the end of the previous year. For the operating result of the year 2016, the company had a net profit of THB 189 million, an increase of THB 207 million from the previous year. Net interest income and non-interest income were THB 164 million and THB 322 million, respectively while non-interest expenses were THB 162 million.
Ratchthani Leasing Public Company Limited S SGD DMC NE 1@SBGSG@MH +D@RHMF /TAKHB Company Limited has still had a strong financial structure. 3GD BNLO@MXĂ„R SNS@K @RRDSR VDQD 3'! LHKKHNM @M increase of THB 3,860 million or 13.08 percent from the end of SGD OQDUHNTR XD@Q R VDKK the company had hire purchase loans in the amount of THB 32,748 million, an increase of THB 3,827 million or 13.23 percent. The Hire purchase loans accounted for 98.15 percent of the total assets. Total KH@AHKHSHDR @MC RG@QDGNKCDQRĂ„ DPTHSX VDQD 3'! LHKKHNM and THB 5,009 million, respectively. Net profit for the year 2016 amounted to THB 881 million, an increase from the previous year of THB 132 million or 17.62 percent. Total income amounted to THB 2,985 million, an increase of THB 203 million or 7.30 percent, due to the fact that the company was able to continue maintaining its market share in hire purchase loans. S SGD R@LD SHLD HMSDQDRS DWODMRDR VDQD 3'! LHKKHNM a decrease of THB 69 million or 6.79 percent. This was a result of its ability to acquire lower costs of borrowings to support lending during the year 2016. Provision expenses amounted to THB 496 million, an increase of THB 84 million or 20.39 percent. This was due to its decision to provide additional provision to support the economic uncertainties.
NATURE OF BUSINESS OPERATIONS
An Overview of the Business Operation Thanachart Bank Company Limited (“TBANK� or “the Bank�) BNLLDMBDC HSR NODQ@SHNM NM OQHK VHSG 3G@M@BG@QS Capital Public Company Limited (“TCAP�) as the major shareholder. On 21 December 2006, the Bank of Thailand (“BOT�) FQ@MSDC @OOQNU@K ENQ 3! -* @MC 3" / SN ENQL EHM@MBH@K ATRHMDRR FQNTO HM BNMRNKHC@SHNM @MC G@UHMF 3" / @R @ O@QDMS BNLO@MX In 2007, the Bank of Nova Scotia (“Scotiabank�) ADB@LD NTQ RSQ@SDFHB O@QSMDQ AX GNKCHMF ODQBDMS NE 3! -* RG@QDR VGHBG K@SDQ HMBQD@RDC SN ODQBDMS 3GD BTQQDMS L@INQ RG@QDGNKCDQR @QD 3" / @MC 2BNSH@A@MJ @MC HM the Bank merged with Siam City Bank Public Company Limited (“SCIB�). 3! -* ATRHMDRR RSQTBSTQD 3" / @R @ O@QDMS BNLO@MX BNMRHRSR NE SVN FQNTOR %HM@MBH@K &QNTO @MC 2TOONQSHMF &QNTO VGHBG RDQUDR @ ETKK Q@MFD NE EHM@MBH@K RDQUHBDR SGQNTFG 3! -* AQ@MBG MDSVNQJ @MC RDQUHBD NTSKDS (S HR RSQNMFKX BNLLHSSDC to the good corporate governance principles.
Financial Group 1. Thanachart Capital Public Company Limited (“TCAPâ€?) operates as the holding company being a parent company of Thanachart Financial Conglomerate. 2. Thanachart Bank Public Company Limited (“TBANKâ€?) 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 (“TNSâ€?) was permitted by the Ministry of Finance and the Office of the Securities and Exchange Commission of Thailand (“SECâ€?) 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 (“TFUNDâ€?) VGHBG HR @ INHMS UDMSTQD ADSVDDM 3! -* GNKCHMF 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 (“TNIâ€?) 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. ,!* +HED RRTQ@MBD /TAKHB "NLO@MX +HLHSDC (“MBKLIFEâ€?) ENQLDQKX JMNVM @R Ă…2H@L "HSX +HED RRTQ@MBD /TAKHB Company Limitedâ€?) operates a life insurance business. The Company provides individual and group life insurance to assure R@UHMFR +HED @MC GD@KSG OQNSDBSHNM HR @KRN NEEDQDC SN HMCHUHCT@KR HMRSHSTSHNMR @MC NQF@MHY@SHNMR HM FDMDQ@K SGQNTFG SGD "NLO@MXĂ„R R@KD BG@MMDKR SDKDR@KDR AQNJDQR @MC NSGDQ BG@MMDKR SG@S @QD MNS 3! -* NQ HSR RTARHCH@QHDR 7. Thanachart Group Leasing Company Limited (“TGLâ€?) NODQ@SDR @ GHQD OTQBG@RD ATRHMDRR ENQ B@QR S OQDRDMS there is no new business; only existing hire purchase contracts remain. THANACHART BANK PUBLIC COMPANY LIMITED
039
8. Ratchthani Leasing Public Company Limited (“THANI�) operates a hire purchase business and financial lease business for both new and used private cars. The Company also focuses on commercial automobiles such as pick-ups, taxis, tractors, and large trucks. -%2 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC (“NFS AMC�) is permitted to operate an asset management ATRHMDRR AX ATXHMF NQ QDBDHUHMF SQ@MREDQR NE -/+R @MC -/ R from financial institutions under Thanachart Group as well as others. , 7 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC (“MAX AMC�) is permitted to operate an asset management ATRHMDRR AX ATXHMF NQ QDBDHUHMF SQ@MREDQR NE -/+R @MC -/ R from other financial institutions. 32 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC (“TS AMC�) operates and asset management business by ATXHMF NQ QDBDHUHMF SQ@MREDQR NE -/+R @MC -/ R EQNL 2"(! @MC 3! -* 12. National Leasing Company Limited (“National Leasing�) operates asset leasing business but not with external juristic persons.
Supporting Business Group 1. Thanachart Management and Services Company Limited (“TMSâ€?) OQNUHCDR RDQUHBDR SN SGD &QNTOĂ„R RDQUHBD RS@EE 2. Thanachart Broker Company Limited (“TBROKEâ€?) operates a brokerage business of life and non-life insurance. The Company introduces or offers products of life and non-life insurance companies under Thanachart Group and of other life and non-life insurance companies to Thanachart &QNTOĂ„R BTRSNLDQ @MC SGD FDMDQ@K OTAKHB 3GD "NLO@MX also operates other businesses associated with the life and non-life insurance industries. 3. Thanachart Training and Development Company Limited (“TTDâ€?) organizes training activities for employees of member companies of Thanachart Group. 4. Security SCIB Services Company Limited (“SCIB Servicesâ€?) (formerly known as “SCIB Services Company +HLHSDCÆ OQNUHCDR FDMDQ@K RDQUHBDR SN 3! -* @MC BNLO@MHDR in the Group, such as janitor, security, delivery, car rental, car drivers, and outsourcing service. 5. TM Broker Company Limited (“TM Brokerâ€?) operates a brokerage business of life and non-life insurance for customers of companies under MBK Group, Thanachart Group and business alliance of the shareholding companies, MNS HMBKTCHMF 3! -* @MC HSR RTARHCH@QHDR 6. MT Service 2016 Company Limited (“MT Serviceâ€?) provides back office and business support to companies under Thanachart Group. 040
ANNUAL REPORT 2016
Business Policy and Strategies of Thanachart Group In 2017, 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 adviceâ€?. Such vision was developed from three major fundamentals which are providing fully integrated financial services (Universal Banking) with the Bank being the main RDQUHBDR NEEDQHMF ENBTRHMF NM R@SHREXHMF NTQ BTRSNLDQRĂ„ 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 allow Thanachart Group to be a fully integrated financial services group with highly successful in competition, but also are keys to drive 3G@M@BG@QS &QNTO SN ADBNLD NMD NE 3G@HK@MCĂ„R KD@CHMF A@MJR 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 B@O@BHSX @MC HMSQNCTBD OQNCTBSR SG@S L@SBG BTRSNLDQRĂ„ MDDCR +$ / ENQ (MSDQMDS !@MJHMF @MC ,NAHKD !@MJHMF HR @ RXRSDL SG@S VHKK CQHUD 3! -* ENQV@QC ADBNLHMF @ #HFHS@K 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 SGD !@MJĂ„R KN@M @OOQNU@KR SN AD LNQD @BBTQ@SD @MC PTHBJDQ to reduce risks of becoming bad loans by using reliable "QDCHS 2BNQHMF SN LDDS @MC R@SHREX SGD BTRSNLDQRĂ„ CDL@MCR 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 2017, 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, and investment products. 2. To ensure our customers succeed financially by helping them choose the right insurance and protection products from across the entire Thanachart Group. 3. To provide borrowing solutions to all customer segments that meet their current and future needs and help them to become financially better off. 4. To provide digital banking solutions that permit customers to bank where they want, when they want, and how they want. In addition, Thanachart Group came up with the CEO’s Focus Agenda comprising 4 items as a tool to successfully achieve its goal efficiently and systematically. The CEO’s Focus Agenda is as follows: 1. Financial Targets: Meet or exceed our key financial targets of Net Income, Loan, and NIR growth and Cost to Income Ratio. 2. Customer Growth Initiatives: To focus on improvements of core infrastructure, end-to-end process reengineering with digital technology, and sales tools to support all sales channels in order to meet demands of each customer segmentation efficiently. 3. Operational Improvement: To focus on centralizing support units, upgrading technology, revamping processes to enhance service, manage risks and expenses effectively. 4. Enhancing Human Capital Capabilities: To focus on strengthening the potential of staff, supervisors and teams by developing leadership, decentralizing authority and responsibilities, and job rotation in order to increase knowledge and skills of employees. For every Strategic Intent, every target, and operations to go on efficiently and drive the organization in the same direction, Thanachart Group has communicated its Business Philosophy comprising 3 items as follows: 1. Belief in our employees: Thanachart Group believes that employees are the most valuable assets. Thanachart Group owes its growth to the contribution of its employees through competence and integrity. 2. Dedicate to excellence: Thanachart Group earnestly focuses on excellence. We are constantly evolving and adapting to the rapid pace of technological change through innovation.
3. Concern for social responsibility: Thanachart Group has a strong sense of responsibility towards the society.
Shareholding Structure of Thanachart Group Policy on Division of Operational Functions among Member Companies of Thanachart Group Being a parent company of Thanachart Financial Conglomerate with a controlling interest (i.e. owning more than fifty percent of issued and paid-up capital), TCAP has adopted the following policies and approaches in managing the member companies of the Group as follows:
Business policies TCAP and 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 THANACHART BANK PUBLIC COMPANY LIMITED
041
expertise of operations staff and various information technologies, and to reduce staffing costs. The centralized support services available now within Thanachart Group included information technology, human resource, systems and internal regulatory development, internal audit, operation control, etc.
Internal control, audit, and corporate governance of parent company and subsidiaries Thanachart Group places strong emphasis on internal control. The Group adheres to the principle of adequate and appropriate internal control by establishing procedures for business conducts, provision of services, and operations. The Group also separates the duties and responsibilities of each unit to allow internal examination of each other, based on a check and balance system. In addition, it puts in writing the announcements as well as order mandates, rules and regulations’ covering key business areas and operations, and this information was also disclosed to all staff in such a way that they can always study them to gain a full understanding. A central unit at the Bank is responsible for preparing and proposing the announcements, order mandates rules and regulations of all member companies of the Group. Regarding 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 relating 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
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ANNUAL REPORT 2016
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. Regarding 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.
Chart of Shareholding Structure of Thanachart Group As of 31 December 2016 Thanachart Capital Public Company Limited
Scotia Netherlands Holdings B.V. Commercial Banking Business
48.99%
50.96%
Asset Management Business 100.00% NFS Asset Management Company Limited 83.44% MAX Asset Management Company Limited
Thanachart Bank Public Company Limited
Life Insurance Business 51.00% MBK LIFE Assurance Public Company Limited 51.00% TM BROKER Company Limited 51.00% MT SERVICE 2016 Company Limited
Financial Business
Supporting Business 100.00% Thanachart Securities Public Company Limited
Securities Business
100.00% Thanachart Management and Services Company Limited
75.00% Thanachart Fund Management Company Limited
100.00% Thanachart Broker Company Limited
100.00% Thanachart Insurance Public Company Limited
Insurance Business
100.00% Thanachart Training and Development Company Limited
100.00% Asset Management Business
TS Asset Management Company Limited
100.00% Thanachart Group Leasing Company Limited
Leasing Business
100.00%
100.00% National Leasing Company Limited
Security SCIB Services Company Limited
65.18% Ratchthani Leasing Public Company Limited
Notes: 1. The above shareholding structure includes shares held by the related parties. 2. On 9 May 2012, the Bank of Thailand 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. 3. On 29 June 2016, SCIB Services Company Limited has registered to change its name to Security SCIB Services Company Limited. .M TFTRS 2H@L "HSX +HED RRTQ@MBD /TAKHB "NLO@MX +HLHSDC G@R QDFHRSDQDC SN BG@MFD HSR M@LD SN ,!* +(%$ RRTQ@MBD Public Company Limited.
THANACHART BANK PUBLIC COMPANY LIMITED
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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 2016, 2015, and 2014 are as follows: Table of income structures of the Bank and its subsidiaries As of December 31 2015
2016
2014
THB Million Percent THB Million Percent THB Million Percent
Interest Income Interbank and money market items Investment for trading Investment for debts securities Loans Hire Purchase and Financial Leases
1,307 30 3,504 18,337 21,708
3.24 0.07 8.67 45.38 53.72
1,580 73 3,761 19,474 23,329
3.98 0.19 9.49 49.13 58.85
1,894 238 4,106 20,320 25,887
4.82 0.60 10.45 51.69 65.85
Total Interest Income Interest Expenses
44,886 16,174
111.08 40.03
48,217 20,536
121.64 51.81
52,445 24,884
133.41 63.30
Net Interest Income
28,712
71.05
27,681
69.83
27,561
70.11
5,904 491 714
14.61 1.22 1.77
5,475 658 1,533
13.81 1.66 3.87
5,927 859 769
15.08 2.18 1.96
400 1,290
0.99 3.19
295 1,275
0.75 3.21
305 1,647
0.78 4.19
Total Non-interest Income
11,695
28.95
11,957
30.71
11,750
29.89
Net Operating Income
40,407
100.00
39,638
100.00
39,311
100.00
Non-interest Income Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments 2G@QDR NE /QNEHS EQNL (MUDRSLDMSR HM RRNBH@SDC "NLO@MHDR BBNTMSDC ENQ $PTHSX ,DSGNC (MRTQ@MBD /QDLHTL +HED (MRTQ@MBD /QDLHTL (MBNLD -DS Dividend Income Other Income
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ANNUAL REPORT 2016
Business Operations of Each Business Group Commercial Banking Business The Bank operated its businesses in compliance with SGD %HM@MBH@K (MRSHSTSHNMR !TRHMDRR BS @MC NSGDQ QDKDU@MS 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. R NE #DBDLADQ SGD !@MJ G@C @ SNS@K NE branches, 42 foreign exchange booths (20 in-branches, and RS@MC @KNMD 3,R TSNL@SHB 3DKKDQ ,@BGHMDR 2 Recycling Machines, 36 CDMs (Cash Deposit Machine), 53 Multi-Function Machines, and 99 PUMs (Passbook Update Machine).
Group of Products and Services The Bank improves and develops to better serve various needs of our customers. Its five 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 2016, the Bank maintained the focus on expanding its customer base and strived to develop products that matched demands of every customer segment; mostly transaction-based such as withdrawals, transfers, and payments through convenient and secure channels for utmost benefits to the customers as customer satisfaction would lead to Main Bank customers.
Earlier this year, the Bank launched Freever savings campaign that put an end to all fees so that the customers could enjoy no-fee transactions such as withdrawals, SQ@MREDQR @MC AHKK O@XLDMSR SGQNTFG SGD !@MJĂ„R DKDBSQNMHB channels. Moreover, the Bank expanded its juristic customer base using Premium Current Plus and Freever-More that also offered free deposits, withdrawals, and transfers, including checkbooks at an exclusive price. Toward the end of 2016, the Bank responded to the FNUDQMLDMSĂ„R OQNLNSHNM NE DKDBSQNMHB SQ@MR@BSHNMR SGQNTFG the launch of Thanachart e-Savings, a high-interest savings deposit account, that encouraged customers to do self-service transactions through Internet Banking (Thanachart iNet) and Mobile Banking (Thanachart Connect) in conjunction with PromptPay registration. Moreover, the Bank introduced a new concept called “Thanachart Smart Solutionâ€? about saving up and spending wisely. Furthermore, during the second half of the year, the Bank introduced a long-term fixed deposit (18 and 22 months) in addition to the existing short and mid-term deposits (5 and 10 months) to cater to different needs of the customers. 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: products and services have been developed to accommodate requirements of corporate customers; various forms of credit facilities such as flexible loans, letters of guarantee for bidding, contracts, performances and payments of utilities, E-GP, namely electronic letters of guarantee and payments of bidding documents under e-Government Procurement of SGD "NLOSQNKKDQ &DMDQ@KĂ„R #DO@QSLDMS OQNIDBS EHM@MBD @MC financial advisory service. These also include the debt and capital market aspect which is debenture issuance and fundraising to be listed in the Stock Exchange of Thailand. Customers are also offered risk management products
THANACHART BANK PUBLIC COMPANY LIMITED
045
RTBG @R (MSDQDRS 1@SD 26 / (12 %NQV@QC "NMSQ@BS @MC %NQDHFM "TQQDMBX 26 / SN GDCFD @F@HMRS UNK@SHKD HMSDQDRS or exchange rates. Moreover, Cash Management is offered to meet individual demands. 2) Commercial Banking: commercial banking customers are offered flexible and diverse loans based on D@BG BTRSNLDQĂ„R MDDCR 3GD Q@MFD NE KN@MR HMBKTCDR 3NO 4O E@BHKHSHDR VGHBG @QD @CCHSHNM@K KHLHSR ENQ . # BTRSNLDQR SN use as working capital, letters of guarantee for enterprises or individuals who need to guarantee performance for public and private companies. E-GP is also available. It offers electronic letters of guarantee and payments for e-bidding under D &NUDQMLDMS /QNBTQDLDMS NE SGD "NLOSQNKKDQ &DMDQ@KĂ„R Department. The Bank also supports the Portfolio Guarantee Scheme and the SME Soft Loan Program and offers Cash Management. 3) SME-S: SME-S loans are loans that have a limit of THB 10 million offered to small businesses. The KN@MR B@M AD SDQL KN@MR NUDQCQ@ESR . # OQNLHRRNQX MNSDR / - @MC KDSSDQR NE FT@Q@MSDD + & 4MCDQVQHSHMF @MC operational processes will be in line with the retail lending policy. The Bank has also joined forces with Thai Credit Guarantee Corporation (TCG) to provide credit guarantee for SGD !@MJĂ„R RL@KK ATRHMDRR BTRSNLDQR VGN G@UD ONSDMSH@K ATS are restricted by insufficient collateral, providing them with LNQD @BBDRR SN SGD !@MJĂ„R BQDCHS E@BHKHSHDR 2,$ 2 KN@MR @QD offered through the branch network and the existing branches to ensure thorough coverage of customer service. Competitive Strategies BBNQCHMF SN @ FQD@S @MC CHRODQRDC MTLADQ of SME customers throughout the country, operational and credit policies have been designed to mirror those of retail ANQQNVDQR @MC KDMS OQNCTBSR SN LDDS BTRSNLDQRĂ„ QDPTHQDLDMSR Competition-wise, although the SME loan market has a high market value, the competition is also intense. Therefore, other than tending to and catering to the existing customer base, the Bank is also focusing on acquiring new customers through lending programs such as the TCG program. Moreover, public relations, marketing activities, sale promotions are held continuously to boost the loan outstanding.
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ANNUAL REPORT 2016
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 OQNCTBSR @MC RDQUHBDR HMBKTCHMF (LONQS +DSSDQ NE "QDCHS + " 3QTRS 1DBDHOS "NKKDBSHNM FDMBX NE # / @MC # ENQ NUDQRD@ ATXDQR /@BJHMF "QDCHS $WONQS !HKKR /TQBG@RDC #HRBNTMSDC $WONQS !HKKR ENQ "NKKDBSHNM +DSSDQ NE &T@Q@MSDD 2S@MC AX + " 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 BNMRHCDQ@SHNM SGD BTRSNLDQRĂ„ MDDCR @MC SGD OQNLNSHNM NE 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 BTRSNLDQRĂ„ R@SHRE@BSNQX NM SGD !@MJĂ„R OQNCTBSR @MC RDQUHBDR
promoted to first-car buyers. 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
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 Cash Your Carâ€? is offered through the branch BG@MMDK "@RG 8NTQ "@Q OQNCTBS B@M RDQUD BTRSNLDQRĂ„ MDDC 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. In 2016, the Bank became the first commercial bank to adopt Credit Bureau Scoring in its underwriting under appropriate risk control. The adoption resulted in customer screening and customer quality control SG@S LDS SGD !@MJĂ„R BQHSDQH@ Competitive Strategies The domestic new car sales in 2016 were similar to 2015 at a slower growth rate by 3.85 percent. However, the Bank obtained more strategic partnerships with leading carmakers and launched promotional campaigns which led to its higher new car market share. R ENQ SGD TRDC B@Q KDMCHMF SGD !@MJ HLOQNUDC its underwriting policy, as well as 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. Cash You Car was also
The Bank focuses on convenience and integrated services that cover every need of the customer. Marketing promotions are conducted based on the situation and competition with Retail and Small Business Product Development 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. 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 KN@MR L@X NQ L@X MNS AD RODBHEHDC 3GD !@MJĂ„R ODQRNM@K KN@MR are served under the product names as follows: 1) Credit Card is a product that provides the KHMD NE BQDCHS SN OTQBG@RD OQNCTBSR RDQUHBDR @R B@RG NQ allows cardholders to withdraw cash. The Bank collaborates VHSG 5(2 @MC ,@RSDQ"@QC SN OQNUHCD BQDCHS B@QC HM LTKSHOKD SXODR RTHS@AKD SN BTRSNLDQRĂ„ PT@KHEHB@SHNMR @MC MDDCR TMCDQ the following names:
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- 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 , 7 /K@SHMTL B@QC - 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 NEEDQDC HM @ ENQL NE B@QC OQNCTBS TMCDQ SGD M@LD Å%+ 2' Plus�. The product highlights convenient and fast cash withdrawal, transferring and payment by installment @BBNLLNC@SHMF BTRSNLDQRÄ MDDC NE SGD RDQUHBDR @MX SHLD with the following features: 2.1 Sabai Cash: cash transferred to the BTRSNLDQÄR @BBNTMS NM SGD B@QC VHSG @ L@WHLTL HMRS@KKLDMS period up to 60 months. 2.2 Cash Transfer: cash transferred to the BTRSNLDQÄR @BBNTMS NM B@KK VHSG @ LHMHLTL QDO@XLDMS NE 3 percent for each bill cycle. 2.3 Cash Advance: cash withdrawal via 3,R VNQKCVHCD GNTQR @MC EQDD NE BG@QFD VHSG @ LHMHLTL 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 Plus SPN Loan is a multi-purposed loan 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, under the Flash Plus personal loan limit. 4) Welfare Loan is a specifically loan to customers whose companies have a campaign with the Bank. 5) Scholar Loan is a loan for payment of tuition NQ @MX DWODMRDR ENQ NAS@HMHMF @ L@RSDQÄR NQ CNBSNQ@SD CDFQDD 6) Pension Secured Loan, this is a special multi-purpose loan for government employees who receive LNMSGKX ODMRHNM O@XLDMS EQNL SGD "NLOSQNKKDQ &DMDQ@KÄR Department.
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7) 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 RDQUHBDR SN RDQUD S@QFDS BTRSNLDQRĂ„ MDDCR 3GTR SGD !@MJ 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 DEEHBHDMS L@MMDQ 3GDRD RDQUHBDR HMBKTCD ETMC SQ@MREDQ TSNL@SHB 3Q@MREDQ 2DQUHBD 32 NMKHMD RDSSKDLDMS ENQ EHM@MBH@K SQ@MR@BSHNMR SGQNTFG SGD !@MJ NE 3G@HK@MCĂ„R TSNL@SHB 'HFG
UNKTLD 3Q@MR@BSHNM -DSVNQJ ! '3-$3 @TSNL@SHB LNMDX 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: 3G@M@BG@QS "NMMDBS ,NAHKD !@MJHMF OOKHB@SHNM service - Thanachart iNet service 3G@M@BG@QS 2,2 KDQS RDQUHBD "@RG !@BJ #DAHS "@QC #DAHS 2TQD "@QC Competitive Strategies The Bank aims to accommodate needs for 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 as the transfer order date is made. Moreover, customers can make inquiries at branches or through call center (1770). Service offerings are as follows:
1. Mobile Banking for individuals allows deposit balance inquiries, account activities, balance inquiries and payments for hire purchase, housing loans, personal loans, BQDCHS B@QCR @MC %+ 2' /KTR RTARBQHOSHNM QDCDLOSHNM @MC RVHSBGHMF NE 3G@M@BG@QS %TMC ,@M@FDLDMSĂ„R LTST@K funds, Credit Bureau Report requests, service and utility bill payments. The Mobile Banking service is under the concept “Connects Every Step of Lifeâ€?; convenient and fast transactions wherever, whenever. 2. Internet Banking Services are available for both individual and juristic person to facilitate customers. For example, account balance information, internal and interbank fund transfer, including the bill payment service. 3. Financial Transaction Notification via SMS service, this 24-hour service notifies all transactions i.e. deposits, VHSGCQ@V@K @MC LNMDX SQ@MREDQ UH@ 2,2 SN SGD BTRSNLDQRĂ„ mobile phone number registered with the Bank. 4. Debit Cash Back has been offered exclusive services throughout 2016. The services include cash back for every card spending and the best-in-class security for cardholders with the EMV chip technology that prevented data theft effectively. Moreover, Debit Sure has been launched under the slogan “No worries about injuries, Debit Sure paysâ€?. Other than the abovementioned special privileges, Debit Sure cardholders also receive accident protection coverage of up to THB 100,000 and medical expense for accidents of up to THB 5,000 per time, unlimited times, 24-hour, worldwide, without any advance payment required at more than 300 participating hospitals nationwide. Group 4 Payments and Merchants 4.1 Payments Characteristics The BIN (Bank Identification Number) Sponsorship is cooperation between the Bank as a member NE 5HR@ ,@RSDQ"@QC @MC D 6@KKDS RDQUHBD OQNUHCDQR HM HRRTHMF Visa or MasterCard-branded prepaid cards to enable e-wallets to make payments for goods and services at worldwide merchants who accept Visa or MasterCard. The prepaid cards can be categorized into 2 groups as follows: 1. Virtual prepaid cards are in an electronic form on e-Wallet applications. Cardholders can use the virtual prepaid card to make payments for goods and services for online merchants only.
2. Physical prepaid cards are prepaid cards that cardholders can use to pay for goods and services both at physical and online merchants with Visa or MasterCard logos. These 2 types of prepaid cards are suitable to the young generation, teenagers, students, and those without access to credit cards. Competitive strategies New payments services have been emerging from both existing and new service providers, resulting in intensifying competition, especially electronic payments. Therefore, the Bank focuses on forging business alliance to improve its services and keep up with the digital trends, BG@MFDR NE BNMRTLDQRÄ ADG@UHNQR @MC @SSHSTCDR QDF@QCHMF financial transactions. The attempt is also a response to support the National e-Payment strategy. 4.2 Merchants Characteristics 3GD LDQBG@MSRÄ RDQUHBD RTOONQSR O@XLDMSR channels by type of merchants and businesses as follows: 1. Electronic Data Capture machines (EDC) are suitable for medium to large size merchants that have high demand and transactions processed through EDC terminals such as restaurants, hospitals, hotels, resorts and educational institutions. 2. Mobile point of sale (mPOS) Pay N’ Go is good for small merchants that do not have many monthly payment transactions, and for medium to large enterprises with agents or sale staff for convenient off-site jobs and quick deal-closing. 3. Thanachart Payment Gateway is perfect for e-Commerce businesses such as airlines and online shops. Competitive Strategies 3GD ,DQBG@MS BPTHQHMF ATRHMDRR HR FD@QDC towards customers with business potentials and is opened to small businesses seeking financial management assistance. The Bank sets a business strategy to go out and acquire new merchants, and to consistently launch sale promotions in order to maintain the customer base and create confidence HM SGD !@MJÄR OQNCTBSR
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4.3 Western Union Characteristics Quick international money reception and sending SN NUDQ BNTMSQHDR SGQNTFG 6DRSDQM 4MHNMĂ„R MDSVNQJ SG@S meets global security standards. Competitive Strategies The Bank aims for convenient, quick and secure RDQUHBDR ENQ SGD BTRSNLDQR M @KSDQM@SHUD BG@MMDK NE 3,R provides the customers with easy money reception and RDMCHMF @S SGD !@MJĂ„R 3,R M@SHNMVHCD Group 5 Other Products 5.1 Foreign Exchange Service Characteristics 3GD !@MJĂ„R RDQUHBDR HMBKTCD ENQDHFM DWBG@MFD RDQUHBDR HM ENQLR NE A@MJ MNSDR @MC SQ@UDKDQĂ„R BGDPTDR money changers, forward foreign exchange for international 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 Q@SDR AX ADMBGL@QJHMF VHSG SGD LNUDLDMSR NE SGD VNQKCĂ„R BTQQDMBX L@QJDS R @ QDRTKS HSR BTRSNLDQR QDBDHUD QD@K SHLD rates and fair prices. 5.2 Securities Business Support Services Characteristics Securities Business Support Services consist of: Custodian, Fund Supervisor, Bondholder Representative and 1DFHRSQ@Q @MC /@XHMF FDMS
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Competitive Strategies To fully offer all range of services to meet BTRSNLDQ MDDCR SGD !@MJĂ„R BTRSNCH@M @MC SQTRSDD RDQUHBDR 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 2016, the Thai economy saw a continuous expansion at 3.2 percent against 2.9 percent in the previous year, thanks to the tourism industry which relied on demands NE ENQDHFM SNTQHRSR @MC SGD FNUDQMLDMSĂ„R RODMCHMF @MC investments. Private consumption and domestic investment improved slightly but they were still restricted by household and SME debts, drought and sluggish economies of key SQ@CHMF O@QSMDQ BNTMSQHDR KSGNTFG SGD NUDQ@KK SNTQHRL HMCTRSQX posted strong growth, it suffered a short-term impact of the suppression of illegal providers of tour packages and the suspension of festivities during the mourning period for *HMF !GTLHANK CTKX@CDI 3GD FNUDQMLDMSĂ„R DWODMCHSTQD V@R aimed at maintaining the economic growth. Budgets were allocated to project investments, especially communication, SQ@MRONQS @MC V@SDQ L@M@FDLDMS CCHSHNM@K LNMDS@QX @MC fiscal measures were issued as short-term economic stimulus or easing of troubled grass roots. Such measures were tax incentives to boost tourism and consumption during important festivals, real-estate incentives, income-boost for the low-income, a project to strengthen the fundamental economy in accordance with the civil state guideline, and drought victim assistance measures. However, the exports, formerly @ JDX DMFHMD SG@S CQNUD SGD BNTMSQXĂ„R DBNMNLX QDL@HMDC dull, similar to the economies of trading partner countries. The global competitiveness of certain exported goods deteriorated as a result of structural issues of manufacturing for exports: high labor costs and low labor efficiency. The Thai economy grew gradually but relatively steadily as reflected from the low headline inflation in 2016 at 0.2 percent compared to - 0.9 in 2015, a slight increase in line with the recovering domestic demands which would GDHFGSDM SGD BNLLNCHSHDRĂ„ OQHBDR @MC KNV TMDLOKNXLDMS
rate at only 0.97 percent. In terms of offshore stability, the Thai economy still had consistent overbalanced current account in parallel with the tourism revenue while the capital and finance account ran deficit. This was partly an outcome of Thai entrepreneurs investing overseas and lower foreign investments due to the policy rate hike projection of the %DCDQ@K 1DRDQUD NE SGD 4MHSDC 2S@SDR NE LDQHB@ Å42 Æ For 2017, the commercial banking industry will still face both domestic and global risk factors that will impact SGD DBNMNLHB FQNVSG (S HR DWODBSDC SG@S !.3ÄR LNMDS@QX policies will be increasingly pressured by the minimum wage raise by THB 5-10 in 69 provinces from 1 January 2017 onwards, coupled with the oil production cut agreement by OPEC and Non-OPEC that will cause global oil prices to surge. However, BOT still applies the average headline inflation range at 2.5 percent ¹ 1.5 percent in 2017 as a medium-term monetary policy target which will help L@HMS@HM SGD BNTMSQXÄR OQHBD BNRS BNLODSHSHUDMDRR $WSDQM@K risk factors to be closely watched comprise of economic uncertainties of the US, political instability, financial risks, monetary policy implementation, sluggish European and Chinese economies which will impact international trade, 3G@HK@MCÄR LNMDS@QX @MC EHRB@K ONKHBX HLOKDLDMS@SHNM @R well as bringing about volatility to Thai and global financial markets. However, BOT forecasts the Thai economy to grow at 3.2 percent in 2017. The growth will be backed mainly by SGD FNUDQMLDMSÄR DWODMCHSTQD @MC HMUDRSLDMSR DRODBH@KKX in new communication and transport infrastructures such as dual-track railway, extended Skytrains lines, Motorway and Highway, short-term economic stimulus, continuous growth in the tourism industry, and improvements in the export sector OTQRT@MS SN SGD ,HMHRSQX NE "NLLDQBDÄR FNNCR @MC service export plan focusing on food, construction materials, medical equipment, health and entertainment and logistics. Nevertheless, private investments will be a crucial factor to SGD BNTMSQXÄR K@QFDQ @MC RSQNMFDQ DBNMNLX The fragile global economy and the slowly recovering 3G@H DBNMNLX G@R OQNLOSDC SGD !@MJÄR OK@MR ENQ BKNRDKX monitoring and reviewing domestic and foreign economic and political situations; expansion of domestic industrial economics, debt service ability of households and businesses, SGD OQHU@SD RDBSNQÄR BNLODSHSHUDMDRR @MC @AHKHSX SN @C@OS to the innovation-driven economy, changes of consumer behaviors, evolutions in the global financial markets and international fund mobilization, monetary and fiscal policy
HLOKDLDMS@SHNM NE 3G@HK@MC RH@M BNTMSQHDR @MC JDX DBNMNLHB countries, corporate governance issues of the commercial banking industry in the United States and Europe, including geopolitical risks. These factors have implications on the overall economy and volatility in the Thai financial market. In terms of business opportunities in 2017, the government sector still plays a key role in stimulating and driving the Thai economy, creating economic activities, and DKDU@SHMF SGD BNTMSQXĂ„R NUDQ@KK BNLODSHSHUD ONSDMSH@K SGQNTFG investments in development of transport and logistics infrastructure such as the dual-track railway, expansion of Skytrain lines, Motorway, expansion of Suvarnabhumi HQONQS HMEQ@RSQTBSTQDR @MC KNFHRSHBR HM SGD 2ODBH@K $BNMNLHB Zones, etc. These projects align with the infrastructure and logistics development plan in the 12th National Economic and Social Development Plan (2017 - 2021). The government sector has encouraged the private sector to join the Public Private Partnership (PPP) and implemented PPP Fast Track to accelerate and reduce steps and time frame for project approval in a bid to attract private investors and concretely implement the projects swiftly. This is a factor SG@S GDKOR ANNRS HMUDRSNQRĂ„ BNMEHCDMBD OQNLNSD @MC RSHLTK@SD private investments in relevant industries of 2017 such as construction, transport and logistics, including the Special Economic Zones of East-West and Southern Corridors. ,NQDNUDQ SGD EHQRS OG@RD NE 3G@HK@MCĂ„R #HFHS@K Economy and Society Development Plan in 2017, that will see the investment and development in digital foundation: nationwide high-speed internet, enhancement of international network, promotion of tech startups based on innovation creation, and the National e-Payment System, are important steps towards a variety of transactions with government agencies, private entities, the general public and commercial banks in the future through electronic channels, without physical or location restrictions. The emergence of FinTech (Financial Technology) to close the gaps in financial services of commercial banks is both an opportunity and a challenge to the financial sector.
Industry and Competition Outlook In 2016, commercial banks encountered domestic and international challenge factors that affected the commercial banking business and financial statuses of households and private entities who were bank customers. Such challenge THANACHART BANK PUBLIC COMPANY LIMITED
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factors were household debts and drought that hurt the BTRSNLDQRĂ„ OTQBG@RHMF ONVDQ HKKDF@K SNTQ O@BJ@FDR SG@S directly disturbed the tourism industry and other related businesses, refraining from festivities, entertainment and advertisement during the mourning period due to the passing NE *HMF !GTLHANK CTKX@CDI DLDQFDMBD NE MNM A@MJ RDQUHBD providers concentrating on Financial Technology (FinTech), cyber security threats, lackluster economy in key trading partner countries affecting international trades, volatile LNMDX @MC B@OHS@K L@QJDSR CTD SN SGD 4MHSDC *HMFCNLĂ„R QDEDQDMCTL SN DWHS SGD $TQNOD@M 4MHNM !1$7(3 SGD 4MHSDC 2S@SDRĂ„ OQDRHCDMSH@K DKDBSHNM HMUDRSNQRĂ„ BNMBDQM NM SGD %DCDQ@K 1DRDQUDĂ„R ONKHBX Q@SD HMBQD@RD @MC OQDO@Q@SHNM ENQ BNLOKH@MBD with new regulations such as capital requirements by Basel III and International Financial Reporting Standard (IFRS 9).
The commercial banking industry in 2017 will see intensifying competition in deposit mobilization and lending due to the expected recovery of the Thai economy and DWO@MRHNM NE OQHU@SD HMUDRSLDMSR SN RTOONQS SGD FNUDQMLDMSĂ„R LDF@OQNIDBSR KSGNTFG BNLLDQBH@K A@MJR ENBTRDR NM growing the customer base by delivering excellent customer experience and deepening customer relationships, evolving competition due to digital technology will require them to place importance on changes of the customer behaviors and various influencers affecting decisions to use financial services. The banks must understand these changes in conjunction with appropriate cost management and maintenance of asset quality.
Despite the many economic challenges the commercial banks may have faced, their financial stability remained firm as evidenced by high capital funds and reserves. In addition, the commercial banks were still an important source of funds for businesses and households. This is reflected in the loan volume increase from THB 13,218,274 million in 2015 to THB 13,627,117 million in 2016, generating a total net profit of THB 198,997 million, a 3.6 percent growth compared to last XD@QĂ„R OQNEHS NE 3'! LHKKHNM 'HFGDQ A@C @MC CNTASETK debts coupled with personnel productivity were key factors that restrained the performance of commercial banks.
Ç (M SGD !@MJ RSHKK OQHNQHSHYDC CHUDQRHEXHMF SGD loan portfolio structure to create balance by growing its non-hire purchase lending products: corporate loans, commercial loans, housing loans, retail loans, credit cards and personal loans, in conjunction with total financial solutions offered to the customers. The focus was to offer and develop products, life and non-life insurance, securities, and mutual funds, with the subsidiaries. Special attention was paid to life insurance products as the Bank partnered with Prudential Life RRTQ@MBD 3G@HK@MC /KB 3GD O@QSMDQRGHO KDC SN HMMNU@SHUD products well suited to diverse needs of the customers.
In 2017, commercial banks in general will still uphold the direction of Customer Centricity, offering integrated financial products and services (Universal Banking) that meet requirements of each customer segment. The service channel through the digital platform will play an increasingly bigger role as consumer behaviors change towards full financial transactions without having to go to a bank branch in QDRONMRD SN SGD FNUDQMLDMSĂ„R #HFHS@K $BNMNLX ONKHBX 'DMBD commercial banks will focus on developing and adopting digital technology to enhance financial services through internet banking and mobile banking such as an application that enables customers to perform various transactions quickly and effortlessly, and be assured of data security and user privacy. Furthermore, commercial banks are paying more attention to personnel productivity and appropriate cost management, including forging business partnerships to add more service channels and fill service gaps of the banks.
Ç #DUDKNOLDMS NE RXRSDLR V@R BNMSHMTDC SN strengthen the business, especially information technology improvements to solidify the foundation and support changes of products and distribution channels in order to better serve SGD BTRSNLDQRÄ MDDCR $W@LOKDR NE RXRSDL CDUDKNOLDMS included the mobile banking application called Thanachart Connect, support for PromptPay, which was the national e-payment system, more complete Origination Manager 2XRSDL ., SN SQTKX QDRONMC SN TRDQRÄ QDPTHQDLDMSR @ BTRSNLDQ QDK@SHNMRGHO L@M@FDLDMS SNNK B@KKDC 3 CUHRNQ SG@S enabled a 360-degree perspective into the customers, and Predictive Dialer for Contact Center (outbound), telesales and Collection for convenient and quick customer contact.
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TBANK Accomplishment in 2016
Ç 3GD !@MJ SNNJ O@QS HM HMEQ@RSQTBSTQD CDUDKNOLDMS SN DMG@MBD 3G@HK@MCÄR O@XLDMS RXRSDLR AX INHMHMF SGD installation of over 400,000 EDC terminals countrywide in response to the National e-Payment Master Plan. Merchants could have EDC terminals installed at a lower cost, less expense and fees.
Ç 3GD !@MJ BNMCTBSDC RS@EE RDFLDMS@SHNM HM SN learn true capabilities, strengths and weaknesses of the staff. Pursuant to this initiative, the focus on people development was carried on in order to improve the management of services, sale and personnel. In 2016, customer-oriented sale and service training were carried out to branch employees to develop skills for sale conversation, product knowledge, and customer analysis. Branch service was standardized (TBANK Service Standard) nationwide. Human resource initiatives, such as training, coaching, and e-Learning, were reviewed. Talent Management was launched to raise the human capital competitiveness. In addition, Human Resource IT system called HRIS 9.2 was developed to upgrade the capacity and provided efficiency of information to employees so that they could work efficiently and drives the Bank towards its mission and goals. Ç V@QDMDRR V@R Q@HRDC @LNMF DWDBTSHUDR HM DUDQX department of internal communication through various channels so that every level of employees understood the Bank’s goals and that the understanding could be reflected through professional customer service. In the past year, external communication was consistently made to create recognition and impression through many channels such as social media and CSR activities to access the current lifestyles of existing customers. Ç .SGDQ SG@M ATRHMDRR @BBNLOKHRGLDMSR SGD !@MJ also received “Suriyasasithornâ€? awards from the Public Relations Society of Thailand; first prize in the desk calendar type and runner-up in the hanging calendar type in the Honoring the Royal Institution category. Thai histories were expressed through the calendar series called “234 Years of Ratanakosin Era under Chakri Royal Familyâ€? under the theme “Passing on Values through Time with Advanced Technologyâ€? using techniques of Art Nouveau and digital painting combined with AR codes.
Competitive advantage and competitors Compared to other commercial banks, the Bank is considered as one that has long-term growth potential. In 2016, the Bank’s assets were THB 950,511 million, making up 5.92 percent of total assets of commercial banks registered in Thailand. Its net loans were THB 666,909 million, or 6.20 percent of gross net loans of commercial banks registered in Thailand. A slight decrease in total loans from the previous year was attributable to the commitment to adjust the Bank’s
loan portfolios to bring balance between risks and maximum returns and to maintain the asset quality at an appropriate level. This is evident in the reduction of NPL ratio to only 2.29 percent compared to 2.84 percent at the end of the previous year. Additional reserves resulted in better coverage ratio at 151.16 percent from 119.42 in 2015. In addition, in 2016, the Bank’s total deposits and borrowings were THB 725,966 million, a minor decrease from the previous year due to short-term debentures that matured in 2016. Nevertheless, the Bank managed to expand its deposit base from the previous year, particularly retail deposits. The ratio of the Bank’s deposits to total deposits of commercial banks registered in Thailand was 5.90 percent. In terms of the Bank’s strengths, its BIS ratio is as high as 19.15 percent, higher than the industry average at 17.44 percent and BOT’s criteria. Its liquidity coverage ratio (LCR) is above 100 percent. Consequently, the Bank had sufficient potential to take risks or losses from unexpected circumstances. Overall, efficient and continuous maintenance of asset quality coupled with strong capital and balance sheets are key factors that allow the Bank to grow robustly and sustainably. Apart from excellent products and services offered through the branch network and internet or “Thanachart iNet�, the Bank developed another channel of mobile banking to support online transactions on a mobile application called Thanachart Connect. Plans are in place for continuous improvements of the application in order to meet requirements of the customers such as mutual funds and securities and loan application thoroughly in every channel in an integrated manner (Total Financial Solution) under the data security and user privacy policies. On service quality and efficiency enhancement, development and improvement of infrastructure related to core banking were made to connect the processes. Personnel capabilities were also boosted so that they became proficient, knowledgeable and prepared to give advice to customers and deliver excellent experience through the Bank’s financial services. In addition, under the partnership and cooperation with the Bank of Nova Scotia, the Bank planned to adopt Scotia’s globally accepted technological innovation, financial products and new service to add to its competitiveness and service efficiency. THANACHART BANK PUBLIC COMPANY LIMITED
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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 2016, the company had a total of 34 branches and offered the following services: 1. Brokerage Business covers brokerage services which include 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. 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. Equity-Linked Notes are issued and sold for customers in order to increase an opportunity of investment and spread of risks.
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ANNUAL REPORT 2016
Competition and Market Outlook 1. In 2016, the Thai economy recovered quickly in a continuation from 2015 as the SET index picked up by 19.80 percent amid volatile trading volumes and SET index caused by key domestic and international political factors. During 2016, domestic and foreign economic and political situations still presented challenges to the Thai stock market, both in terms of trade volumes and stock index. 5 key external factors that mainly caused volatility in the Thai stock market but generally supported the recovery of the SET index were: 1) possible drastic drop in China’s economy and outflow of the Yuan worried central banks worldwide and pressured the Federal Reserve Bank (Fed) to signal the delay of the rate increase. This resulted in high global liquidity and continuous inflows to the Thai stock market, 2) overall economic upturn, particularly the strong recovery of the US economy and gradual improvement of the European and Japanese economies, was backed by the quantitative easing whose byproduct was even higher global liquidity, 3) the United Kingdom’s referendum to exit the European Union (BREXIT) unpredicted by the majority of investors and polls caused short-term volatility, 4) the United States’ Presidential Election won by Donald Trump that contradicted most polls also caused a temporary stir. However, the policy that supported extreme economic growth drove global risk asset prices and Thai SET index to move up, and 5) the successful agreement of the Organization of Petroleum Exporting Countries (OPEC) to cut oil production for the first time in 8 years drove oil prices upward, and the Thai SET index increased as an indirect result. Since the beginning of 2016, the Thai economy showed signs of continued recovery from 2015. The recuperation was mainly driven by consistently growing tourism and government’s investments. Prices of agricultural produce posted strong improvement, especially fruits and rice in the first half of the year, in conjunction with better rubber prices throughout the year helped boost revenues in the agricultural sector. However, the Thai economy in Q4/2016 weakened after a tragic loss on 13 October 2016 when the entire country suffered emotionally. The grief that ensued weighed down spending atmosphere despite the government’s tax incentive measures launched in hopes of stimulating year-end spending. However, the measures were not enough to compensate the lower private spending. In
addition, the government’s policy to suppress “zero-dollar tours” from China for long-term sustainability would have short-term pressure on tourism. For 2017, the Thai economy is expected to continue its recovery from 2016, particularly the agricultural sector as drought has eased in 2016. Consequently, agricultural produce in 2017 would also improve from the drought in 2014-2016. Most agricultural produce prices, including fruits, rubber, sugarcane, will pick up. Moreover, the new income tax structure that will ease the burden of income tax and the ending burden of the tax-deductible first-car scheme will help stimulate the private spending, supporting the overall consumption. The government’s investments are still strong and likely to be accelerated, which will be another push to the Thai economy. The Stock Exchange of Thailand (SET) disclosed information that, during January 2016 to November 2016, IPO values of listed companies were THB 157,766 million, a 45 percent increase compared to the end of 2015. The majority of the values were from fund raising in the primary market. As of December 2016, SET’s market capitalization was THB 15.08 trillion, a 23 percent increase from 2015. MAI’s market capitalization was THB 425,634 million, a 31 percent increase from the end of 2015. The market share of TNS is 4.17 percent, ranked 7 among 36 securities companies. In 2016, the competition remained intense and the main customer target was retail investors. New securities companies introduced in 2014; AEC Securities Plc. (AEC), Apple Wealth Securities Plc. (Apple Wealth) and Land & House Securities Plc. (LHSEC) have gained greater influence in the competition in the securities brokerage business as seen from their increasing market shares. In 2015, two new securities companies emerged; ASL Securities Co., Ltd. (ASL) and SBI Thai Online Securities Co., Ltd. (SBITO). Investment consultants in the industry constantly switched workplaces. In addition, the competition in general was geared towards offering innovations to investors; readymade programs to provide customers with fundamental and technical information, a new trading system called Algo Trading and other trading platforms as alternate channels for submission of buy and sell orders. Apart from competition from Thai securities companies, foreign securities companies were also able to secure more market shares. More cooperation in various forms among banks and their affiliate securities companies is still seen. th
2. There are a total of 44 members in the Thailand Futures Exchange (TFEX). In 2016, total trading volumes was 69 million contracts, or a daily average of 285,189 contracts, an increase of 43 percent from 2015. The majority of the trading volumes were from stock futures and SET50 Index Futures with a growing number of investors of over 15,000 accounts. TNS’ trading volumes were 8,503,303 contracts and its market share was 6.11 percent, or the 3rd 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 Limited (“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 2016, there were a total of 22 fund management companies, with total assets under management of THB 4,230,701.60 million (excluding Vayupak Fund, Foreign Funds, Property Fund for Resolving Financial Institution Problem and Property and Loan Fund), an increase of 12.50 percent from 2015. During 2016, there were 605 newly issued funds, accounting for THB 1,322,907 million of net assets. Among the newly issued funds, 453 were debt securities with both domestic and foreign investment, which accounted for THB 1,249,292 million of net assets or 94.40 percent of total net assets of the newly issued funds during 2016. 89.40 percent of funds issued by TFUND in 2016 were domestic and offshore bonds. THANACHART BANK PUBLIC COMPANY LIMITED
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R NE #DBDLADQ 3%4-#Ă„R @RRDSR TMCDQ management were THB 189,008.27 million, an increase of THB 22,654.08 million or 13.62 percent from 2015. The increase of assets under management was from mutual funds offered to the general public of THB 18,948.81 million NQ ODQBDMS RRDSR TMCDQ L@M@FDLDMS BNLOQHRDC NE 84.59 percent mutual funds, 8.00 percent private funds, and 7.41 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 – September 2016, the Thai non-life insurance business saw growth in direct premiums compared with the same period of 2015 at 1.64 percent. Total direct premiums were THB 153,642 million. The non-life insurance market structure during January - September 2016 showed that the automobile insurance dominated up to 59 percent of the total market value, followed by the miscellaneous insurance with the market share of 34 percent. Fire and marine insurance gained market shares of 5 percent and 2 percent respectively. TNI focuses on a standard of products, service quality, productivity, efficiency and honesty, as well as development of new products in order to offer new policies which are more coherent with economic and social conditions and responsive to customer needs, by taking into consideration a fair premium rate to customers. Furthermore, the company constantly adjusts its progressive competitive strategy to be coherent with ever-changing conditions, by ways of increasing sales channels, expanding the customer base, @MC L@HMS@HMHMF SGD DWHRSHMF BTRSNLDQ A@RD R LTBG @R 98 percent of all customers are those with a policy claim limit not exceeding THB 5 million. The customers mostly select
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ANNUAL REPORT 2016
automobile, personal accident, and fire insurance and these BTRSNLDQR L@HMKX @QD SGD !@MJĂ„R KDMCHMF BTRSNLDQR @R VDKK @R BTRSNLDQR EQNL SGD BNLO@MXĂ„R L@QJDSHMF B@LO@HFMR 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 BTRSNLDQ AX LNQD SG@M ODQBDMS NE 3-(Ă„R SNS@K QDUDMTD Moreover, TNI provides insurance services to domestic customers only. !@RDC NM SGD 3G@H &DMDQ@K (MRTQ@MBD RRNBH@SHNMĂ„R 2017 direct premium forecast, the Thai non-life insurance industry is expected to grow at 2.50 percent in 2017 with total premiums of THB 214,328 million.
