ANNUAL REPORT 2018
THANACHART BANK PUBLIC COMPANY LIMITED
CONTENTS 001 002 014 018 020 035 056 069 102 117 119 120 131 168 174 177 178 180 182 311 324
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 Sustainable Development and Corporate Social Responsibility 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 2018 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”
The Strategic Focuses for the Business Operation in
2019 1 2 3 4
Reorganizing the executive chart and establishing new business units in response to the Business Plan and the Customer Journey to be able to deliver financial products and services efficiently, and meet the customers’ demands in every channel of the Bank. Being a data-driven organization by leveraging data to create business values in forms of acquisition, retention and deepening. Developing and improving the end-to-end process for agility and adopting automation for quicker and more accurate customer services. Developing people to be professional and able to provide financial advice and solutions by focusing on knowledge and new set of skills both in terms of Up-Skill and Re-Skill of the employee in alignment with a more complicated financial environment during the digital era and changing customers’ demand.
Vision
To be the leading bank at providing fully integrated solutions to our customers’ complete financial needs by offering the highest quality products, services, and advice.
Three Items for the Business Philosophy 1. Employee Trust: Thanachart Group believes that employees are its most valuable assets and owes its growth to the competence and integrity of its employees. 2. Dedication for Excellence: Thanachart Group earnestly focuses on excellence by 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 its society.
FINANCIAL HIGHLIGHTS As at and for the year ended 31 December
Consolidated Financial Statements
Separate Financial Statements
2018 2017 2016 2015 2014 2018 2017 2016 2015 2014 Operating results (THB million) Interest income 46,288 Interest expenses 15,250 Net interest income 31,038 Non-interest income 12,201 Total income(1) 43,239 Non-interest expenses 20,525 Bad debt and doubtful 4,741 accounts(2) Net income(3) 14,703
44,366 14,956 29,410 12,572 41,982 20,437
44,886 16,174 28,712 11,654 40,366 20,585
48,217 20,536 27,681 11,957 39,638 19,721
6,244 6,251 8,592 13,810 12,434 10,743
52,445 24,884 27,561 11,750 39,311 19,515
42,806 14,440 28,365 9,251 37,616 17,785
41,282 14,144 27,138 9,646 36,784 17,702
41,843 15,295 26,548 8,909 35,457 17,792
45,125 19,572 25,553 10,441 35,994 17,096
49,102 23,920 25,182 8,643 33,825 17,029
7,122 4,465 5,935 5,808 8,007 9,922 13,911 13,135 11,962 11,452
7,181 7,918
Operating performance 2.42
2.28
2.05
1.90
1.80 2.29 2.17
1.97
2.03
1.44
1.46
1.42
1.29
1.11
0.98 1.47 1.42
1.31
1.24
0.82
10.68 3.06
10.68 3.06
10.27 3.03
9.83 2.84
9.93 10.95 10.95 2.68 3.03 3.05
10.64 3.02
11.39 2.83
8.60 2.66
47.47
48.68
51.00
49.75
Loans 753,498 711,675 Total assets 1,046,612 1,009,557 Deposits and borrowings 795,239 755,586 Total liabilities 902,407 873,349 (6) Shareholders’ equity 141,698 134,290
690,907 950,511 725,966 824,391 124,488
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)
49.64
47.28
713,446 754,370 980,972 1,008,890 741,145 787,189 863,281 902,726 116,226 104,977
699,601 984,124 773,950 852,982 131,141
48.12 50.18 47.50 50.34
Statement of financial position (THB million) 665,505 954,460 737,812 830,074 124,385
651,613 906,868 712,329 791,283 115,585
Definition and Formula (1) Total income = Net interest income + Non-interest income (2) Including loss on debt restructuring (3) Excluding non-controlling interest (4) Interest spread = Yield - Cost of fund Yield = Interest income / Average earning assets Earning assets = Interbank and money market from interest bearing + net investment + loans Cost of fund = Interest expenses / Average paying liabilities Paying liabilities = Total deposits + interbank and money market from interest bearing + total borrowings (5) Cost to income ratio = Non-interest expenses / Total income (6) Excluding non-controlling interest
676,001 938,834 726,002 830,784 108,050
714,436 967,216 773,578 871,614 95,602
As at and for the year ended 31 December
Consolidated Financial Statements
Separate Financial Statements
2018 2017 2016 2015 2014 2018 2017 2016 2015 2014 Asset quality Loans to deposits and borrowings ratio (Percent) 94.75 94.19 95.17 96.27 95.83 90.39 90.20 91.48 93.11 92.35 NPL-gross to total loans (Percent) 2.30 2.30 2.29 2.84 4.09 2.02 1.94 1.90 2.20 2.97 NPL-net to total loans (Percent) 1.22 1.19 1.07 1.26 2.02 1.24 1.19 1.05 1.15 1.61 Coverage ratio (Percent) 123.20 134.07 151.16 119.42 85.52 124.72 139.80 151.64 127.41 90.64 Total allowance to BOT regulation (Percent) 154.90 172.91 192.38 159.33 133.38 165.07 191.59 202.23 171.94 138.16 Non-performing loans (NPL) (THB million) 19,329 18,108 16,434 21,681 32,761 15,905 14,413 12,893 15,986 22,595 Capital measures Tier I capital ratio (Percent) 15.42 14.81 13.27 12.04 10.70 Total capital ratio (Percent) 19.45 18.94 19.15 17.92 15.83 Risk weighted assets (THB million) 677,775 662,905 682,373 682,245 724,209 Common share information Common shares outstanding (Million shares) - Average-basic 6,065 6,065 6,065 5,641 5,514 6,065 6,065 6,065 5,641 5,514 - End of period 6,065 6,065 6,065 6,065 5,514 6,065 6,065 6,065 6,065 5,514 Book value (THB) 23.78 22.46 20.80 19.41 19.25 21.62 20.51 19.06 17.82 17.34 Dividends per share (THB) 0.51 0.92 0.75 0.62 0.45 Other information Employees 13,700 13,698 14,553 14,719 14,806 11,544 11,535 12,305 12,468 12,676 Branches 512 523 592 614 617 Exchange booth 24 36 45 49 51
PROGRESS RAPIDLY AND STAY FOCUSED
Precise solutions to resonate rapidly with all lifestyles in the digital era are proactively dedicated strategies.
WORKFORCE SPIRIT Take Thanachart workforce to a new level,
ensure professionalism in all expertises and share mutual directions.
CUSTOMIZED DELIVERY Ready to deliver success as customers’ goals are ours.
PACE UP WITH TECHNOLOGY Technological know-how, accessible application and maximized advancement.
SOCIAL ENGAGEMENT Determined and proud to foster Thai culture and identity while offering help and sharing opportunities in the society.
MESSAGE FROM THE BOARD OF DIRECTORS
Dear Shareholders, In 2018, the global economy continued to grow but was impacted by increased volatility surrounding trade and geopolitical affairs. As a result, Thai export growth slowed in the second half of the year but the overall Thai economy demonstrated resilience - underpinned by economic policy to stimulate private consumption and investment, as well as positive momentum from Government led projects and programs. The Thai commercial banking sector focused on developments in the areas of process and technology to better address evolving customer needs, preferences, and regulations. The sector remains well capitalized, maintains sufficient liquidity, and continues to grow its profitability at a multiple of GDP. Over the last year Thanachart Bank continued to execute its customer centric strategy, focused on becoming the Main Bank for our customers. This was accelerated by
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ANNUAL REPORT 2018
customer driven channel & product mix optimization, with corresponding gains in productivity being used to invest in high value digital capabilities. The support of our strategic shareholder - Scotiabank - helped in a number of areas including significant improvements to the stability, capability, and security of our technology systems and platforms. Our partnership also helped drive automation through our processes, producing market leading improvements to our cost-to-income ratio and leading the sector in operating leverage. In addition, we focused on continuously developing skills, capabilities, and potential of people, whereby the succession plan was systematically formulated during the last year and our people were provided with the opportunity for self-development via blended-learning platform. This could help enhance skills and capabilities of our people and forge new form of learning culture to be supportive and compatible with our business operation in the digital era.
(Mr. Banterng Tantivit) Chairman of the Board of Directors
The result was a 4th consecutive year of record earnings with net income after tax reaching THB 14,703 million, an increase of 6% from last year. Total assets grew 4% driven by our retail and SME portfolios while maintaining our industry-leading position in auto loans. Our growth was prudently managed within our risk appetite - including an NPL ratio of 2.3%, Tier 1 Capital of 15.4%, and CAR of 19.5%. Our strategy to become the main bank to our customers led to the launch of a number of innovative products & services including: • Automotive Digital Lending Experience (ALDX); • Diamond-series credit cards; • TShop Application; which provides QR code payment service to merchants; • Cash Your Home; and • 3 new SMEs products (SME Dai Jai, SME Biz Smart, and SME Single Account).
Our ability to drive growth through customer focused innovation was clear amongst our subsidiaries as well: • Thanachart Insurance Public Company Limited launched the Thanachart Line Official Account, which offers services via the Line application in order for customers to acknowledge all insurance coverage and notify the Company of accident claims 24 hours a day, together with receiving discount offers and benefits at participating stores. • Thanachart Securities Public Company Limited improved its customer service systems which reduced required documents, improved service times, and consolidated customer statements. • Thanachart Fund Management Company Limited launched T-SmartBeta, which employs a flexible investment strategy to address market volatility by appropriate allocation across mid and low-beta stocks.
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THANACHART BANK PUBLIC COMPANY LIMITED
(Mr. Suphadej Poonpipat) Chairman of the Executive Committee
Overall, 2018 was another great year for our bank and its subsidiaries, marked by numerous awards and recognition from industry including:
• “Best Mutual Fund of the Year 2018 in the category of RMF Fixed Income” from Money & Banking Awards 2018 for the 2nd year - Money and Banking Magazine;
• “The Thailand Country Awards 2018 in the category of the Best Automobile Lending Product of the Year” for the 2nd straight year - Asian Banker Magazine;
• “Outstanding Asset Management Company Awards” from SET Awards 2018 for the 6th straight year - the Stock Exchange of Thailand and Money and Banking Magazine.
• “Honorable Shield Award” - Department of Special Investigation (DSI);
We understand that our growth and success comes with responsibility. This included our active participation in the 2018 International Anti-Corruption Day, and being a member of the Private Sector Collective Action Coalition against Corruption Program (CAC). We have also updated the bank’s risk appetite framework, and created additional training programs and service tools for our teams to continue to prioritize the best interests of our customers.
• “Outstanding Derivatives House Awards” from SET Awards 2018 for the 2nd straight year - the Stock Exchange of Thailand and Money and Banking Magazine; • “The 2018 Morningstar Thailand Fund Awards in the category of Retirement Mutual Fund, Fixed - Income” - the Stock Exchange of Thailand, the Association of Investment Management Companies, and Morningstar Research (Thailand) Limited;
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ANNUAL REPORT 2018
In 2019 the challenges facing the Thai banking sector will persist - an evolving political landscape, changing regulations, and accelerated use of technology.
(Mr. Praphan Anupongongarch) Chief Executive Officer and President
Specific considerations include a potential further slowing of the Thai and global economies, a Thai election planned for March 2019, rising interest rates, peaking private sector and households debt levels, new banking regulations surrounding mortgages and debt service requirements, new labour laws, and further competition from technology led non-bank FI’s. Our priorities for 2019 are clear:
On behalf of the Board of Directors, we would like to take this opportunity to extend our sincerest gratitude to you - our partners - for your unyielding support, trust, and confidence in Thanachart Bank
1) Maintaining the Bank’s position as a leader in the automotive lending industry; 2) Enhancing our breadth and depth of relationships with retail and SME customers; 3) Growing more main bank relationships through our deposit offerings; 4) Remaining committed to our strong risk culture and ensuring the continued support & trust for all of our key stakeholders - our customers, employees, shareholders, and regulators.
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THANACHART BANK PUBLIC COMPANY LIMITED
BOARD OF DIRECTORS THANACHART BANK PUBLIC COMPANY LIMITED
2. Mr. Suphadej Poonpipat
Vice Chairman Chairman of the Executive Committee Member of the Succession Committee
3. Mr. Somjate Moosirilert*
Director Member of the Executive Committee Chairman of the Risk Management Committee Chief Executive Officer and President
1. Mr. Banterng Tantivit Chairman
Note * Mr. Somjate Moosirilert resigned from his directorship (an executive director) and reached his term as Chief Executive Officer and President and the Bank’s Board of Director has appointed Mr. Praphan Anupongongarch as a replacement, effective on 1 January 2019.
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ANNUAL REPORT 2018
4. Mr. Praphan Anupongongarch*
Director Member of the Executive Committee Member of the Risk Oversight Committee Chairman of the Risk Management Committee Chief Executive Officer and President
5. Dr. Thanachart Numnonda
6. Mr. Narong Chivangkur
7. Mr. Alexander Kwai Lap Choi
8. Ms. Suvarnapha Suvarnaprathip
9. Assoc. Prof. Dr. Somjai Phagaphasvivat
10. Ms. Mookda Pairatchavet
11. Mr. William George Said
12. Mr. Rod Michael Reynolds
13. Mr. Walter Tas
Independent Director Chairman of the Audit Committee
Director Vice Chairperson of the Executive Committee
Director Member 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 Chairman of the Risk Oversight Committee
Independent Director Independent Director Member of the Audit Committee Member of the Audit Committee Member of the Nomination and Member of the Risk Oversight Committee Remuneration Committee Member of the Succession Committee
Director Member of the Nomination and Remuneration Committee Member of the Succession Committee
Director
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THANACHART BANK PUBLIC COMPANY LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS Economics Outlooks and Banking Industry In 2018, the Thai economy expanded by 4.1 percent, an increase from the previous year growth of 4.0 percent, mainly from export sector, although the growth rate has slowed down in the second half of the year as a results of the subdued economies of the trade partnering countries and the trade war between the US and China. Government spending, private investment and private consumption are expected to continue growing. As for the tourism sector, the growth rate shows a declining trend from the previous year mainly due to declining number of Chinese tourists. As the Thai economy shows a trend of expansion while inflation has been increasing gradually following increase in demand, the Monetary Policy Committee of the Bank of Thailand (“BOT”) issued a resolution to increase the policy rate from 1.50 percent per annum to 1.75 percent per annum in the fourth quarter of 2018, in order to mitigate risk for financial stability and to enhance future economic growth. In 2018, loan volume in the commercial bank industry shows an increasing trend following economic improvement. Corporate loans show a tendency to grow especially in the wholesale and retail businesses, as well as in real-estate. Retail loans should increase from housing loans and hire purchase loans. Non-performing loans are expected to increase slightly from the previous year. For 2019, the Thai economy is expected to grow 3.5 - 4.5 percent as predicted by the Office of the National Economic and Social Development Council. The key supporting drivers include private consumption that tends to have a favorable growth, private investment and public investment that are expected to grow strongly, as well as expected recovery from tourism sector to its normal level. However, export sector may slow down as the global economy may be subdued and trade war between the US and China continues.
Key Events in 2018 • On 25 April 2018, the Annual General Meeting of Shareholders of 2018 issued a resolution to approve dividend payments for shareholders of Thanachart Bank Public Company Limited (“the Bank”) at THB 0.52 per share, equivalent to THB 3,154 million. Together with the interim dividend payment of THB 0.40 per share equivalent to THB 2,426 million, the dividend payment of the year 2017 totaled to THB 0.92 per share equivalent to THB 5,580 million, or 42.48 percent of 2017 net profit in the bank only financial statements and 40.40 percent of 2017 net profit in consolidated financial statements. Dividends were paid on 11 May 2018. • The Bank’s Board of Directors No. 8/2018 dated 23 August 2018 issued a resolution for an interim dividend payment from the operating results in the first six-month period of 2018 at THB 0.51 per share, an equivalent of THB 3,093 million or 44.80 percent of first half of 2018 net profit in the bank only financial statements or 40.70 percent in consolidated financial statements. This is in accordance with the dividend payout policy and dividends were paid on 21 September 2018.
Consolidated Financial Statements were of the Bank and its subsidiaries as follows: Subsidiaries directly held by the Bank Thanachart Securities Public Company Limited Thanachart Fund Management Company Limited
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ANNUAL REPORT 2018
Thanachart Insurance Public Company Limited Thanachart Broker Company Limited
Thanachart Group Leasing Company Limited Thanachart Training and Development Company Limited Security SCIB Services Company Limited
Thanachart Management and Services Company Limited TS Asset Management Company Limited Ratchthani Leasing Public Company Limited
Subsidiary indirectly held by the Bank RTN Insurance Broker Company Limited
National Leasing Company Limited
Overall Operating Result (Analysis comparing performance of 2018 and 2017 based on consolidated financial statements) (Unit: THB million)
Statement of Comprehensive Income
2018
2017
Variance Increase/ Percentage (Decrease)
Interest Income Interest expenses Net interest income Net fees and service income Other operating income (1) Net operating income Other operating expenses (2)
46,288 44,366 1,922 4.33 15,250 14,956 294 1.97 31,038 29,410 1,628 5.54 6,627 5,897 730 12.38 5,574 6,675 (1,101) (16.49) 43,239 41,982 1,257 2.99 20,525 20,437 88 0.43
Profit before impairment loss of loans   and debt securities
22,714
21,545
1,169
5.43
4,741
6,244
(1,503)
(24.07)
17,973
15,301
2,672
17.46
2,515
932
1,583
169.85
Impairment loss of loans and debt securities from Normal Business Operation Profit before income tax Income Tax Net profit The Bank   Non-controlling interests Earnings per share (THB) Weighted average number of ordinary shares (million shares) Notes
15,458 14,369 1,089 7.58 14,703 13,810 893 6.47 755 559 196 35.06 2.42 6,064.86
2.28 6,064.86
(1)
Operating income deducted by insurance expense. Excluding insurance expense.
(2)
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THANACHART BANK PUBLIC COMPANY LIMITED
Operating Results of 2018
The success in the strategic aim at becoming Customer Centric as an organization, and thus, becoming the Main Bank for the customers through excellence in services in all channels coupled with offering products suitable for the specific needs of each customer and the increase in the productivity in business operation, especially in the core businesses. In 2018, the Bank and its subsidiaries’ net profit grew for the fourth consecutive quarter and totaled at THB 14,703 million for the year, an increase of THB 893 million or 6.47 percent from the previous year. Pre-provision operating profit grew as a result of the core business growth. Furthermore, the Bank continued to maintain asset quality, liquidity and capital adequacy consistently, illustrating strength in business operation and competitive edge. Total income of the Bank grew 2.99 percent from net interest income which grew 5.54 percent from expanding loan volume. However, Non-interest income declined by 2.95 percent mainly from a lower gain on investments. Operating expenses increase slightly at 0.43 percent while impairment loss of loans and debt securities expenses decreased by 24.07 percent. Consequently, net profit before tax increased THB 2,672 million or 17.46 percent from the previous year. Total assets have been growing consistently throughout the year and have increased 3.67 percent from the end of last year, following good performing loan growth which increased by 5.88 percent mainly from retail and SME loan. Amid loan growth, the Bank was able to maintain strong asset quality from a prudent risk policy. Total deposit also increased by 5.01 percent. NPL ratio on consolidated financial statements ended at 2.30 percent with coverage ratio at 123.20 percent. Reserve to required reserve as of 31 December 2018 was 154.90 percent.
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ANNUAL REPORT 2018
On separate financial statements, NPL ratio ended at 2.02 percent with coverage ratio at 124.72 percent. Reserve to required reserve was at 165.07 percent. For capital adequacy, BIS ratio was at 19.45 percent, an increase from 18.94 percent at the end of 2017. Tier 1 capital ratio of the Bank is at 15.42 percent, an increase from 14.81 percent at the end of 2017. Summary of key operating results in 2018 compared to 2017: • Net interest income increased 5.54 percent from growing loan volume, while interest spread was at 3.06 percent. • Non-interest income decreased 2.95 percent mainly from lower gain on investment. • Total income grew 2.99 percent from an increase in net interest income. • Operating expenses increased slightly by 0.43 percent from effective cost management. • Pre-provision operating profit increased by THB 1,169 million or 5.43 percent from growing income base. • Impairment less of loans and debt securities expenses decreased by 24.07 percent while income tax expense increased as the tax benefit has been fully utilized since May 2018. • Net profit totaled THB 14,703 million, an increase of THB 893 million or 6.47 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
2018
2017
46,288
44,366
Variance Increase/ Percentage (Decrease)
1,922
1,743 1,365 108 25 2,631 3,143 17,551 17,759 24,255 22,074
Interest Expenses
15,250
Deposits Interbank and Money Market Items Fund Contributed to FIDF and DPA Debts Issued and Borrowing Borrowing Fee
14,956
4.33
378 27.69 83 332.00 (512) (16.29) (208) (1.17) 2,181 9.88 294
1.97
9,071 8,699 372 4.28 997 792 205 25.88 3,482 3,348 134 4.00 1,690 2,110 (420) (19.91) 10 7 3 42.86
Net Interest Income
31,038
29,410
1,628
5.54
In 2018, the Bank and its subsidiaries’ net interest income totaled THB 31,038 million, an increase of THB 1,628 million or 5.54 percent from last year. • Interest income totaled THB 46,288 million, an increase of THB 1,922 million or 4.33 percent from growing loan volume, especially hire purchase loan that grew 13.44 percent from the previous year. • Interest expense totaled THB 15,250 million, an increase of THB 294 million or 1.97 percent mainly from cost of fund management following liquidity strategy. Consequently, interest spread in 2018 was at 3.06 percent, maintained from the previous year. (Unit: Percent)
4Q17
1Q18
2Q18
3Q18
4Q18
2017
2018
Average Policy Interest Rate
1.50
1.50
1.50
1.50
1.54
1.50
1.51
Yield Cost of Fund Interest Spread
4.87 4.87 4.92 4.92 4.95 4.93 4.91 1.85 1.86 1.87 1.84 1.85 1.87 1.86 3.02 3.00 3.06 3.08 3.10 3.06 3.06
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THANACHART BANK PUBLIC COMPANY LIMITED
Non-interest Income Non-interest Income
Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments Share of Profit from Investments in Associated Companies Accounted for under Equity Method Net Insurance Income Dividend Income Other Income Total Other Operating Income Non-interest Income
(Unit: THB million)
Variance Increase / Percentage (Decrease)
2018
2017
6,627
5,897
730
12.38
357 (85)
548 1,113
(191) (1,198)
(34.85) (107.64)
299 2,937 411 1,655
200 2,928 464 1,422
99 9 (53) 233
49.50 0.31 (11.42) 16.39
5,574
6,675
(1,101)
(16.49)
12,201
12,572
(371)
(2.95)
In 2018, non-interest income of the Bank and its subsidiaries totaled THB 12,201 million, a decrease of THB 371 million or 2.95 percent from last year. This was mainly due to a decrease in gain on investments. • Net fee and service income was in the amount of THB 6,627 million, an increase of THB 730 million or 12.38 percent, mainly from fund management fee and insurance commission income. • Other operating income totaled THB 5,574 million, a decrease of THB 1,101 million or 16.49 percent from last year. This was mainly due to gain on investment which declined THB 1,198 million as a result of investment portfolio adjustment in accordance to the market environment. Due to the reasons above, non-interest income ratio for 2018 was 28.22 percent, a decrease from 29.95 percent last year.
Other Operating Expenses Other Operating Expenses
(Unit: THB million)
2018
2017
Variance Increase / Percentage (Decrease)
Employee’s Expenses Premises and Equipment Expenses Taxes and Duties Directors’ Remuneration Other Expenses
11,171 11,981 (810) (6.76) 2,602 2,806 (204) (7.27) 713 726 (13) (1.79) 58 53 5 9.43 5,981 4,871 1,110 22.79
Total Other Operating Expenses
20,525
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ANNUAL REPORT 2018
20,437
88
0.43
In 2018, other operating expenses of the Bank and its subsidiaries totaled THB 20,525 million, an increase of THB 88 million or 0.43 percent from last year. Consequently, cost to income ratio of 2018 was at 47.47 percent, a decrease from 48.68 percent in the previous year.
Impairment Losses of Loans and Debt Securities Impairment Losses of Loans and Debt Securities
Impairment losses of loans and debt securities Credit Cost (percentage)
(Unit: THB million)
Variance Increase / Percentage (Decrease)
2018
2017
4,741
6,244
(1,503)
(24.07)
0.57
0.79
(0.22)
(27.85)
In 2018, the Bank and its subsidiaries had THB 4,741 million impairment loss of loans and debt securities, a decrease of THB 1,503 million or 24.07 percent from the previous year. Credit cost was at 0.57 percent, lower than 0.79 percent last year.
Financial Position of the Bank and Its Subsidiaries’ Consolidated Statements of Financial Position
Assets Cash Interbank and money market items - net Investments - net Loans to customers Accrued interest receivables Allowance for doubtful accounts and Revaluation allowance for debt restructuring Properties foreclosed - net Land, premises and equipment - net Goodwill and intangible assets - net Other assets Total Assets
31 December 2018
(Unit: THB million)
31 December 2017
Variance from 2017 Increase / Percentage (Decrease)
11,019 11,453 (434) (3.79) 97,568 94,651 2,917 3.08 161,078 167,368 (6,290) (3.76) 753,498 711,675 41,823 5.88 645 589 56 9.51 (23,652) 2,815 7,996 19,790 15,855 1,046,612
(24,034) 2,793 8,622 20,202 16,238 1,009,557
382 22 (626) (412) (383) 37,055
(1.59) 0.79 (7.26) (2.04) (2.36) 3.67
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THANACHART BANK PUBLIC COMPANY LIMITED
Assets As of 31 December 2018, the Bank and its subsidiaries’ total assets amounted to THB 1,046,612 million, an increase of THB 37,055 million or 3.67 percent from the end of 2017. The key changes are as follows: • Net interbank and money market items were in the amount of THB 97,568 million, an increase of THB 2,917 million or 3.08 percent from the end of last year, mainly due to liquidity management. • Net investments totaled THB 161,078 million, a decrease of THB 6,290 million or 3.76 percent from the end of last year, mainly due to management for suitable yield return. • Loans totaled THB 753,498 million, an increase of THB 41,823 million or 5.88 percent from the end of last year from retail and SME loans. In particular, hire purchase loans have experienced good growth of 13.44 percent, a result of an improved internal process and recovered automotive market, allowing the Bank to maintain a market leader position. The proportion of retail to corporate and SME loans was 74 to 26 percent. (Unit: THB million)
Consolidated Statements 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 2018
31 December 2017
Variance from 2017 Increase / Percentage (Decrease)
752,160 716,278 35,882 5.01 71,955 82,424 (10,469) (12.70) 1,163 1,989 (826) (41.53) 43,079 39,308 3,771 9.59 3,875 3,638 237 6.51 5,729 5,476 253 4.62 24,445 24,236 209 0.86 902,406 873,349 29,057 3.33 141,699 134,290 7,409 5.52 2,507 1,918 589 30.71 1,046,612 1,009,557 37,055 3.67
Liabilities and Equity The Bank and its subsidiaries’ total liabilities as of 31 December 2018 amounted to THB 902,406 million, an increased of THB 29,057 million or 3.33 percent from the end of 2017. The key changes are as follows: • Deposits totaled THB 752,160 million, an increase of THB 35,882 million or 5.01 percent from the end of last year. An increase was mainly due to saving deposits. As a result, CASA ratio was 48.52 percent, an increase from 42.93 percent at the end of last year. • Debt issued and borrowings totaled THB 43,079 million, an increase of THB 3,771 million or 9.59 percent mainly from issurance and offering of subsidiary company.
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ANNUAL REPORT 2018
Shareholders’ equity as of 31 December 2018 was in the amount of THB 144,206 million, an increase of THB 7,998 million or 5.87 percent from the end of 2017. The details are as follows: • The Bank’s shareholders’ equity was in the amount of THB 141,699 million, an increase of THB 7,409 million or 5.52 percent. This was mainly due to profitable operating results of the Bank and its subsidiaries in 2018 which totaled THB 14,703 million, mark to market on investment which decreased by THB 1,063 million and dividend payment of THB 6,247 million. • Equity attributable to non-controlling interests was in the amount of THB 2,507 million, an increase of THB 589 million or 30.71 percent, a result of profitable operating results of subsidiaries.
Asset Quality The asset quality was considered based on consolidated financial statements.
1. Loans 1.1 Loans to customers and accrued interest receivables As of 31 December 2018, the Bank and its subsidiaries’ loan to customers and accrued interest receivables totaled THB 754,143 million, increased from the previous year by THB 41,879 million or 5.88 percent. Hire purchase loans expanded by 13.44 percent, contributed by process improvement and the recovering automotive market. Other retail loans decreased by 0.33 percent. Housing loans grew by 7.07 percent. Corporate and commercial loans declined 6.95 percent from the previous year. The retail to corporate and SME loans ratio was 74 percent to 26 percent. In addition, the Bank managed NPLs and maintained the strength of asset quality. In 2018, the Bank and its subsidiaries carried out debt restructuring agreements with debtors in a number of ways; changing repayment conditions, transfers of assets and/or equity shares and/ or amending repayment terms, totaling 1,165 accounts whose accounting outstanding pre-restructuring was THB 2,403 million. At the end of 2018, the Bank and its subsidiaries had 6,620 restructured accounts, and the principle and accrued interest amounted to THB 9,755 million.
Loan diversification
At the end of 2018, hire purchase loans accounted for 55.88 percent, followed by corporate and SME loans of 25.85 percent, housing loans of 14.58 percent, and others of 3.69 percent. Structure Loans (THB million)
800,000
17.99%
3.99% 11.41% 16.68%
3.90% 11.43% 16.08%
3.79% 11.51% 15.35%
3.69% 11.48% 14.37%
14.75%
14.42%
14.50%
14.54%
14.58%
14.58%
51.81%
52.15%
53.42%
54.06%
54.77%
55.88%
600,000
4.26% 11.05% 18.56%
4.07% 11.00%
3.94% 11.26%
4.02% 11.42%
19.06%
18.25%
400,000
14.89%
14.76%
200,000
51.23%
51.11%
0
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 HP
Housing
Corporate
SME
Other
027
THANACHART BANK PUBLIC COMPANY LIMITED
1.2 Loans to customers’ classified in accordance with the BOT’s regulation of the Bank and its financial institution subsidiary As of 31 December 2018, the Bank and its subsidiaries that are financial institutions (Asset Management Company) had an amount of loan to customers and accrued interest receivables classified in accordance with the BOT’s guidelines of THB 701,652 million, increased from the previous year by THB 34,081 million or 5.11 percent. Allowance for doubtful account records as of 31 December 2018, was 21,117 million and total allowance for doubtful accounts to total loans and accrued interest receivable was 3.01 percent.
Borrowers classified by the BOT’s regulations (Unit: THB million)
Loans and accrued interest receivables 31 December 2018
31 December 2017
Allowance for doubtful accounts 31 December 2018
31 December 2017
Normal Special mention Substandard Doubtful Doubtful of loss
656,396 624,828 4,127 3,310 27,759 26,304 2,438 2,336 4,602 5,938 1,617 2,219 3,171 2,672 1,155 823 9,724 7,829 3,562 3,013
Total
701,652 667,571 12,899 11,701
Additional allowance for doubtful accounts
8,218
10,017
Total allowance for doubtful accounts
21,117
21,718
Ratio of total allowance for doubtful accounts to loans and accrued interest receivables (percentage)
3.01
3.25
1.3 Non-performing Loans As the market and economic conditions were recovering, the Bank and its subsidiaries managed to reduce NPLs through systematic and effective control. NPLs as of 31 December 2018 was at THB 19,329 million, an increase of THB 1,221 million or 6.74 percent from the end of last year as a result of a default of corporate loan. As a result, the NPL ratio of the Bank and its subsidiaries remained at 2.30 percent, the same as the end of last year. For Bank only, NPLs increased by THB 1,493 million from the end of last year. Consequently, NPL ratio of the Bank was at 2.02 percent, an increase from 1.94 percent at the end of last year. Coverage ratio of the Bank and its subsidiaries as of 31 December 2018 was at 123.20 percent. The Bank and its subsidiaries had an excess reserve of THB 8,439 million according to BOT’s regulations, and a reserve to required reserve ratio of 154.90 percent as of 31 December 2018. The coverage ratio of the Bank as of 31 December 2018 was at 124.72 percent. The Bank had an excess reserve according to BOT’s regulations of THB 7,820 million and a reserve to required reserve ratio of 165.07 percent.
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ANNUAL REPORT 2018
Non-performing Loans TBANK Only
NPL-gross Total Allowance* NPL-gross to Total Loans NPL-net to Total Loans Reserve to Required Reserve Coverage Ratio
(THB million) (THB million) (Percentage) (Percentage) (Percentage) (Percentage)
TBANK and its subsidiaries
31 December 2018
31 December 2017
31 December 2018
31 December 2017
15,905 19,837 2.02 1.24 165.07 124.72
14,412 20,149 1.94 1.19 191.59 139.80
19,329 23,812 2.30 1.22 154.90 123.20
18,108 24,278 2.30 1.19 172.91 134.07
* Including revaluation allowance for debt restructuring
Consolidated Financial Statement Non-performing Loans (THB Million) and NPL Ratio (Percent) of TBANK and Its Subsidiaries 18,108
2.30% 4Q17
19,146
2.38%
1Q18
18,622
2.25%
19,090
2.42%
2Q18
3Q18
Non-performing Loans
Coverage Ratio (Percent) and Reserve to Required Reserve (Percent) of TBANK and Its Subsidiaries
19,329 172.91%
169.38%
165.67%
160.61%
154.90%
2.30%
134.07%
130.33%
132.34%
128.18%
123.20%
4Q18
4Q17
1Q18
2Q18
3Q18
4Q18
Coverage Ratio Reserve to Required Reserve
NPL Ratio
Separate Financial Statement Non-performing Loans (THB Million) and NPL Ratio (Percent) of TBANK 14,412
1.94% 4Q17
15,399
2.03%
1Q18
14,865
1.91% 2Q18
Non-performing Loans
15,281
2.06%
3Q18 NPL Ratio
Coverage Ratio (Percent) and Reserve to Required Reserve (Percent) of TBANK 15,905 191.59%
186.45%
181.93%
174.16%
165.07%
2.02%
139.80%
134.73%
137.01%
132.02%
124.72%
4Q18
4Q17
1Q18
2Q18
3Q18
4Q18
Coverage Ratio Reserve to Required Reserve
029
THANACHART BANK PUBLIC COMPANY LIMITED
2. Investments in securities In 2018, the Bank and its subsidiaries had a total amount of investment in securities of THB 161,078 million. A major portion of approximately 69.97 percent was in government and state enterprises securities, followed by 13.83 percent in private debt securities. After adding (deducting) allowance for change in values and impairment, net investment decreased from 2017 of THB 167,368 million. Details of securities investment were as follows: Securities Investment classified by types of instruments (Unit: THB million)
Type of investment
Debt securities Government and state enterprises securities • Trading • Available-for-sale • Held-to-maturity Private debt securities • Trading • Available-for-sale • Held-to-maturity Foreign debt securities • Trading • Available-for-sale • Held-to-maturity Equity securities Listed securities • Trading • Available-for-sale Investment in receivables purchased • Held-to-maturity General Investment Total debt securities Add (less) Allowance for change in value Allowance for impairment Total investment - net
31 December 2018
Percentage
31 December 2017
Percentage
12,300 100,009 381
7.64 62.09 0.24
9,119 113,782 42
5.45 67.98 0.03
693 21,361 220
0.43 13.26 0.14
232 24,009 240
0.14 14.35 0.14
0 17,385 0
0.00 10.79 0.00
0 10,441 0
0.00 6.24 0.00
1,079 4,464
0.67 2.77
1,749 3,147
1.04 1.88
0 3,640 161,532 (446) (8)
0.00 2.26 100.29 (0.28) (0.01)
0 3,662 166,423 955 (10)
0.00 2.19 99.44 0.57 (0.01)
161,078
100.00
167,368
100.00
Liquidity As of 31 December 2018, loans to deposits and debt issued and borrowings ratio of the Bank and its subsidiaries was 94.75 percent, a slight improvement from 94.19 percent at the end of 2017, due to liquidity management in coherence with market condition. The Bank maintained its strong liquidity with a high level of liquid and low risk assets portion. 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 2018 was higher than the 80-percent criteria prescribed by the BOT.
030
ANNUAL REPORT 2018
At the end of 2018, the Bank and its subsidiaries spent cash in operating activities of THB 9,304 million, from investment activities of THB 13,193 million, and used in financing activities of THB 4,323 million, attributed to a net decrease in cash of THB 434 million. At the end of 2018, the Bank had an amount of THB 11,019 million in cash and cash equivalents. Key items consisted of the followings: - Cash flow spent in operating activities mainly stemmed from increases in debts issued by THB 53,303 million, offset by deposit growth of THB 35,882 million and decrease in NPAs by THB 6,242 million. - Cash flows from investing activities were largely a result of a decrease in investment in investment securities of THB 10,346 million. - Cash flows used in financing activities were spent on repayment of borrowing of THB 10,749 million and dividend payment of THB 6,247 million, while cash flows received from borrowing were THB 14,520 million. (Unit: THB million)
Major changes items
2018
2017
Net cash flows from operating activities Net cash flows from (used in) investing activities Net cash flows used in financing activities
(9,304) 13,193 (4,323)
2,615 14,195 (17,434)
Net decrease in cash Cash at beginning of the year
(434) 11,453
(624) 12,077
Cash at end of the year
11,019
11,453
Relations between sources and uses of funds In 2018, the Bank and its subsidiaries’ sources of fund from deposits and borrowings were of THB 752,160 million and THB 43,079 million, respectively. Use of fund in giving credits was THB 753,498 million and investments before adjustment was of THB 161,532 million. List of sources and uses of major fund by remaining tenor to 31 December 2018, the record date of the financial statement, are as follows: Type
At call Less than 1 year Over 1 year Unspecified Total THB million Percent THB million Percent THB million Percent THB million Percent THB million Percent
Sources of fund
Deposits 364,977 45.90 342,847 43.11 44,336 5.58 Borrowing 334 0.04 5,600 0.70 37,145 4.67
Total sources of fund 365,311
45.94 348,447
43.81
81,481
10.25
0 0.00 752,160 94.580 0 0.00 43,079 5.42 0
0.00
795,239 100.00
Uses of fund Loans(1) 40,263 4.40 187,204 20.46 526,031 57.49 0 0.00 753,498 82.35 Investment 5 0.00 69,153 7.56 83,190 9.09 9,184 1.00 161,532 17.65 Total uses of fund Note
(1)
40,268
4.40 256,357
28.02 609,221
66.58
9,184
1.00
915,030 100.00
Outstanding of loans at call includes stop-accrued loans
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THANACHART BANK PUBLIC COMPANY LIMITED
From the breakdown of sources and uses of fund by remaining tenor of the financial instruments as of 31 December 2018, sources of funds consisted of a major portion of callable deposits of 45.90 percent and deposits reaching maturity in less than 1 year of 43.11 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 57.49 percent and loans with remaining tenors of less than 1 year of 20.46 percent of total uses of fund. However, this incongruence between the sources and uses of funds is 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
As of 31 December 2018, the Bank and its subsidiaries’ total commitments increased by THB 3,910 million (4.70 percent) from THB 83,196 million at the end of December 2017. This was largely a result of an elevation in other commitments as shown in the table below: (Unit: THB million)
31 December 2018
303 283 759 2,402
31 December 2017
115 270 1,045 2,291
Variance from 2017 Increase / Percentage (Decrease)
Aval to bills Liability under unmatured import bills Letter of credits Loan guarantee Other obligations Committed (but not drawn) overdraft Others
22,341 23,832 (1,491) (6.26) 61,018 55,643 5,375 9.66
Total
87,106
83,196
188 13 (286) 111
3,910
163.48 4.81 (27.37) 4.85
4.70
Capital Adequacy As of 31 December 2018, the Bank’s capital according to Basel III totaled THB 131,859 million, of which an amount of THB 104,481 million was Tier I capital and THB 27,378 million was Tier II capital. The capital adequacy ratio was at 19.45 percent compared to 18.94 percent at the end of 2017, comprising 15.42 percent of Tier I capital and 4.03 percent of the Tier II capital. However, the capital adequacy ratio was well over the minimum requirement of BOT of not below 10.375 percent. Details were as follows:
Capital Adequacy Ratio 31 December 2018 THB million Percentage
Tier I capital Total capital funds
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ANNUAL REPORT 2018
104,481 131,859
15.42 19.45
31 December 2017 THB million Percentage
98,209 125,527
14.81 18.94
Operating Results of Subsidiaries (Unit: THB million)
Percent of Holding Direct / Indirect (Percent)
Net Profit (Loss) 2018 2017
Thanachart Bank Public Company Limited Consolidated Financial Statements 14,703 Thanachart Securities Public Company Limited 100.00 593 Thanachart Fund Management Company Limited 75.00 655 Thanachart Insurance Public Company Limited 100.00 1,042 TS Asset Management Company Limited 100.00 237 Ratchthani Leasing Public Company Limited 65.18 1,641
13,810 609 426 1,051 210 1,126
Thanachart Securities Public Company Limited Average daily trading volume of Thanachart Securities Public Company Limited in 2018 was THB 3,152 million, a decrease from THB 3,388 million in the previous year. Market share of securities trading was at 3.11 percent, a decrease from the previous year of 3.78 percent. The trading volume could be divided into 50.56 percent of retails, 36.23 percent of institutions, and 13.21 percent of foreign investors. Net profit for the year ended 31 December 2018 amounted to THB 593 million, a decrease of THB 16 million or 2.63 percent from the previous year. Total income decreased by 6.14 percent, due to the brokerage fees which decreased in line with the trading volume of the stock market during the period. At the same time, fees and service income also decreased. However, interest income on margin loans increased from higher credit balances. Total expenses declined by 8.14 percent which was in line with the decrease in total income and the company’s cost control policy. As of 31 December 2018, the company maintained its liquidity ratio (Net Liquid Capital Rules: NCR) at 37.74 percent, higher than the minimum requirement regulated by the Securities and Exchange Commissions (“SEC”) of 7.00 percent of general indebtedness and securities pledged.
Thanachart Fund Management Company Limited As of 31 December 2018, Thanachart Fund Management Company Limited had assets under management of THB 221,360 million, a decrease of THB 7,230 million or 3.16 percent from the end of 2017. Assets under management comprised of 86.59 percent mutual funds, 7.28 percent provident funds, and 6.13 percent private funds. Mutual fund business of the company ranked 8 with market share of 3.83 percent (As of 28 December 2018). Provident fund business ranked 13 with market share of 1.43 percent (As of 30 November 2018) while private fund business ranked 12 with market share of 1.38 percent (As of 30 November 2018). For operating results in 2018, the company had a net profit of THB 655 million, an increase of THB 229 million or 53.76 percent from that of the previous year. This was due to an increase in fund management fees of equity funds which increased at the beginning of the year.
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THANACHART BANK PUBLIC COMPANY LIMITED
Thanachart Insurance Public Company Limited
Ratchthani Leasing Public Company Limited
In 2018, Thanachart Insurance Public Company Limited had total insurance premium of THB 7,987 million, an increase of THB 481 million or 6.41 percent from the previous year. The increase was due to higher sales volumes through the Bank’s branches, dealers and brokers.
As of 31 December 2018, Ratchthani Leasing Public Company Limited has still had a strong financial structure. The company’s total assets were THB 47,531 million, an increase of THB 8,039 million or 20.36 percent from the end of the previous year. The company had hire purchase loans and financial leases in the amount of THB 46,412 million, an increase of THB 7,813 million or 20.24 percent. This was mainly from an increase in truck hire purchase. Moreover, the hire purchase loans accounted for 97.64 percent of the total assets. Total liabilities and shareholders’ equity were THB 40,336 million and THB 7,195 million, respectively.
For operating results, the company had a net profit in 2018 of THB 1,042 million, a decrease of THB 9 million or 0.86 percent from the previous year. This was due to higher claims and increasing in its operating expenses.
TS Asset Management Company Limited TS Asset Management Company Limited has been managing non-performing debts in accordance with the policy and business plan of Thanachart Group continuously. As a result, on 31 December 2018, the company’s the total assets were THB 2,498 million, a decrease of THB 11 million or 0.44 percent from the end of last year. For operating result in 2018, the company had a net profit of THB 237 million, an increase of THB 27 million or 12.86 percent from the previous year. This was mainly due to the fact that there were gains on debts repayment, gains on debts transferred, and gains on selling NPA.
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ANNUAL REPORT 2018
Net profit for the year 2018 amounted to THB 1,641 million, an increase of THB 515 million or 45.74 percent from the previous year. Total income of the company amounted to THB 3,827 million, an increase of THB 520 million or 15.97 percent. This was due to the fact that the company has been able to maintain its hire purchase market share. At the same time, financial costs were THB 870 million, a decrease of THB 13 million or 1.47 percent, due to the acquisition of low cost borrowings to support new lending in the year 2018. Provision expenses amounted to THB 403 million, a decrease of THB 121 million or 23.09 percent from the previous year, due to the improved in its asset quality. However, such provision expenses have already included in general provision that the company decided to add on for supporting the IFRS9 implementation in 2020.
NATURE OF BUSINESS OPERATIONS An Overview of the Business Operation Thanachart Bank Public Company Limited (“TBANK” or “the Bank”) commenced its operation on 22 April 2002 with Thanachart Capital Public Company Limited (“TCAP”) as the major shareholder. On 21 December 2006, the Bank of Thailand (“BOT”) granted approval for TBANK and TCAP to form financial business group in consolidation and having TCAP as a parent company. In 2007, the Bank of Nova Scotia (“Scotiabank”) became our strategic partner by holding 24.98 percent of TBANK shares, which later increased to 48.99 percent. The current major shareholders are TCAP and Scotiabank, and in 2011, the Bank merged with Siam City Bank Public Company Limited (“SCIB”). TBANK business structure, TCAP as a parent company, consists of two groups: 1) Financial Group and 2) Supporting Group, which serves a full range of financial services through TBANK branch network and service outlet. It is strongly committed to the good corporate governance principles.
Companies of Thanachart Financial Conglomerate Companies in Financial Group 1. Thanachart Capital Public Company Limited (“TCAP”) operates as the holding company being a parent company of Thanachart Financial Conglomerate. 2. Thanachart Bank Public Company Limited (“TBANK”) operates commercial banking business and other businesses permitted by the BOT, such as life and non-life insurance broker, and securities such as securities brokerage, proprietary trading, unit trust underwriting, mutual fund trustee service, provident fund custodian service, debt instrument underwriting and trading, securities registrar, and gold derivative trading. 3. Thanachart Securities Public Company Limited (“TNS”) was granted a Full-Services 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. In addition, TNS was granted a Derivetive Business Sor 1 License for derivative brokerage and proprietary trading. 4. Thanachart Fund Management Company Limited (“TFUND”), which is a joint venture between TBANK (holding 75 percent of the total shares) and the Government Saving Bank (holding 25 percent shares), operates a full range of investment management services in mutual fund management business, private fund and provident fund management business, and investment advisory business. 5. Thanachart Insurance Public Company Limited (“TNI”) operates a non-life insurance business and a disaster insurance business such as fire insurances, automobile insurances, marine and transportation insurances miscellaneous insurance, and investment business. 6. MBK Life Assurance Public Company Limited (“MBKLIFE”) operates a life insurance business. The Company provides individual and group life insurance to assure savings. Life and health protection is also offered to individuals, institutions and organizations in general through the Company’s sale channels of brokers such as TM Broker Company Limited, and other brokerage companies; the Company’s sale channels of employees, the Company’s electronic sales channels, and other channels that are not TBANK or its subsidiaries.
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THANACHART BANK PUBLIC COMPANY LIMITED
7. Thanachart Group Leasing Company Limited (“TGL”) operates a hire purchase business for cars. At present, there is no new business; only existing hire purchase contracts remain. 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; including hire purchase businesses and leasing property which are also THANI’s core businesses. 9. NFS Asset Management Company Limited (“NFS AMC”) is permitted to operate an asset management business by buying or receiving transfers of NPLs and NPAs from financial institutions under Thanachart Group as well as others. 10. MAX Asset Management Company Limited (“MAX AMC”) is permitted to operate an asset management business by buying or receiving transfers of NPLs and NPAs from other financial institutions. 11. TS Asset Management Company Limited (“TS AMC”) operates and asset management business by buying or receiving transfers of NPLs and NPAs from SCIB and TBANK. 12. National Leasing Company Limited (“Nationan Leasing”) which dissolved on 31 October 2017 and registration of liquidation has been completed by the registrar dated 22 January 2019.
Companies in Supporting Group 1. Thanachart Management and Services Company Limited (“TMS”) provides services to the Group’s service staff. 2. Thanachart Training and Development Company Limited (“TTD”) organizes training activities for employees of member companies of Thanachart Group. 3. Thanachart Broker Company Limited (“TBroker”) operates as non-life insurance and life insurance broker, provides services of registration, car and motorcycle tax renewal to clients of Thanachart Financial Group, introduces the Bank’s financial products, and renews motor insurance policies for the Bank’s hire purchase customers. Their services include tax follow-ups, collection of taxes, insurance premiums and related service fees, debt collection specifically annual car tax renewal for the Bank’s hire purchase customers. Tax-follow ups, collection of taxes, insurance premiums and related service fees are also included. The company operates other businesses related to life and non-life insurane as well. 4. Security SCIB Services Company Limited (“SCIB Services”) (formerly known as “SCIB Services Company Limited”) provides general services to TBANK and companies
036
ANNUAL REPORT 2018
in the Group, such as janitor, security, delivery, car rental, and outsourcing service. 5. TM Broker Company Limited (“TM Broker”) operates a brokerage business of life and non-life insurance by recommending products to customers of companies under MBK Group, Thanachart Group and business alliance of the shareholding companies, not including TBANK and its subsidiaries. Moreover, TM Broker organizes training for TCAP employees, MBK employees, partners, employees of partner companies, and individuals interested in becoming insurance brokers or providers. 6. MT Service 2016 Company Limited (“MT Service”) provides back office and business support to companies under Thanachart Group. 7. RTN Insurance Broker Company Limited (“RTN”) operates non-life insurance and life insurance brokerage and other businesses related to non-life insurance and life insurance businesses as required by law.
Business Policy and Strategies of Thanachart Group Thanachart Group aims to drive and advance continuously at being an organization with high capacity and flexibility in delivering excellent customer experience and being the customer’s main bank by offering complete financial products, services, and innovations through various distribution channels. This is to fullfil all of customers’ financial needs in the digital era under the vision “to be the leading bank at providing fully integrated solutions to our customers’ complete financial needs by offering the highest quality products, services, and advice.” The vision is comprised of the following 3 main concepts: universal banking, customer centricity in the development of products and services for each group of customers, and the collaboration of all business units in delivering excellent experience to customers. Moreover, aside from the cooperation within Thanachart Group, Thanachart Group also has an important business partner, Scotiabank, who has been providing consistent support through knowledge, expertise, and financial innovation. This has contributed to Thanachart Group’s development in operating systems, work processes, IT, innovation, and financial servicing. Some examples include the CRM Tools for Sales and Service, a significant tool that enhances advisory and introduces products that match customers’ needs; LEAP for Internet Banking and Mobile Banking, a secure system that aids in advancing TBANK into
a Digital Bank in order to gain access and respond to the changing lifestyles of customers. Another example is LOS (Loan Origination System), a modern loan approval system that uplifts the quality of the Bank’s loan approvals to be more accurate and quick, while reducing the risk of bad loans by using the reliable Credit Scoring. Credit Scoring elevates loan assessment efficiency, manages risk credit, and customer relations to provide them with satisfying experiences. Apart from this, Credit Scoring also aids in increasing product holdings to boost revenue for the Bank. In 2019, Thanachart Group policies and management approaches place importance on providing services to customers with a fast and focused principle. The group prioritizes maintaining the position as the leader in the Automotive Lending industry, developing relationships with SME customers, growing Main Bank customers and adhering to the corporate culture of strict risk management. Thanachart Group has laid out its strategies and directions as below: 1. Reorganizing the executive chart and establishing new business units in response to the Business Plan and the Customer Journey to be able to deliver financial products and services efficiently, and meet the customers’ demands in every channel of the Bank. 2. Being a data-driven organization by leveraging data to create business values in forms of acquisition, retention and deepening. 3. Developing and improving the end-to-end process for agility and adopting automation for quicker and more accurate customer services. 4. Developing people to be professional and able to provide financial advice and solutions by focusing on knowledge and new set of skills both in terms of Up-Skill and Re-Skill of the employee in alignment with a more complicated financial environment during the digital era and changing customers’ demand. In addition, Thanachart Group has also communicated its business strategy to employees at all levels in all business units, in an effort that all employees endeavor to achieve Thanachart Group’s vision, while adhering to 3 business philosophies: 1. Employee Trust: Thanachart Group believes that employees are its most valuable assets and owes its growth to the competence and integrity of its employees.
2. Dedication for Excellence: Thanachart Group earnestly focuses on excellence by 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 its 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
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THANACHART BANK PUBLIC COMPANY LIMITED
within the existing resources including expertise of operations staff and various information technologies, and to reduce staffing costs. The centralized support services available new 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 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 management of each
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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 has a system that ensures 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 2018
Thanachart Capital Public Company Limited
Scotia Netherlands Holdings B.V.
Commercial Banking Business
Asset Management Business
Insurance Business
Supporting Business
16.56% 48.99%
50.96%
Thanachart Bank Public Company Limited
100.00%
83.44%
51.00%
NFS Asset Management MAX Asset Management Company Limited Company Limited
MBK Life Assurance Public Company Limited
49.00%
51.00% TM Broker Company Limited
51.00% MT Service 2016 Company Limited
Financial Business
100.00% Thanachart Securities Public Company Limited
Securities Business
75.00% Thanachart Fund Management Company Limited
100.00% Insurance Business
Thanachart Insurance Public Company Limited
100.00% TS Asset Management Company Limited
Asset Management
49.00% 49.00%
Supporting Business 100.00% Thanachart Management and Service Company Limited
100.00%
25.00% Government Savings Bank
MBK Public Company Limited
Thanachart Broker Company Limited
100.00% Thanachart Training and Development Company Limited
100.00% Security SCIB Service Company Limited
100.00% Thanachart Group Leasing Company Limited
Leasing Business
65.18% Ratchthani Leasing Public Company Limited
100.00% National Leasing Company Limited
100.00% RTN Insurance Broker Company Limited
Notes 1. The above shareholding structure includes shares held by the related parties. 2. On 9 May 2011, 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. The National Leasing Company Limited dissolved on 31 October 2017 and registration of liquidation has been completed by the registrar dated 22 January 2019.
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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 2018, 2017, and 2016 are as follows: Table of income structures of the Bank and its subsidiaries As of 31 December 2018 2017 2016 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
1,743 108 2,631 17,551 24,255
Total Interest Income Interest Expenses
46,288 107.05 44,366 15,250 35.27 14,956
Net Interest Income
31,038
Non-interest Income Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments Shares of Profit from Investments in Associated Companies Accounted for Equity Method Insurance Premium/Life Insurance Premium Income - Net Dividend Income Other Income
4.03 1,365 3.25 1,307 3.24 0.25 25 0.06 30 0.07 6.08 3,143 7.49 3,504 8.68 40.59 17,759 42.30 18,337 45.43 56.10 22,074 52.58 21,708 53.78 105.68 44,886 35.63 16,174
111.20 40.07
71.78 29,410
70.05 28,712
71.13
6,627 357 (85)
15.33 0.83 (0.20)
5,897 548 1,113
14.04 1.31 2.65
5,904 491 714
14.63 1.22 1.77
298
0.69
200
0.48
207
0.51
2,938 411 1,655
6.79 0.95 3.83
2,928 464 1,422
6.97 1.11 3.39
2,689 400 1,249
6.66 0.99 3.09
Total Non-interest Income
12,201
28.22 12,572
29.95 11,654
28.87
Net Operating Income
43,239 100.00 41,982
100.00 40,366
100.00
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Business Operations of Each Business Group Commercial Banking Business The Bank operates its businesses in compliance with the Financial Institutions Business Act and other relevant notifications issued by the BOT. It acted as a non-life and life insurance brokerage agent, an advisor and investment unit distributor for mutual funds, trustee services for mutual funds, custodian services for private fund, securities registrar, and a selling agent for gold derivatives. As of 31 December 2018, the Bank had a total of 512 branches, 24 foreign exchange booths (11 in-branches and 13 stand-alone), 1,780 ATMs (Automatic Teller Machines), 25 CDMs (Cash Deposit Machine), 108 Multi-Function Machines, and 89 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 an effort to constitute customer satisfaction in using the Bank as the main bank, develop various transaction channels, and boost convenience and speed, the Bank continually maintains its focus on expanding customer base and strives to develop products that match the demands of every customer segment. In this way, customers can transact at their own convenience and enjoy flexibility in their lifestyle. Hence, the Bank offers Freever-Lite, a savings account, which
provides features such as inquiring balance/withdrawing cash from all ATM booths, in all banks throughout Thailand, with zero fees for unlimited number of bill payments and inter-bank money transfers via Thanachart Bank ATM booths and Thanachart Connect Mobile App. This enables customers to save transaction fees on withdrawals, transfers, payments - all in one account. To meet the changing lifestyle of customers in electronic financial transactions, the Bank developed the e-SAVINGS account, an electronic savings account giving high interest rate. e-Savings allow customers to carry out unlimited number of deposit/withdrawal transactions anytime, anywhere via Thanachart Connect Mobile App. In addition, to meet economic conditions and provide alternatives in managing savings, the Bank offers Ultra Savings, a savings account giving interest rates comparable to fixed deposits. With Ultra Savings, customers can receive high interest and receive flexibility in withdrawing money. Moreover, to promote the government’s concept of growing the economy sustainably and thoroughly, the Bank issued the Basic Banking Account, in an effort to cater financial services to all sectors by facilitating basic financial services for state welfare cardholders or those aged 65 years and above. 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) Wholesale Banking: The Bank’s products and services are developed to accommodate the requirements of corporate customers. Various forms of credit facilities are available such as the single account scheme with low interest, financial aid program for business operators in the 3 southern border provinces, project finance, trade finance, and financial advisory service. These also include the debt and capital market aspect which is debenture issuance and fundraising
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to be listed in the Stock Exchange of Thailand. Furthermore, customers are offered risk management products such as Interest Rate SWAP (IRS), Forward Contract and Foreign Currency SWAP to hedge against volatile interest or exchange rates. In addition, Cash Management is offered to meet individual demands. 2) Commercial Banking: The Bank offers commercial banking customers flexible and diverse loans based on each customer’s needs. This includes transformation loans for business strengthening (Soft Loans for Machinery Modification Phase 2), a business loan that gives special interest rates for SME enterpreneurs in the S-Curve 10 targeted industries, in an effort to boost efficiency for SME enteprenerus. Another loan program, the SMEs credit guarantee service under the revised portfolio guarantee scheme 6 (PGS6), helps potential entrepreneurs who need credit lines but lack collateral to have access to loans from financial institutions. In addition, this also aids and promotes liquidity for entrepreneurs. Moreover, the Bank supports the financial aid program for business operators in the 3 southern border provinces; the single account scheme, which gives low-interest loans; Top Up facilities, which are additional limits for O/D customers to use as working capital; and letters of guarantee for enterprises or individuals who need to guarantee performance for public and private companies. Aside from this, the Bank also services customers with Cash Management. 3) SME-S: SME-S loans are loans that have a limit of THB 20 million and are offered to small businesses. The loans range from term-loans, overdrafts (OD), promissory notes (PN), to letters of guarantee (LG). These SME loan programs are sold through the Bank’s branches; therefore, branches are responsible to effectively care and service customers. An SME loan specialist is also situated in every district to coordinate with the Bank’s branches so that the needs of SMEs customers and business customers are efficiently served. Competitive Strategies Due to the great and dispersed number of SME customers throughout the country, operational and credit policies have been designed to mirror those of retail
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borrowers. Three diverse product groups have been designed to cater to the needs of retail borrowers: 1) “SME Dai Jai”, with a credit limit of THB 3 million, is geared to customers with limited revenue documents and income proof. In this case, the Bank would send an officer to aid in assessing the business’ revenue. 2) “SME Biz Smart”, with a credit limit of THB 20 million, is geared to customers who need products that meet all financial aspects: savings account, loans, non-life & life insurance, with special interest rates. 3) “SME Single Account”, with a credit limit of THB 20 million, is geared to juristic customers using a single account, with a special interest rate of 5 percent for the first two years. 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. One example is PTT Dealer Financing, cooperation between Wholesale Banking and PTT Public Company Limited, where the Bank recommended and jointly developed loan products to support PTT Dealer Financing operators in providing a well-rounded credit line, both for long-term loans and working capital (who are the Bank’s Commercial Banking customers). In addition, the Bank also developed service efficiency, integrating digital technology in issuing an E-LG: PEA to facilitate and accelerate services for consumers between the Bank and the Provincial Electricity Authority (PEA). The issuance of guarantees, e-Guarantees, letters of guarantee are to guarantee biddings, contracts, operational results, and utility payments. This includes E-GP service, which is an electronic guarantee service and payment service for electronic tender documents under the e-Government procurement of the Comptroller General’s Department. 2.2 Automobile SMEs Characteristics The Bank offers floor plan financing to car dealers who need to use their credit lines to purchase cars, and 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 provides loan services to new car dealers, concentrating on automobile business partners in the captive wholesale finance sector, for the growth of car dealership loans. For the fleet and financial lease sector, the Bank focuses on providing services through existing customers with high potential and financial soundness, concentrating on those who operate cars on large-scales, such as car rentals and transport. 2.3 Trade Finance Characteristics The Bank provides a full range of trade finance products and services including Import Letter of Credit (L/C), Trust Receipt, Collection Agency of D/P and D/A for oversea buyers, Packing Credit, Export Bills Purchased / Discounted, Export Bills for Collection, Letter of Guarantee, Stand-by L/C, and Oversea Money Transfer. Competitive Strategies The main factors that promote trade finance services to customers are accuracy in services, convenience, competitive interest rate and fees. The Bank took into consideration the customers’ needs and the promotion of business transactions as the main concerns. For the corporate clients, the Bank has the target to expand customer base to large scale businesses and SMEs. The Bank provides trade finance credit limit, liquidity supports, and specialist advices on trade finance documents. The Bank also develops trade finance products and services to cater to customer needs. The global business alliance network is useful for fast and convenience service which provides customers’ satisfactory on the Bank’s products and services.
2.4 Automobile Hire Purchase Loans Characteristics The Bank offers four 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 Car”. The Bank had also a new product, “Thanachart Cash Your Book”, where both products serve customers’ need for cash with higher limits and longer installment periods than normal personal loans. The product also allows customers to choose the installment period and amount to suit their debt service ability. In addition, the Bank focuses on developing its products and services to meet the needs of different customers. The Bank developed the On-line service for automotive lending customers under the Automotive Digital Lending Experience campaign, in an effort to facilitate customers in a seamless journey beginning from loan application, monitoring the loan approval status, presenting the sales sheet in accordance with Market Conduct, as well as gaining other special benefits when becoming the Bank’s customer. Competitive Strategies The domestic new car sales in 2018 when compared to 2017 had a growth rate at 20.96 percent. The Bank cooperated in more strategic partnerships with leading carmakers and continuously launched different promotional campaigns to customer segments. This boosted the Bank’s loan growth and upheld the Bank’s position as key player in the new car market sector. As for used car lending, the Bank improved its underwriting policy and process to enhance efficiency of its debt quality control. The Bank also continues to focus on offering Cash Your Car and Cash Your Book to the existing customers via over 500 branches nation-wide.
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2.5 Secured Personal Loans 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”, which enabled existing home loan customers to top up their TBANK home loans. Competitive Strategies 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 Housing and Secured Personal Loan under the Retail and Small Business Product Development as a unit responsible for product development, stipulating conditions, interest rates, and promoting new products through branch channels. Target customers looking for houses and those who need multi-purposed loans using their house as collateral. In addition, the Bank provides service channels where retail customer 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 Loans Characteristics The Bank provides many types of unsecured personal loans. To be accessible and responsive to cover a wide range of customer needs and other needs, therefore, the purpose of loans may or may not be specified. The Bank’s personal loans are served under the product names as follows: 1) Credit Card is a product that provides the line of credit to purchase products / services as cash or allows cardholders to withdraw cash via Cash Advance, Sabai Cash, Cash Transfer, and Smile Plan. The Bank collaborates with VISA and MasterCard to provide credit card in multiple types suitable to customers’ needs under the following names:
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- Thanachart Diamond Card: for customers who wish to accumulate points, gaining 1 point with every THB 25 used with the card. The Diamond Cards come in three types: Diamond (Platinum), Blue Diamond, and Black Diamond (World or Signature). - Thanachart MAX Platinum Card: for customers who do not wish to accumulate points but would like to receive cash back up to 1.25 percent for every spending made via MAX Platinum Card. - Thanachart LIVE Platinum Card: for customers who like the flexibility in paying a lower interest rate than the typical rate (18 percent) at 15 percent. 2) FLASH Plus is a revolving personal loan offered in a form of card product under the name “FLASH Plus”. The product highlights convenient and fast cash withdrawal, transferring and payment by installment accommodating customers’ need of the services any time with the following features: 2.1 Sabai Cash: cash transferred to the customer’s account on the card, with a maximum installment period up to 60 months. 2.2 Cash Transfer: cash transferred to the customer’s account on call, with a minimum repayment of 3 percent for each bill cycle. 2.3 Cash Advance: cash withdrawal via ATMs worldwide, 24 hours, and free of charge, with a minimum repayment of 3 percent for each bill cycle. 2.4 Smile Plan: customers can make installment payment for goods and services purchased at participating stores, with a maximum installment period up to 60 months. 3) Flash 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 0.5 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 or any expenses for obtaining a master’s or doctorate degree. 6) Pension Secured Loan, this is a special multi-purpose loan for government employees who receive monthly pension payment from the Comptroller General’s Department.
Competitive Strategies Products under unsecured personal loans defined competitive strategies on product development, marketing campaign, distribution channel, and appropriate services to serve target customers’ needs. Thus, the Bank provides a variety of products for customers to choose appropriated by life stage and life style. These products have been designed in an easily understandable and practical way for the everyday needs of customers. Group 3 Electronic Products and Services 3.1 Electronic Services for Business Customers Characteristics For better efficiency, the Bank offers electronic products and services to both large-scale companies and individuals through Thanachart Biz and other Bank channels. These services include fund transfers, online settlement for financial transactions through the Bank of Thailand’s Automatic High-volume Transaction Network (BAHTNET), SMART, bill payments service for goods and services, Prompt Pay fund transfers, QR payments, direct debits, payroll, outward remittance, and trade finance. 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 Bank’s sales strategy focuses on utilizing cash management specialists for big and medium-sized companies while using cross-selling and up-selling for small companies and individuals. Furthermore, the Bank plans to increase service channels through the Service Delivery Specialist team to ensure that customers use products safely and effectively. Customers can also direct their inquiries to the call center (1770).
3.2 Electronic Services for Individual Consumers Characteristics The Bank’s financial transactions are facilitated through a variety of channels for efficacy. These channels include fund transfers, ORFT, bill payments, Prompt Pay fund transfers, QR Payments, housing loan balance inquiry and payment services, personal loans, credit card accounts, FLASH Plus, credit reporting services from the National Credit Bureau, buying, selling, and switching of mutual funds from Thanachart Fund, and Pay Alert. Furthermore, the following internet services have been developed for customer needs: - Thanachart Connect - Thanachart iNet - Thanachart SMS Alert Competitive Strategies The Bank focuses on sale strategies through bank branches by cross-selling and up-selling to individual customers. Moreover, preparations to increase service channels have been carried out to attract more customers. These channels emphasize accessibility, simplicity, convenience, and security of service, and receiving money within the same day as the transfer date. Customers can also direct their inquiries to the call center (1770). Group 4 Payments and Merchants 4.1 Payments Characteristics The BIN (Bank Identification Number) Sponsorship is cooperation between the Bank as a member of Visa/ MasterCard and payment facilitators for merchandise payments or through different payment tools. Concurrently, the BIN Sponsorship for e-Wallet service providers maximizes the potential of electronic wallets, enabling 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:
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THANACHART BANK PUBLIC COMPANY LIMITED
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. BIN Sponsorship for payment facilitators helps maximize potential for shops ranging from small shops to large-scale operators, and facilitate merchandise and service payments via Visa or MasterCard. Types of shops can be categorized into 2 types: 1. Brick and mortar shops receive payments for goods and services via the Electronic Data Capture (EDC) machine. 2. E-Commerce shops receive payments for goods and services via Payment Gateway. 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, changes of consumers’ behaviors and attitudes regarding financial transactions. The attempt is also a response to support the National e-Payment strategy. 4.2 Merchants Characteristics The merchants’ service supports payments channels by type of merchants and businesses as follows:
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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. 4. QR Code (QR Pa Ruay) is suitable for small to medium-sized businesses that prefer electronic payments over cash-based payments and wish to pay lower costs than card payment costs. Apart from the printed QR code, merchants can also download the T-Shop application to receive notifications of QR payments, check the sale history, and create a QR code on the screen for flexibility in off-site payments of goods and services. Competitive Strategies The Merchant Acquiring business is geared 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 in the Bank’s products. 4.3 Western Union Characteristics Quick international money reception and sending to over 200 countries through Western Union’s network that meets global security standards.
Competitive Strategies The Bank aims for convenient, quick and secure services for the customers. An alternative channel of ATMs provides the customers with easy money reception and sending at the Bank’s ATMs nationwide. Group 5 Other Products 5.1 Foreign Exchange Service Characteristics The Bank’s services include foreign exchange services in forms of: bank notes and traveler’s cheques, money changers, forward foreign exchange for international business transaction, inward and outward foreign currency transfer for goods and services, transfer for personal accounts, account opening for Foreign Currency Deposit (FCD), etc. Competitive Strategies The Bank has expanded its branch network and currency exchange booths to serve all business sectors and tourists nationwide. The Bank also adjusts exchange rates by mirroring the movements of the global market to provide customers with fair and timely exchange rates. 5.2 Securities Business Support Services Characteristics Securities Business Support Services consist of: Custodian, Fund Supervisor, Bondholder Representative and Registrar and Paying Agent. Competitive Strategies To fully offer all range of services to meet customer needs, the Bank’s custodian and trustee services 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 debentureholder representative, securities registrar and payment agent services.
Factors Influencing Opportunities or Constraints to Business Operations In 2018, the Thai economy continued to grow at 4.1 percent, a slight increase from the previous year. In the first half of the year, the economic growth was relatively strong at 5.0 percent and 4.7 percent in the first and second quarters respectively. The growth was mainly propelled by the exports and tourism sectors. The economic growth was continuously backed by the ongoing expansion in private consumptions of durable goods, hotels and restaurants, private investments in machinery, including government expenditures and investments since the beginning of the year. These were advantages of the government investment projects, particularly the Eastern Economic Corridor (EEC) and several of its measures to stimulate private spending. However, in the latter half of the year, the global economy encountered a number of negative factors e.g. the trade war between the United States of America and China which significantly impacted the global economy, and the rate hike by the US Federal Reserve (Fed) that led to capital outflows from emerging economies and impacted the stability of the regional currencies. Both factors had a direct influence on the Thai economy in the second half of the year. As a result, the economic growth in the third and fourth quarters slowed down to 3.2 percent and 3.7 percent respectively. The overall stability of the Thai economy maintained a good momentum. The headline inflation in 2018 was low at 1.07 percent, still within the BOT’s target range. The unemployment rate was low at 1.05 percent, a slight decrease from the year before, while average wages improved. The foreign stability was also healthy as reflected in the international reserves at a high level compared to short-term offshore debts. The balance on current accounts continued to have a surplus due to robust exports and tourism. However, the capital and finance account balances saw net deficits and the baht currency was volatile due to the capital outflow situation and overseas risk factors. Nevertheless, BOT raised the policy rate for the first time in 7 years from 1.50 percent to 1.75 percent to enhance the ability to implement monetary policies in the future and regulate the stability of the financial system under overseas risk factors that were still highly uncertain. The central
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bank also paid attention to monitoring the search-for-yield behavior in high-risk asset investment as investors might have underpricing of risk, and the debt burden and the debt service ability of households and businesses. The Macroprudential policy was issued to reduce systemic risks: supervisory regulations to oversee housing loans and other related loans to be enforced on housing loans and other related loans entered into contracts from 1 April 2019. Aside from economic and regulatory factors, rapid changes in consumer behaviors and business models in pace with technology disruption compelled the commercial banking industry in 2018 to emphasize IT investment, process improvement, adjustments in branch model and management, and development of various digital platforms for financial services. Strategies were adapted by reducing or waiving transaction fees to be able to compete with new financial services from financial technology (FinTech) operators and competitors from other industries e.g. the telecommunications industry that had an advantage on customer big data. Furthermore, BOT propelled policies that encouraged e-Payment through PromptPay, QR code payments for goods and services through e-Wallet or credit card accounts. Consequently, electronic transactions surged quickly. Benefits were enjoyed by the people in terms of convenience, speed and lower costs, and by the Bank in terms of long-term saving on cash management costs. Opportunities were also presented to other juristic persons to serve as banking agents to provide financial services to bank customers and as a service point for certain types of transactions in place of commercial banks. Amid the tepid global economy, risks from the trade war, and the rising interest rate cycle, the Thai economy in 2019 is likely to enjoy growth at a slower rate despite additional government and private investments in the Eastern Economic Corridor (EEC). Nevertheless, the risk in continuity of the government promotional policies will remain until a new government is established. As a result, some investors have held back their investments to observe the situation. Therefore, corporate lending might face greater challenges. As for the personal loan business, it will benefit from the government’s projects or regulations e.g. the National Digital ID, e-KYC for fundamental transactions, and the peer-to-peer lending platform.
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Industry and Competition Outlook Changing consumer behaviors and IT disruption that transformed the way of life, operation models and economic activities, as well as the emergence of non-bank financial service providers remain key pressures for commercial banks to urgently acclimatize themselves by applying modern technology to financial services in many aspects such as electronic fund transfers or payments via PromptPay and QR code scanning, e-Wallet, personal loans via mobile applications, electronic savings accounts, e-donations, electronic letters of guarantee on Blockchain. Amid the increasingly intensifying competition among commercial banks alone and non-bank players, the commercial banks continue to face pressure from the gradual realization of both direct and indirect impact from several factors such as the reduction or waiver of fees for fund transfers and payments made on mobile banking and internet banking, lower transfer and payment fees on PromptPay, higher reserves to accommodate the International Financial Reporting Standard 9 (IFRS 9), adjustment to elevate Market Conduct standards, uncertainty arising from the trade dispute between the United States of America (“the United States”) and China, which caused severe fluctuations in the money market and impacted Thailand’s export sector, and tightened global monetary policies affecting volatility in the money market. Nevertheless, the commercial banks in general still maintained strong stability as reflected in the high capital adequacy ratio of the entire industry from 18.34 percent, up from 18.20 in 2017, the increased liquidity coverage ratio (LCR) from 180.14 percent to 184.24 percent, higher than the BOT’s minimum requirement. Special mentioned loans of the entire industry decreased from the previous year from 2.55 percent to 2.42 percent. Although the non-performing loan to total loan ratio was 2.93 percent, a slight increase from 2.91 percent in 2017, the banking industry still managed to generate profits as much as THB 207,245 million from THB 187,060 million last year, or 10.8 percent growth. This was contributed by the increase in interest income of 3.8 percent from THB 692,166 million in 2017 in correlation with the industry loan growth of 6.0 percent from THB
12,457,863 million in 2017, in line with the continuous economic expansion, and the decrease of provisions for bad debts, doubtful debts and impairment losses at 12.1 percent from last year’s THB 169,623 million. In 2019, the banking industry overall will encounter economic, social and political conditions that bring about no less challenges from last year, which will put pressures on the ability to conduct business. Such challenges involve the decelerated Thai and global economies from the year before, the policy rate and domestic interest rate raise, high household debts, loan quality in the rising interest rate environment, intensifying competition under the everchanging financial ecosystem due to rapid development in financial technology, regulators’ rules or measures to be enforced or under consideration such as the macroprudential policy, the single-account measure, shifting the financial institution supervision to principle-based from rule-based, and tax imposition on investment gains in bonds through mutual funds. However, propelling the government’s investment and infrastructure projects to continue, revamping city plans of 3 provinces (Chachoengsao, Chonburi and Rayong) in the Eastern Special Economic Zone, including the certainty of the general election remain vital supporting factors to create an investment atmosphere and confidence in the business sector, and to stimulate more private investments and foreign direct investments. If the investment sector and domestic spending grow consistently, they will present positive opportunities for the banking industry to expand corporate loans and some consumer loans. The banking business in general has at least two key issues namely the development of the ability to analyze and leverage from the customer database to get a deep insight to customer behaviors and needs, which will be advantageous to developing innovative financial products and services to suit those needs, and the extension of partnerships to connect more business among each other, leading to market development and access to a broader customer base. Nevertheless, investments to develop technology and digital platform must go on to be able to accommodate changing customer behaviors and needs, while simultaneously prioritizing people development so that they are equipped to provide financial services in the digital age.
Competitive advantage and competitors The Bank operates an integrated banking business with the Bank of Nova Scotia as a strong business partner who provides all of the support to raise the competitiveness and the efficiency of financial services. Examples of the provided support are an efficient risk management system, up-to-date technological innovation, product development and new services. In addition, the Bank has an outstanding business strength that presents various advantages over other banks; strong and high potential subsidiaries ready to provide total financial solutions and integrated customer service to fulfill all forms of customer needs through the mutual fund, private fund and provident fund management business, the securities business, the insurance business and the leasing business. Moreover, the Bank is the leader in automotive lending that offers end-to-end products and services from upstream, midstream to downstream. The Bank provides an advisory service by financial experts, develops new products and financial innovations, has efficient customer-screening tools and applies modern digital technology to operating processes for convenience, swiftness and delivery of excellent customer experience. In the past period, the Bank has prioritized enhancing competitiveness by developing infrastructures and digital technology in its process and services to drive the business and add service value, and elevating staff’s potential and reinforcing skills of every personnel level continuously so that they are ready for a new way of work and the organization’s sustainable growth in the digital age. In addition, business models have been revamped and improved regularly to be able to respond to changing customer behaviors and demands. Customer service channels were developed to be convenient and diverse for each customer segment; normal branches, new branch models namely Thanachart Express and Thanachart Next, telephone and digital channels both online internet banking “Thanachart iNet” and mobile banking application “Thanachart Connect”. The quality of service channels has been developed consistently while maintaining the dedication towards elevating service quality and enabling seamless service integration among the channels, and creating customer confidence on security standards for financial transactions and strict customer confidentiality.
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In 2018, the Bank was considered one of the banks with high growth potential, strong and stable financial status. The Bank was able to secure its position of the automotive lending market leader, grow the lending base at a level that was in line with Thailand’s economic expansion, continue to do well in expanding the business to housing loans and SME loans, and adjust the deposit structure by increasing low-cost savings deposits and lowering fixed deposits. The Bank also managed its cost effectively, resulting in the operating expense to the net operating income ratio to be lower than predicted. Concurrently, the strong asset quality was maintained through systematic and efficient non-performing loan management and the BIS ratio according to Basel III was high. Furthermore, due to financial strength and continuously strong asset quality, Fitch Ratings (Thailand) Co., Ltd. has upgraded the National Long-Term Ratings of the Bank from ”A+(tha)”, to “AA-(tha)”, and the National Long-Term Rating of Thanachart Capital Public Company Limited, the Bank’s holding company, from “A(tha)” to “A+(tha)” and its National Short-Term Rating from “F1(tha)” to “F1+(tha)”. As an overview of 2018, the Bank and its subsidiaries had total assets of THB 1,046,612 million, and loans of THB 753,498 million, or a 5.9 percent increase from the previous year. The net profit was THB 14,703 million, a 6.5 percent increase from last year. In addition, the Bank’s deposits were THB 752,160 million, a 5.0 percent growth. Considering risk management and asset quality, the Bank’s non-performing loan (NPL ratio) was 2.3 percent, similar to the end of last year but lower than the industry average. The capital adequacy ratio was 19.5 percent, higher than the industry average. The Liquidity coverage ratio (LCR) remained above 100 percent, higher than the BOT’s requirement. Accomplishments of the Bank and subsidiaries in 2018 The Bank and the subsidiaries earned a number of accomplishments as seen in awards given by various domestic and international organizations: • The Best Automobile Lending Product of the Year from the Asian Banker Thailand Country Awards 2018, the Bank received this award for the second consecutive year;
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• Outstanding Derivatives House Awards from SET Awards 2018, an event arranged by the Stock Exchange of Thailand in cooperation with Money and Banking magazine, Thanachart Securities Plc. received this award for the second consecutive year; • Outstanding Asset Management Company Awards from SET Awards 2018; an event arranged by the Stock Exchange of Thailand in cooperation with Money and Banking magazine, Thanachart Fund Management Co., Ltd. received this award for the sixth consecutive year; • Best Mutual Fund of the Year 2018 in the Best RMF Fixed Income Fund category for the second time from Money & Banking Awards 2018 by Money and Banking magazine; • Long-Term Equity and Retirement Mutual Fund Awards in the Fixed Income RMF category from Morningstar Thailand Fund Awards 2018, an event arranged by the Stock Exchange of Thailand, the Association of Investment Management Companies and Morningstar Research (Thailand) Co., Ltd., Thanachart Fund Management Co., Ltd. received this award for the fourth consecutive year; • The First Prime Minister’s Insurance Award of the year 2017 from the Prime Minister’s Insurance Awards event arranged by the Office of Insurance Commission, Thanachart Insurance Plc. received the first prize for the third consecutive year. Social responsibility • The Runner Up, Suriyasasidhorn Award in the category of honoring the Royal Institution from the hanging calendar “Celebration of the Chakri Dynasty”, from the 38th Outstanding Calendar Award event held by the Public Relations Association of Thailand; • The plaque of honor given by the Department of Special Investigation (DSI) from helping and preventing a customer from losing THB 500,000 to a first-prize lottery scam gang.
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 (domestic and international), 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 businesses: brokerage business and investment banking business. As of 31 December 2018, the company had a total of 19 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 decisions 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 have desires 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, independent financial advisory business, underwriting service of debt and equity securities both in roles of lead underwriter, counderwriter, and dealer. 7. Securities Registrar covers three types of services, namely, a securities issuance registrar, securities holder registrar for the Employee Stock Option Program (ESOP). 8. Issuer and offerer of structured notes as an added opportunity for customers to access a greater variety of investments, and as an option for investment risk diversification.
Competition and Market Outlook 1. The Thai economy in 2018 was supported by the private consumption growth; consumer goods and automobiles. Public and private investments expanded in the same direction. While Chinese arrivals increased at a slower pace last year, there were more and more tourists from marginal countries such as Malaysia, Laos and Cambodia. The export sector was on a sluggish trend in line with the weakened global economy. The SET Index was down 10.8 percent and closed at 1,563.88 points in 2018, with a daily average trade volume of THB 56.4 billion, an increase of 18.1 percent compared to the daily average of THB 47.8 billion in 2017. The SET Index peaked at 1,852 points in the first quarter of 2018. However, with several risk factors, both domestic and international, in the past year, the SET Index continued to decline for the rest of the year as follows: The first factor: The stricter monetary policy imposed by the Federal Reserve (Fed) of the United States since the Fed’s Chairman, Mr. Jerome Powell, took the office in the beginning of the year. The Fed fund rate was raised from 1.5 percent to 2.5 percent at the end of 2018. The Fed’s balance sheet normalization since the end of 2017 impacted the liquidity of the global capital market. The second factor: Concerns over the economic stability of Emerging Markets where there were issues of capital outflows, accelerated inflation, current account deficits, and decine in interational reserves. These were particularly the case with Latin American countires and Turkey, and other Emerging Markets also consequently suffered. Although Thailand was not bothered with issues of inflation or current account deficits like the other Emerging Markets, there were also continued stock sales. The third factor: The United States’ increasingly stringent trade policies imposed by the President, Mr. Donald Trump, on trade partner countires, especially China, caused a worldwide slowdown in trade volumes. Economies of many Emerging Markets depended heavily on the export industry.
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The fourth factor: The tourism industry which was the key boost to the economic growth for several years started to grow at a decelerated pace due to the shrinkage of Chinese tourists who made up as much as 28 percent of total tourists. However, Thailand’s tourism had a good distribution and tourists from marginal countries such as Malaysia, Laos and Cambodia were on an upward trend last year. The fifth factor: High prices of many medium-small stocks affected by fiercer competition and evolving technology posted inferior performance to the forecast. This was the pressuring factor to the market throughout the past year. In 2019, the Thai economy has a potential to continue the growth at 3.9 percent, primarily reinforced by private consumption directly benefitting from the government stimulation. Public and private investments will see a faster pace than last year after many mega projects; upon the construction of the Orange, Yellow and Pink lines of Skytrain and the disbursement. The export industry is predicted to grow at a slower rate of 3.8 percent from the previous prediction of 7.0 percent growth in 2018. Tourism will also expand at a slower rate because Chinese tourists surged in the previous year and the Chinese economy was dull. The Stock Exchange of Thailand disclosed information from January 2018 to December 2018 that during the period, listed Companies in the SET and MAI had securities value at the IPO price of THB 163,521 million, down by 57 percent compared to 2017. As of December 2018, the SET market capitalization was THB 15.98 trillion, down by 9.1 percent from 2017. MAI market capitalization was THB 240 billion, down by 28.8 percent from 2017. TNS had a market share of 3.11 percent, ranked th 14 among 38 securities companies in total. The competition in 2018 remained continuously intense as last year. The market condition was not favorable to investments despite the fact that the overall market trade volume grew by 18.6 percent year-over-year to THB 56.4 billion per day. Individual investor segmentation would indicate that the trade volume increased from 2 main segments: 39.5 percent increase from foreign investors, 35.8 percent increase from proprietary trading, and 11 percent from institutional investors. On the contrary,
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the trade volume of local investors grew only 2 percent. The company added products and enhanced convenient access to products via the online channel. 2. There were currently 40 members in the Thailand Futures Exchange (TFEX). In 2018, the total trade volume was 104,422,200 contracts, up 31.0 percent from 2017. The majority of the volume came from single stock futures and SET50 index futures. The number of investors’ trading accounts was 168,506 accounts, up 21,947 accounts from 2017. TNS had a market share of 3.81 percent, ranked 11th among TFEX members. 3. At the moment, the competition of financial advisory business and securities underwriting services remains aggressive, especially in mergers & acquisitions, IPOs and fund raisings. Although the competition focuses increasingly on price, the key competitive factors remain on service quality, expertise of personnel in providing customers with relevant advices and solutions to problems, having wide service networks as well as creative product innovations which can add more values and provide greater benefits to customers. These will be the key factors in drawing more customers towards using TNS’s services.
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 the SEC under the Bank’s Corporate Governance. TFUND’s staffs are in accordance to the SEC’s stipulated requirements for investment services; they are legally qualified and strictly adhere to related laws and regulations.
Competition and Market Outlook As of 28 December 2018, there were 25 fund management companies in total. Net asset value of management of mutual funds offered to the general public was THB 4,647,059 million, an increase of 1.04 percent from 2017. In 2018, there were 483 newly established funds, amounting to total net value of THB 933,223 million. Most of them, 418 funds, were fixed income funds with domestic and international investments, with net asset value of THB 884,167 million, or 90.50 percent of net asset value of funds set up in 2018. 88.37 percent of TFUND’s new funds in 2018 were fixed income funds with domestic and international investments. As of 28 December 2018, TFUND’s assets under management totaled THB 221,270 million, down from 2017 by THB 7,318.69 million, or 3.20 percent. The decrease was made up of THB 10,234 million or 5.07 percent from mutual funds offered to the general public. The assets under management comprised 86.60 percent of mutual funds, 6.10 percent of private funds, and 7.20 percent from provident funds.
Insurance Business Non-life insurance business is operated by Thanachart Insurance Public Company Limited (“TNI”), which offers all types of non-life insurance services. Characteristics TNI offers all types of insurance services e.g. fire, automobile, marine, and miscellaneous. In addition, the company also operates investment businesses. Competition and Market Outlook During January – October 2018, Thailand’s general insurance business posted higher written premiums compared to the same period in 2017 at 6.97 percent. Gross written premiums were THB 192,140 million. The non-life insurance market structure during January – October 2018 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 insurance and marine and transportation insurance gained market shares of 5 percent and 2 percent, respectively. Throughout the past 20 years, and in the coming years, TNI’s direction has made and will make it a priority to revise its strategy in response to the changing business landscape. Customer base is developed and stored systematically for analysis that will lead to product development and insurance services that satisfy the customers, with professional risk management. In addition, TNI also emphasizes improving processes by incorporating technology to every system; insurance, claims and compensation, and supporting units, with an aim of creating utmost satisfaction to clients, partners, and promoting operations under governance, transparency, fairness, and social and environmental responsibility. In 2018, TNI developed Line Official application to upgrade its after-sale service quality and develop good customer relationships. Main customer segments, around 98 percent of total customers, were retail customers with sum insured of not exceeding THB 5 million and their insurance product choices were motor insurance, personal accident insurance, and fire insurance for homes. These customer segments were from the Bank’s borrowing customers and TNI’s marketing. Customers with sum insured of over THB 5 million are private organizations that operate many areas of businesses, both commercial and industrial. Key products offered to this group of customers are miscellaneous insurance and fire insurance. Based on the characteristics of the aforementioned customer base, it can be concluded that since TNI began its non-life insurance business, it has not relied solely on a single customer by more than 30 percent of TNI’s total revenue. Moreover, TNI provides insurance services to domestic customers only. Based on the Thai General Insurance Association’s 2018 direct premium forecast, the Thai non-life insurance industry will grow at 8.0 percent in 2018 with total premiums of THB 236.384 billion.