Assets Management Business Characteristics RRDSR ,@M@FDLDMS !TRHMDRR NODQ@SDR AX 32 RRDS 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, allowing them to repay the debts at their real capacity and turning non-performing assets back to becoming the performing ones. Competition and Market Outlook 32 ," NODQ@SDR HSR ATRHMDRR VHSG @ OQHL@QX NAIDBSHUD to manage and restructure the non-performing assets received from SCIB. To manage, divest, or sell those non-performing @RRDSR -/ R SN SGHQC O@QSHDR VGN @QD HMSDQDRSDC HM QD@K DRS@SD L@QJDS 32 ," GHQDR @ OQNEDRRHNM@K @CUHRNQX HM @RRDSR sales to determine the selling price and manage the assets in such a way that creates the highest value. It also appoints a professional asset selling agent to develop value-added asset packages as well as collaborates with the related group of companies to expand sales channels, such as brokers or auction agents as well as cross selling and through website of TNS and the other channels to reach the target customers as much as possible.
Leasing Business Characteristics 1@SBGSG@MH +D@RHMF /TAKHB "NLO@MX +HLHSDC Å3' -(Æ NODQ@SDR GHFG OTQBG@RD ATRHMDRR @MC EHM@MBH@K KD@RHMF 3' -( focuses on both new and used car markets, especially commercial cars such as pickups, taxis, tail trailers and large trucks, and personal cars. Moreover, the company also offers credit for both new and used cars at 60 percent and 40 percent of the total credit respectively, and credit for trucks and other car types at 70 percent and 30 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 OQNSDBSR SGD BTRSNLDQRÄ OQNODQSHDR Competition and Market Outlook Though the overall domestic leasing and hire purchase industry displayed a slowdown in 2016 as compared to the previous years, the fierce competition in the industry continued. The reason was that financial institutions, commercial banks, as well as leasing and hire purchase business of car manufacturers and dealers, carried out their marketing activities with a focus on credit for new and used personal cars. This resulted in the increased expansion of some manufacturers to credit for used cars. However, these manufacturers were not considered to be direct competitors NE SGD BNLO@MX @R SGD BNLO@MXÄR S@QFDSDC L@QJDS V@R MDV and used commercial cars, where the competition in this market was not quite aggressive as compared to the market of personal cars.
'NVDUDQ 3' -( OK@MMDC SN L@HMS@HM HSR BNLLDQBH@K portfolio in the next 3 - 5 years at the 65 percent - 70 percent NE SGD BNLO@MXĂ„R GHQD OTQBG@RD ONQSENKHN 3GD QD@RNM V@R that this customer group was expected to grow continuously @MC SN FDMDQ@SD GHFG OQNEHS@AHKHSX (M @CCHSHNM SGD BNLO@MXĂ„R extensive experience and business expertise proved to be advantageous for competitiveness, customer retention, high yield to used car dealers, fast services, market share retention, and tighter relationship with used car dealers, in order to increase business opportunities and business channels. With high experience, business expertise, fast services, combined with relationship retention and high XHDKC ENQ TRDC B@Q CD@KDQR 3' -( V@R BNMEHCDMS SN L@HMS@HM its competitiveness and its market share under the intense competition at the present.
Products and Services Management Sources of fund 3GD RNTQBD NE SGD !@MJĂ„R @MC HSR RTARHCH@QHDRĂ„ ETMC comprises of issued and paid-up capital, whereby as of 31 December 2016, was in the amount of THB 60,649 million, in which the statutory reserve and retained earnings were HMBKTCDC MNSGDQ SVN JDX RNTQBDR NE ETMC VDQD 1. Deposits as at the end of 2016 were in the amount of THB 676,557 million. 2. Borrowings were in the amount of THB 49,409 million, of which THB 32,516 million were Tier 2 subordinated debentures, THB 13,905 million were non-subordinated debentures, THB 2,000 million were short-term debentures, THB 937 million were promissory notes, THB 50 million were structured notes, and THB 1 million were borrowing others.
Funding or lending to related parties The Bank extended loans to parent companies, subsidiaries, and related companies in Thanachart Group. S SGD DMC NE HS DWSDMCDC KN@MR SN 3' -( SGD !@MJĂ„R subsidiary, for business operations under Thanachart Group Policy amounting to THB 3,180 million, increased by THB 1,279 million from the end of 2015. There was remaining A@K@MBD NE 3'! LHKKHNM EQNL KDMCHMF SN 32 ," NE 3'! LHKKHNM @MC 3' -( NE 3'! LHKKHNM The aforementioned loan outstanding balance accounted for 0.49 percent of total loans at the end of 2016. KK KDMCHMF @MC ANQQNVHMF SQ@MR@BSHNMR VDQD BNMCTBSDC TMCDQ the permission of the BOT. THANACHART BANK PUBLIC COMPANY LIMITED
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RISK FACTORS
An overview of the Risk Management (M SGD 3G@H DBNMNLX BNMSHMTNTRKX HLOQNUDC @R @ QDRTKS NE SGD FNUDQMLDMSĂ„R DBNMNLHB RSHLTKTR O@BJ@FD @MC a consistent growth of tourism. While the private consumer sector and domestic investment slightly improved, there were still KHLHS@SHNMR EQNL DWSDQM@K @MC CNLDRSHB HLO@BSR NE ENQDHFM SQ@CD BNTMSQHDRĂ„ DBNMNLHB RKNVCNVM VD@JDMDC OQNCTBS DWONQS@SHNM household debt, SMEs, and drought. In 2016, total loans of commercial banks continued to expand as compared to last year, in line with the slow economic recovery. Despite various economic challenges, commercial banks were able to strongly maintain their financial stability, which were reflected in high mutual funds and reserve. However, commercial banks continue to be cautious with business operations, especially in loan approval. (M SGD 3G@H DBNMNLX SDMCDC SN QDBNUDQ BNMSHMTNTRKX VHSG SGD FNUDQMLDMS RDBSNQĂ„R ATCFDS CHRATQRDLDMS @MC investment as key drivers. However, the overall economy remained fragile and needed to be monitored closely in various areas, which may impact market risk, credit risk, and liquidity risk, for example. 3GD !@MJ @MC HSR RTARHCH@QHDR QD@KHYD SGD HLONQS@MBD NE BNMSHMTNTR QHRJ L@M@FDLDMS SG@S SGD (MSDQM@K "@OHS@K CDPT@BX RRDRRLDMS /QNBDRR ("" / V@R DLOKNXDC SN L@M@FD QHRJR HM BNLOKH@MBD VHSG SGD !@MJ NE 3G@HK@MC (“BOTâ€?)Ă„R B@OHS@K 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 NTSKHMD UH@ U@QHNTR BNLLHSSDDRĂ„ RTODQUHRHNMR @R ENKKNVR
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 ENQ @M DEEHBHDMS DMSDQOQHRD VHCD QHRJ L@M@FDLDMS AX S@JHMF HMSN BNMRHCDQ@SHNM SGD HLO@BS NE QHRJR NM SGD !@MJÄR NODQ@SHNM@K 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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ANNUAL REPORT 2016
The Committees at the Operation Level: Asset and Liability Management Committee G@R @ QNKD HM RTODQUHRHMF SGD RSQTBSTQD NE SGD !@MJÄR @RRDSR @MC KH@AHKHSHDR SN AD @OOQNOQH@SD ENQ BG@Q@BSDQHRSHBR NE SGD ATRHMDRR @MC HM KHMD VHSG SGD !@MJÄR QHRJ L@M@FDLDMS ONKHBX Investment Portfolio Committee played a role in overseeing the investment in financial instruments, to be in line VHSG SGD !@MJÄR L@QJDS QHRJ L@M@FDLDMS ONKHBX Credit Committee has a role in supervising the credit lending and other credit-related transactions to be in line VHSG SGD !@MJÄR BQDCHS QHRJ L@M@FDLDMS ONKHBX 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 BNMSQNK NE SGD !@MJÄR @MC HSR RTARHCH@QHDRÄ RXRSDLR
The Bank’s Risk Management Structure As of 31 December 2016
Board of Directors Audit Committee
Risk Management Committee Chief Risk Officer
Executive Committee
Compliance
Risk Policy and Capital Markets
Credit Risk Management
Retail Risk Management
Chief Audit
Chief Executive Officer and President
Special Risk Management
Asset and Liability Management Committee
Investment Portfolio Committee
Credit Committee
Deputy Chief Executive Officer
IT Security Management Committee
THANACHART BANK PUBLIC COMPANY LIMITED
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Ç 3GD BNMCTBS NE ATRHMDRR @EE@HQR HR TMCDQ SGD system of check and balance with the Middle Office, comprising the Risk Control Unit and the Back Office, being separated from the Front Office. Ç 3GD !@MJ OTSR HM VQHSHMF @KK SGD DRS@AKHRGDC 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. Ç 3GD CDSDQLHM@SHNM NE RHYD @MC OQNONQSHNM NE 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. Ç 3GD @ENQDLDMSHNMDC QHRJ L@M@FDLDMS RXRSDLR are developed based on prudent principles, and will be reviewed regularly to suit prevailing situations. The systems are designed to be transparent, examinable, and to take into consideration the interests of shareholders, customers and employees of the Bank.
Key Risk Categories
Under its credit risk management policies and guidelines, the Bank has successfully established a credit culture. To start with, the credit risk of the borrowers, counterparties or issuers of debt instruments will be independently assessed by the model developed specifically to each type of borrowers or counterparties by the Credit 1HRJ ,@M@FDLDMS 4MHS S SGHR ITMBSTQD @TSGNQHYDC "QDCHS 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 QHRJ BNMSQNK TMHS O@QS EQNL SGD @ENQDLDMSHNMDC TMHSR SGDQD HR @KRN @M (MSDQM@K TCHS #HUHRHNM SN UDQHEX SG@S SGD BQDCHS SQ@MR@BSHNMR @QD HM BNLOKH@MBD VHSG SGD !.3ÄR FTHCDKHMDR To ensure optimal returns under acceptable risk, SGD !@MJ G@R DLOKNXDC LD@RTQHMF SNNK B@KKDC 1 1." 1HRJ CITRSDC 1DSTQM NM "@OHS@K SN QDEKDBS SGD @OOQNOQH@SD level of capital. Moreover, the Bank also performed stress tests to estimate any damage that may occur during the crisis. 4MCDQ SGHR BNMCHSHNM SGD ANQQNVDQÄR @AHKHSX SN QDO@X BNTKC 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 SGD CDASNQRÄ ATRHMDRR ADKNMFDC SN
1. Credit Risk
Important credit risk factors
Credit risk arises from a situation in which the debtors or counterparties fail to repay or fulfill their agreed obligations. This might be contributed by the fact that the CDASNQÄR EHM@MBH@K ONRHSHNM HR TMCDQ CHRSQDRR CTD SN UNK@SHKHSHDR of economic conditions that pose adverse impact on ATRHMDRRDR NQ SGD CDASNQRÄ LHRL@M@FDLDMS VGHBG @R @ QDRTKS L@X @CUDQRDKX @EEDBS SGD !@MJ @MC SGD RTARHCH@QHDRÄ D@QMHMFR and capital. The credit risk may arise from ordinary financial transactions such as credit lending, financial obligations in the form of avals or guarantees, other transactions related to credit lending, as well as investment in debt instruments issued by state agencies or state enterprises with neither guarantee from government nor the BOT and private debt instruments such as debentures.
1.1 Credit concentration risk
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ANNUAL REPORT 2016
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 2016 and 31 December 2015 classified by business types was as follows: Business type
2016 Debt balance Percent (THB Million)
2015 Debt balance Percent (THB Million)
FQHBTKSTQ@K @MC LHMHMF Manufacturing and commerce Real estate and construction Public utilities and services Private consumption Housing loans Margin loans for securities business Hire purchase Others Others
78,054 47,686 59,990
11.30 6.90 8.68
78,608 49,677 65,550
11.02 6.96 9.19
97,689 3,536 345,294 28,590 15,998
14.14 0.51 49.98 4.14 2.31
89,005 3,458 364,929 26,631 20,615
12.48 0.48 51.15 3.73 2.89
Total loans
690,907
100.00
713,466
100.00
The overall credit data showed that the portion of hire purchase lending granted by the Bank and its subsidiaries decreased from 51.15 percent as of 31 December 2015 to 49.98 percent of total loan outstanding as of 31 December 2016. 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 its subsidiaries. S SGHR ITMBSTQD SGD !@MJ G@R OTS HSR DEENQSR HMSN BNMSQNKKHMF BQDCHS PT@KHSX SGQNTFG @OOQNOQH@SD ONKHBHDR @MC OQNBDCTQDR SN regularly monitor the quality of the loans. The NPLs ratios of the Bank and its subsidiaries that were financial institution
R NE #DBDLADQ @MC #DBDLADQ VDQD @R ENKKNVR Loan classification
Substandard Doubtful Doubtful of loss Total
2016 Debt balance Percent (THB Million)
2015 Debt balance Percent (THB Million)
4,252 3,362 7,277
28.55 22.58 48.87
4,038 3,332 12,788
20.03 16.53 63.44
14,891
100.00
20,158
100.00
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The non-performing loans of the Bank and its subsidiaries decreased from THB 20,158 million as of 31 December SN 3'! LHKKHNM @R NE #DBDLADQ R ENQ SGD NUDQUHDV SGD MNM ODQENQLHMF KN@MR @BBNTMSDC ENQ ODQBDMS of total loan outstanding, decreased from 2.83 percent as of 31 December 2015. The Non-Performing Loans of the Bank and its subsidiaries that are financial institution (excluding accrued interest receivables) Business type
FQHBTKSTQ@K @MC LHMHMF 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
2016 Debt balance Percent (THB Million)
2015 Debt balance Percent (THB Million)
3,164 2,169 1,263
21.25 14.57 8.48
5,614 1,352 1,322
27.85 6.71 6.56
2,204 4,588 1,128 24
14.80 0.00 30.81 7.58 0.15
2,075 7,907 1,279 205
10.29 0.00 39.23 6.34 1.02
14,891
100.00
20,158
100.00
Troubled Debt Restructuring
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)
(Unit: THB Million)
2016
2015
13,857 14,354 5,773 2
21,321 16,519 7,924 4
691,527
714,124
2.08
2.31
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 2016, accounted for the amount of principal and the accrued interest receivables totaling THB 14,354 million or 2.08 percent of total loan outstanding and accrued interest receivables. The total value of the restructured debt based on net collaterals would amount to THB 5,773 million, approximately.
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ANNUAL REPORT 2016
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 securities, non-listed 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 belonged to the Bank and its subsidiaries. In case the debtor was unable to service the debt, the Bank and its subsidiaries could immediately repossess and sell the collateral asset in used car market. Consequently, the Bank and its subsidiaries were exposed to the risk from unsuccessful cars repossession as well as from the sale that did not cover the incurred loss. The risk factors involved, 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 44 percent and the Bank’s provision was set at a higher portion than LGD, 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 2016, the Bank and its subsidiaries’ obligations in the form of avals and guarantees for loans amounted to THB 28,955 million or 3.05 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 and Loss 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. For prompt risk management, the Bank assigns the Investment Portfolio Committee to control and monitor of this particular risk aspect. In order to ensure the efficiency and accuracy of its tools for risk measurement, the Bank requires that the tools are subject to back-testing in accordance with the Bank of International Settlement (BIS) standards. Moreover, the Bank has conducted stress testing by formulating stress scenarios which can create extraordinary reduction in stock prices. The test result could therefore shed light on the impact on the Bank’s earnings and required capital should such events occur. THANACHART BANK PUBLIC COMPANY LIMITED
063
R NE #DBDLADQ SGD !@MJ @MC HSR RTARHCH@QHDRÄ SQ@CHMF HMUDRSLDMSR @MC @U@HK@AKD ENQ R@KD RDBTQHSHDR classified by type of investment were as follows: Fair Value (THB Million) 2016
2015
Trading investments Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
7,171 0 0 1,597
3,065 0 0 105
Total trading investments
8,768
3,170
Available-for-sale investments Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
124,678 22,175 11,434 3,991
117,669 25,181 10,068 3,039
Total available-for-sale investments
162,278
155,957
Total trading and available-for-sale investments
171,046
159,127
3GD !@MJÄR U@KTD NE SQ@CHMF @MC @U@HK@AKD ENQ R@KD HMUDRSLDMSR HMBQD@RDC EQNL SGD OQDUHNTR XD@Q L@HMKX ADB@TRD NE @CCHSHNM@K HMUDRSLDMS HM FNUDQMLDMS @MC RS@SD DMSDQOQHRD RDBTQHSHDR R @ QDRTKS SGD NUDQ@KK /QHBD 1HRJ NE SGD !@MJ @MC HSR 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, liabilities 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 HMSDQU@KR 3N DMRTQD L@WHLTL ADMDEHSR NE SGD !@MJ @MC SGD !@MJÄR RG@QDGNKCDQR SGD !@MJ G@R CDUDKNODC SGD 1DOQHBHMF &@O M@KXRHR ,NCDK @R @ SNNK ENQ LD@RTQHMF HMSDQDRS Q@SD QHRJ AX @RRDRRHMF SGD HLO@BS SG@S L@X @QHRD EQNL SGD LHRL@SBG NE SGD 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 @R VDKK @R HMSDQDRS Q@SD QDOQHBHMF VGHBG @QD DWODBSDC SN S@JD O@BD HM D@BG ODQHNC NE SGD !@MJ ATRHMDRR OK@M 3GD RRDS @MC +H@AHKHSX ,@M@FDLDMS "NLLHSSDD +". HR QDRONMRHAKD ENQ LNMHSNQHMF @MC BNMSQNKKHMF RTBG QHRJ UDQX BKNRDKX 3N DEEDBSHUDKX design appropriate measures to accommodate the risks, the committee has to monitor economic conditions, development in SGD LNMDX L@QJDS @MC B@OHS@K L@QJDS @MC SGD HMSDQDRS Q@SD SQDMC VGHBG BNTKC ADBNLD HLONQS@MS QHRJ E@BSNQR SN SGD !@MJÄR rate-sensitive items.
064
ANNUAL REPORT 2016
Details of financial assets and liabilities as of 31 December 2016, 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 assets Investments Loans Receivables from purchase and sale of securities Receivables from clearing house Total financial assets Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Debt issued and Borrowings Payables from purchase and sale of securities Payables to clearing house Total financial liabilities
Interest rate adjusted in accordance with market interest rate
At call
3-12 months
496 500 28,043 127,656 6,735 28,345 242,898 144,948
734 219,956
2,950
41,092 3,312 51,671
-
-
-
220,690
2,950
96,075
307,104 13,902 4
92 449 933
-
-
321,010
Over 5 years No interest
0-3 months
-
1-5 years
-
-
56,884 371,054 151,683
98,927 232,934 28,872 17,046 50 9,671
31,190 2,779 6,235
1,483 32,516
-
-
-
1,474 127,849 259,651
40,204
33,999
-
Total
12,077 12,077 4,781 47,603 3,564 3,564 9,627 175,373 139 690,907 1,126 1,332
1,126 1,332
32,646 931,982 6,310 676,557 1,303 65,834 1,986 1,986 4,912 4,912 - 49,409 2,366 2
2,366 2
16,879 801,066
With reference to the financial structure of assets and liabilities, should the market interest rate increase, SGD !@MJÄR MDS HMSDQDRS HMBNLD NE SGD MDWS XD@Q VNTKC CDBQD@RD 3GHR V@R L@HMKX ADB@TRD SGD !@MJÄR GHQD OTQBG@RD ATRHMDRR 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). 3GD +". HR QDRONMRHAKD ENQ LNMHSNQHMF @MC BNMSQNKKHMF SGHR SXOD NE QHRJ SGQNTFG SGD BNMRHCDQ@SHNM HM SGD OQNODQ L@SBGHMF ADSVDDM SGD RSQTBSTQD @MC SGD L@STQHSX NE @RRDSR @MC KH@AHKHSHDR HM ENQDHFM BTQQDMBHDR 3GD !@MJÄR ONKHBX HR SN @KRN 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
065
R NE #DBDLADQ SGD !@MJ @MC HSR RTARHCH@QHDR G@C @RRDSR @MC KH@AHKHSHDR HM ENQDHFM BTQQDMBHDR NE 3'! LHKKHNM @MC 3'! LHKKHNM QDRODBSHUDKX DPT@KDC SN MDS @RRDSR NE 3'! LHKKHNM MC @R LNRS NE SGD @RRDSR HM 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 610 million or 0.06 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 NSGDQ SXODR NE SGD !@MJĂ„R KH@AHKHSHDR NQ HMBQD@RD SGD !@MJĂ„R @RRDSR AX TRHMF SGD +HPTHCHSX &@O M@KXRHR 5@QHNTR KHPTHCHSX Q@SHNR and “What ifâ€? 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 ifâ€? 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 @RRHFMDC +". BNMSQNKKHMF @MC L@M@FHMF SGD KHPTHCHSX QHRJ VHSG SVN VDDJKX LDDSHMF SN LNMHSNQ @MC L@M@FD QHRJ 3GD RSQTBSTQD NE SGD !@MJĂ„R @MC HSR RTARHCH@QHDRĂ„ B@OHS@K ETMC BNTKC AD BK@RRHEHDC AX CHEEDQDMS SXODR @MC L@STQHSHDR NE sources of funds as follows: Capital Funds Classified by Sources (Unit: THB Million)
2016
Percent
2015
Percent
Deposits Interbank and money market items Debt issued and Borrowings
676,557 65,834 49,409
85.45 8.31 6.24
669,504 85,688 71,641
80.97 10.36 8.67
Total
791,800
100.00
826,833
100.00
Capital Fund Classified by Maturities
(Unit: THB Million)
2016
Percent
2015
Percent
Less than 1 year More than 1 year
716,431 75,369
90.48 9.52
769,969 56,864
93.12 6.88
Total
791,800
100.00
826,833
100.00
R NE #DBDLADQ CDONRHSR @MC ANQQNVHMFR NE SGD !@MJ @MC HSR RTARHCH@QHDR @LNTMSDC SN 3'! LHKKHNM 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 issued other products such as NCD and debentures as saving alternatives for customers.
066
ANNUAL REPORT 2016
The financial assets and liabilities of the Bank and its subsidiaries as of 31 December 2016 classified by maturity date were as follows:
(Unit: THB Million)
Items
The maturity date of financial instruments Less than More than Not specified At call 1 year 1 year
Total
Financial assets Cash Interbank and money market items Derivatives assets Investments Loans Receivables from purchase and sale of securities Receivables from clearing house
12,077 5,516 261 38,343 -
41,587 1,009 31,355 204,421 1,126 1,332
500 2,555 134,416 448,143 -
9,341 -
12,077 47,603 3,564 175,373 690,907 1,126 1,332
Total financial assets
56,197
280,830
585,614
9,341
931,982
Financial liabilities Deposits Interbank and money market items Liabilities payable on demand Derivative liabilities Debt issued and Borrowings Payables from purchase and sale of securities Payables to clearing house
308,515 15,654 1,986 937 -
335,686 45,918 1,609 9,721 2,366 2
32,356 4,262 3,303 38,751 -
-
676,557 65,834 1,986 4,912 49,409 2,366 2
Total financial liabilities
327,092
395,302
78,672
-
801,066
Off-balance sheet items U@KR SN AHKKR Obligation under unmatured import bills Letter of credits Other commitments
40 457 41,129
597 2,210 36,031
2,355
-
637 2,667 79,515
Total off-balance sheets
41,630
39,434
2,384
-
83,448
THANACHART BANK PUBLIC COMPANY LIMITED
067
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. R SGD HMSDQM@K BNMSQNK RXRSDL HR @M HLONQS@MS SNNK HM BNMSQNKKHMF and preventing potential risk that may occur, the Bank has implemented an efficient internal control system as follows: Ç 1DF@QCHMF SGD NQF@MHY@SHNM NE SGD !@MJÄR RSQTBSTQD 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. Ç $RS@AKHRG SGD SQ@MR@BSHNM RTOONQSHMF TMHSR VGHBG @QD 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. Ç /TS NODQ@SHNM@K OQNBDCTQDR @MC QDFTK@SHNMR QDK@SDC 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 Ç $RS@AKHRG SGD TCHS "NLLHSSDD @MC SGD 1HRJ 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 RNTMCMDRR @MC DEEHBHDMBX HM SGD !@MJÄR NODQ@SHNM Ç (LOQNUD SGD L@M@FDLDMS NE SGD HMENQL@SHNM technology system and information security system in order to enhance its potential to accommodate business expansion and gain credibility from the customers in the 068
ANNUAL REPORT 2016
@RODBS NE C@S@ @MC SDBGMNKNFX O@QSHBTK@Q ENBTR HR FHUDM to the prevention of damages from unauthorized access to SGD !@MJÄR HMENQL@SHNM Ç %NQLTK@SD SGD !TRHMDRR "NMSHMTHSX /K@M VGHBG 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 NQ L@X G@OODM R ODQ !.3ÄR RODBHEHB@SHNM ENQ BNLLDQBH@K 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 OOQN@BG SN B@KBTK@SD NODQ@SHNM@K QHRJR 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 NE SGD !@MJĂ„R ATRHMDRR FN@KR 3GD $WDBTSHUD "NLLHSSDD is responsible for regular monitoring and evaluating the performance of the work units upon the established targets stated in the annual operation plan.
6. Regulatory Risk The regulatory risk arises from non-compliance of laws, regulations, requirements, standards, and practice FTHCDKHMDR QDFTK@SDC SGD !@MJĂ„R SQ@MR@BSHNMR VGHBG BNTKC cause serious financial loss, reputational damage, or state of ADHMF HMSDQUDMDC MX @LDMCLDMS NQ BG@MFD HM QDFTK@SHNMR laws, or requirements made by the authorities such as the Bank of Thailand, the Securities and Exchange Commission, the Stock Exchange of Thailand, the Office of Insurance "NLLHRRHNM SGD MSH ,NMDX +@TMCDQHMF .EEHBD @MC NSGDQR may affect the business strategies and operations of the Bank and its subsidiaries. The Bank established the team of Compliance, QDONQSHMF CHQDBSKX SN ANSG SGD TCHS "NLLHSSDD @MC SGD "$. 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 !@RDC OOQN@BG 1! V@R DLOKNXDC SN CDSDQLHMD HLO@BS and probability of incident and used as a guideline for the Control and Monitor process to ensure compliance. The "NLOKH@MBDĂ„R CTSHDR @KRN HMBKTCD ENKKNVHMF TO VHSG SGD ENTMC issues and propose recommendations on corrective actions.
7. Risk from Capital Adequacy 3GD !@MJÄR B@OHS@K @CDPT@BX V@R B@KBTK@SDC A@RHMF on the supervisory guideline of Basel III, as follows: Ç "QDCHS QHRJ AX LD@MR NE SGD 2S@MC@QCHYDC OOQN@BG Ç ,@QJDS QHRJ SN DWOKNQD RS@STR NE L@QJDS QHRJ AX LD@MR NE SGD 2S@MC@QCHYDC OOQN@BG Ç .ODQ@SHNM@K QHRJ AX LD@MR NE SGD !@RHB (MCHB@SNQ OOQN@BG 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 ATRHMDRRÄ FQNVSG @R OK@MMDC R NE #DBDLADQ SGD !@MJÄR B@OHS@K SNS@KDC THB 130,673 million, of which THB 90,561 million was common equity Tier I capital and Tier I capital while Tier II capital was THB 40,112 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 19.15 percent, 13.27 percent, and 13.27 percent, QDRODBSHUDKX GHFGDQ SG@M SGD !.3ÄR LHMHLTL QDPTHQDLDMSR @S 5.125 percent, 6.625 percent, and 9.125 percent, respectively.
THANACHART BANK PUBLIC COMPANY LIMITED
069
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. 2. 3. 4. 5.
Anti-fraud and corruptions Fair labor practices Righteous operations Responsibility towards consumers 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 had not yet included the stakeholder engagement in the implementation of its CSR activities in order to establish linkages with all stakeholder groups, it clearly recognized the importance of such engagement. Therefore, it endeavored to develop the stakeholder engagement in due course, to ensure coherence between its CSR activities and all stakeholders’ needs. In 2016, Thanachart Group initiated more projects that demonstrated its consideration of all stakeholder groups continuously as follows:
1. “Rethink” Campaign Thanachart Group initiated the Rethink Campaign in 2015 as it recognized the importance of enhancing the financial knowledge and developing financial discipline as a key foundation for living. The Rethink Campaign began with the main objective of promoting awareness among the general public to change their spending habits, in order to manage the spending to be in line with the income, and to develop financial self-discipline, which would lead to stable and sustainable happy lives. The campaign’s slogan of “Rethink, Spend Wisely, Be Happy”, was adopted from the late His Majesty King Bhumibhol Adulyadej’s “Self Sufficient Economy” philosophy. The project implementation in 2016 was distributed and promoted through series of daily financial knowledge via various television programs. In addition, the campaign was publicized through story-telling financial videos of famous celebrities in different age groups, with varied financial management perspectives, in order to respond to the digital society and current data-recognition behavior of customers. Moreover, the financial-management knowledge, awareness-raising and financial-disciplinary information, and financial advice were dispersed via social media channels such as the Bank’s Facebook pages, Instagram, Line, and on www.thanachartcsr.com.
2. Thanachart Insurance “Yes - We Safe” Project With recognition on the issue of road traffic accidents, and the concerns on safety and assets of road travelers, Thanachart Insurance Public company Limited initiated a project called “Yes, We Safe”, with the objectives of reducing road traffic accidents and preventing potential loss to human lives and assets. The project had 2 parts: (1) Prevention: Focused on the promotion and creation of road safety, and (2) Assistance: Focused on providing support and material assistance to those affected by traffic accidents. The implemented activities in 2016 were as follows: 070
ANNUAL REPORT 2016
Prevention: “Drive DD United Season 2” conducted a video contest under the theme “It’s Cool to be Calm”, with the objective of promoting a conscious-minded driving in order to reduce road traffic accidents causing by recklessness, unconscious mindset, carelessness, and provoked minds, leading to potential accidents and physical assaults. University students nationwide were invited to display their knowledge, skills, and capacity by creating a campaign video that promoted safe driving and awareness-raising on the consequences of careless driving. The contest also provided opportunities for contestants to express opinions and to share ideas with their peers and the general public of the same age group. Teams of students from 30 different universities submitted a total of 118 videos to the contest. More than 20 percent of the teams were students from upcountry. Assistance: Provided scholarships to students of Sirindhorn School of Prosthetics and Orthotics, Faculty of Medicine, Mahidol University, continuously since 2012. There were 4 scholarships of THB 25,000 each, total THB 100,000. Sirindhorn School of Prosthetics and Orthotics was a Bachelor-degree academic institution that produced prospective prosthetists and orthotists, in order to rehabilitate patients, and to make prosthetics and orthotics that were the same quality as international standards.
3. “Thanachart Reduces Global Warming” Campaign Thanachart Group implemented the “Thanachart Reduces Global Warming” campaign continuously since 2012, as a good member of the society, and to reduce business footprints on the environment that could affect
every group of stakeholders. The campaign focused on taking the Energy Conservation Policy to actual implementation, promoting the resource utilization in the most efficient manner, raising awareness, encouraging participation of staffs and business units. A committee was established to consider and develop various policies and measures related to efficient energy management through a monthly meeting. In order to promote efficient energy usage as well as to enhance employees’ knowledge and participation, the Bank additionally implemented the following activities in 2016: 1. Organizing study trips on energy conservation at prototype buildings, which were Richmond Stylish Convention Hotel, Tan Land Learning Center, and Phyathai 2 Hospital. 2. Organizing the Electricity Bill Contest and Energy Conservation Ambassador Contest for executives and staffs to participate. 3. Organizing training courses to promote understanding and knowledge on energy conservation for executives and staffs at 5 Bank office buildings. In 2016, the Bank’s Petchburi Building entered the 2016 Thailand Energy Awards and won Creative Energy Conservation Prize for retrofitted building. 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.
41
3
2
1 - 2 “Rethink” Campaign 3 “Thanachart Insurance - Yes, We Safe” Project 4 Thanachart... “Power of ants... Reducing Global Warming”
4
THANACHART BANK PUBLIC COMPANY LIMITED
071
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 2016 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 employees’ 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 through various channels.
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ANNUAL REPORT 2016
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 2016, Thanachart Group’s implementations on the Code of Conduct were as follows: 1) The code-of-conduct training course for new employees at all levels, including the monthly signing-for-acknowledgement on code of conduct, as well as the development of knowledge and mindset enhancement curriculum. 2) Development and distribution of CG E-learning on Intranet to enable self-learning for the staff. 3) Additional complaint handling guidelines and copyright procedures for the Bank’s website. 4) 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. 5) Semiannual group-wide evaluation of every employee at all levels to develop, test, and assess knowledge and understanding of good corporate governance and code of conduct. 6) Lecturing programs for business partners and business representatives to acknowledge good corporate governance, business ethics, and employees’ ethics of Thanachart Group.
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 concerned organization, including public, private, and non-profitable sectors
- 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.
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 2016, activities held for the society and the environment as the engagement in various aspects of social development are as follows:
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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 be a significant foundation for a strong nation. 4. Environmental management: to express the dedication to reduce indirect environmental impacts, which could result from the Thanachart 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. In addition, Thanachart Foundation for the Thai Society was founded as a key drive of Thanachart Group’s CSR activities. Most of the foundation’s activities focused on building and developing the society in parallel. The foundation’s main objective was to create a model for community and social development in various forms, so that community members were capable of developing, improving, and changing independently. They would also be equipped with
knowledge, ideas, and practical skills. Moreover, community members would be confident and able to make decisions on their own, with the right attitudes, appropriate values for the lifestyle, and betterment of their own living situations. This was in line with the late His Majesty King Bhumibhol Adulyadej’s philosophy of Sufficiency Economy, which included creating a network of cooperation for social assistance in many situations. Furthermore, the Bank also maintained and operated the Garuda Museum, in order to preserve Thai arts and culture for the general public and the next generations.
1. Campaign and promotion of Thai culture and religion Presentation of Royal Krathin Robes in 2016 Presentation of Royal Krathin Robes in 2016 marked the 10 Anniversary that His Majesty the King had graciously bestowed the Royal Robes to Thanachart Group to offer to the Royal Temples nationwide. This year, Thanachart Group offered the Royal Robes to the monks during the Buddhist Lent at the Royal Temple’s Wat Payap in Nakhon Ratchasima province. On this occasion, companies under Thanachart Group, customers, business partners, executives, employees, and the general public, jointly donated an amount of THB 8,888,999 to the temple in good faith, as part of the fund for the construction of the temple’s main hall. In addition, 20 scholarships were awarded to students in need, who showed good academic records and good behaviors. In addition, funds were granted to support 3 non-profit organizations in the province. th
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Presentation of Royal Krathin Robes in 2016
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Since 2006, Thanachart Bank had been continuously hosting the presentation of the Royal Krathin robes, started at Wat Keaw Kro Wararam Temple in Krabi. Since then, the Bank had been organizing this activity on an annual basis. It promoted the maintenance of Buddhism, the royal temples, and sacred places to remain with the Thai nation.
“Thanachart Initiates and Fulfills Thai Identity” Project In 2016, the implementation of “Thanachart Initiates and Fulfills Thai Identity” project marked the 45th consecutive years since it was inherited from Siam City Bank. The main objective of the project was to maintain and preserve the Thai identity, including reading aloud in Thai and Thai manners in daily life. The project helped preserve the unique identity and prevent their dissolution over time. It also brought balance to social values as Thai culture was being more and more influenced by the foreign cultures. Moreover, the project helped inculcate in Thai youth the love of Thai culture. This love made them cherish the culture and helped keep it as part of Thai society. Both Thai language and Thai manners were widely recognized as unique characteristics of Thai identity. The project comprised two main activities, which were Reading Aloud Contests and Thai Manners Contests. Students from 1st grade to university levels were eligible to participate in the contests, on behalf of their academic institutions, to compete for Her Royal Highness Maha Chakri Sirindhorn honorary plaques, certificates of honor, and scholarships. In 2016, more than 4,000 students from every region entered the contests. This was also the 2nd year of
the Thai Manner Contests for youths with hearing impairment to compete for Her Royal Highness Maha Chakri Sirindhorn honorary plaques, certificates of honor, and scholarships. 104 students from 12 schools participated, in order to promote and support children with hearing disability to be included in social activities, to boost their ability to live equally with others, to demonstrate determination and to recognize potential of these children in being a part conserving the Thai identity.
Garuda Museum by Thanachart Bank “The Garuda Museum by Thanachart Bank” was considered the first and only Garuda Museum in ASEAN. Its establishment was traced back to 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 Thai people 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 Bangpu sub-district, Samut Prakan province. 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
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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 was set to display the Garuda Emblems respectfully relocated from the branches of Siam City Bank to reflect the relationship between Garuda and the Nation, the Religion, and the Monarchy, as well as to pay tribute to the late His Majesty King Bhumibol Adulyadej. In addition, the museum served as a resourceful place for children, youth, and interested members of the general public to learn about Thai history.
“Continuation and Conservation of Local Traditions” activities It was recognized that the values of Thai identity, customs, and traditions in regions nationwide reflected the inherited lifestyles, wisdoms, and cultural prosperity, representing an identity unmatched by any other countries, and therefore were worth preserving. As a result, the “Continuation and Conservation of Local Traditions” activities were originated. The Bank’s nationwide branch network was 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 local public and private organizations. Regional tourism was also promoted and publicized. In 2016, the Continuation and Conservation of Local Traditions activities were as follows: 1. Chinese New Year in China Town 2. 100th Years Anniversary of Traditional Inheritance, Nakhon Sawan province
3. 41st Years Death Anniversary in Remembrance of Reverend Grand Father Tim Issariko of Laharn Rai Temple, Rayong province 4. Songkran Festival, Prapadaeng, Samut Prakan 5. 2016 Buddhist lent candle procession, Ubon Ratchathani 6. Lotus Reception Tradition (14th day of the 11th month), Samut Prakan 7. The end of Buddhist Lent, Wat Praputthachai Temple, Saraburi 8. Vegetarian Festival, Phuket 9. Lantern Festival, Chiang Mai
2. Promotion and support of charitable programs “Annual Red Cross Fair” The Bank participated in issuing Red Cross lottery tickets and setting up a booth at the Annual Red Cross Fair every year. Started 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”. In 2002, when 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 Red Cross Booth”. Currently, the Bank was still the only commercial bank invited to set up a booth at the Annual Red Cross Fair at Amporn Garden Palace (Suan Amporn).
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10 The Garuda Museum by TBANK 11 - 12 Annual Red Cross Fair 12
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In 2016, the Bank set up its booth at the Annual Red Cross Fair held at Suan Amporn during 31st March to 7th April 2016. The booth was set under the concept of “Let’s Play - Let’s Learn”, equipped with playground play sets as a creative space for children to play and learn. After the fair, pieces of playground equipment such as slides, ball pool for kids, swings, and teeter-totters, were donated to schools in need, in order to promote learning development of children. Wat Ruechai School and Wat Mab Po School in Ayutthaya province were recipients of the donation. Net proceedings from the sale of 2016 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 6,300,000 for the maintenance of the Thai Red Cross Society.
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 publicize 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 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
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13 - 14 Blood Donation in Unity for the King and the Queen
3. Promotion and Development of Education
Supporting for Chakri Narubodin Medical Institution project, Ramathibodi Foundation
“Reuse” project
Realizing the importance of contributing to the healthcare system development and providing access to public health services and disease prevention for the general public, Thanachart Capital Plc., Thanachart Bank Plc., Thanachart Fund Management Co., Ltd., and Thanachart Insurance Plc., jointly donated THB 1,500,000 to support the Chakri Narubodin Medical Institution project of Ramathibodi Foundation. The project was to serve as a medical school and a 400-bed hospital for integrated medical services for all patients. The project aimed to promote health and rehabilitation, disease prevention, and to provide standardized public health services. It would also serve as a Medical Learning Center aiming at creating a learning network and academic services to promote public health in the eastern region of Thailand.
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 2016, 5,378 items of desks, cabinets, chairs and computers were given to 136 government organizations, associations, foundations and schools nationwide.
4. Environmental management “Thanachart Reduces Global Warming” Explanation is given in “Thanachart Group’s Corporate Social Responsibility Activities”.
“Blood Donation in Unity for the King and the Queen”
Thanachart Group’s CSR activities were not only limited to the 4 areas of (1) promotion of Thai culture and religions, (2) promotion and support of charitable work, (3) promotion and development of education, and (4) environment management as mentioned above, but the group also conducted mourning activities in remembrance of the late His Majesty King Bhumibol Adulyadej as follows:
This activity had been held for 12 consecutive years by the Northeastern Hub 2 (Khon Kaen). The main objective was to urge residents and employees in Khon Kaen, Roi Et, Kalasin, and Maha Sarakham to do good deeds for His Majesty King Bhumibol Adulyadej and Queen Sirikit through blood donation to help emergency patients and to reduce blood shortage in hospitals. The Faculty of Medicine, Khon Kaen University, had always provided cooperation and facilitation of the blood donation. In addition, a financial checkup was provided for participants. In 2016, there were 823 participants donated a total of 359,000 cc of blood to the Thai Red Cross Society.
1. The mourning activity in remembrance of the late His Majesty King Bhumibol Adulyadej was conducted on 20 October 2016 at Thanachart Bank, Suan Mali Building. A memorial speech was conducted in mourning of
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15 - 16 Mourning and Paying Tribute to the Memory of His Majesty King Bhumibol Adulyadej’s Boundless Generosity
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the late His Majesty the King. Participants stood in silence for 99 seconds, sang the Royal Anthem, and transformed into a black ribbon in remembrance of the late His Majesty the King. 2. Volunteering for the making of black ribbons distributed the general public who did not own black clothing, or had to wear uniforms for work, in mourning of the late His Majesty King Bhumibol Adulyadej. More than 3,000 pieces of black ribbons were made for distribution by voluntary Thanachart Group employees. 3. Pathumwan District locals doing good deeds for the Father was conducted on 28 November 2016 in coordination with Pathumwan District Office, Pathumwan Institute of Technology, and Siam Synergy Trade Association. The ceremony of offering rice and dried food was conducted to 999 Buddhist monks starting at Siam Paragon to Tesco Lotus at Charoen Phon Intersection on Rama I Road. 4. The project, Tree Planting for the Father, honoring King Rama IX at San Pa Tong district, Chiang Mai Province, under cooperation of the Bank, the local government body, and the locals. The project activities included landscaping the community environment by planting trees to increase the green space. 25 kilometers of Mahogany trees were planted along the entire road. This project would be implemented continuously in order to collectively lift the locals’ quality of lives. In addition, this project demonstrated the private sector’s determined awareness and sustainable responsibilities toward the society, economy, and environment.
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17 - 18 Pathumwan People Do Good Deeds for Father 19 Tree Planting - Retracing Our Father’s Footsteps - in Honor of King Rama IX
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Disclosure of Prevention of Corruption Involvement 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. During 2014-2015, 12 companies under Thanachart Group became certified members of the Private Sector Collective Action Coalition against Corruption (CAC). As part of the Coalition, the CAC provided the Group with a gold CAC logo with the “the Gold CAC Logo Usage Guidelines for Thanachart Group” to comply with CAC’s regulation, including the usage of CAC logo on the intranet, the Bank’s website, and the Group’s website. In 2016, Thanachart Group’s implementations related to fraud and corruption prevention are as follows: 1. 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.
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2. Every executive and employee was strictly obligated to provide a written compliance to the Anti-Corruption Policy, measures, and related regulations via e-Learning. 3. Every executive and employee must conduct the bi-annual self evaluation via e-Learning, in order to develop, test, and measure the level of knowledge and understanding of the Anti-Corruption Policy, measures, and related regulations. 4. Training courses on the Anti-Corruption Policy, measures, and related regulations to new employees at all levels were conducted with a written form indicating their acknowledgement and compliance. In addition, the “Corruption Free / Transparent Movement” training courses were conducted to current staffs to raise awareness, acknowledgement, and understanding on the topics, which included the “Awareness Raising - Build Consciousness – Doing Good Deeds” activities. 5. Continuous communication to employees for acknowledgement and staff development via Thanachart Channel. For example, TV media, print media, and Thanachart Group’s online media. The communication format would have to be easy to access, such as Video Tape Recorder (VTR) and short films. There was coordination with the Office of the National Anti-Corruption Commission (ONACC), the Anti-Money Laundering Office (AMLO), and the Anti-Corruption Organization of Thailand (ACT), on the anti-corruption and anti-money laundering cognitive media. In addition, there were TV programs - “Dhamma Sawasdee” and “Governance Guru”. This year, Thanachart was honored to be invited by ACT’s Chairperson, to be interviewed under the theme “How to Develop Corporate Governance in the Organization?” 6. The development of easy-to-understand anti-corruption e-Learning that was distributed on the intranet for staffs’ self-learning. 7. The development of complaint channels via telephone, website, and other channels. The complaint handling process must be well-defined, transparent, and fair. Moreover, the Bank disclosed the “Guidelines on Complaint Handling” on its website. 8. The lecture on “Thanachart Anti-Corruption Advocate” to business partners and business representatives to be informed about the Anti-Corruption Policy of Thanachart Group, to be aware of and to understand the benefits of being a certified member of CAC, as well as the verification process as a CAC member. For those interested in joining the project, Thanachart Group would provide consultation and facilitators free of charge. 9. Thanachart Group sent 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. Trade partners and business agents provided their signatures of acknowledgement and commitment to comply back with the Thanachart Group. Cooperation from customers were asked on printed material, e.g. invoices, receipts, payments, tax invoices, and on the Bank’s website; www.thanachartbank.co.th. 10. To evaluate compliance with the anti-corruption policy and measures, the Audit Committee will review and ensure sufficient internal control in the Group, and ensure that the operations are in line with the anti-corruption policy by including it in the annual plan. 11. 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. Various organizations continued to request Thanachart Group to provide consultation and facilitators free of charge. 12. Conducting “Raising Awareness – Enhancing Consciousness – Doing Good Deeds” year-round activities for external academic institutions, at school levels and university levels. 13. Conducting trainings and external study trips for employees on “Membership Certification of the Private Sector Collective Action Coalition against Corruption by the Private Sector Collective Action Coalition against Corruption Council”, that the membership would be expired in 2017. The objective was to provide employees with knowledge and understanding on the government’s Compliance Department, especially on risk assessment and internal measures on government officials’ bribery prevention. As Thanachart Group was aware of the importance and benefits of the anti-corruption program to the business operations, it required additional two companies to provide written compliances to join the program, and to have the membership certification within 2017. 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 was announced on www.thanachartbank.co.th. Thanachart Group was determined to develop concrete anti-corruption measures to be a part of the organizational culture, especially the staff development to publicize to the general public that Thanachart Group was “Virtuous, Transparent, Anti-Corruption Organization” THANACHART BANK PUBLIC COMPANY LIMITED
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Corporate Governance Policy The Board of Directors had put in place written Corporate Governance Policy (“the Policy”) since 2003, with an annual review to conform with the principle of corporate governance assessment issued by the Thai Institute of Directors Association (IOD: CGR), and the principle of good corporate governance for listed companies issued by the Stock Exchange of Thailand (“SET”). The Bank also established the reporting process on business compliance with corporate governance principles of the Bank, and improved the business ethics as well as codes of conduct for directors, executives, and staffs, in order to establish a framework for all personnel of the Bank. The Bank had disclosed 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 was intended to be the communication channel with staffs of the Group at every level and every stakeholder about corporate governance established and practice by the Board of Directors. In 2016, the developments in the area of corporate governance include: Ç 1DUHRHNM NE SGD "NQONQ@SD &NUDQM@MBD /NKHBX SN AD BNMRHRSDMS VHSG SGD OQHMBHOKD NE BNQONQ@SD FNUDQM@MBD assessment issued by the Thai Institute of Directors Association (IOD: CGR) for listed companies; Ç 1DPTHQDLDMS ENQ BNLO@MHDR TMCDQ 3G@M@BG@QS &QNTO SN QDUHRD SGD /NKHBX HM @KHFMLDMS VHSG SGD !@MJ Ç 3Q@HMHMF NM SGD "NQONQ@SD &NUDQM@MBD /NKHBX @MC BNCDR NE BNMCTBS ENQ MDVKX QDBQTHSDC DLOKNXDDR NE @KK KDUDKR @MC the training course called “Transparency and Anti-Corruption Driving Force” for current employees of Thanachart Group; Ç 1DPTHQDLDMS ENQ 3G@M@BG@QS &QNTOÄR DWDBTSHUDR @MC RS@EER NE @KK KDUDKR SN RHFM @ VQHSSDM BNLOKH@MBD NM SGD "NQONQ@SD Governance Policy, codes of conduct, and conflict of interest; Ç $U@KT@SHNM NE @KK RS@EER @S 3G@M@BG@QS &QNTO @S @KK KDUDKR HM NQCDQ SN CDUDKNO @RRDRR @MC DU@KT@SD SGDHQ JMNVKDCFD and comprehension of corporate governance practices twice a year; Ç "NMSHMTNTR CDUDKNOLDMS NE "& $ KD@QMHMF NM SGD (MSQ@MDS SN AD BTQQDMS TO SN C@SD @MC TRDQ EQHDMCKX HM NQCDQ SN enable the employees to conduct self learning; Ç /NRSHMF NE &THCDKHMDR ENQ "NLOK@HMSR '@MCKHMF @MC "NOX 1HFGSR @MC 3Q@CDL@QJ &THCDKHMDR NM SGD !@MJÄR VDARHSD Ç "NMCTBSHMF RDLHM@QR NM SGD "NQONQ@SD &NUDQM@MBD /NKHBX @MC BNCDR NE BNMCTBS SN SGD ATRHMDRR QDOQDRDMS@SHUDR of Thanachart Group for acknowledgement and cooperation. In addition, Thanachart Group continuously promoted corporate governance and reinforced corporate social responsibility (CG & CSR projects) through its policies and various activities among Thanachart Group’s employees consistently. The objective was to encourage practical learning in the units pursuant to corporate governance through internal communication channels under the “Thanachart Corporate Governance and Morality Initiation” project, advocating awareness and understanding of the Policy and ethics, in compliance with the foundation of values, morality, and professional ethics. This was communicated through easily accessible format such as short films. Cooperation was made with the Office of the National Anti-Corruption Commission (“ONACC”), the Anti-Money Laundering Office (“AMLO”), and the Anti-Corruption Organization of Thailand (“ACT”), for assistance in the learning aid about anti-corruption and money laundering in Dharma Sawasdee and Governance Guru TV programs. This year, Thanachart was honored to be invited by ACT’s Chairperson, to be interviewed under the theme “How to Develop Corporate Governance in the Organization?” In addition, staffs jointly organized an activity called “Principle and Morality of the Orange”, where staffs and their family members shared viewpoints and ideas on personal and professional lives, principles, voluntary activities for family members, and team-building activities for co-workers. This activity brought pride to staffs and their families and promoted good relationship among members of the Orange Family and Thanachart Group. In addition, 082
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the Thanachart Group also conducted Buddhist meditation events in Bangkok, Bangkok’s perimeters, and upcountry for spiritual management of the employees in their professional lives and daily lives. As for social activities, Thanachart Group provided consultation and facilitators for the “Raising Awareness – Enhancing Consciousness – Doing Good Deeds” activities for external academic institutions, at school levels and university levels year-round. Furthermore, the Bank took part at the judging panel in the “SME Corporate Governance 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). Thanachart Group was determined to develop concrete anti-corruption measures to be a part of the organizational culture, especially the staff development to publicize to the general public that Thanachart Group was a “Virtuous, Transparent, and Anti-Corruption Organization”
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 2016, 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. Rod Michael Reynolds Director 8. Mr. Walter Tas Director 9. Mr. Adil Aziz Chaudhry 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, acting as Secretary to the Board of Directors 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;
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6. Ensure that the Bank has in place the audit process, internal control, risk management, and monitoring and compliance systems that are adequate and fit with the prevailing business environment; 7. The Board of Directors shall provide a system to control work execution, financial reporting, and compliance to the rules, regulations, and policies. The Board of Directors shall provide independent person or institute to audit such monitoring system and must be exhibited in the annual report; 8. The Board of Directors or the Audit Committee shall comment on the sufficiency of the internal control system and risk management in the annual report; 9. Ensure fair treatment to all groups of stakeholders and assume responsibility for financial reporting and information disclosure on an accurate, transparent and timely basis; 10. Prepare a report on responsibilities of the Board of Directors for financial report for publishing, together with report of an auditor, in the Bank’s annual report, covering therein all crucial matters specified in the ‘code of best practices for listed company directors,’ to assure that the Bank’s financial reports are accurate, complete and reliable. The Bank has duly complied with the accounting standards by adopting and adhering consistently to appropriate accounting policies; 11. Appoint members of all Board committees as deemed appropriate; 12. Determine scope of power and duties of the Chief Executive Officer and President; 13. Conduct a performance evaluation, determine compensation and employ 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 2016, the name list of the Executive Committee was as follows:
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1. Mr. Suphadej Poonpipat Chairman 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson 3. Mr. Peter Clifford Bessey Vice Chairman 4. Mr. Somjate Moosirilert Member Mr. Kriangkrai Phurivitvattana 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; 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 considers 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 2016, 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 Ç 3N QDUHDV SGD !@MJÄR EHM@MBH@K QDONQSR @MC the disclosure of information therein, and to evaluate the appropriateness of significant accounting policies; Ç 3N QDUHDV SGD @BBNTMS@AHKHSX NE L@SDQH@K transactions in financial reports, including complex or irregular transactions and transactions requiring an exercise of discretion.