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Assets Management Business Characteristics TS Asset Management Company Limited (“TS AMC”) operates stressed assets management business transferred from SCIB, including both non-performing loans and nonperforming assets, in order to conduct debt restructuring with the debtors, hence, allowing them to repay the debts at their actual capacity and turning non-performing assets back to becoming the performing ones. Competition and Market Outlook TS AMC operates its business with a primary objective to manage and restructure the non-performing assets received from SCIB. To manage, divest, or sell those non-performing assets (NPAs) to general third parties who are interested and also to ensure that such assets sales are performed effectively and capable of competing with others in the real estate market, TS AMC hires professional consultants in assets sales to determine the selling price and manage high-value assets. TS AMC’s operations involve also in the asset feasibility study as well as strategic planning and sales offers to the target customers. It also appoints professional asset selling agents to provide value-added cross-selling package of assets with the collaboration of affiliated companies through more sales channels e.g. agents of asset auction companies, Thanachart Group websites, and other potential channels to reach the target customers as much as possible.
Leasing Business Characteristics Ratchthani Leasing Public Company Limited (“THANI”) operates hire purchase business and financial leasing. THANI focuses on both new and used car markets, especially commercial cars such as pickups, taxis, tail trailers and large trucks, and personal cars. Moreover, the company also offers credit for both new and used cars at 65 percent and 35 percent of the total credit respectively, and credit for trucks and other car types at 70 percent and 30 percent respectively.
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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 related to their core business, e.g. annual renewal of the motor-vehicle tax, insurance policy Renewal Corporation, and car check-up to renew the motor-vehicle tax. This will net only province a convenience to the customers, but also generates income to the company. In addition, this approach is beneficial to the company as it protects the customers’ properties. Competition and Market Outlook In 2018, the hire purchase and leasing industry indicated signals of continuous growth from previous years. Even so, the competition in the leasing and hire purchase business continued to intensify as financial institutions, commercial banks, and leasing and hire purchase businesses of car dealers focused their marketing on new and used personal car loans. As a result, some operators had to adjust and expand its used car loan portion further. Yet, these operators were not considered as the company’s direct competitor because its main target customers were new and used commercial vehicles, which had moderate competition compared to the personal car market. However, THANI planned to maintain its commercial portfolio in the next 3-5 years at the 65 percent – 70 percent of the company’s hire purchase portfolio. The reason was that this customer group was expected to grow continuously and to generate high profitability. In addition, the company’s 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 yield for used car dealers, THANI was confident to maintain its competitiveness and its market share under the intense competition at the present.
Products and Services Management
Sources of fund The source of the Bank’s and its subsidiaries’ fund comprises of issued and paid-up capital, whereby as of 31 December 2018, was in the amount of THB 60,649 million, in which the statutory reserve and retained earnings were included. Another two key sources of fund were:
Funding or lending to related parties The Bank extended loans to parent companies, subsidiaries, and related companies in Thanachart Group. At the end of 2018, it extended loans to THANI, the Bank’s subsidiary, for business operations under Thanachart Group Policy amounting to THB 1,030 million, decreased by THB 540 million from the end of 2017. There was remaining balance of THB 1,570 million. The aforementioned loan outstanding balance accounted for 0.15 percent of total loans at the end of 2018. All lending and borrowing transactions were conducted under the permission of the BOT.
1. Deposits as at the end of 2018 were in the amount of THB 752,160 million. 2. Borrowings were in the amount of THB 43,079 million, of which THB 19,930 million were Tier 2 subordinated debentures, THB 22,250 million were non-subordinated debentures, THB 623 million were promissory notes, and THB 276 million were structured notes.
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RISK FACTORS An Overview of the Risk Management
In 2018, the Thai economy continued to expand year-on-year. Key factors were growth in private consumptions of consumer goods and automobiles. Public and private investments increased in the same direction. Exports and tourism posted strong growth in the first half of the year, but slowed down in the second half in line with the weakened global economy due to the trade war that significantly affected the global economy and the Thai economy as a partner with both China and the United States of America. The rate hike by the US Federal Reserve (Fed) that led to capital outflows from emerging economies and impacted the stability of the regional currencies. Both factors had a direct influence on the Thai economy in the second half of the year. Total loans of commercial banks still grew year-on-year, following the continued expansion of the Thai economy in general. Although the non-performing loan to total loan ratio saw a slight increase from the previous year, the banking industry still managed to generate higher profits than last year. This was contributed by the increase in interest income and the decrease of provisions for bad debts, doubtful debts and impairment losses. The commercial banks in general still maintained strong stability as reflected in the capital and reserves at a level higher than the minimum requirement set by the Bank of Thailand (“BOT”). In 2019, the Thai economy is likely to be slower than last year, due to economic, social and political conditions that bring about pressures on the ability to conduct business. There are several risk factors that need to be closely monitored: the policy rate and domestic interest rate raise, high household debts, loan quality in the rising interest rate environment. These can impact risks in various areas such as market risk, credit risk and liquidity risk. The Bank and its subsidiaries realize the importance of continuous risk management that the Internal Capital Adequacy Assessment Process (ICCAP) was employed to manage risks in compliance with the BOT’s capital supervisory measures of Basel III framework. This allows the Bank and its subsidiaries to efficiently manage the capital and have a strong capital status to firmly support the business growth. Nevertheless, the Board of Directors and executives of the Bank closely oversee, monitor, and develop the risk management system regularly to ensure that the measures are updated and in line with the ever-changing internal and external risk factors. The Bank strategically establishes an organizational structure to support the risk management under the policy outline via various committees’ supervisions as follows:
The Board and Committees at the Policy Level: The Bank’s Board of Directors and the Executive Committee have a role in policy making and establish guidelines for an efficient enterprise-wide risk management by taking into consideration the impact of risks on the Bank’s operational goal and financial position that have to be in line with its normal operation. The Risk Oversight Committee has a role in overseeing, revising, reviewing, and assessing effectiveness of overall risk policies, risk management strategies, and key risks of the Bank, in order to ensure alignment with the approved risk appetite and new risks, and that the risk management policies and strategies are followed in order to assess whether the Bank’s risk management strategies cover all risk types, and whether the risk level is appropriate. 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, the Risk Oversight Committee, and the Bank’s Board of Directors for consideration and approval.
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Audit Committee has a role in determining the supervisory guidelines for the operation to comply with measures of related authorities as well as assessing the effectiveness and sufficiency of the risk management process and internal control system.
The Committees at the Operating Level: Asset and Liability Management Committee has a role in supervising the structure of the Bank’s assets and liabilities to be appropriate for characteristics of the business and in line with the Bank’s risk management policy. Investment Portfolio Committee played a role in overseeing the investment in financial instruments, to be in line with the Bank’s market risk management policy. Credit Committee has a role in supervising the credit lending and other credit-related transactions to be in line with the Bank’s credit risk management policy. IT Security Management Committee has a role in establishing policies regarding the IT Security System, proposing preventive measures against risks arising from information and technology system, as well as monitoring, supervising and controlling the operation of the IT Security System to be in line with the proposed plan. Audit Division has a key role in reviewing internal control system, risk management system, the conduct and disclosure of financial information, the operation, the report and supervisory procedures to ensure practices in accordance with policies, work plans, rules and regulations of the Bank and its subsidiaries, official rules and regulations of relevant regulators and good corporate governance principle, and providing consultation with other divisions for further development and proper internal control of the Bank’s and its subsidiaries’ systems.
The Bank’s Risk Management Structure As of 31 December 2018
Board of Directors Audit Committee
Risk Oversight Committee Risk Management Committee
Chief Audit
Executive Committee
Compliance
Chief Risk Officer Risk Policy and Capital Markets
Credit Risk Management
Asset and Liability Management Committee
Chief Executive Officer and President
Investment Portfolio Committee
Retail Risk Management
Special Risk Management
Credit Committee
Deputy Chief Executive Officer
IT Security Management Committee
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• The conduct of business affairs is under the system of check and balance with the Middle Office, comprising the Risk Control Unit and the Back Office, being separated from the Front Office. • The determination of size and proportion of different risk values by the use of risk calculation tools and models allows the Bank to perceive the degree of severity from feasible risks. These risk variables could also be used as the ceiling to control risk under the acceptable level as well as to provide warning signals before severe losses occur. The abovementioned risk management systems are designed based on prudent principles and are reviewed regularly to suit prevailing situations; they are also transparent and examinable while also concerning the interests of shareholders, customers, and employees of the Bank significantly.
The Bank’s Key Risk Categories: 1. Credit Risk Credit risk arises from a situation in which the debtors or counterparties fail to repay or fulfill their agreed obligations. This might be contributed by the fact that the debtor’s financial position is under distress due to volatilities of economic conditions that pose adverse impact on businesses or the debtors’ mismanagement, which as a result, may adversely affect the Bank and the subsidiaries’ earnings and capital. The credit risk may arise from ordinary financial transactions such as credit lending, financial obligations in the form of avals or guarantees, other transactions related to credit lending as well as investment in debt instruments issued by state agencies or state enterprises with neither guarantee from government nor the BOT and private debt instruments such as debentures. 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
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Risk Management Unit. At this juncture, authorized Credit Committee would then consider and determine the level of credit risk of borrowers or counterparties, appropriate credit lines and investment budget, as well as terms and conditions on loans or other obligations. The Committee also controls the overall risk status by appropriately diversifying credit risk into various business sectors and groups of customers within the established risk ceilings. In addition, the Committee closely monitors the quality of loans to ensure proper and vigilant management by emphasizing business capability and repayment ability under the supervision of an independent risk control unit. Apart from the aforementioned units, there is also an Internal Audit Division to verify that the credit transactions are in compliance with the BOT’s guidelines. To ensure optimal returns under acceptable risk, the Bank has employed measuring tool called RAROC (Risk Adjusted Return on Capital) to reflect the appropriate level of capital. Moreover, the Bank also performed stress tests to estimate any damage that may occur during the crisis. Under this condition, the borrower’s ability to repay can erode or they may fail to make a repayment under terms and conditions stated in the hypothesized contract. The risk factors in the tests are assumed to affect the industry that the debtors’ businesses belong to.
Important credit risk factors are as listed below: 1.1 Credit concentration risk The Bank aims to appropriately diversify its loans to various groups of customers, focusing on high potential customers and attempt to prevent concentration of loans to a particular group of customers. Group limits and single limits are set in accordance with risk level of the borrowers. Analyses and monitoring are carried out, and results are regularly reported to relevant committees to minimize risks from uncontrollable factors. Furthermore, the Bank has loan portfolio management and analyzes the loan portfolios in general, and manages the portion of the portfolios in correlation with circumstantial changes for maximum return under acceptable risk levels.
Credit status, as of 31 December 2018 and 31 December 2017 classified by business types was as follows: Business type
2018 Debt balance Percentage (THB Million)
2017 Debt balance Percentage (THB Million)
Agricultural and mining Manufacturing and commerce Real estates and construction Public utilities and services Personal consuming Housing loans Securities business Hire purchase Others Others
6,582 74,639 48,415 54,037
0.87 9.91 6.43 7.17
7,495 80,925 47,289 58,752
1.05 11.37 6.64 8.26
103,022 3,822 420,634 31,114 11,233
13.67 0.51 55.82 4.13 1.49
97,541 4,116 370,986 29,194 15,377
13.71 0.58 52.13 4.10 2.16
Total loans
753,498
100.00
711,675
100.00
The overall credit data showed that the portion of hire purchase lending granted by the Bank and its subsidiaries increased from 52.13 percent as of 31 December 2017 to 55.82 percent of total loan outstanding as of 31 December 2018. 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. At this juncture, the Bank has put its efforts into controlling credit quality through policies and procedures to regularly monitor the quality of loans. The NPLs ratios of the Bank and its subsidiaries that are financial institutions
As of 31 December 2018 and 31 December 2017 were as follows: Loan classification
Substandard Doubtful Doubtful of loss Total
2018 Debt balance Percentage (THB Million)
2017 Debt balance Percentage (THB Million)
4,598 26.28 5,935 36.11 3,171 18.13 2,672 16.26 9,724 55.59 7,829 47.63 17,493 100.00 16,436 100.00
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THANACHART BANK PUBLIC COMPANY LIMITED
The NPLs of the Bank and its subsidiaries jumped from THB 16,436 million as of 31 December 2017 to THB 17,493 million as of 31 December 2018. As for the overview, the non-performing loans accounted for 2.32 percent of total loan outstanding, increased from 2.31 percent as of 31 December 2017. The NPLs of the Bank and its subsidiaries that are financial institution classified by business types (excluding accrued interest receivables) Business type
2018 Debt balance Percentage (THB Million)
2017 Debt balance Percentage (THB Million)
Agricultural and mining 73 0.42 65 Manufacturing and commerce 4,929 28.18 4,805 Real estates and construction 1,788 10.22 1,870 Public utilities and services 1,355 7.75 1,318 Personal consuming Housing loans 4,220 24.12 3,457 Hire purchase 3,549 20.29 3,532 Other 1,427 8.16 1,237 Others 152 0.86 152 Total loans
17,493
100.00
0.40 29.23 11.38 8.02 21.03 21.49 7.53 0.92
16,436
100.00
Troubled Debt Restructuring (Unit: THB million)
2018
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 (percentage)
2017
6,620 9,755 2,712 1
8,703 10,820 3,543 1
753,498
712,264
1.29
1.52
The risk on debt restructuring arises from the re-entry of the NPL debtors that is, after the debt is restructured, the debtors default on their repayments again and resumes 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 2018, accounted for the amount of principal and the accrued interest receivables totaling THB 9,755 million or 1.29 percent of total loan outstanding and accrued interest receivables. The total value of the restructured debt based on net collaterals would amount to THB 2,712 million approximately.
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ANNUAL REPORT 2018
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 regulations on asset classification and provisioning of financial institutions, June 2016, cars can be counted as collaterals and their ownership belongs to the Bank and its subsidiaries. In case the debtor is unable to service the debt, the Bank and its subsidiaries can immediately repossess and sell the collateral asset in used car market. Consequently, the Bank and its subsidiaries are exposed to the risk from unsuccessful cars repossession as well as from sales that do not cover the incurred loss. The risk factors involve, for instance, the used car market condition and repossessed car condition. Basing on the Bank’s statistical data, Loss Given Default (LGD) is identified and the Bank’s provision is 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 risks, 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 the regular lending procedure of the Bank.
As of 31 December 2018, the Bank and its subsidiaries’ obligations in the form of avals and guarantees for loans amounted to THB 25,471 million or 2.43 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 3 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 earnings or capital are affected by negative changes in the price of debt and equity instruments, causing the value of trading and available-forsales 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 directors to consider investing to be a controller and a 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 the stress testing by formulating stress scenarios which can create extraordinary reduction in stock prices. The test result can therefore shed light on the impact on the Bank’s earnings and required capital if such events occur.
061
THANACHART BANK PUBLIC COMPANY LIMITED
As of 31 December 2018, the trading investments and available-for-sale securities classified by type of investment were as follows: Fair Value (THB million) 2018
2017
Trading securities Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
12,317 694 0 958
9,127 232 0 1,713
Total trading securities
13,969
11,072
Available-for-sale securities Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
99,720 21,340 17,203 4,613
113,978 24,336 10,430 3,618
Total available-for-sale securities
142,876
152,362
Total trading and available-for-sale securities
156,845
163,434
The Bank’s value of trading and available-for-sale securities decreased from the previous year mainly because of the drop in government and state enterprise securities and private debt securities. As a result, the overall price risk of the Bank and its subsidiaries declined.
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 that are rate sensitive items. 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, the Bank endeavors to maintain an appropriate structure of assets and liabilities which are rate-sensitive at different time intervals at an appropriate level for efficient operations and maximum benefit for the Bank and the Bank’s shareholders. Thus, the Repricing Gap Analysis Model was developed as a tool for measuring interest rate risk by assessing the impact that may arise from the mismatch of the repricing periods of assets, liabilities and obligations at different time intervals, which is used for risk measurement every month. In order to ensure that the risk of the Bank business operations is within an acceptable limit, they have also established an acceptable risk ceiling and an early warning risk level, taking into account the structure of assets, liabilities and obligations as well as interest rate repricing which are expected to take pace in each period of the Bank business plan. The Asset and Liability Management Committee (ALCO) is responsible for monitoring and controlling such risk very closely. To effectively design appropriate measures to accommodate the risks, the committee has to monitor economic conditions, development in the money market and capital market and the interest rate trend which could become important risk factors to the Bank’s rate-sensitive items.
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ANNUAL REPORT 2018
Details of financial assets and liabilities as of 31 December 2018, classified by the period when the interest rates would be repriced in accordance with contracts related to financial assets and liabilities of the Bank and its subsidiaries were as follows:
(Unit: THB million)
Period of interest rate repricing or due date Items
Interest rate adjusted in accordance with market interest rate
At call
0-3 months
3-12 Over months 1-5 years 5 years
No interest
Total
Financial assets Cash - - - - - - 11,019 11,019 Interbank and money market items 1,184 850 86,032 2,100 - - 7,524 97,690 Derivatives assets - - - - - - 2,005 2,005 Investments - - 58,455 12,829 75,940 5,119 9,189 161,532 Loans to customers 213,035 6,440 36,361 19,484 241,170 236,786 222 753,498 Receivables from purchase and - - - - - - 2,742 2,742 sale of securities Receivables from clearing house - - - - - - 64 64 Total financial assets
214,219
7,290 180,848 34,413 317,110 241,905
32,765 1,028,550
Financial liabilities Deposits 362,047 18 127,523 212,007 43,488 - 7,077 752,160 Interbank and money market items 17,956 920 38,257 11,281 1,749 488 1,304 71,955 Liability payable on demand - - - - - - 1,163 1,163 Derivatives liabilities - - - - - - 2,097 2,097 Debt issued and borrowings 4 330 2,476 3,124 17,215 19,930 - 43,079 Payables from purchase and - - - - - - 1,518 1,518 sale of securities Payables to clearing house - - - - - - 795 795 Total financial liabilities
380,007
1,268 168,256 226,412 62,452 20,418
13,954 872,767
With reference to the financial structure of assets and liabilities, should the market interest rate increase, the Bank’s net interest income of the next year would decrease. This was mainly because the Bank’s hire purchase business used the fixed interest rate as reference. Nevertheless, the Bank carried out interest rate swap agreements and raised long-term deposits for effective risk management.
2.3 Exchange Rate Risk The exchange rate risk is a risk that the earnings or capital of the Bank and its subsidiaries can be adversely affected by exchange rate fluctuations from transactions in foreign currencies, exchange rate exposures in their possession of assets or liabilities in foreign currencies. There are two types of exchange rate risk-risk from transactions in foreign currencies (Transaction Risk) and risk from exchanging foreign currency to local currency (Translation Risk). The ALCO is responsible for monitoring and controlling this type of risk through the consideration in the proper matching between the structure and the maturity of assets and liabilities in foreign currencies. The Bank’s policy is to also rely on the VaR ceiling in order to control the impact of exchange rate movements on earnings and capital. Nevertheless, in order to avoid the exchange rate risk, the Bank has also relied on hedging instruments such as forward contracts.
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THANACHART BANK PUBLIC COMPANY LIMITED
As of 31 December 2018, the Bank and its subsidiaries had assets and liabilities in foreign currencies of THB 31,313 million and THB 14,730 million, respectively, equaled to net assets of THB 16,583 million. And as most of the assets in foreign currencies were hedged against the exchange rate risk by forward contracts, the Bank and its subsidiaries were exposed to low risks. The total non-hedged assets in foreign currencies amounted to THB 588 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 other types of the Bank’s liabilities or increase the Bank’s assets by using the Liquidity Gap Analysis. Various liquidity ratios and “What if” scenarios to evaluate the sufficiency of the cash flow liquidity depending on customer behavior in extending contracts upon maturity and estimate the need of liquidity in various “What if” scenarios depending on the economic climate and extraordinary situations that may happen to the Bank and the financial institution system. In addition, the Bank prepares an additional liquidity indicator in accordance with the Bank of Thailand’s regulations and BASEL III, that is, LCR (liquidity coverage ratio), which reflects the liquidity status in an extreme situation. BOT set the 2018 minimum requirement of commercial banks’ LCR at 80 percent, while the Bank’s LCR is 138 percent. Meanwhile, the Bank and its subsidiaries developed an emergency plan in case of a liquidity problem and there will be a revision of the significant occurrences that affect working operations. In this regard, the Bank and its subsidiaries have assigned ALCO, controlling and managing the liquidity risk with two weekly meetings to monitor and manage risk. The structure of the Bank’s and its subsidiaries’ capital fund could be classified by different types and maturities of sources of funds as follows: Capital Funds Classified by Sources (Unit: THB million)
2018
Percentage
2017
Percentage
Deposits Interbank and money market items Debt issued and borrowings
752,160 86.73 716,278 85.47 71,955 8.30 82,424 9.84 43,079 4.97 39,308 4.69
Total
867,194 100.00 838,010 100.00
Capital Fund Classified by Maturities
(Unit: THB million)
2018
Percentage
Percentage
757,617 80,393
90.41 9.59
Less than 1 year More than 1 year
783,476 83,718
Total
867,194 100.00 838,010 100.00
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ANNUAL REPORT 2018
90.35 9.65
2017
As of 31 December 2018, deposits and borrowings of the Bank and its subsidiaries amounted to THB 867,194 million. The major source of fund was the public, of which the maturity was less than one year; a common structure of the commercial banks. Nevertheless, the Bank issued other products such as NCD and debentures as saving alternatives for customers. The financial assets and liabilities of the Bank and its subsidiaries as of 31 December 2018 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 to customers Receivables from purchase and sale of securities Receivables from clearing house
11,019 - - - 11,019 9,558 88,132 - - 97,690 - 670 1,335 - 2,005 5 69,153 83,190 9,184 161,532 40,263 187,204 526,031 - 753,498 - 2,742 - - 2,742 - 64 - - 64
Total financial assets
60,845
347,965
610,556
9,184
1,028,550
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 Payables to clearing house
364,977 342,847 44,336 22,430 47,288 2,237 1,163 - - - 703 1,394 334 5,600 37,145 - 1,518 - - 795 -
- 752,160 - 71,955 - 1,163 - 2,097 - 43,079 - 1,518 - 795
Total financial liabilities
388,904
398,751
85,112
-
872,767
Commitments Aval to bill Guarantees of loans Liability under unmatured import bills Letter of credits Other commitments
2 87 57 31 37,732
291 2,315 226 728 43,857
10 - - - 1,770
- - - - -
303 2,402 283 759 83,359
Total commitments
37,909
47,417
1,780
-
87,106
065
THANACHART BANK PUBLIC COMPANY LIMITED
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 at 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 is well aware that efficient operational risk management is crucial to the business to achieve goals sustainably. Under current uncertainties, the Bank, thus, places importance on efficient and effective operational risk management that is sufficiently comprehensive across the Bank, so that timely preparations can be made in unexpected situations and increasingly stringent regulations are followed. The Bank sets operational risk policies and management that gear toward risk prevention and monitoring. In addition, as internal control is a key mechanism in controlling and mitigating possible damage, the Bank ensures that there is a strong internal control system: an organization structure that has counterbalance, transaction-supporting units with a specialized skill set and independence to reduce possible errors, practice regulations applicable to all types of transactions, information technology system and data security system, including the business continuity plan. The Bank devises a risk appetite framework and guidelines for operational risk management, which include essential operational risk management processes and tools in accordance with Basel New Capital Accord (Basel II) e.g. risk and control self-assessment, key risk indicators (KRIs), loss data, incident management, outsourcing risk management, and business continuity plans. Moreover, as BOT requires commercial banks to maintain capital proportionate to risk assets in credit, market and operation pursuant to Basel III, the Bank calculates its operational risk assets with a basic indicator approach.
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ANNUAL REPORT 2018
Under the Bank’s risk appetite framework, the Bank determines its risk appetite and risk limit for losses from operational risks to ensure that such risks are detected and controlled in a timely manner, and that strategic objectives are met. In the measurement and assessment of operational risk, the Bank puts in place the risk and control self assessment, which is a process to identify, assess and control key risks as well as to devise risk reduction plans. In the determination of this process, the Bank considers the circumstantial factors such as supervising guidelines of the government units associated with the Bank, state and complexity of the business, the capability of the Bank in accepting risk, probability, likelihood or frequency as well as the impact or severity of risk that has happened or may happen. Also, the Bank formulates key risk indicators as warning signals to every level of executives to take proactive risk management and control. Additionally, the Bank ensures records and reports of operational loss data, and monitors that the Bank’s operational loss stays within the risk appetite and risk limit. Incident management is also in place as it is a process that detects and analyzes risk incidents so that they are tracked and rectified effectively. Moreover, the Bank values quality of customer service and care in every channel. A market conduct policy has been prepared as a guideline that oversees fair product offering and customer service, security enhancement to operating systems, information technology systems, electronic/digital channels, including customer data confidentiality. The Bank also identifies and assesses risks, and determines sufficient and efficient control guidelines according to the risk and control self assessment by relevant units to make sure the end-to-end process is covered. Risk management is also available for frauds related to the Bank’s products and services namely credit cards, ATM cards and other electronic services to create confidence to the customers and the Bank. New products also undergo risk analysis, assessment and control to ensure acceptable risk levels and appropriate offering processes. 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 reports on data regarding operational risk management continually and regularly to the Board of Directors, the Risk Management Committee and the senior 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. In addition, the Bank prioritizes communication to employees at every level so that they understand and recognize the gravity of operational risk management in order to create a risk culture organization-wide.
5. Information Technology Risk The information technology risk is the risk that may arise from using information technology systems to support the business, providing financial services to customers digitally, data management and cyber threats that may cause other risks, financial and non-financial damage to the Bank e.g. strategic risk, reputational risk and operational risk. Digital adoption is rising so rapidly that it has become the Bank’s main service, and the Bank has adopted information technology systems to enhance efficiency and provide services to customers confidently and securely. With such reasons, the Bank has realized the importance of information technology risk management. In 2018, key actions taken were as follows: 1) Organized a risk management structure into Three Lines of Defence, duties was separated: (1) information technology operations, (2) information technology risk management, and (3) information technology audit. The Bank established an information technology risk management unit under Risk Management, and applied an international risk management framework to manage information technology risk by ensuring risk identification, risk assessment, risk response and monitoring and reporting. Information technology risk was also added as a part of the enterprise risk appetite.
2) Prepared information technology risk policy based on international standards e.g. COBIT 5, ISO and BOT’s risk management guidelines 3) Applied DLP (data leakage protection) system to the Bank and its subsidiaries to protect customer data and key information of the Bank In addition, in the management of internal units relevant to information technology, international standards and practices are applied e.g. ISO 27001 and ITIL (Information Technology Infrastructure Library) to ensure strict and highest security information technology management. Response levels are set for abnormal incidents, including how to handle them, so that unwanted incidents and cyber threats are tackled systematically and timely. Moreover, the Bank has promoted IT security awareness to all levels of employees so that personnel in every unit understands possible risks from using information technology systems, knows how to protect themselves and the Bank’s vital data and assets from threats.
6. Strategic Risk The strategic risk arises when the formulation of strategic plans, action plans and their implementations are not compatible with internal factors and external conditions, affecting the Bank’s performance e.g. revenue, capital, or the existence of the Bank and its subsidiaries. In managing the strategic risk, the Bank requires a preparation of a strategic plan to depict its direction and goals for the next 3 years, and action plans to set up a key framework to support the plan accomplishment and serve as a guideline to the units to set their own action plans. The strategic plan and action plans must be approved and reviewed by the Board of Directors at least once a year. It is the duty of the Board of Directors and senior management to monitor the Bank’s performance against the annual plan, including external circumstances and to regularly consider causes that may impact the accomplishment of the business plan, and to determine corrective actions through various committees responsible for monitoring the action plan in each of the Bank’s areas.
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THANACHART BANK PUBLIC COMPANY LIMITED
7. Reputational Risk The reputational risk means a risk that occurs when the public i.e. customers, strategic or alliance partners, investors and regulators have a negative perception of the Bank or lose confidence in the Bank. This risk may impact the Bank’s revenue and/or capital at present and in the future. Reputational risk may arise from noncompliance with corporate governance and business ethics, or nonconformity to the laws, regulations, as well as the banking industry practice rules. The Bank has continuously taken into account the importance of the reputational risk. To align with BOT’s capital supervisory regulations in accordance with Pillar II, a reputational risk policy has been formulated. The policy consists of reputational risk framework and reputational risk management processes which entail reputational risk assessment and measurement divided into 5 levels of impact and likelihood, reputational risk prevention by raising awareness and devising measures to prevent reputational risk events, regular monitoring and reporting to relevant committees, including risk management in case of high and very high risk levels. The Bank sets Communication and Brand Management, and Case and Fraud Management as key units responsible for the risk management processes.
8. Regulatory Risk The regulatory risk arises from non-compliance of laws, regulations, requirements, standards, and practice guidelines regulated the Bank’s transactions, which could cause serious financial loss, reputational damage, or state of being intervened. Any amendment or change in regulations, laws, or requirements made by the authorities such as the Bank of Thailand, the Securities and Exchange Commission, the Stock Exchange of Thailand, the Office of Insurance Commission, the Anti-Money Laundering Office, and others may affect the business strategies and operations of the Bank and its subsidiaries. The Bank established the team of Compliance, reporting directly to both the Audit Committee and the CEO and President, to monitor and ensure compliance of Bank and its subsidiaries under the financial group with the laws and requirements of the regulators and business ethics; provide consultations; educate executives and staff; and enable the executives to perform and manage regulatory risks efficiently,
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ANNUAL REPORT 2018
without redundancy with other internal units or special task forces such as the anti-money laundering, coordination and monitoring, official regulators. To manage regulatory risks, the Compliance would evaluate the risks in activities taking into account the internal and external factors that may impact the Bank and its subsidiaries, including direction of regulatory supervision, official audit result, business policy, inquiries, complaints, internal control and systems involved the matter. The Risk Based Approach (RBA) was employed to determine impact and probability of incident and used as a guideline for the Control and Monitor process to ensure compliance. The Compliance’s duties also include following up with the found issues and propose recommendations on corrective actions.
9. Risk from Capital Adequacy The Bank’s capital adequacy was calculated basing on the supervisory guideline of Basel III, as follows: • Credit risk by means of the Standardized Approach • Market risk to explore status of market risk by means of the Standardized Approach • Operational risk by means of the Basic Indicator Approach In addition, the Bank has assessed its future capital adequacy based on budget and 3-year business plan. The calculated risk is capped with risk capital budget in which the Risk Management Division monthly reports the adequacy of capital to the Executive Committee and the Board of Directors to ensure that the Bank has sufficient capital after risk capital allocation to support sustainable business’ growth as planned. Also, the Bank has prepared and assessed impact from the Thai Financial Reporting Standard 9 (TFRS9) to be effective in 2020, which does not impact the capital adequacy in the business. As of 31 December 2018, the Bank’s capital totaled THB 131,859 million, of which THB 104,481 million was common equity Tier I capital and Tier I capital while Tier II capital was THB 27,378 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 15.42 percent, 15.42 percent, and 19.45 percent, respectively, higher than the BOT’s minimum requirements at 6.375 percent, 7.875 percent, and 10.375 percent, respectively.
SUSTAINABLE DEVELOPMENT AND CORPORATE SOCIAL RESPONSIBILITY Activities Undertaken by Thanachart Group in Relation to Sustainable Development and Corporate Social Responsibility
Thanachart Group is a business group committed to giving fully-integrated financial services to fulfill all needs of customers for every stage of life. The objective of its business is to make profit with its operations taking into account effects towards all stakeholders in three key areas including society, environment, and corporate governance. It is important for the Group to be innovative, progressive, and fulfilling while striking a balance between economy, society, and environment in a sustainable manner. In this connection, its actions need to reflect both CSR in process and CSR after process, with focus on activities that cover as many key areas of Thanachart Group’s business operations as possible.
Process in Reporting on Thanachart Group’s Corporate Social Responsibility The Corporate Governance Code for Listed Companies 2017 which was prepared and publicized by the Securities and Exchange Commission, Thailand (“SEC”) was adopted by Thanachart Group. The Code serves as principles for the Group not only in developing practice guidelines but also in preparing corporate social responsibility reports. This represents a good starting point for improving the quality of reports and getting ready for the preparation of sustainability reports in the future. The objective is to cover every area that needs to be reported, both at the national and international levels. Although the businesses of Thanachart Group which is a provider of fully-integrated financial services do not have direct impacts on the environment, the Group considers it important to take on responsibility towards protection of the environment in various areas. As well, the Group is determined to develop guidelines on obligations to stakeholders. In particular, the Group’s staff members play an instrumental role in driving, supporting, and ensuring the achievement of the business sustainability goal. Up to 2018, Thanachart Group has continued implementing the following programs that take into account all the stakeholders.
1. Looking after Employees Thanachart Group’s Fair Treatment of Employees and Observance of Human Rights • Follow employment practices in line with the established standards as well as the related laws. In this connection, the Bank has also established a clear policy and clear regulations. Avoid violating human rights, e.g. employment of child labor and use of forced labor. Also put in place a process for checking various qualifications before recruitment, such as criminal record checks. • Thanachart Group treats employees equitably without giving undue advantages or depriving employees of their rights unfairly, due to differences in their race, religion, social status, gender, age, physical impairment or disability. As well, the Group has adopted a clear policy aiming at adopting measures for preventing and addressing sexual harassment. • To support the disabled so that they not only could earn income but also recognize their inherent dignity and worth, Thanachart Group has employed the disabled to work in positions appropriate to their qualifications and skills.
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THANACHART BANK PUBLIC COMPANY LIMITED
They are provided with the same opportunities and compensation as those of normal employees. Moreover, Thanachart Group has joined the Thai Bankers Association, the Thai Red Cross Society, the Social Innovation Foundation, and the Don’t Drive Drunk Foundation in employing the disabled in the form of service contracting since 2017. In particular, the disabled were employed to work at the Red Cross Society and also to help the Don’t Drive Drunk Foundation conduct campaigns. • As regards the disabled who work for Thanachart Group or the disabled who visit Thanachart Group for services, appropriate facilities and amenities are put in place in the buildings and premises concerned. In particular, parking spaces and wheelchair ramps are made available for the disabled. • Emphasis is placed on ensuring procedural fairness in relation to disciplinary actions. As well, the Group has put in place procedures for investigating all people involved to establish facts and for hearing both sides of the story in a careful manner. It has also established a screening committee consisting of qualified outsiders who participate in the procedures. The objective is to ensure that the disciplinary procedures are followed in the fairest manner possible. Importantly, a procedure has been put in place to allow employees who are subject to disciplinary action to lodge an appeal so that the case could be reconsidered and that the organization could arrive at a final decision. • Thanachart Group has issued regulations, Code of Conduct as well as Good Corporate Governance Policy which serve as guidelines for handling various parties concerned, including, among others, shareholders, executives, employees and trading partners. The objectives are not only to ensure that Thanachart Group’s business operations and the conduct of business affairs are in compliance with the laws or the regulations imposed by the authorities concerned, but also to promote transparency and implementation of the principles of good corporate governance. Emphasis is placed on protection against frauds and also on compliance with the regulations, guidelines, and work procedures, based on the principles of transparency. • Thanachart Group also encourages collective bargaining negotiations, aiming at bringing about group
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ANNUAL REPORT 2018
discussions, suggestions and negotiations among the parties concerned, including the organization, employees’ representatives, the employee welfare committee, the employee committee, and the labor union, etc. The objectives are to act on useful suggestions and to build good employer-employee relationships. In addition, arrangements have been made to the effect that the centralized human resource department establishes an HR business partner unit responsible for looking after employees, keeping them happy and productive so that they continue working for the organization.
Health Care Thanachart Group recognizes the importance of ensuring that all employees are healthy and are able to access health services conveniently, mainly because the well-being of employees brings about organizational productivity. As a result, Thanachart Group pays great attention to the health of all employees. On one hand, it promotes the maintenance of the employees’ health by putting in place of preventive measures which raise the awareness of and mitigate health risks. On the other hand, it puts in place the following measures with the aim of promoting the good health of employees. • Health protection guidelines: Employees are provided with health knowledge in different areas so that they recognize the importance of keeping themselves fit and healthy. In particular, for the convenience of all employees, the Group makes arrangements for their annual medical examination. The annual checkups help early detection of harmful diseases such as cancer as well as prevention and minimization of illness. Employees also receive vaccines against infectious diseases. The objective is for them to rest assured that they will have good health and will not get sick. • Based on the health promotion guidelines, the Bank ensures that employees receive medical benefits when they get ill. As well, they are provided with convenient medical services. In particular, the Bank puts in place a first aid room for giving medical services. As well, it arranges for doctors from various hospitals to share their health knowledge with employees. In addition, the Bank makes available medicines and medical supplies for first aid services. The objectives are to give first aid treatment and to prevent illness or injury from becoming worse.
Safety, Occupational Health, and Work Environment Thanachart Group pays attention to safety management and ensures healthy working environment for all employees, in line with the principles of occupational health. In this connection, the Bank has established a policy and practice guidelines on safety, occupational health, and work environment in compliance with the provisions of the law. The Bank has also established the Committee on Safety, Occupational Health, and Work Environement. The Committee is responsible for implementing various activities with an aim of achieving the established objectives. In this connection, it encourages employees to recognize the importance of safety, occupational health, and work environment by sharing the related knowledge through acitivities and training courses on safety with employees at all level. As well, the Bank looks after sick or injured employees, ensuring that they receive proper treatment. In addition, it has adopted the policy with details as follows: Policy on safety, occupational health, and work environment Thanachart Group not only plays an important role of adopting the policy on safety management but also oversees and ensures the establishment of a safety plan and the implementation of the plan on a continuous manner. The related details are as follows: 1. Comply with the rules and regulations, notifications, orders, and standards related to safety, occupational health, and work environment in line with the requirements imposed by the state agencies concerned. 2. Manage and oversee business locations, ensuring that employees have safe and healthy workplaces. As well, ensure that, in carrying out their duties, employees are prevented from loss of life and protected from physical or psychological injuries or illnesses. 3. Control, govern, and oversee the implementation of activities which promote occupational safety and health as well as healthy working environment in line with the scope of safety and health management systems. 4. Make available the regulations and handbook on workplace safety at business locations.
5. Support and promote the implementation of activities related to safety, occupational health, and work environment on a continuous basis. As well, make available appropriate and adequate human resources and budgets. 6. Improve the work environment and the areas surrounding the business locations on a continuous basis, ensuring that the workplaces are safe and the work environment is healthy. The improvements will bring about the quality of work life and the good health of employees. 7. Organize training courses for safety officers at management and supervisory levels as well as training courses for all employees. 8. Put in place a committee and personnel responsible for safety, occupational health, and work environment. The objective is to ensure proper implementation of Thanachart Group’s related policies.
Human Resource Development Based on the belief that personnel are the organization’s most valuable resources, Thanachart Group pays serious attention to systematic human resource development. In particular, the Group puts into practice Thanachart’s People Development Model 70:20:10 with on-the-job learning experiences accounting for 70 percent while subordinate development by supervisors, such as through coaching and mentoring, accounts for 20 percent and training activities account for the remaining 10 percent.
Practice Guidelines on Training
Thanachart Group’s human resource development processes start with the development of newly recruited employees, training and development activities which focus on enhancement of key skills necessary for carrying out job duties of each position, as well as development activities aiming at raising the level of professionalism, which encompasses product knowledge, customer service, work processes, and work systems which are based on the conduct of business affairs in compliance with the regulations of the state agencies concerned and the code of professional ethics. Also noteworthy is the development of managerial skills and leadership for supervisors at each level. The objective is to develop potential
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of the Bank’s personnel so that they are well prepared for implementing the organization’s business strategies in an effective and efficient manner. In 2018, Thanachart Group implemented the following human resource activities: 1. Corporate Training: This type of training activities focuses on development of key skills necessary for performing one’s duties. The objective is to achieve people excellence which covers four areas including (a) thinking skills, (b) people management, (c) performance management, and (d) communication skills. 2. Functional Training: This type of training activities focuses on development of skills suitable for one’s roles, duties, and responsibilities. The objectives are to raise the level of customer service based on the concept of customer centricity and to ensure that customers receive financial services which meet their needs and are in line with their risk tolerance. Not less importantly, emphasis is placed on ensuring that the services are delivered properly in compliance with the requirements and regulations of the state agencies concerned and in a transparent manner. 2.1 Product knowledge training activities were organized, aiming at providing employees with knowledge and understanding of various products and services of the Group which were constantly improved and updated. As a result, employees were capable of appropriately introducing products and services that met the real needs of each group of customers. 2.2 The Group developed a branch academy training course which was aimed at building a body of knowledge and preparing branch employees at all levels so that they were capable of identifying customer needs, giving advice, and offering financial services that met customer needs (Customer Solutions) in an accurate, timely, and efficient manner. 2.3 As well, training activities were conducted on basic infrastructure of various work systems. The objective was to ensure that customer services could be delivered in a timely and efficient manner. Among others, these included training on customer management systems for introducing
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financial services, loan approval system, and systems related to buy and sell orders of life and non-life insurance products. The Group also provided employees with knowledge and understanding of information technology which constantly changed. As well, it organized training activities and seminars on innovative concepts and innovation skills for employees. The objective was to encourage employees to have concepts of product development and to adopt work processes that met customer needs in the digital age in a timely manner. 2.4 Professional certificate courses were also organized. Among others, these included courses for securities investment consultants, general insurance agents, and life insurance agents as well as courses on unit-linked insurance plans. 2.5 As well, training courses on regulations of the authorities concerned were conducted. The objectives were to provide all executives and staff with knowledge and understanding of the regulations and to ensure that the executives and staff were able to manage and do their work in full compliance with the regulations. In this connection, tests were given to assess participants’ knowledge of course contents after training. Among others, the trainings included courses on the Anti-Money Laundering Act, Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing Act, Ministerial Regulations on Customer Due Diligence (CDD) as well as the course on CG & Anti-corruption Measures which covered the Group’s corporate governance and anticorruption policies. The Group also cooperated with the public sector in promoting ethical behavior and fostering fairness in business. As a result, the cooperation had positive impacts on the country’s social and economic development. 3. Leadership and Managerial Development Training: Executives play an important role in implementing the organization’s policies and strategies. As a result, Thanachart Group has organized training activities with an aim of enhancing leadership and management skills for executives at each level in an earnest and continuous manner. The objective is to enhance, accelerate, and maintain potential, competence, and capacity of executives in managing their work and human resources in an efficient manner Among others, the training courses included thinking and decision-
making skills, strategic influencing skills and coaching skills. Importantly, the Group encourages executives to participate in training activities and seminars held by leading organizations, in both local and international. The objectives are for them to broaden their perspective and to build a networking relationship. 4. Establishment of Blended-Learning Organization: Thanachart Group has designed and developed blended learning systems whereby employees could learn through a wide range of channels. The objective is to maximize employee productivity. The related details are as follows: 4.1 Coaching: Supervisors were required not only to provide trainees with advice and suggestions but also to share various experiences with them so that they would be able to work efficiently. 4.2 On-the-job Training: Employees were encouraged to exchange their experiences with one another and to help solve problems together while they received suggestions from advisory experts. The objective was to promote group learning and foster teamwork skills which were beneficial to the organization. 4.3 Educational Television: The Group used educational television to promote employees’ learning. In this connection, broadcast programs were properly scheduled so that they would not negatively affect customer services. 4.4 E-learning: The Group also promoted E-learning through its corporate intranet. In 2018, several training courses were developed for the E-learning system which allowed employees to access and learn from available training materials by themselves at any time. To measure the E-learning effectiveness in a systematic manner, tests were administered before and after training.
4.5 Knowledge Management: Thanachart Group has made arrangements for collection of the body of knowledge that is useful to employees. It covers knowledge and skills necessary for employees to fulfill their tasks at various levels. As well, it includes the knowledge for raising the quality levels of products and services of the Group, knowledge about regulations of the authorities concerned, work manuals for related work systems, staff regulations and employee welfare as well as knowledge about how to look after physical and mental health and how to strike a work-life balance. Importantly, the collection of knowledge has been properly grouped and stored in the system so that it could be accessed conveniently and effiently. In addition to the above-mentioned elements, Thanachart Group has enhanced preparedness of newly recruited staff. Each new employee is required to attend a one-day orientation session, in which they will be provided with product knowledge, core values, organizational structure, compliance with the anti-money laundering law as well as the countering the financing of terrorism law as well as information about staff welfare. The objective is for new employees to know the business overview as well as direction and various strategies so that they could adjust themselves to Thanachart Group and establish good relationships with fellow colleagues and the organization. The orientation lays the foundation for the organization to retain the new employees. The training and development activities have been implemented through a diverse range of various learning channels such as in-house learning and public learning through participation in activities organized by various institutes outside the organization, as well as self-paced learning through the E-learning system. After employees participate in each training activity, a training evaluation will be carried out to measure results and training effectiveness. The objective is for trainees to know their own potential, which will lead to further development for their future work.