2. Internal Control and Risk Management Ç 3N QDUHDV SGD !@MJÄR HMSDQM@K BNMSQNK HMBKTCHMF 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; Ç 3N DMRTQD SG@S SGD HMSDQM@K @TCHSNQRÄ @MC the auditors’ recommendations on internal control are implemented by the management; Ç 3N QDUHDV SGD RTODQUHRHNM NE SGD ONKHBHDR @MC duties relating to risk management of the Bank, so as to ensure its adequacy. 3. Internal Audit Ç 3N QDUHDV @MC @OOQNUD SGD HMSDQM@K @TCHS BG@QSDQ annual plan as well as necessary personnel and resources for the performance of duties; Ç 3N QDUHDV SGD @TCHS QDONQSR @MC QDBNLLDMC@SHNMR of the auditors, as well as to follow up the results of the implementation of such recommendations; Ç 3N DMRTQD SG@S SGD (MSDQM@K TCHS &QNTO BNLOKHDR with the internal audit standards; Ç 3N DU@KT@SD SGD HMCDODMCDMBD NE SGD (MSDQM@K Audit Group. 4. Compliance with the Rules and Regulations Ç 3N QDUHDV @MC @OOQNUD SGD BG@QSDQ NE SGD Compliance Group, its annual plan as well personnel and resources necessary for the performance of duties; Ç 3N QDUHDV SGD OQNBDRR NE LNMHSNQHMF SGD ATRHMDRR conducts of the Bank to ensure compliance with the related laws, rules, codes of conducts, policy guidelines and regulations; Ç 3N QDUHDV @MX @LDMCLDMSR SN SGD K@VR @MC regulations which affect the Bank’s operations; Ç 3N QDUHDV @MX EHMCHMFR AX SGD "NLOKH@MBD Group and the authorities, as well as to follow up on the implementation of their recommendations. 5. Auditors Ç 3N BNMRHCDQ SGD PT@KHEHB@SHNMR HMCDODMCDMBD 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; Ç 3N GNKC @ LDDSHMF VHSG SGD @TCHSNQR VHSGNTS other management present at least once a year.
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6. Connected Transactions or Transactions which May Lead to Conflicts of Interest Ç 3N QDUHDV BNMMDBSDC SQ@MR@BSHNMR @R VDKK 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 Ç 3N OQDO@QD @MC CHRBKNRD @ QDONQS NE SGD TCHS 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 in the Bank’s annual report; Ç 3N OQNUHCD NOHMHNMR HM @M @MMT@K BNLOKH@MBD report submitted to the BOT; Ç 3N QDUHDV SGD @BBNTMS@AHKHSX NE SGD BG@QSDQ NE 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 Ç 3N DMRTQD SG@S SGD ATRHMDRR BNMCTBSR NE SGD Bank and its subsidiaries are in compliance with the Bank’s policies, by giving the Internal Audit Group the following assignments: 1) To report a summary of the overall performance of the Internal Audit Group which is responsible for auditing the subsidiaries to the Bank’s Audit Committee; 2) To report a summary of the overall performance of the Internal Audit Group, which is responsible for auditing the Bank and its subsidiaries, to the Audit Committee of Thanachart Capital Public Company Limited (“TCAP”) and to further submit this summary report to the Bank’s Board of Directors; 3) For the reporting under 1) and 2), if there are material issues, i.e. conflicts of interest, fraud, corruptions and violation of law, the Internal Audit Group must report them in detail. Ç 3N QDONQS SN SGD !@MJÄR !N@QC NE #HQDBSNQR HM 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, etc. 1) Conflict of interest transactions; 2) Any fraud, corruptions, irregularity or material deficiency in the internal control system;
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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. 4) To conduct a self-evaluation of the entire Audit Committee and submit it to the Board of Directors on an annual basis; 5) 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 2016, the members of the Nomination and Remuneration Committee were as follows: 1. Mr. Narong Chivangkur Chairman (Independent Director) 2. Mr. Sataporn Jinachitra Member (Independent Director) 3. Mr. Rod Michael Reynolds Member (Non-Executive Director) Mr. Thaneit Khantikaroon Secretary Roles and Responsibilities of the Nomination and Remuneration Committee 1. To propose policy relating to nomination and remuneration of directors, Sub-Committee’s directors, Chief Executive Officer and President, and executives to the Bank’s Board of Directors; 2. To propose criteria relating to nomination and remuneration of directors and Sub-Committee’s directors, Chief Executive Officer and President, and executives to the Bank’s Board of Directors;
3. To propose performance appraisal criteria of Chief Executive Officer and President and Executives for annual consideration of remuneration package; 4. To select and examine the candidates with appropriate qualifications for appointment as director, Sub-Committee’s directors, or Chief Executive Officer and President and to propose qualified candidates to the Bank’s Board of Directors or Annual General Meeting of Shareholders (depending on the situation); 5. To consider annual remunerations of director, Sub-Committee’s directors, Chief Executive Officer and President, and executives which are in alignment of the criteria that have been set; 6. To review policy and principles of nomination and remuneration of directors, Chief Executive Officer and President, and executives to be appropriate with job descriptions and the market; 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 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 Succession Committee The Board of Directors established the Succession Committee in order to seek a person eligible and capable of succeeding the existing Chief Executive Officer and President. As of 31 December 2016, the members of the Committee were as follows:
1. Mr. Narong Chivangkur Chairman (Independent Director) 2. Mr. Suphadej Poonpipat Member (Executive Director) 3. Mr. Sataporn Jinachitra Member (Independent Director) 4. Mr. Rod Michael Reynolds Member (Non-Executive Director) Roles and Responsibilities of the Succession Committee 1. To determine steps of nomination; 2. To define conditions and qualifications of recruitment agencies; 3. To consider and select suitable and efficient recruitment agencies; 4. To prescribe qualifications of the Chief Executive Officer and President in accordance with the current business directions, market trends and BOT’s regulations; 5. To determine employment conditions for the Chief Executive Officer and President; 6. To allow disclosure of information to directors associated with items 1 through 5; 7. To select a person to take the position of Chief Executive Officer and President, and to propose for approval to Thanachart Capital Plc., the Bank and BOT; 8. To approve expenses related to the succession processes; 9. To report on the performance and progress to the Board of Directors every month until the succession processes end. 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 overseen 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 2016, the members of the Risk Management Committee were as follows:
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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 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; Remark:
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1
7. To consider and appoint a committee or an officer, as well as delegate the authority to the appointed committee or officer under roles and responsibilities of the Risk Management Committee; 8. To monitor and control the risk management conduct of committees and/or business units to ensure that they adhere to the established policy; 9. To report the committee’s performance to the Audit Committee regularly on areas that need improvement, ensuring that the improvements are in line with the established risk management policy and strategies. The Asset and Liability Management Committee The Executive Committee has established the Asset and Liability Management Committee to manage the Bank’s liquidity, interest rates and exchange rates effectively. As of 31 December 2016, 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 1 9. Mr. Enghug Nontikarn Member 10. Mr. Sanong Kumnuch Member 11. Mr. Ziad El-Hoss Member 12. Ms. Wisarnsri Nilodom Member
Mr. Ajay Pratap Mundkur’s service at the Bank has ended as assigned by the Bank of Nova Scotia and his successor has not yet been recruited. ANNUAL REPORT 2016
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 2016, the members of the Investment Portfolio Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Ms. Suvarnapha Suvarnaprathip Member 4. Mr. Peter Clifford Bessey Member 5. Mr. Piyaphong Artmangkorn Member Representative of the Risk Control Department Secretary
Roles and Responsibilities of the Investment Portfolio Committee 1. To determine investment policies as well as to consider and approve investment plans; 2. To approve investments within the scope of authority specified by the Bank, which must be complied within established position limits and VaR limits and to examine investment proposals that exceed its approval authority before proposing them to the Executive Committee which has higher approval authority; 3. To review the investment performance and determine guidelines aimed at improving investment performance; 4. To acknowledge and delegate the approving authority to the respected committee or individuals under the roles and responsibilities of the Investment Portfolio Committee; 5. To manage the market risk arising from changes in prices of investment portfolios; 6. To establish and review the ratio of provisioning or determine the impairment value of the securities invested. The Credit Committee The Executive Committee has established the Credit Committee to enhance the efficiency of the Bank’s credit approval process. As of 31 December 2016, 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
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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.
directors and independent directors of which have been clearly written in the good corporate governance policy of the Bank as follows: 1. Have knowledge, skill and experience in diverse fields that are useful and contribute to the Bank’s business and must be an expertise in the area that should benefit the Bank with at least one non-executive director with experience in the Bank’s business, whereby gender is disregarded; 2. Not possess any of the prohibited characteristics prescribed by applicable laws and regulations; 3. Not hold board positions in any other entity that operates a business of the same nature as and competing with the Bank, whether for personal benefit or for the benefit of other parties, unless it is notified in the shareholders’ meeting before any appointment. The Nomination and Remuneration Committee, which has the duty to nominate director candidates for shareholders’ consideration and election, shall examine and ensure that those candidates do not hold board positions in or operate a business of the same nature as and competing with the Bank; 4. Directors, executives or related persons are allowed to enter into a transaction that is in the usual course of business with the Bank and members of its group, provided that the transaction is under the same commercial terms as those an ordinary person would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation and without any dependent interest, except for the transactions prohibited by laws or the authority’s directives; 5. Additional qualifications required for each of the following positions: Executive Directors Ç !DHMF HMUNKUDC VHSG C@X SN C@X L@M@FDLDMS NE the Bank and overseeing and ensuring that the management implements the policies established by the Board of Directors. Ç -TLADQHMF MNS LNQD SG@M @ G@KE NE SGD SNS@K !N@QC members.
The Nomination and Appointment of Executives of the Highest Level
Independent Directors (applicable to public limited companies or as required by the authority)
Qualifications of Directors Qualifications of Directors
Ç -NS GNKCHMF LNQD SG@M ODQBDMS NE SGD !@MJÄR paid-up registered capital. Ç 0T@KHEHB@SHNMR @QD HM @BBNQC@MBD VHSG SGD BQHSDQH@ set by the BOT, SET, or SEC, or other governing bodies.
The Bank has specified the qualifications of directors including the additional qualifications required for executive
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Ç -NS DWGHAHSHMF @MX BG@Q@BSDQHRSHBR SG@S UHNK@SD SGD BQHSDQH@ ENQ HMCDODMCDMS CHQDBSNQR RDS NTS AX SGD "@OHS@K ,@QJDS Supervisory Board. Ç -TLADQHMF MNS KDRR SG@M NMD SGHQC NE SGD SNS@K !N@QC LDLADQR Ç S KD@RS HMCDODMCDMS CHQDBSNQ SG@S G@R A@MJHMF DWODQHDMBD 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
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; THANACHART BANK PUBLIC COMPANY LIMITED
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(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.
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.
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.
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.
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
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.
Governance of the Business Conducts of Subsidiaries and Associated Companies
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.
(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,
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 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.
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The Audit team must summarize the overall auditing of the subsidiaries for acknowledgement of the Audit Committee and further report to the Board of Directors. Significant issues, i.e. conflicts of interest, frauds, corruptions, and violations of laws, must be reported to the Board of Directors in detail for improvement within a period of time deemed appropriate by the Audit Committee. (2) Agreements between the Bank and other shareholder(s) in regards to the management of subsidiaries and associated companies - None -
The Controls of the Use of Internal Information The Bank has specified the controls of the use of internal information in the ethics and code of conduct which can be summarized as follows: Ç M @OOQNOQH@SD NUDQRHFGS NM SGD HMSDQM@K C@S@ maintenance system is required for all business units within the Bank; Ç (M BNLOKH@MBD VHSG SGD 2$" QDFTK@SHNMR DWDBTSHUDR 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; Ç #HQDBSNQR DWDBTSHUDR RS@EER DLOKNXDDR @MC advisors who have accessed 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; Ç BBNQCHMF SN SGD !@MJÄR MNSHEHB@SHNM NM RDBTQHSHDR 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; Ç 3GD TRD NE HMSDQM@K C@S@ ENQ SGD HMCHUHCT@K HMSDQDRS 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 23rd Annual General Meeting of Shareholders held on 5 April 2016, 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 and/or 2. Ms. Somjai Khunapasut Certified Auditor No. 4499 and/or 3. Ms. Rachada Yongsawadvanich Certified Auditor No. 4951 The 2016 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 1.1 Audit Fee of the Bank of THB 11,000,000. 1.2 Audit Fee of 11 Subsidiaries of THB 6,115,000. (2) Non - Audit Fee The Bank and its subsidiaries paid the non-audit fee for 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 for the fiscal year 2016 in an amount of THB 830,000.
Other Practices In Accordance With Good Corporate Governance In accordance with the good corporate governance policy of the Bank.
Related Transactions Details of related transactions are shown in the notes to financial statements No. 43: Related party transactions.
THANACHART BANK PUBLIC COMPANY LIMITED
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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
094
ANNUAL REPORT 2016
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.
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 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
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 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. 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. 2/2017 on 23 February 2017, the Board of Directors agreed that the Bank’s internal control system was adequate and appropriate for its business operations.
THANACHART BANK PUBLIC COMPANY LIMITED
095
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 2016 were as follows: 1. Mr. Narong Chivangkur 2. Mr. Sataporn Jinachitra 3. Mr. Rod Michael Reynolds Mr. Thaneit Khantikaroon
Chairman Member Member Secretary
(Independent Director) (Independent Director) (Non-Executive Director)
In 2016, the Nomination and Remuneration Committee convened fourteenth 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 2016 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 2017 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 2016 remuneration packages were proposed for approval at the Bank’s Board of Directors’ meeting and the Annual General Meeting of Shareholders for the year 2016. 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, recommend, and monitor the Chief Executive Officer and President Recruitment process. 9. To review, recommend and monitor the Bank’s succession planning for senior executives and key positions. 10. 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
096
ANNUAL REPORT 2016
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 2016 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. Rod
Michael Reynolds
Director
-
-
8. Mr. Walter
Tas
Director
-
-
9. Mr. Adil
Aziz Chaudhry
Director
-
-
10. Ms. Suvarnapha
Suvarnaprathip
Director
-
-
11. Mr. Peter
Clifford Bessey
Director
-
-
12. Mr. Somjate
Moosirilert
Director
-
-
Directors retired from position in 2016 1. Mr. Alberto Jaramillo
Director
-
-
Notes: 1) Mr. Alberto Jaramillo resigned from his directorship on 1 March 2016. 2) Mr. Adil Aziz Chaudhry has assumed his directorship since 1 April 2016. 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
097
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. 2. 3. 4. 5.
The Board of Directors meeting is held approximately once a month. The Executive Committee meeting is held at least once a month. The Audit Committee meeting is held at least once a quarter. The Nomination and Remuneration Committee meeting is held at least twice a year. 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 2016, 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 2016 List of TBANK’s Directors
Board of Directors
Executive Committee
Audit Committee
Nomination and Risk Management Remuneration Committee Committee
(12 Meetings)
(42 Meetings)
(12 Meetings)
(14 Meetings)
(12 Meetings)
1. Mr. Banterng
Tantivit
12
-
-
-
-
2. Mr. Suphadej
Poonpipat
12
40
-
-
-
3. Mr. Kiettisak
Meecharoen
12
-
12
-
-
4. Mr. Narong
Chivangkur
12
-
-
14
-
5. Mr. Sataporn
Jinachitra
12
-
12
14
-
6. Assoc. Prof. Dr. Somjai Phagaphasvivat
12
-
12
-
-
7. Mr. Rod
Michael Reynolds
8
-
-
9
-
8. Mr. Walter
Tas
8
-
-
-
-
9. Mr. Adil
Aziz Chaudhry
9
-
-
-
-
10. Ms. Suvarnapha
Suvarnaprathip
11
39
-
-
-
11. Mr. Peter
Clifford Bessey
11
38
-
-
11
12. Mr. Somjate
Moosirilert
12
39
-
-
12
1
-
-
-
-
Directors retired from position in 2016 1. Mr. Alberto Jaramillo
Notes: 1) Mr. Alberto Jaramillo resigned from his directorship on 1 March 2016. 2) Mr. Adil Aziz Chaudhry has assumed his directorship since 1 April 2016. 098
ANNUAL REPORT 2016
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 2016, 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. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32.
Mr. Suphadej Ms. Suvarnapha Mr. Somjate Mr. Peter Mrs. Noossara Mr. Piyaphong Mr. Anuwat Mr. Enghug Mr. Sanong Mr. Ziad Ms. Wisarnsri Mr. Boonlerd Mr. Praphan Mr. William Mrs. Sasima Mr. Ricky Mr. Wutthichai Ms. Kanoksri Mrs. Vijitra Mr. Kriangkrai Mr. Wichak Dr. Sutut Mr. Songwut Mr. Pompet Mr. Lalit Dodampe Mr. Wisoot Mr. Noel Mrs. Anisa Mrs. Chanaporn Mr. Yuadrith Mrs. Teranuj Mr. Tirachart
Poonpipat Suvarnaprathip Moosirilert Clifford Bessey Roonsamrarn Artmangkorn Luengtaweekul Nontikarn Kumnuch El-Hoss Nilodom Sinsombat Anupongongarch George Said Taweeskulchai Jon Yakabowich Suraratchai Rojmeta Thumpothong Phurivitvattana Praditavanij Chitmongkongsuk Chaowalit Rasanon Gamange Dharmaseri Tangadulrat Singh Choocharn Chantaprateep Dhiantravan Koomsap Chiracharasporn
33. 34. 35. 36.
Mr. Taweesak Mr. Smart Mrs. Pittimart Mr. Premsak
Songsithichoke Saensuk Sanguansook Chitprapaporn
Chairman of the Executive Committee Vice Chairperson of the Executive Committee Chief Executive Officer and President Deputy Chief Executive Officer Executive Vice President, Corporate Banking Team 1 Executive Vice President, Investment Management Executive Vice President, Chief Financial Officer Executive Vice President, Treasury and Debt Capital Markets Executive Vice President, Retail and Small Business Distribution Executive Vice President, Chief Risk Officer Executive Vice President, Corporate Banking Team 2 Executive Vice President, Information Technology Executive Vice President, Automotive Lending Executive Vice President, Chief Administrative Officer Executive Vice President, Special Asset Management Executive Vice President, Shared Services Executive Vice President, Credit Risk Management Executive Vice President, Retail and Small Business Distribution 3 (North) Executive Vice President, Chief Audit Executive Vice President, Office of Executive Committee Chairman and CEO Executive Vice President, Retail and Small Strategic Management Executive Vice President, Commercial Banking Executive Vice President, Retail & Small Business Distribution 1 (BKK 1) Executive Vice President, Sales Network – Automotive Lending Executive Vice President, Treasury Executive Vice President, Corporate Banking Sales 1 Executive Vice President, Corporate and Commercial Products Executive Vice President, Non-Branch Channels and CEM Executive Vice President, Human Resources Executive Vice President, Retail Risk Management Executive Vice President, Retail and Small Business Product Development Executive Vice President, Product and Marketing Management - Automotive Lending Executive Vice President, Business Transformation Executive Vice President, Investment Banking Senior Vice President, Finance First Vice President, Accounting THANACHART BANK PUBLIC COMPANY LIMITED
099
Notes: 1. Number 3 - 14 are executive officers and number 35-36 are those in the top four levels after the President as defined by the SEC. 2. Number 1 - 34 are those with managing authority under section 4 and 25 of the Financial Institution Business Act B.E. 2551. 3. The changes during 2016 were as follows: 3.1 Mrs. Chanaporn Chantaprateep has been appointed as Executive Vice President, Human Resources with effect from 29 April 2016. 3.2 Ms. Angkana Swasdipoon retired from Executive Vice President, Office of Executive Committee Chairman and CEO on 1 May 2016. 3.3 Mr. Yuadrith Dhiantravan has been appointed as Executive Vice President, Retail Risk Management with effect from 23 May 2016. 3.4 Mr. Wathanyu Nithyayon, Executive Vice President, Corporate Banking Sales 2, retired early with an effect on 1 June 2016. 3.5 Mr. Ajay Pratap Mundkur, Executive Vice President, Retail and Small Business Banking, completed the obligation to work in the Bank effective on 13 June 2016. 3.6 Mrs. Teranuj Koomsap has been appointed as Executive Vice President, Retail and Small Business Product Development with effect from 18 June 2016. 3.7 Mrs. Pittimart Sanguansook has been appointed as Senior Vice President, Finance with effect from 1 August 2016. 3.8 Mr. Premsak Chitprapaporn has been appointed as First Vice President, Accounting with effect from 1 August 2016. 3.9 Mr. Tirachart Chiracharasporn has been appointed as Executive Vice President, Product and Marketing Management - Automotive Lending with effect from 27 August 2016. 3.10 Mr. Praphan Anupongongarch has been appointed as Executive Vice President, Automotive Lending with effect from with effect from 17 September 2016. 3.11 Mr. Taweesak Songsithichoke has been appointed as Executive Vice President, Business Transformation with effect from 17 September 2016. 3.12 Mr. William George Said has been appointed as Executive Vice President, Chief Administrative Officer with effect from 4 November 2016. 3.13 Mr. Smart Saensuk has been appointed as Executive Vice President, Investment Banking with effect from 7 November 2016.
On 1 January 2017, the Bank had a change of manager and executive position according to the criteria of the SEC, including the authority to deal under Section 4 and Section 25 of the Financial Institution Business Act B.E. 2551 as follows: 1. Mr. Enghug Nontikarn retired from Executive Vice President, Treasury and Debt Capital Markets on 1 January 2017. 2. Mr. Wichak Praditavanij, had new work scope due to the revised organizational structure, from Executive Vice President, Retail & Small Strategic Management, to Executive Vice President, Non-Branch Channels. 3. Mrs. Anisa Choocharn resigned from Executive Vice President, Non-Branch Channels and CEM on 15 January 2017. 4. Mr. Boonlerd Sinsombat resigned from Executive Vice President, Information Technology on 8 February 2017.
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ANNUAL REPORT 2016
THANACHART BANK PUBLIC COMPANY LIMITED
101
Executive Vice President, Commercial Banking Executive Vice President, Corporate and Commercial Products Executive Vice President, Investment Banking
Executive Vice President, Shared Services
Executive Vice President, Business Transformation
Senior Vice President Compliance
Retail and Small Business Product Development
Remark: 1 - 14 means executives according to SEC’s definition.
Executive Vice President,
7 Executive Vice President, Corporate Banking Team 2
6 Executive Vice President, Corporate Banking Team 1
5 Executive Vice President, Information Technology
4 Executive Vice President, Chief Administrative Officer
Credit Committee
Senior Vice President, Marketing Communication
Senior Vice President, Collections and Recoveries
14
First Vice President, Accounting
Finance
13 Senior Vice President,
Chief Financial Officer
12 Executive Vice President,
Senior Vice President, Communication and Brand Management
Automotive Lending
9 Executive Vice President,
Investment Management
11 Executive Vice President, Executive Vice President, Human Resources
8 Executive Vice President, Treasury and Debt Capital Markets
Chief Risk Management
10 Executive Vice President,
Investment Portfolio Committee
Asset and Liability Management Committee
Risk Management Committee
Succession Committee
Nomination and Remuneration Committee
Executive Vice President, Office of Executive Committee Chairman and CEO
Chief Executive Officer and President
Executive Vice President, Chief Audit
1
Executive Committee
Board of Directors
Executive Vice President, Non-Branch Channels and CEM
Retail and Small Business Distribution
3 Executive Vice President,
Officer
2 Deputy Chief Executive
Audit Committee
Management Structure of the Bank as at 31 December 2016
102
ANNUAL REPORT 2016 Executive Vice President, Commercial Banking Executive Vice President, Corporate and Commercial Products Executive Vice President, Investment Banking
Executive Vice President, Shared Services
Executive Vice President, Business Transformation
Senior Vice President Compliance
Retail and Small Business Product Development
Remark: 1 - 14 means executives according to SEC’s definition.
Executive Vice President,
7 Executive Vice President, Corporate Banking Team 2
6 Executive Vice President, Corporate Banking Team 1
5 Executive Vice President, Information Technology
4 Executive Vice President, Chief Administrative Officer
Credit Committee
Senior Vice President, Marketing Communication
Senior Vice President, Collections and Recoveries
14
First Vice President, Accounting
Finance
13 Senior Vice President,
Chief Financial Officer
12 Executive Vice President,
Senior Vice President, Communication and Brand Management
Automotive Lending
9 Executive Vice President,
Investment Management
11 Executive Vice President, Executive Vice President, Human Resources
8 Executive Vice President, Treasury and Debt Capital Markets
Chief Risk Management
10 Executive Vice President,
Investment Portfolio Committee
Asset and Liability Management Committee
Risk Management Committee
Succession Committee
Nomination and Remuneration Committee
Executive Vice President, Office of Executive Committee Chairman and CEO
Chief Executive Officer and President
Executive Vice President, Chief Audit
1
Executive Committee
Board of Directors
Executive Vice President, Digital Banking
Retail and Small Business Distribution
3 Executive Vice President,
Officer
2 Deputy Chief Executive
Audit Committee
Management Structure of the Bank as at 1 January 2017
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 2016, the Bank has remunerated 3 panels of the Board of Directors, the Audit Committee, and the Nomination and Remuneration Committee totaling THB 35,965,000. The remuneration was paid in the forms of monthly compensation, meeting stipend, and performance allowance (based on the performance in 2015), which can be summarized as follows: Table of the remuneration of the Board of Directors Type of remuneration (THB per year) Meeting Performance stipends allowance
List of Directors
Monthly compensation
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. Rod Michael Reynolds 8. Mr. Walter Tas 9. Mr. Adil Aziz Chaudhry 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 2016 1. Mr. Alberto Jaramillo Total
1,200,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00 450,000.00 600,000.00 600,000.00 600,000.00
600,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 200,000.00 200,000.00 225,000.00 275,000.00 275,000.00 300,000.00
3,307,692.32 1,653,846.15 1,653,846.15 1,653,846.15 1,653,846.15 1,653,846.15 1,653,846.15 1,386,512.13 1,653,846.15 1,653,846.15 1,653,846.15
5,107,692.32 2,553,846.15 2,553,846.15 2,553,846.15 2,553,846.15 2,553,846.15 2,453,846.15 2,186,512.13 675,000.00 2,528,846.15 2,528,846.15 2,553,846.15
-
-
267,334.05
267,334.05
100,000.00 7,750,000.00
25,000.00 3,600,000.00
1,653,846.15 21,500,000.00
1,778,846.15 32,850,000.00
Total
Notes: 1) Mr. Kobsak Duangdee resigned from his directorship on 1 March 2015. 2) Mr. Alberto Jaramillo resigned from his directorship on 1 March 2016. 3) Mr. Adil Aziz Chaudhry has assumed his directorship since 1 April 2016. * The Bank is exempted from the enforcement of Division 3/1 of the Securities and Exchange Act B.E. 2535, in congruence with the Notification of the Securities and Exchange Commission No. Tor Chor. 20/2015 Re: Characteristics of companies exempted from the enforcement of Division 3/1 of the Securities and Exchange Act B.E. 2535, dated 21 May 2015. THANACHART BANK PUBLIC COMPANY LIMITED
103
Table of the remuneration of the Audit Committee List of Directors
Type of remuneration (THB per year) Monthly compensation Meeting stipends
Total
1. Mr. Kiettisak
Meecharoen
540,000.00
360,000.00
900,000.00
2. Mr. Sataporn
Jinachitra
360,000.00
180,000.00
540,000.00
360,000.00
180,000.00
540,000.00
1,260,000.00
720,000.00
1,980,000.00
3. Assoc. Prof. Dr. Somjai Phagaphasvivat Total
Table of the remuneration of the Nomination and Remuneration Committee List of Directors
Type of remuneration (THB per year) Monthly compensation
1. Mr. Narong
Chivangkur
560,000.00
2. Mr. Sataporn
Jinachitra
350,000.00
3. Mr. Rod
Michael Reynolds
225,000.00
Total
1,135,000.00 The remuneration of independent director of the subsidiaries None of the Bank’s independent director sits as an independent director of the subsidiaries. (b) 2016 total remuneration, number of executive directors and executives, and forms of remuneration
In 2016, remuneration was paid in the form of salary, allowances, provident fund, etc. to executive directors and executives in accordance with the regulations as follows: Ç !X SGD 2$"ÄR CDEHMHSHNM SGDQD VDQD DWDBTSHUD CHQDBSNQR @MC DWDBTSHUDR HMBKTCHMF DWDBTSHUD BG@MFDC CTQHMF the past year) that a total remuneration paid amounted to THB 134,765,826. Ç 6HSG QDEDQDMBD SN SGD !@MJ NE 3G@HK@MCÄR FTHCDKHMD VGHBG @R HM @BBNQC@MBD VHSG RDBSHNM @MC NE SGD %HM@MBH@K Institution Business Act B.E. 2551, there are 37 of those with managing authority (including 3 executives changed during the past year) that a total remuneration paid amounted to THB 275,039,120.
(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 2016, provident fund was paid in compliance with the regulations as follows: Ç !X SGD 2$"ÄR CDEHMHSHNM SGDQD VDQD DWDBTSHUD CHQDBSNQR @MC DWDBTSHUDR HMBKTCHMF DWDBTSHUD BG@MFDC during the past year) that a total provident fund paid amounted to THB 6,103,899. Ç 6HSG QDEDQDMBD SN SGD !@MJ NE 3G@HK@MCÄR FTHCDKHMD VGHBG @R HM @BBNQC@MBD VHSG RDBSHNM @MC NE SGD Financial Institution Business Act B.E. 2551, there are 37 of those with managing authority (including 3 executives changed during the past year) that a total provident fund paid amounted to THB 11,405,320. 104
ANNUAL REPORT 2016
BOARD OF DIRECTORS AND MANAGEMENT TEAM
Mr. Banterng Tantivit
Chairman (Non-Executive Director) Date of Appointment
22 April 2002
Age
72 years
Education(s)
Ç ,@RSDQ NE 2BHDMBD %HM@MBD HM ,@M@FDLDMS Massachusetts Institute of Technology, U.S.A. Ç !@BGDKNQ NE 2BHDMBD HM $KDBSQHB@K $MFHMDDQHMF Massachusetts Institute of Technology, U.S.A.
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR
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 /QDRDMS /QDRDMS /QDRDMS Position(s) in Other Legal Entities /QDRDMS /QDRDMS /QDRDMS /QDRDMS
Ç "G@HQL@M /K@M $RS@SD "NLO@MX +HLHSDC Ç CUHRNQ /@STL 1HBD ,HKK @MC &Q@M@QX /TAKHB "NLO@MX +HLHSDC Ç CUHRNQ #TRHS 3G@MH /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M 3G@M@BG@QS +HED RRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç 5HBD "G@HQL@M 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M 2H@L "HSX !@MJ /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ #TRHS 3G@MH /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M 3G@M@BG@QS "@OHS@K /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M ,!* /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M NE SGD $WDBTSHUD "NLLHSSDD ,!* /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ +@L 2@H 5HKK@FD "NLO@MX +HLHSDC Ç #HQDBSNQ 2H@L /HV@S 'NKCHMF "NLO@MX +HLHSDC Ç "G@HQL@M ,!* 1DRNQS /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ 2H@L /HV@S "NLO@MX +HLHSDC Ç #HQDBSNQ ! 5 'NKCHMF "NLO@MX +HLHSDC Ç #HQDBSNQ #DDATJ "NLO@MX +HLHSDC Ç #HQDBSNQ 3G@H %@QLHMF "NLO@MX +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
105
Mr. Suphadej Poonpipat
Vice Chairman, Chairman of the Executive Committee, and Member of the Succession Committee (Executive Director) Date of Appointment
1 September 2005
Age
66 years
Education(s)
Ç ,@RSDQ NE 2BHDMBD 4MHUDQRHSX NE 6HRBNMRHM 4 2 Ç Bachelor of Business Administration and Accounting, Chulalongkorn University
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD 1NKD NE SGD "G@HQL@M /QNFQ@L 1"/ "K@RR Ç "DQSHEHB@SD 1NKD NE SGD "NLODMR@SHNM "NLLHSSDD 1"" "K@RR Ç "DQSHEHB@SD %HM@MBH@K (MRSHSTSHNMR &NUDQM@MBD /QNFQ@L %&/ "K@RR Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUD "K@RR Capital Market Academy, the Stock Exchange of Thailand Ç "DQSHEHB@SD +D@CDQRGHO /QNFQ@L "K@RR Ernst & Young Office Limited with Thanachart Training and Development Company Limited Ç .UDQUHDV @MC /QHMBHOKDR NE (MSDQM@SHNM@K BBNTMSHMF 2S@MC@QCR No. 39 (IAS39) (2009) Thanachart Training and Development Company Limited with SASIN Ç 3G@HK@MC HM SGD -DV &KNA@K +@MCRB@OD
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 /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS Position(s) in Other Legal Entities /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS 106
ANNUAL REPORT 2016
Ç #HQDBSNQ #,2 /QNODQSX (MUDRSLDMS /QHU@SD +HLHSDC Ç #HQDBSNQ /K@M $RS@SD "NLO@MX +HLHSDC Ç Member of the Compensation and Nomination Committee, MBK Public Company Limited Ç 5HBD "G@HQL@M 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç Chairman of the Executive Committee, Thanachart Life Assurance Public Company Limited Ç #HQDBSNQ 3G@M@BG@QS +HED RRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç 5HBD "G@HQL@M /@STL 1HBD ,HKK @MC &Q@M@QX /TAKHB "NLO@MX +HLHSDC Ç 5HBD "G@HQL@M 2H@L "HSX !@MJ /TAKHB "NLO@MX +HLHSDC Ç CUHRNQ /@STL 1HBD ,HKK @MC &Q@M@QX /TAKHB "NLO@MX +HLHSDC Ç Chairman of the Compensation and Nomination Committee, MBK Public Company Limited Ç "G@HQL@M /@STL 1HBD ,HKK @MC &Q@M@QX /TAKHB "NLO@MX +HLHSDC Ç Chairman of the Executive Committee, Patum Rice Mil and Granary Public Company Limited Ç "GHDE $WDBTSHUD .EEHBDQ 3G@M@BG@QS "@OHS@K /TAKHB "NLO@MX +HLHSDC Ç Vice Chairman and Chairman of the Executive Committee, Thanachart Capital Public Company Limited Ç #HQDBSNQ 1NX@K .QBGHC 'NSDK 3G@HK@MC /TAKHB "NLO@MX +HLHSDC Ç 5HBD "G@HQL@M ,!* /TAKHB "NLO@MX +HLHSDC Ç 5HBD "G@HQL@M NE SGD $WDBTSHUD "NLLHSSDD ,!* /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ ,!* /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M #,2 /QNODQSX (MUDRSLDMS /QHU@SD +HLHSDC Ç "G@HQL@M ,!* +HED RRTQ@MBD /TAKHB "NLO@MX +HLHSDC (Formerly known as “Siam City Life Assurance Public Company Limitedâ€?) Ç "G@HQL@M 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ 3G@H 1NX@K .QBGHC 1D@K $RS@SD "NLO@MX +HLHSDC Ç #HQDBSNQ 2H@L /HV@S 'NKCHMF "NLO@MX +HLHSDC Ç Director and Chairman of the Executive Committee, Thanachart Insurance Public Company Limited Ç #HQDBSNQ ,!* 1DRNQS /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ 2H@L /HV@S "NLO@MX +HLHSDC
Mr. Kiettisak Meecharoen
Chairman of the Audit Committee (Independent Director) Date of Appointment
22 April 2002
Age
70 years
Education(s)
Ç ,@RSDQ NE QSR HM 3GDNQDSHB@K $BNMNLHBR *DHN 4MHUDQRHSX Tokyo, Japan Ç !@BGDKNQ NE 2BHDMBD HM %HM@MBD 'HSNSRTA@RGH 4MHUDQRHSX Kunitachi, Tokyo, Japan
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR Ç "DQSHEHB@SD TCHS "NLLHSSDD /QNFQ@L "/ "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDRŠ "K@RR World Bank Ç %TSTQDR $WBG@MFD Merrill Lynch, New York Ç /NQSENKHN (MUDRSLDMS JP Morgan, New York Ç ,@M@FDLDMS 1DRDQUDR Harvard Institute for International Development, Harvard University Ç !@MJHMF @MC ,NMDS@QX /NKHBX HM #DUDKNOHMF "NTMSQHDR
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 Position(s) in Other Legal Entities /QDRDMS /QDRDMS
Ç (MCDODMCDMS #HQDBSNQ 3G@M@BG@QS +HED RRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç (MCDODMCDMS #HQDBSNQ @MC "G@HQL@M NE SGD TCHS "NLLHSSDD Siam City Bank Public Company Limited None Ç (MCDODMCDMS #HQDBSNQ 3@Q@QNL $MSDQOQHRD /TAKHB "NLO@MX +HLHSDC Ç (MCDODMCDMS #HQDBSNQ @MC "G@HQL@M NE SGD TCHS "NLLHSSDD Safety Insurance Public Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
107
Mr. Narong Chivangkur
Chairman of the Nomination and Remuneration Committee and Chairman of the Succession Committee (Independent Director) Date of Appointment
22 April 2002
Age
72 years
Education(s)
Ç Higher Diploma in Business and Marketing, Assumption Commercial College
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD !N@QCR SG@S ,@JD @ #HEEDQDMBD !,# "K@RR Ç "DQSHEHB@SD !N@QC ,@SSDQR @MC 3QDMCR !,3 "K@RR Ç "DQSHEHB@SD CU@MBDC TCHS "NLLHSSDD /QNFQ@L "/ "K@RR Ç "DQSHEHB@SD $SGHB@K +D@CDQRGHO /QNFQ@L $+/ "K@RR Ç "DQSHEHB@SD MSH "NQQTOSHNM $WDBTSHUD /QNFQ@L "$/ "K@RR Ç "DQSHEHB@SD 1NKD NE SGD -NLHM@SHNMR @MC &NUDQM@MBD "NLLHSSDD (RNG), Class 1/2011 Ç "DQSHEHB@SD %HM@MBH@K (MRSHSTSHNMR &NUDQM@MBD /QNFQ@L %&/ "K@RR Ç "DQSHEHB@SD TCHS "NLLHSSDD /QNFQ@L "/ "K@RR Ç "DQSHEHB@SD %HM@MBH@K 2S@SDLDMS ENQ #HQDBSNQR %2# "K@RR Ç "DQSHEHB@SD 2TBBDRRETK %NQLTK@SHNM $WDBTSHNM NE 2SQ@SDFX 2%$ Class 2/2008 Ç "DQSHEHB@SD 1NKD NE SGD "NLODMR@SHNM "NLLHSSDD 1"" "K@RR Ç "DQSHEHB@SD "G@QSDQDC #HQDBSNQ "K@RR "#" "K@RR Ç "DQSHEHB@SD "NQONQ@SD 2NBH@K 1DRONMRHAHKHSX "21 "K@RR Ç "DQSHEHB@SD #HQDBSNQ "DQSHEHB@SHNM /QNFQ@L #"/ "K@RR Ç "DQSHEHB@SD #HQDBSNQ $W@LHM@SHNM "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR "K@RR Pennsylvania State University Ç CU@MBDC $WDBTSHUD #DUDKNOLDMS /QNFQ@L Rochester Institute of Technology, New York, U.S.A. Ç %HM@MBH@K ,@M@FDLDMS /QNFQ@L Asian Institute of Management, Philippines Ç ,@M@FDLDMS #DUDKNOLDMS /QNFQ@L
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 Position(s) in Other Legal Entities /QDRDMS
108
ANNUAL REPORT 2016
Ç #HQDBSNQ ,NLBG@HK@H #DUDKNOLDMS "NLO@MX +HLHSDC Ç #HQDBSNQ ,NLDMSTL (, "NLO@MX +HLHSDC Ç (MCDODMCDMS #HQDBSNQ @MC "G@HQL@M NE SGD -NLHM@SHNM @MC 1DLTMDQ@SHNM Committee, Siam City Bank Public Company Limited Ç #HQDBSNQ ,NLDMSTL 2@KD @MC #HRSQHATSHNM "NLO@MX +HLHSDC None Ç #HQDBSNQ ,NLDMSTL !!2 "NLO@MX +HLHSDC
Mr. Sataporn Jinachitra
Member of the Audit Committee, Member of the Nomination and Remuneration Committee, and Member of the Succession Committee (Independent Director) Date of Appointment
19 July 2007
Age
68 years
Education(s)
Ç ,@RSDQ NE 2BHDMBD $BNMNLDSQHBR 3GD +NMCNM 2BGNNK NE $BNMNLHBR and Political Science (University of London), England Ç !@BGDKNQ NE 2BHDMBD $BNMNLHBR 4OODQ 2DBNMC "K@RR 'NMNTQR University College London, England Ç !@BGDKNQ NE QS +@V 2TJGNSG@H 3G@LL@SGHQ@I .ODM 4MHUDQRHSX
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD !N@QCR SG@S ,@JD @ #HEEDQDMBD !,# "K@RR Ç 3GD 3G@HK@MCÄR SG -@SHNM@K "NMEDQDMBD NM "NKKDBSHUD BSHNM against Corruption, under the theme of “Tackling Corruption through Public-Private Collaboration Ç "DQSHEHB@SD MSH "NQQTOSHNM ENQ $WDBTSHUD /QNFQ@L "$/ "K@RR Ç "DQSHEHB@SD SGD $WDBTSHUD #HQDBSNQ "NTQRD $#" "K@RR Ç "DQSHEHB@SD 1NKD NE SGD "G@HQL@M /QNFQ@L 1"/ "K@RR Ç "DQSHEHB@SD 1NKD NE SGD "NLODMR@SHNM "NLLHSSDD 1"" "K@RR Ç "DQSHEHB@SD 2TBBDRRETK %NQLTK@SHNM @MC $WDBTSHNM NE 2SQ@SDFX 2%$ Class 4/2009 Ç "DQSHEHB@SD "NQONQ@SD 2NBH@K 1DRONMRHAHKHSX "21 "K@RR Ç "DQSHEHB@SD "G@QSDQDC #HQDBSNQ "K@RR "#" "K@RR Ç "DQSHEHB@SD #"/ 1DEQDRGDQ "NTQRD "K@RR Ç "DQSHEHB@SD #HQDBSNQ "DQSHEHB@SHNM /QNFQ@L #"/ "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR "K@RR
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 Position(s) in Other Legal Entities
Ç (MCDODMCDMS #HQDBSNQ ,DLADQ NE SGD TCHS "NLLHSSDD @MC ,DLADQ NE SGD Nomination and Remuneration Committee, Siam City Bank Public Company Limited Ç #HROTSD 1DRNKTSHNM "NLLHSSDD (MSDQBNMMDBSHNM (MRSHSTSHNM -3" Ç #HQDBSNQ 3G@H (MRSHSTSD NE #HQDBSNQR RRNBH@SHNM None None
THANACHART BANK PUBLIC COMPANY LIMITED
109
Assoc. Prof. Dr. Somjai Phagaphasvivat Member of the Audit Committee (Independent Director) Date of Appointment
26 March 2009
Age
70 years
Education(s)
Ç #NBSNQ@CN CD $RS@CN %@BTKS@C CD "HDMBH@ /NKHSHB@ Universidad Complutense de Madrid, Spain Ç #HOKNLD CÄ$STCDR 2TODQHDTQDR $BNMNLHB (MSDFQ@SHNM Universite de Nancy, France Ç +HBDMBH@STQ@ %@BTKS@C CD "HDMBH@ /NKHSHB@ X $BNMNLHB@ Universidad Complutense de Madrid, Spain Ç !@BGDKNQ NE QSR "GTK@KNMFJNQM 4MHUDQRHSX
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years Position(s) in Other Listed Companies /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS Position(s) in Other Legal Entities
110
ANNUAL REPORT 2016
Ç Director and Chairman of the Audit Committee, Thai Hua Rubber Public Company Limited Ç Director and Chairman of the Audit Committee, The Krungthep Thanakom Company Limited Ç "G@HQL@M NE SGD TCHS "NLLHSSDD 2$ %". /TAKHB "NLO@MX +HLHSDC Ç Member of the Audit Committee, Amarin Printing and Publishing Public Company Limited Ç (MCDODMCDMS #HQDBSNQ @MC ,DLADQ NE SGD TCHS "NLLHSSDD Siam City Bank Public Company Limited Ç #HQDBSNQ 2TO@K@H /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M 2$ %". /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M NE SGD TCHS "NLLHSSDD Amarin Printing and Publishing Public Company Limited Ç (MCDODMCDMS #HQDBSNQ @MC "G@HQL@M NE SGD TCHS "NLLHSSDD Lee Feed Mill Public Company Limited Ç (MCDODMCDMS #HQDBSNQ 2$ %". /TAKHB "NLO@MX +HLHSDC Ç Independent Director, Amarin Printing and Publishing Public Company Limited None
Mr. Rod Michael Reynolds
Member of the Nomination and Remuneration Committee and Member of the Succession Committee (Non-Executive Director) Date of Appointment
15 January 2013
Age
59 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM 8NQJ 4MHUDQRHSX 3NQNMSN "@M@C@ Ç !@BGDKNQ NE 2BHDMBD HM $MFHMDDQHMF 0TDDMÄR 4MHUDQRHSX .MS@QHN "@M@C@
Training Program Related to Roles, Duties, and Skills of Directorship
Euromoney Training Ç $TQNLNMDX RH@ "NQONQ@SD &NUDQM@MBD /QNFQ@L
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in Other Listed Companies Position(s) in Other Listed Companies Position(s) in Other Legal Entities /QDRDMS
Ç 5@QHNTR DWDBTSHUD ONRHSHNMR @S 3GD !@MJ NE -NU@ 2BNSH@ Ç 2DMHNQ (MCDODMCDMS #HQDBSNQ " ' !@HKDX /TAKHB +HLHSDC "NLO@MX Ç #HQDBSNQ 3TKR@ (MRODBSHNM 1DRNTQBDR +HLHSDC +H@AHKHSX "NLO@MX None Ç #HQDBSNQ +NF@QHSGLHBR +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
111
Mr. Walter Tas
Director (Non-Executive Director) Date of Appointment
1 March 2015
Age
45 years
Education(s)
Ç ,@RSDQ NE QSR $BNMNLHBR @MC !TRHMDRR CLHMHRSQ@SHNM Vrije Universiteit Amsterdam, The Netherlands Ç !@BGDKNQ NE "NLLDQBD $BNMNLHBR 'NFDRBGNNK UNNQ $BNMNLHRBGD 2STCHDR Amsterdam, The Netherlands The Hong Kong Institute of Bankers Ç 1DFTK@SNQÄR /DQRODBSHUD BBNTMS .ODMHMF *8" (MENQL@SHNM "NKKDBSHNM and Financial Inclusion (2016) Ç 3QDMCR @MC 4OC@SDR NM "QDCHS 1HRJ 1DFTK@SHNMR @MC 1DPTHQDLDMSR Impact on Banking and Finance Sector of HK and China (2016) Ç 1DRNKTSHNM 1DFHLD ENQ %HM@MBH@K (MRSHSTSHNMR HM 'NMF *NMF Ç (LOKDLDMS@SHNM NE !@RDK ((( HM 'NMF *NMF @MC 1DFTK@SNQX 1DPTHQDLDMSR (2015) Ç "NQONQ@SD &NUDQM@MBD ENQ (R
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Training Program Related to Roles, Duties, and Skills of Directorship
Experience(s) in the Past 5 Years Position(s) in Other Listed Companies Position(s) in Other Legal Entities /QDRDMS /QDRDMS
112
ANNUAL REPORT 2016
Ç 5HBD /QDRHCDMS "%. "NQONQ@SD #DUDKNOLDMS RH@ /@BHEHB Bank of Nova Scotia Ç 5HBD /QDRHCDMS 2SQ@SDFHB 3Q@MR@BSHNMR @MC 1DUHDV !@MJ NE -NU@ 2BNSH@ None Ç #HQDBSNQ 2BNSH@ 2DBTQHSHDR RH@ +HLHSDC Ç "GHDE .ODQ@SHMF .EEHBDQ "%. &KNA@K !@MJHMF @MC ,@QJDSR Asia Pacific, Bank of Nova Scotia Ç #HQDBSNQ 2BNSH@A@MJ 'NMF *NMF +HLHSDC 'NMF *NMF
Mr. Adil Aziz Chaudhry Director (Non-Executive Director) Date of Appointment
1 April 2016
Age
59 years
Education(s)
Ç ,@RSDQ NE (MSDQM@SHNM@K +@V @MC !@MJHMF RH@M 2STCHDR Columbia University in the City of New York Ç !@BGDKNQ NE QSR $MFKHRG @MC /NKHSHB@K 2BHDMBD 1TSFDQR 4MHUDQRHSX New Brunswick
Training Program Related to Roles, Duties, and Skills of Directorship
The Institute of Banking and Finance Singapore (IBF) Ç 3GD "@OHS@K ,@QJDSR @MC %HM@MBH@K CUHRNQX 2DQUHBDR $W@LHM@SHNM (CMFAS Exam) Module 1B - Rules and Regulations for Dealing in Securities (2016) The National Association of Securities Dealers (NASD) Ç 3GD 2DQHDR $W@L &DMDQ@K 2DBTQHSHDR 1DOQDRDMS@SHUD $W@LHM@SHNM (1986)
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 Position(s) in Other Legal Entities /QDRHCDMS
None None Ç 5HBD /QDRHCDMS @MC 'D@C 1DFHNM@K "QDCHS ,@QJDSR The Bank of Nova Scotia Asia Limited, Singapore
THANACHART BANK PUBLIC COMPANY LIMITED
113
Ms. Suvarnapha Suvarnaprathip
Vice Chairperson of the Executive Committee (Executive Director) Date of Appointment
22 April 2002
Age
71 years
Education(s)
Ç !@BGDKNQ NE $BNMNLHBR ,NM@RG 4MHUDQRHSX TRSQ@KH@
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR Ernst & Young Office Limited with Thanachart Training and Development Company Limited Ç .UDQUHDV @MC /QHMBHOKDR NE (MSDQM@SHNM@K BBNTMSHMF 2S@MC@QCR No. 39 (IAS39) (2009) Thanachart Training and Development Company Limited with SASIN Ç 3G@HK@MC HM SGD -DV &KNA@K +@MCRB@OD Banker Trust, New York, U.S.A. Ç "DQSHEHB@SD $WDBTSHUD "NLLDQBH@K +DMCHMF 3Q@HMHMF /QNFQ@L
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 /QDRDMS /QDRDMS Position(s) in Other Legal Entities /QDRDMS
114
ANNUAL REPORT 2016
Ç #HQDBSNQ @MC ,DLADQ NE SGD $WDBTSHUD "NLLHSSDD Thanachart Life Assurance Public Company Limited Ç #HQDBSNQ @MC 5HBD "G@HQODQRNM NE SGD $WDBTSHUD "NLLHSSDD Siam City Bank Public Company Limited Ç 5HBD "G@HQODQRNM NE SGD $WDBTSHUD "NLLHSSDD Thanachart Capital Public Company Limited Ç #HQDBSNQ 3G@M@BG@QS "@OHS@K /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ 2D@BNM #DUDKNOLDMS /TAKHB "NLO@MX +HLHSDC
Mr. Peter Clifford Bessey
Vice Chairman of the Executive Committee, Vice Chairman of the Risk Management Committee, and Deputy Chief Executive Officer (Executive Director) Date of Appointment
1 September 2014
Age
56 years
Education(s)
Ç !@BGDKNQ NE !TRHMDRR CLHMHRSQ@SHNM 4MHUDQRHSX NE -DV !QTMRVHBJ Canada
Training Program Related to Roles, Duties, and Skills of Directorship
Richard Ivey School of Business Ç (UDX $WDBTSHUD /QNFQ@L Investment Funds in Canada Ç (MRSHSTSD NE "@M@CH@M !@MJDQR Associate of the Institute of Canadian Bankers Ç (MRSHSTSD NE "@M@CH@M !@MJDQR
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 Position(s) in Other Legal Entities /QDRDMS
Ç /QDRHCDMS @MC "GHDE $WDBTSHUD .EEHBDQ 2BNSH@A@MJ CD /TDQSN 1HBN Ç 2DMHNQ 5HBD /QDRHCDMS 1DS@HK @MC 2L@KK !TRHMDRR !@MJHMF SK@MSHB Region, Halifax, Nova Scotia, Canada None Ç #HQDBSNQ 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
115
Mr. Somjate Moosirilert
Member of the Executive Committee, Chairman of the Risk Management Committee, and Chief Executive Officer and President (Executive Director) Date of Appointment
29 October 2009
Age
60 years
Education(s)
Ç Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University Ç !@BGDKNQ NE !TRHMDRR CLHMHRSQ@SHNM 3G@LL@R@S 4MHUDQRHSX
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association Ç Certificate, Corporate Governance for Capital Market Intermediaries (CGI), Class 15/2016 Ç "DQSHEHB@SD 1NKD NE SGD "G@HQL@M /QNFQ@L 1"/ "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR "K@RR Thai Listed Companies Association, the Stock Exchange of Thailand Ç "DQSHEHB@SD 3+" +D@CDQRGHO #DUDKNOLDMS /QNFQ@L +#/ Capital Market Academy, the Stock Exchange of Thailand Ç "DQSHEHB@SD +D@CDQRGHO /QNFQ@L "K@RR Judicial Training Institute Ç 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 Experience(s) in the Past 5 Years
None
Position(s) in Other Listed Companies /QDRDMS /QDRDMS Position(s) in Other Legal Entities /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS /QDRDMS
116
ANNUAL REPORT 2016
Ç ,DLADQ NE SGD 2SDDQHMF "NLLHSSDD 2@RHM &Q@CT@SD (MRSHSTSD NE !TRHMDRR Administration of Chulalongkorn University Ç #HQDBSNQ 3GD 3G@H !@MJDQRÄ RRNBH@SHNM Ç #HQDBSNQ @MC 5HBD "G@HQL@M 3G@H +HRSDC "NLO@MHDR RRNBH@SHNM Ç "G@HQL@M @MC "G@HQL@M NE SGD $WDBTSHUD "NLLHSSDD 2H@L "HSX +HED RRTQ@MBD Public Company Limited Ç &NUDQMNQ 3GD 2SNBJ $WBG@MFD NE 3G@HK@MC Ç "G@HQL@M 2H@L "HSX RRDS ,@M@FDLDMS "NLO@MX +HLHSDC Ç "G@HQL@M 3G@M@BG@QS %TMC ,@M@FDLDMS "NLO@MX +HLHSDC Ç "G@HQL@M 2H@L "HSX 2DBTQHSHDR "NLO@MX +HLHSDC Ç Director, Chairman of the Executive Committee and Chief Executive Officer and President, Siam City Bank Public Company Limited Ç 5HBD "G@HQL@M 3GD 2SNBJ $WBG@MFD NE 3G@HK@MC Ç #HQDBSNQ 3G@H "@OHS@K ,@QJDS #DUDKNOLDMS "NLLHSSDD Ç 2DMHNQ $WDBTSHUD 5HBD /QDRHCDMS 3G@M@BG@QS "@OHS@K /TAKHB "NLO@MX +HLHSDC Ç Director and Member of the Executive Committee, Thanachart Capital Public Company Limited Ç CUHRNQ SN SGD !N@QC 3GD 3G@H !@MJDQRÄ RRNBH@SHNM Ç CUHRNQX "G@HQL@M 3G@H +HRSDC "NLO@MHDR RRNBH@SHNM Ç 5HBD "G@HQL@M 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC Ç "G@HQL@M 3G@M@BG@QS %TMC ,@M@FDLDMS "NLO@MX +HLHSDC Ç Chairman of the Executive Committee, Thanachart Securities Public Company Limited Ç Vice Chairman of the Executive Committee, Thanachart Insurance Public Company Limited Ç "G@HQL@M 32 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC Ç Chairman of the Executive Committee, Thanachart Fund Management Company Limited Ç #HQDBSNQ 3G@M@BG@QS %TMC ,@M@FDLDMS "NLO@MX +HLHSDC Ç Director and Member of the Executive Committee, Thanachart Insurance Public Company Limited Ç CUHRNQX !N@QC RRNBH@SHNM NE 3G@H 2DBTQHSHDR "NLO@MHDR Ç "G@HQL@M 3G@M@BG@QS 2DBTQHSHDR /TAKHB "NLO@MX +HLHSDC
Mrs. Noossara Roonsamrarn
Executive Vice President, Corporate Banking Team 1 Date of Appointment
22 April 2002
Age
58 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM National Institute of Development Administration Ç !@BGDKNQ NE /NKHSHB@K 2BHDMBD "GTK@KNMFJNQM 4MHUDQRHSX
Training Program
Thai Institute of Directors Association Ç "DQSHEHB@SD #"/ 1DEQDRG "NTQRD "K@RR Ç "DQSHEHB@SD #HQDBSNQ "DQSHEHB@SHNM /QNFQ@L #"/ "K@RR Harvard Business School Ç "DQSHEHB@SD HM CU@MBDC ,@M@FDLDMS /QNFQ@L ,/ Capital Market Academy, The Stock Exchange of Thailand Ç "DQSHEHB@SD +D@CDQRGHO /QNFQ@L "K@RR ", The National Defence College Ç Diploma, National Defence College, The Joint-State-Private Sector Course (Class 22)
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 Position(s) in Other Legal Entities /QDRDMS
Ç Member of the Audit Committee, Thanachart Insurance Public Company Limited None Ç #HQDBSNQ 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
117
Mr. Piyaphong Artmangkorn
Executive Vice President, Investment Management Date of Appointment
1 September 2005
Age
59 years
Education(s)
Ç ,@RSDQ NE /TAKHB CLHMHRSQ@SHNM 3@W@SHNM University of Southern California, U.S.A. Ç !@BGDKNQ NE $BNMNLHBR 3G@LL@R@S 4MHUDQRHSX
Training Program
Thai Institute of Directors Association Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR "K@RR
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 /QDRDMS /QDRDMS Position(s) in Other Legal Entities /QDRDMS
None
118
ANNUAL REPORT 2016
Ç ,DLADQ NE SGD $WDBTSHUD "NLLHSSDD ,!* /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ ,!* /TAKHB "NLO@MX +HLHSDC Ç #HQDBSNQ 3G@M@BG@QS %TMC ,@M@FDLDMS "NLO@MX +HLHSDC
Mr. Anuwat Luengtaweekul
Executive Vice President, Chief Financial Officer Date of Appointment
1 June 2009
Age
53 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM 1@MFRHS 4MHUDQRHSX Ç !@BGDKNQ NE 2BHDMBD BBNTMSHMF *@RDSR@QS 4MHUDQRHSX
Training Program
Thai Institute of Directors Association Ç "DQSHEHB@SD 1NKD NE SGD "NLODMR@SHNM "NLLHSSDD 1"" "K@RR Ç 'NV SN ,D@RTQD SGD 2TBBDRR NE "NQONQ@SD 2SQ@SDFX ',2 Class 4/2014 Ç "DQSHEHB@SD 2TBBDRRETK %NQLTK@SHNM @MC $WDBTSHNM NE 2SQ@SDFX 2%$ Class 3/2009 Ç "DQSHEHB@SD #HQDBSNQ "DQSHEHB@SHNM /QNFQ@L #"/ "K@RR Ç "DQSHEHB@SD !N@QC @MC /DQENQL@MBD $U@KT@SHNM /QNFQ@L Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR "K@RR Association of Finance Companies Ç %HM@MBDQRÄ $WDBTSHUD #DUDKNOLDMS /QNFQ@L "K@RR
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 /QDRDMS
None
/QDRDMS Position(s) in Other Legal Entities /QDRDMS
Ç ,DLADQ NE SGD -NLHM@SHNM @MC 1DLTMDQ@SHNM "NLLHSSDD Ratchthani Leasing Public Company Limited Ç #HQDBSNQ 1@SBGSG@MH +D@RHMF /TAKHB "NLO@MX +HLHSDC Ç (MCDODMCDMS #HQDBSNQ @MC ,DLADQ NE SGD TCHS "NLLHSSDD Information and Communication Networks Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
119
Mr. Enghug Nontikarn
Executive Vice President, Treasury and Debt Capital Markets * Date of Appointment
1 June 2011
Age
60 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM 3G@LL@R@S 4MHUDQRHSX Ç !@BGDKNQ NE $BNMNLHBR 3G@LL@R@S 4MHUDQRHSX
Training Program
Thai Institute of Directors Association Ç "DQSHEHB@SD #HQDBSNQ BBQDCHS@SHNM /QNFQ@L # / "K@RR Thanachart Bank Public Company Limited Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR "K@RR
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 /QDRDMS Position(s) in Other Legal Entities /QDRDMS /QDRDMS Notes:
120
Ç 2DMHNQ $WDBTSHUD 5HBD /QDRHCDMS 2H@L "HSX !@MJ /TAKHB "NLO@MX +HLHSDC Ç (MCDODMCDMS #HQDBSNQ ,DLADQ NE SGD TCHS "NLLHSSDD @MC ,DLADQ NE SGD Nomination Committee, Srithai Superware Public Company Limited Ç #HQDBSNQ 31(2 "NQONQ@SHNM +HLHSDC Ç #HQDBSNQ @MC "G@HQL@M NE SGD 1HRJ ,@M@FDLDMS "NLLHSSDD Thanachart Fund Management Company Limited ** Ç ,DLADQ NE SGD -NLHM@SHNM "NLLHSSDD 31(2 "NQONQ@SHNM +HLHSDC
* Mr. Enghug Nontikarn retired from Executive Vice President – Treasury and Debt Capital Markets on 1 January 2017. ** Mr. Enghug Nontikarn resigned from his directorship and Chairman of the Risk Management Committee of Thanachart Fund Management Company Limited, effective on 1 January 2017.
ANNUAL REPORT 2016
Mr. Sanong Kumnuch
Executive Vice President, Retail and Small Business Distribution Date of Appointment
12 February 2015
Age
55 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM %HM@MBD University of the Thai Chamber of Commerce Ç !@BGDKNQ NE +@VR 2TJGNSG@H 3G@LL@SGHQ@S .ODM 4MHUDQRHSX Ç !@BGDKNQ NE BBNTMS@MBX 1@LJG@LG@DMF 4MHUDQRHSX
Training Program
Association of Investment Management Companies Ç 2DBTQHSHDR (MUDRSLDMS "NMRTKS@MS 3TSNQHMF PacRim Group Ç +D@CDQRGHO &QD@SMDRR The Bank of Thailand Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR Grid Business Solutions Limited Ç 3GD +D@CDQRGHO &QHC The Continuing Education Center Chulalongkorn University Ç /RXBGNKNFX NE +D@CDQRGHO ENQ $WDBTSHUDR
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 Position(s) in Other Legal Entities /QDRDMS
Ç $WDBTSHUD 5HBD /QDRHCDMS 3G@M@BG@QS !@MJ /TAKHB "NLO@MX +HLHSDC None Ç #HQDBSNQ 3G@M@BG@QS %TMC ,@M@FDLDMS "NLO@MX +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
121
Mr. Ziad El-Hoss
Executive Vice President, Chief Risk Officer Date of Appointment
12 February 2015
Age
61 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM 3GD LDQHB@M 4MHUDQRHSX NE !DHQTS Lebanon
Training Program
Canadian Securities Course The Bank of Nova Scotia Ç MSH "NQQTOSHNM Ç MSH ,NMDX +@TMCDQHMF Ç .ODQ@SHNM@K 1HRJ Ç (MSDFQHSX @MC /QHU@BX Ç &KNA@K 2@MBSHNMR Ç (MENQL@SHNM @MC "XADQ 2DBTQHSX Ç ,@M@FHMF 'HFG 1HRJ "TRSNLDQR
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 Position(s) in Other Legal Entities /QDRDMS
122
ANNUAL REPORT 2016
Ç Executive Vice President, Chief Risk Officer, Thanachart Bank Public Company Limited Ç 5HBD /QDRHCDMS 3GD !@MJ NE -NU@ 2BNSH@ None Ç 5HBD "G@HQL@M 32 RRDS ,@M@FDLDMS "NLO@MX +HLHSDC
Ms. Wisarnsri Nilodom
Executive Vice President, Corporate Banking Team 2 Date of Appointment
12 February 2015
Age
53 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM 2 2(- &Q@CT@SD (MRSHSTSD NE !TRHMDRR Administration of Chulalongkorn University Ç !@BGDKNQ NE BBNTMS@MBX "GTK@KNMFJNQM 4MHUDQRHSX
Training Program
Capital Market Academy, The Stock Exchange of Thailand Ç "DQSHEHB@SD +D@CDQRGHO /QNFQ@L "K@RR ", The National Defence College Ç #HOKNL@ 3GD -@SHNM@K #DEDMBD "NTQRD ENQ SGD )NHMS 2S@SD à /QHU@SD 2DBSNQR "K@RR Ç Certificate of Achievement, Advanced Security Management Program (ASMP 5) The Bank of Thailand Ç MSH "NQQTOSHNM ENQ $WDBTSHUDR Thanachart Bank Public Company Limited Ç 2DBTQHSX NEEHBH@KR HM SGD DWDBTSHUD L@M@FDLDMS "NTQRD "K@RR Ç ! -* &4 1 -3$$ @MC 23 -# !8 + " @MC (MSDQM@SHNM@K 1DFTK@SHNMR Class 3/2013 Ç *MNVKDCFD NE SGD ,NMDX +@TMCDQHMF BS @MC SGD 3DQQNQHRL %HM@MBHMF Act for Branch Executives
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in Other Listed Companies Position(s) in Other Listed Companies Position(s) in Other Legal Entities /QDRDMS
Ç $WDBTSHUD 5HBD /QDRHCDMS 3G@M@BG@QS !@MJ /TAKHB "NLO@MX +HLHSDC Ç Executive Vice President, Standard Chartered Bank (Thai) Public Company Limited None Ç #HQDBSNQ @MC 2G@QDGNKCDQ "21 KKH@MBD 3G@HK@MC "NLO@MX +HLHSDC Ç #HQDBSNQ @MC 2G@QDGNKCDQ ,NMDX , "NLO@MX +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
123
Mr. Boonlerd Sinsombat
Executive Vice President, Information Technology Date of Appointment
1 April 2015
Age
48 years
Education(s)
Ç ,@RSDQ NE 2BHDMBD "NLOTSDQ $MFHMDDQHMF ,@M@FDLDMS Assumption University Ç !@BGDKNQ NE 2BHDMBD ,@SGDL@SHBR *HMF ,NMFJTSÄR (MRSHSTSD NE Technology Thonburi PacRim Ç +D@CDQRGHO &QD@S +D@CDQ &QD@S 3D@L &QD@S 1DRTKS GE Capital Ç $WDBTSHUD (MENQL@SHNM +D@CDQRGHO /QNFQ@L à 4 2 Thai Banking Association Ç !@MJDQ ,@M@FDQH@K 3Q@HMHMF
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Training Program
Experience(s) in the Past 5 Years Position(s) in Other Listed Companies Position(s) in Other Legal Entities
124
ANNUAL REPORT 2016
Ç $WDBTSHUD 5HBD /QDRHCDMS *&"/ (MENQL@SHNM 3DBGMNKNFX Ayudhya Capital Services Company Limited None None
Mr. Praphan Anupongongarch
Executive Vice President, Automotive Lending Date of Appointment
9 September 2016
Age
53 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM -@SHNM@K (MRSHSTSD NE #DUDKNOLDMS Administration Ç Bachelor of Business Administration (Marketing), Sukhothai Thammathirat Open University Ç Bachelor of Science (Mathematics), King Mongkut’s Institute of Technology Thonburi
Training Program
Thai Institute of Directors Association Ç "DQSHEHB@SD 2TBBDRRETK %NQLTK@SHNM @MC $WDBTSHNM NE 2SQ@SDFX 2%$ Class 22/2014 Ç "DQSHEHB@SD #HQDBSNQ "DQSHEHB@SHNM /QNFQ@L #"/ "K@RR
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 /QDRDMS Position(s) in Other Legal Entities /QDRDMS
Ç $WDBTSHUD 5HBD /QDRHCDMS TSNLNSHUD +DMCHMF Thanachart Bank Public Company Limited Ç $WDBTSHUD 5HBD /QDRHCDMS 2DBTQDC +DMCHMF @MC #DONRHSR Thanachart Bank Public Company Limited Ç #HQDBSNQ @MC ,DLADQ NE SGD $WDBTSHUD "NLLHSSDD Ratchthani Leasing Public Company Limited Ç #HQDBSNQ 3G@M@BG@QS (MRTQ@MBD /TAKHB "NLO@MX +HLHSDC
THANACHART BANK PUBLIC COMPANY LIMITED
125
Mr. William George Said
Executive Vice President, Chief Administrative Officer Date of Appointment
4 November 2016
Age
44 years
Education(s)
Ç ,@RSDQ NE !TRHMDRR CLHMHRSQ@SHNM 0TDDMÄR 4MHUDQRHSX *HMFRSNM "@M@C@ Ç !@BGDKNQ NE "NLLDQBD #@KGNTRHD 4MHUDQRHSX
Training Program
None
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 Position(s) in Other Legal Entities
Ç ,@M@FHMF #HQDBSNQ @MC 'D@C NE &QD@SDQ "GHM@ 2BNSH@A@MJ Ç ,@M@FHMF #HQDBSNQ 2SQTBSTQ@K "NRS 3Q@MRENQL@SHNM 2BNSH@A@MJ None None
Mrs. Pittimart Sanguansook Senior Vice President, Finance Date of Appointment
1 August 2016
Age
52 years
Education(s)
Ç !@BGDKNQ NE BBNTMSHMF 3G@LL@R@S 4MHUDQRHSX Ç 'HFG #HOKNL@ HM TCHSHMF 3G@LL@R@S 4MHUDQRHSX
Training Program
Ç 2DLHM@Q (%12 3NQNMSN "@M@C@ Ç 2DLHM@Q %TMC@LDMS@K /Q@BSHBD ENQ "%.
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 Position(s) in Other Legal Entities
Ç 5HBD /QDRHCDMS "HSHA@MJ Ç Senior Vice President, Accounting, Thanachart Bank Public Company Limited None None
126
ANNUAL REPORT 2016
Mr. Premsak Chitprapaporn
First Vice President, Accounting Date of Appointment
1 August 2016
Age
40 years
Education(s)
Ç !@BGDKNQ NE BBNTMSHMF 3G@LL@R@S 4MHUDQRHSX Ç ,@RSDQ NE BBNTMS@MBX "GTK@KNMFJNQM 4MHUDQRHSX
Training Program
Ç 2DLHM@Q (%12 4OC@SD 3NQNMSN "@M@C@
Percentage of Shareholding in TBANK
None
Family Relationship with Director and Management
None
Experience(s) in Other Listed Companies Position(s) in Other Listed Companies Position(s) in Other Legal Entities
Ç 5HBD /QDRHCDMS %HM@MBH@K M@KXRHR @MC #@S@ ,@M@FDLDMS !-2 2TOONQS Thanachart Bank Public Company Limited None None
THANACHART BANK PUBLIC COMPANY LIMITED
127
ANNUAL REPORT 2016
Notes:
7
8
9
X
E
X
X
H
G
E
E
E
E
E
X
X
X
X / D XXX /// XXX /// XX //
X //
E
E
E
E
X/B
X // C
X //
X
X
X
X
X
X
X
XX
X/
X/
XX //
X
6 XXX ///
XXX
5
XXX
XXX ///
4
XX /// A
3
Associated Company
XXX
2
Subsidiary Companies
XX ///
1
Parent Company
XXX Chairman XX Vice Chairman A Chief Executive Officer B Chief Executive Officer and President G Senior Vice President H First Vice President
Mr. Banterng Tantivit Mr. Suphadej Poonpipat Mr. Kiettisak Meecharoen Mr. Narong Chivangkur Mr. Sataporn Jinachitra Assoc. Prof. Dr. Somjai Phagaphasvivat Mr. Rod Michael Reynolds Mr. Walter Tas Mr. Adil Aziz Chaudhry Ms. Suvarnapha Suvarnaprathip Mr. Peter Clifford Bessey Mr. Somjate Moosirilert Mrs. Noossara Roonsamsarn Mr. Piyaphong Artmongkorn Mr. Anuwat Luengtaweekul Mr. Enghug Nontikarn Mr. Sanong Kumnuch Mr. Ziad El-Hoss Ms. Wisarnsri Nilodom Mr. Boonlerd Sinsombat Mr. Praphan Anupongongarch Mr. William George Said Mrs. Pittimart Sanguansook Mr. Premsak Chitprapaporn
Name
As of 31 December 2016
X X
XXX X
X
X
X
X
X XXX
X
XXX
XXX
X X
X X
X
XXX
X
X X X
F
X F X
X X
X
X
X
X Director /// Chairman of the Executive Committee // Vice Chairman / Vice Chairperson of the Executive Commit ee / Member of the Executive Committee C Deputy Chief Executive Office D Senior Executive Vice President E Executive Vice President F Authorized Person Management Power
X
X
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
Related Companies
The Information of the Executives and Authorized Persons’ Position in Subsidiary, Associated, and Related Companies
TBANK
128
List of Parent Company, Subsidiary, Associated, and Related Companies Parent Company 1. Thanachart Capital Public Company Limited
Subsidiary Companies 2. 3. 4. 5.
Thanachart Securities Public Company Limited Thanachart Fund Management Company Limited Thanachart Insurance Public Company Limited 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. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.
Dusit Thaini Public Company Limited Siam Piwat Holding Company Limited MBK Resort Public Company Limited Siam Piwat Company Limited B.V. Holding Company Limited Deebuk Company Limited Thai Farming Company Limited Lam Sai Village Company Limited Patum Rice Mill and Granary Public Company Limited Royal Orchid Hotel (Thailand) Public Company Limited DMS Property Investment Private Limited MBK Life Assurance Public Company Limited Thai Royal Orchid Real Estate Company Limited Tararom Enterprise Public Company Limited Safety Insurance Public Company Limited Momentum BBS Company Limited
26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
Supalai Public Company Limited SEAFCO Public Company Limited Amarin Printing & Publishing Public Company Limited Lee Feed Mill Public Company Limited Logarithmics Limited Scotia Securities Asia Limited The Bank of Nova Scotia – Asia Pacific Scotiabank (Hong Kong) Limited, Hong Kong The Bank of Nova Scotia Asia Limited, Singapore Seacon Development Public Company Limited Information and Communication Networks Company Limited Srithai Superware Public Company Limited TRIS Corporation Limited CSR Alliance (Thailand) Company Limited Money M Company Limited
THANACHART BANK PUBLIC COMPANY LIMITED
129
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 of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
1.
Thanachart Securities PCL. 444 MBK Tower, 14th, 18th and 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8888, 2217-9595
Securities
Ordinary Share
1,500,000,000
1,499,999,930
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
Non-life Insurance
Ordinary share
74,000,000
73,999,434
100.00
3.
Thanachart Management and Services Co., Ltd. 2 Suan Mali Building, 2nd Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1569 Fax. +66 (0) 2220-2522
Services
Ordinary share
600,000
599,993
100.00
4.
Thanachart Training and Development Co., Ltd. 2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1018 Fax. +66 (0) 2220-2300
Training
Ordinary share
500,000
499,993
100.00
5.
Thanachart Group Leasing Co., Ltd. 444 MBK Tower, 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000, 2613-6000 Fax. +66 (0) 2217-8098
Leasing
Ordinary share
36,000,000
35,999,994
100.00
6.
National Leasing Co., Ltd.2 444 MBK Tower, 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000
Leasing
Ordinary share
600,000
599,994
100.00
130
ANNUAL REPORT 2016
No.
Company/Location
7.
Security SCIB Services Co., Ltd. 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
Type of Business
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
Services
Ordinary Share
100,000
99,998
100.00
Non-performing Ordinary asset Share management
200,000,000
199,999,997
100.00
Ordinary Share
10,000,000
9,999,000
99.99
Mutual fund Ordinary management Share
10,000,000
7,499,993
75.00
Life and Non-life Insurance Broker
10.
Thanachart Fund Management Co., Ltd. 231 MBK 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. 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
Leasing
Ordinary Share
2,416,227,209
1,574,951,400
65.18
12.
Thoon Ruam Kan Co., Ltd.3 133/2 Soi Sukhumvit 21, Sukhumvit Road, Klongtoey, Bangkok 10110
Others
Ordinary Share
240,000
80,000
33.33
13.
Siam Media and Communication Co., Ltd.3 18 Building 2 West SCB Park Plaza, 17th-22nd Floor, Ratchadapisek Road, Ladyao, Chatuchak, Bangkok 10900
Communication Ordinary Share
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
Industrial Ordinary pipe Share Manufacturing
500,001
70,470
14.09
THANACHART BANK PUBLIC COMPANY LIMITED
131
No.
Company/Location
Type of Business
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
Medical Clinic
Ordinary Share
100,000
9,998
10.00
Construction Ordinary Share
750,000
75,000
10.00
15.
Puen Pob Paet Co., Ltd.3 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330
16.
Crystal City Development Co., Ltd. 419 Sathupradit Road, Chong Nonsi, Yannawa, Bangkok 10120
17.
Metropolitan Industrial Leasing Co., Ltd. 81/42 Moo 5, Surasak, Sriracha, Chonburi 20110 Tel. +66 (0) 3804-8052 Fax. +66 (0) 3804-8053
Leasing
Ordinary Share
2,500,000
250,000
10.00
18.
Sahakol Chassis Co., Ltd. 1418/6-8 Phaholyotin Road, Lad Yao, Chatuchak, Bangkok 10900
Vehicle
Ordinary Share
45,000,000
4,500,000
10.00
19.
Siam Tire Cord Co., Ltd. 46/1 Moo 9, Bangna – Trad Road, K.M. 39, Bangprakong, Chachoengsao, 24180 Tel: +66 (0) 3853-8403-5 Fax: +66 (0) 3853-8399
Textiles and Ordinary apparel Share
20,000
2,000
10.00
20.
Soonvijai Development Co., Ltd.3 1740 New Petchburi Road, Bangkapi, Huay Klang, Bangkok 10310
Construction Ordinary Share
13,000
1,300
10.00
21.
Modular Samko Co., Ltd.3 155 Moo 14, Sukhumvit Sai Kao Road, Bangpakong, Chachoengsao 24130
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 and Ordinary Securities Share
13,000,000
1,300,000
10.00
23.
Siam City Real Estate Services Co.,Ltd.3 Construction Ordinary 62 Thaniya Building, 1st Floor, Silom Road, Suriyawong, Share Bangrak, Bangkok 10500
1,000,000
100,000
10.00
Notes:
1 2 3
132
Household
Shareholding percentage has shown included the shareholding of related companies. The Bank indirectly held shares through TGL which was in line with the definition of subsidiary company announced by the SET. Held by the Bank, which is in the process of liquidation, dissolution, bankruptcy, receivership or abandoned.
ANNUAL REPORT 2016
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
:
0-2217-8000
Fax
:
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, +66 (0) 2651-7915 Website www.thanachartbank.co.th
THANACHART BANK PUBLIC COMPANY LIMITED
133
Bondholders’ Representative : Debenture TBANK227A, and TBANK22OA
Bank of Ayudhya Public Company Limited 1222, 17th Floor, Rama III Road, Bang Phongphang, Yan Nawa, Bangkok 10120 Tel. +66 (0) 2296-3582 Fax. +66 (0) 2683-1298 Website www.krungsri.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 -
0134
ANNUAL REPORT 2016
Companies in Thanachart Group Thanachart Capital Public Company Limited
Thanachart Insurance Public Company Limited
Thanachart Bank Public Company Limited
MBK Life Assurance Public Company Limited
444 MBK Tower, 16 - 17 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax +66 (0) 2217-8312 www.thanachart.co.th Registration No. 0107536000510 th
th
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 Fax +66 (0) 2217-9642 www.tnsitrade.com Registration No. 0107557000591
Thanachart Fund Management Company Limited
231 MBK Life Building, 5th-7th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2126-8300 Fax +66 (0) 2253-8483 www.thanachartfund.co.th Registration No. 0105535049696
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
231 MBK Life Building, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2252-5070 Fax +66 (0) 2252-7155 www.mbklife.co.th Registration No. 0107555000481
NFS Asset Management Company Limited 444 MBK Tower, 17th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax +66 (0) 2217-8289 Website: None Registration No. 0105540086022
MAX Asset Management Company Limited
444 MBK Tower, 17th Floor, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax +66 (0) 2217-8289 Website: None Registration No. 0105540093282
THANACHART BANK PUBLIC COMPANY LIMITED
135
TS Asset Management Company Limited
Thanachart Management and Services Company Limited
1101 Petchburi Building, 9 Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400, Thailand Tel. +66 (0) 2208-5555 Fax +66 (0) 2208-5892 www.thanachartnpa.com Registration No. 0105554031624
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
Ratchthani Leasing Public Company Limited
Thanachart Training and Development Company Limited
Thanachart Group Leasing Company Limited
Thanachart Broker Company Limited
th
77/35-36 Sinn Sathorn Tower, 11 UP Floor, Krung Thonburi Road, Klong Ton Sai, Klong San, Bangkok 10600, Thailand Tel. +66 (0) 2431-9000 Fax +66 (0) 2431-9099 www.ratchthani.com Registration No. 0107545000209 th
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
444 MBK Tower, 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax +66 (0) 2217-8098 Website: None Registration No. 0105538045861
999/3, 999/4 The Nine Tower D, E, F 4th Floor, Rama 9 Road, Suanluang, Suanluang, Bangkok 10250, Thailand Tel. +66 (0) 2685-0200, +66 (0) 2308-9700 Fax +66 (0) 2685-0333, +66 (0) 2308-9775 Website: None Registration No. 0105540075314
National Leasing Company Limited
Security SCIB Services Company Limited
444 MBK Tower, 19 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand Tel. +66 (0) 2217-8000 Fax None Website: None Registration No. 0105532078407 th
136
ANNUAL REPORT 2016
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 1 September 2016 (the latest closing date of the suspended share-transfer register) were as follows: 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
Issued and Paid-up Shares
6,064,862,170
100.000
Thai Shareholders
3,093,079,707
51.000
Foreign Shareholders
2,971,782,463
49.000
Rank
1. 2. 3 4. 5. 6. 7. 8. 9. 10. 11.
Source: Remark
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
Report of the Bank’s major shareholders as of 1 September 2016 prepared by Thailand Securities Depository Company Limited 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”).
THANACHART BANK PUBLIC COMPANY LIMITED
137
Name list of the company’s major shareholders as at 31 October 2016 (the latest closing date of the suspended share-transfer registerwere as follows:
Name of shareholders
Ordinary Shares
Preferred Shares
Total Shares
Percentage of Shareholding
1. Thai NVDR Company Limited 2. MBK Public Company Limited Primacy Elegance Investments Limited 3. State Street Bank Europe Limited 4. Thanachart Capital Public Company Limited 5. State Street Bank and Trust Company 6. Chase Nominees Limited 7. Krungsri Dividend Stock LTF 8. Nortrust Nominees LTD-CL AC 9. The Bank of New York (Nominees) Limited 10. HSBC (Singapore) Nominees PTE LTD
217,746,901 129,914,400 3,400,000
-
217,746,901 129,914,400 3,400,000
18.048 10.768 0.282
59,071,353 41,350,000
-
59,071,353 41,350,000
4.896 3.427
29,188,023
-
29,188,023
2.419
26,772,229 22,710,600 17,684,198 15,458,690
-
26,772,229 22,710,600 17,684,198 15,458,690
2.219 1.882 1.466 1.281
12,916,800
-
12,916,800
1.071
Other Shareholders
630,253,293
13,216
630,266,509
52.240
1,206,466,487
13,216
1,206,479,703
100.000
Thai Shareholders
844,721,941
13,156
844,735,097
70.017
Foreign Shareholders
361,744,546
60
361,744,606
29.983
Issued and Paid-up Shares
Notes: 1) The second Shareholders including related parties under Section 258 of the Securities and Exchange Act (No. 4) B.E. 2551 is the same order. 2) The fourth largest shareholder (Thanachart Capital Public Company Limited) was obtained from the repurchase of shares under the Treasury Stock Program during 10 February 2015 to 9 August 2015. 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 48.999 percent of the Bank’s total paid-up shares via Scotia Netherlands Holding B.V. on 9 May 2011.
(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. 138
ANNUAL REPORT 2016
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
2011 2012
2012* 2013
2013 2014
2014 2015
2015*** 2016
Earnings per share (THB)
1.21
1.24
2.56
1.44
2.03
Interim dividend payment per share for the performance during the first half of the year (THB)
-
-
-
-
0.22
Dividend payment per share for the performance during the second half of the year (THB)
0.35
0.37
0.45
0.45
0.40
28.94
29.76
**17.58
31.34
32.83
Dividend Payout Ratio 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) *** During 2015, the Bank called up additional paid-up share capital of 551,197,267 shares at THB 10 and registered additional share capital. The Bank has issued and paid-up share capital totaling THB 60,648,621,700.
However, on 15 September 2016, the Bank paid an interim dividend for the year 2016 at the rate of THB 0.35 per share, an equivalent of 35.37 percent of the first half of 2016 net profit in consolidated financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
139
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 2016 which is in compliance with financial reporting standards and relevant rules and regulations.
(Mr. Banterng Tantivit) Chairman of the Board of Director
140
ANNUAL REPORT 2016
(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 2. Assoc. Prof. Dr.Somjai 3. Mr. Sataporn
Meecharoen Phagaphasvivat 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 2016, the Audit Committee convened twelve meetings in total with the management, top level executives of the related business units and auditors to acknowledge and consider numerous matters as of the following: Ç %HM@MBH@K 2S@SDLDMS Reviewed the quarterly, year-end and consolidated financial statements of TBANK and its subsidiaries by consulting VHSG SGD DWSDQM@K @TCHSR @MC "GHDE %HM@MBH@K .EEHBDQ "%. HM NQCDQ SN DMRTQD EHM@MBH@K QDONQSHMF RS@MC@QCR SGD @BBTQ@BX NE HSR 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. Ç (MSDQM@K "NMSQNK @MC (MSDQM@K TCHS 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. Ç 1DFTK@SNQX "NLOKH@MBD 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
141
Ç 1HRJ ,@M@FDLDMS 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. Ç TCHS "NLLHSSDDÄR "G@QSDQ 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. Ç (MCDODMCDMS TCHSNQ 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 for an approval of the auditors and the remuneration of the auditors. Ç 1DK@SDC SQ@MR@BSHNMR NQ BNMEKHBS NE HMSDQDRS 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
142
ANNUAL REPORT 2016
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Thanachart Bank Public Company Limited Opinion I have audited the accompanying consolidated financial statements of Thanachart Bank Public Company Limited and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2016, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and have also audited the separate financial statements of Thanachart Bank Public Company Limited for the same period. 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 2016, their EHM@MBH@K ODQENQL@MBD @MC B@RG EKNVR ENQ SGD XD@Q SGDM DMCDC HM @BBNQC@MBD VHSG 3G@H %HM@MBH@K 1DONQSHMF 2S@MC@QCR Basis for Opinion I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under those standards are further CDRBQHADC HM SGD TCHSNQÄR 1DRONMRHAHKHSHDR ENQ SGD TCHS NE SGD %HM@MBH@K 2S@SDLDMSR RDBSHNM NE LX QDONQS ( @L HMCDODMCDMS NE SGD &QNTO HM @BBNQC@MBD VHSG SGD "NCD NE $SGHBR ENQ /QNEDRRHNM@K BBNTMS@MSR @R HRRTDC AX SGD %DCDQ@SHNM NE BBNTMSHMF /QNEDRRHNMR TMCDQ SGD 1NX@K Patronage of His Majesty the King as relevant to my audit of the financial statements, and I have fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Emphasis of matter I draw attention to Note 4 to the consolidated financial statements regarding the change in accounting policy on the measurement of land, from cost method to revaluation method. My opinion is not qualified in respect of this matter. Other Information Management is responsible for the other information. The other information comprise the information included in annual report of the Group, but does not include the financial statements and my auditor’s report thereon. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Thai %HM@MBH@K 1DONQSHMF 2S@MC@QCR @MC ENQ RTBG HMSDQM@K BNMSQNK @R L@M@FDLDMS CDSDQLHMDR HR MDBDRR@QX SN DM@AKD SGD OQDO@Q@SHNM of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. THANACHART BANK PUBLIC COMPANY LIMITED
143
Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Thai Standards on Auditing, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: Ç (CDMSHEX @MC @RRDRR SGD QHRJR NE L@SDQH@K LHRRS@SDLDMS NE SGD EHM@MBH@K RS@SDLDMSR VGDSGDQ CTD SN EQ@TC NQ DQQNQ design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Ç .AS@HM @M TMCDQRS@MCHMF NE HMSDQM@K BNMSQNK QDKDU@MS SN SGD @TCHS HM NQCDQ SN CDRHFM @TCHS OQNBDCTQDR SG@S @QD @OOQNOQH@SD in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Ç $U@KT@SD SGD @OOQNOQH@SDMDRR NE @BBNTMSHMF ONKHBHDR TRDC @MC SGD QD@RNM@AKDMDRR NE @BBNTMSHMF DRSHL@SDR @MC related disclosures made by management. Ç "NMBKTCD NM SGD @OOQNOQH@SDMDRR NE L@M@FDLDMSÄR TRD NE SGD FNHMF BNMBDQM A@RHR NE @BBNTMSHMF @MC A@RDC NM SGD audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Ç $U@KT@SD SGD NUDQ@KK OQDRDMS@SHNM RSQTBSTQD @MC BNMSDMS NE SGD EHM@MBH@K RS@SDLDMSR HMBKTCHMF SGD CHRBKNRTQDR @MC whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Ç .AS@HM RTEEHBHDMS @OOQNOQH@SD @TCHS DUHCDMBD QDF@QCHMF SGD EHM@MBH@K HMENQL@SHNM NE SGD DMSHSHDR NQ ATRHMDRR @BSHUHSHDR within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. The engagement partner on the audit resulting in this independent auditor’s report is Ratana Jala.
Ratana Jala Certified Public Accountant (Thailand) No. 3734
EY Office Limited !@MFJNJ %DAQT@QX 144
ANNUAL REPORT 2016
STATEMENT OF FINANCIAL POSITION
Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2016 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Assets Cash
12,076,997
13,337,280
12,072,227
13,336,176
Interbank and money market items - net
47,475,583
57,583,120
47,465,946
56,941,123
Derivatives assets
3,564,235
5,446,810
3,563,917
5,446,786
Investments - net
175,081,237
171,782,138
167,275,226
163,667,389
Investments in subsidiary and associated companies - net
2,253,187
1,899,982
7,359,391
7,359,391
Loans to customers and accrued interest receivables
739,078,351
764,002,978
695,679,822
722,792,730
619,974
657,621
620,272
657,840
Total loans to customers and accrued interest receivables
739,698,325
764,660,599
696,300,094
723,450,570
Less: Deferred revenue
(48,171,212)
(50,536,590)
(44,066,834)
(46,791,967)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
(24,615,884)
(25,676,138)
(19,300,696)
(20,141,589)
Revaluation allowance for debt restructuring
(1,976)
(4,080)
(1,976)
(4,080)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
666,909,253
688,443,791
632,930,588
656,512,934
9,544
9,944
9,544
9,944
Properties foreclosed - net
3,111,894
4,093,136
1,443,860
1,837,462
Land, premises and equipment - net
9,546,383
8,004,706
9,295,669
7,764,063
Goodwill and intangible assets - net
20,649,159
20,953,948
20,533,529
20,856,782
Deferred tax assets
790,631
740,976
-
-
1,125,862
1,006,278
-
-
7,917,733
7,670,312
4,917,923
5,102,392
950,511,698
980,972,421
906,867,820
938,834,442
Receivables from purchase and sale of securities Other assets - net
Total assets
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
145
STATEMENT OF FINANCIAL POSITION (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2016 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Liabilities and equity Deposits
676,556,502
669,504,133
677,807,238
670,575,221
Interbank and money market items
65,834,486
85,687,630
56,155,845
78,698,898
1,986,425
2,201,580
1,986,425
2,201,580
Liability payable on demand Derivatives liabilities
4,912,489
6,757,528
4,912,407
6,750,929
Debt issued and borrowings
49,408,917
71,641,089
34,522,128
55,426,489
9,544
9,944
9,544
9,944
Banks' liability under acceptances Provisions
3,578,928
3,293,614
3,340,786
3,046,619
Deferred tax liabilities
867,710
893,302
799,034
873,765
Payables from purchase and sale of securities
2,366,288
2,072,513
1,000,000
-
Accrued interest payables
2,053,948
2,962,116
1,969,591
2,859,200
Accrued expenses
5,113,739
4,960,675
4,400,753
4,298,048
Insurance contracts liabilities
4,936,796
4,793,269
-
-
Other liabilities
6,765,334
8,504,301
4,379,393
6,043,743
824,391,106
863,281,694
791,283,144
830,784,436
99,136,649
99,136,649
99,136,649
99,136,649
60,648,622
60,648,622
60,648,622
60,648,622
2,100,694
2,100,694
2,100,694
2,100,694
1,556,365
1,121,529
947,584
820,220
3,601,763
3,003,674
3,601,763
3,003,674
56,581,148
49,351,232
48,286,013
41,476,796
124,488,592
116,225,751
115,584,676
108,050,006
1,632,000
1,464,976
-
-
Total equity
126,120,592
117,690,727
115,584,676
108,050,006
Total liabilities and equity
950,511,698
980,972,421
906,867,820
938,834,442
Total liabilities Equity Share capital Registered 9,913,664,903 ordinary shares of Baht 10 each Issued and paid-up share capital
6,064,862,170 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.
146
ANNUAL REPORT 2016
STATEMENT OF COMPREHENSIVE INCOME Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2016 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Profit or loss Interest income
44,885,834
48,217,216
41,843,450
45,124,869
Interest expenses
(16,174,138)
(20,536,160)
(15,295,196)
(19,572,064)
28,711,696
27,681,056
26,548,254
25,552,805
8,814,210
8,179,528
6,423,610
6,132,836
(2,909,701)
(2,704,730)
(2,642,782)
(2,488,314)
Net interest income Fees and service income Fees and service expenses Net fees and service income
5,904,509
5,474,798
3,780,828
3,644,522
Gains on trading and foreign exchange transactions
491,315
658,040
435,055
629,881
Gains on investments
714,390
1,532,714
616,243
1,491,635
206,567
169,095
-
-
6,035,644
5,961,637
-
-
399,846
295,456
2,828,821
3,346,744
Other operating income
1,290,019
1,274,436
1,298,917
1,328,581
Total operating income
43,753,986
43,047,232
35,508,118
35,994,168
(3,346,848)
(3,409,215)
-
-
40,407,138
39,638,017
35,508,118
35,994,168
11,646,882
10,952,116
9,889,374
9,269,982
45,641
43,967
33,995
32,809
3,051,097
2,969,738
2,728,323
2,646,065
757,490
837,225
732,235
785,683
5,124,715
4,918,207
4,459,267
4,361,705
20,625,825
19,721,253
17,843,194
17,096,244
6,251,266
8,591,933
5,808,275
8,007,369
13,530,047
11,324,831
11,856,649
10,890,555
105,118
561,413
11,961,767
11,451,968
Share of profit from investments accounted for under equity method Insurance income
Dividend income
Insurance expenses
Net operating income Other operating expenses Employee's expenses Directors' remuneration
Premises and equipment expenses Taxes and duties Other expenses Total other operating expenses Impairment losses of loans and debt securities
Profit before income tax Income tax Profit for the year
(691,423) 12,838,624
(198,421) 11,126,410
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
147
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2016 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note Other comprehensive income
Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
7UDQVDFWLRQV ZLOO EH UHFODVVLILHG VXEVHTXHQWO\ WR SURILW RU ORVV Losses on changes in value of available-for-sale investments
(1,454,017)
(1,162,976)
Share of other comprehensive income of associate (loss)
153,392
(75,640)
Income tax relating to components of other comprehensive income
275,449
(1,438,751)
(672,332)
-
-
240,868
287,750
134,467
1,605,507
-
1,602,581
-
199,361
-
-
-
7UDQVDFWLRQV WKDW ZLOO QHYHU EH UHFODVVLILHG VXEVHTXHQWO\ WR SURILW RU ORVV Surplus on revaluation of assets
Share of other comprehensive income of associate Actuarial gains (losses) on defined benefit plan Income tax relating to components of other comprehensive income Total other comprehensive income (loss)
16,041
(214,270)
(11,894)
(177,661)
(344,233)
41,507
(318,137)
35,532
121,549
(679,994)
451,500
Total comprehensive income
(1,170,511)
13,290,124
9,955,899
12,083,316
10,771,974
12,434,329
10,742,829
11,961,767
11,451,968
404,295
383,581
12,838,624
11,126,410
12,886,025
9,573,026
12,083,316
10,771,974
404,099
382,873
13,290,124
9,955,899
1.97
2.03
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
Basic earnings per share Profit attributable to the Bank (Baht per share)
The accompanying notes are an integral part of the financial statements.
148
ANNUAL REPORT 2016
2.05
1.90
THANACHART BANK PUBLIC COMPANY LIMITED
149
The accompanying notes are an integral part of the financial statements.