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Training Courses Held in 2018 TBANK and Other Member Companies of Thanachart Group Number of Courses
Courses
TBANK
In-house Learning Public Learning E-learning Total
Other Members of Thanachart Group
Number of Participating Groups Other Members TBANK of Thanachart Group
194 199 25
99 118 3
615 238 25
418
220 878
Number of Participating Employees Other Members TBANK of Thanachart Group
295 139 1
31,549 791 51,895
2,984 679 1,579
435 84,235
5,242
Welfare Benefits Thanachart Group provides welfare benefits to permanent employees as well as those on fixed-term and temporary employment contracts. These welfare benefits are as follows: Welfare Benefits
Salaries Overtime Training/Staff Development/Staff Scholarship Funeral Benefits Educational Assistance for Staff’s Children Medical Treatments Residential Rental Expenses Welfare Loans Danger Pay Allowance Provident Fund Staff Uniforms Remarks
074
1) 2) 3) 4) 5)
Permanent ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ *
Types of Employees Fixed-term ✓ ✓ ✓ ✓ ** ✓ ** ✓ ** ✓ ** ✓ ** ✓ ✓ ** ✓ *
Temporary ✓ ✓ ✓
X X X X X ✓
X X
Permanent employees are those who are engaged by Thanachart Group on a permanent basis. Fixed-term employees are those who are on fixed-term employment contracts. Temporary employees are employed for the nature of work which is temporary or of a definite duration of not more than one year. * Only for some specified jobs. ** Only employees holding some positions are entitled to the benefits.
ANNUAL REPORT 2018
Survey of Employee Opinions about the Organization Thanachart Group places strong emphasis on the well-being and development of its human resources, encouraging them to feel motivated and engaged on a continuous basis. In this connection, the Group conducted the Voice of Employee Survey (VOE) to get their opinions about the organization. The Group realizes that organizational growth primarily depends on all its employees. As a result, it pays close attention to opinions and suggestions given by all employees through the survey in relation to various contributing factors within the organization. These factors include, among others, improvement of work environment, work processes, work systems, supervisors, as well as the balance between work and personal life. Since the information received from the survey will be kept confidential, employees could rest assured that their opinions will not have any impact on their performance appraisal. Thanachart Group is determined to raise its employee engagement to a level higher than or equal to those of leading organizations in the market. In 2018, the number of the employees taking part in the survey accounted for 100 percent of Thanachart Group’s employees. In this connection, their opinions were already grouped. As well, the development plan was drawn up and presented to high-level executives of every department.
Performance Appraisal and Staff Remuneration Thanachart Group has set up a clear and transparent performance appraisal process. Not only it adopted a standard methodology but also prepared a standard appraisal form for all work units. Performance appraisals, whether individuals, team or executives, have been clearly grouped. In this connection, the appraisal of the division/section must specify their main goals which are in line with the annual Key Performance Indicators (KPIs) of their respective department. As well, the individual KPIs and the team KPIs have to be in line with the main goals set by each of their respective division/section. Such appraisal process will help drive the performance of the staff members of the whole organization to achieve the established business goals. The appraisal will be conducted twice a year in order to allow proper monitoring of the implementation. A central unit will be responsible for ensuring that the appraisal of the whole organization follows the same direction as specified. As regards remuneration, Thanachart Group has laid down the remuneration principles, ensuring that the remuneration is in line with the different nature of work, and that the remuneration in the form of monthly salaries and annual bonuses will be properly taken into account. The objectives are to motivate staff members to carry out their duties and achieve the goals established by each division/section and to ensure that the compensation levels the Group provides are competitive with those offered by companies in the same business.
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THANACHART BANK PUBLIC COMPANY LIMITED
Employee Information
Number of Thanachart Group’s Employees by Level Permanent Employees by Level
Gender
Number of Employees 2018 2017 2016
High-level Executives (from SVP to CEO)1 Male 77 82 70 Female 24 22 25 Total 101 104 95 Executives (from AVP to FVP)2
Male 448 454 455 Female 460 451 453
Total 908 905 908 Employees (from O to SM)3
Male 4,490 4,577 4,595 Female 8,394 8,299 8,390
Total 12,884 12,876 12,985 Grand Total 13,893 13,885 13,988 Remarks
1
Positions from Senior Vice President (SVP) to Chief Executive Officer (CEO) Positions from Assistant Vice President (AVP) to First Vice President (FVP) 3 Positions from Officer (O) to Senior Manager (SM) 2
Temporary Employees
Male Female Total
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ANNUAL REPORT 2018
Number of Employees 2018 2017
88 69 105 78 193
147
Number of Thanachart Group’s Employees by Location Employees by Location
Gender
Number of Employees 2018 2017 2016
Headquarters Male 2,839 3,730 3,662 Female 4,971 5,003 4,962 Total 7,810 8,733 8,624 Domestic Branches
Male 2,057 1,383 1,458 Female 4,026 3,769 3,906
Total 6,083 5,152 5,364 Grand Total 13,893 13,885 13,988 Remark Thanachart Group has no overseas branch
Number of New Employees and Former Employees Types of Employees
Gender
Number of Employees 2018 2017 2016
New Employees Male 519 423 510 Female 1,356 979 1,293 Total 1,875 1,402 1,803 Former Employees
Male 615 803 664 Female 1,252 1,471 1,305
Total 1,867 2,274 1,969
Number of Employees Returning to Work and the Rate of Employees Remaining Employed after Exercising Maternity Leave Right (Applicable to Female Only) In Case of Taking Leaves
2018
Number of employees who are entitled to take maternity leave to take care of a newborn child Number of employees who exercise maternity leave right to take care of a newborn child Number of employees who return to work after the end of maternity leave right to take care of a newborn child Rate of employees (percent) who return to work after the end of maternity leave right to take care of a newborn child Number of employees who return to work after the end of maternity leave to take care of a newborn child and remain employed for one year
2017
2016
8,708
8,772
8,868
281
337
313
279
320
313
99
95
100
252
296
297
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THANACHART BANK PUBLIC COMPANY LIMITED
In this connection, the number of employees disclosed in this part in 2018 included those of 1) THANI, 2) SSV, 3) MBK LIFE, 4) TM Broker, 5) MTS, and 6) RTN while the number of employees in 2017 included those of 1) to 5).
2. Environmental Protection Environmental and Energy Management Thanachart Group pays attention to the environmental management in a continuous manner. It has established a clear energy conservation policy and environmental measures. In this connection, all employees are required to participate in the implementation of energy reduction activities and the energy conservation is considered as one of their duties. As a result, Thanachart Group could manage its energy consumption in an efficient manner. As well, Thanachart Group places strong emphasis on inculcating in employees the environmental conservation habit and consciousness through implementation of various projects and activities. The objective is to reduce adverse impacts on the environment which are expected to increase as a result of population growth. Among others, these include water shortage and dwindling natural resources. In this connection, employees are encouraged to participate in conserving energy and use energy as an economical commodity and in a sustainable manner at the headquarters and regional offices as well as branches. Among others, fluorescent lamps have been replaced by LED tubes in office buildings in order to extend the lifespan of use and reduce energy consumption in the buildings. Color innovations which place emphasis on safety and environmental friendliness have also been introduced. Moreover, new magnetic chiller systems have been used at Suanmali Building in replacement of the traditional systems. The objectives are to increase the efficiency of the air-conditioning systems and reduce the use of the separate air-conditioning systems. In addition, the organization’s electricity usage has been closely controlled and monitored in a continuous manner. As well, machinery systems have been improved, aiming at increasing their efficiency. Solar energy as an alternative energy source is being used in some parts of the office buildings. The objectives are to reduce electricity consumption and to reduce carbon dioxide emissions, ensuring that they are at the level close to every year’s level. Thanachart Group has three buildings considered as designated buildings for energy conservation purposes under the Royal Decree on Designated Buildings. These include (1) Suanmali Building, (2) Petchburi Building, and (3) Wongsawang Building. As well, energy conservation measures are imposed for other buildings of Thanachart Group, which are not yet considered as designated buildings.
Table showing electric energy consumption (kWh) in 2015 - 2017 in the three designated buildings Building
Suanmali Petchburi Wongsawang
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Electric energy consumption
Energy consumption (kWh) Carbon Dioxide (CO2) emission reduction (Ton/year) Energy consumption (kWh) Carbon Dioxide (CO2) emission reduction (Ton/year) Energy consumption (kWh) Carbon Dioxide (CO2) emission reduction (Ton/year)
ANNUAL REPORT 2018
2017
2016
2015
3,723,000.00
3,860,000.00
3,852,000.00
2,167.16
2,246.91
2,242.25
2,896,000.00
3,027,000.00
3,323,000.00
1,624.66
1,762.02
1,934.32
1,378,000.00
1,466,000.00
1,508,000.00
773.05
853.36
877.81
Training for Instilling Energy Conservation Consciousness The energy conservation training course for the Power of Ants which consists of representatives of each work unit in the organization has been developed and revised, ensuring that it will meet the established objective. Emphasis is placed on the knowledge which could be applied to workplaces and also to the daily life of trainees. The training course is organized one or two times annually. The objective is to instill the sustainable energy conservation consciousness in the participants.
1
2
3
4
5
6
7
8
9
10
Imparting Body of Knowledge to Achieve Sustainability and Continuity Thanachart Group organized an energy day activity under the project entitled “Reuse-Recycle-Refund”. The objective was to promote environmental protection and climate change mitigation. As well, the Group aimed to instill participants with the energy conservation consciousness. A campaign was also launced to promote reuse and recycling of everyday items as well as collection reward points. As part of the event, a cloth bag painting activity was also organized. Noteworthy was a game of lucky draw called Soi Dao which required participants to pull a prize ticket from a mock sky display. The proceeds from selling 1,100 cloth bags were given to state hospitals for purchasing medicines for members of the general public. Other activities included acceptance of donations in the form of aluminium materials to be used for producing prostheses, and in the form of plastic bottles via automated reverse vending machines. Donators would collect reward points in exchange. In this connection, the collected plastic bottles would be recycled. As a result, the donations helped reduce up to 121 kilograms of carbon dioxide emissions.
“Thanachart…Power of Ants in Reducing Global Warming” Project Thanachart Group pays attention to conservation of the environment which might be indirectly affected by its business operations through the use of energy and natural resources. In this connection, it is likely that all groups of stakeholders will be affected. In 2018, Thanachart Group enhanced potential and the body of knowledge of its personnel in relation to the environment. Noteworthy was the area of
1 - 7 Training the energy conservation at seven buildings of Thanachart Group 8 - 10 An “Energy Day” Fair activity, the “Reuse - Recycle - Refund” Project
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THANACHART BANK PUBLIC COMPANY LIMITED
energy conservation. The Group invited external lecturers to conduct two training courses for its personnel. These included the course on “Energy Conservation and World Change” and the course on “Why Do We Have to Conserve Energy?”. The objective was to ensure that the energy conservation was implemented correctly with a clear goal in mind. Another objective was to encourage employees to recognize the importance of joint efforts in the organization in conserving energy. In addition, the Group arranged for the representatives of its working committee on energy management to attend two external seminars which included the course on “In-depth Knowledge about Chillers in the Era of Internet of Things (IoT) in a Connected World” and the course on “Innovation Solutions for Energy Management and Air-Conditioning Systems in the Digital Era”. The two training courses were held by the Department of Alternative Energy Development and Efficiency, Ministry of Energy, at the Energy Conservation Building in Honour of His Majesty the King. The objective was for the Group’s personnel to broaden their knowledge and understanding about air-conditioning systems.
11
12
In view of the past implementation, Thanachart Group continuously placed emphasis on achieving sustainability for the organization and its businesses. In this connection, all the work units of the organization were required to participate in the energy conservation activities. The knowledge gained was useful not only to the organization but also to the employees themselves. For examples, on an annual basis, the Group organized field visits to the organizations which were successful in energy conservation. The knowledge gained from the visits was appropriately applied to the conservation of energy used in the buildings of Thanachart Group. • First field visit to observe energy conservation management at the Well-Being Learning Center Building, the Office of the Thai Health Promotion Foundation, on Thursday, 17 May 2018
13
14
15
16
• Second field visit to observe energy conservation management at PTT Metro Forest Learning Center, PTT Reforestation Institute, on Thursday, 18 October 2018
Water and Waste Management Thanachart Group has implemented the water and waste management plan in a continuous manner. In this
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11 - 13 First field visit to observe energy conservation management at the Well-Being Learning Center Building 14 - 16 Second field visit to observe energy conservation management at PTT Metro Forest Learning Center
connection, it has established formats and processes in relation to the water used in the organization. As well, it has launched a campaign aiming at making employees realize the importance of using water as an economic commodity in order to alleviate water shortage in the future. In particular, it has implemented public relations activities encouraging employees to use water economically. As well, it has changed various devices in order to save water. It also ensures proper management of the treated wastewater before it is released. In addition, it has the treated water tested for quality regularly by experts and officers from the Pollution Control Department, Ministry of Natural Resources and Environment, ensuring that the treated water meets the standards imposed by the ministerial regulations. The main objective is to avoid causing negative impacts on the environment and ecosystems.
Implementation of Energy Consumption Reduction Measures Thanachart Group pays close attention to energy consumption reduction measures in line with the energy conservation policy. In this connection, both executives and staff constantly ensure that energy is being used in an effective and efficient manner. Emphasis is placed on continuous implementation of energy conservation measures and on improvements of existing systems. The measures implemented in each building of Thanachart Group must take into account the energy consumption reduction as a key element. Importantly, the implementation must not affect the well-being of the personnel in the buildings. As well, it must not directly or indirectly affect the environment, both inside and outside the building. Among others, these measures include the following: • Controlling water pump on-off switchis a way to manage electricity usage based on peak and off-peak times, by avoiding usage during peak hours and promoting usage during off-peak hours from 22:00 hours to 9:00 hours. • TBANK made arrangements for the replacement of incandescent lamps with LED lamps both inside and outside buildings. • TBANK made arrangements for seasonal adjustments of the chilled water temperature set point on chillers in order to save energy usage and reduce expenses.
• Installing new Air Handling Units (AHUs), replacing the existing ones which have been used for a long time. • Improving air cooler piping systems in order to enable the ventilation systems for cooling to work more efficiently.
Environmental Protection in Terms of Occupational Health and Safety in Buildings Thanachart Group has been closely monitoring, assessing, and controlling risk factors that have potential to cause harm. Emphasis is placed on improving the work environment, both inside the building and outside areas surrounding the building in the immediate vicinity. The objective is to ensure workplace health and safety of employees and all parties concerned in a regular and continuous manner. • Measuring lighting levels in buildings, ensuring that the work environment is appropriate and the indoor lighting is in line with the established standards and the related laws as well as the occupational health and safety requirements. The lighting levels are scheduled to be measured at least once a year. • Testing quality of air in buildings, ensuring that the work environment is appropriate and the indoor air quality is in line with the established standards and the related laws as well as the occupational health and safety requirements. The air quality is scheduled to be tested at least once a year. • Testing quality of drinking water in buildings in compliance with the established standards and the related laws as well as occupational health and safety in buildings. It is important not only to closely monitor, assess the containment of hazards but also to establish measures aiming at preventing water contamination. The measures help bolster the confidence of employees in buildings and customers visiting buildings as the drinking water in each building is clean and meets the established standards. The water quality is scheduled to be tested at least twice a year. • Organizing training courses for employees on basic life safety and fire extinguishing. The objective is for employees at all levels to acquire emergency fire safety skills. Covering theory and practice, the training enables participants to get acquainted with the use of various firefighting tools and equipment.
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THANACHART BANK PUBLIC COMPANY LIMITED
Improving work processes to reduce the use of natural resources Apart from encouraging employees to make the best use of available paper, Thanachart Group improves work processes in order to reduce paper usage. The efforts also indirectly help preserve the environment. In this connection, the following activities have been implemented in various forms. • Applying electronic systems to operations, workflows as well as meetings and meeting arrangements in the organization. The application helps reduce paper usage significantly. Previously, a lot of paper was used for preparing supporting documentation for meetings. • Sending information or lists to customer electronically (in place of paper) in business processes also helps reduce paper usage significantly. As well, customers receive information more quickly via electronic channels of communication as agreed. • Launching campaigns aiming at inculcating the benefits of paper reduction in employees. As a result, they will minimize paper usage. Among others, they are encouraged to reuse waste paper within the office.
3. Fair Business Practice Priority Areas
Code of Conduct
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ANNUAL REPORT 2018
Practice Guidelines
- In 2018, Thanachart Group took the following actions in relation to the Code of Business Ethics. 1) The Group revised its policies and Handbook of the Code of Ethics, ensuring that they were in line with the various changes that took place. In this connection, the Group took into consideration the Corporate Governance Code for Listed Companies 2017 (CG Code) issued by the Office of the Securities and Exchange Commission (SEC), the regulations on consolidated supervision and the corporate governance of financial institutions issued by the Bank of Thailand (“BOT”), the Banking Industry Code of Conduct issued by the Thai Bankers’ Association, as well as the Corporate Governance Report of Thai Listed Companies (CGR) issued by the Thai Institute of Directors Association (IOD). 2) The Group requested its member companies to revise policies and code handbook, ensuring that they were in line with the Group’s policies and Handbook of the Code of Ethics. 3) The Group organized a training activity on the Handbook of the Code of Ethics for employees at all level continuously. In this connection, new employees were required to sign the handbook acknowledgement form. 4) The Group made arrangements for its executives and employees at all levels to sign not only an agreement to adhere to the policies and the Code of Ethics but also an agreement to avoid taking any action in pursuit of business benefits which represented a conflict of interest with Thanachart Group.
Priority Areas
Practice Guidelines
5) The Group prepared an appraisal form to be used for assessing employees of Thanachart Group at all levels. The objectives were to develop tests and to assess the knowledge and understanding in relation to the compliance with the principles of good corporate governance and anti-corruption twice a year. 6) The Group organized seminars for trading partners, and business representatives to learn about the Group’s Corporate Governance Policy, Code of Business Ethics as well as the Code of Conduct for staff members. The objectives were for them to be aware of and support the Policy and the Code of Ethics. Supporting Socially Responsible Trading Partners
- In selecting trading partners, the Group has adopted a clear policy of not supporting trading partners that are not socially responsible, such as those using child labor. Nor shall it encourage unethical or illegal business conduct.
Providing Consumers with Clear Information about Its Products and Services.
- Thanachart Group not only publicizes details of its products and services but also provides customers and consumers in general with clear user manuals related to the products and services.
Protection of Customer Rights
- Thanachart Group gives services that meet professional standards and are of good quality. - Staff members of the Group are required to keep customer information confidential and are prohibited from disclosing it to any third party. - Staff members are prohibited from using customer information for an undue advantage for the Bank and related parties, except in compliance with the requirements of the law. - Thanachart Group puts in place or makes available channels, through which customers could file complaints and give opinions about services. In handling complaints, the Group takes corrective actions and inform customers of the results in a timely manner through its website, the Group’s customer service marketing officers (Thanachart Contact Center 1770) and TBANK’s Facebook Page (www.facebook.com/thanachartbank).
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THANACHART BANK PUBLIC COMPANY LIMITED
Responsibility to Trading Partners in Supply Chain Thanachart Group conducts its business affairs by following the sustainable development guidelines across the entire supply chain, starting with management of social and environmental impacts through TBANK’s procurement process. Emphasis is placed on development of trading partners on a continuous basis, ensuring their sustainable development. Such development would be achieved through honest, transparent, and accountable business operations. As a result, it is hoped that Thanachart Group’s trading partners will be able to develop their business operation processes while raising social and environmental standards at the same time. The Group’s business operations have to depend on trading partners’ cooperation, in order to be able to deliver products and services that meet customer needs in a responsible manner. In 2018, Thanachart Group had over 400 trading partners in the following areas: 1. Procurement of stationery and general supplies including general products and services, stationery, office supplies, important printing forms, general printing supplies, printed plastic cards, and other miscellaneous items. 2. Outsourcing services including marketing and sales promotions, public relations, document/cash transportation services, security services, cleaning services, chauffeur services, and messenger services, The services are provided by quality companies whose business operations are in compliance with the labor law. 3. Building maintenance services such as refurbishment of office buildings (both at headquarters and at branches), renovation, maintenance, repairs and replacement of spare parts and equipment within TBANK’s offices or in areas where electronic appliances are installed, as well as furniture repair jobs. 4. Procurement of information technology and office equipment including electronic equipment (such as desktop computers, notebooks, multifunction copiers, cash deposit machines, and automated teller machines), security devices (such as CCTV cameras and burglar alarm systems), and all types of electric appliances.
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As a result, it is essential for Thanachart Group to pay close attention to the efficiency of its trading partners in managing resources. The trading partners are required to comply with environmental laws, regulations, and standards. As well, they must be capable of using natural resources in an efficient and effective manner and reducing negative impacts on the environment by following the 3R’s: reduce, reuse/recycle, and replenish. The above criteria serve as guidelines for the work units in charge of procurement in selecting each trading partner. In the future, Thanachart Group will incorporate into the guidelines three additional dimensions including society, environment, and corporate governance, which will cover issues related to business ethics, labor conditions, human rights, laws, occupational health and safety, and environment. In this connection, trading partners are required to sign an acknowledgement, agreeing to strictly adhere to the anti-corruption policy. Thanachart Group will also check, monitor, and assess the performance of its trading partners in these areas in a continuous manner. In case trading partners fail to follow the established guidelines, Thanachart Group may consider taking actions against them, taking into account the impacts and damages caused, such as activating penalty clauses specified in the agreement, claiming compensation for damages in line with the agreement, cancelling the agreement or removing the name of the trading partners in the approved vendor list.
Actions Taken in 2018 • Thanachart Group restructured the procurement management, aiming at streamlining procurement processes including administration and management processes as well as business operations across the supply chain. In this connection, the Group has adopted a centralized procurement policy and has assigned the responsibility to the strategic procurement division and the central administration office. The objective is to ensure that the procurement processes are transparent and that suppliers and service providers are assessed on a continuous basis. • Thanachart Group established guidelines for selecting trading partners, ensuring that they had qualifications that meet the needs of the work units which would like to
make use of their services. As well, they had to be a juristic person whose registered capital amount being in line with the requirements established for each procurement characteristic. Importantly, they also had to possess a site reference in line with the procurement characteristic, with its value being no less than the vaue of the project concerned. For example, if the project pursued by TBANK had a value of THB 5 million, the value of the past performance which served as the site reference had to be equal to or more than THB 5 million. Importantly, the Group also made use of the Electronic Data Interchange (EDI) to check relationships between trading partners. Moreover, the Group checked whether the trading partners were on the designated list issued by the AntiMoney-Laundering Office (AMLO). • Thanachart Group encouraged its suppliers and service providers to pay close attention to the conduct of business affairs in a socially and environmentally responsible manner. The objective was to raise the standards and broaden the scope in order to achieve sustainable procurement. Emphasis was placed on developing operating procedures in collaboration with trading partners in various forms and on managing costs in a systematic manner. The Group expected that trading partners would benefit from the concepts which would enable them to manage better and learn how to reduce costs properly in order to be able to deliver good products and services at a competitive price. In the end, trading partners would be able to operate their businesses in a stable and sustainable manner as well. • Thanachart Group developed a procurement policy, aiming at raising procurement standards, by taking into consideration social and environmental factors such as fair trade, human rights, labor conditions, occupational health, and safety, environmentally friendly production processes, and environmental management in the workplace. The developments were in line with the Group’s Code of Business Ethics as well as its Code of Conduct for staff members. The main objective was to achieve sustainable development across the supply chain. • Thanachart Group managed its relationships with suppliers and service providers (Supplier Relationship Management) in a systematic manner as the relationships had impacts on its overall business performance. All parties concerned were cooperated with one another in developing
products and services that cater to the business needs. The cooperation not only enhanced the Group’s competitiveness but also facilitated the business expansion of suppliers and service providers. Visits were paid to the workplaces of the trading partners. Financial knowledge was shared with the trading partners’ employees so that they had the knowleddge and could make use of it. • Thanachart Group was determined to promote further adoption of the sustainable development concept throughout the supply chain. It started by discussing and cooperating with trading partners in developing businesses, aiming at raising procurement standards by taking into account economic, social, and environmental factors. The cooperation enabled all parties to achieve several goals in concrete terms. An example was the purchase of various products from charitable organizations, which could be used as mementoes on various occasions. As another example, the Group and a number trading partners jointly developed various print media by using environmentally friendly print materials. Other example was the continuous cooperation with trading partners in researching and developing new procurement processes in order to come up with innovative products for the society and the environment which are in line with the sustainable development policy.
Examples of Project Electronic Equipment Procurement Project Thanachart Group has established a procurement guideline that places emphasis on use of environmentally friendly materials and reduction of carbon dioxide emissions by requiring that raw materials for production must be capable for being recycled. As well, it is required that the various electronic equipment to be procured must meet standards for safety requirements established by national standards institutes such as Underwriter Laboratories (UL). In addition, the equipment must receive certification from national institutes such as Federal Communications Commission (FCC) that it conforms to standards that limit the amount of electromagnetic interference (EMI). Importantly, the equipment must receive certification for energy efficiency, such as Energy Star 5, apart from receiving certification from national institutes for products that meet electronic product environmental performance criteria, such as Electronic Product Environmental
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Assessment Tool (EPEAT) rating. The guideline covers procurement of electronic equipment such as computers and their peripheral devices, multifunction photocopiers that received product certification from Thai Green Label Scheme, and other electrical appliances. A4 Paper Procurement Project Foreseeing impacts on the environment, Thanachart Group has adopted a policy, ensuring that the A4 paper to be procured must be made from perennial plant fibers or those of farm trees or used agricultural materials mixed with 100 percent recycled fibers without using any new trees since the production of paper is based on an environmentally friendly process. In this connection, over 95 percent of the paper used consists of the following: 1. A4 Paper 80 grams is made from 70 percent farmed tree fibers and 30 percent recycled fibers using waste or used materials as mixtures. Emphasis is also placed on reduction of the use of bleaching agents in the environmentally friendly production process. The raw materials are suitable for producing paper with quality equal to the photocopy paper made from 100 percent new fibers. Apart from being thick, smooth, slippery, and white, both sides of the paper could be printed. 2. A4 Paper 70 grams which accounts for 90 percent of printing is made from 50 percent farmed tree fibers and 50 percent recycled fibers using waste or used materials as mixtures. Emphasis is also placed on reduction of the use of bleaching agents in the environmentally friendly production process. The result is a higher degree of opacity for high performance. Apart from being thick, smooth, slippery, and white, both sides of the paper could be printed. Project on Renovation and Redecoration of Branches and Office Buildings Thanachart Group has established guidelines for procuring construction raw materials for renovating and decorationg branches and office buildings, which are environmentally friendly. In this connection, the Group recognizes the importance of procuring construction materials which meet quality standards in terms of occupational health, safety, and the environment. In particular, in selecting
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interior paint for areas within branches and office buildings, emphasis is placed on paint which is safe for consumers and environmentally friendly. The objective is to minimize Volatile Organic Compounds (VOCs) exposure, As well, paint to be used must be free not only from Alkylphenol Ethoxylate (APEO) but also from other harmful chemicals such as formaldehyde, mercury, lead, cadmium, chromium, and evaporators. Fire Extinguisher Purchase Project Fire extinguishers making use of liquid formula instead of dry powder were purchased. Apart from being eco-friendly, NON-CFC fire extinguishers were capable of preventing toxic gas production. Importantly, users could see things clearly when using the fire-extingusihers as they did not produce dust. As well, bearing the green label, the fire extinguishers could be safely used on electronic devices and electrical devices. Office Furniture Procurement Projects Thanachart Group has established guidelines for office furniture procurement, in which emphasis is placed on ensuring that raw materials used for production must be environmentally friendly and also that the furniture must be purchased from manufacturers whose product designs, production processes, and green buildings must be environmentally friendly. Importantly, the raw materials used in the production processes must be recyclable. For example, one could recycle office furniture by changing their forms or rearranging them, instead of throwing them away as useless items. In this connection, recycling helps reduce the use of natural resources for reproduction. Another aspect is the steps involved in the design of products. For example, the area of a table top, arm rest and table legs could be designed in such a way that their left and right sides could be used without having to place orders for new parts in case offices have to be renovated or furniture has to be removed or relocated. Project for Buying Water-cooled Chillers Using Magnetic Bearing Oil-Free Technology, to be Installed at Suanmali Building Thanachart Bank developed guidelines for selecting appropriate products which helped reduce electricity
consumption. In this connection, the Bank chose water-cooled chiller systems using magnetic bearing oil-free technology since air-conditioners on any floor could be turned on or off separately. In addition, the new systems did not have to use oil to operate the air-conditioners as in the case of conventional air-conditioning systems. As a result, use of oil was reduced and maintenance costs were also cut. Importantly, the new systems were eco-friendly. Online Procurement Project Thanachart Group has adopted an Online Purchasing System as its standard procurement procedure. As a result, apart from being able to reduce paper use by over 1 percent, compared with past consumption, the Group managed to save THB 150,000 per annum in terms of reduced paper usage expenses. In addition, the Group made use of Electronic Request For (x) (eRFX) as part of its standard procurement procedure. As a result, the Group was able to reduce use of paper which normally had to be sent to its trading partners for preparation of quotations for different projects.
Responsibility towards Lenders The Company and member companies of Thanachart Group not only strictly adhere to the agreements with lenders but also fulfill all the obligations, particularly those related to guarantee conditions, capital management and in an event of default, what the loan proceeds are used for, principal and interest payments, guarantee conditions and any other matters agreed with the lenders. In this connection, the Company shall send a report on the financial position and financial information to the lenders in line with the established terms and conditions in an accurate, transparent, and regular manner. As regards the capital management, the Company pays great attention to stability and strength as well as liquidity management, ensuring that it has enough liquidity to make repayments to the lenders in accordance with the established schedules.
Responsibility towards Prevention of Software Piracy On the Policy Thanachart Group has established security measures for computers and usage. The objective is to control software piracy in relation to computer hardware and software pakage installation. On the Processes • Thanachart Group has put in place processes for keeping asset registers and reviewing them at least once a year for improvements. In this connection, officers will be assigned to check the software installed on the employees’ computers. • As well, the Group has put in place processes for entering a purchase requisition in the purchase invoice register when a user submits a request. On the Technology • Computer users are prohibited from installing software themselves. Otherwise, they will be denied permission to access their computers. If they want to use certain software, they are required to get a prior permission from the work unit concerned and to make a request to the information system and technology department for further action. • A desktop management system has been installed on each computer for the purposes of checking the installed software and collecting data for preparing a monthly report. On the Users Thanachart Group organizes IT Security Awareness Training and Testing for employees at least once a year. The objective is for employees to be aware of the Group’s policy on information systems security.
CSR in Process towards Other Stakeholders 1. “Rethink” Campaign Program Rethink Project is a Corporate Social Responsibility (CSR) activity initiated by TBANK. Based on the sufficiency economy philosophy of His Majesty the late King Bhumibol
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Adulyadej, the project has been implemented continuously for four consecutive years. The objective is to create and develop a social economy, ensuring that it is stable and sustainable. To achieve this, members of the general public are provided with knowledge and guidelines on financial discipline, which are introduced under the slogan “Rethink, Use Money Wisely and Feel Happiness”. In 2018, TBANK publicized the project in numerous formats via various channels, using the concept of “A Series of Rethink Second”. Messages were transmitted in the form of video clips about everyday life stories and a second just before a person from a different group of people decides to make a payment. The person may belong to a group of teenagers, working age population, or a group of seniors. The objective is to raise the awareness of the important time just before making a financial decision. If one could rethink and change one’s payment behavior in the present, it could serve as a good starting point for achieving financial stability and sustainable happiness in the future. In this connection, the video clips were further developed and produced in various formats in order to broaden knowledge and understanding of a wider public. Moreover, in order to inculcate members of the public with the financial discipline and the financial management which are easy to understand and could be practically implemented in real-world settings, TBANK produced a series of “T-Money Tips” video clips, aiming at introducing to the public tips, secrets, and suggestions about everyday finance management, including income tax calculation and retirement financial planning, among others. The video clips and other financial knowledge were publicized through TBANK’s various channels such as Facebook, LINE, television sets at branches, and its website (www.thanachartcsr.com) throughout the year.
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2. “Thanachart Insurance - Yes, We Safe” Project As an operator in insurance business, TNI recognizes the importance of losses caused by numerous car accidents that occur each year. As a result, it is determined not only to operate its business with responsibility towards the society but also to participate in promoting socially beneficial activities. In particular, it inculcates in members of the public the good consciousness of jointly implementing preventive measures for road safety in a continuous manner through its “Thanachart Insurance - Yes, We Safe” Project. The project consists of two key areas. The first one focuses on ensuring safety while
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17 - 18 “Rethink” Campaign Program 19 - 21 “Thanachart Insurance - Yes, We Safe” Project
the other focuses on giving different types of aid to victims of road traffic accidents. The program has been implemented since 2013. In 2018, TNI implemented the “Drive DD United Season 4” program which was the fourth consecutive year of contest. The objectives are to participate in preventing accidents on the road and ensuring road traffic safety. In particular, it provides university students at all levels nationwide, whose age does not exceed 25 years, with an opportunity to participate in submitting their entries in a video clip contest on the theme of “Keep Life, Drive Slow”. Realizing that these students belong to the age group with the highest road traffic accident rate, the contest helps inculcate the consciousness of safe driving in the youth who are on the receiving end of media messages. It is also hoped that many of them will probably become some of the people producing media messages for the public when they grow up, and that they will play a key role in inculcating in members of the general public the consciousness of building a society free from road traffic accidents in a sustainable manner. In this connection, the program receives support and advice from both the public and private sectors including the Office of Insurance Commission (OIC), the Office of Accident Reduction Network, and the Thai Health Promotion Foundation (ThaiHealth). On the assistance side, believing that accidents could not be completely avoided, TNI has been giving scholarships to students of Sirindhorn School of Prosthetics and Orthotics, the Faculty of Medicine, Siriraj Hospital, and Mahidol University. The school produces professional prosthetists/orthotists with a Bachelor in Prosthetics and Orthotics. They have knowledge to produce prosthetics and orthotics (P&O) devices and appliances to restore the physical capabilities of patients. They are also capable of producing, redesign, and developing the devices and corrective appliances with standards on a par with the international level. With these devices and appliances, people with disabilities can live normal lives. In addition, TNI initiated a project entitled “Safer on the Road”, aiming at joining hands with communities to make roads safer. To achieve this, TNI coordinated with road safety party networks and communities in implementing problem-solving measures and improving community areas which pose accident risks on collector roads. The objectives are to prevent accidents and to raise road safety standards for both people living in the communities and users of the road. These include 10 locations in the
following nine provinces nationwide: Khon Kaen, Phitsanulok, Ratchaburi, Suphan Buri, Surat Thani, Pathum Thani, Nakhon Pathom, Phra Nakhon Si Ayutthaya, and Nakhon Nayok.
CSR after Process This type of CSR covers any activities other than those undertaken in the ordinary course of its business. Thanachart Group has been involved in this type of activities for a long time since the beginning of its business operations. Later, as the commercial banking services became one of Thanachart Group’s main businesses with an extensive branch network nationwide, the CSR activities have been implemented by regional hubs with cooperation from the staff members of Thanachart Group. Their customers, business counterparts, and people living in communities are also invited to participate in the activities. In 2018, the Group took part in the following CSR and environmental protection activities in order to promote and develop society in various areas. 1. Promotion of Education, Religion, and Thai Cultural Identity: Thanachart Group participated in activities aiming at filling in education gaps as well as streamlining the country’s educational systems. As well, the Group supported activities related to promotion of religion as well as Thai cultural identity and local culture in collaboration with the communities, employees, and members of the general public. The joint efforts laid a strong foundation for the country’s strengths and competitiveness. 2. Promotion and support of implementation of activities for charity: Playing the role of a good corporate citizen, Thanachart Group participated in social development by giving support to the activities implemented by various charitable organizations which were involved in strengthening society and making it sustainable. The activities covered all target groups, regardless of whether they are patients, children, youth, women or the underprivileged. 3. Environmental protection: As part of its determination to implement activities which help reduce indirect impacts on the environment created by its business operations, Thanachart Group promoted education and understanding in using energy in the most efficient manner. It also participated in campaigns aiming at inculcating energy conservation culture in both executives and employees.
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Moreover, Thanachart Group has established the Thanachart Foundation for Thai Society which serves as a key mechanism in driving the implementation of the Group’s CSR activities. Most of the Foundation’s activities focus on creating a sound and sustainable society as well as social development. The main aim is to build a prototype model for developing communities and society in various ways. Emphasis is placed on the knowledge in developing, improving, and changing oneself, including thoughts, practicing skills, confidence, making decision as well as right attitudes and values suitable for making a living. Focus is also given on improvements of one’s livelihood based on His Majesty the late King Bhumibol Adulyadej’s concept of the ‘Sufficiency Economy’. Importantly, Thanachart Group has established coordination networks for giving social assistance and services in case of unfortunate events. The Group also participated in activities related to preservation of Thai arts and culture. Recognizing the importance of encouraging executives and employees of Thanachart Group to jointly improve the society as well as instilling the spirit of volunteering in employees at all levels in various work units, in 2018 TBANK established Thanachart CSR Club which served as a center for mobilizing the power of members in supporting the implementation of CSR and environmental protection activities to be organized. In this connection, the members would be provided with opportunities to express opinions about the existing CSR and environmental protection activities and to jointly develop plans for CSR activities with an aim of making the society strong and sustainable.
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Promotion of Education, Religion, and Thai Cultural Identity Presentation of Royal Kathin Robes in 2018 Thanachart Group’s presentation of Royal Kathin Robes could be traced back to the year 2006 when the Group organized the presentation at Wat Kaew Korawaram in Krabi Province. The year 2018 marked the 12th consecutive year. The presentation of Royal Kathin Robes could be well considered as the Group’s main CSR activity which has been implemented regularly. The main objective is to promote and maintain Buddhism so that it continues staying with the Thai society.
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22 - 24 Presentation of Royal Kathin Robes in 2018
In 2018, Thanachart Group was graciously bestowed by His Majesty King Maha Vajiralongkorn Bodindradebayavarangkun to offer the Royal Robes at Wat Pom Wichian Chotikaram, a royal temple in Samut Sakhon Province. In this connection, this was the first year in which TBANK invited member companies of Thanachart Group, customers, trading partners, executives, employees, and members of the general public to jointly make donations in support of Buddhism and also to partly contribute to the construction of a heart center at Samut Sakhon Hospital. The total cash given by the donators amounted to THB 15,773,182.40. As an annual practice, Thanachart Group continued to give not only scholarships to needy students with good academic records and good behavior but also education funding support to schools in Samut Sakhon Province.
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“Thanachart Initiates and Fulfills Thai Identity” Project In appreciation of the royal kindness of Princess Bajrakitiyabha, the Royal Granddaughter, TBANK humbly invited Her Royal Highness Princess Bajrakitiyabha to preside over the opening ceremony of the final round of the 47th Annual Contest of ‘Thanachart Initiates and Fulfills Thai Identity’ Project in 2018. The ceremony was held in Suanmali Hall of TBANK’s Suanmali Building for second consecutive year. In this connection, Her Royal Highness graciously attended to the previous two reading aloud contests among students of lower and upper levels of the secondary education (Mathayom Suksa). Her Royal Highness Princess Bajrakitiyabha has been attaching great importance to preservation of Thai identity and culture. As part of her many contributions, Her Royal Highness currently gives assistance to several underprivileged groups in society. As a result, she makes a good role model for young people in the country. “Thanachart Initiates and Fulfills Thai Identity” Project was inherited from Siam City Bank whose project previously called ‘Siam City Preservation of Thai Identity’. The implementation of the project in 2018 marked the 47th consecutive year. One of its main objectives is to maintain and preserve Thai identity including reading aloud Thai and using Thai manners in daily life. The project not only helps preserve the unique identity for Thai people and prevent its disintegration over time, but also strikes a balance between social values which have been increasingly affected by foreign cultures. Moreover,
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25 - 28 “Thanachart Initiates and Fulfills Thai Identity” Project
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the project helps inspire and inculcate in Thai youth about the love of Thai culture. The love makes them cherish the culture and helps keep it as part of Thai society forever. Both Thai language and Thai manners are widely recognized as unique characteristics of Thai identity. The project consists of two main activities including reading aloud contests and Thai manners contests. Representing their educational institutions, students from Prathomsuksa 1 to the University level are provided with an opportunity to participate in the contests to compete for Her Royal Highness Princess Maha Chakri Sirindhorn’s Cups, honorable shields and certificates of honor, as well as scholarships. In 2018, there were more than 5,500 students from every region participating in the contests and in this year there was still the Thai manners contests for hearing-impaired children to compete for Her Royal Highness Princess Maha Chakri Sirindhorn’s honorable shields and scholarships. In addition, TBANK recognizes the importance of promoting and supporting hearing-impaired children so that they have opportunities to participate in various social activities and are able to lead dignified lives as normal people. As well, these hearingimpaired children should be provided with opportunities to show their determination, intention, and potential for participating in the activities related to the maintenance and preservation of Thai identity by practicing Thai manners properly. This marked the fourth consecutive year of the implementation. Apart from enhancing potential and opening up opportunities in the society, TBANK intends to enhance potential of visually impaired children by initiating a project entitled “Reading Aloud Contest for Visually Impaired Children”, through the use of Braille. This was the first year in which the contest was organized. In this connection, teachers from educational institutions nationwide which taught visually impaired children had their students applied for the contest. In 2018, TBANK continued to organize favorable school video clip contests on the theme of “Before getting on the stage”. This was the second consecutive year in which the contests were held. The objective was to encourage participation of teachers, children, and their parents in the project. The project consisted of two main activities including reading aloud contests and Thai manners contests. TBANK made use of its online media as main channels to promote the activities. There were over 60 schools which participated in the contests. Moreover, in order to enhance preparedness
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and potential of teachers so that they had appropriate knowledge and understanding to serve as a role model and share the correct knowledge about Thai manners with the country’s youth, TBANK organized a training activity entitled “Teachers as Role Models of Thai Manners” by coordinating with the Department of Cultural Promotion, Ministry of Culture. This was the first time which the activity was organized. Over 240 teachers participated in the training activity. Furthermore, to encourage employees of Thanachart Group to recognize the importance of Thai cultural identity preservation and to enable them to adopt Thai manners and read Thai correctly both during and outside office hours, TBANK organized a training activity entitled “Thanachart-Smart as Thais…Anyone Can Do” for employees of Thanachart Group. They were given training in Thai manners and how to read aloud Thai correctly. In this connection, the training activities were conducted by lecturers from the Department of Cultural Promotion, Ministry of Culture, as well as the National Broadcasting and Telecommunication Commission. As well, Thai manners and reading Thai aloud contests were organized for the training participants. Garuda Museum by TBANK “The Garuda Museum by TBANK” is considered the first and only Garuda museum in ASEAN. Its establishment could be traced back to the event on 1 October 2011 in which TBANK took transfer of SCIB’s entire business. Before the acquisition, SCIB had been operating for over 70 years and the Royal Garuda Emblems had been graciously bestowed by His Majesty the King upon SCIB for display at its headquarters and branches since 1941. After the merger with TBANK in 2011, it was necessary to dismount Garuda Emblem in compliance with the Garuda Emblem Act (No. 2) B.E. 2535 (1992). TBANK recognized the value and the importance of the Royal Garuda Emblem which Thai people have a great faith in and a strong relationship with. The Emblem is also a symbol representing His Majesty the King of Thailand. As a result, TBANK respectfully relocated the Emblems from the headquarters and branches to its Bangpu Training Center in the municipal area of Tambon Bangpu, Samut Prakan Province. This was followed by the founding of the Garuda Museum. The Museum showcases various stories of Garuda in a multimedia format. The stories are principally based on Thai people’s basic understanding about Garuda and Buddhism beliefs. It is designed and created so that visitors could
learn about the origin of Garuda according to the legend from the viewpoints of both Buddhism and Brahmanism. Importantly, an area in the museum has been set aside for exhibiting the Emblems which are respectfully relocated from SCIB’s branches. One of the objectives of the exhibition is to reflect the Royal Garuda Emblem’s relationship with the country’s three fundamental institutions, namely the Nation, Religion, and Monarchy. In addition, the museum serves as a resourceful place for children, youth, and interested members of the general public to learn about the history. Moreover, in honor of and in gratitude for the boundless and gracious kindness of His Majesty the late King Bhumibol Adulyadej, TBANK built an additional room for “Remembering The Great King”. The room shows to visitors the linkages between the Garuda and the royal duties of His Majesty the late King Bhumibol Adulyadej.
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Activities “Related to Sustenance and Preservation of Local Traditions” TBANK recognized the value of Thai identities, customs, and traditions in various localities throughout the country, which reflect ways of living, folk wisdom, and cultural growth. The heritages which have been passed from one generation to the next and represent unique identities which no other country could imitate. They are invaluable and worthy of preservation. As a result, the activities related to “sustenance and preservation of local traditions” have been conceived. In this connection, TBANK’s network hubs which are located nationwide are responsible for implementing these activities and cooperating with communities as a member of their respective localities. This leads to cooperation among the employees, customers, members of the public as well as various institutes and agencies, both in the public and private sectors. The activities also include regional tourism promotions and public relations. In 2018, the following were the activities organized in relation to the sustenance and preservation of local traditions. 1. Nakhon Sawan Chinese New Year Festival 102th in 2018, Nakhon Sawan Province, 2. Commemoration marking the 43rd anniversary of the death of Luang Pu Tim Issariko, Wat Lahanrai, Rayong Province, 3. Candle festival for the Buddhist Lent in 2018, Ubon Ratchathani Province, 4. Buddhist Lent Candle Making and Offering Ceremony 2018, Songkhla Province,
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5. Tak Bat Khaotom Lukyon Festival, Saraburi Province, 6. Lotus throwing festival (held on the 14th day of 11th lunar month) in Samut Prakan Province, 7. Sustenance of vegetarian tradition and culture, Phuket Province, 8. Conservation of Yi Peng festival in Chiang Mai Province.