60,648,622
-
Transferred to retained earnings
Balance as at 31 December 2016
-
Other comprehensive income for the year
-
-
Profit for the year
Transfer of retained earnings to statutory reserve
-
Decrease in non-controlling interests of the subsidiaries
-
Dividend paid
60,648,622
Balance as at 1 January 2016
Effect of share capital reduction of associate
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
5,511,973
-
55,136,649
share capital
Share premium
2,100,694
-
-
-
-
-
-
-
2,100,694
2,100,694
-
-
-
-
-
-
-
2,100,694
(123,379)
-
-
-
-
-
-
-
(123,379)
(123,379)
-
-
-
-
-
-
-
(123,379)
common control
combination under
fully paid-up
Dividend paid
Note
business
Surplus from Issued and
Increase in share capital
policy for fair value measurement
Cumulative effect of change in accounting
Balance as at 1 January 2015
For the year ended 31 December 2016
Statements of changes in equity
Thanachart Bank Public Company Limited and its subsidiaries
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,280,588
(3,700)
1,284,288
of assets
revaluation
Surplus on
(64,087)
-
(1,163,229)
-
-
-
-
-
1,099,142
1,099,142
(929,672)
-
-
-
-
-
-
2,028,814
of investments - net
changes in value
Surplus on
463,243
-
317,477
-
-
-
-
-
145,766
145,766
(68,076)
-
-
-
-
-
-
213,842
associate
income of
other comprehensive
Share of
Consolidated financial statements Other components of equity
STATEMENTS OF CHANGES IN EQUITY
Retained earnings
3,601,763
-
-
-
598,089
-
-
-
3,003,674
3,003,674
-
-
572,598
-
-
-
2,431,076
56,581,148
3,700
13,160
12,434,329
(598,089)
-
(4,548,646)
(74,538)
49,351,232
49,351,232
(172,055)
10,742,829
(572,598)
-
(3,815,419)
-
(20,863)
43,189,338
statutory reserve Unappropriated
Appropriated -
1,632,000
-
(196)
404,295
-
(237,075)
-
-
1,464,976
1,464,976
(708)
383,581
-
(105,172)
-
-
-
1,187,275
interests
Non-controlling
126,120,592
-
451,500
12,838,624
-
(237,075)
(4,548,646)
(74,538)
117,690,727
117,690,727
(1,170,511)
11,126,410
-
(105,172)
(3,815,419)
5,511,973
(20,863)
106,164,309
Total
(Unit: Thousand Baht)
150
ANNN UA REPORT 2016 ANNUAL
Transferred to retained earnings
The accompanying notes are an integral part of the financial statements.
60,648,622
-
Other comprehensive income for the year
Balance as at 31 December 2016
-
-
Profit for the year
-
Transfer of retained earnings to statutory reserve
60,648,622
Balance as at 1 January 2016
Dividend paid
60,648,622
Balance as at 31 December 2015
-
Other comprehensive income for the year (loss)
-
Transfer of retained earnings to statutory reserve -
-
Dividend paid
Profit for the year
5,511,973
-
55,136,649
2,100,694
-
-
-
-
-
2,100,694
2,100,694
-
-
-
-
-
-
2,100,694
-
-
-
-
-
-
-
-
-
-
-
-
1,278,365
(3,700)
1,282,065
of assets
revaluation Share premium
fully paid-up share capital
Surplus on
Note
(330,781)
-
(1,151,001)
-
-
-
820,220
820,220
(537,865)
-
-
-
-
-
1,358,085
investments - net
in value of
Surplus on changes Appropriated -
3,601,763
-
-
-
598,089
-
3,003,674
3,003,674
-
-
572,598
-
-
-
2,431,076
48,286,013
3,700
(9,515)
11,961,767
(598,089)
(4,548,646)
41,476,796
41,476,796
(142,129)
11,451,968
(572,598)
(3,815,419)
-
(20,863)
34,575,837
Unappropriated
Retained earnings
statutory reserve
Separate financial statements Other components of equity Issued and
Increase in share capital
policy for fair value measurement
Cumulative effect of change in accounting
Balance as at 1 January 2015
For the year ended 31 December 2016
Statements of changes in equity (continued)
Thanachart Bank Public Company Limited and its subsidiaries
STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
115,584,676
-
121,549
11,961,767
-
(4,548,646)
108,050,006
108,050,006
(679,994)
11,451,968
-
(3,815,419)
5,511,973
(20,863)
95,602,341
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 2016 (Unit: Thousand Baht) Consolidated
Separate
financial statements 2016
financial statements
2015
2016
2015
Cash flows from operating activities Profit before income tax
13,530,047
11,324,831
11,856,649
10,890,555
Adjustments to reconcile profit before income tax to net cash received (paid) from operating activities: -
-
Depreciation and amortisation
Share of profit from investments accounted for under equity method
1,598,545
(206,567)
1,478,967
(169,095)
1,513,763
1,392,780
Impairment losses of loans and debt securities
6,251,266
8,591,933
5,808,275
8,007,369
Increase in provisions
673,302
773,247
647,521
754,618
Amortisation of premiums (discounts) on investment in debt securities
244,296
(83,870)
247,196
(82,766)
Decrease in allowance for impairment of investments
(2,603)
(2,848)
(2,576)
Gain on capital refunded from a subsidiary company
-
-
-
Loss on liquidation from a subsidiary company
-
12,771
-
9,104
10,847
Decrease (increase) in allowance for change in value of investment
(2,648)
(2,845) (152,059) 10,284
Increase (decrease) in allowance for impairment of properties foreclosed Decrease in allowance for impairment of land, premises and equipment Loss from revaluation of land Decrease in allowance for impairment of intangible assets
(143,629)
239,658
(753) 13,640
781
112,150
-
-
-
-
13,640
-
(18,244)
(14,316)
(18,244)
(14,316)
(10)
(4,574)
(10)
(4,574)
(26,650)
(19,754)
(27,976)
(16,038)
Interest income and other income from the assets transferred for debt repayment Gain from disposal of land, premises and equipment Loss from disposal of intangible assets Unrealised loss (gain) on exchange Increase (decrease) in allowance for impairment of other assets
43,864
6,957
299,496
(1,557,526)
10,623
(9,497)
43,515 299,496 (21,387)
6,957 (1,557,526) 3,949
Decrease (increase) in other income receivable
21,256
(36,088)
14,231
(33,217)
Decrease in fees and rental received in advance
(159,697)
(142,435)
(159,697)
(142,435)
(47,014)
(42,911)
(47,014)
(42,911)
Decrease in deferred income Increase (decrease) in accrued expenses
Net interest income Dividend income Cash received from interest income Cash paid for interest expenses Cash paid for corporate income tax
227,177
(94,339)
176,817
(66,540)
22,317,449
20,261,958
20,342,332
19,063,435
(28,955,992)
(27,597,186)
(26,795,450)
(25,470,039)
(2,828,821)
(3,346,744)
41,271,745
(399,846)
44,455,095
(295,456)
38,348,905
41,528,985
(14,400,790)
(18,017,525)
(14,236,481)
(17,826,058)
(961,995)
(1,749,241)
(205,624)
(890,642)
Income from operating activities before changes in operating assets and liabilities
18,870,571
17,057,645
14,624,861
13,058,937
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
151
STATEMENT OF CASH FLOWS (CONTINUED)
Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2016 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Cash flows from operating activities (continued) Decrease (increase) in operating assets Interbank and money market items
10,225,051
7,845,601
9,566,089
8,392,203
Investments in trading securities
(5,606,659)
3,005,882
(4,103,253)
2,917,063
Derivatives assets
2,427,331
906,728
2,427,625
906,439
Loans to customers
10,082,618
25,667,631
13,087,388
26,347,436
6,369,275
8,533,524
5,099,419
7,105,248
831,132
-
-
Properties foreclosed Receivables from purchase and sale of securities
(119,584)
Other assets
(204,783)
(2,381,279)
274,108
(1,396,165)
7,052,370
(27,487,490)
7,232,017
(29,159,692)
(20,032,334)
5,218,650
(22,722,242)
5,352,287
(215,156)
546,198
(215,155)
546,198
Increase (decrease) in operating liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities
(2,495,400)
(1,129,263)
(2,488,883)
Payables from purchase and sale of securities
293,775
552,817
1,000,000
Insurance contract liabilities
143,526
95,745
-
(609,112)
(813,508)
Other liabilities Net cash flows from operating activities
26,181,489
(417,977)
(1,132,812) (100,286) (84,268)
38,450,013
23,363,997
32,752,588
(25,469,946)
(1,196,051)
(25,181,497)
Cash flows from investing activities Decrease (Increase) in investments in securities held for investment Cash received from capital refunded from a subsidiary company Cash received from interest on investments Cash received from dividend Cash paid for purchase of equipment Cash received from disposal of land, premises and equipment Cash paid for purchase of intangible assets Net cash flows from (used in) investing activities
The accompanying notes are an integral part of the financial statements.
152
ANNUAL REPORT 2016
715,291 -
-
-
1,536,753
3,875,519
3,679,340
3,752,462
3,487,489
399,444
407,535
2,828,821
3,346,744
(967,345)
(763,163)
(878,963)
(673,109)
70,891
25,105
66,237
21,187
(436,441)
(290,565)
(399,656)
(260,880)
3,657,359
(22,411,694)
4,172,850
(17,723,313)
STATEMENT OF CASH FLOWS (CONTINUED)
Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2016 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Cash flows from financing activities Cash received from issued additional share capital
-
5,511,973
-
5,511,973
13,689,312
61,582,824
8,000,000
58,703,000
(35,921,484)
(80,139,555)
(28,904,361)
(77,119,832)
Cash paid for interest from borrowings
(2,746,973)
(3,664,864)
(2,013,519)
(2,904,955)
Cash paid for dividend
(5,882,916)
(2,481,149)
(5,882,916)
(2,481,149)
(237,070)
(115,303)
-
-
(317)
-
-
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
(31,099,131)
(19,306,391)
(28,800,796)
(18,290,963)
Net decrease in cash
(1,260,283)
(3,268,072)
(1,263,949)
(3,261,688)
Cash at beginning of the year
13,337,280
16,605,352
13,336,176
16,597,864
Cash at end of the year
12,076,997
13,337,280
12,072,227
13,336,176
5,207,030
6,280,107
4,669,225
5,671,800
61,632
154,281
60,250
143,698
6,708,749
7,850,747
6,588,906
7,624,117
-
1,334,270
-
1,334,270
Supplemental cash flows information Non-cash transactions Transfer of properties foreclosed from receivables for debt settlement Accounts payable for purchase of fixed assets Bad debt written-off Dividend payable
The accompanying notes are an integral part of the financial statements.
THANACHART BANK PUBLIC COMPANY LIMITED
153
NOTES TO FINANCIAL STATEMENTS
Thanachart Bank Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2016
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 Holdings B.V., 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 592 operational branches (2015: 614 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.
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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 Nature of business
2016
2015
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
Non-performing
100.00
100.00
Services
100.00
100.00
Hire purchase and
65.18
65.18
100.00
100.00
Subsidiaries directly held by the Bank
broker Thanachart Group Leasing Co., Ltd.
TS Asset Management Co., Ltd.
asset management Security Scib Services Co., Ltd. (Formerly known as “SCIB Services Co., Ltd.”) Ratchthani Leasing Plc.
leasing business Subsidiary indirectly held by the Bank National Leasing Co., Ltd.
b)
Leasing business
Total assets and net operating income of the subsidiaries that have significant impact to and are included in the consolidated financial statements as at 31 December 2016 and 2015 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 2016 Ratchthani Leasing Plc.
2015
2016
2015
32,779
28,849
2,002
1,727
2,856
4,295
323
443
Thanachart Insurance Plc.
11,236
10,718
3,090
3,098
Thanachart Securities Plc.
9,307
7,233
1,914
1,640
TS Asset Management Co., Ltd.
THANACHART BANK PUBLIC COMPANY LIMITED
155
c)
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.
d)
All subsidiaries are fully consolidated, being the date on which the Bank obtains control, and continue to be consolidated until the date when such control ceases.
e)
The financial statements of the subsidiaries are prepared for the same reporting period as the Bank, using the same significant accounting policies. In case where there are different accounting policies, the Bank has adjusted the effect of these in the consolidated financial statements.
f)
The outstanding balances and significant intercompany transactions between the Bank and its subsidiaries have been eliminated from the consolidated financial statements. The investments in subsidiaries as recorded in the Bank’s and subsidiaries’ books of accounts have been eliminated against equity of the subsidiaries.
g)
Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Bank and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position.
2.3
The separate financial statements present investments in subsidiary and associated companies under the cost method.
3
New financial reporting standards
3.1
Financial reporting standards that became effective in the current year During the year, the Bank and its subsidiaries have adopted the revised (revised 2015) and new financial reporting standards and accounting treatment guidance issued by the Federation of Accounting Professions which become 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, 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 and its subsidiaries’ financial statements. However, some of these standards involve changes to key principles, which are summarised below:
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TFRS 4 Insurance Contracts The objective of Thai Financial Reporting Standard No. 4 (TFRS 4) is to specify the financial reporting for insurance contracts (including reinsurance contracts) issued by any entity and the reinsurance contracts held by an entity, and to provide limited amendments in accounting for insurance contracts until the second phase of the project on the financial reporting standard regarding insurance contracts is completed. In particular, this standard requires disclosure that identifies and explains the amounts in an insurer’s financial statements arising from insurance contracts and prohibits provisions for possible claims under contracts that are not in existence at the end of the reporting period. It also requires insurers to test for the adequacy of recognised insurance contract liabilities and perform an impairment test for reinsurance assets. Moreover, this standard temporarily exempts insurers from some requirements of other standards, including the requirement to consider the framework in selecting accounting policies for insurance contracts. The management of the Bank and its subsidiaries consider that this standard does not have any significant impact to the financial statements. 3.2
Financial reporting standard that will become effective in the future During the current year, the Federation of Accounting Professions issued a number of the revised financial reporting standards and interpretations (revised 2016) and new accounting treatment guidance which is effective for fiscal years beginning on or after 1 January 2017. 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 management of the Bank and its subsidiaries believe that the revised financial reporting standards and interpretations and new accounting treatment guidance will not have any significant impact on the financial statements when they are initially applied. However, one standard involves changes to key principles, which are summarised below. TAS 27 (revised 2016) Separate Financial Statements This revised standard stipulates an additional option to account for investments in subsidiaries, joint ventures and associates in separate financial statements under the equity method, as described in TAS 28 (revised 2016) Investments in Associates and Joint Ventures. However, the entity is to apply the same accounting treatment for each category of investment. This standard will not have any significant impact on the Bank and its subsidiaries’ financial statements because the management has decided to continue accounting for such investments under the cost method in the separate financial statements. THANACHART BANK PUBLIC COMPANY LIMITED
157
4.
Change in accounting policy During the year, the Bank and its subsidiaries reviewed and changed their accounting policy for recording the value of land from the cost method to the revaluation method, under which value is the fair value of the asset at the valuation date appraised by an independent professional appraiser. In making the changes in accounting policy, the Bank and its subsidiaries adopted TAS 8. This is considered to be a revaluation of assets in accordance with TAS 16 Property, Plant and Equipment, which does not require the change to be applied retroactively. Therefore, the Bank and its subsidiaries have applied the change prospectively. The amounts of adjustments affecting the statements of financial position as at 31 December 2016 and the statements of comprehensive income for the year then ended are as follows. (Unit: Million Baht) 31 December 2016 Consolidated
Separate
financial statements
financial statements
The statements of financial position: Increase in investment in associated Increase in land, premises and equipment Increase in deferred tax liabilities Increase in retained earnings - unappropriated Increase in other components of equity
198
-
1,580
1,577
336
315
4
4
1,460
1,278 (Unit: Million Baht)
For the year ended 31 December 2016 Consolidated
Separate
financial statements
financial statements
The statements of comprehensive income: Profit or loss Increase in premises and equipment expenses
(14)
(14)
(1)
-
3
3
(12)
(11)
1,606
1,603
Increase in share of other comprehensive income of associate
199
-
Increase in income tax relating to components of other
341
321
Decrease in share of profit from investments accounted for under equity method Decrease in income tax Decrease in profit for the year Other comprehensive income Increase in surplus on revaluation of assets
comprehensive income Earnings per share of the Bank Decrease in basic earnings per share (Baht per share)
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(0.002)
(0.002)
5.
Significant accounting policies
5.1
Revenue recognition a)
Interest and discounts on loans Interest on loan is recognised as income on an accrual basis, based on the amount of principal outstanding. Interest on hire purchase and financial lease is recognised based on the effective interest method. For loans on which principal or interest payments have been defaulted for more than three months past the due date, the Bank and its subsidiaries cease accrual of interest income, and accrued interest already recorded is reversed from the Bank and its subsidiaries’ accounts. Interest is then recognised as income on a cash basis until settlement of such overdue balance has been received from the debtors. Interest income on restructured loans is recognised as income on an accrual basis, with reference to the interest rate stipulated in the agreements, with the exception of interest on loans that are subject to monitoring for compliance with restructuring conditions, which the Bank and its subsidiaries recognise as income on a cash basis until the receivable is able to comply with the restructuring conditions for a period of no less than three months or three installments, whichever is longer. The Bank and its subsidiaries recognise interest income on investments in purchased/transferred loans for which loan repayment is received during the year based on the effective yield rate of the portfolio multiplied by the new book value (acquisition cost) of the outstanding balances of receivables, to the extent that this is not greater than the amount received from such receivables. After the restructuring, interest income is recognised using the effective interest method, for those receivables from which loan repayment was received during the year. Interest or discounts already included in the face value of notes receivable or loans are recorded as deferred interest and taken up as income evenly throughout the term of the notes or loans or in proportion of debt repayment. Interest income received in advance on hire purchase represents discounted on interest given to debtors by dealers, is recognised based on the effective interest method, in the same manner as interest income on hire purchase receivables.
b)
Interest and dividends on investments Interest on investments is recognised as income on an accrual basis based on the effective interest rate. Dividends are recognised as income when the right to receive the dividends is established.
THANACHART BANK PUBLIC COMPANY LIMITED
159
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 programmed 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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ANNUAL REPORT 2016
5.2
Expenses recognition a)
Interest expenses Interest expenses are charged to expenses on an accrual basis. Interest on notes payable included in the face value is recorded as deferred interest and amortised to expenses evenly throughout the term of the notes.
b)
Commission and direct expenses charged on hire purchase/financial leases Initial direct expenses at the inception of a hire purchase/financial lease contract (i.e. commission expenses and stamp duty expenses) are to be deferred and amortised using the effective interest method, with amortisation deducted from interest income throughout the contract period, in order to reflect the effective rate of return on the contracts. Unearned income on hire purchase/financial leases is presented net of commission expenses and initial direct cost on the inception of the contracts.
c)
Fees and service expenses Fees and service expenses are recognised as expenses on an accrual basis.
5.3
Investments Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss in the statements of comprehensive income. Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income in the statements of comprehensive income, and will be recognised in profit or loss when the securities are sold. Investments in held-to-maturity debt securities are stated at amortised cost. Premiums/ discounts on debt securities are amortised/accreted by the effective rate method with the amortised/accreted amount presented as an adjustment to the interest income. Investments in non-marketable equity securities, which are classified as general investments, are stated at cost net of allowance for impairment (if any). 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.
THANACHART BANK PUBLIC COMPANY LIMITED
161
The Bank and its subsidiaries recognise loss on impairment (if any) of available-for-sale securities, held-to-maturity debt securities and general investments in profit or loss in the statements of comprehensive income. In the event that the Bank and its subsidiaries transfer investments to another category, the investments are valued at their fair values prevailing on the transfer date. Differences between the carrying amount of the investments and their fair value on that date are recorded as profit or loss or other comprehensive income in the statements of comprehensive income, depending on the type of investment being reclassified. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss in the statements of comprehensive income. In case of disposal partial of the investment, the carrying value per share used to calculate the cost of the portion sold is determined using the weighted average method. 5.4
Investments in receivables purchased and allowance for impairment Investments in receivables purchased are presented at their acquisition cost net of allowance for impairment (if any). Loss on impairment is recognised as an expense in profit or loss in the statements of comprehensive income. In case that the receivables purchased enter into debt restructuring agreements, they are transferred to loans to customers and presented at fair value. The fair value is determined based on the outstanding balance of investments as at the transfer date or as at the date of restructuring. Allowance for impairment of investments in receivables purchased is determined based on the fair value, with reference to the collateral value.
5.5
Investments in subsidiary and associated companies Investments in subsidiary and associated companies in the separate financial statements are accounted for under the cost method net of allowance for impairment (if any). Loss on impairment is recognised as expenses in part of profit or loss in the statements of comprehensive income. Investments in associated companies in the consolidated financial statements are accounted for under the equity method. Under this method, investments are initially recorded at acquisition cost and are adjusted to reflect the attributable shares of the net income from the operations of the associated companies, in proportion to the investment.
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ANNUAL REPORT 2016
5.6
Loans to customers Loans to customers are stated at the principal balances, excluding accrued interest receivables, except for overdrafts which are presented at the principal balances plus accrued interest receivables. Unrecognised deferred income and discounts on loans are deducted from the loan balances. Hire purchase receivables and financial lease receivables are stated at the contract value of the hire purchase receivables and financial lease receivables net of unearned income, which is presented after netting commission expenses and initial direct cost on the inception of the contracts. Securities and derivatives business receivables comprise the net balances of securities business receivable and derivatives business receivables. Securities business receivable comprises credit balance receivables (for which the securities purchased are used as collateral), securities borrowing and lending receivables and guarantee deposit receivables (which comprise cash placed as guarantee for borrowers of securities or Thailand Securities Depository) as well as other receivables, such as overdue amounts in cash accounts and receivables which are under legal proceedings, are undergoing restructuring, or are being settled in installments. The receivable balance of cash accounts is presented as “Receivables from purchase and sale of securities�.
5.7
Allowances for doubtful accounts a)
Allowance for doubtful accounts for loans The Bank and its subsidiary 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 percent and 2 percent, 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 percent 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.
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However, non-performing hire purchase receivables and financial lease receivables are treated as uncollateralised. The Bank sets provision for hire purchase receivable - personal consuming of the Bank using the collective approach, which classifies groups of receivables having similar credit risk characteristics, and taking into account the historical loss of loans calculated based on the probability of default and a percentage of the loss given default. Furthermore, the Bank has set aside an additional provision by taking into consideration the potential additional loss arising from changes in economic circumstances that may impact certain borrowers’ ability to pay. This methodology, its parameters and assumptions have been reviewed in detail and will be monitored on an ongoing basis for continued applicability. b)
Subsidiary engaged in securities business has provided an allowance for doubtful accounts based on a review of debtors’ repayment capability, taking into consideration the risk of recovery and the value of collateral. An allowance is set aside for doubtful debts not fully covered by collateral and/or those which may not be fully recovered. Such debt classifications and provisions are made in accordance with the Notifications of the SEC.
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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5.8
Troubled debt restructuring In cases where the debt restructuring involves modifications of the terms of repayment, the fair value of the receivables after restructuring is based on the net present value of expected future cash flows, discounted by the market’s minimum loan rate for credit to large customers prevailing at the restructuring date. The differences between the fair values of receivables as of the restructuring date and their previous book values is recorded as “Revaluation allowance for debt restructuring”, and recognised as an expense in part of profit or loss in the statements of comprehensive income in the restructuring period. The Bank and its subsidiaries review such revaluation allowance based on the net present value of future cash flows over the remaining period to maturity, recognising adjustments against impairment losses of loans accounts. In cases where the troubled debt restructuring involves the transfer of assets or equity, the Bank and its subsidiaries record the assets or equity interest received as a result of debt restructuring at their fair value (based on the value appraised by internal appraisers or external independent appraisers) providing this does not exceed the amount of principal legally claimable from the debtor (including interest of which recognition has ceased until the restructuring date). Any excess of the fair value of the assets over the book value is recognised as gain on restructuring or interest income in part of profit or loss in the statements of comprehensive income, as the case may be. Losses arising from debt restructuring through waivers of part of principal or recorded accrued interest receivable are recognised as losses in part of profit or loss in the statements of comprehensive income when incurred.
5.9
Recognition and amortisation of customers’ assets Assets which customers have placed with the subsidiary company for securities trading, in term of cash accounts and credit balance accounts, including amounts which customers have placed as security for derivative trading, are recorded as assets and liabilities of the subsidiary company for internal control purpose. As at the reporting date, the subsidiary company eliminates those amounts which there are no guarantee obligations from both assets and liabilities and present only those assets which belong to the subsidiary company.
THANACHART BANK PUBLIC COMPANY LIMITED
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5.10 Property foreclosed Property foreclosed is stated at the lower of cost (fair value with reference to appraisal value, providing this does not exceed the legally claimable amount of debt) or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. Gains on disposal of property foreclosed are recognised as income in part of profit or loss in the statements of comprehensive income on the disposal date, unless the purchase is made with a loan from the Bank. In such cases, gains are recognised in accordance with the BOT’s guideline. Losses on disposal and impairment losses are recognised as expenses in part of profit or loss in the statement of comprehensive income. 5.11 Land, premises and equipment and depreciation a)
Land is stated at revalued amount less allowance for impairment (if any). No depreciation is provided on land. The Bank and its subsidiaries initially record land at its cost on the acquisition date, and subsequently have it revalued by an independent professional appraiser, and state it at the revalued amount. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at the end of reporting period. The Bank and its subsidiaries recognise the differences arising from the revaluation as follows: - When an asset’s carrying amount is increased as a result of the revaluation, the increase is credited directly to other comprehensive income and the cumulative increase is recognised in equity under the heading of “Surplus on revaluation of assets”. However, the revaluation increase is recognised as income to the extent that it reverses the revaluation decrease in respect of the same asset previously recognised as an expense. - When an asset’s carrying amount is decreased as a result of the revaluation, the decrease is recognised in profit or loss. However, the revaluation decrease is charged to other comprehensive income to the extent that it does not exceed the amount already held in “Surplus on revaluation of assets” in respect of the same asset.
b)
166
Assets under installation are stated at cost, and depreciation is not provided.
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c)
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. d)
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.
e)
The Bank and its subsidiaries derecognise the revaluation surplus on an asset upon disposal or when no future economic benefits are expected from its use or disposal. The revaluation surplus, remaining upon derecognition, is transferred directly to retained earnings.
5.12 Intangible assets and amortisation Intangible assets acquired through business combination are initially recognised at their fair value on the date of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial recognition, the intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses (if any). The Bank and its subsidiaries amortised intangible assets with finite lives on a systematic basis over their economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense and loss on impairment are recognised as expenses in part of profit or loss in the statement of comprehensive income. The intangible assets with finite useful lives have useful lives of approximately 3 - 10 years. No amortisation for computer software under development.
THANACHART BANK PUBLIC COMPANY LIMITED
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5.13 Leasehold rights Leasehold rights are stated at cost less accumulated amortisation. Leasehold rights are amortised on a straight-line basis over the lease periods and the amortisation amounts are recognised as expenses in part of profit or loss in the statements of comprehensive income. 5.14 Business combination and goodwill Business combination accounted for under purchase method. Goodwill is initially recorded at cost, which equals to the excess of the cost of business combination over the fair value of the net assets acquired. Goodwill is carried at cost less accumulated impairment losses (if any). Goodwill is tested for impairment annually or when circumstances indicate that the carrying value may be impaired. 5.15 Receivable from/payable to Clearing House Receivable from/payable to Clearing House comprise the net balance receivable/payable in respect of securities trades settled and derivatives business. These also include amounts pledged with Thailand Clearing House as security for derivatives trading. 5.16 Classification of insurance contracts A subsidiary classifies insurance contracts and reinsurance contracts based on the nature of the contract. An insurance contract is one under which the insurer has accepted significant insurance risk from another party by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Determination of whether a significant insurance risk has been accepted is based on comparison of the amount of benefit payable under the contract if an insured event occurs with the payment obligation if the insured event does not occur. If a contract does not meet these criteria, the subsidiary classifies it as an investment contract. Investment contracts are those contracts that transfer significant financial risk but not significant insurance risk. Financial risks are the interest rate risk, exchange rate risk and price risk. A subsidiary classifies insurance contracts by determining significant insurance risk individually. Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, unless all rights and obligations are extinguished or expire. Investment contracts can, however, be reclassified as insurance contracts after inception if insurance risk becomes significant.
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5.17 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 under resale agreement 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. 5.18 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. 5.19 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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5.20 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 is
accident with coverage periods
effective, throughout the period of insurance
of not over six-months
coverage
Others
- Monthly average basis (the one-twenty fourth basis)
Unearned reinsurance premiums reserve is calculated based on the proportion of premiums ceded, using the same method as that applied for direct insurance policies that transfer the insurance risk throughout the term of the insurance contract to a reinsurer. 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.
5.21 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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ANNUAL REPORT 2016
5.22 Long-term leases Leases that transfer substantially all the risks and rewards of ownership to the Bank and its subsidiaries are classified as financial leases. Financial leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other payables, while the interest element is charged to profit or loss in the statement of comprehensive income over the lease period. Assets acquired under finance leases are depreciated over their estimated useful lives. Leases of assets which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as expenses on a straight-line basis over the lease term. 5.23 Financial derivatives The Bank and its subsidiaries have entered into derivative financial instruments in order to manage risk of the Bank and its subsidiaries and in response to customer needs. Financial derivative contracts which were originated for trading purposes are recorded as off-balance items. Gains or losses arising from changes in the fair value of the contracts are recognised as part of profit or loss in the statement of comprehensive income. The fair values of the contracts are based on the quoted market prices. If the fair value of financial derivatives cannot be determined with reference to market price, it is determined using valuation techniques and models, in which the variables used, are derived from observable market factors 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.
THANACHART BANK PUBLIC COMPANY LIMITED
171
5.24 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Bank and its subsidiaries, whether directly or indirectly, or which are under common control with the Bank and its subsidiaries. They also include associated companies and individuals which directly or indirectly own a voting interest in the Bank and its subsidiaries that give them significant influence over the Bank and its subsidiaries, key management personnel, directors and officers with authority in the planning and direction of the Bank’s and its subsidiaries’ operations. 5.25 Impairment of assets At the end of each reporting date, the Bank and its subsidiaries assess whether there is an indication that an asset may be impaired. The Bank and its subsidiaries perform impairment review whenever events or changes in circumstances indicate that an asset may be impaired. Loss on impairment is recognised when the asset’s recoverable amount is less than the book value. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. Fair value less costs to sell reflects the amount that the Bank and its subsidiaries could obtain at the financial reporting date from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Bank and its subsidiaries recognise impairment losses as expenses in part of profit or loss in the statement of comprehensive income. In assessing impairment of asset other than goodwill, if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Bank and its subsidiaries estimate the asset’s recoverable amount. A previously recognised impairment loss for assets other than goodwill is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined 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.
172
ANNUAL REPORT 2016
5.26 Structured notes Structured notes are debentures which a subsidiary offered to customers, who are institutional investors or high net worth investors. The notes are issued under conditions approved by the Office of the Securities and Exchange Commission, and the underlying assets are securities listed on the Stock Exchange of Thailand. The notes are recorded at amortised cost, adjusted by the discount on the notes. The discount is amortised by the effective rate method with the amortised amount presented as interest expenses in profit or loss. Embedded derivatives are recorded as derivative assets at fair value and the changes in fair value are recorded in profit or loss. In determining the fair value, the subsidiary uses a valuation technique and theoretical model. The input to the model is derived from observable market conditions that include liquidity, dividend, interest rate, and the price and the volatility of the underlying asset. 5.27 Employee benefits a)
Short-term employee benefits The Bank and its subsidiaries recognised short-term employee benefits such as salary, wages, bonuses, contributions to the social security fund and vacation as expenses when incurred.
b)
Post-employment benefits (Defined contribution plans) The Bank, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Bank and its subsidiaries. The fund’s assets are held in a separate trust fund, and the Bank and its subsidiaries’ contributions are recognised as expenses when incurred.
c)
Post-employment benefits (Defined benefit plans) The Bank and its subsidiaries have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Bank and its subsidiaries treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary, using the projected unit credit method. The Bank and its subsidiaries recognise actuarial gains and losses in other comprehensive income.
THANACHART BANK PUBLIC COMPANY LIMITED
173
5.28 Foreign currencies The consolidated and separate financial statements are presented in Baht, which are also the Bank and its subsidiaries’ functional currency. Items of each entity included in the consolidated financial statements of each entity are measured using the functional currency of that entity. Foreign currency transactions are translated into Baht at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies and commitment outstanding on the financial reporting date have been translated into Baht at the rates ruling at the reporting date. Exchange gains and losses arising from trading or translation of foreign currencies are included in determining income. 5.29 Income tax Income tax expense represents the sum of current income tax and deferred tax. Current income tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Bank and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and 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.
174
ANNUAL REPORT 2016
5.30 Provisions Provisions are recognised when the Bank and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 5.31 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 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. 6.
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
175
6.1
Recognition and derecognition of assets and liabilities In considering whether to recognise or to derecognise assets or liabilities, the management is required to make 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.
6.2
Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables are intended to adjust the value of loans for probable credit losses. The management uses the BOT’s and SEC’s regulations regarding the provision of allowance for doubtful accounts and judgements to estimate losses on outstanding loans when there is any doubt about the borrower’s capability to repay the principal and the interest. The allowances for loan losses are determined through a combination of specific reviews, probability of default, value of collateral and current economic conditions.
6.3
Allowance for impairment of investments in securities The Bank and its subsidiaries review an impairment of investments in securities when indication of impairment exists. The determination of what is indication of impairment requires the management’s judgement.
6.4
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.
6.5
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.
176
ANNUAL REPORT 2016
6.6
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.
6.7
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. The Bank and its subsidiaries measure land at revalued amounts. Such amounts are determined by the independent appraisers using the market approach. The valuation involves certain assumptions and estimates as described in Note 16 to the financial statements. 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.
6.8
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.
6.9
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.
THANACHART BANK PUBLIC COMPANY LIMITED
177
6.10 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. 6.11 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. 6.12 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. 6.13 Post-employment benefits under defined benefit plans Obligations under the defined benefit plan are determined by using actuarial technique. Such determination is made based on various assumptions, including discount rate, future salary increase rate, staff turnover rate, and mortality rate, based on their best knowledge of current situation. 6.14 Litigation and contingent liabilities The Bank and its subsidiaries have contingent liabilities as a result of litigation and contingent liabilities as a result of transfer of business and transfer of non-performing assets. The management has used 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.
178
ANNUAL REPORT 2016
7.
Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2016 At call
2015
Term
Total
At call
Term
Total
3,606
5,500
9,106
2,985
3,000
5,985
245
2,875
3,120
364
28,150
28,514
Specialised financial institutions
1
3,450
3,451
1
211
212
Other financial institutions
2
22,196
22,198
28
21,470
21,498
3,854
34,021
37,875
3,378
52,831
56,209
Add: Accrued interest receivables
-
24
24
-
17
17
Less: Deferred revenues
-
(2)
(2)
-
-
-
Less: Allowance for doubtful accounts
-
(222)
(222)
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks
Total
Total domestic items
(1)
(209)
(210)
3,854
33,821
37,675
3,377
52,639
56,016
1,368
8,068
9,436
1,066
246
1,312
32
-
32
53
3
56
262
-
262
202
-
202
1,662
8,068
9,730
1,321
249
1,570
Add: Accrued interest receivables
-
71
71
-
-
-
Less: Deferred revenues
-
-
-
-
(1)
(1)
Less: Allowance for doubtful accounts
-
-
-
-
(2)
(2)
Total foreign items
1,662
8,139
9,801
1,321
246
1,567
Total
5,516
41,960
47,476
4,698
52,885
57,583
Foreign US Dollar Euro Others Total
THANACHART BANK PUBLIC COMPANY LIMITED
179
(Unit: Million Baht) Separate financial statements 2016 At call
2015
Term
Total
At call
Term
Total
3,605
5,500
9,105
2,984
3,000
5,984
136
970
1,106
252
27,000
27,252
-
3,000
3,000
-
-
-
Other financial institutions
2,502
22,196
24,698
878
21,470
22,348
Total
6,243
31,666
37,909
4,114
51,470
55,584
Add: Accrued interest receivables
-
5
5
1
8
9
Less: Deferred revenues
-
(2)
(2)
-
-
-
(222)
(247)
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks Specialised financial institutions
Less: Allowance for doubtful accounts Total domestic items
(25)
(10)
(209)
(219)
6,218
31,447
37,665
4,105
51,269
55,374
1,368
8,068
9,436
1,066
246
1,312
32
-
32
53
3
56
262
-
262
202
-
202
1,662
8,068
9,730
1,321
249
1,570
Add: Accrued interest receivables
-
71
71
-
-
-
Less: Deferred revenues
-
-
-
-
(1)
(1)
Less: Allowance for doubtful accounts
-
-
-
-
(2)
(2)
Total foreign items
1,662
8,139
9,801
1,321
246
1,567
Total
7,880
39,586
47,466
5,426
51,515
56,941
Foreign US Dollar Euro Others Total
As at 31 December 2016, the Bank had loan to a subsidiary company, which was a financial institution, of Baht 2,500 million in the separate financial statements (2015: Baht 850 million).
180
ANNUAL REPORT 2016
8.
Derivatives As at 31 December 2016 and 2015, 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 2016
2015 Fair value/Adjustments
Fair value/Adjustments on an accrual basis Assets
Notional
Liabilities
amount*
642
698
85,966
44
103
2,505
on an accrual basis Assets
Notional
Liabilities
amount*
1,282
1,160
86,309
11,076
3
56
4,661
2,485
309,647
3,749
3,712
345,178
-
-
1,000
-
-
3,000
373
335
9,693
395
342
8,570
-
1,291
11,430
18
1,484
11,129
-
-
1,713
-
4
432
3,564
4,912
430,525
5,447
6,758
459,279
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 2016
2015 Fair value/Adjustments
Fair value/Adjustments on an accrual basis Assets
Notional
Liabilities
amount*
642
698
85,966
44
103
2,505
on an accrual basis Assets
Notional
Liabilities
amount*
1,282
1,157
86,308
11,076
3
56
4,661
2,485
309,647
3,749
3,712
345,178
-
-
1,000
-
-
3,000
373
335
9,693
395
342
8,570
-
1,291
11,430
18
1,484
11,129
3,564
4,912
428,812
5,447
6,751
458,846
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
* Disclosed only in case that the Bank has an obligation to pay
THANACHART BANK PUBLIC COMPANY LIMITED
181
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 2016 and 2015. Consolidated financial statements Counterparties
Financial institutions
2016
2015
2016
2015
Percent
Percent
Percent
Percent
93.04
Investments
9.1
Classified by type of investments
93.43
94.48
-
5.58
6.57
5.49
100.00
100.00
100.00
100.00
Third parties
9.
94.42
6.96
Companies within Thanachart Group
Total
Separate financial statements
-
0.03
(Unit: Million Baht) Consolidated financial statements 2016
Separate financial statements
2015
2016
2015
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
Fair value
cost
Fair value
cost
Fair value
cost
Fair value
Trading securities Government and state enterprises securities Domestic marketable equity securities
Add (less): Allowance for change in value
7,166
7,171
3,063
3,065
7,166
7,171
3,063
3,065
1,613
1,597
110
105
-
-
-
-
8,779
8,768
3,173
3,170
7,166
7,171
3,063
3,065
(3)
(11)
3,170
8,768
Net
5
2
7,171
3,065
Available-for-sale securities Government and state enterprises securities
125,033
124,678
117,141
117,669
121,883
121,556
112,978
113,499
Private debt securities
22,076
22,175
24,492
25,181
21,069
21,155
22,593
23,193
Foreign debt securities
11,465
11,434
10,006
10,068
11,465
11,434
10,006
10,068
Domestic marketable equity securities
Add (less): Allowance for change in value
3,991
3,069
3,039
1,876
1,735
1,460
1,302
162,278
154,708
155,957
156,293
155,880
147,037
148,062
(206) 162,278
Net
182
3,910 162,484
ANNUAL REPORT 2016
1,249 155,957
(413) 155,880
1,025 148,062
(Unit: Million Baht) Separate financial statements
Consolidated financial statements 2016
2015
2016
2015
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
Fair value
cost
Fair value
cost
Fair value
cost
cost
Fair value
Held-to-maturity debt securities Government and state enterprises 62
67
8,448
8,634
-
-
8,406
Private debt securities
securities
205
237
205
247
474
508
150
8,586 190
Net
267
304
8,653
8,881
474
508
8,556
8,776
General investment Unit trusts
24
254
24
254
3,780
3,786
3,762
3,768
39
39
39
39
3,843
4,079
3,825
4,061
Domestic non-marketable equity securities Foreign non-marketable equity securities
(75)
Less: Allowance for impairment Net Total investments - net
9.2
(77)
(75)
(77)
3,768
4,002
3,750
3,984
175,081
171,782
167,275
163,667
Classified by remaining period of debt securities (Unit: Million Baht) Consolidated financial statements
At call
2016
2015
Due within
Due within
Less than
1-5
Over
1 year
years
5 years
Total
At call
Less than
1-5
Over
1 year
years
5 years
Total
Available-for-sale securities Government and state 261
18,927
105,011
834
125,033
263
37,361
78,928
589
117,141
Private debt securities
enterprises securities
-
1,630
16,126
4,320
22,076
-
3,917
18,120
2,455
24,492
Foreign debt securities
-
3,592
7,512
361
11,465
-
1,314
8,328
364
10,006
261
24,149
128,649
5,515
158,574
263
42,592
105,376
3,408
151,639
-
78
-
82
1,025
172
1,279
261
24,227
128,422
5,377
158,287
263
42,674
106,401
3,580
152,918
-
20
-
42
62
-
8,406
-
42
8,448
Private debt securities
-
20
35
150
205
-
15
40
150
205
Total
-
40
35
192
267
-
8,421
40
192
8,653
261
24,267
128,457
5,569
158,554
263
51,095
106,441
3,772
161,571
Total Add (less): Allowance for change in value Total
(227)
(138)
(287)
Held-to-maturity debt securities Government and state enterprises securities
Total debt securities
THANACHART BANK PUBLIC COMPANY LIMITED
183
(Unit: Million Baht) Separate financial statements
At call
2016
2015
Due within
Due within
Less than
1-5
Over
1 year
years
5 years
Total
At call
Less than
1-5
Over
1 year
years
5 years
Total
Available-for-sale securities Government and state 261
17,040
104,582
-
121,883
263
34,204
78,081
430
112,978
Private debt securities
enterprises securities
-
1,440
15,819
3,810
21,069
-
3,787
17,266
1,540
22,593
Foreign debt securities
-
3,592
7,512
361
11,465
-
1,313
8,329
364
10,006
261
22,072
127,913
4,171
154,417
263
39,304
103,676
2,334
145,577
-
76
-
81
981
121
1,183
261
22,148
127,685
4,051
154,145
263
39,385
104,657
2,455
146,760
-
-
-
-
-
-
8,406
-
-
8,406
Private debt securities
-
-
84
390
474
-
-
-
150
150
Total
-
-
84
390
474
-
8,406
-
150
8,556
261
22,148
127,769
4,441
154,619
263
47,791
104,657
2,605
155,316
Total Add (less): Allowance for change in value Total
(228)
(120)
(272)
Held-to-maturity debt securities Government and state enterprises securities
Total debt securities
9.3
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 2016 and 2015, 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 2016 Banking and finance sector
184
ANNUAL REPORT 2016
2015 2
Separate financial statements 2016
4
2015 2
4
10.
Investments in subsidiary and associated companies
10.1 Separate financial statements As at 31 December 2016 and 2015, 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 2016
2015
2016
TS Asset Management Co., Ltd.
2,000
2,000
100
Thanachart Securities Plc.
1,500
1,500
Ratchthani Leasing Plc.
2,416
Thanachart Insurance Plc.
2015
2016
2015
2016
2015
100
2,000
2,000
700
1,500
100
100
1,858
1,858
480
555
2,416
65.18
65.18
1,201
1,201
283
39
740
740
100
100
867
867
600
500
Thanachart Group Leasing Co., Ltd.
360
360
100
100
400
400
52
26
Thanachart Broker Co., Ltd.
100
100
100
100
104
104
100
172
Thanachart Fund Management Co., Ltd.
100
100
75
75
97
97
257
283
10
10
100
100
5
5
-
-
6
6
100
100
6
6
-
-
100
100
5
5
18
15
6,543
6,543
2,490
3,090
Subsidiary companies
Security Scib Service Co., Ltd. (Formerly Known as “SCIB Services Co., Ltd.”) Thanachart Management and Services Co., Ltd. Thanachart Training and Development
5
5
Co., Ltd. Total investments in subsidiary companies
(5)
Less: Allowance for impairment
(5)
Total investments in subsidiary companies - net
6,538
6,538
821
821
51
46
821
821
51
46
7,359
7,359
2,541
3,136
Associated company MBK Plc.
1,708
1,886
4.50
4.07
Total investment in an associated company Total investments in subsidiary and associated companies - net
THANACHART BANK PUBLIC COMPANY LIMITED
185
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. 10.2 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
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
(%)
(%)
Ratchthani Leasing Plc.
34.82
34.82
1,560
1,396
151
21
315
304
-
1
Thanachart Fund
25.00
25.00
72
69
86
94
89
80
-
-
Management Co., Ltd.
10.3 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 Ratchthani Leasing Plc. 2016
2015
Management Co., Ltd. 2016
2015
Total assets
32,856
28,977
457
424
Total liabilities
28,376
24,968
169
149
186
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ANNUAL REPORT 2016
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 31 December Thanachart Fund Management Ratchthani Leasing Plc. 2016 Net operating income Profit for the year
Co., Ltd.
2015
2016
2015
1,959
1,697
736
671
906
873
355
320
-
1
355
321
Other comprehensive income (loss) Total comprehensive income
(1) 905
(3) 870
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Summarised information about cash flow (Unit: Million Baht) For the years ended 31 December Thanachart Fund Management Ratchthani Leasing Plc. 2016 Cash flow from operating activities
Co., Ltd.
2015
2,587
2016
3,845
2015
363
329
Cash flow used in investing activities
(50)
(54)
(23)
(1)
Cash flow used in financing activities
(2,533)
(3,797)
(342)
(377)
4
(6)
(2)
(49)
Net increase (decrease) in cash
THANACHART BANK PUBLIC COMPANY LIMITED
187
10.4 Cash flow information of an asset management company that is a subsidiary Cash flow information of TS Asset Management Company Limited, a subsidiary, for the years ended 31 December 2016 and 2015 is as follows: (Unit: Million Baht) 2015
2016 Cash flows from operating activities Profit (loss) before income tax
148
(83)
16
(811)
(146)
134
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 (decrease) in allowance for impairment of property foreclosed and other assets Increase in provisions Interest income - net Cash received from interest income
1
1
(297)
(346)
300
409
Cash paid for interest expense
(4)
(52)
Cash paid for corporate income tax
(6)
(73)
12
(821)
Income (loss) from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Loans to customers
663
3,630
Properties foreclosed
862
920
Other assets
10
(4)
Decrease in operating liabilities Interbank and money market items Provisions Other liabilities
(691) (21)
(2,211) (8) (5)
835
1,501
Dividend paid
(700)
(1,500)
Net cash flows used in financing activities
(700)
(1,500)
Net increase in cash and cash equivalents
135
1
55
54
190
55
Net cash flows from operating activities Cash flows from financing activities
Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year
188
ANNUAL REPORT 2016
10.5 Investment in associated company in consolidated financial statements As at 31 December 2016 and 2015, investment in an associated company, which presented under the equity method, in the consolidated financial statements consists of investment in ordinary shares of the following company which operates in Thailand: (Unit: Million Baht) Share of other comprehensive
Company’s name
Paid-up share
Percentage
capital
of holding (%)
2016 MBK Plc. (operating
1,708
2015
2016
1,886 10.94
2015 9.90
Value of investment Cost method 2016
Equity method
Dividend income
Share of profit
income (loss)
during the years
during the years
during the years
2015
2016
2015
2016
984
984
2,253
1,900
123
2015 112
2016 207
2015 169
2016 352
2015 (76)
984
984
2,253
1,900
123
112
207
169
352
(76)
in property rental, hotel and services businesses) Total investment in an associated company
The Bank and its subsidiaries classified investment in MBK Plc. as investment in an associated company since the Parent company, the Bank and its subsidiaries had significant influence in that company. 10.6 Summarised financial information of an associated company a)
Summarised financial information of MBK Plc. as at 30 September 2016 and 2015 and for the years then ended are as follows: Summarised information about financial position (Unit: Million Baht)
Total assets Total liabilities
30 September
30 September
2016
2015
44,626
39,487
(22,672)
(22,173)
(936)
Other equity items of an associated company Net assets
1,810
21,018
19,124
Shareholding percentage (%)
10.94
9.90
Share of net assets
2,299
1,893
Elimination entries Goodwill Carrying amounts of associate based on equity method
(348)
(295)
302
302
2,253
1,900
THANACHART BANK PUBLIC COMPANY LIMITED
189
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 30 September
2016 Revenue
2015
12,654
10,812
Profit for the year
2,046
1,707
Other comprehensive income (loss)
3,498
(795)
Total comprehensive income for the year
5,544
912
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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 2016 was determined based on financial statements that were prepared with reference to financial statements for the year ended 30 September 2016 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 2016 is not materially different from the income for the year ended 31 December 2016. On 13 October 2016, MBK Plc. registered a decrease in its share capital in relation to its scheme to acquire 178,331,000 shares of treasury stock. As a result, paid-up share capital was reduced from 1,886,291,000 shares to 1,707,960,000 shares and the shareholding of the Bank and its subsidiaries increased from 9.90 percent to 10.94 percent. The Bank and its subsidiaries recognised the effect of the share capital reduction, amounting to Baht 75 million, in retained earnings. b)
The fair value of investment in an associated company As at 31 December 2016 and 2015, 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.
190
ANNUAL REPORT 2016
Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
2,690
2,634
1,107
1,083
11.