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“Things Given by Elders Used by Juniors” Project The Project was conceived as a result of Thanachart Group’s determination to promote and develop Thailand’s education. The concept was based on reuse of office equipment which was no longer used but was still in a good condition. They were obtained from improvements of TBANK’s headquarters and branches. The equipment was donated to state agencies, associations, foundations and various schools for futher use. In 2018, TBANK donated 2,215 pieces of equipment to 54 recipients nationwide, including state agencies, associations, foundations, and schools. The equipment included tables, cabinets, chairs, and computers.
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Promotion and Support of Implementation of Activities for Charity Annual Red Cross Fair TBANK continuously participated in the sale of Red Cross lottery tickets as well as the Red Cross Fair on a yearly basis. The participation in the fair could be traced back to the year 1976 when Bangkok Metropolitan Bank was invited to join the Red Cross Fair, at which the bank used the name of “Bangkok Metropolitan Bank’s Red Cross Booth”. Later in 2002 when Bangkok Metropolitan Bank merged with SCIB, the name of SCIB was used at the fair under the name “Siam City Bank’s Red Cross Booth”. Then in 2011 when the business of SCIB was transferred to TBANK, the name of “Thanachart Bank” was used at the fair. The booth name was “Thanachart Bank’s Red Cross Booth”. Today, TBANK continues to participate in the sale of Red Cross lottery tickets and the Red Cross Fair annually. In 2018, TBANK participated in the Red Cross Fair held at Lumpini Park from 23 November to 1 December 2018. The decoration of its booth was based on the concept of
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“Engine to Success” which represented the Bank’s policy of not only delivering good products and services to customers but also giving back to society through CSR activities. At the fair, TBANK held a workshop for its customers who participated in activities organized at the Bank’s booth. Used plastic straws were recycled by using them for decorating cloth bags. The recycling of the used plastic straws was part of TBANK’s campaign against climate change. In addition, the Bank received donations of plastic straws which would be forwarded to a youth group called “Sandal Gang” in Lopburi Province. The youth group used the straws as raw materials for producing pillows for paralyzed or bed-ridden patients. Moreover, TBANK would humbly present the net proceeds worth THB 6,300,000 from its sale of Red Cross lottery tickets and its participation in the Red Cross Fair in 2018, to Her Royal Highness Princess Maha Chakri Sirindhorn, Executive Vice President of the Council of the Thai Red Cross Society for supporting the Society’s activities.
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Activity Supporting Inspire Project Initiated by H.R.H. Princess Bajrakittiyabha, Ministry of Justice Recognizing the importance of boosting morale of and giving opportunities to the underprivileged sections of the society, TBANK participated in support for “the Inspire Project under the initiatives of Her Royal Highness Princess Bajrakittiyabha, the Ministry of Justice”. The main objectives of the project were not only to boost morale of the group of people who made missteps in life and to enable them to re-enter society, but also to build a society which provided inmates with opportunities. The objectives were in line with the initiatives of Her Royal Highness Princess Bajrakittiyabha. Her Royal Highness kindly recommended that prisons adopt His Majesty the late King Bhumibol Adulyadej’s Philosophy of Sufficiency Economy so that inmates recognized their own values, were able to depend on themselves, and stop wasting or being extravagant with money. In addition, inmates were provided with vocational training, startup capital and scholarships. This was to enable them to get back on their own two feet, look after themselves and their family, and also avoid repeating the same mistakes when they were released from prisons. In 2018, TBANK participated in support for “Run for Better Life” Doi Hang Cross Country Trail, marking the 12th anniversary of the Inspire Project under the initiatives of Her
35 - 36 Activity supporting Inspire Project Initiated by H.R.H Princess Bajrakittiyabha, Ministry of Justice
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Royal Highness Princess Bajrakittiyabha. The event took place at Doi Hang Temporary Prison in Chiang Rai Province. The objective was to expose the areas of the prison to the public, so that they knew the inmates were useful and were able to help the society. Her Royal Highness expected that Doi Hang Temporary Prison would serve as a learning center and a new agro tourism attraction in Chiang Rai Province. In fact, it was the first time in Thailand that a prison served as a tourist attraction as well as a learning center. In addition, TBANK purchased the products produced by inmates and gave them as souvenirs to its customers on various occasions. As part of the implementation of the activity, staff of TBANK visited the production process and directly talked with inmates. In this connection, the staff provided the inmates with suggestions on product design, packaging and development of marketing channels. Emphasis was placed on development of online marketing channels so that the products produced under the Inspire Project would become more popular in the marketplace. Bridge-of-Merit Project The establishment of the Bridge-of-Merit Project could be traced back to the “Thanachart Initiates and Fulfills….Merit Saving Exposition” Project which was implemented in 2009. Several charitable organizations were invited to participate in the exposition, open their booths and publicize the work of their organization. Later in 2011, the establishment of the “Bridge-of-Merit” Project was conceived. The objective was to carry on the support to the work of the charitable organizations in a sustainable manner. In this connection, TBANK served as the bridge linking givers and recipients. TBANK’s customers and members of the general public could jointly donate cash to the charitable organizations through the Bank’s various channels including ATMs TBANK counters, Automatic Deposit Machines (ADMs) or through the internet without any service fee to be charged. In addition, TBANK plans to introduce an E-donation system to faciliatate donation in the future. Currently, there are altogether 15 charitable organizations which participate in the Bridge-ofMerit Project. Their names are as follows: 1. Association for the Promotion of the Status of Women, 2. Baan Nokkamin Foundation, 3. Cardiac Children Foundation of Thailand Under the Royal Patronage of Her Royal Highness Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindra,
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4. Foundation for Children with Disability, 5. Foundation for Slum Child Care Under the Royal Patronage of Her Royal Highness Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindra, 6. Ramathibodi Foundation, 7. Thammasat University, 8. Princess Mother’s Medical Volunteer Foundation, 9. Foundation for the Family Welfare of War Veterans Under the Royal Patronage of Her Royal Highness the Princess Mother, 10. Sai Jai Thai Foundation Under the Royal Patronage, 11. Srithanya Hospital Foundation, 12. Khum Klao Foundation Under the Royal Patronage, 13. Soka Gakkai Thailand, 14. Queen Sirikit Center for Breast Cancer Foundation, and 15. Friend in Need (of “PA”) Volunteers Foundation, Thai Red Cross. Support to Chakri Naruebodindra Medical Institute, Ramathibodi Foundation Thanachart Group joined hands in making cash donations as a partial support to a Project of Chakri Naruebodindra Medical Institute, Ramathibodi Ffoundation continuously on an annual basis. The Project’s objectives are to build a medical institute and a hospital with 400 beds for treating patients at all levels in an integrated manner as well as promoting health, rehabilitation, protection against diseases, health care and public health services with proper standards. In addition, the new medical institute would serve as a learning network center which gave academic services in relation to health promotion for people living in the country’s eastern region. In 2018 which was the fifth consecutive year of the continuous support, TBANK, TFUND, TNI, and TBROKE jointly donated cash in the amount of THB 5,000,000. Blood Donation in Honor of H.R.H. Princess Maha Chakri Sirindhorn The activity has been implemented by TBANK’s Network Hub 2 of the northeastern region (Khon Kaen) for fourteen consecutive years. The four areas covered by the activity include Khon Kaen Province, Roi Et Province, Kalasin Province, and Maha Sarakham Province. The objective of the activity is to encourage members of the public and staff members to perform good deeds in honor of Her Royal
Highness Princess Maha Chakri Sirindhorn. In this connection, they jointly donate blood to be used not only for saving lives of accident victims in emergency rooms, but also for alleviating blood shortage during treatment. In 2018, more than 700 people donated 280,000 cc of blood to the Thai Red Cross Society. Other Corporate Social Responsibility Activities
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Apart from the various Corporate Social Responsibility activities which Thanachart Group has been implemented in a continuous manner, Thanachart Group is determined to implement other activities which enable the Group to play a participative role in strengthening the society in a sustainable manner. The related details are as follows: 38
1. Early Warning Video Clip Project: TBANK and the Department of Special Investigation (DSI) jointly implemented the “Early Warning Video Clip” Project, providing customers and members of the general public with early warning alerts and assistance which enable them to avoid becoming victims of fraudsters or being cheated in financial transaction frauds committed by groups of people who take up unlawful occupations. In this connection, each episode of the video clip series was broadcast via various communication channels of the Bank and DSI. Among others, these included TV sets at branches, the Bank’s website (www.thanachartbank. co.th), LINE, Facebook, and Twitter as well as the website of DSI.
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2. Farmers-Can-Still-Smile Project: This was a Corporate Social Responsibility project jointly implemented by TBANK, MBK Center, and Pathumwan Princess Hotel. The objective was to give assistance to Thai farmers who were hard hit by plummeting pineapple prices. In particular, the Project purchased 5,000 kilograms (or 5 tonnes) of honey pineapple variety (a sub-variety of Pattavia) from farmers in Lampang Province and gave the pineapples to their trading partners, customes, members of the public, as well as communities and schools in the vicinity of Pathumwan District. In addition, those who participated in the project activity were provided with an opportunity to make cash donations in the form of scholarships to Phra Dabos School. The total money donated by the participants amounted to THB 50,000. 3. Disaster Relief Fund Raising for Laos: The fund was for assisting victims of the flash floods caused by the collapse of Xepian-Xe Nam Noy hydropower dam in Laos
37 - 39 “Early Warning Video Clip” Project
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People’s Democractic Republic. The floods did enormous damage to houses and commercial properties in the southern part of the country. Over 6,000 people were affected with many reported missing. TBANK donated 600 blankets to the Embassy of the Lao People’s Democratic Republic in Thailand. As well, the Bank served as a conduit for donations from its executives, employees, customers and members of the general public to help the victims. The total fund raised amounted to THB 500,000.
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4. Under the activity marking National Children’s Day: TBANK participated in organizing an activity for children, on the theme of “Thanachart Kids Zone” in the compound of Government House. The design of the activity was in line with the 2018 motto “Clever, Cautious, and Creative in Technology”. The objective was for children to participate in the game called “Superheroes Go Lucky”. Participants in the activity were given gifts, rewards and sweets. In addition, TBROKE joined the Nine Center Rama 9 and Bangkok Broadcsting & Television Company Limited Channel 7 in organizing an activity on the theme of “Good Thinking, Kids’ Day”. As well, the company provided children with sports equipment, learning equipment and materials as well as various toys under a toy-sharing project during the Ripley’s Carnival 2018 at Ripley’s World Pattaya.
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5. In relation to the activity titled “T-Broker Builds Teams, Builds Energy, and Builds Success - 2nd Anniversary”: TBROKE has been implementing social and environmental activities in a continuous manner. In 2018, the company gave learning equipment and materials as well as scholarships to students with good academic performance records. As well, it helped improve the environment surrounding San Chao Mae Akat (Rotemanee) School in Samut Songkram Province.
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6. Under the activity titled “TCAP brings young children happiness”: TCAP organized a social responsible activity in which it gave things to young children at Bangkok School for the Blind. As well, it hosted a luncheon for them with its staff participating in the activity for bringing the young children happiness.
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40 - 42 “Farmers - Can - Still - Smile” Project 43 - 44 “Disaster Relief Fund Raising for Laos” Project
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Anti-Fraud and Anti-Corruption Thanachart Group recognizes that corruption is not only the root cause of evils and an obstacle to the country’s social and economic development, but also leads to unfair business practices. As a result, it has joined with both the private and public sectors in the program called “Thailand’s Private Section Collective Action Coalition Against Corruption (CAC)” by signing an agreement confirming its commitment to the coalition. In 2014, Thanachart Group adopted an “Anti-Corruption Policy” and established measures as well as the related operational practices and procedures. They served as guidelines that all employees of the Group are requested to adhere to. The details of which are as follows: 1. The Bank’ Board of Directors and companies of Thanachart Group adopted resolutions approving the Anti-Corruption Policy. The policy clearly defines “corruption” and various forms of corruption. The policy basically requires that Directors, executives, and employees must not be involved in or accept any corruption in any form, directly or indirectly, for the benefit of the organization, themselves, families, friends, or acquaintance. They are required to serve as role models complying with the Anti-Corruption Policy. As well, the executives of Thanachart Group are not only responsible for looking after and supporting the implementation of the policy, but also for reviewing the various measures, ensuring that they are appropriate and in line with business changes as well as laws and regulations. 2. Thanachart Group has established the Anti-Corruption as one of the organization’s core values. This core value known as ‘C3SIP’ serves as a guideline to which all employees of Thanachart Group are required to adhere. The key components of C3SIP are as follows: • Customer Focus : meeting the customer needs; • Collaboration : working as a team; • Commitment : fulfilling one’s duties until goals are achieved; • Spirit : devotion to one’s work; • Integrity : adhering to integrity and anti-corruption; and • Professional : possessing adequate knowledge and ability to perform one’s duties.
3. As regards the corruption risk assessment, member companies of Thanachart Group have adopted the principles and methodology based on the Risk and Control Self Assessment (RCSA) which is one of the tools used for management of operational risk management i.e. risk identification, risk level assessment, formulation of internal control systems to control and reduce risks as corruption risk prevention. Corruption risks are also monitored and reviewed consistently every 3 years. The progress of the action plans as well as the implementation of the risk control measures are monitored, or whenever the risk factors are changed significantly to the extent that they have a material impact on the operational processes. Assessment results are reported to the Audit Committee and the Bank’s Board of Directors for acknowledgement. 4. Thanachart Group has established Anti-Corruption Measures, to which the employees of Thanachart Group are required to adhere. The measures are based on the internal control principles which are in line with the corruption risk and the Anti-Corruption Policy. These measures will be reviewed annually, ensuring that they are appropriate and in line with the risks. As well, the Group has established disciplinary actions to be taken against employees who are involved in any corrupt act. 5. Thanachart Group places emphasis on all forms of corruption, particularly in relation to giving or accepting presents or gifts, throwing parties or giving or accepting any other benefits. These are issues, to which the Group pays special attention as they could easily lead to corruption. As a result, they have been included in the Code of Business Conduct as well as the rules and regulations which cover all operational and control procedures. The employees are required to notify their supervisors of their acceptance or provision of presents. Violation or failure to implement the Anti-Corruption Measures as well as any action supporting, facilitating, or being involved in corruption are considered wrongdoings and the involved employees will be subject to disciplinary actions. 6. To make the Anti-Corruption Measures more efficient, Thanachart Group requires that each member company adopts the related rules, operational procedures, and guidelines, particularly about notification of corruption clues as well as handling of complaints about fraud and
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corruption. The member companies are also required to establish safe channels, through which any members of the general public or any employees of Thanachart Group who came across any suspicious fraudulent or corrupt activity could report clues or file their complaints. The information provided by whistleblowers will be sent to the head of the internal audit until. In this connection, the information will be kept confidential and presented to the Audit Committee, then escalated to the Board of Directors respectively. Moreover, Thanachart Group has a policy of treating fairly and protecting employees who are whistleblowers or refuse to get involved in corruption although such refusal may cause the organization to lose a business opportunity. Also, the whistleblowers will be commended for their actions. 7. All directors, executives, and employees are required to sign an agreement confirming that they will strictly adhere to Thanachart Group’s policies, measures and practice regulations regarding Corporate Governance, Code of Conduct, anti-corruption, whistle-blowing of frauds and corruption, giving/receiving gifts, rewards, entertainment or other benefits, customer confidentiality protection measures, including other related regulations. 8. Executives and employees, including outsource employees, are encouraged to be aware, to recognize and understand practice guidelines in the anti-corruption policy, anti-corruption measures, whistle-blowing and Thanachart Group’s regulation announcement through various channels. These include new staff training as part of the orientation curriculum, and self-appraisal forms of all executives and employees on E-learning every 6 months. As well, the Group makes use of easily accessible presentations such as VTR short films by coordination with the Office of the National Anti-Corruption Commission (NACC) and the Anti-Corruption Organization, Thailand (ATC), and the National Institute of Development Administration’s Center for Philanthropy and Civil Society in relation to media to enhance understanding of all forms of anti-corruption. 9. Thanachart Group publicized its anti-corruption campaigns through the emails sent to trading partners and business representatives, requesting for their cooperation and support. In particular, they are requested to refrain from giving presents to executives or employees of Thanachart
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Group, regardless of any festivals or any other cooperation on this matter through printed media such as invoices, receipts, payment vouchers, and tax invoices as well as through the Bank’s websites. 10. To appraise the performance related to the implementation of the Anti-Corruption policy and measures, the Audit Committee will be responsible for reviewing and ensuring that the member companies of Thanachart Group have put in place adequate internal control and that the conduct of business affairs are in line with the Anti-Corruption Policy. Audit will conduct the audit exercise according to annual audit plan assigned by the Audit Committee, and report significant audit results and recommendations to the Audit Committee. In this connection, in order to make the public aware of Thanachart Group’s intent in relation to anti-corruption, Thanachart Group has brought its Anti-Corruption Policy to the public notice by making it available through the website of each member company of the Group. On the part of the Bank, it makes the policy available through its website. In 2017, Thanachart Group submitted membership renewal applications for the Group’s twelve member companies to the CAC. As well, it submitted membership applications for certification to the CAC for the Group’s 2 newly formed companies including TM Broker and MT Service 2016. As a result, there were altogether 14 member companies of Thanachart Group which were the CAC’s certified members. Thanachart Group is dedicated to preventing fraud and corruption in line with the established policy. In this connection, Thanachart Group reviewed its Anti-Corruption Policy and Measures, the related regulations as well as procedures with regard to assessment of corruption risks involving the public and private sectors. The objective was to ensure that the Group had put in place practice guidelines that were in line with the Anti-Corruption Policy. All parties concerned were requested to sign an agreement to adhere to both the Anti-Corruption Policy and Measures. Thanachart Group also communicated the information to employees, providing them with knowledge and understanding of practice guidelines in line with the policy as well as key
measures and procedures in relation to anti-corruption. The communication modes included training activities, self evaluation, and continuous distribution of the information through Thanachart Group’s various media channels. In addition, emails were sent to trading partners and business representatives annually, not only informing them of the Anti-Corruption Policy and Measures, but also requesting them to support anti-corruption campaigns and other related activities. For external organizations, Thanachart Group provided advice and its representatives served as lectures on how to become certified members of the CAC. The main objective was to promote ethical behavior and organization-wide implementation of the Anti-Corruption Measures. All employees were required to strictly adhere to the Anti-Corruption Policy, Measures as well as related regulations. As a result, the organization is transparent and without corruption on a sustainable basis. Not less importantly, customers feel confident and safe to make use of Thanachart Group’s services. Apart from continuous internal and external communication on Anti-corruption, in 2018, the Group encouraged and provided advice/lecturers to customers, trading partners, and business representatives to be certified members of CAC. The Group raised awareness and educated the public to change the value to anti-corruption and corruption condemnation in all forms. The key of this action was to display Thanachart Group’s commitment to its personnel, the government and the public in its fair and transparent business operations under good corporate governance, anti-corruption, incorporated into the corporate culture as follows:
1. Thanachart Group provided advice and a lecturer on “certification of members of Thailand’s Private Section Collective Action Coalition Against Corruption (CAC)” and “CG & Anti-Corruption” to Comseven Plc. 2. Thanachart Group organized the seminar titled “Thanachart extends invitations to join the campaign to fight against corruption” to communicate to the first class of trading partners and business representatives and ask for their support on the cause on 19 October 2018. 3. Thanachart Group participated in “the National Anti-Corruption Day 2018” event under the concept of “Thais Alert and Aware: Anti-Corruption” organized by the Anti-Corruption Organization of Thailand which made 6th September of every year as the Anti-Corruption Day. The Group also joined “the International Anti-Corruption Day (Thailand) under the theme of “Zero tolerance: Thai people will not tolerate corruption” arranged by the Office of the National Anti-Corruption Commission and network members from every sector. According to the United Nations’ resolution, 9 December of every year shall be the International Anti-Corruption Day. To express Thanachart Group’s commitment, the group refrains from involving in any form of corruption, and is ready to cooperate with the private and government sectors.
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CORPORATE GOVERNANCE Corporate Governance Policy The Board of Directors has put in place written Corporate Governance Policy (“the Policy”) and the code of conduct for directors, executives, and employees; they are established as an operational framework for all personnel since 2003. Each subsidiary is prompted to adopt such codes properly and adequately in its business operation, prioritizing moral, integrity, and compliance with related laws. The Policy and the code of conduct are reviewed regularly while the CG Code is also adopted in response to the business contexts regularly or at least once a year. In 2018, the Bank has revised its Policy together with the code of conduct so as to be modernized and in accordance with the changes occurred. Topics and guidelines are adjusted pursuant to the “Good Corporate Governance of 2017”, which is published by the Securities and Exchange Commission (“SEC”), and the Regulations on Risk Supervision of Financial Business Groups along with the Corporate Governance of Financial Institutions, which is prescribed by the Bank of Thailand (“BOT”). The Bank has disclosed the Policy as well as the codes of conduct on the Bank’s website: “www.thanachartbank. co.th” and Thanachart Group’s intranet system, with an aim to be the communication channel that can be accessible by staffs of every level. The priority is to convey messages to all employees, shareholders, and stakeholders, building trust on fair treatment while reflecting the Bank and Thanachart Financial Group’s decent image. In 2018, the developments in the area of corporate governance include: 1. Revision of the Corporate Governance Policy to be consistent with the principle of corporate governance assessment project for listed companies issued by the Thai Institute of Directors Association (IOD), the 2017 code of good corporate governance of (CG Code) for listed companies issued by SEC, and the Regulations on Risk Supervision of Financial Business Groups along with the Corporate Governance of Financial Institutions specified by the BOT; 2. Requirement for subsidiaries under Thanachart Group to revise the Policy and the code of conduct in alignment with the one another; 3. Training on the Corporate Governance Policy and the code of conduct for newly recruited employees of all levels; 4. Requirement for Thanachart Bank’s executives and staffs of all levels to sign a written compliance on the Corporate Governance Policy, codes of conduct, and conflict of interest; 5. Evaluation of all staffs at all levels of Thanachart Bank, in order to develop, assess, and evaluate their knowledge and comprehension of corporate governance as well as anti-corruption practices twice a year; 6. Continuous development of CG & Anti-Corruption E-learning on the Intranet to be current, up-to-date, and user-friendly, in order to enable the employees to conduct self-learning; 7. Conducting seminars on the “Corporate Governance Policy, business code of conduct, and employees’ etiquette” to the business representatives and partners of Thanachart Group for acknowledgement and cooperation of such conduct; 8. Arranging an activity under the CG & Anti-Corruption project to raise and improve awareness using an intellectual educational approach among the personnel at all levels so that they are informed and responsible in their duties under the code of conduct and Thanachart stakeholders’ social etiquette. In addition, Thanachart Group continuously promotes corporate governance and reinforces corporate social responsibility (CG & CSR projects) through its policies and various activities among Thanachart Group’s employees consistently. The objective is to encourage practical learning in the units pursuant to corporate governance through internal
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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 is communicated through easily accessible format such as short films. Cooperation is made with the Office of the National Anti-Corruption Commission (“ONACC”) and the Anti-Corruption Organization of Thailand (“ACT”), for assistance in the learning aid about anti-corruption in the Dharma Sawasdee TV program. In addition, 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 business partners and external institutions. Thanachart Group is determined to develop concrete anti-corruption measures, which are expressing determination to its personnel, government sector, and general public about the virtuous, transparent business operations under good corporate governance as well as an anti-corruption approach as a part of the organizational culture.
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 2018, the name list of the Bank’s Directors was as follows:
1. Mr. Banterng Tantivit Chairman 2. Mr. Suphadej Poonpipat Vice Chairman 3. Dr. Thanachart Numnonda Director 4. Mr. Narong Chivangkur Director 5. Assoc. Prof. Dr. Somjai Phagaphasvivat Director 6. Ms. Mookda Pairatchavet Director 7. Mr. Rod Michael Reynolds Director 8. Mr. Walter Tas Director 9. Mr. Alexander Kwai Lap Choi Director 10. Ms. Suvarnapha Suvarnaprathip Director 11. Mr. Somjate Moosirilert Director * 12. Mr. William George Said 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 visions, missions, key policies, strategic plans, financial goals and budgets while also make a review of the past fiscal year by ensuring that 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.;
Note * Mr. Somjate Moosirilert resigned from his position as the Bank’s executive director on 1 January 2019 and the Board of Directors has hence appointed Mr. Praphan Anupongongarch as the executive director, effective since 1 January 2019.
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4. Oversee and control its affiliated companies in order to protect the interest of the Bank’s investment. The Board of Directors is to consider the appropriateness and appoint the person to be sent to assume a director position or a managing director position at Thanachart Fund Management Company Limited and Ratchthani Leasing Public Company Limited. As for other affiliated companies which the Bank directly holds shares, the Executive Board Committee is assigned to appoint eligible persons as committee members, executives, or the persons of authority in the companies unless for smaller companies which are the Bank’s operating arms, the President will be responsible for the appointment; 5. Oversee, monitor and ensure the Bank’s business conduct is in compliance with the strategies, 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. The directors should pay attention to any incidents incurred or other operations of the Bank; 6. Ensure that the Bank has in place the audit process, internal control, risk management, and monitoring and compliance systems that are adequate and fit with the prevailing business environment; 7. The Board of Directors shall provide a system to control work execution, financial reporting, and compliance to the rules, regulations, and policies. The Board of Directors shall provide independent person or institute to audit such monitoring system and must be exhibited in the annual report; 8. The Board of Directors or the Audit Committee shall review and comment on the sufficiency of the internal control system and risk management in the annual report while placing importance on the review of systems that are significant to internal control and risk management regularly or at least once a year; 9. Ensure fair treatments 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 a 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; 16. Advocate value-added innovations benefiting the business, considering their impacts on customers or related individuals while also being responsible to society and environment.
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 2018, the name list of the Executive Committee was as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson 3. Mr. Somjate Moosirilert Member * 4. Mr. William George Said Member 5. Mr. Kriangkrai Phurivitvattana Secretary
Note * Mr. Somjate Moosirilert resigned from his position as the Bank’s executive director on 1 January 2019 and the Board of Directors has hence appointed Mr. Praphan Anupongongarch as the executive director, effective since 1 January 2019.
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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 the Bank in compliance with the Financial Institutions Businesses Act as well as the rules and regulations of the BOT; 3. To manage business operations in line with the Bank’s business objectives as well as managing liquidity, risks and the interest rate structures; 4. Authorized to make purchases, take transfers, and dispose of the Bank’s assets in an amount up to 5 percent of the Bank’s share capital; 5. To consider and screen matters which are beyond the authority of the Executive Committee and to present them to those having higher authority for consideration; 6. Authorized to restructure and manage the organization, to establish rules and regulations related to work process, to appoint and remove employees, to appoint advisors, as well as directing and governing the conduct of the Bank’s business affairs; 7. Authorized to approve salaries or other compensation benefits for employees and advisors to support the Bank’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 obligation 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 appointed the Audit Committee consisting of three independent directors, all of which posses knowledge, understanding and experience in accounting of 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 2018, the members of the Audit Committee were as follows: 1. Dr. Thanachart Numnonda Chairman (Independent Director) 2. Assoc. Prof. Dr. Somjai Phagaphasvivat Member (Independent Director) 3. Ms. Mookda Pairatchavet Member (Independent Director) 4. Ms. Thanawan Teekautamakorn Secretary Roles and Responsibilities of the Audit Committee 1. Financial Reporting • To review the Bank’s financial reports and the disclosure of information therein, and to evaluate the appropriateness of significant accounting policies; • To review the accountability of material transactions in financial reports, including complex or irregular transactions and transactions requiring an exercise of discretion. 2. Internal Control and Risk Management • To review the Bank’s internal control, including the internal control of its information technology system, sufficient anti-corruption measures, as well as the guidelines for communicating the significance of internal control and risk management throughout the Bank; • To ensure that the internal auditors’ and the auditors’ recommendations on internal control are implemented by the management; • To review the supervision of the policies and duties relating to risk management of the Bank, so as to ensure its adequacy.
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3. Internal Audit • To review and approve the internal audit charter, annual plan as well as necessary personnel and resources for the performance of duties; • To review the audit reports and recommendations of the auditors, as well as to follow up the results of the implementation of such recommendations; • To ensure that the Internal Audit Group complies with the internal audit standards; • To evaluate the independence of the Internal Audit Group. 4. Compliance with the Rules and Regulations • To review and approve the charter of the Compliance Group, its annual plan as well personnel and resources necessary for the performance of duties; • To review the process of monitoring the business conducts of the Bank to ensure compliance with the related laws, rules, codes of conducts, policy guidelines and regulations; • To review any amendments to the laws and regulations which affect the Bank’s operations; • To review any findings by the Compliance Group and the authorities, as well as to follow up on the implementation of their recommendations. 5. Auditors • To consider the qualifications, independence, performance and remuneration of the auditors, and to provide recommendations on the appointment of audits and determination of auditors’ fee to the Board of Directors; • To hold a meeting with the auditors without other management present at least once a year. 6. Connected Transactions or Transaction which May Lead to Conflict of Interest • To review connected transactions as well as transactions that may lead to conflicts of interest in accordance with the law and regulations of the authorities, to ensure that they are reasonable and for the best interests of the Bank. 7. Report of the Audit Committee • To prepare and disclose a report of the Audit Committee which is signed by the Chairman of the Audit Committee and consists of at least the information stipulated under the regulations of the Stock Exchange of Thailand (“SET”) in the Bank’s annual report;
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• To provide opinions in an annual compliance report submitted to the BOT; • To review the accountability of the charter of the Audit Committee at least once a year, and to submit it to the Board of Directors for its approval in the case of any amendments thereto. 8. Other Responsibilities • To ensure that the business conducts of the Bank and its subsidiaries are in compliance with the Bank’s policies, by giving the Internal Audit Group the following assignments: 1) To report 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. conflict of interest, fraud, corruptions and violation of law, the Internal Audit Group must report them in detail. • To report to the Bank’s Board of Directors in order to make improvement and rectification in a timely manner as deemed appropriate by the Audit Committee if it finds or is doubtful that there are transactions or acts which may materially affect the Bank’s financial position and operating results, etc. 1) Conflict of interest transactions; 2) Any fraud, corruptions, irregularity or material deficiency in the internal control system; 3) Any violation of the law relating to financial institution businesses, or regulations of the authorities or other related laws. If the Bank’s Board of Directors or management fails to make improvement and rectification within a reasonable time, the Audit Committee shall disclose such failure in the annual report and report it to the BOT. • To conduct a self-evaluation of the entire Audit Committee and submit it to the Board of Directors on an annual basis. • To perform any other duties assigned by the Board of Director 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 current conditions, competitive environment, related law, the organization’s visions, missions, and long-term strategies. As of 31 December 2018, the members of the Nomination and Remuneration Committee were as follows: 1. Mr. Narong Chivangkur Chairman (Independent Director) 2. Ms. Mookda Pairatchavet Member (Independent Director) 3. Mr. Rod Michael Reynolds Member (Non-Executive Director) 4. Mr. Thaneit Khantigaroon 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);
Note
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 determines policy on corporate governance in compliance with the 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 2018, the members of the Succession Committee were as follows: 1. Mr. Narong Chivangkur Chairman (Independent Director) 2. Mr. Suphadej Poonpipat Member (Executive Director) 3. Ms. Mookda Pairatchavet Member (Independent Director) 4. Mr. Rod Michael Reynolds Member (Non-Executive Director)
* The Board of Directors has appointed Mrs. Vijitra Thumpothong as the Secretary, effective 1 January 2019.
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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 TCAP, 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 Oversight Committee The Board of Directors has been aware of the importance of Good Corporate Governance, the Risk Oversight Committee, therefore, is set up in order to be a crucial tool of the Board of Directors to oversee overall risk of the Bank at the appropriate level. As of 31 December 2018, the members of the Risk Oversight Committee were as follows: 1. Mr. Alexander Kwai Lap Choi Chairman 2. Assoc. Prof. Dr. Somjai Phagaphasvivat Member 3. Mr. Praphan Anupongongarch Member 4. Mr. Ziad El-Hoss Secretary Roles and Responsibilities of the Risk Oversight Committee 1. Give suggestions to the Board of Directors about the financial institution’s risk appetite framework.
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2. Oversee that senior executives and the head of risk management function comply with risk management policies and strategies as well as the acceptable risk appetite. 3. Oversee that strategies on capital and liquidity management for absorbing various types of risk of the financial institution are in line with the approved risk appetite. 4. Revisit and review the sufficiency and effectiveness of the overall risk management policies and strategies as well as risk appetite at least once a year or when there is any significant change, where the Risk Oversight Committee should consult and exchange views with the Audit Committee in order to assess if the risk management policies and strategies cover all existing and new types of risk facing the financial institution and if the implementation of such policies and strategies are effective and efficient. 5. Report the following to the Board of Directors: risk exposures of the financial institution, effectiveness of risk management, progress on the implementation of risk culture, as well as important factors and problems, and the required revisions to meet the risk management policies and strategies. 6. Express opinions or take part in the evaluation of the effectiveness and efficiency of the head of risk management function. 7. Perform other duties as specified by the authorities or assigned by the Board of Directors. 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 2018, the members of the Risk Management Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Mr. William George Said Vice Chairman
3. Mr. Ziad El-Hoss Member 4. Mr. Wichak Sirisae Member 5. Mrs. Pittimart Sanguansook Member 6. Ms. Thanawan Teekautamakorn Member 7. Dr. Suwat Chritamara Secretary As Mr. Somjate Moosirilert resigned from his position, effective 1 January 2019, the Executive Committee Meeting has appointed and adjusted the Risk Management Committee members as follows: 1. Mr. Praphan Anupongongarch Chairman 2. Mr. William George Said Vice Chairman 3. Mr. Ziad El-Hoss Member 4. Dr. Sutut Chitmonkongsuk Member 5. Mr. Wichak Sirisae Member 6. Mrs. Pittimart Sanguansook Member 7. Ms. Thanawan Teekautamakorn Member 8. Mr. Kittichai Singha Member 9. Dr. Suwat Chritamara Secretary Roles and Responsibilities of the Risk Management Committee 1. To consider the risk management policies together with the risk appetite of the Bank and propose them to the Risk Oversight Committee along with the Board of Directors for approval. In the regard, monitoring and auditing standards must be established to ensure that the risk management policies are strictly adhered to;
2. To formulate risk management strategies in accordance with the risk management policies and to ensure that the Bank’s risks are appropriately measured, monitored, and maintained at an appropriate level; 3. To follow up and to review the adequacy of risk management policies, including the effectiveness of the risk management system indicator and the adherence to the established policies; 4. To establish risk management measures which aim at preventing feasible losses 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; 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 enterprise risk management of committee and/or business units to ensure that they adhere to the established policies; 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 policies 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 rate, and exchange rates effectively. As of 31 December 2018, the members of the Asset and Liability Management Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Mr. Piyaphong Artmangkorn Advisor 4. Ms. Suvarnapha Suvarnaprathip Member
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5. Mr. William George Said Member 6. Mr. Anuwat Luengtaweekul Member 7. Mr. Ziad El-Hoss Member 8. Mr. Praphan Anupongongarch Member 9. Mr. Wichak Sirisae Member 10. Mr. Wisoot Tangadunrat Member 11. Representative of Risk Control Department Secretary As Mr. Somjate Moosirilert resigned from his position, effective 1 January 2019, the Executive Committee Meeting has appointed and adjusted the Asset and Liability Management Committee members as follows: 1. Mr. Praphan Anupongongarch Chairman 2. Mr. William George Said Vice Chairman 3. Mr. Piyaphong Artmangkorn Advisor 4. Mr. Wichak Sirisae Member 5. Mr. Ziad El-Hoss Member 6. Mr. Anuwat Luengtaweekul Member 7. Representative of Risk Control Department Secretary Roles and Responsibilities of the Asset and Liability Management Committee 1. To consider both short-term and long-term business plans and action plans prior to proposing to the Risk Oversight Committee and the Board of Directors for approval; 2. To formulate the Bank’s market risk, liquidity risk, interest rate risk, and exchange rate risk management plans under the Bank’s specified risk management guidelines;
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3. To manage the Bank’s market, liquidity, and exchange rate risks in accordance with the trends of the money market and capital market conditions; 4. 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, including monitoring that the business operations are in accordance with the specified interest rate management guidelines; 5. To approve investments in bonds and private debt instruments within budget limits in line with related policies and risk management guidelines; 6. To supervise and control the stipulation and submission of the interest rate to be sent to the BOT; 7. To authorize a person or a group of persons under the authority of the Asset and Liability Management 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 2018, the members of the Investment Portfolio Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Mr. Piyaphong Artmangkorn Advisor 4. Ms. Suvarnapha Suvarnaprathip Member 5. Mr. William George Said Member 6. Mr. Wichak Sirisae Member 7. Representative of Risk Control Department Secretary As Mr. Somjate Moosirilert resigned from his position, effective 1 January 2019, the Executive Committee Meeting has appointed and adjusted the Investment Portfolio Committee members as follows:
1. Mr. Praphan Anupongongarch Chairman 2. Mr. William George Said Vice Chairman 3. Mr. Piyaphong Artmangkorn Advisor 4. Mr. Wichak Sirisae Member 5. Representative of 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 in line with the stipulated policies and market risk management guidelines and to examine investment proposals that exceed its approval authority before proposing them to the Executive Committee that has higher approval authority; 3. To monitor, review the investment performance in accordance with the investment plan, and determine guidelines aimed at improving investment performance; 4. To 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 Committees has established the Credit Committee to enhance the efficiency of the Bank’s credit approval process. As of 31 December 2018, the members of the Credit Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Mr. Suvarnapha Suvarnaprathip Vice Chairperson Note
3. Mr. William George Said Member 4. Mr. Ziad El-Hoss Member 5. Mrs. Sasima Taweeskulchai Member 6. Mr. Wisoot Tangadunrat / Mr. Yuthyong Sudharatna Member * 7. Representative of Risk Control Department Secretary As Mr. Somjate Moosirilert resigned from his position, effective 1 January 2019, the Executive Committee Meeting has appointed and adjusted the Credit Committee members as follows: 1. Mr. Praphan Anupongongarch Chairman 2. Mr. William George Said Vice Chairperson 3. Mr. Ziad El-Hoss Member 4. Mrs. Sasima Taweeskulchai Member 5. Mr. Wisoot Tangadunrat Member 6. Mr. Yuthyong Sudharatna Member 7. Representative of Risk Control Department Secretary 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;
* Attends only when his/her agendas are presented
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4. To consider the annual review of the retail, automotive lending, and wholesale credit policies prior to proposing to the Risk Oversight Committee and the Board of Directors for approval respectively; 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 and Board of Directors. The Management Committee To enhance the efficiency of Thanachart Group’s businesses and collaboration between executives, as of 31 December 2018, the members of the Management Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Mr. William George Said Vice Chairman 3. Mr. Anuwat Luengtaweekul Member 4. Mr. Praphan Anupongongarch Member 5. Dr. Sutut Chitmonkongsuk Member 6. Mr. Ziad El-Hoss Member 7. Mr. Wichak Sirisae Member 8. Mrs. Vijitra Thumpothong Member 9. Mr. Wisoot Tangadunrat Member 10. Mr. Kriangkrai Phurivitvattana Member 11. Mrs. Pittimart Sanguansook Member
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12. Ms. Thanawan Teekautamakorn Member 13. Mr. Kittichai Singha Member 14. Mr. Yuthyong Sudharatna Member 15. Mrs. Manika Sitthichai Secretary As Mr. Somjate Moosirilert resigned from his position, effective 1 January 2019, the Bank has appointed and adjusted the Management Committee members as follows: 1. Mr. Praphan Anupongongarch Chairman 2. Mr. William George Said Vice Chairman 3. Mr. Anuwat Luengtaweekul Member 4. Dr. Sutut Chitmonkongsuk Member 5. Mr. Ziad El-Hoss Member 6. Mr. Wichak Sirisae Member 7. Mrs. Vijitra Thumpothong Member 8. Mr. Wisoot Tangadunrat Member 9. Mr. Pompet Rasanon Member 10. Mr. Taweesak Songsithichoke Member 11. Mr. Kriangkrai Phurivitvattana Member 12. Mrs. Pittimart Sanguansook Member 13. Ms. Thanawan Teekautamakorn Member 14. Mr. Kittichai Singha Member 15. Mr. Yuthyong Sudharatna Member 16. Mrs. Manika Sitthichai Secretary
Roles and Responsibilities of the Management Committee 1. To specify the operating methods driving Thanachart Group’s businesses in line with the policy or assignments given by the Board of Directors or the Executive Committee; 2. To keep track on the overall business operations including the progress of the Bank’s business plan; 3. To determine the solutions to problems or obstacles of the business that may affect the policy or the Bank’s business plan as well as to follow-up the progress of such solutions in order to achieve the targets; 4. To jointly come up with recommendations which are useful to the business in order to enhance the potential and capacity of the Bank in competing; 5. To scrutinize policies, business plan, budget, or other related things which are to be proposed to the Executive Committee and the Board of Directors; 6. To proceed as assigned or suggested by the Chief Executive Officer and President.
The Nomination and Appointment of Executives of the Highest Level Qualifications of Directors
The Bank has specified the qualifications of directors including the additional qualifications required for executive directors and independent directors of which have been clearly written in the good corporate governance policy of the Bank as follows: 1. Have knowledge, skill and experience in diverse fields that are useful and contribute to the Bank’s business and must be an expertise in the area that should benefit the Bank with at least one non-executive director with experience in the Bank’s business, whereby gender is disregarded; 2. Not posses 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 general party under the similar circumstances, on the basis of commercial negotiation and without any dependent interest, expect for the transactions prohibited by laws or the authority’s directives; 5. Additional qualifications required for each of the following positions: Executive Directors • Being involved with day-to-day management of the Bank and overseeing and ensuring that the management implements the policies established by the Board of Directors; • Numbering not more than a half of the total Board members. Independent Directors (applicable to public limited companies or as required by the authority) • Not holding more than 0.5 percent of the Bank’s paid-up registered capital; • Qualifications are in accordance with the criteria set by the BOT, SET, SEC, or other governing bodies; • Not exhibiting any characteristics that violate the criteria for Independent directors set out by the Capital Market Supervisory Board; • Numbering not less than one-third of the total Board members; • At least 1 independent director that has banking experience. 6. The Chairman of the Board of Directors and Chief Executive Officer and President shall not be the same person and must be exhibited in the annual report and on the Bank’s website; 7. Each director should assume a director position in not more than 5 listed companies. In the case where a director assumes a position of chairman, executive director or authorized director, either one position or many positions in other companies, such director shall not hold positions in more than 3 business groups.
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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; (3) At the election of the directors, the votes shall be decided by majority. In case of an equality of vote, the Chairman of the meeting shall have a casting vote. 2. In case of the appointment made during the directorship tenure due to a vacancy, the Board of Directors is able to approve the director’s appointment as selected and proposed by the Nomination and Remuneration Committee. According to Articles 21 and 23 of the Bank’s Articles of Association which states that if the office of director is vacant otherwise than by completion of a vacating director’s term of office, the Board of Directors, by votes of not less than three-fourth (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.
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Nomination of Executives of the Highest Level The Nomination and Remuneration Committee conducts preliminary consideration and proposes for the Board of Directors’ approval of the qualified candidate(s) possessing the knowledge, competency, skills and experience of use to the Bank’s operations to be nominated for the position of the Chief Executive Officer and President. This position requires thorough understanding of the Bank’s business, and the ability to manage the business in a way that achieves objectives and goals set by the Bank’s Board of Directors.
Governance of the Business Conducts of Subsidiaries and Associated Companies (1) Governance of the business conducts of subsidiaries and associated companies The Bank monitors and controls its subsidiaries to protect the interest in its investments. The Bank’s executives are assigned to be the directors in the subsidiaries consistent with the shareholding portions in order to monitor and ensure that the performance of the subsidiaries is appropriate, smooth, in line with the Bank’s policies and operations. After the consideration and consent of the Board of Director for the Bank’s executives to be the directors in the subsidiaries, the Chief Executive Officer, representing the Bank, will make a written announcement to the Chairman of the subsidiaries to accept the appointment of directors pursuant to the related criteria, conditions of laws, and regulations. Managing Directors of the subsidiaries are obliged by the Bank to report on their monthly operating performance compared with the estimation in the Business Plan to the Bank’s Executive Committee every month. The report shall also include business strategies. The Chief Executive Officer will present the report to the Board of Directors within the same month. Scopes of responsibilities of directors and executives representing the Bank in the subsidiaries must be as prescribed in the regulations of the subsidiaries. The directors and executives must ensure that the operating performance of the subsidiaries is in line with the resolution of the shareholders’ meeting and related laws. Moreover, since the Bank’s business is under a financial group, the directors and executives representing the Bank in the subsidiaries must ascertain that the strategic plans of the subsidiaries go as planned and in line with Thanachart Group’s risk management policy.