Loans to customers and accrued interest receivables
11.1 Classified by loan type (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Loans to customers Overdrafts Loans Notes receivables Hire purchase receivables Financial lease receivables Others
17,261
18,294
17,261
18,294
260,596
270,272
256,078
264,468
62,527
54,885
65,708
56,786
393,273
415,278
355,248
381,893
1,744
1,465
1,245
1,001
141
351
141
351
(48,171)
(50,537)
(44,067)
(46,792)
687,371
710,008
651,614
676,001
620
658
620
658
687,991
710,666
652,234
676,659
- Individual Approach
(14,843)
(15,506)
(9,835)
(10,085)
- Collective Approach
(7,194)
(8,555)
(7,194)
(8,555)
(2,565)
(1,502)
(2,272)
(1,502)
(2)
(4)
(2)
(4)
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
663,387
685,099
632,931
656,513
3,508
3,336
-
-
28
122
-
-
3,536
3,458
-
-
-
-
Securities business receivables Credit balances receivables Other receivables Total securities business receivables Less: Allowance for doubtful accounts Securities business receivables - net
(14)
(113)
3,522
3,345
-
-
666,909
688,444
632,931
656,513
Loans to customers and accrued interest receivables - net
THANACHART BANK PUBLIC COMPANY LIMITED
191
11.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2016
2015
Domestic
Foreign
671,638
Baht US Dollar
Total
Domestic
Foreign
-
671,638
691,195
-
691,195
11,916
6,455
18,371
14,054
7,082
21,136
120
778
898
346
789
1,135
683,674
7,233
690,907
705,595
7,871
713,466
Other currencies Total*
Total
* Total loans net of deferred revenues (Unit: Million Baht) Separate financial statements 2016
2015
Domestic
Foreign
632,345
-
632,345
653,730
-
653,730
11,916
6,455
18,371
14,054
7,082
21,136
120
778
898
346
789
1,135
644,381
7,233
651,614
668,130
7,871
676,001
Baht US Dollar Other currencies Total*
Total
Domestic
Foreign
Total
* Total loans net of deferred revenues
11.3 Classified by type of business and loan classification (Unit: Million Baht) Consolidated financial statements 2016 The Bank and a subsidiary company which is a financial institution Other Special
Sub-
Doubtful
Normal
mention
standard
Doubtful
Agricultural and mining
13,704
14
299
35
17
14,069
1
14,070
Manufacturing and commerce
74,383
206
937
424
1,803
77,753
301
78,054
Real estate and construction
45,370
111
362
887
920
47,650
36
47,686
Public utilities and services
58,275
349
183
50
1,030
59,887
103
59,990
94,087
1,344
570
517
1,117
97,635
54
97,689
-
-
-
-
-
-
3,536
3,536
284,130
22,826
1,363
1,264
1,961
311,544
33,750
345,294
26,760
636
534
184
410
28,524
66
28,590
Others
15,970
3
4
1
19
15,997
1
15,998
Total*
612,679
25,489
4,252
3,362
7,277
653,059
37,848
690,907
subsidiary Total
of loss
companies
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
192
ANNUAL REPORT 2016
(Unit: Million Baht) Consolidated financial statements 2015 The Bank and a subsidiary company which is a financial institution Other subsidiary
Special
Sub-
Doubtful
Normal
mention
standard
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
Total
of loss
companies
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
(Unit: Million Baht) Separate financial statements 2016 Special Normal
Doubtful
mention
Substandard
Doubtful
of loss
Total
Agricultural and mining
13,681
14
293
7
13
14,008
Manufacturing and commerce
72,977
204
926
421
875
75,403
Real estate and construction
45,311
105
359
883
650
47,308
Public utilities and services
57,641
339
173
40
518
58,711
Housing loans
94,015
1,331
541
499
1,048
97,434
Hire purchase
283,917
22,813
1,362
1,263
1,960
311,315
26,747
631
518
180
342
28,418
Others
18,992
3
4
-
18
19,017
Total*
613,281
25,440
4,176
3,293
5,424
651,614
Personal consuming
Others
* Total loans net of deferred revenues
THANACHART BANK PUBLIC COMPANY LIMITED
193
(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
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
Personal consuming
Others
* Total loans net of deferred revenues
11.4 Non-performing loans As at 31 December 2016 and 2015, 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
2016
2015
2016
2015
12,895
15,989
12,893
15,986
14
113
-
-
1,996
4,169
-
-
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.
194
ANNUAL REPORT 2016
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
2016
2015
2016
2015
12,978
16,972
12,974
16,968
14
113
-
-
The subsidiary company engaged in the asset management business recognises income from loan on a cash basis. 11.5 Debt restructuring During the years 2016 and 2015, 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
restructuring
Million Baht
Million Baht
1,943
5,451
5,406
8
167
160
Fair value of Type of assets
assets to be
to be
transferred under
transferred
agreement Million Baht
2016 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
195
building
repayment conditions Total
1,951
5,618
5,566
2,232
3,592
3,475
34
309
308
2015 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
310
building
repayment conditions Total
2,266
3,901
3,783
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THANACHART BANK PUBLIC COMPANY LIMITED
195
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
restructuring
Million Baht
Million Baht
1,917
3,532
3,513
6
35
32
Million Baht
2016 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
32
building
repayment conditions Total
1,923
3,567
3,545
2,122
3,034
2,978
26
226
226
2015 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of
Land and
214
building
repayment conditions Total
3,260
2,148
3,204
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Counting from the end of the year, the remaining periods to maturity of receivables which entered into debt restructuring agreements during the years 2016 and 2015, are summarised below. Consolidated financial statements 2016
2015 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
899
947
799
1,143
Due within the year
218
787
377
1,697
Less than 5 years
562
2,744
633
243
5 - 10 years
172
646
356
388
10 - 15 years
42
322
40
177
Over 15 years
58
120
61
135
1,951
5,566
2,266
3,783
Total
196
ANNUAL REPORT 2016
Separate financial statements 2016
2015 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
895
885
782
1,127
Due within the year
208
445
322
1,237
Less than 5 years
555
1,159
615
191
5 - 10 years
166
624
332
361
10 - 15 years
41
312
36
153
Over 15 years
58
120
61
135
1,923
3,545
2,148
3,204
Total
Supplemental information for the years 2016 and 2015 relating to restructured loans is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Interest income recognised in the statements of comprehensive income Cash repayment from receivables
972
1,205
695
858
5,173
5,121
3,075
4,155
215
336
52
240
-
-
-
-
Properties foreclosed received for debts settlement Loss on debt restructuring (net of allowance for doubtful accounts as previously recorded)
As at 31 December 2016 and 2015, the Bank and its subsidiaries have the following restructured receivables balances (principal and accrued interest receivable): Restructured receivables Outstanding balances, Number of receivables 2016
Thanachart Bank Plc. Thanachart Securities Plc. TS Asset Management Co., Ltd.
2015
net of collateral
Outstanding balances 2016
2015
2016
2015
Million Baht
Million Baht
Million Baht
Million Baht
13,532
20,756
10,093
11,196
2,850
4,668
-
1
-
7
-
7
325
564
4,261
5,316
2,923
3,249
THANACHART BANK PUBLIC COMPANY LIMITED
197
11.6 Hire purchase/Financial lease receivables As at 31 December 2016 and 2015, 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 2016 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Over 5 years
Total
Gross investment in the lease
115,575
260,267
19,175
395,017
Less: Unearned finance income
(17,546)
(29,592)
(1,016)
(48,154)
98,029
230,675
18,159
346,863
Present value of minimum lease payments receivables Allowance for doubtful accounts
(9,609) 337,254
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(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
198
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statement as at 31 December 2016 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Gross investment in the lease
112,924
224,662
Less: Unearned finance income
(17,492)
(25,576)
95,432
199,086
Over 5 years 18,907
Total 356,493
(982)
(44,050)
Present value of minimum lease payments receivables
17,925
312,443
Allowance for doubtful accounts
(7,499) 304,944
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(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 Hire purchase/Financial lease receivables - net
(9,061) 327,084
* Included non-performing receivables
THANACHART BANK PUBLIC COMPANY LIMITED
199
11.7 Classified by classification As at 31 December 2016 and 2015, 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
Net balance used in making Loans and accrued interest
allowance for doubtful
receivables
accounts
Allowance for doubtful accounts
2016
2015
2016
2015
613,276
629,475
404,054
424,400
9,805
8,101
25,506
30,993
23,188
27,995
3,046
3,525
Substandard
4,258
4,039
2,443
2,703
1,705
1,798
Doubtful
3,362
3,332
1,656
2,440
974
1,351
Doubtful of loss
7,277
12,788
4,267
8,472
4,617
7,555
653,679
680,627
435,608
466,010
20,147
22,330
2,345
1,502
22,492
23,832
Normal Special mention
Total
Additional allowance for possible uncollectability debts Total
2016
2015
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200
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements Net balance used in making Loans and accrued interest
allowance for doubtful
receivables
accounts
Allowance for doubtful accounts
2016
2015
2016
2015
613,878
629,814
405,407
425,117
8,185
7,395
25,457
30,858
23,183
27,965
3,039
3,484
Substandard
4,182
3,632
2,419
2,597
1,671
1,658
Doubtful
3,293
3,168
1,627
2,356
941
1,264
Doubtful of loss
5,424
9,187
2,940
6,085
3,193
4,839
652,234
676,659
435,576
464,120
17,029
18,640
2,272
1,502
19,301
20,142
Normal Special mention
Total
2016
Additional allowance for possible uncollectability debts Total
2015
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Percentage of allowance for doubtful account The Banks’ hire purchase receivablespersonal consumer 2016
Other loans
2015
2016
2015
Normal
0.77
0.76
1
1
Special mention
9.50
8.56
2
2
Substandard
43.83
46.40
100
100
Doubtful
40.96
41.47
100
100
Doubtful of loss
94.69
60.98
100
100
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THANACHART BANK PUBLIC COMPANY LIMITED
201
11.8 Loans to companies which have settlement problems As at 31 December 2016 and 2015, 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 2016
1. Listed companies possible to
4
2015
2
Collateral value
in the accounts
2016
2015
2016
2015
2016
2015
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
211
416
6
8
2
408
111
169
delisting from the SET 2. Non - listed companies with
22
39
476
490
365
322
similar operating results and financial position to listed companies possible to delisting from the SET 3. Companies which have loan
427
842
7,809
7,985
3,836
3,369
3,937
4,623
settlement problems or have defaulted on the repayment
Separate financial statements Allowance for doubtful accounts provided Number of debtors 2016
1. Listed companies possible to
4
Debt balances
2015
1
Collateral value
in the accounts
2016
2015
2016
2015
2016
2015
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
211
8
476
490
6
8
2
-
delisting from the SET 2. Non - listed companies with
22
39
365
322
111
169
2,942
1,920
967
1,662
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
202
ANNUAL REPORT 2016
340
694
3,909
3,583
11.9
Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission As at 31 December 2016 and 2015, 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 2016 Normal
2016
2015
2016
2015
3,522
3,345
-
-
3,522
3,345
1
1
1
1
-
-
13
112
13
112
-
-
3,536
3,458
14
113
3,522
3,345
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. 11.10 Hire purchase/financial lease receivables of subsidiaries classified by aging As at 31 December 2016 and 2015, 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) 2016
2015
32,663
28,549
Overdue 91 - 365 days
813
922
Overdue more than 1 year
170
218
Debtors under legal actions
545
270
34,191
29,959
2,110
1,731
Current or overdue not over 90 days
Total Allowance for doubtful accounts provided in the accounts
THANACHART BANK PUBLIC COMPANY LIMITED
203
12.
Allowance for doubtful accounts (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 The Bank and a subsidiary company which is a financial institution Other
Balance - beginning of the year
Special
Sub-
Normal
mention
standard
8,101
3,525
1,798
subsidiary
Doubtful
General
Doubtful
of loss
provision
1,351
7,555
1,502
23,832
1,844
25,676
2,340
843
3,938
349
4,287
Total
companies Consolidated
Increase (decrease) during the year
1,704
(479)
(93)
(377)
Bad debts recovery
-
-
-
-
1,355
-
1,355
7
1,362
Bad debts written-off
-
-
-
-
(6,633)
-
(6,633)
(76)
(6,709)
9,805
3,046
1,705
974
Balance - end of the year
4,617
2,345
22,492
2,124
24,616
(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
Special
Sub-
Normal
mention
standard
5,832
4,342
2,392
subsidiary
Doubtful
General
Doubtful
of loss
provision
1,703
11,141
294
25,704
1,993
27,697
Total
companies Consolidated
Increase (decrease) during 2,430
1,208
4,144
63
4,207
Bad debts recovery
the year
-
-
-
-
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
2,269
(817)
(594)
(352)
7,555
1,502
23,832
1,844
25,676
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Special
Balance - beginning of the year
Normal
mention
7,395
3,484
Substandard 1,658
Doubtful 1,264
Doubtful
General
of loss
provision
Total
4,839
1,502
20,142
Increase (decrease) during 3,588
770
4,393
Bad debts recovery
the year
-
-
-
-
1,355
-
1,355
Bad debts written-off
-
-
-
-
(6,589)
-
(6,589)
8,185
3,039
1,671
941
Balance - end of the year
204
ANNUAL REPORT 2016
790
(445)
13
(323)
3,193
2,272
19,301
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015 Special mention
Normal Balance - beginning of the year
5,088
Substandard
4,305
Doubtful
2,052
Doubtful
General
of loss
provision
1,502
Total
6,909
294
20,150
3,946
1,208
6,008
Increase (decrease) during the year
2,307
(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
13.
(821)
4,839
1,502
20,142
Revaluation allowance for debt restructuring (Unit: Million Baht) Consolidated financial statements 2016
14.
Separate financial statements
2015
2016
2015
Balance - beginning of the year
4
103
4
103
Decrease during the year
-
(97)
-
(97)
Amortised during the year
(2)
(2)
(2)
(2)
Balance - end of the year
2
4
2
4
Classification of assets As at 31 December 2016 and 2015, 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 2016 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Properties Investments
foreclosed
Other assets
Total
26,213
613,276
-
-
213
639,702
Special mention
-
25,506
-
-
115
25,621
Substandard
-
4,258
-
-
13
4,271
Doubtful
-
3,362
-
-
10
3,372
Doubtful of loss
-
7,277
1,115
356
258
9,006
26,213
653,679
1,115
356
609
681,972
Total
THANACHART BANK PUBLIC COMPANY LIMITED
205
(Unit: Million Baht) Consolidated financial statements 2015 Loans to Interbank and
customers and Properties
money market accrued interest items
receivables
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
(Unit: Million Baht) Separate financial statements 2016 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Properties Investments
foreclosed
Other assets
Total
28,713
613,878
-
-
213
642,804
Special mention
-
25,457
-
-
115
25,572
Substandard
-
4,182
-
-
13
4,195
Doubtful
-
3,293
-
-
10
3,303
Doubtful of loss
-
5,424
1,120
313
255
7,112
28,713
652,234
1,120
313
606
682,986
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
206
ANNUAL REPORT 2016
15.
Properties foreclosed (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 Balance -
Balance -
beginning
end of Additions
Disposals
the year
3,195
204
(1,150)
2,249
604
5,173
(5,359)
418
736
156
(156)
736
90
29
(22)
97
4,625
5,562
(6,687)
3,500
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
(532) 4,093
(940) 4,622
1,084
(388)
(5,603)
3,112
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2015 Balance -
Balance -
beginning
end of 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)
4,625
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
(292) 6,507
(938) 5,668
698 (8,082)
THANACHART BANK PUBLIC COMPANY LIMITED
(532) 4,093
207
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Balance -
Balance -
beginning
end
of the year
of the year
Additions
Disposals
1,112
34
(244)
902
483
4,635
(4,789)
329
464
70
(105)
429
90
29
(22)
97
2,149
4,768
(5,160)
1,757
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
(312)
(681) 4,087
1,837
680
(313)
(4,480)
1,444
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015 Balance -
Balance -
beginning
end
of the year
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
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
208
ANNUAL REPORT 2016
(200) 3,304
(731) 5,063
619 (6,530)
(312) 1,837
16.
Land, premises and equipment (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 Revaluation Cost basis
basis
Land
Buildings and
Furniture,
Assets
building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2016 Additions Appraisal increase
4,432
2,375
6,884
87
56
13,834
-
15
696
4
137
852
1,606
-
-
-
-
1,606
-
-
-
Appraisal decrease
(14)
-
Transfers/disposals
(50)
(1)
(148)
(19)
(181)
(14) (399)
5,974
2,389
7,432
72
12
15,879
1 January 2016
-
625
5,034
70
-
5,729
Transfers/disposals
-
(302)
(18)
-
(326)
Depreciation for the year
-
119
706
6
-
831
31 December 2016
-
738
5,438
58
-
6,234
68
26
6
-
-
100
(1)
-
-
-
(1)
68
25
6
-
-
99
5,906
1,626
1,988
14
12
9,546
31 December 2016 Accumulated depreciation
(6)
Allowance for impairment 1 January 2016 Decrease during the year 31 December 2016
-
Net book value 31 December 2016 Depreciation charge for the years 2015
752
2016
831
THANACHART BANK PUBLIC COMPANY LIMITED
209
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2015 Cost basis
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
210
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Revaluation basis
Cost basis
Land
Buildings and
Furniture,
Assets
building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2016 Additions Appraisal increase
4,350
2,224
5,624
31
56
12,285
-
-
667
-
106
773
1,603
-
-
-
-
1,603
-
-
-
-
Appraisal decrease
(14)
Transfers/disposals
(50)
31 December 2016
(13)
(50)
(17)
(151)
(14) (281)
5,889
2,211
6,241
14
11
14,366
1 January 2016
-
581
3,909
26
-
4,516
Transfers/disposals
-
(197)
(16)
-
(215)
Depreciation for the year
-
111
652
1
-
764
31 December 2016
-
690
4,364
11
-
5,065
1 January 2016
-
-
5
-
-
5
31 December 2016
-
-
5
-
-
5
5,889
1,521
1,872
3
11
9,296
Accumulated depreciation
(2)
Allowance for impairment
Net book value 31 December 2016 Depreciation charge for the years 2015
681
2016
764
THANACHART BANK PUBLIC COMPANY LIMITED
211
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2015 Cost basis
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
As at 31 December 2016 and 2015, the Bank and its subsidiaries have vehicles acquired under financial lease agreements with net book values amounting to approximately Baht 4 million and Baht 6 million, respectively. In addition, the Bank and its subsidiaries have office equipment and vehicles which have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for impairment amounting to approximately Baht 3,410 million and Baht 3,065 million, respectively (separate financial statements: the Bank have vehicles acquired under financial lease agreements with net book values amounting to approximately Baht 3 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 3,007 million and Baht 2,749 million, respectively). The Bank and its subsidiaries arranged for an independent professional appraiser to appraise the value of land in 2015, using the market approach.
212
ANNUAL REPORT 2016
Had the land been carried in the financial statements on a historical cost basis, its net book value as of 31 December 2016 would have been as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
Land
4,326
4,312
Assumptions used in the valuation are summarised below. Result to fair value where as an
Price per square wah (Baht)
Consolidated
Separate
increase in
financial statements
financial statements
assumption value
6,300 - 1,000,000
8,000 - 1,000,000
Increase in fair value
Surplus on revaluation of assets Movements in surplus on revaluation of assets arising from revaluation of land of the Bank and its subsidiaries during the year ended 31 December 2016 are summarised below. (Unit: Million Baht)
Beginning balance Increased during the year Transferred out during the year Ending balance
Consolidated
Separate
financial statements
financial statements
-
-
1,606
1,603
(5) 1,601
(5) 1,598
Surplus on revaluation of assets can neither be offset against deficit nor used for dividend distribution.
THANACHART BANK PUBLIC COMPANY LIMITED
213
17.
Intangible assets (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 Membership fees for
Goodwill
Intangible
Thailand
Computer
assets from
Futures
software
business
Computer
Exchange
under
combination
software
and others
development
Total
Cost 1 January 2016
17,951
4,100
2,382
8
270
24,711
Additions
-
-
180
-
279
459
Transfers/disposals
-
-
239
-
(373)
(134)
31 December 2016
17,951
4,100
2,801
8
176
25,036
1 January 2016
-
2,589
1,112
7
-
3,708
Transfers/disposals
-
-
(89)
-
-
(89)
Amortisation for the year
-
451
287
-
-
738
31 December 2016
-
3,040
1,310
7
-
4,357
1 January 2016
-
-
49
-
-
49
Decrease during the year
-
-
(19)
-
-
(19)
31 December 2016
-
-
30
-
-
30
17,951
1,060
1,461
1
176
20,649
-
3.25
0 - 9.99
-
-
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2016 Remaining amortisation period (years) Amortisation expenses for the years
214
2015
691
2016
738
ANNUAL REPORT 2016
(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
Accumulated amortisation
(5)
(5)
Allowance for impairment
Net book value 31 December 2015
THANACHART BANK PUBLIC COMPANY LIMITED
215
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Intangible Computer
assets from
Goodwill
business
Computer
software under
combination
software
development
Total
Cost 1 January 2016
17,941
3,613
2,080
265
23,899
Additions
-
-
161
261
422
Transfers/disposals
-
-
274
(350)
(76)
31 December 2016
17,941
3,613
2,515
176
24,245
1 January 2016
-
2,102
891
-
2,993
Transfers/disposals
-
-
(32)
-
Amortisation for the year
-
451
269
-
720
31 December 2016
-
2,553
1,128
-
3,681
1 January 2016
-
-
49
-
49
Decrease during the year
-
-
(19)
-
(19)
31 December 2016
-
-
30
-
30
17,941
1,060
1,357
176
20,534
-
3.25
0 - 9.99
-
Accumulated amortisation
(32)
Allowance for impairment
Net book value 31 December 2016 Remaining amortisation period (years) Amortisation expenses for the years 2015
677
2016
720
216
ANNUAL REPORT 2016
(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
(7)
Accumulated amortisation
(1)
-
(1)
Allowance for impairment
Net book value 31 December 2015
As at 31 December 2016 and 2015, 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 162 million and Baht 84 million, respectively (separate financial statements: Baht 88 million and Baht 22 million, respectively).
THANACHART BANK PUBLIC COMPANY LIMITED
217
Goodwill The Bank and its subsidiaries allocated goodwill acquired through business combinations to the cash generating unit (CGU) for annual impairment testing, on the assumption that the CGU is the consolidated financial statements of the Bank and its subsidiaries. The recoverable amount of the CGU have been determined based on value in use calculation using cash flow projections for the consolidated operating results of the Bank and its subsidiaries covering a five-year period. Key assumptions used in value in use calculation are summarised below: Rate (Percentage) Terminal growth rate Discount rate
5 12
The management of the Bank determined these key assumptions based on historical operating results and expected market growth. The discount rate used is a rate that reflects risks specific to the Bank and its subsidiaries. The management of the Bank believes that changes in the key assumptions used to determine the value in use of the CGU would not result in impairment. The management of the Bank believes that there is no impairment of goodwill.
218
ANNUAL REPORT 2016
18.
Deferred tax assets/ liabilities and income tax
18.1 Deferred tax assets/ liabilities As at 31 December 2016 and 2015, deferred tax assets and liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2016
Deferred tax assets Deferred tax liabilities Net
Separate financial statements
2015
2016
2015
791
741
-
-
(868)
(893)
(799)
(874)
(77)
(152)
(799)
(874)
The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2016
2015
Deferred tax assets Non-accrued interest income
64
81
Allowance for doubtful accounts - general provision/other assets
929
703
Provisions for employee benefits
480
417
Provisions
231
235
Accrued expenses
100
96
Fees income received in advance
369
381
Late payment fee income
178
176
Insurance contract liabilities
306
290
Others
482
592
3,139
2,971
(1,104)
(1,115)
(1,379)
(1,348)
Intangible assets
(212)
(302)
Others
(521)
(358)
(3,216)
(3,123)
(77)
(152)
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
219
(Unit: Million Baht) Separate financial statements 2016
2015
Deferred tax assets Non-accrued interest income
64
78
Allowance for doubtful accounts - general provision/other assets
513
364
Provisions for employee benefits
437
374
Provisions
231
235
82
80
Fees income received in advance
369
381
Late payment fee income
178
176
Others
264
337
2,138
2,025
(1,104)
(1,115)
(1,294)
(1,276)
Intangible assets
(212)
(302)
Others
(327)
(206)
(2,937)
(2,899)
(799)
(874)
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 2016, the Bank has tax losses totaling Baht 14,669 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.
220
ANNUAL REPORT 2016
18.2
Income tax Income tax expenses for the years ended 31 December 2016 and 2015 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Current income tax: Corporate income tax charge
825
726
-
-
2
12
-
9
Adjustment in respect of income tax from previous year Deferred tax: Relating to origination and reversal of temporary differences
(136)
(540)
(105)
(570)
691
198
(105)
(561)
Income tax expense reported in statements of comprehensive income (income)
The Bank has no income tax expenses for the year ended 31 December 2016 because it has unused tax losses resulting from the liquidation of a subsidiary company. The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2016 and 2015 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Deferred tax relating to surplus on revaluation of assets
321
-
321
-
Deferred tax relating to loss on changes in value of available-for-sale investments
(291)
(233)
(288)
(134)
3
(41)
(3)
(36)
35
(8)
-
68
(282)
30
Deferred tax relating to actuarial gain (loss) on defined benefit plan Deferred tax relating to share of other comprehensive income of associated company
THANACHART BANK PUBLIC COMPANY LIMITED
(170)
221
Reconciliations between income tax expenses and the product of accounting profit multiplied by the applicable tax rates for the years ended 31 December 2016 and 2015 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
Accounting profit before tax Applicable tax rate
2015
2016
2015
13,530
11,325
11,857
10,891
20%
20%
20%
20%
2,706
2,265
2,371
2,178
2
12
-
9
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
(2,017)
(2,079)
(2,476)
(2,748)
(105)
(561)
Income tax expenses reported in statements of comprehensive income (income)
19.
198
691
Other assets (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Accrued premium insurance income
254
265
-
-
Other receivables
701
602
670
597
Accrued interest and dividend income receivable
892
1,001
870
964
VAT refundable
297
450
259
407
Prepaid leasehold rights
162
191
162
191
255
292
205
243
Deposits
271
289
274
268
Estimated insurance claims recoveries
230
285
-
-
1,332
1,101
-
-
373
440
1,034
1,226
1,034
1,226
200
175
-
-
Others
2,330
1,754
1,662
1,388
Total
8,331
8,071
5,228
5,432
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
222
ANNUAL REPORT 2016
(413) 7,918
(401) 7,670
92
(310) 4,918
148
(330) 5,102
20.
Deposits
20.1 Classified by type of deposits (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Current
11,427
9,786
11,471
9,822
Saving
296,978
258,930
297,417
259,343
Certificates of deposit
125,493
113,598
125,493
113,598
- Less than 6 months
39,442
38,632
39,942
38,858
- 6 months and up to 1 year
93,129
122,076
93,129
122,385
110,088
126,482
110,355
126,569
676,557
669,504
677,807
670,575
Fixed deposits
- Over 1 year Total deposits
20.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2016 Domestic Baht
2015
Foreign
Total
Domestic
Foreign
Total
675,363
1
675,364
668,613
1
668,614
US Dollar
837
30
867
738
24
762
Other currencies
317
9
326
111
17
128
676,517
40
676,557
669,462
42
669,504
Total
(Unit: Million Baht) Separate financial statements 2016 Domestic Baht
2015
Foreign
Total
Domestic
Foreign
Total
676,613
1
676,614
669,684
1
669,685
US Dollar
837
30
867
738
24
762
Other currencies
317
9
326
111
17
128
677,767
40
677,807
670,533
Total
42
THANACHART BANK PUBLIC COMPANY LIMITED
670,575
223
21.
Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2016 At call
2015
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
416
2,779
3,195
416
3,348
3,764
649
17,478
18,127
424
22,886
23,310
47
3,724
3,771
40
2,850
2,890
Other financial institutions
10,813
9,922
20,735
10,353
17,294
27,647
Total domestic items
11,925
33,903
45,828
11,233
46,378
57,611
118
15,766
15,884
85
19,546
19,631
Euro
1
-
1
3
-
3
Baht
3,610
511
4,121
7,650
793
8,443
Total foreign items
3,729
16,277
20,006
7,738
20,339
28,077
15,654
50,180
65,834
18,971
66,717
85,688
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
(Unit: Million Baht) Separate financial statements 2016 At call
2015
Term
Total
416
2,779
3,195
183
8,359
47
Other financial institutions Total domestic items
At call
Term
Total
416
3,348
3,764
8,542
123
16,526
16,649
3,424
3,471
40
2,450
2,490
11,020
9,922
20,942
10,385
17,334
27,719
11,666
24,484
36,150
10,964
39,658
50,622
118
15,766
15,884
85
19,546
19,631
Euro
1
-
1
3
-
3
Baht
3,610
511
4,121
7,650
793
8,443
Total foreign items
3,729
16,277
20,006
7,738
20,339
28,077
15,395
40,761
56,156
18,702
59,997
78,699
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks Specialised financial institutions
Foreign US Dollar
Total
224
ANNUAL REPORT 2016
As at 31 December 2016, interbank and money market items in the consolidated financial statements included loans of a subsidiary company amounting to Baht 1,750 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 200 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 (iv) a loan of Baht 250 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 (2015: included loans of a subsidiary company amounting to Baht 1,573 million). 22.
Debt issued and borrowings As at 31 December 2016 and 2015, 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
2016)
Maturity date
2016
2015
2016
4.70 percent
2022
12,516
12,516
12,516
12,516
4.65, 6.00 percent
2024 and 2025
20,000
20,000
20,000
20,000
2.60 - 4.80 percent
2017 - 2019
13,905
15,071
-
-
Short-term debentures
1.65 percent
2017
2,000
22,900
2,000
22,900
Structured notes
1.00 percent
2017
50
-
-
-
Promissory notes
0.20 - 2.50 percent
At call
937
1,149
5
5
0.50 percent
2017
1
5
1
5
49,409
71,641
34,522
Subordinated debentures
2015
issued under Tier II (a- b) Subordinated instruments issued under Tier II (c - d) Unsubordinated debentures (e - ae)
Borrowings - Department of Alternative Energy Development and Efficiency Total debt issued and borrowings
THANACHART BANK PUBLIC COMPANY LIMITED
55,426
225
(a)
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.
(b)
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.
(c)
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 the conditions specified are met.
(d)
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 the conditions specified are met.
(e)
On 27 April 2012, a subsidiary company issued 2,500,000 units of name registered unsubordinated, unsecured debentures with debenture holders’ representative, with a face value of Baht 1,000 each and bear interest at a fixed rate of 5.50 percent per annum, payable 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. The debentures mature in the second quarter of 2016.
226
ANNUAL REPORT 2016
(f)
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 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. The debentures mature in the fourth quarter of 2016.
(g)
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.
(h)
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.
(i)
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. (j)
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.
(k)
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.
THANACHART BANK PUBLIC COMPANY LIMITED
227
(l)
On 21 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.
(m) 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. (n)
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.
(o)
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.
(p)
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.
(q)
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.
228
ANNUAL REPORT 2016
(r)
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.
(s)
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.
(t)
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 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.
(u)
On 15 February 2016, 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 2019 and bear interest at a fixed rate of 2.88 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 11 March 2016, a subsidiary company issued 770,000 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 2.60 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 8 April 2016, 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 2019 and bear interest at a fixed rate of 2.88 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
229
(x)
On 25 April 2016, a subsidiary company issued 1,000,000 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 2019 and bear interest at a fixed rate of 2.70 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.
(y)
On 9 June 2016, 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 2019 and bear interest at a fixed rate of 3.00 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.
(z)
On 21 June 2016, a subsidiary company issued 215,000 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 2019 and bear interest at a fixed rate of 3.00 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.
(aa) On 21 July 2016, 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 2019 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. (ab) On 3 August 2016, a subsidiary company issued 500,000 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 2019 and bear interest at a fixed rate of 3.00 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. (ac) On 9 August 2016, 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 2019 and bear interest at a fixed rate of 3.00 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.
230
ANNUAL REPORT 2016
(ad) On 9 September 2016, 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 2019 and bear interest at a fixed rate of 2.95 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. (ae) On 15 September 2016, a subsidiary company issued 320,000 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 2019 and bear interest at a fixed rate of 2.95 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. 23.
Provisions (Unit: Million Baht) Consolidated financial statements 2016 Obligations from Loss from
Employee
off-balance
litigation
benefits
items
336
2,118
447
393
3,294
64
411
13
658
1,146
Utilised
(20)
(106)
(13)
(230)
(369)
Reversal of provisions
(15)
(13)
(464)
(492)
Balance as at 31 December 2016
365
434
357
Balance as at 1 January 2016 Increase during the year
2,423
Others
THANACHART BANK PUBLIC COMPANY LIMITED
Total
3,579
231
(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) Separate financial statements 2016 Obligations from
Balance as at 1 January 2016
Loss from
Employee
off-balance
litigation
benefits
items
336
1,871
Others
447
393
-
-
Total 3,047
Employee benefits for staff transferred to subsidiary Increase during the year
232
-
(1)
(1)
64
417
13
658
Utilised
(20)
(102)
(13)
(230)
(365)
Reversal of provisions
(15)
(13)
(464)
(492)
Balance as at 31 December 2016
365
434
357
ANNUAL REPORT 2016
2,185
1,152
3,341
(Unit: Million Baht) Separate financial statements 2015 Obligations from 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)
Balance as at 1 January 2015
Others
Total
Employee benefits for staff transferred from subsidiary Increase during the year Utilised
Balance as at 31 December 2015
-
-
-
1,871
447
393
(4)
Reversal of provisions
336
(4) 3,047
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
2016
2016
2015
2015
Defined benefit obligation at the beginning of the year
2,085
1,847
1,838
1,650
-
-
150
131
125
110
69
74
60
66
(89)
(137)
(77)
(129)
47
(12)
Employee benefits for staff transferred to/from subsidiaries
(1)
6
Included in profit or loss: Current service cost Interest cost Past service cost and gains or losses arising from the payment of benefits Included in other comprehensive income: Actuarial (gain) loss arising from - Demographic assumptions changes - Financial assumptions changes - Experience adjustments Benefits paid Defined benefit obligation at the end of the year
25
3
(66)
170
(59)
150
25
41
24
40
(47)
(44)
(43)
(43)
2,152
2,085
1,914
THANACHART BANK PUBLIC COMPANY LIMITED
1,838
233
As at 31 December 2016 and 2015, the Bank and its subsidiaries expect to pay Baht 69 million and Baht 47 million, respectively, in long-term employee benefits during the next one year (separate financial statements: Baht 65 million and Baht 43 million, respectively). The principal actuarial assumptions used to calculate the defined benefit obligations are as follows: (Percent per annum) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Discount rate
2.71 - 3.51
2.71 - 3.83
3.51
3.21
Future salary increase rate
5.00 - 6.39
5.00 - 7.43
5.00
5.00
Average staff turnover rate
0.00 - 100
0.00 - 92.86
0.20 - 28.22
0.31 - 23.46
(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 2016 and 2015 are summarised below: (Unit: Million Baht)
Change
Consolidated financial
Separate financial
statements
statements
2016
2015
2016
2015
Decrease 0.25%
55
58
49
49
Future salary increase rate
Increase 0.25%
54
56
48
48
Average staff turnover rate
Decrease 0.25%
55
58
50
52
Discount rate
(depending on age)
As at 31 December 2016 and 2015, the weighted average durations of the liabilities for long-term employee benefit obligation of the Bank and its subsidiaries are 10,15,16 and 20 years and 11, 16 and 24 years, respectively (separate financial statements: 16 years and 16 years, respectively).
234
ANNUAL REPORT 2016
24.
Insurance contract liabilities (Unit: Million Baht) 2016
2015
Insurance
Insurance
contract
Reinsurance
liabilities
assets
Net
contract
Reinsurance
liabilities
assets
Net
Loss reserves and outstanding claims
1,558
(159)
1,399
1,707
(153)
1,554
Premium reserves
3,379
(41)
3,338
3,086
(22)
3,064
Total
4,937
(200)
4,737
4,793
(175)
4,618
Assumptions used in determining liabilities from insurance contracts The assumptions used in determining liabilities from insurance contracts are set taking into consideration the model used to assess, the nature of the data, including actual experience up to the date the assessment is made. The analysis performed considers both internal and external factors that affect the pattern of experience, such as the underwriting process, the proportion of insurance, the process of claims handling, the reinsurance policy, economic trends and regulatory changes. In the event that historical loss data is insufficient to be a credible basis for the determination of the assumptions, industry information is used to ensure that this method is appropriate. In addition, the assumptions used in determining insurance liabilities should be consistent with the assumptions used in determining claims liabilities. Sensitivity analysis Sensitivity analysis is performed to analyse the risk that insurance liabilities will increase or decrease as a result of changes in the assumptions used in calculating those liabilities, which will impact claims liabilities both before reinsurance and after reinsurance. The risk may occur because the frequency and severity of the damage or loss adjustment claim expense may not be in line with expectations.
THANACHART BANK PUBLIC COMPANY LIMITED
235
(Unit: Million Baht) 2016 Increase/
Increase/
Change in
Change in
Change in net
(decrease) on
(decrease) on
assumption
gross liabilities
liabilities
profit before tax
equity
Ultimate loss ratio
+ 2%
146
145
(145)
(116)
Ultimate loss ratio
- 2%
(141)
(140)
140
112
Loss adjustment expense
+2%
11
11
(11)
(9)
Loss adjustment expense
-2%
(11)
(11)
11
9 (Unit: Million Baht)
2015 Increase/
Increase/
Change in
Change in
Change in net
(decrease) on
(decrease) on
assumption
gross liabilities
liabilities
profit before tax
equity
Ultimate loss ratio
+ 2%
146
146
(146)
(117)
Ultimate loss ratio
- 2%
(140)
(139)
139
111
Loss adjustment expense
+2%
12
12
(12)
(10)
Loss adjustment expense
-2%
(12)
(12)
12
10
24.1 Loss reserve and outstanding claims (Unit: Million Baht) Consolidated financial statements 2016
2015
Balance - beginning of the year
1,707
1,644
Claims expenses for the year
3,159
3,095
186
266
Change in loss reserve and outstanding in claim and assumption Claims expenses paid during the year Balance - end of the year
(3,494)
(3,298)
1,558
1,707
24.2 Unearned premium reserve (Unit: Million Baht) Consolidated financial statements 2016 Balance - beginning of the year
3,086
3,053
Premium written for the year
6,421
6,088
(6,128)
(6,055)
3,379
3,086
Premium earned for the current year Balance - end of the year
236
2015
ANNUAL REPORT 2016
24.3 Insurance risk Insurance risk is the risk that the frequency and severity of losses may deviate from the assumptions used in determining the premium rate, reserve calculations and underwriting. Insurance risk can be divided into three types, depending on the source of the risk, and these consist of product development and pricing risk, underwriting risk and claims management risk. A subsidiary has insurance risk management procedures covering risk identification, risk assessment using risk measurement indexes like the estimated ultimate combine ratio and claim management, as well as the monitoring and reporting of risk, in order to ensure that risk is appropriately reflected. 25.
Other liabilities (Unit: Million Baht)
Other payables
Separate
financial statements
financial statements
2016
2016
2015
2015
1,282
1,674
1,043
1,387
Suspense cash received from account receivables
376
468
289
389
Insurance premium payable
250
306
266
244
Income received in advance
1,875
1,899
1,828
1,886
381
306
-
-
-
1,334
-
1,334
Others
2,601
2,517
953
804
Total other liabilities
6,765
8,504
4,379
6,044
Corporate income tax payable Dividend payable
26.
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.
THANACHART BANK PUBLIC COMPANY LIMITED
237
27.
Other components of equity (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Surplus from business combination under common control Surplus on revaluation of assets Less: The effect of deferred tax liabilities
(123) 1,601 (320)
(123) -
-
-
1,598
-
(320)
-
1,281
-
1,278
-
Debt instruments
530
1,370
504
1,268
Equity instruments
725
645
123
77
1,255
2,015
627
1,345
Net surplus on revaluation of assets Revaluation surplus (deficit) on investments Revaluation surplus on investments Available-for-sale investments
Total Revaluation deficit on investments Available-for-sale investments Debt instruments
(814)
(87)
(776)
(85)
Equity instruments
(547)
(579)
(264)
(235)
(1,361)
(666)
(1,040)
(320)
Total Total revaluation surplus (deficit) on investments Add (less): The effect of deferred tax liabilities Net revaluation surplus on investments
(106) 41 (65)
1,349 (250) 1,099
(413)
1,025
83
(205)
(330)
820
Share of other comprehensive income of associate Less: The effect of deferred tax liabilities
514
162
-
-
(51)
(16)
-
-
463
146
-
-
1,556
1,122
948
820
Net share of other comprehensive income of associate Total
28.
Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Bank is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.
238
ANNUAL REPORT 2016
On 18 August 2016, the Bank’s Board of Director passed a resolution to allocate Baht 312 million of net income to statutory reserve, and on 31 December 2016, the Bank additional allocated Baht 286 million of net income for the year 2016 to the statutory reserve, a total of Baht 598 million (2015: Baht 573 million). 29.
Capital funds The primary objectives of the Bank’s capital management are to maintain the Bank’s ability to continue as a going concern and to maintain a capital adequacy ratio in accordance with the Act on Undertaking of Banking business B.E. 2551. As at 31 December 2016 and 2015, 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) 2016
2015
60,649
60,649
Share premium
2,101
2,101
Statutory reserve
3,315
2,710
42,837
35,398
1,272
-
Tier I capital Common Equity Tier I capital Issued and fully paid-up share capital
Retained earnings - unappropriated Other components of equity - Revaluation surplus on land - net Other components of equity - Revaluation deficit on investments in equity securities - net
(113)
(127)
(131)
379
Other components of equity - Revaluation surplus (deficit) on investments in debt securities - net
109,930
101,110
(17,941)
(17,941)
Less: intangible assets
(1,428)
(1,045)
Total Common Equity Tier I capital
90,561
82,124
Total Tier I capital
90,561
82,124
7,596
7,602
Subordinated debentures
32,516
32,516
Total Tier II capital
40,112
40,118
Total capital funds
130,673
122,242
Less: goodwill
Tier II capital Reserve for assets classified as normal
On 18 August 2016, the Bank’s Board of Director passed a resolution approving the allocation of Baht 312 million from net income for the six-month period ended 30 June 2016 to the statutory reserve. The remaining net income of Baht 3,796 million was allocated as capital funds of the Bank.
THANACHART BANK PUBLIC COMPANY LIMITED
239
As at 31 December 2016 and 2015, 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: 2016
2015 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)
19.15
9.125
17.92
8.50
Total Common Equity Tier I to risk-weighted
13.27
5.125
12.04
4.50
13.27
6.625
12.04
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 2016 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 2017. 30.
Dividends During the years ended 31 December 2016 and 2015, the Bank has dividends payments as follow: Dividends
Interim dividends on net income for the first haft of the year 2016 Dividends on net income for the year 2015
Approved by
for the first haft of the year 2015 Dividends on net income for the year 2014 Total
240
ANNUAL REPORT 2016
Dividend per share
Million Baht
Baht
The Board of Directors of the Bank on 18 August 2016
2,123
0.35
2,426
0.40
Annual General Meeting of the Shareholders on 5 April 2016
Total Interim dividends on net income
Total dividends
4,549 The Board of Directors of the Bank on 17 December 2015
1,334
0.22
2,481
0.45
Annual General Meeting of the Shareholders on 2 April 2015
3,815
31.
Interest income Interest income for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht)
Interbank and money market items
Separate
financial statements
financial statements
2016
2016
2015
2015
1,307
1,580
1,279
1,555
30
73
30
74
3,504
3,761
3,392
3,582
Loans to customers
18,337
19,474
17,852
18,908
Hire purchase and financial lease
21,708
23,329
19,290
21,006
Total interest income
44,886
48,217
41,843
45,125
Investments and trading transactions Investments in debt securities
32.
Consolidated
Interest expenses Interest expenses for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht)
Deposits Interbank and money market items
Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
9,526
12,832
9,539
12,847
741
957
558
742
3,326
3,405
3,326
3,405
590
1,085
590
1,085
842
1,217
173
502
1,109
990
1,109
990
35
44
-
-
5
6
-
1
16,174
20,536
15,295
19,572
Contribution fee to FIDF and the Deposit Protection Agency Debts issued and borrowings - Subordinated debentures - Unsubordinated debentures and short-term debentures - Subordinated instruments - Others Borrowing cost Total interest expenses
THANACHART BANK PUBLIC COMPANY LIMITED
241
33.
Fees and service income Fees and service income for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Fees and service income Acceptance, aval and guarantees
238
255
239
255
1,599
1,431
-
-
922
878
922
878
Hire purchase fee income
1,575
1,506
1,428
1,369
Insurance brokerage fee income
1,448
1,239
1,673
1,476
Management fees
833
759
-
-
Credit card fee
907
938
908
1,292
1,174
1,254
1,217
8,814
8,180
6,424
6,133
Fees and service expenses
(2,910)
(2,705)
(2,643)
(2,488)
Net fees and service income
5,904
5,475
3,781
3,645
Brokerage fee from securities/ derivatives ATM and electronic banking services
Others Total fees and service income
34.
938
Gains on trading and foreign exchange transactions Gains on trading and foreign exchange transactions for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Foreign exchange and derivatives contract relating to foreign exchange Derivatives contract relating to interest rate Debt securities Equity securities Others Total
242
ANNUAL REPORT 2016
400
577
416
573
5
31
5
31
14
26
14
26
(11)
(45)
-
-
83
69
-
-
491
658
435
630
35.
Gains on investments Gains on investments for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Gains (losses) on disposal Available-for-sale securities
709
1,534
611
1,328
General investments
3
8
3
8
Investment in receivables purchased
-
(1)
-
(1)
2
3
2
3
General investments
-
2
-
2
Investment in a subsidiary company
-
-
-
152
-
-
616
1,492
Reversal of losses on impairment General investments Gains on capital refunded
Loss on liquidation from investment in a -
subsidiary company Total
36.
714
(13) 1,533
Insurance premium income Insurance premium income for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2016 Gross premium written Less: Premium ceded to reinsurers Net insurance premium income Less: unearned premium reserve decreased from prior year Total
6,412 (103) 6,309 (273) 6,036
THANACHART BANK PUBLIC COMPANY LIMITED
2015 6,078 (89) 5,989 (27) 5,962
243
37.
Insurance expenses Insurance expenses for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2016 Gross claim and loss adjustment expenses
3,177
3,267
Other underwriting expenses
202
184
Less: Claims recovery from reinsurers
(32)
(42)
3,347
Total
38.
2015
3,409
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 24 million (separate financial statements: Baht 22 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.
39.
Impairment losses of loans and debt securities Impairment losses of loans and debt securities for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Impairment losses of loans (reversal) Loans to customers Interbank and money market items
6,243
8,599
5,784
8,016
10
(4)
26
(6)
(2)
(2)
(2)
(2)
-
(1)
-
(1)
Amortisation of revaluation allowance for debts restructured during the year Reversal of impairment loss on debt securities Total
244
ANNUAL REPORT 2016
6,251
8,592
5,808
8,007
40.
Components of other comprehensive income Components of other comprehensive income for the years ended 31 December 2016 and 2015 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Other comprehensive income 7UDQVDFWLRQV WKDW ZLOO EH UHFODVVLILHG VXEVHTXHQWO\ WR SURILW RU ORVV Available-for-sale securities: Unrealised gains (losses) during the year
(745)
371
(828)
656
Less: Reclassification of adjustment for the realised gains that included in profit or loss
Share of other comprehensive income of associate (loss) Other comprehensive income for the year (loss)
(709)
(1,534)
(611)
(1,328)
(1,454)
(1,163)
(1,439)
(672)
153 (1,301)
(76) (1,239)
(1,439)
(672)
Impact from related income tax Income tax - losses on changes in value of available-forsale securities
291
233
288
134
8
-
-
241
288
134
Income tax - share of other comprehensive income of associate Impact from related income tax
(15) 276 (1,025)
(998)
(1,151)
(538)
7UDQVDFWLRQV WKDW ZLOO QHYHU EH UHFODVVLILHG VXEVHTXHQWO\ WR SURILW RU ORVV Surplus on revaluation of assets Share of other comprehensive income in associate Actuarial gains (losses) on defined benefit plan Other comprehensive income for the year (loss)
1,606
-
1,603
-
199
-
-
-
16
(214)
1,821
(214)
(12) 1,591
(178) (178)
Impact from related income tax Income tax - surplus on revaluation of assets
(321)
-
(321)
-
(20)
-
-
-
(3)
41
3
36
(344)
41
Income tax - share of other comprehensive income of associate Income tax - actuarial gains (losses) on defined benefit plan Impact from related income tax
(318)
36
1,477
(173)
1,273
(142)
452
(1,171)
122
(680)
Other comprehensive income for the year - net of related income tax (loss)
THANACHART BANK PUBLIC COMPANY LIMITED
245
41.
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) Weighted average number of ordinary shares (Million shares)
42.
Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
12,434
10,743
11,962
11,452
2.05
1.90
1.97
2.03
6,065
5,641
6,065
5,641
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 2016, the Bank and its subsidiaries contributed Baht 426 million to the fund (separate financial statements: Baht 370 million) (2015: Baht 424 million in the consolidated financial statements and Baht 370 million in the separate financial statements).
246
ANNUAL REPORT 2016
43.
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
2016
2016
2015
Transfer pricing policy (For the year 2016)
2015
Transactions occurred during the years Parent company Purchase of debt securities
-
477
-
477
Sales of debt securities
2,019
3,327
2,019
3,327
Fee and service income
-
1
-
-
Income on supporting service
7
10
7
10
At market price
At the rate agreed under the service contract
Other income
1
3
-
-
Interest expenses
-
201
-
201
Rental expenses
5
8
5
7
At the rate agreed under the rental contract
Other expenses Dividend payment
38
40
38
40
2,318
1,944
2,318
1,944
As declared
THANACHART BANK PUBLIC COMPANY LIMITED
247
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
Transfer pricing policy (For the year 2016)
2016
2015
2016
2015
Purchase of debt securities
-
-
2,990
3,722
At market price
Sales of debt securities
-
-
3,480
2,744
At market price
(Related loss)
-
-
1
-
-
-
993
1,471
-
-
122
124
Transactions occurred during the years (continued) Subsidiary companies
Purchase/sales of forward exchange contracts Interest income
At market price At interest rate of 1.47 - 2.47 and 7.68 percent per annum
Dividend income
-
-
2,490
3,090
Fee and service income
-
-
866
798
As declared At the rate agreed under the service contract
Income on supporting service
-
-
277
288
At the rate agreed under the service contract
Other income
-
-
20
23
Interest expenses
-
-
87
112
At interest rate of 0.13 - 2.70 percent per annum
Rental expenses
-
-
-
1
Other expenses
-
-
189
190
Dividend income
-
-
51
46
Other income
6
5
-
-
Interest expenses
1
1
1
1
Associated company As declared
At interest rate of 0.40 percent per annum
Rental expenses
112
103
83
79
At the rate agreed under the rental contract
Other expenses
248
ANNUAL REPORT 2016
3
6
1
4
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
Transfer pricing policy (For the year 2016)
2016
2015
2016
2015
Purchase of debt securities
2,182
2,514
2,182
2,514
At market price
Sales of debt securities
6,078
3,878
5,979
3,878
At market price
1
-
1
-
106,563
226,231
105,505
223,536
270
284
270
284
Transactions occurred during the years (continued) Related parties
(Related gain) Purchase/sales of forward exchange contracts Interest income
At market price At interest rate of 0.05 - 7.68 percent per annum
Dividend income Fee and service income
94
25
55
5
As declared
4
5
4
5
At the rate agreed under the service contract
Income on supporting service
5
7
5
7
At the rate agreed under the service contract
Other income Interest expenses
8
8
-
-
166
307
166
307
At interest rate of 0.05 - 2.95 and 6.00 percent per annum
Rental expenses
135
116
71
60
At the rate agreed under the rental contract
Insurance expense
22
14
-
-
At the rate agreed under the service contract
Other expense Dividend payment
42
51
26
35
2,229
1,870
2,229
1,870
As declared
THANACHART BANK PUBLIC COMPANY LIMITED
249
The outstanding balances of the above transactions during the years ended 31 December 2016 and 2015 have been shown at the average balance at the end of each month as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2016
2015
2015
Parent company Loans to customers
1
5
-
-
79
85
79
85
-
2,798
-
2,798
Interbank and money market items (assets)
-
-
1,850
958
Loans to customers
-
-
1,404
1,969
Deposits
-
-
1,275
1,313
Interbank and money market items (liabilities)
-
-
129
706
135
119
135
119
286
241
286
241
Loans to customers
8,198
7,339
7,857
6,998
Deposits
1,618
1,403
1,618
1,403
14,415
12,578
14,415
12,578
481
3,314
481
3,314
Deposits Debt issued and borrowings Subsidiary companies
Associated company Deposits Related companies Interbank and money market items (assets)
Interbank and money market items (liabilities) Debt issued and borrowings
250
ANNUAL REPORT 2016
As at 31 December 2016 and 2015, the significant outstanding balances of the above transactions are as follows: (Unit: Million Baht) Consolidated financial statements 2016 Assets Interbank
Liabilities
Loans to
Interbank
and money
Investments
customers
and money
Debt issued
market
- debt
and interest
Other
market
and
Other
items
securities
receivables
assets
items
borrowings
liabilities
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
1
2
32
-
-
-
-
-
-
-
32
135
-
-
-
-
250
-
-
-
-
14,333
-
19
195
Krungthai Card Plc.