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. Units performing such transactions are obligated to submit the information to Compliance for further gathering of information of internal and related transactions. It will be then reported to the Audit Committee, the Executive Committee, and the Board of Directors respectively every 6 months. Moreover, public disclosure of transactions is also required in accordance with the regulator’s principles as well as the accounting standard. For the establishment of internal control and mechanism for monitoring subsidiaries, the Bank has set authority levels for significant transactions and types of counterparties, e.g. loan grants, investments, obligations or transactions similar to loan grants to subsidiaries or related parties. If a subsidiary wishes to participate in the transaction, it must seek approval from an authorized person in consistency with the established approval levels. In addition, the Board of Directors has assigned the Bank’s Audit Committee and Audit team to cover the operations of the subsidiaries to ensure alignment to the Bank’s policies. The Audit team must summarize the overall auditing of the subsidiaries for acknowledgement of the Audit Committee and further report to the Board of Directors. Significant issues, i.e. conflicts of interest, frauds, corruptions, and violations of laws, must be reported to the Board of Directors in detail for improvement within a period of time deemed appropriate by the Audit Committee. (2) Agreements between the Bank and other shareholder(s) in regards to the management of subsidiaries and associated companies - None -
The Controls of the Use of Internal Information The Bank has specified the guidelines for employees to strictly behave in line with the Bank’s codes of conducts and IT security policies; all employees are to protect their personal information and to keep the business information of the customers, themselves, and all types of business partners confidential while also not disclosing such information to outsiders in any case. The Bank enforces the measures in controlling the use of internal information, preventing executives and related persons from using the Bank’s internal information in pursuing their own interests. The measures can be summarized as follows:
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• An appropriate oversight on the internal data maintenance system is required for all business units within the Bank; • In compliance with the SEC regulations, executives in manager position, the next four positions below manager position and the highest ranking position in the Accounting and Finance Department are required to report their holdings of the Bank’s shares on a quarterly basis; • Directors, executives, staffs, employees and advisors who have 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; • The use of internal data for the individual interest is considered as policy misconduct and will be subject to the penalties according to the judgment of the Disciplinary Committee.
The 2018 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. Somjai Khunapasut, Certified Public Accountant (Thailand) No. 4499; details were as follows:
Auditors’ Fee
Adoption of the 2017 Good Corporate Governance for Listed Companies
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 25th Annual General Meeting of Shareholders held on 25 April 2018, 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:
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1. Ms. Somjai Khunapasut Certified Public Accountant (Thailand) No. 4499 and/or 2. Ms. Rachada Yongsawadvanich Certified Public Accountant (Thailand) No. 4951 and/or 3. Ms. Wanwilai Phetsang Certified Public Accountant (Thailand) No. 5315
ANNUAL REPORT 2018
(1) Audit Fee 1.1 Audit Fee of the Bank of THB 12,118,000. 1.2 Audit Fee of 11 Subsidiaries of THB 6,830,000. (2) Non - Audit Fee Review and audit of the report on the risk-based capital requirement as required by the Office of Insurance Commission for Thanachart Insurance Public Company Limited in an amount of THB 500,000.
As described in “Corporate Governance Policy”
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. 41 Related party transactions.
INTERNAL CONTROL AND RISK MANAGEMENT The Bank recognizes the importance of internal control by constantly emphasizing that a good internal control procedure will enable the bank to conduct business effectively, achieve goals and help prevent damage 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.
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3. The Operational Control The Bank establishes appropriate internal control activities for all levels covering all processes. Explicit authorization and level of approval authority are in place. As for the related transactions, the Bank has established in Good Corporate Governance Policy the practice guidelines to prevent conflicts of interests prohibiting the related persons to partake in the approving process. Regarding giving credits or investment, recognized as the Bank’s core business, policies were formulated to regulate lending to major shareholders or related parties, and investing in certain businesses with related interest, according to the BOT’s criteria. As for IT controlling system, the formulation of IT procedures, security policy/ standard, as well as general control standard, development and maintenance, are established as standards for controlling and protecting IT operations of the Bank.
4. Information and Communication System
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. 2/2019 on 25 February 2019, the Board of Directors agreed that the Bank’s internal control system was adequate and appropriate for its business operations which were in line with the Bank’s external auditor opinion.
Head of Internal Audit and Head of Compliance of the Bank
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 (Whistleblower hotline) is also provided for internal as well as external persons/units to report information concerning fraud or corruption.
The Bank has assigned Miss Thanawan Teekautamakorn, Head of Audit, to supervise the Bank’s internal audit as she is experienced in internal auditing and skilled in the banking business, activities, and operations. In considering the appointment, evaluation, removal, transfer, and termination of the Head of Internal Audit, approval must be first sought by the Audit Committee.
5. Monitoring and Tracking System
The Bank provides the performance monitoring and reporting process to report on business units’ performance target to the Board of Directors on a monthly basis and review goals every six months.
The Bank assigned Mr. Kittichai Singha as Head of Compliance to be in charge of rules and regulations, which align with the operating business.
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
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Head of Internal Audit
Head of Compliance
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 2018 were as follows: 1. 2. 3.
Mr. Narong Chivangkur Ms. Mookda Pairatchavet Mr. Rod Michael Reynolds Mr. Thaneit Khantikaroon
Chairman Member Member Secretary
(Independent Director) (Independent Director) (Non-Executive Director)
In 2018, the Nomination and Remuneration Committee convened eleven 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 2018 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 2019 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 2018 remuneration packages were proposed for approval at the Bank’s Board of Directors’ meeting and the Annual General Meeting of Shareholders for the year 2018. 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
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MANAGEMENT STRUCTURES The Board of Directors The Bank’s Board of Directors consists of those with high competence who possess expertise and experience in finance and accounting, and 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 2018 were as follows: Name
Position
Executive Director
Non-Executive Director
Independent Director
1. Mr. Banterng Tantivit Chairman - ✓ ✓ - 2. Mr. Suphadej Poonpipat Vice Chairman 3. Dr. Thanachart Numnonda Director - - ✓ 4. Mr. Narong Chivangkur Director - - ✓ 5. Assoc. Prof. Dr. Somjai Phagaphasvivat Director - - ✓ 6. Ms. Mookda Pairatchavet Director - - ✓ 7. Mr. Rod Michael Reynolds Director - ✓ 8. Mr. Walter Tas Director - ✓ 9. Mr. Alexander Kwai Lap Choi Director - ✓ ✓ - 10. Ms. Suvarnapha Suvarnaprathip Director ✓ - 11. Mr. Somjate Moosirilert Director ✓ - 12. Mr. William George Said Director Note
120
The Bank’s directors who are authorized signatories representing the Bank are Mr. Suphadej Poonpipat, Ms. Suvarnapha Suvarnaprathip, Mr. Somjate Moosirilert and Mr. William George Said. Any two out of the four can jointly sign and affix the Bank’s seal.
ANNUAL REPORT 2018
Since 1 January 2019, the Bank made changes to the structure of its Board of Directors as follows: Name
Position
Executive Director
Non-Executive Director
Independent Director
1. Mr. Banterng Tantivit Chairman - ✓ ✓ - 2. Mr. Suphadej Poonpipat Vice Chairman 3. Dr. Thanachart Numnonda Director - - ✓ 4. Mr. Narong Chivangkur Director - - ✓ 5. Assoc. Prof. Dr. Somjai Phagaphasvivat Director - - ✓ 6. Ms. Mookda Pairatchavet Director - - ✓ 7. Mr. Rod Michael Reynolds Director - ✓ 8. Mr. Walter Tas Director - ✓ 9. Mr. Alexander Kwai Lap Choi Director - ✓ ✓ - 10. Ms. Suvarnapha Suvarnaprathip Director ✓ - 11. Mr. Praphan Anupongongarch Director ✓ - 12. Mr. William George Said Director Directors retired from position in 2019 ✓ - 1. Mr. Somjate Moosirilert Director Notes 1) Mr. Somjate Moosirilert resigned from his directorship at the Bank on 1 January 2019 2) Mr. Praphan Anupongongarch assumed his directorship since 1 January 2019 3) The Bank’s directors who are authorized signatories representing the Bank are Mr. Suphadej Poonpipat, Ms. Suvarnapha Suvarnaprathip, Mr. Praphan Anupongongarch and Mr. William George Said. Any two out of the four can jointly sign and affix the Bank’s seal.
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 meetings. The Bank’s Good Corporate Governance Policy stipulates that the Bank meet the minimum requirements of the Board of Directors and sub-committee meetings as follows: 1. The Board of Directors meeting is held approximately 6 times a year. 2. The Executive Committee meeting is held at least 6 times a year. 3. The Audit Committee meeting is held at least 6 times a year. 4. The Nomination and Remuneration Committee meeting is held at least twice a year. 5. The Risk Management Committee Meeting is held at least 6 times a year. 6. 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 transactions, execution 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 the meeting materials before attending the meetings. In 2018, the Board of Directors convened 12 general meetings.
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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 in writing. 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 2018
List of TBANK’s Directors
Board of Directors
Executive Committee
Audit Committee
Nomination and Remuneration Committee
Risk Management Committee
(12 Meetings)
(33 Meetings)
(12 Meetings)
(11 Meetings)
(12 Meetings)
1. Mr. Banterng Tantivit
12/12 - -
-
-
2. Mr. Suphadej Poonpipat
12/12 32/33 -
-
-
-
-
3. Dr. Thanachart Numnonda 12/12 - 12/12 4. Mr. Narong Chivangkur
12/12 - -
5. Assoc. Prof. Dr. Somjai Phagaphasvivat 12/12
-
12/12
11/11 -
6. Ms. Mookda Pairatchavet 12/12 - 12/12 11/11 7. Mr. Rod Michael Reynolds 8/12 - - 8. Mr. Walter Tas
10/12 - -
-
8/11 -
-
9. Mr. Alexander Kwai Lap Choi 11/12 - -
-
-
10. Ms. Suvarnapha Suvarnaprathip 11/12 30/33 -
-
-
11. Mr. Somjate Moosirilert
12/12 31/33 -
-
11/12
12. Mr. William George Said
10/12 29/33 -
-
9/12
Performance Evaluation of the Board of Directors The Bank arranges an electronic 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 formats i.e. the overall performance evaluation and the individual performance evaluation (self-evaluation and peer evaluation). The evaluation forms are in line with that of the Stock Exchange of Thailand and have been considered by the Nomination and Remuneration Committee and approved by the Board of Directors. The evaluation scope entails purposes of duties of the Board of Directors and individual directors as follows: The overall performance evaluation consists of 4 key areas: (1) the Board structure and qualifications are appropriate and support efficiency, (2) the Board meeting is efficiently conducted, (3) the Board gives priority and devotes sufficient time to critical matters in accordance with its duties and responsibilities, and (4) others e.g. the relationship between the Board and the Management; Directors’ self-development and training. The individual performance evaluation consists of 3 key areas: (1) the structure and qualifications of the Board of Directors, (2) the Board of Directors Meetings, and (3) roles, duties and responsibilities of the Board of Directors. The scoring criteria has a scale of 0 – 4, from “strongly disagree or lack of execution” to “strongly agree or excellent execution”.
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The Bank reports the summary of self-evaluation and suggestions to the Board of Directors Meeting. Each director also receives individual self-assessment results. In 2018, the summary result of the overall Board of Directors performance evaluation had an average of 3.51, equivalent to 87.64.
Executives As of 31 December 2018, there were executive officers and executives as defined by the Securities and Exchange Commission (“SEC”)’s criteria, and the persons of management authority as defined by Sections 4 and 25 of the Financial Institution Business Act B.E. 2551 guidelines as follows: 1. Mr. Suphadej Poonpipat 2. Ms. Suvarnapha Suvarnaprathip 3. Mr. Somjate Moosirilert 4. Mr. William George Said 5. Mr. Anuwat Luengtaweekul 6. Mr. Ziad El-Hoss 7. Mr. Praphan Anupongongarch 8. Dr. Sutut Chitmonkongsuk 9. Mr. Wichak Sirisae 10. Mrs. Sasima Taweeskulchai 11. Mr. Ricky Jon Yakabowich 12. Mr. Kanoksri Rojmeta 13. Mrs. Vijitra Thumpothong 14. Mr. Kriangkrai Phurivitvattana 15. Mr. Wichak Praditavanij 16. Mr. Songwut Chaowalit 17. Mr. Pompet Rasanon 18. Mr. Wisoot Tangadunrat 19. Mr. Yuadrith Dhiantravan 20. Mrs. Teranuj Koomsap 21. Mr. Tirachart Chiracharasporn 22. Mr. Taweesak Songsithichoke 23. Mr. Smart Saensuk 24. Mr. Paul Alan DeWolfe 25. Mrs. Pittimart Sanguansook 26. Ms. Thanawan Teekautamakorn 27. Mr. Samuel Anthony Dotro 28. Mr. Kittichai Singha 29. Mr. Yuthyong Sudharatna 30. Mr. Krittapol Nontakrew 31. Mr. Suwit Eurpiyachart 32. Mr. Jaraschai Boworntammarat
Chairman of the Executive Committee Vice Chairperson of the Executive Committee Chief Executive Officer and President Chief Operating Officer Executive Vice President, Retail and Small Business Banking Executive Vice President, Chief Risk Officer Executive Vice President, Automotive Lending Executive Vice President, Chief Information Technology and Digital Officer Executive Vice President, Financial Markets and Treasury Executive Vice President, Credit Risk Management Executive Vice President, Shared Services Executive Vice President, T-Wealth Management Executive Vice President, Chief Human Resources Officer Executive Vice President, Office of Executive Committee Chairman and the CEO Executive Vice President, Non-Branch Channels Executive Vice President, Retail and Small Business Distribution Executive Vice President, Sales Network – Automotive Lending Executive Vice President, Client Relationship Management (Real Estate) and Acting Head of Wholesale Banking 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 Executive Vice President, Customer Experience and Distribution Strategy Chief Financial Officer (Executive Vice President) Executive Vice President, Chief Auditor Chief Technology Officer (Executive Vice President) Executive Vice President, Compliance Head of Commercial Banking (Senior Vice President) Senior Vice President, Special Asset Management Senior Vice President, Accounting First Vice President, Financial Planning and Analysis and Acting Senior Vice President, Finance
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Notes 1. Number 3 - 9, 25, and 31-32 are executive officers and the top four after the President as defined by the SEC. 2. Number 1 - 30 are those with management authority under Sections 4 and 25 of the Financial Institution Business Act B.E. 2551. 3. The changes during 2018 were as follows: 3.1 Mr. Piyaphong Artmangkorn retired from Executive Vice President, Investment Management on 1 January 2018. 3.2 Ms. Kanoksri Rojmeta had new work scope due to the revised organizational structure, from Executive Vice President, Retail and Small Business Distribution 3 (North), to Executive Vice President, Director of Investment Academy, effective from 1 February 2018. 3.3 Mr. Lalit Dodampe Gamage Dharmaseri had new work scope due to the revised organization structure, from Executive Vice President, Treasury and Debt Capital Markets, to Executive Vice President, Head Treasury, effective from 1 March 2018. 3.4 Mr. Wichak Sirisae was appointed as Executive Vice President, Treasury and Financial Markets, effective from 1 March 2018. 3.5 Ms. Kanoksri Rojmeta had new work scope due to the revised organizational structure, from Executive Vice President, Director of Investment Academy, to Executive Vice President, T-Wealth Management, effective from 1 April 2018. 3.6 Mr. Sanong Kumnuch, Executive Vice President, Retail and Small Business Banking, retired early, effective on 1 May 2018. 3.7 Mr. Anuwat Luengtaweekul had new work scope due to the revised organizational structure, from Executive Vice President, Retail and Small Business Distribution, to Executive Vice President, Retail and Small Business Banking, effective from 1 May 2018. 3.8 Mr. Songwut Chaowalit had new work scope due to the revised organizational structure, from Executive Vice President, Retail and Small Business Distribution 1 (BKK 1), to Executive Vice President, Retail and Small Business Distribution, effective from 1 May 2018. 3.9 Mr. Premsak Chitprapaporn resigned from First Vice President, Finance on 21 May 2018. 3.10 Mrs. Pittimart Sanguansook was promoted from Chief Financial Officer (Senior Vice President) to Chief Financial Officer (Executive Vice President), effective from 16 June 2018. 3.11 Ms. Thanawan Teekautamakorn was appointed as Executive Vice President, Chief Auditor, effective from 19 June 2018. 3.12 Ms. Patcharee Leekitwattana, Senior Vice President, Credit Review, ended of acting in the position of Chief Auditor from 19 June 2018 onwards. 3.13 Mr. Lalit Dodampe Gamage Dharmaseri, Executive Vice President, Treasury & Debt Capital Markets, completed his secondee duty at the Bank as assigned by the Bank of Nova Scotia, effective on 1 July 2018. 3.14 Dr. Sutut Chitmonkongsuk changed the name of the position, from Chief Digital Officer, to Chief Information Technology and Digital Officer, effective from 16 July 2018. 3.15 Mr. Suvit was appointed as Senior Vice President, Accounting, effective from 23 July 2018. 3.16 Mr. Samuel Anthony Dotro was appointed as Chief Technology Officer (Executive Vice President), from 26 July 2018. 3.17 Mr. Wichak Sirisae had a change in the unit title from Treasury & Capital Markets to Financial Markets & Treasury, effective from 16 August 2018. 3.18 Mr. Jaraschai Boworntammarat was appointed as Acting Senior Vice President, Finance, as an additional position, effective from 17 September 2018. 3.19 Mr. Wuttichai Suraratchai, Executive Vice President, Credit Risk Management, retired early, effective from 1 October 2018. 3.20 Mrs. Sasima Taweeskulchai had new work scope due to the revised organization structure, from Executive Vice President, Special Asset Management, to Executive Vice President, Credit Risk Management, effective from 1 October 2018. 3.21 Mr. Krittipol Nontakrew was appointed as Senior Vice President, Special Asset Management, effective from 1 October 2018. 3.22 Ms. Wisarnsri Nilodom, Executive Vice President, Wholesale Banking, retired early, effective on 16 October 2018. 3.23 Mr. Kittichai Singha was appointed as Executive Vice President, Compliance, effective from 16 October 2018. 3.24 Mr. Wisoot Tangadunrat, Executive Vice President, Client Relationship Management (Real Estate) was appointed as Acting Head of Wholesale Banking as an additional position, effective from 1 November 2018.
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On 1 January 2019, the Bank had a change of manager and executive position according to the criteria of the SEC, including the authority to deal under Sections 4 and Section 25 of the Financial Institution Business Act B.E. 2551 as follows: 1. Mr. Somjate Moosirilert resigned from his directorship (an executive director) and reached his term as Chief Executive Officer and President on 1 January 2019. 2. Mr. Praphan Anupongongarch was appointed as Chief Executive Officer, effective from 1 January 2019. 3. Mr. William George Said, originally Chief Operations Officer, was appointed as Deputy CEO, effective from 1 January 2019. 4. Mr. Pompet Rasanon had been appointed as Executive Vice President, Chief Automotive Lending Officer, effective from 1 January 2019. 5. Mr. Surasak Aptagama had been appointed as Executive Vice President, Sales Network – Automotive Lending, effective from 1 January 2019. 6. Mr. Wichak Praditavanij had new scope due to the revised organizational structure, from Executive Vice President, Non-Branch Channels, to Executive Vice President, Unsecured Lending Business, effective from 1 January 2019. 7. Mr. Songwut Chaowalit had new scope due to the revised organizational structure, from Executive Vice President, Retail and Small Business Distribution, to Executive Vice President, Branch Distribution, effective from 1 January 2019. 8. Mrs. Teranuj Koomsap had new scope due to the revised organizational structure, from Executive Vice President, Retail and Small Business Product Development, to Executive Vice President, Wealth Product Development, effective from 1 January 2019. 9. Mr. Tirachart Chiracharasporn had new scope due to the revised organizational structure, from Executive Vice President, Product and Marketing Management – Automotive Lending, to Executive Vice President, Enterprise Digital, effective from 1 January 2019. 10. Ms. Kanoksri Rojmeta retired from Executive Vice President, T-Wealth Management on 1 January 2019. 11. Mrs. Sasima Taweeskulchai retired from Executive Vice President, Credit Risk Management on 1 February 2019.
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ANNUAL REPORT 2018
Banking
Office of Executive Committee Chairman and CEO
Management Committee
Credit Committee
Investment Portfolio Committee
- 10 are executives according to the SEC’s notification.
Customer Experience and Distribution Strategy
Retail and Small Business Product Development
1
Non-Branch Channels
Retail and Small Business Distribution
Note
5
1
Wholesale Banking
Automotive Lending
6
Commercial Banking
Financial Markets and Treasury
Chief Executive Officer and President
Executive Committee
9 10
3
8
Finance
Accounting
Chief Financial Officer
Human Resources
and Digital
7 Information Technology
Shared Services
Audit
Collections and Recoveries
Compliance
Business Transformation
2 Chief Operating Officer
Risk Management
Risk Management Committee
Risk Oversight Committee
Succession Committee
Asset and Liability Management Committee
Audit Committee
Board of Directors
Nomination and Remuneration Committee
4 Retail and Small Business
As of 31 December 2018
Management Structure of TBANK
THANACHART BANK PUBLIC COMPANY LIMITED
127
Note
1
Banking
Automotive Lending
Wholesale - Automotive Lending Strategic Planning and MIS
SME “S” Business
Housing Loan Business
Enterprise Digital
- 10 are executives according to the SEC’s notification.
Product and Marketing Management - Automotive Lending
Customer Experience and Distribution Strategy
Wealth Product Development
Automotive Lending Sales Support and Customer Service
Sales Network - Automotive Lending
Unsecured Lending Business
Branch Distribution
5
Management Committee
Credit Committee
Investment Portfolio Committee 1
Collections and Recoveries
10
9
Finance
Accounting
Chief Financial Officer
Information Technology and Digital
7 8
Financial Markets and Treasury
6
Office of Executive Committee Chairman and CEO
Chief Executive Officer and President
Executive Committee
Risk Management
Commercial Banking
Wholesale Banking
Human Resources
Officer
2 Deputy Chief Executive
3
Risk Management Committee
Risk Oversight Committee
Succession Committee
Asset and Liability Management Committee
Audit Committee
Board of Directors
Nomination and Remuneration Committee
4 Retail and Small Business
As of 1 January 2019
Management Structure of TBANK
Compliance
Business Transformation
Shared Services
Audit
Company Secretary and person assigned to be directly responsible for accounting supervision Company Secretary The Bank assigned Mr. Kriangkrai Phurivitvattana, the highest executive of the Office of Chairman of the Executive Committee and the CEO, to be responsible for overseeing the work within the scope of the company secretary and supporting completion of operations of the Board of Directors. Qualifications and Experience 1. Has a legal and regulatory background of units that oversee businesses related to the Bank’s operations, such as the Public Company Limited law, the Financial Institutions law, Securities and Exchange law, Anti-Money Laundering law, Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing law, including internal rules and regulations such as the Bank’s Articles of Association, the Board of Directors Charter, shareholders’ agreement, or has undergone training related to duties of a company secretary; 2. Has knowledge of various businesses and the Bank’s organizational structure; 3. Has knowledge and understanding of the principles of good corporate governance and good corporate governance practices. Duties and Responsibilities 1. To provide preliminary advice to the directors regarding laws, rules, regulations, and requirements that are mandatory for the the Board of Directors to know; 2. To arrange meetings of the Board of Directors and the shareholders in accordance with the laws, rules, regulations and good corporate governance principles; 3. To oversee the agenda arrangement, meeting documents of the Board of Directors and shareholders’ meetings by facilitating sufficient access to necessary information for consideration and decision of important matters of the Bank; 4. To supervise preparation of the minutes of the Board of Directors ‘meetings and the minutes of the shareholders’ meetings to be complete within the time limit set by the relevant laws and regulations; 5. To coordinate and ensure compliance with resolutions of the Board of Directors, the shareholders’ meeting, the Bank’s regulations and good corporate governance principles for successful and effective management of the Bank;
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ANNUAL REPORT 2018
6. To provide advice and necessary information to perform duties for newly appointed directors; 7. To provide training courses or seminars relevant and necessary for business operations to the Board of Directors to promote the development of their knowledge and skills to be able to perform duties more efficiently; 8. To arrange an assessment of the performance of the Board of Directors, overall and individual, and report the assessment results to the Board of Directors meeting; 9. To maintain the Bank’s important documents such as director registration, invitations and minutes of the Board of Directors’ Meeting, and invitations and minutes of the Shareholders’ Meeting; 10. To ensure complete disclosure of information in the responsible part in accordance with the laws, rules and regulations of the Bank’s regulators 11. To support the performance of duties and activities of the Board of Directors as well as to perform other tasks as assigned by the Board.
Person assigned to be directly responsible for accounting supervision The Bank assigned Mrs. Pittimart Sanguansook, Chief Financial Officer (Executive Vice President), to be directly responsible for accounting supervision. She was an accountant who met qualifications and conditions of an accountant in the rules prescribed in the Notification of the Department of Business Development. The profile, qualifications and experience of the person assigned to be directly responsible for accounting supervision are in ‘Board of Directors and Management Team’.
The Remuneration of Directors and Executives (1) Financial remuneration each year
(a) Remuneration of the Board of Directors
As of 31 December 2018, the Bank has remunerated 3 panels of the Board of Directors, the Audit Committee, and the Nomination and Remuneration Committee totaling THB 42,136,600. The remuneration was paid in the forms of monthly compensation, meeting stipends, and performance allowance (based on the performance in 2017), which can be summarized as follows:
Table of the remuneration of the Board of Directors List of Directors
Type of remuneration (THB per year) Annual compensation Meeting stipends Performance allowance
1. Mr. Banterng Tantivit
Total
1,560,000.00
720,000.00
3,647,168.62
5,927,168.62
2. Mr. Suphadej Poonpipat
780,000.00
360,000.00
1,823,584.32
2,963,584.32
3. Dr. Thanachart Numnonda
780,000.00
360,000.00
1,353,948.90
2,493,948.90
4. Mr. Narong Chivangkur
780,000.00
360,000.00
1,823,584.32
2,963,584.32
5. Assoc. Prof. Dr. Somjai Phagaphasvivat
780,000.00
360,000.00
1,823,584.32
2,963,584.32
6. Ms. Mookda Pairatchavet
780,000.00
360,000.00
1,353,948.90
2,493,948.90
7. Mr. Rod Michael Reynolds
780,000.00
240,000.00
1,823,584.32
2,843,584.32
8. Mr. Walter Tas
780,000.00
300,000.00
1,823,584.32
2,903,584.32
9. Mr. Alexander Kwai Lap Choi
780,000.00
330,000.00
-
1,110,000.00
10. Ms. Suvarnapha Suvarnaprathip
780,000.00
330,000.00
1,823,584.32
2,933,584.32
11. Mr. Somjate Moosirilert
780,000.00
360,000.00
1,823,584.32
2,963,584.32
12. Mr. William George Said
780,000.00
300,000.00
744,422.09
1,824,422.09
1. Mr. Kiettisak Meecharoen
-
-
469,635.41
469,635.41
2. Mr. Sataporn Jinachitra
-
-
469,635.41
469,635.41
3. Mr. Peter Clifford Bessey
-
-
1,079,162.23
1,079,162.23
4. Mr. Adil Aziz Chaudhry
-
-
1,818,588.20
1,818,588.20
Directors retired from position in 2017
Total
10,140,000.00 4,380,000.00 23,701,600.00 38,221,600.00
Notes Changes during the course of 2017: 1) At the Annual General Meeting of Shareholders No. 24/2017 on 5 April 2017, • Mr. Kiettisak Meecharoen and Mr. Sataporn Jinachitra retired by rotation. • Dr. Thanachart Numnonda and Ms. Mookda Pairatchavet were elected as the Bank’s directors to replace those retired by rotation. 2) Mr. Peter Clifford Bessey resigned from directorship and Mr. William George Said was appointed as a director since 5 August 2017. 3) Mr. Adil Aziz Chaudhry resigned from his directorship on 31 December 2017 and Mr. Alexander Kwai Lap Choi assumed his directorship since 1 January 2018.
Table of the remuneration of the Audit Committee List of Directors
Type of remuneration (THB per year) Monthly compensation Meeting stipends
1. Dr. Thanachart Numnonda
720,000.00 360,000.00 1,080,000.00
2. Assoc. Prof. Dr. Somjai Phagaphasvivat 480,000.00 3. Ms. Mookda Pairatchavet Total
Total
240,000.00
720,000.00
480,000.00 240,000.00 720,000.00 1,680,000.00 840,000.00 2,520,000.00
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THANACHART BANK PUBLIC COMPANY LIMITED
Table of the remuneration of the Nomination and Remuneration Committee List of Directors
Type of remuneration (THB per year) Monthly compensation Meeting stipends
Total
1. Mr. Narong Chivangkur
324,000.00 297,000.00 621,000.00
2. Mr. Rod Michael Reynolds
216,000.00 144,000.00 360,000.00
3. Ms. Mookda Pairatchavet
216,000.00 198,000.00 414,000.00
Total
756,000.00 639,000.00 1,395,000.00
The remuneration of independent director of the subsidiaries None of the Bank’s independent directors sits as an independent director of the subsidiaries. (b) 2018 total remuneration, number of executive directors and executives, and forms of remuneration
In 2018, remuneration was paid in the form of salary, allowances, and contributions to Social Security, etc. to executive directors and executives in accordance with the regulations as follows: • By the SEC’s definition, there were 12 executives directors and executives (including 2 executives changed during the past year), a total remuneration paid amounted to THB 135,260,323. • With reference to the Bank of Thailand’s guideline, which as in accordance with Sections 4 and 25 of the Financial Institution Business Act B.E. 2551, there are 35 of those with management authority (including 2 executives changes during the past year), a total remuneration paid amounted to THB 297,196,094.
(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 2018, provident fund was paid in compliance with the regulations as follows: • By the SEC’s definition, there were 12 executives directors and executives (including 2 executives changed during the past year), a total provident fund paid amounted to THB 3,934,597. • With reference to the Bank of Thailand’s guideline, which as in accordance with Sections 4 and 25 of the Financial Institution Business Act B.E. 2551, there are 35 of those with managing authority (including 2 executives changed during the past year), a total provident fund paid amounted to THB 10,829,361.
130
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 25 April 2018
The Director’s date of first appointment: 22 April 2002
Chairman Non-Executive Director
In-House Training • Cyber Security for Board of Directors, 2017
External Training Thai Institute of Directors Association • Directors Accreditation Program (DAP), Class 25/2004
Management, Massachusetts Institute of Technology, U.S.A. • Bachelor of Science in Electrical Engineering, Massachusetts Institute of Technology, U.S.A.
1. Mr. Banterng Tantivit 74 • Master of Science (Finance) in
Name / Position / Date of first appointment / Date of latest appointment
As at 31 December 2018
Board of Directors and Management Team
None None
Period
Position
Other Organizations None
Other Non-Listed Companies 2016 - Present Director 2006 - Present Director 2003 - Present Chairman 2003 - Present Director 2003 - Present Director 1987 - Present Director 1987 - Present Director 2003 - 2015 Chairman
Lam Sai Village Co., Ltd. Siam Piwat Holding Co., Ltd. MBK Resort Plc. Siam Piwat Co., Ltd. B.V. Holding Co., Ltd. Deebuk Co., Ltd. Thai Farming Co., Ltd. Plan Estate Co., Ltd.
Other Listed Companies 2006 - Present Chairman MBK Plc. 1994 - 2018 Chairman of the Executive Committee 2015 - 2017 Director Dusit Thani Plc. 2001 - 2015 Advisor 2001 - 2015 Advisor Patum Rice Mill and Granary Plc.
Thanachart Capital Plc. Thanachart Insurance Plc. Thanachart Life Assurance Plc.
Company / Organization
Work Experience within 5 years
Thanachart Group 2006 - Present Chairman 2012 - 2014 Chairman 2005 - 2013 Chairman
Family Percentage of with Shareholding Relationship Director and in the Bank Management
132
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 25 April 2018
The Director’s date of first appointment: 1 September 2005
Vice Chairman Chairman of the Executive Committee Member of the Succession Committee Executive Director Authorized Signatory
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Anti Corruption for Executives, Class 1/2014 • Overview and Principles of International Accounting Standards No. 39 (IAS 39), 2009 • Thailand in the New Global Landscape, 2009
External Training Thai Institute of Directors Association • Role of the Chairman Program (RCP), Class 28/2012 • Role of the Compensation Committee (RCC), Class 15/2012 • Financial Institutions Governance Program (FGP), Class 4/2012 • Directors Accreditation Program (DAP), Class 8/2547 Capital Market Academy • Leadership Program, Class 8/2009
Wisconsin, U.S.A. • Bachelor of Business Administration and Accounting, Chulalongkorn University
Period
Position
Company / Organization
Work Experience within 5 years
Thanachart Group 2007 - Present Vice Chairman and Chairman Thanachart Capital Plc. of the Executive Committee 2006 - Present Director 2013 - 2018 Chairman of the Risk Mangement Committee 2010 - 2018 Chief Executive Officer 2014 - Present Chairman Thanachart Insurance Plc. 2005 - Present Director and Chairman of the Executive Committee 2012 - 2014 Vice Chairman 2014 - Present Chairman MBK Life Assurance Plc. 2014 - Present Director 2005 - 2013 Chairman of the Executive Thanachart Life Assurance Plc. Committee 2003 - 2013 Director Other Listed Companies 2016 - Present Chairman of the Good Patum Rice Mill and Granary Plc. Corporate Governance Committee 2012 - Present Chairman 2011 - 2017 Chairman of the Executive Committee 2018 - Present Chairman of the Executive MBK Plc. Committee 2015 - Present Chairman of the Nomination and Remuneration Committee 2006 - Present Vice Chairman 2003 - Present Vice Chairman of the Executive Committee 1994 - Present Director 2003 - 2018 Vice Chairman of the Executive Committee 2002 - 2015 Member of the Nomination and Remuneration Committee 2007 - 2018 Director Royal Orchid Hotel (Thailand) Plc. Other Non-Listed Companies 2015 - Present Chairman DMS Property Investment Private Ltd. 2011 - 2015 Director 2006 - Present Director Siam Piwat Holding Co., Ltd. 2005 - Present Director MBK Resort Plc. 2003 - Present Director Siam Piwat Co., Ltd. 2007 - 2018 Director Thai Royal Orchid Real Estate Co., Ltd. 2003 - 2015 Director Plan Estate Co., Ltd. Other Organizations None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
2. Mr. Suphadej Poonpipat 68 • Master of Science, University of None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
133
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 5 April 2017
In-House Training • Block Chain Technology, 2018
External Training Thai Institute of Directors Association • Strategic Board Master (SBM), Class 5/2018 • Financial Statements for Directors (FSD), Class 35/2018 • Directors Certification Program (DCP), Class 242/2017 • Role of the Chairman Program (RCP), Class 41/2017 • Advanced Audit Committee Program (AACP), Class 25/2016 • Directors Accreditation Program (DAP), Class 121/2015
Chairman of the Audit Committee Independent Director
The Director’s date of first appointment: 5 April 2017
University of Auckland, New Zealand • Master of Engineering (Electrical and Electronic), University of Auckland, New Zealand • Bachelor of Engineering (Electrical Engineering), Khon Kaen University
Period
Position
IMC Outsourcing (Thailand) Co., Ltd. Other Organizations 2013 - Present Committee of UBU Council Ubon Ratchathani University 2015 - 2017 President The Association of Thai ICT Industry
Other Non-Listed Companies 2013 - Present Director
Other Listed Companies 2016 - Present Chairman, SiamEast Solutions Plc. Independent Director, and Chairman of the Audit Committee 2015 - Present Independent Director Humanica Plc. and Member of the Audit Committee 2015 - Present Independent Director Vintcom Technology Plc. and Member of the Audit Committee
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
3. Dr. Thanachart Numnonda 53 • Doctor of Philosophy in Engineering, None None
Name / Position / Date of first appointment / Date of latest appointment
134
ANNUAL REPORT 2018
Age (years)
The Director’s date of latest appointment: 5 April 2016
Chairman of the Nomination and Remuneration Committee Chairman of the Succession Committee Independent Director The Director’s date of first appointment: 22 April 2002
4. Mr. Narong Chivangkur 74
Name / Position / Date of first appointment / Date of latest appointment Period
Position
Other Organizations None
Other Non-Listed Companies 2005 - 2014 Director
Other Listed Companies None
Momchailai Development Co., Ltd.
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
• Higher Diploma in Business and Marketing, None None Assumption Commercial College External Training Thai Institute of Directors Association • Strategic Board Master (SBM), Class 3/2018 • Driving Company Success with IT Governance (ITG), Class 4/2017 • Boards that Make a Difference (BMD), Class 3/2016 • Board Matters and Trends (BMT), Class 1/2016 • Advanced Audit Committee Program (AACP), Class 23/2016 • Ethical Leadership Program (ELP), Class 3/2016 • Anti-Corruption for Executive Program (ACEP), Class 3/2012 • Role of the Nomination and Governance Committee (RNG), Class 1/2011 • Financial Institutions Governance Program (FGP), Class 2/2011 • Audit Committee Program (ACP), Class 32/2010 • Financial Statement for Directors (FSD), Class 4/2009 • Successful Formulation & Execution of Strategy (SFE), Class 2/2008 • Role of the Compenstation Committee (RCC), Class 4/2007 • Chartered Director Class (CDC), Class 1/2007 • Corporate Governance and Social Responsibility (CSR), Class 1/2007 • Directors Certification Program (DCP), Class 34/2003 • Director Examination, Class 11/2003 Pennsylvania State University • Advanced Executive Development Program, 1987 Rochester Institute of Technology • Financial Management Program, 1986 Asian Institute of Management • Management Development Program, 1982 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Development of Anti-Corruption Standards of Thailand, 2017 • Anti Corruption for Executives, Class 1/2014
Education / Director’s Training Course Program
THANACHART BANK PUBLIC COMPANY LIMITED
135
The Director’s date of latest appointment: 5 April 2016
The Director’s date of first appointment: 26 March 2009
Member of the Audit Committee Member of the Risk Oversight Committee Independent Director
5. Assoc. Prof. Dr. Somjai Phagaphasvivat
Name / Position / Date of first appointment / Date of latest appointment Education / Director’s Training Course Program
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
External Training Thai Institute of Directors Association • Directors Accreditation Program (DAP), Class 34/2005
Period
Position
Other Non-Listed Companies 2007 – 2016 Director and Chairman The Krungthep Thanakom Co., Ltd. of the Audit Committee Other Organizations None
Other Listed Companies 2016 - Present Chairman of the Corporate Supalai Plc. Governance Committee 2015 - Present Independent Director 2013 - Present Chairman SEAFCO Plc. 2004 - Present Independent Director 2013 - Present Chairman of the Audit Amarin Printing and Pubishing Plc. Committee 1996 - Present Independent Director 1996 - 2013 Member of the Audit Committee 2008 - Present Chairman of the Audit Lee Feed Mill Plc. Committee 1991 - Present Independent Director 2007 - 2016 Director and Chairman Thai Hua Rubber Plc. of the Audit Committee
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
72 • Doctorado de Estado, Facultad de None None Ciencia Politica, Universidad Complutense de Madrid, Spain • Diplome d’Etudes Superieurers (Economic Integration), Universite de Nancy, France • Licenciatura, Facultad de Ciencia Politica y Economica, Universidad Complutense de Madrid, Spain • Bachelor of Arts, Chulalongkorn University
Age (years)
136
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 5 April 2017
The Director’s date of first appointment: 5 April 2017
Member of the Audit Committee Member of the Nomination and Remuneration Committee Member of the Succession Committee Independent Director
Period
Position
Other Non-Listed Companies 2016 - Present Managing Director 2002 - 2015 General Manager 2002 - 2015 General Manager Other Organizations None
External Training Thai Institute of Directors Association • Advanced Audit Committee Program (AACP), Class 28/2018 • Board Nomination and Compensation Program (BNCP), Class 3/2018 • Directors Certification Program (DCP), Class 242/2017 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
Other Listed Companies None
Management, Wagner College, Staten Island, New York, U.S.A. • Bachelor of Busniess Administration (Accounting), Assumption University
AMA Management and Consulting Co., Ltd. PepsiCo Services Asia Co., Ltd. Pepsi-Cola (Thai) Trading Co., Ltd.
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
6. Ms. Mookda Pairatchavet 59 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
137
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 25 April 2018
The Director’s date of first appointment: 15 January 2013
Member of the Nomination and Remuneration Committee Member of the Succession Committee Non-Executive Director
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
External Training Euromoney Training • Euromoney Asia Corporate Governance Program, 2012
The Schulich School of Business, York University, Toronto, Canada • Bachelor of Science in Engineering, Queen’s University, Ontario, Canada
Period
Position
Other Non-Listed Companies 2018 - Present Director BG2.1 Ltd. 2017 - Present Director Bouldergate Ltd. 2016 - Present Director Aileron Project Ltd. 2009 - Present Director Logarithmics Co., Ltd. 1983 - 2016 Various executive positons The Bank of Nova Scotia 2012 - 2015 Senior Independent C.H. Bailey Plc. Director 2009 - 2013 Director Tulsa Inspection Resources LLC. Other Organizations None
Other Listed Companies None
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
7. Mr. Rod Michael Raynolds 61 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
138
ANNUAL REPORT 2018
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
External Training The Hong Kong Institute of Bankers • RegTech: Harnessing Behavioural Science and AI for Risk Management and Performance Optimisation, 2018 • Fighting Corruption: Challenges Confronting Bank Directors, 2017 • Regulator’s Perspective - Account Opening, KYC Information Collection and Financial Inclusion, 2016 • Trends and Updates on Credit Risk Regulation and Requirements: Impact on Banking and Finance Sector of HK and China, 2016 • Resolution Regime for Financial Institutions in Hong Kong, 2015 • Implementation of Basel III in Hong Kong and Regulatory Requirements, 2015 • Corporate Governance for AIs, 2014
Period
Position
Other Organizations None
Other Non-Listed Companies 2018 - Present Head, Asia Pacific, Global Banking and Markets 2016 - 2018 Chief Operating Officer & CFO, Global Banking and Markets 2014 - 2016 Vice President, CFO & Corporate Development 2017 - Present Director 2016 - Present Director 2014 - Present Director 2011 - 2014 Vice President, Strategic Transactions and Review
Other Listed Companies None
The Bank of Nova Scotia Asia Limited, Singapore Scotia Securities Asia Limited Scotiabank (Hong Kong) Limited, Hong Kong Bank of Nova Scotia
Bank of Nova Scotia, Asia Pacific
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
The Director’s date of latest appointment: 5 April 2016
Education / Director’s Training Course Program
• Master of Arts, Economics and None None Business Administration, Vrije Universiteit Amsterdam, The Netherlands • Bachelor of Commerce - Economics, Hogeschool voor Economicshe Studies, Amsterdam, The Netherlands
Age (years)
8. Mr. Walter Tas 47 Director Non-Executive Director The Director’s date of first appointment: 1 March 2015
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
139
Age (years)
Education / Director’s Training Course Program
The Director’s date of first appointment: 22 April 2002
The Director’s date of latest appointment: 5 April 2016
Vice Chairperson of the Executive Committee Executive Director Authorized Signatory
10. Ms. Suvarnapha Suvarnaprathip
The Director’s date of latest appointment: 1 January 2018
The Director’s date of first appointment: 1 January 2018
Director Chairman of the Risk Oversight Committee Non-Executive Director
Position
None None 73 • Bachelor of Economics, Monash University, Australia External Training Thai Institute of Directors Association • Directors Accreditation Program (DAP), Class 20/2004 Banker Trust, New York, U.S.A. • Corporate Finance Training Program Bank of Thailand • Thailand Sustainable Banking, 2018 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Overview and Principles of International Acccounting Standards No. 39 (IAS 39), 2009 • Thailand in the New Global Landscape, 2009
Other Organizations None
Other Non-Listed Companies 1991 - Present Director
Seacon Development Plc.
Thanachart Group 2008 - Present Vice Chairperson of Thanachart Capital Plc. the Executive Committee 2005 - Present Director 2013 - 2018 Vice Chairperson of the Risk Management Committee 2005 - 2013 Director and Member of Thanachart Life Assurance Plc. the Executive Committee Other Listed Companies None
Other Organizations None
Company / Organization
In-House Training • Block Chain Technology, 2018
Other Listed Companies None
Thanachart Group None
Period
Work Experience within 5 years
Other Non-Listed Companies 2007 - 2017 Vice President & Bank of Nova Scotia, Asia Pacific, Regional Head, Global Hong Kong Wholesale Operations
None None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
External Training The Bank of Nova Scotia • The Fundamentals of Coaching Excellence, 2007 The Institut Bank-Bank Malaysia • Law of Negotiable Instruments, 1988
Hong Kong • Hong Kong Certificate of Education, Raimondi College, Hong Kong
9. Mr. Alexander Kwai Lap Choi 62 • High School, Raimondi College,
Name / Position / Date of first appointment / Date of latest appointment
140
ANNUAL REPORT 2018
Age (years)
The Director’s date of latest appointment: 25 April 2018
11. Mr. Somjate Moosirilert 62 Director Member of the Executive Committee Chairman of the Risk Management Committee Chief Executive Officer and President Executive Director Authorized Signatory The Director’s date of first appointment: 29 October 2009
Name / Position / Date of first appointment / Date of latest appointment
In-House Training • Cyber Security for Board of Directors, 2017 • Development of Anti-Corruption Standards of Thailand, 2017 • Anti Corruption for Executives, Class 1/2014
External Training Thai Institute of Directors Association • Corporate Governance for Capital Market Intermediaries (CGI), Class 15/2016 • Role of the Chairman Program (RCP), 5/2001 Thai Listed Companies Association • TLCA Leadership Development Program (LDP), 2012 Capital Market Academy • Leadership Program, Class 5/2007 Judicial Training Institute • The Program for Senior Executives on Justice Administration, Class 9/2005 Bank of Thailand • Thailand Sustainable Banking, 2018
Period
Position
Sasin Graduate Institute of Business Administration of Chulalongkorn University
Association of Thai Securities Companies The Thai Bankers’ Association
Thai Listed Companies Association
Siam City Life Assurance Plc.
TS Asset Management Co., Ltd.
Thanachart Insurance Plc.
Thanachart Securities Plc.
Thanachart Fund Management Co., Ltd.
Thanachart Capital Plc.
Company / Organization
Work Experience within 5 years
Thanachart Group 2009 - Present Director and Member of the Executive Committee 2013 - 2018 Member of the Risk Management Committee 2010 - 2018 Senior Executive Vice President 2013 - Present Chairman 2011 - Present Chairman of the Executvie Committee 2010 - Present Director 2013 - Present Chairman of the Executive Committee 2009 - Present Chairman 2014 - 2018 Vice Chairman 2013 - 2018 Vice Chairman of the Executive Committee 2010 - 2018 Director and Member of the Executive Committee 2011 - 2018 Chairman and Chairman of the Executive Committee 2010 - 2014 Chairman and Chairman of the Executive Committee Other Listed Companies None Other Non-Listed Companies None Other Organizations 2017 - Present Vice Chairman 2015 - 2017 Advisor 2011 - 2015 Director and Vice Chairman 2010 - Present Advisory Board 2018 - 2018 Director 2016 - 2018 Advisor 2011 - 2016 Director 2014 - 2016 Member of the Steering Committee
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
• Master of Management, None None Sasin Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Business Administration, Thammasat University
Education / Director’s Training Course Program
THANACHART BANK PUBLIC COMPANY LIMITED
141
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 5 August 2017
Member of the Executive Committee Vice Chairman of the Risk Management Committee Chief Operating Officer Executive Director Authorized Signatory The Director’s date of first appointment: 5 August 2017 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Anti-Bribery & Anti-Corruption, 2017 • Development of Anti-Corruption Standards of Thailand, 2017 • Understanding Global Sanctions, 2017 • Crucial Conversations (Executive Briefing), 2017 • Volcker Rule Fundamentals and Proprietary Trading, 2017 • Anti-money Laudering and Torrorism and Proliferation of Weapons of Mass Destruction Financing, 2017 • Leadershaip Transformation, 2017
Queen’s University, Kingston, Canada • Bachelor of Commerce, Dalhousie University, Nova Scotia, Canada
Period
Position
Company / Organization
Work Experience within 5 years
Other Non-Listed Companies 2015 - 2016 Managing Director, Scotiabank Structural Cost Transformation 2011 - 2015 Managing Director and Head of Greater China Other Organizations None
Thanachart Group 2017 - Present Director Thanachart Securities Plc. 2016 - 2017 Executive Vice President, Thanachart Bank Plc. Chief Administrative Officer Other Listed Companies None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
12. Mr. William George Said 46 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
142
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
External Training Thai Institute of Directors Association • Role of the Compensation Committee (RCC), Class 21/2016 • How to the Measure the Success of Corporate Strategy (HMS), Class 4/2014 • Successful Formulation & Execution of Strategy (SFE), Class 3/2009 • Directors Certification Program (DCP), Class 24/2002 • Board and Performance Evaluation Commerce Academy, UTCC • Top Executive Program in Commerce and Trade, Class 11/2018
The Executive’s date of first appointment: 1 June 2009
In-House Training • Anti Corruption for Executives, Class 1/2014
Rangsit University • Bachelor of Science (Accounting), Kasetsart University
Executive Vice President, Retail and Small Business Banking
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies 2010 - Present Independent Director Information and Communication Network Plc. and Member of the Audit Committee
Thanachart Group 2017 - 2018 Executive Vice President, Thanachart Bank Plc. Retail and Small Business Distribution 2009 - 2017 Executive Vice President, Chief Financial Officer 2016 - Present Member of the Nomination Ratchthani Leasing Plc. and Remuneration Committee 2012 - Present Director
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
13. Mr. Anuwat Luengtaweekul 55 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
143
Age (years)
Education / Director’s Training Course Program
The Executive’s date of first appointment: 12 February 2015
Member of the Risk Management Committee Executive Vice President, Chief Risk Officer External Training The Bank of Nova Scotia • Canadian Securities Course • Anti-Corruption • Anti-Money Laundering • Operational Risk • Integrity and Privacy • Global Sanctions • Information and Cyber Security • Managing High Risk Customers
The American University of Beirut, Lebanon
Period
Position
Company / Organization
Work Experience within 5 years
Other Non-Listed Companies 2008 - 2013 Vice President Other Organizations None
The Bank of Nova Scotia
Thanachart Group 2015 - Present Vice Chairman and TS Asset Management Co., Ltd. Vice Chairman of the Executive Committee 2013 - 2015 Executive Vice President, Thanachart Bank Plc. Chief Risk Officer Other Listed Companies None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
14. Mr. Ziad El-Hoss 63 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
144
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Executive’s date of first appointment: 17 September 2016
Member of the Risk Oversight Committee Executive Vice President, Automotive Lending
External Training Thai Institute of Directors Association • Successful Formulation & Execution of Strategy (SFE), Class 22/2014 • Directors Certification Program (DCP), Class 173/2013 The Thai Institute of Banking and Finance Association • Financial Executive Development Program (FINEX), Class 19/2010 Institute of Business and Industrial Development • Industrial and Investment Development for Executive, Class 5/2018
National Institute of Development Administration • Bachelor of Business Administration (Marketing), Sukhothai Thammathirat Open University • Bachelor of Science (Mathematics), King Mongkut’s Institute of Technology Thonburi
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Listed Companies None Other Non-Listed Companies None
Thanachart Group 2010 - Present Director Thanachart Insurance Plc. 2014 - 2016 Executive Vice President, Thanachart Bank Plc. Automotive Lending 2010 - 2014 Executive Vice President, Secured Lending and Deposits 2010 - 2018 Director and Member of Ratchthani Leasing Plc. the Executive Committee
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
15. Mr. Praphan Anupongongarch 55 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
145
Age (years)
Education / Director’s Training Course Program
External Training Financial Planner Association of Singapore • Certified Financial Planner, 2007
None None
National Institute of Development Administration • Bachelor of Economics, Ramkhamhaeng University
External Training Standard Chartered Bank • Asset and Liability Management EUROMONEY • Credit Derivatives
Member of the Risk Management Committee Executive Vice President, Financial Markets and Treasury
The Executive’s date of first appointment: 1 March 2018
Period
Company / Organization
Thanachart Group Executive Vice President, Thanachart Bank Plc. Chief Digital Officer Executive Vice President, Commercial Banking Senior Vice President, Transaction Banking
Position
Work Experience within 5 years
Other Organizations None
Other Listed Companies 2006 – 2018 Senior Vice President, Siam Commercial Bank Plc. Business Assessment and Control Other Non-Listed Companies None
Thanachart Group None
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
2017 - 2018 2013 - 2017 2012 - 2013
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
17. Mr. Wichak Sirisae 59 • Master of Business Administration, None None
The Executive’s date of first appointment: 16 April 2017
Executive Vice President, Chief Information Technology and Digital Officer
English Program, Institute of International Studies, Ramkhamhaeng University • Master of Business Administration, Assumption University of Thailand • Bachelor of Science (Statistics), Ramkhamhaeng University
16. Dr. Sutut Chitmonkongsuk 57 • Ph.D. Business Administration,
Name / Position / Date of first appointment / Date of latest appointment
146
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
External Training Thailand Securities Institute • Strategic CFO in Capital Markets Program, 2016 The Bank of Nova Scotia, Canada • IFRS Update, 2013
Thammasat University • High Diploma in Auditing, Thammasat University
The Executive’s date of first appointment: 23 July 2018
Senior Vice President, Accounting
Thailand • Master of Accountancy (Financial Accounting), Chulalongkorn University • Bachelor of Accountancy, Chulalongkorn University
19. Mr. Suwit Eurpiyachart 44 • Certified Public Accountant of
Member of the Risk Management Committee Executive Vice President, Chief Financial Officer The Executive’s date of first appointment: 27 June 2017
18. Mrs. Pittimart Sanguansook 54 • Bachelor of Accounting,
Name / Position / Date of first appointment / Date of latest appointment
None None
None None
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
KrungSri Asset Management Co., Ltd. Citibank
Other Listed Companies Vice President, Bank of Ayudhaya Plc. Finance Group Vice President, Head of Financial Control Other Non-Listed Companies 2016 - 2018 Chief Financial Officer 2012 - 2016 Vice President
2017 - 2018 2016 - 2017
Thanachart Group None
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
Thanachart Group 2017 - 2018 Senior Vice President, Thanachart Bank Plc. Chief Financial Officer 2016 - 2017 Senior Vice President, Finance 2014 - 2016 Senior Vice President, Accounting
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
THANACHART BANK PUBLIC COMPANY LIMITED
147
The Executive’s date of first appointment: 17 September 2018
Acting Senior Vice President, Finance
20. Mr. Jaraschai Boworntammarat
Name / Position / Date of first appointment / Date of latest appointment Education / Director’s Training Course Program
External Training Federation of Accounting Professions, Under the Royal Patronage of His Majesty the King • CFO in Practice, 2017
44 • Master of Economics (Business Economics), National Institute of Development Administration • Master of Engineering (Industrial Engineering), Kasetsart University • Bachelor of Engineering (Mechanical Engineering), Kasetsart University
Age (years)
None None
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
Thanachart Group 2016 - Present First Vice President, Thanachart Bank Plc. Financial Planning & Analysis
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
148
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 25 April 2018
The Director’s date of first appointment: 22 April 2002
Chairman Non-Executive Director
In-House Training • Cyber Security for Board of Directors, 2017
External Training Thai Institute of Directors Association • Directors Accreditation Program (DAP), Class 25/2004
Management, Massachusetts Institute of Technology, U.S.A. • Bachelor of Science in Electrical Engineering, Massachusetts Institute of Technology, U.S.A.
1. Mr. Banterng Tantivit 74 • Master of Science (Finance) in
Name / Position / Date of first appointment / Date of latest appointment
From 1 January 2019 onwards
None None
Period
Position
Other Organizations None
Other Non-Listed Companies 2016 - Present Director 2006 - Present Director 2003 - Present Chairman 2003 - Present Director 2003 - Present Director 1987 - Present Director 1987 - Present Director 2003 - 2015 Chairman
Lam Sai Village Co., Ltd. Siam Piwat Holding Co., Ltd. MBK Resort Plc. Siam Piwat Co., Ltd. B.V. Holding Co., Ltd. Deebuk Co., Ltd. Thai Farming Co., Ltd. Plan Estate Co., Ltd.
Other Listed Companies 2006 - Present Chairman MBK Plc. 1994 - 2018 Chairman of the Executive Committee 2015 - 2017 Director Dusit Thani Plc. 2001 - 2015 Advisor 2001 - 2015 Advisor Patum Rice Mill and Granary Plc.
Thanachart Capital Plc. Thanachart Insurance Plc. Thanachart Life Assurance Plc.
Company / Organization
Work Experience within 5 years
Thanachart Group 2006 - Present Chairman 2012 - 2014 Chairman 2005 - 2013 Chairman
Family Percentage of with Shareholding Relationship Director and in the Bank Management
THANACHART BANK PUBLIC COMPANY LIMITED
149
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 25 April 2018
The Director’s date of first appointment: 1 September 2005
Vice Chairman Chairman of the Executive Committee Member of the Succession Committee Executive Director Authorized Signatory
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Anti Corruption for Executives, Class 1/2014 • Overview and Principles of International Accounting Standards No. 39 (IAS 39), 2009 • Thailand in the New Global Landscape, 2009
External Training Thai Institute of Directors Association • Role of the Chairman Program (RCP), Class 28/2012 • Role of the Compensation Committee (RCC), Class 15/2012 • Financial Institutions Governance Program (FGP), Class 4/2012 • Directors Accreditation Program (DAP), Class 8/2547 Capital Market Academy • Leadership Program, Class 8/2009
Wisconsin, U.S.A. • Bachelor of Business Administration and Accounting, Chulalongkorn University
Period
Position
Company / Organization
Work Experience within 5 years
Thanachart Group 2007 - Present Vice Chairman and Chairman Thanachart Capital Plc. of the Executive Committee 2006 - Present Director 2013 - 2018 Chairman of the Risk Mangement Committee 2010 - 2018 Chief Executive Officer 2014 - Present Chairman Thanachart Insurance Plc. 2005 - Present Director and Chairman of the Executive Committee 2012 - 2014 Vice Chairman 2014 - Present Chairman MBK Life Assurance Plc. 2014 - Present Director 2005 - 2013 Chairman of the Executive Thanachart Life Assurance Plc. Committee 2003 - 2013 Director Other Listed Companies 2016 - Present Chairman of the Good Patum Rice Mill and Granary Plc. Corporate Governance Committee 2012 - Present Chairman 2011 - 2017 Chairman of the Executive Committee 2018 - Present Chairman of the Executive MBK Plc. Committee 2015 - Present Chairman of the Nomination and Remuneration Committee 2006 - Present Vice Chairman 2003 - Present Vice Chairman of the Executive Committee 1994 - Present Director 2003 - 2018 Vice Chairman of the Executive Committee 2002 - 2015 Member of the Nomination and Remuneration Committee 2007 - 2018 Director Royal Orchid Hotel (Thailand) Plc. Other Non-Listed Companies 2015 - Present Chairman DMS Property Investment Private Ltd. 2011 - 2015 Director 2006 - Present Director Siam Piwat Holding Co., Ltd. 2005 - Present Director MBK Resort Plc. 2003 - Present Director Siam Piwat Co., Ltd. 2007 - 2018 Director Thai Royal Orchid Real Estate Co., Ltd. 2003 - 2015 Director Plan Estate Co., Ltd. Other Organizations None
Family Percentage of with Shareholding Relationship Director and in the Bank Management
2. Mr. Suphadej Poonpipat 68 • Master of Science, University of None None
Name / Position / Date of first appointment / Date of latest appointment
150
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 5 April 2017
In-House Training • Block Chain Technology, 2018
External Training Thai Institute of Directors Association • Strategic Board Master (SBM), Class 5/2018 • Financial Statements for Directors (FSD), Class 35/2018 • Directors Certification Program (DCP), Class 242/2017 • Role of the Chairman Program (RCP), Class 41/2017 • Advanced Audit Committee Program (AACP), Class 25/2016 • Directors Accreditation Program (DAP), Class 121/2015
Period
Position
IMC Outsourcing (Thailand) Co., Ltd.
Other Organizations 2013 - Present Committee of UBU Council Ubon Ratchathani University 2015 - 2017 President The Association of Thai ICT Industry
Other Non-Listed Companies 2013 - Present Director
Other Listed Companies 2016 - Present Chairman, SiamEast Solutions Plc. Independent Director, and Chairman of the Audit Committee 2015 - Present Independent Director Humanica Plc. and Member of the Audit Committee 2015 - Present Independent Director Vintcom Technology Plc. and Member of the Audit Committee
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
3. Dr. Thanachart Numnonda 53 • Doctor of Philosophy in Engineering, None None University of Auckland, New Zealand Chairman of the Audit Committee • Master of Engineering (Electrical Independent Director and Electronic), University of Auckland, New Zealand The Director’s date of • Bachelor of Engineering (Electrical first appointment: Engineering), Khon Kaen University 5 April 2017
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
151
Age (years)
The Director’s date of latest appointment: 5 April 2016
Chairman of the Nomination and Remuneration Committee Chairman of the Succession Committee Independent Director The Director’s date of first appointment: 22 April 2002
4. Mr. Narong Chivangkur 74
Name / Position / Date of first appointment / Date of latest appointment Period
Position
Other Organizations None
Other Non-Listed Companies 2005 - 2014 Director
Other Listed Companies None
Momchailai Development Co., Ltd.
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of with Shareholding Relationship Director and in the Bank Management
• Higher Diploma in Business and Marketing, None None Assumption Commercial College External Training Thai Institute of Directors Association • Strategic Board Master (SBM), Class 3/2018 • Driving Company Success with IT Governance (ITG), Class 4/2017 • Boards that Make a Difference (BMD), Class 3/2016 • Board Matters and Trends (BMT), Class 1/2016 • Advanced Audit Committee Program (AACP), Class 23/2016 • Ethical Leadership Program (ELP), Class 3/2016 • Anti-Corruption for Executive Program (ACEP), Class 3/2012 • Role of the Nomination and Governance Committee (RNG), Class 1/2011 • Financial Institutions Governance Program (FGP), Class 2/2011 • Audit Committee Program (ACP), Class 32/2010 • Financial Statement for Directors (FSD), Class 4/2009 • Successful Formulation & Execution of Strategy (SFE), Class 2/2008 • Role of the Compenstation Committee (RCC), Class 4/2007 • Chartered Director Class (CDC), Class 1/2007 • Corporate Governance and Social Responsibility (CSR), Class 1/2007 • Directors Certification Program (DCP), Class 34/2003 • Director Examination, Class 11/2003 Pennsylvania State University • Advanced Executive Development Program, 1987 Rochester Institute of Technology • Financial Management Program, 1986 Asian Institute of Management • Management Development Program, 1982 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Development of Anti-Corruption Standards of Thailand, 2017 • Anti Corruption for Executives, Class 1/2014
Education / Director’s Training Course Program
152
ANNUAL REPORT 2018
The Director’s date of latest appointment: 5 April 2016
The Director’s date of first appointment: 26 March 2009
Member of the Audit Committee Member of the Risk Oversight Committee Independent Director
5. Assoc. Prof. Dr. Somjai Phagaphasvivat
Name / Position / Date of first appointment / Date of latest appointment Education / Director’s Training Course Program
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
External Training Thai Institute of Directors Association • Directors Accreditation Program (DAP), Class 34/2005
Period
Position
Other Non-Listed Companies 2007 – 2016 Director and Chairman The Krungthep Thanakom Co., Ltd. of the Audit Committee Other Organizations None
Other Listed Companies 2016 - Present Chairman of the Corporate Supalai Plc. Governance Committee 2015 - Present Independent Director 2013 - Present Chairman SEAFCO Plc. 2004 - Present Independent Director 2013 - Present Chairman of the Audit Amarin Printing and Pubishing Plc. Committee 1996 - Present Independent Director 1996 - 2013 Member of the Audit Committee 2008 - Present Chairman of the Audit Lee Feed Mill Plc. Committee 1991 - Present Independent Director 2007 - 2016 Director and Chairman Thai Hua Rubber Plc. of the Audit Committee
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
72 • Doctorado de Estado, Facultad de None None Ciencia Politica, Universidad Complutense de Madrid, Spain • Diplome d’Etudes Superieurers (Economic Integration), Universite de Nancy, France • Licenciatura, Facultad de Ciencia Politica y Economica, Universidad Complutense de Madrid, Spain • Bachelor of Arts, Chulalongkorn University
Age (years)
THANACHART BANK PUBLIC COMPANY LIMITED
153
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 5 April 2017
The Director’s date of first appointment: 5 April 2017
Member of the Audit Committee Member of the Nomination and Remuneration Committee Member of the Succession Committee Independent Director
Period
Position
Other Non-Listed Companies 2016 - Present Managing Director 2002 - 2015 General Manager 2002 - 2015 General Manager Other Organizations None
External Training Thai Institute of Directors Association • Advanced Audit Committee Program (AACP), Class 28/2018 • Board Nomination and Compensation Program (BNCP), Class 3/2018 • Directors Certification Program (DCP), Class 242/2017 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
Other Listed Companies None
Management, Wagner College, Staten Island, New York, U.S.A. • Bachelor of Busniess Administration (Accounting), Assumption University
AMA Management and Consulting Co., Ltd. PepsiCo Services Asia Co., Ltd. Pepsi-Cola (Thai) Trading Co., Ltd.
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of with Shareholding Relationship Director and in the Bank Management
6. Ms. Mookda Pairatchavet 59 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
154
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of latest appointment: 25 April 2018
The Director’s date of first appointment: 15 January 2013
Member of the Nomination and Remuneration Committee Member of the Succession Committee Non-Executive Director
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
External Training Euromoney Training • Euromoney Asia Corporate Governance Program, 2012
The Schulich School of Business, York University, Toronto, Canada • Bachelor of Science in Engineering, Queen’s University, Ontario, Canada
Period
Position
Other Non-Listed Companies 2018 - Present Director BG2.1 Ltd. 2017 - Present Director Bouldergate Ltd. 2016 - Present Director Aileron Project Ltd. 2009 - Present Director Logarithmics Co., Ltd. 1983 - 2016 Various executive positons The Bank of Nova Scotia 2012 - 2015 Senior Independent C.H. Bailey Plc. Director 2009 - 2013 Director Tulsa Inspection Resources LLC. Other Organizations None
Other Listed Companies None
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
7. Mr. Rod Michael Raynolds 61 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
155
Age (years)
Education / Director’s Training Course Program
External Training The Hong Kong Institute of Bankers • RegTech: Harnessing Behavioural Science and AI for Risk Management and Performance Optimisation, 2018 • Fighting Corruption: Challenges Confronting Bank Directors, 2017 • Regulator’s Perspective - Account Opening, KYC Information Collection and Financial Inclusion, 2016 • Trends and Updates on Credit Risk Regulation and Requirements: Impact on Banking and Finance Sector of HK and China, 2016 • Resolution Regime for Financial Institutions in Hong Kong, 2015 • Implementation of Basel III in Hong Kong and Regulatory Requirements, 2015 • Corporate Governance for AIs, 2014
Director Non-Executive Director The Director’s date of first appointment: 1 March 2015
The Director’s date of latest appointment: 5 April 2016
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017
Business Administration, Vrije Universiteit Amsterdam, The Netherlands • Bachelor of Commerce - Economics, Hogeschool voor Economicshe Studies, Amsterdam, The Netherlands
8. Mr. Walter Tas 47 • Master of Arts, Economics and
Name / Position / Date of first appointment / Date of latest appointment
None None
Period
Position
Other Organizations None
Other Non-Listed Companies 2018 - Present Head, Asia Pacific, Global Banking and Markets 2016 - 2018 Chief Operating Officer & CFO, Global Banking and Markets 2014 - 2016 Vice President, CFO & Corporate Development 2017 - Present Director 2016 - Present Director 2014 - Present Director 2011 - 2014 Vice President, Strategic Transactions and Review
Other Listed Companies None
The Bank of Nova Scotia Asia Limited, Singapore Scotia Securities Asia Limited Scotiabank (Hong Kong) Limited, Hong Kong Bank of Nova Scotia
Bank of Nova Scotia, Asia Pacific
Company / Organization
Work Experience within 5 years
Thanachart Group None
Family Percentage of with Shareholding Relationship Director and in the Bank Management
156
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Director’s date of first appointment: 22 April 2002
The Director’s date of latest appointment: 5 April 2016
Vice Chairperson of the Executive Committee Executive Director Authorized Signatory
10. Ms. Suvarnapha Suvarnaprathip
The Director’s date of latest appointment: 1 January 2018
The Director’s date of first appointment: 1 January 2018
Director Chairman of the Risk Oversight Committee Non-Executive Director
Position
None None 73 • Bachelor of Economics, Monash University, Australia External Training Thai Institute of Directors Association • Directors Accreditation Program (DAP), Class 20/2004 Banker Trust, New York, U.S.A. • Corporate Finance Training Program Bank of Thailand • Thailand Sustainable Banking, 2018 In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Overview and Principles of International Acccounting Standards No. 39 (IAS 39), 2009 • Thailand in the New Global Landscape, 2009
Other Organizations None
Other Non-Listed Companies 1991 - Present Director
Seacon Development Plc.
Thanachart Group 2008 - Present Vice Chairperson of Thanachart Capital Plc. the Executive Committee 2005 - Present Director 2013 - 2018 Vice Chairperson of the Risk Management Committee 2005 - 2013 Director and Member of Thanachart Life Assurance Plc. the Executive Committee Other Listed Companies None
Other Organizations None
Company / Organization
In-House Training • Block Chain Technology, 2018
Other Listed Companies None
Thanachart Group None
Period
Work Experience within 5 years
Other Non-Listed Companies 2007 - 2017 Vice President & Bank of Nova Scotia, Asia Pacific, Regional Head, Global Hong Kong Wholesale Operations
None None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
External Training The Bank of Nova Scotia • The Fundamentals of Coaching Excellence, 2007 The Institut Bank-Bank Malaysia • Law of Negotiable Instruments, 1988
Hong Kong • Hong Kong Certificate of Education, Raimondi College, Hong Kong
9. Mr. Alexander Kwai Lap Choi 62 • High School, Raimondi College,
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
157
Age (years)
Education / Director’s Training Course Program
The Executive’s date of first appointment: 17 September 2016
Member of the Risk Oversight Committee Executive Vice President, Automotive Lending
External Training Thai Institute of Directors Association • Successful Formulation & Execution of Strategy (SFE), Class 22/2014 • Directors Certification Program (DCP), Class 173/2013 The Thai Institute of Banking and Finance Association • Financial Executive Development Program (FINEX), Class 19/2010 Institute of Business and Industrial Development • Industrial and Investment Development for Executive, Class 5/2018
National Institute of Development Administration • Bachelor of Business Administration (Marketing), Sukhothai Thammathirat Open University • Bachelor of Science (Mathematics), King Mongkut’s Institute of Technology Thonburi
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Listed Companies None Other Non-Listed Companies None
Thanachart Group 2019 - Present Chairman and Chairman of TS Asset Management Co., Ltd. the Executive Committee 2019 - Present Vice Chairman and Thanachart Insurance Plc. Vice Chairman of the Executive Committee 2010 - Present Director 2016 - 2018 Executive Vice President, Thanachart Bank Plc. Automotive Lending 2014 - 2016 Executive Vice President, Automotive Lending 2010 - 2014 Executive Vice President, Secured Lending and Deposits 2010 - 2018 Director and Member of Ratchthani Leasing Plc. the Executive Committee
Family Percentage of with Shareholding Relationship Director and in the Bank Management
11. Mr. Praphan Anupongongarch 55 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
158
ANNUAL REPORT 2018
Age (years)
The Director’s date of latest appointment: 5 August 2017
12. Mr. William George Said 46 Member of the Executive Committee Vice Chairman of the Risk Management Committee Deputy Chief Executive Officer Executive Director Authorized Signatory The Director’s date of first appointment: 5 August 2017
Name / Position / Date of first appointment / Date of latest appointment
In-House Training • Block Chain Technology, 2018 • Cyber Security for Board of Directors, 2017 • Anti-Bribery & Anti-Corruption, 2017 • Development of Anti-Corruption Standards of Thailand, 2017 • Understanding Global Sanctions, 2017 • Crucial Conversations (Executive Briefing), 2017 • Volcker Rule Fundamentals and Proprietary Trading, 2017 • Anti-money Laudering and Torrorism and Proliferation of Weapons of Mass Destruction Financing, 2017 • Leadershaip Transformation, 2017
Period
Position
Company / Organization
Work Experience within 5 years
Other Non-Listed Companies 2015 - 2016 Managing Director, Scotiabank Structural Cost Transformation 2011 - 2015 Managing Director and Head of Greater China Other Organizations None
Thanachart Group 2017 - Present Director Thanachart Securities Plc. 2017 - 2018 Chief Operating Officer Thanachart Bank Plc. 2016 - 2017 Executive Vice President, Chief Administrative Officer Other Listed Companies None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
• Master of Business Administration, None None Queen’s University, Kingston, Canada • Bachelor of Commerce, Dalhousie University, Nova Scotia, Canada
Education / Director’s Training Course Program
THANACHART BANK PUBLIC COMPANY LIMITED
159
Age (years)
Education / Director’s Training Course Program
External Training Thai Institute of Directors Association • Role of the Compensation Committee (RCC), Class 21/2016 • How to the Measure the Success of Corporate Strategy (HMS), Class 4/2014 • Successful Formulation & Execution of Strategy (SFE), Class 3/2009 • Directors Certification Program (DCP), Class 24/2002 • Board and Performance Evaluation Commerce Academy, UTCC • Top Executive Program in Commerce and Trade, Class 11/2018
Executive Vice President, Retail and Small Business Banking
The Executive’s date of first appointment: 1 June 2009
In-House Training • Anti Corruption for Executives, Class 1/2014
Rangsit University • Bachelor of Science (Accounting), Kasetsart University
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies 2010 - Present Independent Director Information and Communication Network Plc. and Member of the Audit Committee
Thanachart Group 2019 - Present Director Thanachart Insurance Plc. 2017 - 2018 Executive Vice President, Thanachart Bank Plc. Retail and Small Business Distribution 2009 - 2017 Executive Vice President, Chief Financial Officer 2016 - Present Member of the Nomination Ratchthani Leasing Plc. and Remuneration Committee 2012 - Present Director
Family Percentage of with Shareholding Relationship Director and in the Bank Management
13. Mr. Anuwat Luengtaweekul 55 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
160
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Executive’s date of first appointment: 12 February 2015
Member of the Risk Management Committee Executive Vice President, Chief Risk Officer External Training The Bank of Nova Scotia • Canadian Securities Course • Anti-Corruption • Anti-Money Laundering • Operational Risk • Integrity and Privacy • Global Sanctions • Information and Cyber Security • Managing High Risk Customers
The American University of Beirut, Lebanon
Period
Position
Company / Organization
Work Experience within 5 years
Other Non-Listed Companies 2008 - 2013 Vice President Other Organizations None
The Bank of Nova Scotia
Thanachart Group 2015 - Present Vice Chairman and TS Asset Management Co., Ltd. Vice Chairman of the Executive Committee 2013 - 2015 Executive Vice President, Thanachart Bank Plc. Chief Risk Officer Other Listed Companies None
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
14. Mr. Ziad El-Hoss 63 • Master of Business Administration, None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
161
Age (years)
Education / Director’s Training Course Program
External Training Financial Planner Association of Singapore • Certified Financial Planner, 2007
None None
National Institute of Development Administration • Bachelor of Economics, Ramkhamhaeng University
External Training Standard Chartered Bank • Asset and Liability Management EUROMONEY • Credit Derivatives
Member of the Risk Management Committee Executive Vice President, Financial Markets and Treasury
The Executive’s date of first appointment: 1 March 2018
Period
Company / Organization
Thanachart Group Executive Vice President, Thanachart Bank Plc. Chief Digital Officer Executive Vice President, Commercial Banking Senior Vice President, Transaction Banking
Position
Work Experience within 5 years
Other Organizations None
Other Listed Companies 2006 - 2018 Senior Vice President, Siam Commercial Bank Plc. Business Assessment and Control Other Non-Listed Companies None
Thanachart Group None
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
2017 - 2018 2013 - 2017 2012 - 2013
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
16. Mr. Wichak Sirisae 59 • Master of Business Administration, None None
The Executive’s date of first appointment: 16 April 2017
Member of the Risk Management Committee Executive Vice President, Chief Information Technology and Digital Officer
English Program, Institute of International Studies, Ramkhamhaeng University • Master of Business Administration, Assumption University of Thailand • Bachelor of Science (Statistics), Ramkhamhaeng University
15. Dr. Sutut Chitmonkongsuk 57 • Ph.D. Business Administration,
Name / Position / Date of first appointment / Date of latest appointment
162
ANNUAL REPORT 2018
Age (years)
Education / Director’s Training Course Program
The Executive’s date of first appointment: 1 January 2018
Executive Vice President, Automotive Lending
(Marketing), Phranakhon Rajabhat University • Bachelor of Business Administration (Money and Marketing), Ramkhamhaeng University External Training PacRim • Building Trusted Brands • The 7 Habits of Highly Effective People In-House Training • TLD: Inspire a Culture of Trust & Create Vision for Top Management • IT Security Awareness 2018 for Top Management • Operational Risk Management • Leadership Transformation • Business Transformation Failure & Successful (Modern Banking Executive Development Program) Strategic IT Governance and Information Security • Taxes on investment in securities and tax benefits with mutual fund, LTF, and RMF • Building customer centric business models in retail • Wealth Financial Planning (IC Refresher) • Building Trusted Brands • Leader as a Coach (by Max Potentials) • Individual Development Plan (IDP) Workshop • Leadership Transformation
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
Thanachart Group 2019 - Present Director and Member of Ratchthani Leasing Plc. the Executive Committee 2019 - Present Director Thanachart Insurance Plc. 2000 - Present Director Thanachart Group Leasing Co., Ltd. 2015 - 2018 Executive Vice President, Thanachart Bank Plc. Sales Network - Automotive Lending 2015 Senior Vice President, Sales Network - Automotive Lending 2011 - 2014 Senior Vice President, Sales & Branch Network Team 2
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
17. Mr. Pompet Rasanon 54 • Master of Business Administration None None
Name / Position / Date of first appointment / Date of latest appointment
THANACHART BANK PUBLIC COMPANY LIMITED
163
Age (years)
Education / Director’s Training Course Program
External Training Thailand Securities Institute • Strategic CFO in Capital Markets Program, 2016 The Bank of Nova Scotia, Canada • IFRS Update, 2013
Thammasat University • High Diploma in Auditing, Thammasat University
The Executive’s date of first appointment: 23 July 2018
Senior Vice President, Accounting
Thailand • Master of Accountancy (Financial Accounting), Chulalongkorn University • Bachelor of Accountancy, Chulalongkorn University
19. Mr. Suwit Eurpiyachart 44 • Certified Public Accountant of
Member of the Risk Management Committee Executive Vice President, Chief Financial Officer The Executive’s date of first appointment: 27 June 2017
18. Mrs. Pittimart Sanguansook 54 • Bachelor of Accounting,
Name / Position / Date of first appointment / Date of latest appointment
None None
None None
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
KrungSri Asset Management Co., Ltd. Citibank
Other Listed Companies Vice President, Bank of Ayudhaya Plc. Finance Group Vice President, Head of Financial Control Other Non-Listed Companies 2016 - 2018 Chief Financial Officer 2012 - 2016 Vice President
2017 - 2018 2016 - 2017
Thanachart Group None
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
Thanachart Group 2017 - 2018 Senior Vice President, Thanachart Bank Plc. Chief Financial Officer 2016 - 2017 Senior Vice President, Finance 2014 - 2016 Senior Vice President, Accounting
Family Percentage of with Shareholding Relationship Director and in the Bank Management
164
ANNUAL REPORT 2018
The Executive’s date of first appointment: 17 September 2018
Acting Senior Vice President, Finance
20. Mr. Jaraschai Boworntammarat
Name / Position / Date of first appointment / Date of latest appointment Education / Director’s Training Course Program
External Training Federation of Accounting Professions, Under the Royal Patronage of His Majesty the King • CFO in Practice, 2017
44 • Master of Economics (Business Economics), National Institute of Development Administration • Master of Engineering (Industrial Engineering), Kasetsart University • Bachelor of Engineering (Mechanical Engineering), Kasetsart University
Age (years)
None None
Period
Position
Company / Organization
Work Experience within 5 years
Other Organizations None
Other Non-Listed Companies None
Other Listed Companies None
Thanachart Group 2016 - Present First Vice President, Thanachart Bank Plc. Financial Planning & Analysis
Family Percentage of Relationship Shareholding Director andwith in the Bank Management
THANACHART BANK PUBLIC COMPANY LIMITED
165
X //
X/B
X/C
Mr. Alexander Kwai Lap Choi
Ms.Suvarnapha Suvarnaprathip
Mr. Somjate Moosirilert
Mr. William George Said
E
F
H
H
Dr. Sutut Chitmonkongsuk
Mr. Wichak Sirisae
Mrs. Pittimart Sanguansook
Mr. Suwit Eurpiyachart
Mr. Jaraschai Boworntammarat
X/D
X //
XX ///
XXX
1
Parent Company
3
XXX ///
4
5
X
X
XX //
XXX /// XXX /// XX // XXX ///
2
X/
X
6
7
8
9
10 11
XX ///
XXX
12
Associated Company
Related Companies
X
X X
XXX X
X
X
X
X
X XXX
XXX
XXX XXX
X
X
X
X
XXX
X
X XA X
X
X
X G
X
X
X
X
X
13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41
X Director /// Chairman of the Executive Commitee // Vice Chairman/Chairperson of the Executive Committee / Member of the Executive Committee C Chief Operating Officer D Senior Executive Vice President E Executive Vice President F Executive Vice President H Senior Vice President
Subsidiary Companies
Notes XXX Chairman XX Vice Chairman A Chief Executive Officer B Chief Executive Officer and President G Authorized Person Management Power
E
E
Mr. Praphan Anupongongarch
E
X
Mr. Walter Tas
Mr. Ziad El-Hoss
X
Mr. Rod Michael Raynolds
E
X
Ms. Mookda Pairatchavet
Mr. Anuwat Luengtaweekul
X
X
X
Mr. Narong Chivangkur
Assoc. Prof. Dr. Somjai Phagaphasvivat
X
XX ///
Mr. Suphadej Poonpipat
Dr. Thanachart Numnonda
XXX
Mr. Banterng Tantivit
Name
As at 31 December 2018
The Information of Directors, Executives, and Authorized Persons’ Position in Subsidiary, Associated, and Related Companies
TBANK
ANNUAL REPORT 2018
D
D
D
D
E
G
G
Mr. Ziad El-Hoss
Dr. Sutut Chitmonkongsuk
Mr. Wichak Sirisae
Mr. Pompet Rasanon
Mrs. Pittimart Sanguansook
Mr. Suwit Eurpiyachart
Mr. Jaraschai Boworntammarat
X //
XX ///
XXX
1
Parent Company
X
2
3
5
X
X XX //
XX // XXX ///
XXX ///
4
X/
X
6
8
9
10 11
XX ///
XXX
12
Associated Company
Related Companies
X
X X
X
X
X
X
X XXX
XXX
XXX XXX
X
X
X
X
XXX
X
X XA X
X
X
X F
X
X
X
X
X
/// Chairman of the Executive Commitee // Vice Chairman/Chairperson of the Executive Committee / Member of the Executive Committee D Executive Vice President E Executive Vice President F Authorized Person Management Power
X
XXX
13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41
X Director C Deputy Chief Executive Officer
X
7
Subsidiary Companies
XX Vice Chairman B Chief Executive Officer and President
D
Mr. Anuwat Luengtaweekul
Notes XXX Chairman A Chief Executive Officer G Senior Vice President
X/C
X
Mr. Alexander Kwai Lap Choi
Mr. Praphan Anupongongarch
X
Mr. Walter Tas
Mr. William George Said
X
Mr. Rod Michael Raynolds
X //
X
Ms. Mookda Pairatchavet
X/B
X
Assoc. Prof. Dr. Somjai Phagaphasvivat
Ms.Suvarnapha Suvarnaprathip
X
Mr. Narong Chivangkur
Mr. Suphadej Poonpipat
X
XX ///
Mr. Banterng Tantivit
Dr. Thanachart Numnonda
XXX
Name
From 1 January 2019 onwards
TBANK
166
List of Parent Company, Subsidiary, Associated, and Related Companies Parent Company 1. Thanachart Capital Public Company Limited
Subsidiary Companies 2. Thanachart Securities Public Company Limited 3. Thanachart Fund Management Company Limited 4. Thanachart Insurance Public Company Limited 5. TS Asset Management Company Limited 6. Ratchthani Leasing Public Company Limited
7. Thanachart Group Leasing Company Limited 8. Thanachart Management and Services Company Limited 9. Thanachart Training and Development Company Limited 10. Thanachart Broker Company Limited 11. Security SCIB Services Company Limited
Associated Company 12. MBK Public Company Limited
Related Companies 13. Siam Piwat Holding Company Limited 14. MBK Resort Public Company Limited 15. Siam Piwat Company Limited 16. B.V. Holding Company Limited 17. Deebuk Company Limited 18. Thai Farming Company Limited 19. Lam Sai Village Company Limited 20. MBK Life Assurance Public Company Limited 21. Patum Rice Mill and Granary Public Company Limited 22. DMS Property Investment Private Limited 23. SiamEast Solutions Public Company Limited 24. Humanica Public Company Limited 25. Vintcom Technology Public Company Limited 26. IMC Outsourcing (Thailand) Company Limited 27. Supalai Public Company Limited
2 8. SEAFCO Public Company Limited 29. Amarin Printing & Publishing Public Company Limited 30. Lee Feed Mill Public Company Limited 31. AMA Management and Consulting Company Limited 32. BG2.1 Limited 33. Bouldergate Limited 34. Aileron Project Limited 35. Logarithmics Limited 36. Bank of Nova Scotia, Asia Pacific 37. The Bank of Nova Scotia Asia Limited, Singapore 38. Scotia Securities Asia Limited 39. Scotiabank (Hong Kong) Limited, Hong Kong 40. Seacon Development Public Company Limited 41. Information and Communication Networks Public Company Limited
167
THANACHART BANK PUBLIC COMPANY LIMITED
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 shares paid-up shares of share held shareholding1
1.
Thanachart Securities PCL. Securities Ordinary 1,500,000,000 1,499,999,930 444 MBK Tower, 14th, 18th, and 19th Floor, share Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8888, 2217-9595
100.00
2.
Thanachart Insurance PCL. 999/1 the Nine Tower, Rama 9 Road, Phatthanakan, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9300 Fax. +66 (0) 2308-9333
3.
Thanachart Management and Services Co., Ltd. Services 2 Suan Mali Building, 2nd Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1569 Fax. +66 (0) 2220-2522
4.
74,000,000
73,999,434
100.00
Ordinary share
600,000
599,993
100.00
Thanachart Training and Development Co., Ltd. Training 2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1018 Fax. +66 (0) 2220-2300
Ordinary share
500,000
499,993
100.00
5.
Thanachart Group Leasing Co., Ltd. Leasing 444 MBK Tower, 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8098
Ordinary share
36,000,000
35,999,994
100.00
6.
Security SCIB Services Co., Ltd. Services 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5061-2 Fax. +66 (0) 2651-6611
Ordinary share
100,000
99,998
100.00
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ANNUAL REPORT 2018
Non-life Ordinary Insurance share
Type of Business
of Type of Total number of Total number Percent TBANK’s 1 shares paid-up shares of share held shareholding
No.
Company / Location
7.
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
8.
Thanachart Broker Co., Ltd. 999/3, 999/4 the Nine Tower, Rama 9 Road, Phatthanakan, Suanluang, Bangkok 10250 Tel. +66 (0) 2783-0200 Ext. 9598 Fax. +66 (0) 2308-9775
9.
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
10.
Ratchthani Leasing Pcl. Leasing 77/35-36 Sinn Sathorn Tower, 11 up Floor, Krung Thonburi Road, Klong Ton Sai, Bangkok 10600 Tel. +66 (0) 2431-9000 Fax. +66 (0) 2431-9099
11.
RTN Insurance Broker Company Limited2 77/20, Sinsathorn Tower Building, 2nd Floor, Krungthonburi Road, Klong Ton Sai, Klongsan, Bangkok 10600 Tel. +66 (0) 2431-9000 Ext. 2167
Life and Ordinary Non-life share insurance broker
40,000
39,997
65.18
12. 13.
Puen Pob Paet Co., Ltd.3 Medical Clinic Ordinary 444 MBK Tower, 9th Floor, Phayathai Road, share Wangmai, Pathumwan, Bangkok 10330
100,000
9,998
10.00
2,500,000
250,000
10.00
Non-performing Ordinary asset share management
200,000,000
199,999,997
100.00
Life and Ordinary Non-life share insurance broker
10,000,000
9,999,000
99.99
Mutual fund Ordinary management share
10,000,000
7,499,993
75.00
Ordinary 3,020,283,681 1,968,689,250 share
65.18
Metropolitan Industrial Leasing Co., Ltd. Leasing 81/42 Moo 5, Surasak, Sriracha, Chonburi 20110 Tel. +66 (0) 3804-8052 Fax. +66 (0) 3804-8053
Ordinary share
Notes 1 Shareholding percentage has shown included the shareholding of related companies. 2 The Bank indirectly held shares through Thani which was in line with definition of subsidiary company announced by the SET and is undergoing liquidation. 3 Held by the Bank, which is in the process of liquidation, dissolution, bankruptcy, receivership or abandoned.
169
THANACHART BANK PUBLIC COMPANY LIMITED
The Bank’s References Location of Head Office:
444 MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330, Thailand
Registered Capital: 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.