-
1,056
1,400
6
6
-
-
-
-
Synphaet Co., Ltd.
-
-
1,243
-
16
-
-
-
36
Iconsiam Co., Ltd.
-
-
1,928
-
7
-
-
-
30
Srithai Superware Plc.
-
-
829
-
13
-
-
-
30
Pruksa Real Estate Plc.
-
-
400
-
1
-
-
-
463
Big C Supercenter Plc.
-
-
1,910
-
-
-
-
-
-
Associated company MBK Plc. Related companies The Bank of Nova Scotia
Other related companies
-
407
1,191
39
1,562
204
470
21
297
250
1,463
8,902
79
1,772
14,537
470
40
1,051
(Unit: Million Baht) Consolidated financial statements 2015 Assets Interbank
Liabilities
Loans to
Interbank
and money
customers
market
and interest
Other
and money
items
receivables
assets
Deposits
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
2
-
27
-
-
680
-
Associated company MBK Plc.
-
-
35
63
-
-
-
-
244
-
-
-
15,063
-
666
625
Related companies The Bank of Nova Scotia Krungthai Card Plc.
-
3,018
-
5
-
-
-
-
Synphaet Co., Ltd.
-
1,136
-
21
-
-
-
36
Iconsiam Co., Ltd.
-
1,897
-
39
-
-
-
30
Srithai Superware Plc.
-
883
-
25
-
-
-
37
Pruksa Real Estate Plc.
-
-
-
-
-
-
-
851
-
1,516
127
1,278
267
610
17
412
244
8,452
162
1,458
15,330
610
1,363
1,991
Other related companies
THANACHART BANK PUBLIC COMPANY LIMITED
251
(Unit: Million Baht) Separate financial statements 2016 Assets Interbank
Liabilities
Loans to
Interbank and money
Debt issued
market
and
Other
items
borrowings
liabilities
and money
Investments
customers
market
- debt
and interest
Other
items
securities
receivables
assets
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
-
2
32
-
-
-
-
-
-
-
1
350
-
-
-
-
Thanachart Securities Plc.
2,500
-
-
11
-
166
-
6
670
Thanachart Insurance Plc.
-
-
-
91
339
-
-
179
50
Thanachart Broker Co., Ltd.
-
-
-
11
207
-
-
1
-
-
-
-
-
191
-
-
-
2
Ratchthani Leasing Plc.
-
1,000
3,180
1
68
-
-
1,000
30
Other subsidiary companies
-
-
-
63
110
45
-
14
-
-
-
-
24
135
-
-
-
-
250
-
-
-
-
14,333
-
19
195
Krungthai Card Plc.
-
1,056
1,400
6
6
-
-
-
-
Synphaet Co., Ltd.
-
-
1,243
-
16
-
-
-
36
Iconsiam Co., Ltd.
-
-
1,928
-
7
-
-
-
30
Srithai Superware Plc.
-
-
829
-
13
-
-
-
30
Pruksa Real Estate Plc.
-
-
400
-
1
-
-
-
463
Big C Supercenter Plc.
-
-
1,910
-
-
-
-
-
-
Other related companies
-
407
849
25
1,562
204
470
7
297
2,750
2,463
11,739
235
3,037
14,748
470
1,226
1,803
Subsidiary companies Thanachart Group Leasing Co., Ltd.
TS Asset Management Co., Ltd.
Associated company MBK Plc. Related companies The Bank of Nova Scotia
252
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements 2015 Assets
Liabilities
Interbank
Loans to
Interbank
and money
customers
and money
Debt issued
market
and interest
Other
market
and
Other
items
receivables
assets
items
borrowings
liabilities
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
-
27
-
-
680
-
-
-
-
388
-
-
2
-
Thanachart Securities Plc.
850
-
2
-
186
-
19
642
Thanachart Insurance Plc.
-
-
51
209
-
-
140
50
Thanachart Broker Co., Ltd.
-
-
6
211
-
-
1
-
-
691
1
55
-
-
-
2
Ratchthani Leasing Plc.
-
1,210
-
115
-
-
-
30
Other subsidiary companies
-
1
42
103
41
-
23
-
-
-
27
63
-
-
-
-
244
-
-
-
15,063
-
666
625
Krungthai Card Plc.
-
3,018
-
5
-
-
-
-
Synphaet Co., Ltd.
-
1,136
-
21
-
-
-
36
Subsidiary companies Thanachart Group Leasing Co., Ltd.
TS Asset Management Co., Ltd.
Associated company MBK Plc. Related companies The Bank of Nova Scotia
Iconsiam Co., Ltd.
-
1,897
-
39
-
-
-
30
Srithai Superware Plc.
-
883
-
25
-
-
-
37
Pruksa Real Estate Plc.
-
-
-
-
-
-
-
851
Other related companies
-
1,175
19
1,278
267
610
4
270
1,094
10,011
148
2,539
15,557
610
1,535
2,573
THANACHART BANK PUBLIC COMPANY LIMITED
253
As at 31 December 2016, the Bank has loans to Ratchthani Leasing Plc. amounting to Baht 3,180 million, carrying interest at rates of 1.75, 2.00 and 7.68 percent per annum (2015: loans to TS Asset Management Co., Ltd. amount to Baht 691 million at interest rates of 2.47 - 2.97 percent per annum and Ratchthani Leasing Plc. amounting to Baht 1,210 million at interest rates of 2.17 - 3.75 and 7.68 - 7.78 percent per annum). As at 31 December 2016, the Bank and its subsidiaries have investments amounting to approximately Baht 833 million (Baht 350 million in the separate financial statements) in related companies in which they are related by means of members of their management being shareholders and/or directors of those companies (2015: Baht 811 million in the consolidated financial statements, and Baht 344 million in the separate financial statements). As at 31 December 2016 and 2015, 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
2016
2015
2016
2015
Loans to customers
125
84
114
77
Deposits
815
768
815
768
Directors and management’s remuneration During the years 2016 and 2015, the Bank and its subsidiaries paid the following benefits to their key management personnel, including directors, totaled 116 persons and 115 persons, respectively (the separate financial statements: 45 persons and 43 persons, respectively): (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016 Short-term employee benefits Post-employment benefits
254
ANNUAL REPORT 2016
2015
2016
2015
631
625
323
293
16
14
7
7
647
639
330
300
44.
Financial information classified by operating segment
44.1 Financial position and results of operations classified by business activity The financial position as at 31 December 2016 and 2015, and the operating results for the years then ended, classified by domestic and foreign operations, are as follows: (Unit: Million Baht) Consolidated financial statements 2016 Domestic
Foreign
operations
operations
950,286
Eliminations
Total
21,854
(21,628)
950,512
53,308
15,796
(21,628)
47,476
169,068
6,013
-
175,081
2,253
-
-
2,253
666,909
-
-
666,909
676,557
-
-
676,557
Interbank and money market items (liabilities)
65,834
21,628
Debt issued and borrowings
49,409
-
Total assets Interbank and money market items (assets) Investments Investment in an associated company Loans to customers and accrued interest receivables Deposits
(21,628) -
65,834 49,409
(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) -
THANACHART BANK PUBLIC COMPANY LIMITED
85,688 71,641
255
(Unit: Million Baht) Consolidated financial statements 2016
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
44,811
292
(217)
44,886
(16,174)
(217)
217
(16,174)
28,637
75
-
28,712
Net fees and service income
5,904
-
-
5,904
Net insurance income
2,689
-
-
2,689
Other operating income
3,101
1
-
3,102
(20,626)
-
-
(20,626)
Impairment losses of loans and debt securities
(6,251)
-
-
(6,251)
Profit before income tax
13,454
76
-
13,530
-
-
76
-
Interest expenses Net interest income
Other operating expenses
Income tax Profit before non-controlling interests
(691) 12,763
(691) 12,839
(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
3,916
14
-
3,930
(19,721)
-
-
(19,721)
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
256
ANNUAL REPORT 2016
(198) 11,039
(198) 11,127
(Unit: Million Baht) Separate financial statements 2016 Domestic
Foreign
operations
operations
906,642
Eliminations
Total
21,854
(21,628)
906,868
53,298
15,796
(21,628)
47,466
161,262
6,013
-
167,275
Investments in subsidiary and associated companies
7,359
-
-
7,359
Loans to customers and accrued interest receivables
632,931
-
-
632,931
Deposits
677,807
-
-
677,807
Interbank and money market items (liabilities)
56,156
21,628
Debt issued and borrowings
34,522
-
Total assets Interbank and money market items (assets) Investments
(21,628) -
56,156 34,522
(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) -
THANACHART BANK PUBLIC COMPANY LIMITED
78,699 55,426
257
(Unit: Million Baht) Separate financial statements 2016 Domestic
Foreign
operations
operations
41,768
292
(217)
41,843
(15,295)
(217)
217
(15,295)
26,473
75
-
26,548
Net fees and service income
3,781
-
-
3,781
Other operating income
5,178
1
-
5,179
(17,843)
-
-
(17,843)
Impairment losses of loans and debt securities
(5,808)
-
-
(5,808)
Profit before income tax
11,781
76
-
11,857
105
-
-
105
11,886
76
-
11,962
Interest income Interest expenses Net interest income
Other operating expenses
Income tax Profit for the year
Eliminations
Total
(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
6,782
14
-
6,796
(17,096)
-
-
(17,096)
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
258
ANNUAL REPORT 2016
Eliminations
Total
44.2 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
259
260
ANNUAL REPORT 2016 568 (1,625) 167 3,553 (711) 2,842
4,408 (14,301) (5,107) 6,351 (1,270) 5,081
Impairment losses of loans and debt securities
Profit before income tax
Income tax
Profit before non-controlling interest
Other operating expenses
Other operating income
Net insurance income
4,443
and SME
21,351
Net interest income
Retail
Corporate
Banking business
4,039
2,086
1,953
(868)
(1,917)
3,984
-
754
and others
Investment
Treasury &
1,018
(244)
1,262
2
(1,376)
2,445
-
1,005
(239)
1,244
-
(963)
221
1,795
191
business
business
191
insurance
Securities
Non-life
99
(49)
148
(16)
(156)
24
-
296
business
management
Asset
For the year ended 31 December 2016
991
(252)
1,243
(490)
(845)
1,031
-
1,547
businesses
Other
(2,236)
(12)
(2,224)
61
557
(3,675)
894
(61)
Eliminations
12,839
(691)
13,530
(6,251)
(20,626)
9,006
2,689
28,712
Consolidated
(Unit: Million Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
261
3,042 2,131 5,173
3,604 (721) 2,883
4,245 (849) 3,396
Profit (loss) before income tax
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
457,713 469,261
As at 31 December 2016
As at 31 December 2015
Assets for segment
Retail
226,010
212,469
and SME
Corporate
Banking business
243,563
236,686
and others
7,862
9,935
business
11,532
12,045
business
Non-life insurance
Investment
Securities
Treasury &
Asset
4,350
3,047
t businesses
managemen
Asset
(111)
(28)
(83)
(352)
(123)
45
-
347
business
management
Assets for segment of the Bank and its subsidiaries as at 31 December 2016 and 2015 are as follows:
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)
662
-
4,565
and others
(1,446)
4,354
-
20,185
and SME
Investment
Treasury &
(14,019)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Banking business
For the year ended 31 December 2015
30,584
34,296
businesses
Other
883
(227)
1,110
(400)
(796)
944
-
1,362
businesses
Other
11,127
(198)
11,325
(8,592)
(19,721)
9,405
2,552
27,681
(12,190)
(15,679)
Eliminations
980,972
950,512
Consolidated
(Unit: Million Baht)
(3,022)
(34)
(2,988)
144
546
(4,438)
798
(38)
Eliminations Consolidated
(Unit: Million Baht)
44.3 Major customers For the years 2016 and 2015, the Bank and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues. 45.
Encumbrance of assets As at 31 December 2016 and 2015, 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
2016
2015
2016
2015
Interbank and money market items (assets) Guarantee placed with the registrar Placed with court for stay of execution
650
650
-
-
3
7
-
-
17
17
-
-
399
405
262
266
166
259
-
143
21
94
19
21
1,256
1,432
281
430
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
262
ANNUAL REPORT 2016
46.
Commitments and contingent liabilities As at 31 December 2016 and 2015, significant commitments and contingent liabilities consisted of:
46.1 Commitments (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2015
2016
2015
Aval to bills
629
1,270
629
1,270
Liability under unmatured import bills
637
497
637
497
2,667
2,310
2,667
2,310
Committed (but not drawn) overdraft
24,244
24,506
24,244
24,506
Others
55,271
53,202
55,234
53,172
83,448
81,785
83,411
81,755
Letter of credits Other obligations
Total
In addition, the Bank and its subsidiaries have commitments in respect of foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and gold futures contracts, as mentioned in Note 8 to the financial statements. 46.2 As at 31 December 2016, 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
2017
2,212
11
2,102
11
64
2018
1,094
-
1,023
-
-
792
-
493
-
-
2019 onward
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
263
46.3 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 2016, 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 2016, 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 29 million.
c)
Lawsuits in which SCIB is involved as a result of the transfer of business from BMB amounting to Baht 456 million, as disclosed under contingent liabilities in Note 47 to the financial statements.
264
ANNUAL REPORT 2016
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 2016, the deposit account of the FIDF with Thanachart Bank to fund the payment of compensation for losses has an outstanding balance of approximately Baht 407 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. 47.
Contingent liabilities/Litigation a)
As at 31 December 2016, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 3,069 million (separate financial statements: Baht 2,793 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 456 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.
b)
Furthermore, an organisation supervised by a government agency requested that the Bank pay compensation amounting to Baht 2,100 million, plus interest at 7.5 percent per annum. However, the management of the Bank is confident that no losses will be incurred.
48.
Letter of guarantees As at 31 December 2016, 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).
49.
Financial instruments Financial instruments are any contracts which give rise to both a financial assets of one enterprise and a financial liability or equity instruments of another enterprise.
THANACHART BANK PUBLIC COMPANY LIMITED
265
49.1 Credit risk Credit risk is the risk that the party to a financial instrument will fail to fulfill an obligation, causing the Bank and its subsidiaries to incur a financial loss. The amount of maximum credit risk exposure is the carrying amount of the financial assets less provision for losses as stated in the statements of financial position and the risk of commitments from avals, guarantees of loans, other guarantees and derivative contracts. In addition, the Bank and its subsidiaries manage credit risk by the means of careful consideration of credit approval process, analysis of risk factors and the ability to service debt of customers, and a credit review process, which examines and reviews the quality of the loan portfolio so as to prevent and provide a remedy for problem loans in the future. 49.2 Market risk Market risk is the risk that changes in interest rates, foreign exchange rates and securities prices may have an effect on the Bank and its subsidiaries’ foreign currency position and investment status. As such, market risk consists of interest rate risk, foreign exchange risk and equity/commodity position risk. a)
Interest rate risk
Interest rate risk is the risk that the value of financial instrument will fluctuate as a result of changes in market interest rates. The Bank and its subsidiaries manage the changes in interest rate risk by means of an appropriate structuring of holdings in assets and liabilities with different repricing dates, taking into account the direction of market interest rates, in order to generate a suitable yield while maintaining risk at acceptable levels. Such management is under the supervision of the Asset and Liabilities Management Committee.
266
ANNUAL REPORT 2016
As at 31 December 2016 and 2015, financial assets and liabilities classified by types of interest rate are as follows: (Unit: Million Baht) Consolidated financial statements 2016
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
12,077
12,077
734
42,088
4,781
47,603
-
-
3,564
3,564
-
165,746
9,627
175,373
219,956
470,812
139
690,907
Receivables from purchase and sale of securities
-
-
1,126
1,126
Other assets - receivable from clearing house
-
-
1,332
1,332
307,104
363,143
6,310
676,557
13,902
50,629
1,303
65,834
Liability payable on demand
-
-
1,986
1,986
Derivatives liabilities
-
-
4,912
4,912
Debt issued and borrowings
4
49,405
-
49,409
Payables from purchase and sale of securities
-
-
2,366
2,366
Other liabilities - payable to clearing house
-
-
2
2
Interbank and money market items Derivatives assets Investments Loans to customers
Financial liabilities Deposits Interbank and money market items
7KH RXWVWDQGLQJ EDODQFHV RI ORDQV WR FXVWRPHUV ZKLFK KDYH IORDWLQJ LQWHUHVW UDWHV RU IL[HG LQWHUHVW UDWHV LQFOXGH ORDQV RQ ZKLFK LQWHUHVW UHFRJQLWLRQ LV GLVFRQWLQXHG
THANACHART BANK PUBLIC COMPANY LIMITED
267
(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
Payables from purchase and sale of securities
-
Interbank and money market items Derivatives assets Investments
Loans to customers
Financial liabilities Deposits Interbank and money market items
71,637
-
2,073
71,641 2,073
7KH RXWVWDQGLQJ EDODQFHV RI ORDQV WR FXVWRPHUV ZKLFK KDYH IORDWLQJ LQWHUHVW UDWHV RU IL[HG LQWHUHVW UDWHV LQFOXGH ORDQV RQ ZKLFK LQWHUHVW UHFRJQLWLRQ LV GLVFRQWLQXHG
268
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements 2016
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
12,072
12,072
674
42,232
4,731
47,637
-
-
3,564
3,564
-
161,796
5,962
167,758
211,903
439,583
128
651,614
307,543
363,910
6,354
677,807
14,079
40,761
1,316
56,156
Liability payable on demand
-
-
1,986
1,986
Derivatives liabilities
-
-
4,912
4,912
Debt issued and borrowings
4
34,518
-
34,522
Payables from purchase and sale of securities
-
-
1,000
1,000
Interbank and money market items Derivatives assets Investments Loans to customers
Financial liabilities Deposits Interbank and money market items
7KH RXWVWDQGLQJ EDODQFHV RI ORDQV WR FXVWRPHUV ZKLFK KDYH IORDWLQJ LQWHUHVW UDWHV RU IL[HG LQWHUHVW UDWHV LQFOXGH ORDQV RQ ZKLFK LQWHUHVW UHFRJQLWLRQ LV GLVFRQWLQXHG
(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
Financial liabilities Deposits Interbank and money market items
7KH RXWVWDQGLQJ EDODQFHV RI ORDQV WR FXVWRPHUV ZKLFK KDYH IORDWLQJ LQWHUHVW UDWHV RU IL[HG LQWHUHVW UDWHV LQFOXGH ORDQV RQ ZKLFK LQWHUHVW UHFRJQLWLRQ LV GLVFRQWLQXHG
THANACHART BANK PUBLIC COMPANY LIMITED
269
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 2016 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
-
41,092
496
500
-
42,088
1.36 - 2.76
Investments
-
3,312
28,043
127,656
6,735
165,746
1.89 - 3.86
2,950
51,671
28,345
242,898
144,948
470,812
5.61 - 7.92
92
98,927
232,934
31,190
-
363,143
1.61
Interbank and money market items
449
28,872
17,046
2,779
1,483
50,629
1.10 - 2.11
Debt issued and borrowings
933
50
9,671
6,235
32,516
49,405
1.00 - 5.00
Loans to customers Financial liabilities Deposits
(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
3,441
45,839
21,674
271,393
129,415
471,762
6.36 - 8.13
Deposits
133
88,833
299,467
7,182
-
395,615
2.13
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
270
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements 2016 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
2,500
39,732
-
-
-
42,232
2.69
-
2,791
26,448
126,968
5,589
161,796
1.90
5,537
51,518
26,581
211,379
144,568
439,583
6.23
92
99,583
233,046
31,189
-
363,910
1.61
Interbank and money market items
-
28,572
8,927
1,779
1,483
40,761
1.14
Debt issued and borrowings
1
-
2,001
-
32,516
34,518
5.00
Investments Loans to customers Financial liabilities Deposits
(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
5,038
45,707
20,058
243,653
129,121
443,577
6.34
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
THANACHART BANK PUBLIC COMPANY LIMITED
271
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 2016 and 2015 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements For the years ended 31 December 2016
2015
Average balances
Interest
Average
Average
rate (%)
balances
Average Interest
rate (%)
Interest bearings financial assets Interbank and money market items
49,486
Investments and trading operations
3,132
1,307 30
2.64
54,207
0.95
4,382
1,580 73
2.91 1.68
159,555
3,504
2.20
135,136
3,761
2.78
681,878
40,045
5.87
702,381
42,803
6.09
667,329
12,852
1.93
664,895
16,237
2.44
Interbank and money market items
68,325
741
1.09
70,706
957
1.35
Debt issued and borrowings
59,719
2,581
4.32
80,541
3,342
4.15
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
(Unit: Million Baht) Separate financial statements For the years ended 31 December 2016 Average
2015 Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
48,116
1,279
2.66
53,699
1,555
2.90
Investments and trading operations
3,132
30
0.95
4,382
74
1.68
155,115
3,392
2.19
129,658
3,582
2.76
638,266
37,142
5.82
662,877
39,914
6.02
668,484
12,865
1.92
666,194
16,252
2.44
Interbank and money market items
59,235
558
0.94
62,514
742
1.19
Debt issued and borrowings
43,216
1,872
4.33
64,648
2,578
3.99
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
272
ANNUAL REPORT 2016
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 2016 and 2015 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements 2016 Australian US Dollar
Euro
Yen
Others
Dollar
Foreign currency in the statement of financial position Cash
77
72
8
9
35
9,507
32
122
21
119
Investments
11,466
-
-
-
38
Loans to customers and accrued interest receivable
18,414
73
43
781
4
Other assets
1,005
-
-
-
-
Total assets
40,469
177
173
811
196
867
36
-
49
241
Interbank and money market items
16,242
1
-
-
-
Total liabilities
17,109
37
-
49
241
Net
23,360
140
173
762
(45)
571
6
19
-
2
2,067
97
63
-
10
686
24
-
-
1
Interbank and money market items
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
THANACHART BANK PUBLIC COMPANY LIMITED
273
(Unit: Million Baht) Consolidated 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
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
274
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements 2016 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign currency in the statement of financial position Cash
77
72
8
9
35
9,507
32
122
21
119
Investments
11,466
-
-
-
38
Loans to customers and accrued interest receivable
18,414
73
43
781
4
Other assets
1,005
-
-
-
-
Total assets
40,469
177
173
811
196
867
36
-
49
241
Interbank and money market items
16,242
1
-
-
-
Total liabilities
17,109
37
-
49
241
Net
23,360
140
173
762
(45)
571
6
19
-
2
2,067
97
63
-
10
686
24
-
-
1
Interbank and money market items
Deposits
Foreign currency commitments Liability under unmatured import bills Letter of credits Others
THANACHART BANK PUBLIC COMPANY LIMITED
275
(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
276
ANNUAL REPORT 2016
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: (Unit: Million Baht) Consolidated financial statements 2016 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
42,370
1,187
459
26
621
- Sold
53,861
1,353
394
791
585
4,917
-
-
-
-
16,543
-
-
-
-
- Bought
70,013
-
-
-
-
- Sold
70,013
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Consolidated financial statements 2015 Australian US Dollar
Euro
Dollar
Yen
Others
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
THANACHART BANK PUBLIC COMPANY LIMITED
277
(Unit: Million Baht) Separate financial statements 2016 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
42,370
1,187
459
26
621
- Sold
53,861
1,353
394
791
585
4,917
-
-
-
-
16,543
-
-
-
-
- Bought
70,013
-
-
-
-
- Sold
70,013
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(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
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.
278
ANNUAL REPORT 2016
49.3 Liquidity risk Liquidity risk is the risk that the Bank and its subsidiaries will be unable to liquidate their financial assets and/or procure sufficient funds to discharge their obligations in a timely manner, resulting in the Bank and its subsidiaries incurring a financial loss. The Bank and its subsidiaries manage liquidity risk by means of appropriate structuring of short-term and long-term sources of capital. In addition, the Bank and its subsidiaries have a policy to maintain liquidity to ensure that it has sufficient liquidity to meet both present and future requirements, under the supervision of the Asset and Liability Management Committee. Counting from the financial position date, the periods to maturity of financial instruments held as at 31 December 2016 and 2015 are as follows: (Unit: Million Baht) Consolidated financial statements 2016
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
12,077
-
-
-
12,077
5,516
41,587
500
-
47,603
-
1,009
2,555
-
3,564
261
31,355
134,416
9,341
175,373
38,343
204,421
448,143
-
690,907
-
1,126
-
-
1,126
-
1,332
-
-
1,332
308,515
335,686
32,356
-
676,557
15,654
45,918
4,262
-
65,834
1,986
-
-
-
1,986
-
1,609
3,303
-
4,912
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
937
9,721
38,751
-
49,409
Payables from purchase and sale of securities
Debt issued and borrowings
-
2,366
-
-
2,366
Other liabilities - payable to clearing house
-
2
-
-
2
4
596
29
-
629
40
597
-
-
637
457
2,210
-
-
2,667
41,129
36,031
2,355
-
79,515
Commitments Aval to bill Liability under unmatured import bills Letter of credits Other commitments
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THANACHART BANK PUBLIC COMPANY LIMITED
279
(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
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
44,430
202,516
466,520
-
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 Payables from purchase and sale of securities Commitments Aval to bill Liability under unmatured import bills Letter of credits Other commitments
7KH RXWVWDQGLQJ EDODQFHV RI ORDQV WR FXVWRPHUV DW FDOO LQFOXGHG ORDQV IRU ZKLFK UHYHQXH UHFRJQLWLRQ KDV EHHQ GLVFRQWLQXHG
280
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements 2016
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
12,072
-
-
-
12,072
7,905
39,732
-
-
47,637
-
1,009
2,555
-
3,564
261
29,238
132,582
5,677
167,758
35,398
202,385
413,831
-
651,614
308,998
336,453
32,356
-
677,807
15,395
37,499
3,262
-
56,156
1,986
-
-
-
1,986
Derivatives liabilities
-
1,609
3,303
-
4,912
Debt issued and borrowings
5
2,001
32,516
-
34,522
Payables from purchase and sale of securities
-
1,000
-
-
1,000
4
596
29
-
629
40
597
-
-
637
457
2,210
-
-
2,667
41,129
36,031
2,318
-
79,478
Interbank and money market items Derivatives assets Investments Loans to customers
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
7KH RXWVWDQGLQJ EDODQFHV RI ORDQV WR FXVWRPHUV DW FDOO LQFOXGHG ORDQV IRU ZKLFK UHYHQXH UHFRJQLWLRQ KDV EHHQ GLVFRQWLQXHG
THANACHART BANK PUBLIC COMPANY LIMITED
281
(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
38,385
200,688
436,928
-
676,001
Deposits
269,318
392,327
8,930
-
670,575
Interbank and money market items
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
Interbank and money market items Derivatives assets Investments Loans to customers
Financial liabilities
Liability payable on demand
Commitments Aval to bill
278
Liability under unmatured import bills
19
Letter of credits Other commitments
868
124
-
1,270
478
-
-
497
615
1,690
5
-
2,310
36,967
39,165
1,546
-
77,678
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282
ANNUAL REPORT 2016
49.4 Fair value As at 31 December 2016 and 2015, 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 2016 Book value
Fair value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value 3,520
3,520
-
3,520
-
171,046
171,046
5,586
165,460
-
Land, premises and equipment - land
5,906
5,906
-
-
5,906
Derivatives liabilities
3,518
3,518
-
3,518
-
Cash
12,077
12,077
12,077
-
-
Interbank and money market items (assets)
47,476
47,476
5,514
19,358
22,604
44
44
-
44
-
4,035
8,008
-
352
7,656
666,909
673,842
-
328,482
345,360
1,126
1,126
-
1,126
-
1,332
1,332
-
1,332
-
676,557
676,767
313,414
363,353
-
65,834
65,866
15,206
34,565
16,095
Liability payable on demand
1,986
1,986
1,986
-
-
Derivatives liabilities
1,394
1,256
-
1,256
-
49,409
50,331
-
50,331
-
2,366
2,366
-
2,366
-
2
2
-
2
-
Derivatives assets Investments
Financial assets and liabilities for which fair value are disclosed
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 Payables from purchase and sale of securities Other liabilities - payable to clearing house
THANACHART BANK PUBLIC COMPANY LIMITED
283
(Unit: Million Baht) Consolidated financial statements 2015 Book value
Fair value Total
Level 1
Level 2
Level 3
Financial assets and liabilities measured at fair value Derivatives assets
5,426
5,426
-
5,426
-
159,127
159,127
3,142
155,985
-
5,218
5,218
4
5,214
-
Cash
13,337
13,337
13,337
-
-
Interbank and money market items (assets)
57,583
57,583
4,671
31,401
21,511
21
22
-
22
-
12,655
16,314
-
9,138
7,176
688,444
693,961
-
330,972
362,989
1,006
1,006
-
1,006
-
1,101
1,101
-
1,101
-
669,504
669,616
273,890
395,726
-
85,688
85,707
18,533
54,162
13,012
Liability payable on demand
2,202
2,202
2,202
-
-
Derivatives liabilities
1,540
1,427
-
1,427
-
71,641
72,953
-
72,953
-
2,073
2,073
-
2,073
-
Investments Derivatives liabilities Financial assets and liabilities for which fair value are disclosed
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 Payables from purchase and sale of securities
284
ANNUAL REPORT 2016
(Unit: Million Baht) Separate financial statements 2016 Book value
Fair value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
3,520
3,520
-
3,520
-
163,051
163,051
1,735
161,316
-
Land, premises and equipment - land
5,889
5,889
-
-
5,889
Derivatives liabilities
3,518
3,518
-
3,518
-
Cash
12,072
12,072
12,072
-
-
Interbank and money market items (assets)
47,466
47,466
5,403
16,984
25,079
44
44
-
44
-
4,224
8,171
-
539
7,632
Loans to customers
632,931
639,073
-
327,986
311,087
Deposits
677,807
678,017
313,897
364,120
-
56,156
56,164
15,395
34,565
6,204
Liability payable on demand
1,986
1,986
1,986
-
-
Derivatives liabilities
1,394
1,256
-
1,256
-
34,522
35,336
-
35,336
-
1,000
1,000
-
1,000
-
Investments
Financial assets and liabilities for which fair value are disclosed
Derivatives assets Investments
Interbank and money market items (liabilities)
Debt issued and borrowings Payables from purchase and sale of securities
THANACHART BANK PUBLIC COMPANY LIMITED
285
(Unit: Million Baht) Separate financial statements 2015 Book value
Fair value Total
Level 1
Level 2
Level 3
Financial assets and liabilities measured at fair value Derivatives assets
5,426
5,426
-
5,426
-
151,127
151,127
1,302
149,825
-
5,211
5,211
-
5,211
-
Cash
13,336
13,336
13,336
-
-
Interbank and money market items (assets)
56,941
56,941
4,557
30,031
22,353
21
22
-
22
-
12,540
16,154
-
9,033
7,121
Loans to customers
656,513
661,471
-
329,429
332,042
Deposits
670,575
670,687
274,338
396,349
-
78,699
78,702
18,702
54,203
5,797
Liability payable on demand
2,202
2,202
2,202
-
-
Derivatives liabilities
1,540
1,427
-
1,427
-
55,426
56,569
-
56,569
-
Investments Derivatives liabilities Financial assets and liabilities for which fair value are disclosed
Derivatives assets Investments
Interbank and money market items (liabilities)
Debt issued and borrowings
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 - The fair value is assumed to approximate their book value items (asset)
in the statement of financial position due to their short-term 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 5.23 to the financial statements.
286
ANNUAL REPORT 2016
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 5.3 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.
Land, premises and equipment - land
- The fair value of land is determined using market comparison approach which is used whereby the buying and selling prices for assets with similar characteristics are obtained.
Receivables from purchase - The fair value is assumed to approximate their book and sale of securities
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.
THANACHART BANK PUBLIC COMPANY LIMITED
287
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 - The fair value of interbank and money market items items (liabilities)
payable on demand, 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 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.
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 is 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.
288
ANNUAL REPORT 2016
49.5 Financial derivatives The Bank and its subsidiaries engage in financial derivatives activities as required in the normal course of their business to manage risk and to meet their clients’ needs. These financial derivatives include foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and commodity futures contracts. The Bank and its subsidiaries have set a policy and limit to mitigate related risk, and require risk reporting for the various types of risk, as a control over financial derivative activities. The Bank and its subsidiaries manage the credit risk associated with financial derivatives on the basis of the credit limits granted to customers in general. The same credit approval process as used when granting loans to a customer is adopted for financial derivative customers, as a result the Bank and its subsidiaries are able to maintain overall risk at an acceptable level. As at 31 December 2016 and 2015, 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 2016 Less than
Over
1 year
1 year
2015
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
44,663
-
44,663
46,583
64
46,647
- Sold
56,983
-
56,983
48,159
64
48,223
699
4,218
4,917
1,153
4,360
5,513
4,282
12,261
16,543
2,468
13,219
15,687
- Paid fixed interest rate
41,265
114,131
155,396
37,466
137,655
175,121
- Paid floating interest rate
40,070
115,181
155,251
33,391
139,667
173,058
- Received fixed interest rate
39,070
115,181
154,251
33,391
138,667
172,058
- Received floating interest rate
42,265
114,131
156,396
37,466
138,655
176,121
76
-
76
104
-
104
1,587
-
1,587
239
-
239
-
-
-
89
-
89
50
-
50
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
Future contracts - Bought - Sold Derivative warrants - Sold Other - Sold
THANACHART BANK PUBLIC COMPANY LIMITED
289
(Unit: Million Baht) Separate financial statements 2016 Less than
Over
1 year
1 year
2015
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
44,663
-
44,663
46,446
64
46,510
- Sold
56,983
-
56,983
48,296
64
48,360
699
4,218
4,917
1,153
4,360
5,513
4,282
12,261
16,543
2,468
13,219
15,687
- Paid fixed interest rate
41,265
114,131
155,396
37,466
137,655
175,121
- Paid floating interest rate
40,070
115,181
155,251
33,391
139,667
173,058
- Received fixed interest rate
39,070
115,181
154,251
33,391
138,667
172,058
- Received floating interest rate
42,265
114,131
156,396
37,466
138,655
176,121
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
50.
Events after the reporting period On 23 February 2017, 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.
51.
Approval of financial statements These financial statements were authorised for issue by the Bank’s Board of Directors on 23 February 2017.
290
ANNUAL REPORT 2016
BRANCHES OF TBANK Information as of 31 December 2016
HEAD OFFICE
Charan Sanitwong 35 Branch Tel. +66 (0) 2411 0511, +66 (0) 2411 0605 Fax. +66 (0) 2411 0607
Century the Movie Plaza Branch Tel. +66 (0) 2245 8500-2 Fax. +66 (0) 2245 8504
BANGKOK AND VICNITIES
Charan Sanitwong 86/2 Branch Tel. +66 (0) 2435 7205, +66 (0) 2435 6808-10 Fax. +66 (0) 2435 6807
Central Bang Na Branch Tel. +66 (0) 2398 9572-3 Fax. +66 (0) 2398 9574
Tel. +66 (0) 2217 8000 Fax +66 (0) 2217 8333
BANGKOK Chit Lom Branch Tel. +66 (0) 2251 5821-3 Fax. +66 (0) 2658 5504 Phetburi Branch Tel. +66 (0) 2208 5000 ext. 5099, 5108 Fax. +66 (0) 2208 5118 Suan Mali Branch Tel. +66 (0) 2220 2222 ext. 2106-7, 2112 Fax. +66 (0) 2224 3810, +66 (0) 2226 2437 Department of Land Transport Branch Tel. +66 (0) 2272 6073-5 Fax. +66 (0) 2272 6077 Green Place (Soi Wat Phai Ngoen) Branch Tel. +66 (0) 2211 3515, +66 (0) 2211 3519-20 Fax. +66 (0) 2674 9704
Chamchuri Square Branch Tel. +66 (0) 2160 5254-6 Fax. +66 (0) 2160 5258 Cha Ru Mueang Branch Tel. +66 (0) 2214 1488, +66 (0) 2214 1739 Fax. +66 (0) 2214 2038 Charoen Krung 17 Branch Tel. +66 (0) 2224 1839, +66 (0) 2225 7194 Fax. +66 (0) 2224 2059 Charoen Nakhon Soi 36 Branch Tel. +66 (0) 2862 5010-3, +66 (0) 2862 5016 Fax. +66 (0) 2862 5017 Charoen Phon Branch Tel. +66 (0) 2215 6628-30 Fax. +66 (0) 2215 6627
Kluai Nam Thai Branch Tel. +66 (0) 2258 6620-1 Fax. +66 (0) 2258 5505
Charn Issara Tower (Rama IV) Branch Tel. +66 (0) 2267 4296-98 Fax. +66 (0) 2267 4299
Crystal Design Center Branch Tel. +66 (0) 2102 2410-2 Fax. +66 (0) 2102 2413
Charn Issara Tower II Branch Tel. +66 (0) 2308 2955-7, +66 (0) 2718 1834 Fax. +66 (0) 2308 2950
Khlong Chan Branch Tel. +66 (0) 2377 1364, +66 (0) 2377 1368-9 Fax. +66 (0) 2377 3609
Chok Chai 4 Branch Tel. +66 (0) 2931 0895-7 Fax. +66 (0) 2931 0798
Central Pin Klao Branch Tel. +66 (0) 2884 9680-3 Fax. +66 (0) 2884 9684 Central Rama II Branch Tel. +66 (0) 2872 4770 Fax. +66 (0) 2872 4769 Central Rama III Branch Tel. +66 (0) 2211 8260 Fax. +66 (0) 2211 8190 Central Plaza Grand Rama IX Branch Tel. +66 (0) 2160 2950-2 Fax. +66 (0) 2160 2954 Central Ram Inthra Branch Tel. +66 (0) 2552 7462, +66 (0) 2552 7467-8 Fax. +66 (0) 2970 5518 Central Lat Phrao Branch Tel. +66 (0) 2937 1280-2 Fax. +66 (0) 2937 1283 Central World Branch Tel. +66 (0) 2646 1346-9 Fax. +66 (0) 2646 1350 Don Mueang Branch Tel. +66 (0) 2929 7004, +66 (0) 2566 1950-1 Fax. +66 (0) 2566 3425 The Avenue Chaengwattana Branch Tel. +66 (0) 2573 0673-5 Fax. +66 (0) 2573 0677
Khlong Toei Branch Tel. +66 (0) 2240 0161, +66 (0) 2249 2633 Fax. +66 (0) 2249 4789
Seacon Square Branch Tel. +66 (0) 2721 8548-50 Fax. +66 (0) 2721 8551
Charan Sanitwong 13 Branch Tel. +66 (0) 2864 1560-3 Fax. +66 (0) 2864 1566
Seacon Square Srinagarindra Branch Tel. +66 (0) 2721 9955 Fax. +66 (0) 2721 8321
The Nine (Thanon Rama IX) Branch Tel. +66 (0) 2319 1662-4 Fax. +66 (0) 2718 7869
THANACHART BANK PUBLIC COMPANY LIMITED
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The Paseo (Lat Krabang) Branch Tel. +66 (0) 2346 4103-4, +66 (0) 2346 4109 Fax. +66 (0) 2346 4111
Tao Pun Branch Tel. +66 (0) 2587 7292, +66 (0) 2587 7284-5 Fax. +66 (0) 2587 7379
Thanon Phrasumen (Bang Lamphu) Branch Tel. +66 (0) 2281 6821, +66 (0) 2281 6332 Fax. +66 (0) 2281 7457
The Mall 2 Ramkhamhaeng Branch Tel. +66 (0) 2369 2482, +66 (0) 2369 2486 Fax. +66 (0) 2369 2484
TOYOTA BUZZ Kaset-Nawamin Branch Tel. +66 (0) 2561 0069-71 Fax. +66 (0) 2561 0073
Thanon Phatthanakan Branch Tel. +66 (0) 2369 2814-7 Fax. +66 (0) 2369 2818
The Mall Tha Phra Branch Tel. +66 (0) 2477 7321-3 Fax. +66 (0) 2477 7324 The Mall Bang Khae Branch Tel. +66 (0) 2803 8310 Fax. +66 (0) 2803 8305 The Mall Bangkapi Branch Tel. +66 (0) 2375 1575 Fax. +66 (0) 2375 1686 Trok Chan Branch Tel. +66 (0) 2211 1286, +66 (0) 2211 4511 Fax. +66 (0) 2211 4653 Talat Bang Khae Branch Tel. +66 (0) 2801 1004-6 Fax. +66 (0) 2801 1007 Talat Phlu Branch Tel. +66 (0) 2466 7404, +66 (0) 2466 7423 Fax. +66 (0) 2465 1767 Talat Ying Charoen Branch Tel. +66 (0) 2552 8043, +66 (0) 2552 8045 Fax. +66 (0) 2972 3161 Talat Saphan Mai Don Mueang Branch Tel. +66 (0) 2521 1670, +66 (0) 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, +66 (0) 2270 0308 Fax. +66 (0) 2279 3411 Taling Chan Branch Tel. +66 (0) 2882 7790-4 Fax. +66 (0) 2882 7796
292
ANNUAL REPORT 2016
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, +66 (0) 2543 9191 Fax. +66 (0) 2543 9192 Thanon Chan Branch Tel. +66 (0) 2285 5360, +66 (0) 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, +66 (0) 2286 1898 Fax. +66 (0) 2286 1939 Thanon Borom Rat Chonnani Branch Tel. +66 (0) 2446 8061-4 Fax. +66 (0) 2446 8065 Thanon Burapha (Phahurat) Branch Tel. +66 (0) 2221 2069, +66 (0) 2221 5239 Fax. +66 (0) 2221 5128 Thanon Rama II (Thon Buri Housing 3) Branch Tel. +66 (0) 2451 4402, +66 (0) 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 Phatthanakan 22 Branch Tel. +66 (0) 2318 7241-2, +66 (0) 2318 7620 Fax. +66 (0) 2318 7393 Thanon Petchaburi Soi 20 Branch Tel. +66 (0) 2251 6018-9, +66 (0) 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, +66 (0) 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, +66 (0) 2675 5700 Fax. +66 (0) 2675 5701 Thanon Sirindhorn Branch Tel. +66 (0) 2434 5028-9 Fax. +66 (0) 2434 5661 Thanon Suea Pa Branch Tel. +66 (0) 2221 4327-9 Fax. +66 (0) 2623 0579 Thanon Ekkachai (Bang Bon 5) Branch Tel. +66 (0) 2450 3741-3 Fax. +66 (0) 2450 3744 Thong Lo Branch Tel. +66 (0) 2381 8421-2, +66 (0) 2381 8364-5 Fax. +66 (0) 2381 8423 Thong Lo Soi 17 Branch Tel. +66 (0) 2185 2756, +66 (0) 2185 2758-61 Fax. +66 (0) 2185 2757
Tops RCA Branch Tel. +66 (0) 2203 0267-9 Fax. +66 (0) 2641 5121
Nang Loeng Branch Tel. +66 (0) 2281 0842, +66 (0) 2281 2169 Fax. +66 (0) 2281 2322
BigC Don Mueang Branch Tel. +66 (0) 2551 0638-9 Fax. +66 (0) 2551 0642
Tha Din Daeng Branch Tel. +66 (0) 2863 1283-5 Fax. +66 (0) 2863 1289
Na Na Nuea Branch Tel. +66 (0) 2252 0709, +66 (0) 2252 6540 Fax. +66 (0) 2253 5668
Tha Phra Chan Branch Tel. +66 (0) 2221 7511, +66 (0) 2222 0686 Fax. +66 (0) 2222 4794
Bang Khun Non Branch Tel. +66 (0) 2424 9778-9, +66 (0) 2433 6028-9 Fax. +66 (0) 2434 9772
BigC Bang Na Branch Tel. +66 (0) 2396 0482, +66 (0) 2396 0484-5 Fax. +66 (0) 2396 0500
Thewet Branch Tel. +66 (0) 2628 7240-4, +66 (0) 2628 7247 Fax. +66 (0) 2282 8810
BigC Bang Bon Branch Tel. +66 (0) 2416 9969-71 Fax. +66 (0) 2416 9974
Bang Khae Branch Tel. +66 (0) 2454 2790-2 Fax. +66 (0) 2413 1329
BigC Phet Kasem Branch Tel. +66 (0) 2444 2927, +66 (0) 2444 2904 Fax. +66 (0) 2444 2909
Tesco Lotus Phet Kasem 81 Branch Tel. +66 (0) 2489 2087-9 Fax. +66 (0) 2812 4073
Bang Khlo Branch Tel. +66 (0) 2289 4223, +66 (0) 2289 4236 Fax. +66 (0) 2289 4159
Tesco Lotus Rama II Branch Tel. +66 (0) 2415 9130-2 Fax. +66 (0) 2892 8004
Bang Sue Branch Tel. +66 (0) 2587 0616, +66 (0) 2587 0686 Fax. +66 (0) 2585 9659
BigC Sukhaphiban 3 (Ramkhamhaeng) Branch Tel. +66 (0) 2916 3584-5, +66 (0) 2916 3603 Fax. +66 (0) 2916 3607
Tesco Lotus Wang Hin Branch Tel. +66 (0) 2578 6194-6 Fax. +66 (0) 2578 6197
Bang Na Branch Tel. +66 (0) 2398 0182-4 Fax. +66 (0) 2398 0185
Thian Kua Thian Branch Tel. +66 (0) 2221 3575-6, +66 (0) 2622 9063 Fax. +66 (0) 2221 3575
Bang Na-Trat K+m. 4 Branch Tel. +66 (0) 2399 2841-3 Fax. +66 (0) 2399 2845
Thai Summit Tower (Thanon Petchaburi Tat Mai) Branch Tel. +66 (0) 2252 6458, +66 (0) 2251 1327 Fax. +66 (0) 2251 1357 Thaniya Branch Tel. +66 (0) 2236 3520-1, +66 (0) 2236 9129 Fax. +66 (0) 2236 9119 Nawamin 42 Branch Tel. +66 (0) 2375 1281-2, +66 (0) 2375 1284 Fax. +66 (0) 2375 1285
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
Nawamin 66 Branch Tel. +66 (0) 2519 5724, +66 (0) 2519 4616 Fax. +66 (0) 2519 4627
Bang Lamphu Branch Tel. +66 (0) 2356 0785-6 Fax. +66 (0) 2356 0787
Nawamin Market Place Branch Tel. +66 (0) 2519 1142, +66 (0) 2519 1154 Fax. +66 (0) 2946 7432
Bamrung Mueang Branch Tel. +66 (0) 2216 9794-7, +66 (0) 2214 0606-8 Fax. +66 (0) 2216 9798
BigC Sukhaphiban 5 Branch Tel. +66 (0) 2153 1513-4, +66 (0) 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, +66 (0) 2628 1690 Fax. +66 (0) 2628 1696 Pracha Chuen Branch Tel. +66 (0) 2585 6811, +66 (0) 2585 9656-7 Fax. +66 (0) 2585 2666 Pracha Uthit Branch Tel. +66 (0) 2873 4721-3, +66 (0) 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, +66 (0) 2208 0074-5 Fax. +66 (0) 2208 0076
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Prawet Branch Tel. +66 (0) 2322 2223, +66 (0) 2722 1371-2 Fax. +66 (0) 2322 8943 Pak Khlong Talat Branch Tel. +66 (0) 2221 7511, +66 (0) 2222 7467 Fax. +66 (0) 2222 4794 Pin Klao Branch Tel. +66 (0) 2435 4273-4, +66 (0) 2435 7374 Fax. +66 (0) 2435 4518 Rama III Branch Tel. +66 (0) 2682 7322-6, +66 (0) 2682 7328-9 Fax. +66 (0) 2682 7327 Rama IV Branch Tel. +66 (0) 2249 4201-3, +66 (0) 2671 0260 Fax. +66 (0) 2249 4204 Phran Nok Branch Tel. +66 (0) 2418 0785, +66 (0) 2418 0787 Fax. +66 (0) 2418 0786 Phahon Yothin Soi 6 Branch Tel. +66 (0) 2279 9874-5 Fax. +66 (0) 2279 9895 Phahon Yothin Soi 9 Branch Tel. +66 (0) 2270 1371-3 Fax. +66 (0) 2619 6339 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, +66 (0) 2221 4419-20 Fax. +66 (0) 2623 8098 P.B. Tower (Khlong Tan) Branch Tel. +66 (0) 2381 3114-5, +66 (0) 2381 3121-2 Fax. +66 (0) 2381 3124 Phet Kasem Branch Tel. +66 (0) 2456 0337-42 Fax. +66 (0) 2454 4116
294
ANNUAL REPORT 2016
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 Min Buri Branch Tel. +66 (0) 2517 8014-5, +66 (0) 2517 9321 Fax. +66 (0) 2517 8016 Major Ratchayothin Branch Tel. +66 (0) 2512 1082, +66 (0) 2512 1102 Fax. +66 (0) 2939 5372 Union Mall Lat Phrao Branch Tel. +66 (0) 2511 0236, +66 (0) 2511 0246 Fax. +66 (0) 2511 0268 Yaowarat Branch Tel. +66 (0) 2221 1868, +66 (0) 2221 1845-7 Fax. +66 (0) 2221 1869 Ratchada Phisek Branch Tel. +66 (0) 2641 2225-7 Fax. +66 (0) 2641 3233 Ratchada Phisek (Glas Haus Building) Branch Tel. +66 (0) 2693 9811 Fax. +66 (0) 2693 9820 Ratchada Phisek-Tha Phra Branch Tel. +66 (0) 2878 8845-7 Fax. +66 (0) 2878 8852 Ratchada-Huai Khwang Branch Tel. +66 (0) 2694 1489-91, +66 (0) 2694 1495 Fax. +66 (0) 2694 1496
Ratchadamnoen Klang Branch Tel. +66 (0) 2226 3083-5, +66 (0) 2621 2185 Fax. +66 (0) 2621 2186 Ratchadamri Branch Tel. +66 (0) 2251 4314, +66 (0) 2251 4348-9 Fax. +66 (0) 2251 4316 Ratchawong Branch Tel. +66 (0) 2224 5705, +66 (0) 2224 5870 Fax. +66 (0) 2224 5792 Ratcha Wat Branch Tel. +66 (0) 2241 0868, +66 (0) 2243 6183 Fax. +66 (0) 2241 1483 Ramkhamhaeng 73 Branch Tel. +66 (0) 2375 2126-7, +66 (0) 2374 9644 Fax. +66 (0) 2375 2452 Ramkhamhaeng 160 Branch Tel. +66 (0) 2540 3132-4 Fax. +66 (0) 2917 0047 Ramkhamhaeng Soi 122 Branch Tel. +66 (0) 2372 2377-9 Fax. +66 (0) 2728 2950 Ramkhamhaeng Soi 129 Branch Tel. +66 (0) 2372 3318-20 Fax. +66 (0) 2729 5832 Ram Inthra Branch Tel. +66 (0) 2943 5630-1, +66 (0) 2519 0824-5 Fax. +66 (0) 2519 0826 Ram Inthra (Km. 7) Branch Tel. +66 (0) 2510 9610, +66 (0) 2510 9882 Fax. +66 (0) 2510 9197 Ram Inthra (Km. 8) Branch Tel. +66 (0) 2510 6900, +66 (0) 2510 2342 Fax. +66 (0) 2510 9875 Paolo Memorial Hospital Chok Chai 4 Branch Tel. +66 (0) 2514 3277, +66 (0) 2514 3293-4 Fax. +66 (0) 2933 2292 Navaminthra 9 Hospital Branch Tel. +66 (0) 2518 1100, +66 (0) 2518 2360-1 Fax. +66 (0) 2518 2363
Phyathai 1 Hospital Branch Tel. +66 (0) 2246 7713-5 Fax. +66 (0) 2246 7716
Wong Sawang Branch Tel. +66 (0) 2834 9999 Fax. +66 (0) 2834 9905
Ramkhamhaeng Hospital Branch Tel. +66 (0) 2374 1523-5 Fax. +66 (0) 2374 1562
Wong Sawang Town Center Branch Tel. +66 (0) 2586 0420-2 Fax. +66 (0) 2910 7949
Vichaiyut Hospital Branch Tel. +66 (0) 2278 2194-6 Fax. +66 (0) 2278 2606
Watcharaphon Branch Tel. +66 (0) 2508 2185-7 Fax. +66 (0) 2508 2207
Vibhavadi Hospital Branch Tel. +66 (0) 2561 5320-2 Fax. +66 (0) 2941 3006
Wat Phra Ya Kai Branch Tel. +66 (0) 2289 3026-7, +66 (0) 2289 5033 Fax. +66 (0) 2289 5032
Samitivej Hospital Sukhumwit 49 Branch Tel. +66 (0) 2712 7013-4 Fax. +66 (0) 2712 7016 Lat Krabang Branch Tel. +66 (0) 2327 2754-6 Fax. +66 (0) 2327 2706 Lat Phrao Branch Tel. +66 (0) 2512 2343-4, +66 (0) 2938 2433 Fax. +66 (0) 2512 2342 Lat Phrao 53 Branch Tel. +66 (0) 2539 1167, +66 (0) 2539 1507 Fax. +66 (0) 2539 2261 Lat Phrao 80 Branch Tel. +66 (0) 2933 9172, +66 (0) 2933 9174-5 Fax. +66 (0) 2933 9178 Lat Phrao 118 Branch Tel. +66 (0) 2539 2925-7 Fax. +66 (0) 2530 4348 Lat Phrao Soi 101 Branch Tel. +66 (0) 2187 0162-4 Fax. +66 (0) 2187 0161
Siam Square Branch Tel. +66 (0) 2252 7363-5, +66 (0) 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, +66 (0) 2287 3074 Fax. +66 (0) 2679 3028 Saphan Khwai Branch Tel. +66 (0) 2279 6060-1 Fax. +66 (0) 2616 6747
Wutthakat Branch Tel. +66 (0) 2466 9981-2, +66 (0) 2466 6160 Fax. +66 (0) 2472 5838
Rama VII Bridge (Bang Phlat) Branch Tel. +66 (0) 2423 9011-3 Fax. +66 (0) 2423 9015
Woeng Nakhon Khasem Branch Tel. +66 (0) 2222 2430, +66 (0) 2221 7201-4 Fax. +66 (0) 2222 6475 Si Worachak Branch Tel. +66 (0) 2222 1912, +66 (0) 2222 1917 Fax. +66 (0) 2622 9338
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
Siwara Branch Tel. +66 (0) 2538 8466, +66 (0) 2538 8986 Fax. +66 (0) 2538 9378
Sam Yaek Fai Chai Branch Tel. +66 (0) 2411 3446, +66 (0) 2418 3575-6 Fax. +66 (0) 2411 2321
Appeal Court Branch Tel. +66 (0) 2938 3421-6 Fax. +66 (0) 2938 3428
Sam Yan Branch Tel. +66 (0) 2215 1549, +66 (0) 2215 4199 Fax. +66 (0) 2216 6170
Sirirat Branch Tel. +66 (0) 2412 4515, +66 (0) 2412 4583-4 Fax. +66 (0) 2866 3218
Sam Pheng Branch Tel. +66 (0) 2222 7396, +66 (0) 2223 2898 Fax. +66 (0) 2225 8468
Lam Sa Li Branch Tel. +66 (0) 2735 2060-3 Fax. +66 (0) 2735 2067
The Government Complex Commemorating Chaengwattana (Building B) Branch Tel. +66 (0) 2143 9393-5, +66 (0) 2143 9396 Fax. +66 (0) 2143 9397
Leng Noei Yi Branch Tel. +66 (0) 2221 1248, +66 (0) 2221 3501 Fax. +66 (0) 2223 3211
Sanam Pao Branch Tel. +66 (0) 2271 0026-8 Fax. +66 (0) 2271 0030
Wongwian Yai Branch Tel. +66 (0) 2437 0188, +66 (0) 2437 2596 Fax. +66 (0) 2437 5784
Siam Paragon Branch Tel. +66 (0) 2129 4374-7 Fax. +66 (0) 2129 4372
Samrae Branch Tel. +66 (0) 2468 0609, +66 (0) 2468 1008-9 Fax. +66 (0) 2476 5423 Si Kak Phra Ya Si Branch Tel. +66 (0) 2222 4477-8, +66 (0) 2226 2267 Fax. +66 (0) 2225 7036 Si Phra Ya Branch Tel. +66 (0) 2233 5305-7, +66 (0) 2267 2191-4 Fax. +66 (0) 2233 4174
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Si Yaek Kaset Branch Tel. +66 (0) 2579 1340, +66 (0) 2579 3483 Fax. +66 (0) 2579 6794
Seri Thai 32 Branch Tel. +66 (0) 2376 1043-6 Fax. +66 (0) 2376 1122
Siam Kit Building Branch Tel. +66 (0) 2251 6763, +66 (0) 2252 5252 Fax. +66 (0) 2253 9429
Si Yaek Chaloem Buri (Yaowarat) Branch Tel. +66 (0) 2221 1236, +66 (0) 2221 7194 Fax. +66 (0) 2225 0580
Nong Khaem Branch Tel. +66 (0) 2445 4790-2 Fax. +66 (0) 2445 4789
Ekkamai 28 Branch Tel. +66 (0) 2392 2831, +66 (0) 2392 7278-9 Fax. +66 (0) 2392 2832
Si Yaek Ban Khaek Branch Tel. +66 (0) 2465 2115, +66 (0) 2465 5072 Fax. +66 (0) 2465 5071
Huai Khwang Branch Tel. +66 (0) 2692 0061, +66 (0) 2692 2098-100 Fax. +66 (0) 2276 1134
Si Yaek Prawet Branch Tel. +66 (0) 2328 8023-5 Fax. +66 (0) 2328 8027
Hua Lam Phong Branch Tel. +66 (0) 2237 9710-4 Fax. +66 (0) 2237 9713
Esplanade Ratchada Branch Tel. +66 (0) 2354 2052-4 Fax. +66 (0) 2660 9250
Silom Branch Tel. +66 (0) 2266 7414, +66 (0) 2266 7417 Fax. +66 (0) 2266 7416
Hua Mak Branch Tel. +66 (0) 2314 2627, +66 (0) 2314 0086-7 Fax. +66 (0) 2314 7277
Udom Suk Branch Tel. +66 (0) 2398 4024-7 Fax. +66 (0) 2398 4028
Silom (Thanon Pan) Branch Tel. +66 (0) 2237 9317-20, +66 (0) 2235 5800-2 Fax. +66 (0) 2237 9321 Silom Complex Branch Tel. +66 (0) 2231 3237, +66 (0) 2231 3663-5 Fax. +66 (0) 2235 8833 Sukhumwit 71 Branch Tel. +66 (0) 2391 6067, +66 (0) 2392 5944 Fax. +66 (0) 2392 2534 Sukhumwit Soi 25 Branch Tel. +66 (0) 2259 4727-9 Fax. +66 (0) 2259 4730 Sukhumwit Soi 47 Branch Tel. +66 (0) 2204 0307-9 Fax. +66 (0) 2662 5632 Sukhumwit Soi 66 Branch Tel. +66 (0) 2393 5782 Fax. +66 (0) 2399 2399 Sukhumwit Soi 101/1 (Piyarom Place) Branch Tel. +66 (0) 2332 7060-2 Fax. +66 (0) 2741 8017 Sutthi San Branch Tel. +66 (0) 2616 3553-5 Fax. +66 (0) 2616 3561 Surawong Branch Tel. +66 (0) 2234 5964-6 Fax. +66 (0) 2631 7031 296
ANNUAL REPORT 2016
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 Berli Jucker House (Kluai Nam Thai) Branch Tel. +66 (0) 2381 5065-7 Fax. +66 (0) 2381 5068 Vorawat Building Silom Branch Tel. +66 (0) 2635 1150-2 Fax. +66 (0) 2635 1157 Vibulthani Tower (Rama IV) Branch Tel. +66 (0) 2661 5534-7 Fax. +66 (0) 2661 5539
MBK Center Branch Tel. +66 (0) 2611 4752-4 Fax. +66 (0) 2611 4751
Ocean Tower II Branch Tel. +66 (0) 2204 1695-6 Fax. +66 (0) 2204 1698-9 IT Square Branch Tel. +66 (0) 2576 0104-5 Fax. +66 (0) 2576 0106
VICNITIES King Kaeo Branch Tel. +66 (0) 2316 1990-2 Fax. +66 (0) 2317 1312 Khru Nai Branch Tel. +66 (0) 2462 8020, +66 (0) 2462 8034 Fax. +66 (0) 2462 6193 Khlong Luang Branch Tel. +66 (0) 2516 1230-2, +66 (0) 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, +66 (0) 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
Tesco Lotus Srinagarindra Branch Tel. +66 (0) 2175 7844-6 Fax. +66 (0) 2759 9054
Pathum Thani Branch Tel. +66 (0) 2581 5766, +66 (0) 2581 6976 Fax. +66 (0) 2581 6925
Zeer-Rangsit Branch Tel. +66 (0) 2992 6807-9 Fax. +66 (0) 2992 6810
Nonthaburi Branch Tel. +66 (0) 2526 3453-6 Fax. +66 (0) 2526 3457
The Mall Ngamwongwan Branch Tel. +66 (0) 2550 1231-3 Fax. +66 (0) 2550 1235
Navanakhon Branch Tel. +66 (0) 2909 0620-3, +66 (0) 2909 0626 Fax. +66 (0) 2909 0625
Pak Kret Branch Tel. +66 (0) 2960 9928-9, +66 (0) 2583 7246 Fax. +66 (0) 2583 7562
Talat Klang Bang Yai Branch Tel. +66 (0) 2595 0682-4 Fax. +66 (0) 2595 0685 Talat Thai Branch Tel. +66 (0) 2529 6171-2 Fax. +66 (0) 2529 6175 Talat Bang Bua Thong Branch Tel. +66 (0) 2571 3598-9, +66 (0) 2571 3373-5 Fax. +66 (0) 2571 7845 Talat Pak Nam Branch Tel. +66 (0) 2702 8380-4 Fax. +66 (0) 2702 8388 Talat Samrong Branch Tel. +66 (0) 2756 8411-4 Fax. +66 (0) 2756 8419 Thanon Samakkhi Branch Tel. +66 (0) 2574 2794-5 Fax. +66 (0) 2574 2793 Tha Nam Phra Pradaeng Branch Tel. +66 (0) 2463 0488, +66 (0) 2463 2228 Fax. +66 (0) 2464 2156 Thepharak Branch Tel. +66 (0) 2759 6061-4, +66 (0) 2759 6066 Fax. +66 (0) 2759 6067 Tesco Lotus Navanakhon Branch Tel. +66 (0) 2529 6187-9 Fax. +66 (0) 2909 7097 Tesco Lotus Rattana Thibet Branch Tel. +66 (0) 2950 1160, +66 (0) 2950 1297 Fax. +66 (0) 2950 1157 Tesco Lotus Lam Luk Ka Khlong 6 Branch Tel. +66 (0) 2569 1694, +66 (0) 2569 1655 Fax. +66 (0) 2998 8164
Bang Pu Industrial Estate Branch Tel. +66 (0) 2324 0360, +66 (0) 2324 0364 Fax. +66 (0) 2324 0805 Bang Kruai Branch Tel. +66 (0) 2447 2897, +66 (0) 2447 5095 Fax. +66 (0) 2883 8619 Bang Khru Branch Tel. +66 (0) 2817 5417-9 Fax. +66 (0) 2817 5423
Megabangna Branch Tel. +66 (0) 2105 1681-3 Fax. +66 (0) 2105 1684
Bang Pu Branch Tel. +66 (0) 2323 2960-3 Fax. +66 (0) 2323 2964 Bang Yai Branch Tel. +66 (0) 2594 1143, +66 (0) 2594 1152 Fax. +66 (0) 2594 1161 BigC Bang Phli Branch Tel. +66 (0) 2312 2284, +66 (0) 2312 2300 Fax. +66 (0) 2312 2321
BigC Suk Sawat Branch Tel. +66 (0) 2463 0992-3 Fax. +66 (0) 2463 0980
Future Park Rangsit Branch Tel. +66 (0) 2958 5116-8 Fax. +66 (0) 2958 5121
Market Village Suvarnabhumi Branch Tel. +66 (0) 2040 3124-6 Fax. +66 (0) 2040 3129
Bang Bua Thong Branch Tel. +66 (0) 2571 7124, +66 (0) 2571 7142-3 Fax. +66 (0) 2920 9603
BigC Samrong 2 Branch Tel. +66 (0) 2380 1100-2 Fax. +66 (0) 2755 0240
Phra Pradaeng Branch Tel. +66 (0) 2463 3940-1, +66 (0) 2463 8415-7 Fax. +66 (0) 2463 6897
Huachiew Chalermprakiet University Branch Tel. +66 (0) 2312 6600-5 Fax. +66 (0) 2312 6603
Bang Bo Branch Tel. +66 (0) 2338 1822-3, +66 (0) 2338 1248 Fax. +66 (0) 2708 3242
BigC Samut Prakan Branch Tel. +66 (0) 2702 1792-3, +66 (0) 2702 1859 Fax. +66 (0) 2702 1982
Pu Chao Saming Prai Branch Tel. +66 (0) 2183 2044, +66 (0) 2183 2046-7 Fax. +66 (0) 2183 2043
Mueang Mai-Bang Phli Branch Tel. +66 (0) 2706 0322-6 Fax. +66 (0) 2706 0329 Rangsit Branch Tel. +66 (0) 2567 1117, +66 (0) 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, +66 (0) 2969 9043 Fax. +66 (0) 2969 9048 Paolo Memorial Hospital Samut Prakan Branch Tel. +66 (0) 2182 7239-41 Fax. +66 (0) 2182 7243
THANACHART BANK PUBLIC COMPANY LIMITED
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Lam Luk Ka Branch Tel. +66 (0) 2994 5747-9 Fax. +66 (0) 2994 5753
Kamphaeng Saen Branch Tel. +66 (0) 3435 1100, +66 (0) 3435 1614 Fax. +66 (0) 3435 1094
Thanon Songphon Branch Tel. +66 (0) 3220 0427, +66 (0) 3221 1900 Fax. +66 (0) 3220 0426
Samut Prakan Branch Tel. +66 (0) 2395 0045, +66 (0) 2702 8086 Fax. +66 (0) 2395 2021
Kaeng Khoi Branch Tel. +66 (0) 3624 4176, +66 (0) 3624 5127-8 Fax. +66 (0) 3624 4178
Thanon Bowon Branch Tel. +66 (0) 3451 1022, +66 (0) 3451 4205 Fax. +66 (0) 3451 1597
Bang Kadi Industrial Park Branch Tel. +66 (0) 2501 1254-6 Fax. +66 (0) 2501 1257 Sam Yaek Phra Pradaeng Branch Tel. +66 (0) 2463 2156-7, +66 (0) 2462 6284 Fax. +66 (0) 2462 5355 Samrong Branch Tel. +66 (0) 2396 0278-80 Fax. +66 (0) 2399 5103 Samrong Nuea Branch Tel. +66 (0) 2384 7141, +66 (0) 2384 7244 Fax. +66 (0) 2384 7678 Si Mum Mueang-Rangsit Branch Tel. +66 (0) 2531 9774, +66 (0) 2531 3445 Fax. +66 (0) 2531 9636 Nam Daeng Branch Tel. +66 (0) 2385 2511-2, +66 (0) 2385 2920 Fax. +66 (0) 2385 2921
Khao Wang Branch Tel. +66 (0) 3242 5622, +66 (0) 3242 8352 Fax. +66 (0) 3242 8351 Khlong Khru Branch Tel. +66 (0) 3482 7086, +66 (0) 3482 7093 Fax. +66 (0) 3482 7094 Cha-am Branch Tel. +66 (0) 3243 4130-1, +66 (0) 3247 1158 Fax. +66 (0) 3247 1185 Dan Chang Branch Tel. +66 (0) 3559 5497-8 Fax. +66 (0) 3559 5499 Damnoen Saduak Branch Tel. +66 (0) 3225 3810-2 Fax. +66 (0) 3225 3813 Talat Chao Prom Branch Tel. +66 (0) 3524 4768, +66 (0) 3524 5162-3 Fax. +66 (0) 3524 5441
Thanon Phahon Yothin (Saraburi) Branch Tel. +66 (0) 3621 1166, +66 (0) 3621 2420-1 Fax. +66 (0) 3621 2421 Thanon Ratchawithi (Nakhon Pathom) Branch Tel. +66 (0) 3424 2348, +66 (0) 3425 1080 Fax. +66 (0) 3425 1081 Thanon Setthakit 1 (Om Noi) Branch Tel. +66 (0) 2810 4596-8 Fax. +66 (0) 2810 4605 Thanon Sut Banthat (Saraburi) Branch Tel. +66 (0) 3631 4512, +66 (0) 3631 4256-7 Fax. +66 (0) 3631 5404 Thanon Amarin (Ratchaburi) Branch Tel. +66 (0) 3233 7142, +66 (0) 3232 5802-5 Fax. +66 (0) 3232 5801
Talat Tha Na (Nakhon Chai Si) Branch Tel. +66 (0) 3433 1107-9 Fax. +66 (0) 3433 1151
Thanon Ekkachai (Samut Sakhon) Branch Tel. +66 (0) 3441 1127, +66 (0) 3442 5205-8 Fax. +66 (0) 3442 5204
Talat Mahachai Branch Tel. +66 (0) 3481 0287-8 Fax. +66 (0) 3481 0467
Thong Pha Phum Branch Tel. +66 (0) 3459 9073, +66 (0) 3459 9352 Fax. +66 (0) 3459 9613
Homework Ratchaphruek Branch Tel. +66 (0) 2447 6690-2 Fax. +66 (0) 2447 6693
Talat Suphan Buri Branch Tel. +66 (0) 3551 1330, +66 (0) 3552 3882 Fax. +66 (0) 3552 3881
Tha Ruea-Kanchanaburi Branch Tel. +66 (0) 3456 1130, +66 (0) 3456 2074 Fax. +66 (0) 3456 2073
CENTRAL REGION
Thanon Khun San (Sing Buri) Branch Tel. +66 (0) 3651 1199, +66 (0) 3652 1200-1 Fax. +66 (0) 3652 1202
Tha Ruea-Ayutthaya Branch Tel. +66 (0) 3534 1019, +66 (0) 3534 1029 Fax. +66 (0) 3534 1795
Ha Yaek Pak Kret Branch Tel. +66 (0) 2583 7574, +66 (0) 2583 9144 Fax. +66 (0) 2584 3959 Imperial World Samrong Branch Tel. +66 (0) 2380 2943-5, +66 (0) 2756 9023 Fax. +66 (0) 2756 9024
Krathum Baen Branch Tel. +66 (0) 3447 2422, +66 (0) 3447 2651-2 Fax. +66 (0) 3447 1511 Kanchanaburi Branch Tel. +66 (0) 3451 5096-100 Fax. +66 (0) 3451 5102
298
ANNUAL REPORT 2016
Thanon Sai Phra (Nakhon Pathom) Branch Tel. +66 (0) 3425 5317-9 Fax. +66 (0) 3425 4915
Tha Muang Branch Tel. +66 (0) 3461 1119, +66 (0) 3461 2417-8 Fax. +66 (0) 3461 2419 Tha Yang Branch Tel. +66 (0) 3246 1445-6 Fax. +66 (0) 3246 1447
Thung Khok Branch Tel. +66 (0) 3556 8086-7 Fax. +66 (0) 3556 8069 Nakhon Chai Si Branch Tel. +66 (0) 3433 1350-1 Fax. +66 (0) 3433 1349 Nakhon Nayok Branch Tel. +66 (0) 3731 1131, +66 (0) 3731 2609 Fax. +66 (0) 3731 2610 Nakhon Pathom Branch Tel. +66 (0) 3421 9131 Fax. +66 (0) 3421 9160 Bang Sai Branch Tel. +66 (0) 3528 2118, +66 (0) 3537 5226 Fax. +66 (0) 3537 5144 Bang Pahan Branch Tel. +66 (0) 3538 1023-5 Fax. +66 (0) 3538 1026 Bang Len Branch Tel. +66 (0) 3439 1026-9 Fax. +66 (0) 3439 1030 Ban Phaeo Branch Tel. +66 (0) 3448 1088, +66 (0) 3448 0111-2 Fax. +66 (0) 3448 1606 Ban Pong Branch Tel. +66 (0) 3220 0429-31, +66 (0) 3221 1993 Fax. +66 (0) 3221 1035 Ban Mo Branch Tel. +66 (0) 3620 1141, +66 (0) 3620 1391-2 Fax. +66 (0) 3620 1142 BigC Lop Buri 2 Branch Tel. +66 (0) 3678 0731-4 Fax. +66 (0) 3678 0736 Prachuap Khiri Khan Branch Tel. +66 (0) 3260 4464-7 Fax. +66 (0) 3260 4468 Pran Buri Branch Tel. +66 (0) 3262 1643, +66 (0) 3262 2373-4 Fax. +66 (0) 3262 2055
Lat Bua Luang Branch Tel. +66 (0) 3537 9290-1 Fax. +66 (0) 3537 9292
Pak Phriao Branch Tel. +66 (0) 3621 1833-4, +66 (0) 3622 1286 Fax. +66 (0) 3622 1884 Phra Nakhon Si Ayutthaya Branch Tel. +66 (0) 3521 3892-4, +66 (0) 3524 4381 Fax. +66 (0) 3524 2136 Phra Pathom Chedi Branch Tel. +66 (0) 3425 4203-5, +66 (0) 3421 3541 Fax. +66 (0) 3425 9131 Phutthamonthon Sai 4 Branch Tel. +66 (0) 2420 0444, +66 (0) 2420 5964 Fax. +66 (0) 2813 1116 Phetchaburi Branch Tel. +66 (0) 3242 7023-5 Fax. +66 (0) 3241 5455
Wiset Chai Chan Branch Tel. +66 (0) 3563 2801-4 Fax. +66 (0) 3563 2805 Si Prachan Branch Tel. +66 (0) 3558 1150, +66 (0) 3558 1160 Fax. +66 (0) 3558 1140 Salaya Branch Tel. +66 (0) 2441 4557-9 Fax. +66 (0) 2441 4560 Samut Songkhram Branch Tel. +66 (0) 3471 1361, +66 (0) 3471 1510 Fax. +66 (0) 3471 5555
Photharam Branch Tel. +66 (0) 3274 7591-4 Fax. +66 (0) 3274 7595
Samut Sakhon Branch Tel. +66 (0) 3482 0359-60, +66 (0) 3482 0365-6 Fax. +66 (0) 3482 0445
Pho Hak Branch Tel. +66 (0) 3238 7021-2 Fax. +66 (0) 3238 7023 Mahachai Mueang Mai Branch Tel. +66 (0) 3481 2620-2 Fax. Ratchaburi Branch Tel. +66 (0) 3231 1203-5 Fax. +66 (0) 3231 1207 Phetcharat Hospital (Phetchaburi) Branch Tel. +66 (0) 3241 0505-6, +66 (0) 3241 0514 Fax. +66 (0) 3240 0618 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 Lop Buri Branch Tel. +66 (0) 3642 1020-2 Fax. +66 (0) 3642 1023
Wat Thian Dat Branch Tel. +66 (0) 2429 0216, +66 (0) 2429 0813 Fax. +66 (0) 2429 0847
Saraburi Branch Tel. +66 (0) 3621 8500 Fax. +66 (0) 3631 6601 Rojana Industrial Park Ayutthaya Branch Tel. +66 (0) 3571 9710-2 Fax. +66 (0) 3533 1651 Song Phi Nong Branch Tel. +66 (0) 3553 2890-3 Fax. +66 (0) 3553 2894 Sam Chuk Branch Tel. +66 (0) 3557 1644, +66 (0) 3557 1666 Fax. +66 (0) 3557 1099 Sam Phran Branch Tel. +66 (0) 3432 2781, +66 (0) 3432 2783 Fax. +66 (0) 3432 2782 Sing Buri Branch Tel. +66 (0) 3653 0410, +66 (0) 3653 0413 Fax. +66 (0) 3651 2021 Suphan Buri Branch Tel. +66 (0) 3552 1575, +66 (0) 3552 1963 Fax. +66 (0) 3552 1964
THANACHART BANK PUBLIC COMPANY LIMITED
299
Sena Branch Tel. +66 (0) 3520 1035, +66 (0) 3520 1748 Fax. +66 (0) 3520 1749
Chai Nat Branch Tel. +66 (0) 5641 6650-3 Fax. +66 (0) 5641 6654
Tesco Lotus Phitsanulok Branch Tel. +66 (0) 5525 3701-3 Fax. +66 (0) 5525 3705
Nong Khae Branch Tel. +66 (0) 3637 1504, +66 (0) 3637 1517 Fax. +66 (0) 3637 1516
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
Hua Hin Branch Tel. +66 (0) 3251 1098, +66 (0) 3251 2218 Fax. +66 (0) 3251 2219
Talat Varorot Branch Tel. +66 (0) 5387 4018-9, +66 (0) 5387 4002 Fax. +66 (0) 5387 4006
Nan Branch Tel. +66 (0) 5471 1095-9 Fax. +66 (0) 5471 1098
Ayutthaya Branch Tel. +66 (0) 3525 2431-4, +66 (0) 3525 2359 Fax. +66 (0) 3525 2437
Tak Branch Tel. +66 (0) 5551 1275, +66 (0) 5551 1360 Fax. +66 (0) 5551 3486
Ayutthaya Park Branch Tel. +66 (0) 3522 9560-1 Fax. +66 (0) 3522 9554
TaKhli Branch Tel. +66 (0) 5626 1093, +66 (0) 5626 1133 Fax. +66 (0) 5626 2383
Om Yai Branch Tel. +66 (0) 2420 4920, +66 (0) 2420 4930 Fax. +66 (0) 2811 6538
Thanon Chang Chlan (Chiang Mai) Branch Tel. +66 (0) 5382 0538-41 Fax. +66 (0) 5382 0543
Om Noi Branch Tel. +66 (0) 2420 1450, +66 (0) 2420 2565-6 Fax. +66 (0) 2420 1132 Amphawa Branch Tel. +66 (0) 3475 1177-8, +66 (0) 3475 1640-1 Fax. +66 (0) 3475 1642 Ang Thong Branch Tel. +66 (0) 3561 1099, +66 (0) 3561 2301-3 Fax. +66 (0) 3561 1100 U Thong Branch Tel. +66 (0) 3555 1299, +66 (0) 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, +66 (0) 5321 6586 Fax. +66 (0) 5322 2718 Chong Khae Branch Tel. +66 (0) 5626 9163, +66 (0) 5626 9128-30 Fax. +66 (0) 5626 9127 300
ANNUAL REPORT 2016
Thanon Nimmanhemin Branch Tel. +66 (0) 5322 5483, +66 (0) 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, +66 (0) 5421 8790 Fax. +66 (0) 5422 4667 Thanon Wet Suwan (Nakhon Sawan) Branch Tel. +66 (0) 5622 2998, +66 (0) 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, +66 (0) 5525 9322 Fax. +66 (0) 5524 4268 Tha Phae Branch Tel. +66 (0) 5323 5755 Fax. +66 (0) 5323 5757
Bo Sang Branch Tel. +66 (0) 5333 7004-6 Fax. +66 (0) 5333 7007 BigC Kamphaeng Phet Branch Tel. +66 (0) 5585 3928-30 Fax. +66 (0) 5585 3932 BigC Chiang Mai Branch Tel. +66 (0) 5324 1248-9, +66 (0) 5324 1336 Fax. +66 (0) 5324 1337 BigC Hang Dong Branch Tel. +66 (0) 5380 4092, +66 (0) 5380 4094 Fax. +66 (0) 5380 4086 Pak Nam Pho Branch Tel. +66 (0) 5621 2082, +66 (0) 5621 2847-8 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, +66 (0) 5448 2386-8 Fax. +66 (0) 5443 1272 Phichit Branch Tel. +66 (0) 5661 1033, +66 (0) 5661 1651 Fax. +66 (0) 5661 1127 Phitsanulok Branch Tel. +66 (0) 5530 4313 Fax. +66 (0) 5530 4279 Phetchabun Branch Tel. +66 (0) 5672 3103 Fax. +66 (0) 5672 3104
Phrae Branch Tel. +66 (0) 5452 2004, +66 (0) 5452 2006 Fax. +66 (0) 5452 2005
Lom Sak Branch Tel. +66 (0) 5670 1540, +66 (0) 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, +66 (0) 5645 1500 Fax. +66 (0) 5645 1499
Mae Sot Branch Tel. +66 (0) 5553 3311-3, +66 (0) 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, +66 (0) 4431 3855-6 Fax. +66 (0) 4431 3255
Mae Sai Branch Tel. +66 (0) 5373 1675, +66 (0) 5373 1904 Fax. +66 (0) 5373 1905
Hang Dong Branch Tel. +66 (0) 5343 4035-7 Fax. +66 (0) 5343 4038
Lampang Branch Tel. +66 (0) 5431 8927-9 Fax. +66 (0) 5431 8960
Hang Nam Sakorn Branch Tel. +66 (0) 5643 1232-3 Fax. +66 (0) 5643 1234
Lamphun Branch Tel. +66 (0) 5351 0371, +66(0) 5351 2060 Fax. +66 (0) 5351 0372
Uttaradit Branch Tel. +66 (0) 5544 1777, +66 (0) 5544 2240 Fax. +66 (0) 5541 4096
Wang Chao Branch Tel. +66 (0) 5555 6059, +66 (0) 5555 6061 Fax. +66 (0) 5555 6063
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, +66 (0) 4425 1376 Fax. +66 (0) 4425 9002
Sawankhalok Branch Tel. +66 (0) 5564 1478-9, +66 (0) 5564 2512 Fax. +66 (0) 5564 1480
Happy Plaza (Phichit) Branch Tel. +66 (0) 5661 6471-3 Fax. +66 (0) 5665 0987
Thanon Si Chan Branch Tel. +66 (0) 4322 7275-8 Fax. +66 (0) 4322 7279
NORTH EASTERN REGION
Thanon Sappasit Branch Tel. +66 (0) 4524 4315, +66 (0) 4524 4729 Fax. +66 (0) 4524 3193
San Sai Branch Tel. +66 (0) 5349 1457, +66 (0) 5349 1934 Fax. +66 (0) 5349 1728 San Pa Khoi Branch Tel. +66 (0) 5324 4157, +66 (0) 5324 9167-8 Fax. +66 (0) 5324 1157 Sukhothai Branch Tel. +66 (0) 5561 6022, +66 (0) 5562 2465-6 Fax. +66 (0) 5562 2469
Thanon Klang Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 8266, +66 (0) 4332 2630 Fax. +66 (0) 4332 2386 Thanon Kuang Heng (Si Sa Ket) Branch Tel. +66 (0) 4561 7861-3 Fax. +66 (0) 4561 7860
Kalasin Branch Tel. +66 (0) 4382 1080-1, +66 (0) 4382 1420 Fax. +66 (0) 4381 6584 Khon Kaen Branch Tel. +66 (0) 4332 4321, +66 (0) 4322 6888 Fax. +66 (0) 4332 5919 Chum Phae Branch Tel. +66 (0) 4331 1684, +66 (0) 4331 2292 Fax. +66 (0) 4331 2395
Nong Ben Branch Tel. +66 (0) 5629 6163-5 Fax. +66 (0) 5629 6166
Central Plaza Khon Kaen Branch Tel. +66 (0) 4328 8361-3 Fax. +66 (0) 4328 8365
Lom Kao Branch Tel. +66 (0) 5670 8492-93 Fax. +66 (0) 5670 8494
Central Plaza Udon Thani Branch Tel. +66 (0) 4292 1344, +66 (0) 4292 1346-7 Fax. +66 (0) 4292 1369
Thanon Prachak (Nong Khai) Branch Tel. +66 (0) 4241 2890-4 Fax. +66 (0) 4241 2895
Thanon Suranari Branch Tel. +66 (0) 4424 2560, +66 (0) 4424 2904 Fax. +66 (0) 4425 6706 Thanon Na Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 1163, +66 (0) 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, +66 (0) 4224 7732 Fax. +66 (0) 4224 7510 Tesco Lotus Khorat Branch Tel. +66 (0) 4426 3564, +66 (0) 4426 3567 Fax. +66 (0) 4426 3565
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Tesco Lotus Chaiyaphum Branch Tel. +66 (0) 4483 8324-6 Fax. +66 (0) 4481 3352
Roi Et Branch Tel. +66 (0) 4303 3213-5 Fax. +66 (0) 4351 8644
Amnat Charoen Branch Tel. +66 (0) 4551 1721-4 Fax. +66 (0) 4551 1726
Nakhon Phanom Branch Tel. +66 (0) 4251 6125-8 Fax. +66 (0) 4251 6129
Loei Branch Tel. +66 (0) 4283 0851-3 Fax. +66 (0) 4281 4472
Udon Thani Branch Tel. +66 (0) 4234 2550 Fax. +66 (0) 4234 2398
Nakhon Ratchasima Branch Tel. +66 (0) 4426 9797 Fax. +66 (0) 4426 9790
Wang Sam Mo Branch Tel. +66 (0) 4238 7486-7 Fax. +66 (0) 4238 7488
Ubon Ratchathani Branch Tel. +66 (0) 4531 9401-3 Fax. +66 (0) 4531 9405
Nang Rong Branch Tel. +66 (0) 4463 1049, +66 (0) 4463 1586-8 Fax. +66 (0) 4463 1050
Warin Chamrap Branch Tel. +66 (0) 4532 2788, +66 (0) 4532 2791-3 Fax. +66 (0) 4532 2790
EASTERN REGION
Ban Phai Branch Tel. +66 (0) 4327 4038-40 Fax. +66 (0) 4327 4043
Si Sa Ket Branch Tel. +66 (0) 4562 0500-2 Fax. +66 (0) 4564 4197
BigC Buri Ram Branch Tel. +66 (0) 4469 0450, +66 (0) 4469 0458 Fax. +66 (0) 4469 0469
Sakon Nakhon Branch Tel. +66 (0) 4271 6446-50 Fax. +66 (0) 4271 6451
BigC Yasothon Branch Tel. +66 (0) 4572 4361, +66 (0) 4572 4376 Fax. +66 (0) 4572 5067
Sang Khom Branch Tel. +66 (0) 4227 6222-4 Fax. +66 (0) 4227 6225
BigC Udon Thani Branch Tel. +66 (0) 4212 8551-3 Fax. +66 (0) 4212 8548
Sam Yaek Pak Thong Chai Branch Tel. +66 (0) 4421 3993-5, +66 (0) 4428 1815-6 Fax. +66 (0) 4421 3994
Bueng Kan Branch Tel. +66 (0) 4249 1779, +66 (0) 4249 1781 Fax. +66 (0) 4240 3097 Buri Ram Branch Tel. +66 (0) 4460 1555, +66 (0) 4460 2000 Fax. +66 (0) 4460 2123 Pak Chong Branch Tel. +66 (0) 4431 6866-9 Fax. +66 (0) 4431 6859 Maha Sarakham Branch Tel. +66 (0) 4374 0681-3 Fax. +66 (0) 4372 2958 Mukdahan Branch Tel. +66 (0) 4263 1367-70 Fax. +66 (0) 4263 1374 Yasothon Branch Tel. +66 (0) 4571 4051-6 Fax. +66 (0) 4571 4054
302
ANNUAL REPORT 2016
Kabin Buri Branch Tel. +66 (0) 3728 0796, +66 (0) 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) 3960 7463-5 Fax. +66 (0) 3960 7466
Surin Branch Tel. +66 (0) 4451 4455-8 Fax. +66 (0) 4451 4459
Chachoengsao Branch Tel. +66 (0) 3851 5835-7 Fax. +66 (0) 3851 5838
Surin Plaza Branch Tel. +66 (0) 4453 8517-20 Fax. +66 (0) 4453 8521
Chon Buri Branch Tel. +66 (0) 3827 6930-6 Fax. +66 (0) 3827 6935
Suwannakhuha Branch Tel. +66 (0) 4237 2515-6 Fax. +66 (0) 4237 2517
Central Festival Pattaya Beach Branch Tel. +66 (0) 3300 3571-3 Fax. +66 (0) 3804 3194
Nong Khai Branch Tel. +66 (0) 4246 0119-22 Fax. +66 (0) 4246 0199 Nong Bua Lam Phu Branch Tel. +66 (0) 4231 1107, +66 (0) 4231 1166 Fax. +66 (0) 4231 1657 Ha Yaek Nampu (Udon Thani) Branch Tel. +66 (0) 4222 1703, +66 (0) 4224 7211-2 Fax. +66 (0) 4224 7209
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, +66 (0) 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, +66 (0) 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, +66 (0) 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, +66 (0) 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, +66 (0) 3827 6651 Fax. +66 (0) 3827 6652 Ban Bueng Branch Tel. +66 (0) 3844 3060-1, +66 (0) 3844 4015-6 Fax. +66 (0) 3844 3713
BigC Chachoengsao 2 Branch Tel. +66 (0) 3851 5188, +66 (0) 3851 5190 Fax. +66 (0) 3851 5219
Wang Nam Yen Branch Tel. +66 (0) 3725 1543-7 Fax. +66 (0) 3725 1546
BigC Chon Buri 2 Branch Tel. +66 (0) 3878 3032-4 Fax. +66 (0) 3838 7923
Wang Sombun Branch Tel. +66 (0) 3744 9193-4 Fax. +66 (0) 3744 9195
BigC Pattaya Tai Branch Tel. +66 (0) 3837 4270, +66 (0) 3837 4273 Fax. +66 (0) 3837 4463
Sa Kaeo Branch Tel. +66 (0) 3724 1061, +66 (0) 3724 1585-6 Fax. +66 (0) 3724 1062
BigC Rayong Branch Tel. +66 (0) 3887 3094, +66 (0) 3887 3301 Fax. +66 (0) 3862 2659 BigC Sa Kaeo Branch Tel. +66 (0) 3742 1761-3 Fax. +66 (0) 3742 1765
Sattahip Branch Tel. +66 (0) 3843 7321, +66 (0) 3843 7986 Fax. +66 (0) 3843 7717
Prachin Buri Branch Tel. +66 (0) 3721 1300, +66 (0) 3721 3855-9 Fax. +66 (0) 3721 3080
Sam Yaek Klaeng Branch Tel. +66 (0) 3888 4503-5 Fax. +66 (0) 3888 4506
Pluak Daeng Branch Tel. +66 (0) 3865 9768-9 Fax. +66 (0) 3865 9770 Pacific Park (Si Racha) Branch Tel. +66 (0) 3831 3226, +66 (0) 3831 3236 Fax. +66 (0) 3831 3245 Pranom Sarakham Branch Tel. +66 (0) 3855 1005, +66 (0) 3855 1824-5 Fax. +66 (0) 3855 1659 Pattaya Branch Tel. +66 (0) 3872 0334, +66 (0) 3872 0339 Fax. +66 (0) 3842 9973 Pattaya Nuea Branch Tel. +66 (0) 3842 8901-2, +66 (0) 3842 8905 Fax. +66 (0) 3842 8963 PASSiONE Rayong Branch Tel. +66 (0) 3802 3405-7 Fax. +66 (0) 3802 3409 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
Saha Pathana Industrial Park (Si Racha) Branch Tel. +66 (0) 3848 1826-8 Fax. +66 (0) 3848 1829
Nong Mon Branch Tel. +66 (0) 3839 2302, +66 (0) 3839 2125 Fax. +66 (0) 3839 2501 Huai Sathon Branch Tel. +66 (0) 3939 5381-3 Fax. +66 (0) 3939 5384 Hat Pattaya (Nuea) Branch Tel. +66 (0) 3841 5772-4, +66 (0) 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, +66 (0) 3815 3936 Fax. +66 (0) 3815 3994 Aranyapraphet Branch Tel. +66 (0) 3722 3505-7 Fax. +66 (0) 3722 3511 Kabin Buri Industrial (Nongki) Branch Tel. +66 (0) 3745 5428-29, +66 (0) 3745 5420-1 Fax. +66 (0) 3745 5439 Harbor Mall Laem Chabang Branch Tel. +66 (0) 3849 3194-6 Fax. +66 (0) 3314 5215
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SOUTHERN REGION Krabi Branch Tel. +66 (0) 7563 2838-41 Fax. +66 (0) 7563 2835 Kantang Branch Tel. +66 (0) 7525 1250, +66 (0) 7525 1640 Fax. +66 (0) 7525 1644
Takua Pa Branch Tel. +66 (0) 7642 5176, +66 (0) 7643 1503-5 Fax. +66 (0) 7642 5177
Thanon Sala Daeng (Chumphon) Branch Tel. +66 (0) 7750 5051-2 Fax. +66 (0) 7750 5054
Thanon Chuti Uthit (Hat Yai) Branch Tel. +66 (0) 7434 6396-8 Fax. +66 (0) 7434 6393
Thanon Sai Buri (Songkhla) Branch Tel. +66 (0) 7431 1638, +66 (0) 7432 3735-6 Fax. +66 (0) 7431 3543
Ko Tao Branch Tel. +66 (0) 7745 6533-4 Fax. +66 (0) 7745 6784
Thanon Chon Kasem (Surat Thani) Branch Tel. +66 (0) 7728 3627-30 Fax. +66 (0) 7728 4080
Ko Pha-ngan Branch Tel. +66 (0) 7737 7051, +66 (0) 7723 8186-7 Fax. +66 (0) 7737 7052
Thanon Thawi Wong (Hat Patong) Branch Tel. +66 (0) 7629 2116-8 Fax. +66 (0) 7634 5687
Ko Lanta Branch Tel. +66 (0) 7566 8152 Fax. +66 (0) 7566 8151
Thanon Thammanun Withi (Hat Yai) Branch Tel. +66 (0) 7423 5549, +66 (0) 7435 5396-7 Fax. +66 (0) 7424 3648
Ko Samui Branch Tel. +66 (0) 7742 1110-1, +66 (0) 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, +66 (0) 7620 9292 Fax. +66 (0) 7620 9291
Thanon Punnakan (Hat Yai) Branch Tel. +66 (0) 7450 0040, +66 (0) 7450 0044-5 Fax. +66 (0) 7450 0089 Thanon Montri Branch Tel. +66 (0) 7621 2993, +66 (0) 7621 5393 Fax. +66 (0) 7621 3149 Thanon Ratthakan (Hat Yai) Branch Tel. +66 (0) 7434 9070-2, +66 (0) 7426 1751 Fax. +66 (0) 7426 1752
Central Hat Yai Branch Tel. +66 (0) 7423 9010 Fax. +66 (0) 7423 0414
Thanon Ratsada (Phuket) Branch Tel. +66 (0) 7621 9664, +66 (0) 7625 6873-5 Fax. +66 (0) 7621 9731
Diana Si Phuwanart Branch Tel. +66 (0) 7446 5316-8 Fax. +66 (0) 7446 5319
Thanon Ramet (Phatthalung) Branch Tel. +66 (0) 7462 6952-4 Fax. +66 (0) 7461 5451
Trang Branch Tel. +66 (0) 7522 3240-3 Fax. +66 (0) 7522 3244
Thanon Ratchadamnoen (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534 2779-80, +66 (0) 7535 6119 Fax. +66 (0) 7535 6741
Talat Tha Phae (Nakhon Si Thammarat) Branch Tel. +66 (0) 7538 3271, +66 (0) 7538 3316 Fax. +66 (0) 7538 3110
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ANNUAL REPORT 2016
Thanon Si Wichai (Surat Thani) Branch Tel. +66 (0) 7720 6488, +66 (0) 7726 4170-1 Fax. +66 (0) 7720 6671
Thalang Branch Tel. +66 (0) 7631 1020, +66 (0) 7631 1432 Fax. +66 (0) 7631 1433 Thap Thiang (Trang) Branch Tel. +66 (0) 7521 8059, +66 (0) 7521 1321 Fax. +66 (0) 7521 1320 Tha Ruea Bang Rak (Ko Samui) Branch Tel. +66 (0) 7741 7184 Fax. +66 (0) 7741 7185 Thai Mueang Branch Tel. +66 (0) 7657 1234-7 Fax. +66 (0) 7657 1215 Thung Song Branch Tel. +66 (0) 7541 1087, +66 (0) 7541 1956 Fax. +66 (0) 7541 1054 Tesco Lotus Krabi Branch Tel. +66 (0) 7565 0833, +66 (0) 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 9930-2 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 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 Narathiwat Branch Tel. +66 (0) 7351 2013, +66 (0) 7351 4463-5 Fax. +66 (0) 7351 2014
Phatthalung Branch Tel. +66 (0) 7461 3082, +66 (0) 7461 3951-2 Fax. +66 (0) 7461 1918
Sai Buri Branch Tel. +66 (0) 7341 1021, +66 (0) 7341 1314-5 Fax. +66 (0) 7341 1138
Phunphin Branch Tel. +66 (0) 7731 1449, +66 (0) 7731 2368-70 Fax. +66 (0) 7731 1537
Surat Thani Branch Tel. +66 (0) 7721 4581-7 Fax. +66 (0) 7721 3560 Su-ngai Kolok Branch Tel. +66 (0) 7361 1359, +66 (0) 7361 1002 Fax. +66 (0) 7361 3632
Phuket Branch Tel. +66 (0) 7626 1570-5 Fax. +66 (0) 7626 1576
Ban Don Branch Tel. +66 (0) 7721 0365, +66 (0) 7728 1551-2 Fax. +66 (0) 7721 0366
Mae Nam Branch Tel. +66 (0) 7724 8375, +66 (0) 7733 2259 Fax. +66 (0) 7733 2260
Lang Suan Branch Tel. +66 (0) 7754 1965, +66 (0) 7758 1417-8 Fax. +66 (0) 7754 1987
Ban Na Doem Branch Tel. +66 (0) 7735 9013, +66 (0) 7735 9015 Fax. +66 (0) 7735 9014
Yala Branch Tel. +66 (0) 7321 2592, +66 (0) 7321 3375 Fax. +66 (0) 7321 1691
BigC Pattani Branch Tel. +66 (0) 7333 8004, +66 (0) 7331 3982-3 Fax. +66 (0) 7333 8005
Yan Ta Khao Branch Tel. +66 (0) 7528 1003, +66 (0) 7528 1101 Fax. +66 (0) 7528 1102
Huai Yot Branch Tel. +66 (0) 7523 5033-5, +66 (0) 7527 1013 Fax. +66 (0) 7527 1064
BigC Satun Branch Tel. +66 (0) 7472 5251-3 Fax. +66 (0) 7472 5254 BigC Hat Yai 2 Branch Tel. +66 (0) 7446 9235-7 Fax. +66 (0) 7455 5609 Betong Branch Tel. +66 (0) 7323 1120, +66 (0) 7323 1416 Fax. +66 (0) 7323 0914 Pattani Branch Tel. +66 (0) 7333 5950-1, +66 (0) 7333 1851 Fax. +66 (0) 7333 5949 Pak Phanang Branch Tel. +66 (0) 7551 7132, +66 (0) 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, +66 (0) 7641 1527-8 Fax. +66 (0) 7641 1326
Ranong Branch Tel. +66 (0) 7781 1198, +66 (0) 7781 1752 Fax. +66 (0) 7781 1751 Robinson Trang Branch Tel. +66 (0) 7559 0128-9, +66 (0) 7559 0120 Fax. +66 (0) 7522 6157 Robinson Ocean Nakhon Si Thammarat Branch Tel. +66 (0) 7534 1875, +66 (0) 7534 1960-1 Fax. +66 (0) 7534 1876 Wiang Sa Branch Tel. +66 (0) 7736 1461-2, +66 (0) 7736 3550 Fax. +66 (0) 7725 7268 Songkhla Branch Tel. +66 (0) 7444 1198-9, +66 (0) 7444 1232 Fax. +66 (0) 7444 1233 Sadao Branch Tel. +66 (0) 7441 4315-7 Fax. +66 (0) 7446 0501 Sam Kong (Phuket) Branch Tel. +66 (0) 7622 2838-40 Fax. +66 (0) 7622 2841
Ha Yaek Chalong (Phuket) Branch Tel. +66 (0) 7638 3222, +66 (0) 7638 3431 Fax. +66 (0) 7638 3348 Hat Chaweng Branch Tel. +66 (0) 7723 0405, +66 (0) 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, +66 (0) 7639 6485-6 Fax. +66 (0) 7639 6980 Hat Lamai Branch Tel. +66 (0) 7745 8159-60, +66 (0) 7745 8162-4 Fax. +66 (0) 7745 8161 Ao Nang Branch Tel. +66 (0) 7566 1434, +66 (0) 7566 1430-2 Fax. +66 (0) 7566 1433 Ao Luek Branch Tel. +66 (0) 7561 0739, +66 (0) 7563 4335-7 Fax. +66 (0) 7561 0755
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Summary of Specified Items per form 56-2 in 2016 Annual Report Items
Page
1. Policy and Overall Business Operation
039
2. Nature of Business Operations
044
3. Risk Factors
058
4. General and Other Key Information
130
5. Shareholders
137
6. Dividend Payment Policy
139
7. Management Structures
097
8. Corporate Governance
082
9. Corporate Social Responsibility
070
10. Internal Control and Risk Management
094
11. Related Transactions
093
12. Financial Highlight
006
13. Management Discussion and Analysis
024
306
ANNUAL REPORT 2016
444 MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, THAILAND Tel. +66 (0) 2217 8000 Fax +66 (0) 2217 8333 Thanachart Contact Center Call 1770 Thanachart Smartcar Call Center +66 (0) 2217 5555 www.thanachartbank.co.th Registration No. 0107536001401