Home Page
www.thanachartbank.co.th
Telephone:
+66 (0) 2217-8000
Fax:
+66 (0) 2217-8333
Thanachart Contact Center: 1770
Other References Registrar: Ordinary shares
Thailand Securities Depository Company Limited 93 Ratchadaphisek Road, Dindaeng, Bangkok 10400 Tel. +66 (0) 2009-9000 SET Contact Center +66 (0) 2009-9999 Fax. +66 (0) 2009-9384 Website www.set.or.th/tsd
Debenture 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
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ANNUAL REPORT 2018
Bondholders’ Representative: Debenture TBANK24DA and TBANK25NA
None
Auditor:
Miss Somjai Khunapasut Certified Public Accountant (Thailand) No. 4499 EY Office Limited 193/136-137 Lake Rajada Office Complex, 33rd Floor, New Ratchadaphisek Road, Klongtoey, Bangkok 10110 Tel. +66 (0) 2264-9090 Fax. +66 (0) 2264-0789 Website www.ey.com
Legal Advisor: None Advisor or management under the management agreement:
None
171
THANACHART BANK PUBLIC COMPANY LIMITED
Companies in Thanachart Group Thanachart Capital Public Company Limited
MBK Life Assurance Public Company Limited
Thanachart Bank Public Company Limited
NFS Asset Management Company Limited
Thanachart Securities Public Company Limited
MAX Asset Management Company Limited
Thanachart Fund Management Company Limited
TS Asset Management Company Limited
th
th
444 MBK Tower, 16 - 17 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8312 Registration No. 0107536000510 Website: www.thanachart.co.th 444 MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8333 Registration No. 0107536001401 Website: www.thanachartbank.co.th th
th
th
444 MBK Tower, 14 , 18 , and 19 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8888 Fax. +66 (0) 2217-8625 Registration No. 0107547000591 Website: www.thanachartsec.com
231 MBK Life Building, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2252-5070 Fax. +66 (0) 2252-7155 Registration No. 0107555000481 Website: www.mbklife.co.th
444 MBK Tower, 17th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8289 Registration No. 0105540086022 Website: None 444 MBK Tower, 17th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8289 Registration No. 0105540093282 Website: None
231 MBK Life Building, 5th - 7th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2126-8300 Fax. +66 (0) 2217-5281 Registration No. 0105535049696 Website: www.thanachartfund.com
1101 Petchburi Building, 9th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5555 Fax. +66 (0) 2208-5892 Registration No. 0105554031624 Website: www.thanachartnpa.com
Thanachart Insurance Public Company Limited
Ratchathani Leasing Public Company Limited
999/1 The Nine Tower, Rama 9 Road, Phatthanakan, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9300 Fax. +66 (0) 2308-9333 Registration No. 0107555000473 Website: www.thanachartinsurance.co.th
172
ANNUAL REPORT 2018
77/35-36 Sinsathorn Tower Building, 11th Floor, Krungthonburi Road, Klong Ton Sai, Klongsan, Bangkok 10600 Tel. +66 (0) 2431-9000 Fax. +66 (0) 2431-9099 Registration No. 0107545000209 Website: www.ratchthani.com
Thanachart Group Leasing Company Limited th
TM Broker Company Limited
444 MBK Tower, 19 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8098 Registration No. 0105538045861 Website: None
231 MBK Life Building, 8th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2252-5070 Fax. +66 (0) 2252-7155 Registration No. 0105559122776 Website: None
National Leasing Company Limited
RTN Insurance Broker Company Limited
th
444 MBK Tower, 19 Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. None Registration No. 0105532078407 Website: None
Thanachart Management and Services Company Limited
77/20, Sinsathorn Tower Building, 2nd Floor, Krungthonburi Road, Klong Ton Sai, Klongsan, Bangkok 10600 Tel. +66 (0) 2431-9500 Fax. +66 (0) 2431-9567 Registration No. 0105561189971 Website: www.rtnbroker.com
Security SCIB Services Company Limited
2 Suan Mali Building, 2nd Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10100 Tel. +66 (0) 2220-2222 Fax. +66 (0) 2220-2520 Registration No. 0105533119077 Website: None
1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5061-2 Fax. +66 (0) 2651-6611 Registration No. 0105534009895 Website: None
Thanachart Training and Development Company Limited
MT Services 2016 Company Limited
2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10100 Tel +66 (0) 2220-2222 Fax. +66 (0) 2220-2300 Registration No. 0105550042966 Website: None
231 MBK Life Building, 10th, 11th Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2254-4166 Fax. +66 (0) 2254-4166 Registration No. 0105559103291 Website: None
Thanachart Broker Company Limited 999/3, 999/4 The Nine Tower, Rama 9 Road, Phatthanakan, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9700 Fax. +66 (0) 2308-9775 Registration No. 0105540075314 Website: None
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THANACHART BANK PUBLIC COMPANY LIMITED
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 6 September 2018 (the latest closing date of the suspended share-transfer register) were as follows: Rank
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
List of Shareholders
Thanachart Capital Public Company Limited 1 Scotia Netherlands Holdings B.V. 2 Mr. Thung-ngern Pum-ngern Ms. Kittima Tolieng Mr. Sathit Mujarintangkur Ms. Piangjai Hanpanich Mr. Kobchai Chirathivat Mr. Thanawat Charoenthassanont Mr. Pinit Laosoontorn Mr. Somyos Jittipralangsri By redeivership of Legal Execution Department of Thai Finance and Securities Plc. Other Shareholders
Number of Shares
Percentage of Shareholding
3,090,699,234 2,971,739,163 460,309 173,278 121,360 96,665 84,809 70,000 69,926 60,000
50.961 48.999 0.008 0.003 0.002 0.002 0.001 0.001 0.001 0.001
1,287,426
0.021
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
Source
Report of the Bank’s major shareholders as of 6 September 2018 prepared by Thailand Securities Depository Company Limited
Remarks 1. The number 1 shareholder (Thanachart Capital Public Company Limited (“TCAP”)), 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”).
174
ANNUAL REPORT 2018
The list of the company’s top 10 shareholders/groups of shareholders holding ordinary and preferred shares of TCAP as of 9 October 2018 (the latest closing date of the suspended share-transfer register) was as follows:
Name of shareholders / groups of shareholders
Number of Shares Ordinary shares Preferred shares
1. Thai NVDR Company Limited 207,252,739 2. MBK Public Company Limited 129,914,400 Primacy Elegance Investments 3,400,000 Limited 3. State Street Europe Limited 75,626,680 4. South East Asia UK (Type C) 28,894,500 Nominees Limited 5. BNY Mellon Nominees Limited 25,763,297 6. Thanachart Dividend Stock Fund 18,922,300 7. SE Asia (Type B) Norminees LLC 17,188,100 8. State Street Bank and Trust 16,391,401 Company 9. Nortrust Nominees LTD-CL-AC 15,183,869 10. Dr. Nivate Hemvachiravarakorn 14,000,000 Other Shareholders
Total Shares
Percentage of shareholding
- - -
207,252,739 129,914,400 3,400,000
17.788 11.150 0.292
- -
75,626,680 28,894,500
6.491 2.480
- - - -
25,763,297 18,922,300 17,188,100 16,391,401
2.211 1.624 1.475 1.407
- 15,183,869 - 14,000,000
1.303 1.202
612,579,201
13,216
612,592,417
52.577
1,165,116,487
13,216
1,165,129,703
100.000
Thai Shareholders
843,911,985
13,156
843,925,141
72.432
Foreign Shareholders
321,204,502
60
321,204,562
27.568
Issued and Paid-up Shares
Notes 1) The second shareholders including related parties under Revised Section 258 of the Securities and Exchange Act (No. 4) B.E. 2551 is the same order. MBK Plc. operates businesses of real estate rental, hotels and services. The list of top 10 shareholders was as of 20 September 2018 (the latest closing date of the suspended share-transfer register). 2) The third, and fifth to tenth shareholders are nominee accounts for which true shareholders are unknown.
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 Holdings 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.
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THANACHART BANK PUBLIC COMPANY LIMITED
Dividend Payment Policy Dividend Payment Policy of the Bank
It is the Bank’s policy to pay dividend to the shareholders when the operating results are profitable, considering the capital adequacy and the statutory reserves. However, the Board may occasionally pay interim dividend to shareholders if it is deemed that the Bank’s profit is sufficient. After the dividend is paid, it will be reported to the shareholders at the next meeting.
Dividend Payment Policy of the Subsidiaries
The Bank has not fixed a dividend payout ratio for its subsidiaries. Their dividend payments shall depend on the operating results of each company. It is the subsidiaries’ policy to pay dividend when the operating results are profitable, considering the remaining cash after operation and the statutory reserves. However, the Board of the companies may occasionally pay interim dividend to shareholders if it is deemed that the companies’ profit is sufficient. After the dividend is paid, it will be reported to the shareholders at the next meeting.
Previous Dividend Payment Performance of the year Paid in
Earnings per share
2013 2014
2015** 2016
2016 2017
2017 2018
2.56
1.44
2.03
1.97
2.17
Interim dividend payment per share for (THB) the performance during the first half of the year
-
-
0.22
0.35
0.40
Dividend payment per share for (THB) the performance during the second half of the year
0.45 0.45 0.40 0.40 0.52
Dividend Payout Ratio
(THB)
2014 2015
(Percentage)
*17.58
31.34
32.83
38.03
42.48
Notes * 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 21 September 2018, the Bank paid an interim dividend for the year 2017 at the rate of THB 0.51 per share, out of unappropriated retained earnings which is subject to 30 percent, 23 percent and 20 percent corporate income tax.
176
ANNUAL REPORT 2018
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 2018 which is in compliance with financial reporting standards and relevant rules and regulations.
(Mr. Banterng Tantivit) Chairman of the Board of Director
(Mr. Somjate Moosirilert) Chief Executive Officer and President่
177
THANACHART BANK PUBLIC COMPANY LIMITED
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. Dr. Thanachart 2. Assoc. Prof. Dr. Somjai 3.. Ms. Mookda
Numnonda Phagaphasvivat Pairatchavet
Chairman Member Member
Ms. Thanawan Teekautamakorn, 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 2018, the Audit Committee convened twelve meetings in total with the management, top level executives of the related business units and auditors to acknowledge and consider numerous matters as of the following: • Financial Statement Reviewed the quarterly, year-end and consolidated financial statements of TBANK and its subsidiaries by consulting with the external audits and Chief Financial Officer (CFO) in order to ensure financial reporting standards, the accuracy of its significant matters, and the appropriate disclosure of information. In addition, the Audit Committee convened the meetings without the presence of TBANK management in order to ensure the independence of the auditors’ duties and comments. • Internal Control and Internal Audit Reviewing the Bank’s internal control system and internal audit are efficient, as well as sufficient anti-corruption measures, inclusive of whistle-blowing processes, independent scrutiny, and protection of the whistle-blowers to ensure they will not be in predicament and that the accused are treated fairly. Consulting with the internal auditors in planning and approving the annual audit plan, considering the adequacy and appropriateness of personnel in the performance and independence of internal audit by monitoring and evaluating the monthly performance, assessing the ability of officers in order to improve auditing knowledge and efficiency, and considering examination report of the BOT’s and the auditor in order to assess the adequacy of the internal control system. • Regulatory Compliance Reviewed the performance of the Bank to comply with laws and regulations, such as the SEC, SET, IOC, AMLO and BOT and acknowledged changes of any rules or regulations that affected operation and ensured the adjustment of operations in response to those changes.
178
ANNUAL REPORT 2018
• Risk Management The Audit Committee has focused on risk management systems and processes and is aware that any change in economy, politics and society will significantly affect the risk management of the Bank. We have meetings with the risk management group in order to make sure that of the Bank has appropriate, adequate and effective oversight. • Audit Committee’s Charter Approved the amendment in the Audit Committee’s Charter to make it up-to-date and more appropriate and evaluation of the performance of the Audit Committee including the results of the evaluation which showed that audit compliance as set forth in the Charter and performance were in line with the best practices that strengthened good governance effectively. • Independent Auditor Consider and make recommendations on the appointment of the auditor of the Bank by considering qualifications, capabilities, experiences, independence and quality of previous works and the remuneration of the auditors in line with responsibility by the Board of Directors to propose to the shareholders for an approval of the auditors and the remuneration of the auditors. • Related transactions or conflict of interest Related transactions or transactions which may have conflict of interest based on the principle of accountability, transparency and adequate disclosure to the relevant authorities, as reported from business units before proposing to the Board of Directors. The Audit Committee performed its duties prudently and independently, and provided straightforward comments based on transparency and good governance. The Audit Committee considered core operation jointly with senior executive in charge of concerned groups, and internal and external auditors. The Audit Committee is of the opinion that financial statements have been prepared accurately with adequate information disclosure. The internal control, internal audit and risk management have been appropriate, effective, and in compliance with laws and regulations. Independent auditor was independent to perform duties. Transactions and transactions that may have potential conflicts of interests are reasonable and normal business activities, including adequate disclosure.
(Dr. Thanachart Numnonda) Chairman of the Audit Committee
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THANACHART BANK PUBLIC COMPANY LIMITED
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 2018, 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 2018, their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards. Basis for Opinion I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Group in accordance with the Code of Ethics for Professional Accountants as issued by the Federation of Accounting Professions 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. 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 Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 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.
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ANNUAL REPORT 2018
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 judgement and maintain professional skepticism throughout the audit. I also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, 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. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the 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. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities 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. I am responsible for the audit resulting in this independent auditor’s report.
Somjai Khunapasut Certified Public Accountant (Thailand) No. 4499
EY Office Limited Bangkok: 25 February 2019
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THANACHART BANK PUBLIC COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2018 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Assets Cash
11,019,018
11,452,983
11,012,023
11,444,929
Interbank and money market items - net
6
97,567,628
94,651,333
95,257,115
94,576,963
Derivatives assets
7
2,005,387
2,889,208
2,001,344
2,888,037
Investments - net
8
161,077,885
167,367,984
152,430,216
157,447,597
Investments in subsidiary and associated companies - net
9
2,436,970
2,258,030
7,156,290
7,170,077
Loans to customers and accrued interest receivables
10 819,654,144
766,801,166
760,284,420
715,967,834
645,276
589,074
645,471
589,271
Total loans to customers and accrued interest receivables
820,299,420
767,390,240
760,929,891
716,557,105
Less: Deferred revenue
(66,156,575)
(55,126,638)
(60,683,476)
(50,462,785)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
11
(23,651,007)
(24,033,034)
(19,661,597)
(19,876,541)
Revaluation allowance for debt restructuring
12
(603)
(977)
(603)
(977)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
730,491,235
688,229,591
680,584,215
646,216,802
9,164
9,824
9,164
9,824
Properties foreclosed - net
14
2,814,835
2,792,566
1,633,036
1,467,300
Land, premises and equipment - net
15
7,995,772
8,621,914
7,798,454
8,396,204
Goodwill and intangible assets - net
16
19,790,601
20,202,569
19,637,196
20,069,209
Deferred tax assets
17
767,994
712,880
-
-
2,741,745
3,126,779
1,090,531
33,771
7,893,423
7,241,183
5,513,955
4,738,848
1,046,611,657
1,009,556,844
984,123,539
954,459,561
Receivables from purchase and sale of securities Other assets - net
18
Total assets
The accompanying notes are an integral part of the financial statements.
182
ANNUAL REPORT 2018
STATEMENT OF FINANCIAL POSITION (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2018 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Liabilities and equity Deposits
19
752,160,436
716,277,964
753,944,978
717,807,077
Interbank and money market items
20
71,954,867
82,424,434
55,964,405
69,809,251
1,163,165
1,988,656
1,163,165
1,988,656
Liability payable on demand Derivatives liabilities
7
2,097,019
2,867,633
2,092,519
2,864,594
Debt issued and borrowings
21
43,079,280
39,307,788
20,005,158
20,005,158
9,164
9,824
9,164
9,824
Banks' liability under acceptances Provisions
22
3,874,580
3,638,175
3,582,155
3,369,306
Deferred tax liabilities
17
1,319,748
1,055,733
1,183,607
939,460
Payables from purchase and sale of securities
1,518,341
2,318,019
759,003
43,710
Accrued interest payables
2,187,972
2,355,530
2,065,060
2,241,760
Accrued expenses
5,966,880
5,346,583
5,240,305
4,635,555
Insurance contracts liabilities
23
5,729,438
5,475,413
-
-
Other liabilities
24
11,345,546
10,283,135
6,972,799
6,359,724
902,406,436
873,348,887
852,982,318
830,074,075
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
25
1,440,747
2,541,962
651,307
1,601,478
26
4,954,068
4,258,534
4,954,068
4,258,534
72,554,413
64,740,444
62,786,530
55,776,158
141,698,544
134,290,256
131,141,221
124,385,486
2,506,677
1,917,701
-
-
144,205,221
136,207,957
131,141,221
124,385,486
1,046,611,657
1,009,556,844
984,123,539
954,459,561
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 Total equity Total liabilities and equity
The accompanying notes are an integral part of the financial statements.
183
THANACHART BANK PUBLIC COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2018 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Profit or loss Interest income
29
46,287,309
44,365,707
42,805,500
41,281,638
Interest expenses
30
(15,249,746)
(14,955,982)
(14,440,105)
(14,143,950)
Net interest income
31,037,563
29,409,725
28,365,395
27,137,688
Fees and service income
10,215,500
9,099,941
7,825,804
6,872,021
Fees and service expenses
(3,588,268)
(3,203,316)
(3,360,812)
(2,928,872)
Net fees and service income
31
6,627,232
5,896,625
4,464,992
3,943,149
Gains on trading and foreign exchange transactions
32
357,429
548,281
268,399
434,648
Gains (losses) on investments
33
(84,661)
Share of profit from investments accounted for under equity method
1,112,547
(126,704)
1,033,212
298,475
199,874
-
-
6,862,656
6,843,080
-
-
410,689
464,413
3,111,994
2,838,259
Other operating income
1,654,846
1,421,869
1,531,868
1,396,517
Total operating income
47,164,229
45,896,414
37,615,944
36,783,473
(3,925,288)
(3,914,975)
-
-
43,238,941
41,981,439
37,615,944
36,783,473
11,170,917
11,981,266
9,367,275
10,135,215
58,206
52,752
42,137
39,799
2,602,025
2,806,371
2,313,941
2,506,797
713,087
725,823
697,646
708,046
5,980,719
4,870,854
5,363,617
4,312,096
20,524,954
20,437,066
17,784,616
17,701,953
4,741,233
6,243,714
4,464,916
5,934,973
17,972,754
15,300,659
15,366,412
13,146,547
Insurance income
34
Dividend income
Insurance expenses
35
Net operating income Other operating expenses Employee's expenses Directors' remuneration
36
Premises and equipment expenses Taxes and duties Other expenses Total other operating expenses Impairment losses of loans and debt securities
37
Profit before income tax Income tax Profit for the year
The accompanying notes are an integral part of the financial statements.
184
ANNUAL REPORT 2018
17.2
(2,515,061) 15,457,693
(931,525) 14,369,134
(1,455,739) 13,910,673
(11,110) 13,135,437
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2018 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note Other comprehensive income
Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
38
Transactions that will be reclassified subsequently to profit or loss Gains (losses) on changes in value of available-for-sale investments
(1,328,097)
Share of other comprehensive income of the associate
4,222
Income tax relating to components of other comprehensive income
264,844
1,164,360 75,755 (245,307)
(1,137,026) 227,405
874,586 (174,917)
Transactions that will never be reclassified subsequently to profit or loss Share of other comprehensive income of the associate
16
Actuarial gains (losses) on defined benefit plan
(3,753)
Income tax relating to components of other comprehensive income
627
(235,693)
1,864
(228,008)
46,845
(373)
45,602
805,960
(908,130)
517,263
Total other comprehensive income (loss)
(1,062,141)
Total comprehensive income
14,395,552
15,175,094
13,002,543
13,652,700
14,703,337
13,810,325
13,910,673
13,135,437
754,356
558,809
15,457,693
14,369,134
13,641,421
14,616,960
13,002,543
13,652,700
754,131
558,134
14,395,552
15,175,094
2.29
2.17
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
39
Basic earnings per share Profit attributable to the Bank (Baht per share)
2.42
2.28
The accompanying notes are an integral part of the financial statements.
185
THANACHART BANK PUBLIC COMPANY LIMITED
186
ANNUAL REPORT 2018 Share premium
-
-
26
-
Transferred to retained earnings
The accompanying notes are an integral part of the financial statements.
60,648,622
-
Balance as at 31 December 2018
-
-
Profit for the year
Other comprehensive income for the year (loss)
2,100,694
-
-
-
-
Decrease in non-controlling interests of the subsidiaries
Transfer of retained earnings to statutory reserve
-
-
28
-
2,100,694
Dividend paid
-
60,648,622
9.6
Balance as at 1 January 2018
2,100,694
-
-
-
-
-
-
-
2,100,694
Effect of share capital reduction of the associate
60,648,622
-
Other comprehensive income for the year (loss)
Transferred to retained earnings
Balance as at 31 December 2017
-
-
Profit for the year
subsidiaries of the associate
Surplus from the change in the ownership interests in
-
26
Transfer of retained earnings to statutory reserve
-
60,648,622
share capital
(123,379)
-
-
-
-
-
-
-
(123,379)
(123,379)
-
-
-
-
-
-
-
(123,379)
common control
combination under
fully paid-up
-
28
Note
business
Surplus from Issued and
Decrease in non-controlling interests of the subsidiaries
Dividend paid
Balance as at 1 January 2017
For the year ended 31 December 2018
Statements of changes in equity
Thanachart Bank Public Company Limited and its subsidiaries
1,194,263
(40,550)
-
-
-
-
-
-
1,234,813
1,234,813
(45,775)
-
-
-
-
-
-
1,280,588
of assets
revaluation
Surplus on
(200,290)
-
(1,062,831)
-
-
-
-
-
862,541
862,541
-
926,628
-
-
-
-
-
(64,087)
of investments - net
changes in value
Surplus on
Share of
533,838
(1,369)
3,814
-
-
-
-
-
531,393
531,393
(30)
68,180
-
-
-
-
-
463,243
associate
income of the
other comprehensive
Retained earnings Appropriated -
36,315
(279)
-
-
-
-
-
-
36,594
36,594
-
-
-
36,594
-
-
-
-
4,954,068
-
-
-
-
695,534
-
-
4,258,534
4,258,534
-
-
-
-
656,771
-
-
3,601,763
72,554,413
42,198
(2,899)
14,703,337
-
(695,534)
(6,246,808)
13,675
64,740,444
64,740,444
45,805
(188,173)
13,810,325
-
(656,771)
-
(4,851,890)
56,581,148
subsidiaries of the associate statutory reserve Unappropriated
ownership interests in
the change in the
Share of surplus from
Consolidated financial statements Other components of equity
STATEMENTS OF CHANGES IN EQUITY
2,506,677
-
(225)
754,356
(165,155)
-
-
-
1,917,701
1,917,701
-
(675)
558,809
-
-
(272,433)
-
1,632,000
interests
Non-controlling
144,205,221
-
(1,062,141)
15,457,693
(165,155)
-
(6,246,808)
13,675
136,207,957
136,207,957
-
805,960
14,369,134
36,594
-
(272,433)
(4,851,890)
126,120,592
Total
(Unit: Thousand Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
187
The accompanying notes are an integral part of the financial statements.
60,648,622
-
Transferred to retained earnings
Balance as at 31 December 2018
-
-
Other comprehensive income for the year (loss)
26
Transfer of retained earnings to statutory reserve
-
Profit for the year
28
60,648,622
Balance as at 1 January 2018
Dividend paid
60,648,622
-
Balance as at 31 December 2017
Transferred to retained earnings
-
Other comprehensive income for the year (loss)
-
26
Transfer of retained earnings to statutory reserve
-
60,648,622
2,100,694
-
-
-
-
-
2,100,694
2,100,694
-
-
-
-
-
2,100,694
1,192,040
(40,550)
-
-
-
-
1,232,590
1,232,590
(45,775)
-
-
-
-
1,278,365
of assets
revaluation
fully paid-up Share premium
Surplus on
share capital
(540,733)
-
(909,621)
-
-
-
368,888
368,888
-
699,669
-
-
-
(330,781)
investments - net
in value of
Surplus on changes
Appropriated -
4,954,068
-
-
-
695,534
-
4,258,534
4,258,534
-
-
-
656,771
-
3,601,763
62,786,530
40,550
1,491
13,910,673
(695,534)
(6,246,808)
55,776,158
55,776,158
45,775
(182,406)
13,135,437
(656,771)
(4,851,890)
48,286,013
Unappropriated
Retained earnings
statutory reserve
Separate financial statements Other components of equity Issued and
Profit for the year
28
Note
Dividend paid
Balance as at 1 January 2017
For the year ended 31 December 2018
Statements of changes in equity (continued)
Thanachart Bank Public Company Limited and its subsidiaries
STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
131,141,221
-
(908,130)
13,910,673
-
(6,246,808)
124,385,486
124,385,486
-
517,263
13,135,437
-
(4,851,890)
115,584,676
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 2018 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Cash flows from operating activities Profit before income tax
17,972,754
15,300,659
15,366,412
13,146,547
-
-
Adjustments to reconcile profit before income tax to net cash received (paid) from operating activities: Share of profit from investments accounted for under equity method
(298,475)
(199,874)
Depreciation and amortisation
1,454,016
1,565,248
1,371,680
1,483,021
Impairment losses of loans and debt securities
4,741,233
6,243,714
4,464,916
5,934,973
749,626
670,798
721,723
643,360
(158,191)
378,502
(149,496)
389,580
Increase in provisions Amortisation of premiums on investment in debt securities Decrease in allowance for impairment of investments
(1,461)
(65,057)
(1,494)
(102,976)
Gain from disposal of investment in the associated company
(16,475)
(202,207)
(15,238)
(176,746)
Decrease (increase) in allowance for change in value of investment
139,830
16,194
53,940
(3,400)
Increase (decrease) in allowance for impairment of properties foreclosed
(30,852)
10,693
(5,336)
2,865
Decrease in allowance for impairment of land, premises and equipment
-
(5,436)
-
(5,436)
-
(735)
-
(735)
Interest income and other income from the assets transferred for debt repayment Loss (gain) from disposal of land, premises and equipment Loss from disposal of intangible assets
(23,783)
13,561
(23,616)
14,926
370
348
267
-
132,867
1,455,894
132,867
1,455,894
26,551
35,051
20,330
25,831
Decrease (increase) in other income receivable
(287,951)
139,931
(56,956)
220,981
Decrease in fees and rental received in advance
(231,467)
(170,182)
(231,467)
(170,182)
Decrease in deferred income
(10,080)
(28,358)
(10,080)
(28,358)
Increase in accrued expenses
584,546
145,776
569,000
147,734
24,743,058
25,304,520
22,207,452
22,977,879
(30,879,372)
(29,788,228)
(28,215,899)
(27,527,268)
Unrealised loss on exchange Increase in allowance for impairment of other assets
Net interest income Dividend income Cash received from interest income Cash paid for interest expenses Cash paid for corporate income tax
(3,111,994)
(2,838,259)
43,587,280
(410,689)
41,277,382
(464,413)
40,239,040
38,288,334
(13,717,725)
(12,360,712)
(13,489,910)
(12,163,949)
(1,450,065)
(1,102,869)
(429,426)
(238,195)
21,872,487
22,865,680
Income from operating activities before changes in operating assets and liabilities
The accompanying notes are an integral part of the financial statements.
188
ANNUAL REPORT 2018
17,199,263
18,498,542
STATEMENT OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2018 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Cash flows from operating activities (continued) Decrease (increase) in operating assets Interbank and money market items
(2,853,237)
(47,351,560)
(612,333)
(47,273,212)
Investments in trading securities
(4,972,814)
(2,320,459)
(5,610,817)
(2,215,790)
Derivatives assets
1,230,119
1,111,356
1,232,992
1,112,209
Loans to customers
(53,302,612)
(33,546,069)
(44,596,085)
(24,680,242)
6,241,949
5,627,179
5,520,504
4,803,224
(2,000,917)
(1,056,760)
(33,771)
(387,146)
(115,303)
Properties foreclosed Receivables from purchase and sale of securities Other assets
385,034 (243,226)
488,542
Increase (decrease) in operating liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Payables from purchase and sale of securities Insurance contract liabilities Other liabilities Net cash flows from (used in) operating activities
35,882,472
39,721,462
36,137,901
39,999,839
(10,300,576)
16,456,575
(13,675,855)
13,520,032
(825,491)
2,231
(825,491)
2,231
(1,444,263)
(1,744,879)
(799,678)
(48,268)
254,025
538,618
(1,445,724) 715,293 -
(1,747,837) (956,290) -
(427,987)
2,815,787
(390,504)
1,280,622
(9,303,798)
2,615,278
(7,794,762)
2,194,254
10,346,326
10,271,390
9,853,494
11,890,167
29,026
366,060
29,026
366,060
2,866,568
3,782,104
2,756,030
3,684,714
410,519
464,393
2,466,994
2,838,259
(266,710)
(419,357)
(236,555)
52,771
12,781
50,145
(246,226)
(282,307)
(204,970)
Cash flows from investing activities Decrease in investments in securities held for investment Cash received from disposal of investment in the associated 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 investing activities
13,192,274
14,195,064
14,714,164
(381,748) 8,444 (241,108) 18,164,788
The accompanying notes are an integral part of the financial statements.
189
THANACHART BANK PUBLIC COMPANY LIMITED
STATEMENT OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2018 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Cash flows from financing activities Cash received from borrowings
14,520,202
12,723,572
-
(10,748,711)
(22,824,701)
-
Cash paid for interest from borrowings
(1,681,969)
(2,208,904)
(1,105,500)
(1,617,481)
Cash paid for dividend
(6,246,808)
(4,851,890)
(6,246,808)
(4,851,890)
(165,155)
(272,433)
(4,322,441)
(17,434,356)
(7,352,308)
(20,986,340)
(433,965)
(624,014)
(432,906)
(627,298)
Cash paid for borrowings
Cash paid for dividend to non-controlling interests Net cash flows used in financing activities Net decrease in cash
-
(14,516,969)
-
Cash at beginning of the year
11,452,983
12,076,997
11,444,929
12,072,227
Cash at end of the year
11,019,018
11,452,983
11,012,023
11,444,929
6,046,732
4,793,307
5,494,271
4,283,733
83,559
33,680
77,820
32,833
5,672,936
7,672,186
5,533,087
6,219,709
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
The accompanying notes are an integral part of the financial statements.
190
ANNUAL REPORT 2018
NOTES TO FINANCIAL STATEMENTS Thanachart Bank Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2018 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 BV, a company registered in Netherlands, holds 49.00 percent of the Bank’s issued shares. The Bank’s registered address is 444, MBK Tower, Phayathai Road, Wangmai, Pathumwan, Bangkok. The Bank has 512 operational branches (2017: 523 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
These 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.
191
THANACHART BANK PUBLIC COMPANY LIMITED
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
2018
2017
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
Insurance broker
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
65.18
-
-
100.00
Subsidiaries directly held by the Bank
Thanachart Broker Co., Ltd. Thanachart Group Leasing Co., Ltd.
TS Asset Management Co., Ltd.
asset management Security Scib Services Co., Ltd. Ratchthani Leasing Plc.
leasing business Subsidiary indirectly held by the Bank RTN Insurance Broker Co., Ltd.
Non-life insurance broker
National Leasing Co., Ltd. (1)
In liquidation process
(1) National Leasing Co., Ltd. returned all capital to its shareholders on 20 September 2018 and registered the completion of its liquidation with the Ministry of Commerce on 22 January 2019.
b)
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 2018 and 2017 and for the years then ended, after eliminating significant intercompany transactions, are as follows: (Unit: Million Baht) Net operating income Total assets 2018 Ratchthani Leasing Plc.
2017
2018
2017
47,124
39,019
2,899
2,378
2,066
2,528
120
178
Thanachart Insurance Plc.
13,742
12,784
3,299
3,291
Thanachart Securities Plc.
8,702
11,447
1,645
1,762
TS Asset Management Co., Ltd.
192
for the years
ANNUAL REPORT 2018
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 financial reporting standards and interpretations (revised 2017) which are effective for fiscal years beginning on or after 1 January 2018. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes and clarifications directed towards disclosures in the notes to financial statements. The adoption of these financial reporting standards does not have any significant impact on the Bank and its subsidiaries’ financial statements.
3.2
Financial reporting standards that will become effective for fiscal years beginning on or after 1 January 2019. The Federation of Accounting Professions issued a number of revised and new financial reporting standards and interpretations (revised 2018) which are effective for fiscal years beginning on or after 1 January 2019. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards clarifying accounting treatment and providing accounting guidance for users of the standards.
193
THANACHART BANK PUBLIC COMPANY LIMITED
The management of the Bank and its subsidiaries believe that most of the revised financial reporting standards will not have any significant impact on the financial statements when they are initially applied. Key principles of this standard are summarised below: TFRS 15 Revenue from Contracts with Customers TFRS 15 supersedes the following of accounting standards together with related interpretations. TAS 11 (revised 2017)
Construction Contracts
TAS 18 (revised 2017)
Revenue
TSIC 31 (revised 2017)
Revenue - Barter Transactions Involving Advertising Services
TFRIC 13 (revised 2017)
Customer Loyalty Programmes
TFRIC 15 (revised 2017)
Agreements for the Construction of Real Estate
TFRIC 18 (revised 2017)
Transfers of Assets from Customers
Entities are to apply TFRS 15 to all contracts with customers unless those contracts fall within the scope of other standards. The standard establishes a five-step model to account for revenue arising from contracts with customers, with revenue being recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model. The management of the Bank and its subsidiaries is currently evaluating the impact of this standard to the financial statements in the year when it is adopted. 3.3
Financial reporting standards related to financial instruments that will become effective for fiscal years beginning on or after 1 January 2020. During the current year, the Federation of Accounting Professions issued a set of TFRSs related to financial instruments, which consists of five accounting standards and interpretations, as follows: Financial reporting standards: TFRS 7
Financial Instruments: Disclosures
TFRS 9
Financial Instruments
Accounting standard: TAS 32
Financial Instruments: Presentation
Financial Reporting Standard Interpretations:
194
TFRIC 16
Hedges of a Net Investment in a Foreign Operation
TFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
ANNUAL REPORT 2018
These TFRSs related to financial instruments make stipulations relating to the classification of financial instruments and their measurement at fair value or amortised cost (taking into account the type of instrument, the characteristics of the contractual cash flows and the Bank’s business model), calculation of impairment using the expected credit loss method, and hedge accounting. These include stipulations regarding the presentation and disclosure of financial instruments. When the TFRSs related to financial instruments are effective, some accounting standards, interpretations and guidance which are currently effective will be cancelled. The management of the Bank and its subsidiaries is currently evaluating the impact of these standards to the financial statements in the year when they are adopted. 4.
Significant accounting policies
4.1
Revenue recognition a)
Interest and discounts on loans Interest on loan is recognised as income on an accrual basis, based on the amount of principal outstanding. Interest on hire purchase and financial lease is recognised based on the effective interest method. For loans on which principal or interest payments have been defaulted for more than three months past the due date, the Bank and its subsidiaries cease accrual of interest income, and accrued interest already recorded is reversed from the Bank and its subsidiaries’ accounts. Interest is then recognised as income on a cash basis until settlement of such overdue balance has been received from the debtors. Interest income on restructured loans is recognised as income on an accrual basis, with reference to the interest rate stipulated in the agreements, with the exception of interest on loans that are subject to monitoring for compliance with restructuring conditions, which the Bank and its subsidiaries recognise as income on a cash basis until the receivable is able to comply with the restructuring conditions for a period of no less than three months or three installments, whichever is longer. The
Bank
and
its
subsidiaries
recognise
interest
income
on
investments
in
purchased/transferred loans for which loan repayment is received during the year based on the effective yield rate of the portfolio multiplied by the new book value (acquisition cost) of the outstanding balances of receivables, to the extent that this is not greater than the amount received from such receivables. After the restructuring, interest income is recognised using the effective interest method, for those receivables from which loan repayment was received during the year.
195
THANACHART BANK PUBLIC COMPANY LIMITED
Interest or discounts already included in the face value of notes receivable or loans are recorded as deferred interest and taken up as income evenly throughout the term of the notes or loans or in proportion of debt repayment. Interest income received in advance on hire purchase represents discounted on interest given to debtors by dealers, is recognised based on the effective interest method, in the same manner as interest income on hire purchase receivables. b)
Interest and dividends on investments Interest on investments is recognised as income on an accrual basis based on the effective interest rate. Dividends are recognised as income when the right to receive the dividends is established.
c)
Brokerage fee income Brokerage fees on trading of securities and derivatives are recognised as income on the transaction date.
d)
Interest on margin loans for purchase of securities Interest on margin loans for purchases of securities is recognised as income over the term of the loans based on the amount of principal outstanding. The subsidiary company ceases accruing interest for certain loans that fall under the conditions set by the Securities and Exchange Commission (“SEC”).
e)
Gains (losses) on investments and derivatives Gains (losses) on investments and derivatives are recognised as income/expenses on the transaction date.
f)
Fees and service income Fees and service income are recognised on an accrual basis. When the Bank and its subsidiaries provide loyalty programmes to customers, they apportion compensation received from such services based on the fair value of accumulated reward points and realise it as deferred revenue. This deferred revenue is recorded under “other liabilities” in the statement of financial position. The Bank and its subsidiaries then realise it as revenue through the statement of comprehensive income when the customers claim a reward and the Bank and its subsidiaries have fulfilled their commitment to provide such reward.
g)
Insurance premium income Premium income consists of direct premium and reinsurance premium less premium of cancelled policies and premiums refunded to policy holders, and adjusted with unearned premium reserve.
196
ANNUAL REPORT 2018
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. 4.2
Expenses recognition a)
Interest expenses Interest expenses are charged to expenses on an accrual basis. Interest on notes payable included in the face value is recorded as deferred interest and amortised to expenses evenly throughout the term of the notes.
b)
Commission and direct expenses charged on hire purchase/financial leases Initial direct expenses at the inception of a hire purchase/financial lease contract (i.e. commission expenses and stamp duty expenses) are to be deferred and amortised using the effective interest method, with amortisation deducted from interest income throughout the contract period, in order to reflect the effective rate of return on the contracts. Unearned income on hire purchase/financial leases is presented net of commission expenses and initial direct cost on the inception of the contracts.
c)
Fees and service expenses Fees and service expenses are recognised as expenses on an accrual basis.
4.3
Investments Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss in the statements of comprehensive income. Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income in the statements of comprehensive income, and will be recognised in profit or loss when the securities are sold. Investments in held-to-maturity debt securities are stated at amortised cost. Premiums/ discounts on debt securities are amortised/accreted by the effective rate method with the amortised/accreted amount presented as an adjustment to the interest income. Investments in non-marketable equity securities, which are classified as general investments, are stated at cost net of allowance for impairment (if any).
197
THANACHART BANK PUBLIC COMPANY LIMITED
The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of debt securities is determined using the yield rates quoted by the Thai Bond Market Association, other markets, or yield rate of government bond adjusted by an appropriate risk factor, as the case may be. The fair value of unit trusts is determined from their net asset value. The Bank and its subsidiaries recognise loss on impairment (if any) of available-for-sale securities, held-to-maturity debt securities and general investments in profit or loss in the statements of comprehensive income. In the event that the Bank and its subsidiaries transfer investments to another category, the investments are valued at their fair values prevailing on the transfer date. Differences between the carrying amount of the investments and their fair value on that date are recorded as profit or loss or other comprehensive income in the statements of comprehensive income, depending on the type of investment being reclassified. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss in the statements of comprehensive income. In case of disposal partial of the investment, the carrying value per share used to calculate the cost of the portion sold is determined using the weighted average method. 4.4
Investments in receivables purchased and allowance for impairment Investments in receivables purchased are presented at their acquisition cost net of allowance for impairment (if any). Loss on impairment is recognised as an expense in profit or loss in the statements of comprehensive income. In case that the receivables purchased enter into debt restructuring agreements, they are transferred to loans to customers and presented at fair value. The fair value is determined based on the outstanding balance of investments as at the transfer date or as at the date of restructuring. Allowance for impairment of investments in receivables purchased is determined based on the fair value, with reference to the collateral value.
4.5
Investments in subsidiary and associated companies Investments in subsidiary and associated companies in the separate financial statements are accounted for under the cost method net of allowance for impairment (if any). Loss on impairment is recognised as expenses in part of profit or loss in the statements of comprehensive income. Investments in associated companies in the consolidated financial statements are accounted for under the equity method. Under this method, investments are initially recorded at acquisition cost and are adjusted to reflect the attributable shares of the net income from the operations of the associated companies, in proportion to the investment.
198
ANNUAL REPORT 2018
4.6
Loans to customers Loans to customers are stated at the principal balances, excluding accrued interest receivables, except for overdrafts which are presented at the principal balances plus accrued interest receivables. Unrecognised deferred income and discounts on loans are deducted from the loan balances. Hire purchase receivables and financial lease receivables are stated at the contract value of the hire purchase receivables and financial lease receivables net of unearned income, which is presented after netting commission expenses and initial direct cost on the inception of the contracts. Securities and derivatives business receivables comprise the net balances of securities business receivable and derivatives business receivables. Securities business receivable comprises credit balance receivables (for which the securities purchased are used as collateral), securities borrowing and lending receivables and guarantee deposit receivables (which comprise cash placed as guarantee for borrowers of securities or Thailand Securities Depository) as well as other receivables, such as overdue amounts in cash accounts and receivables which are under legal proceedings, are undergoing restructuring, or are being settled in installments. The receivable balance of cash accounts is presented as “Receivables from purchase and sale of securities�.
4.7
Allowances for doubtful accounts a)
Allowance for doubtful accounts for loans The Bank and its subsidiary that operates in asset management business provide allowance for doubtful accounts in accordance with the Notifications of the BOT and adjust these by the additional amount which is expected not to be collectible based on an evaluation of the current status of the debtors, taking into consideration the recovery risk and the value of collateral. Increase (decrease) in an allowance for doubtful accounts is recognised as an expense during the year. For loans, excluding hire purchase receivable - personal consuming of the Bank, the Bank and its subsidiary set provision for normal loans (including restructured receivables) and special mention loans at minimum rates of 1% and 2%, respectively, of the loan balances (excluding accrued interest receivable) net of collateral value. For non-performing loans, provision is set at a rate of 100% of the debt balance remaining after deducting the present value of expected future cash flows from debt collection or the present value of expected cash flows from collateral disposal, based on the use of a discount rate and assumptions as to the time needed to dispose of the collateral, in accordance with the BOT’s guideline. However, non-performing hire purchase receivables and financial lease receivables are treated as uncollateralised.
199
THANACHART BANK PUBLIC COMPANY LIMITED
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.
4.8
Troubled debt restructuring In cases where the debt restructuring involves modifications of the terms of repayment, the fair value of the receivables after restructuring is based on the net present value of expected future cash flows, discounted by the market’s minimum loan rate for credit to large customers prevailing at the restructuring date. The differences between the fair values of receivables as of the restructuring date and their previous book values is recorded as “Revaluation allowance for debt restructuring”, and recognised as an expense in part of profit or loss in the statements of comprehensive income in the restructuring period. The Bank and its subsidiaries review such revaluation allowance based
200
ANNUAL REPORT 2018
on the net present value of future cash flows over the remaining period to maturity, recognising adjustments against impairment losses of loans accounts. In cases where the troubled debt restructuring involves the transfer of assets or equity, the Bank and its subsidiaries record the assets or equity interest received as a result of debt restructuring at their fair value (based on the value appraised by internal appraisers or external independent appraisers) providing this does not exceed the amount of principal legally claimable from the debtor (including interest of which recognition has ceased until the restructuring date). Any excess of the fair value of the assets over the book value is recognised as gain on restructuring or interest income in part of profit or loss in the statements of comprehensive income, as the case may be. Losses arising from debt restructuring through waivers of part of principal or recorded accrued interest receivable are recognised as losses in part of profit or loss in the statements of comprehensive income when incurred. 4.9
Recognition and amortisation of customers’ assets Assets which customers have placed with the subsidiary company for securities trading, in term of cash accounts and credit balance accounts, including amounts which customers have placed as security for derivative trading, are recorded as assets and liabilities of the subsidiary company for internal control purpose. As at the reporting date, the subsidiary company eliminates those amounts which there are no guarantee obligations from both assets and liabilities and present only those assets which belong to the subsidiary company.
4.10 Property foreclosed Property foreclosed is stated at the lower of cost (fair value with reference to appraisal value, providing this does not exceed the legally claimable amount of debt) or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. Gains on disposal of property foreclosed are recognised as income in part of profit or loss in the statements of comprehensive income on the disposal date, unless the purchase is made with a loan from the Bank. In such cases, gains are recognised in accordance with the BOT’s guideline. Losses on disposal and impairment losses are recognised as expenses in part of profit or loss in the statement of comprehensive income.
201
THANACHART BANK PUBLIC COMPANY LIMITED
4.11 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)
Assets under installation are stated at cost, and depreciation is not provided.
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.
202
ANNUAL REPORT 2018
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.
4.12 Intangible assets and amortisation Intangible assets acquired through business combination are initially recognised at their fair value on the date of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial recognition, the intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses (if any). The Bank and its subsidiaries amortised intangible assets with finite lives on a systematic basis over their economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense and loss on impairment are recognised as expenses in part of profit or loss in the statement of comprehensive income. The intangible assets with finite useful lives have useful lives of approximately 3 - 10 years. No amortisation for computer software under development. 4.13 Leasehold rights Leasehold rights are stated at cost less accumulated amortisation. Leasehold rights are amortised on a straight-line basis over the lease periods and the amortisation amounts are recognised as expenses in part of profit or loss in the statements of comprehensive income. 4.14 Business combination and goodwill Business combination accounted for under purchase method. Goodwill is initially recorded at cost, which equals to the excess of the cost of business combination over the fair value of the net assets acquired. Goodwill is carried at cost less accumulated impairment losses (if any). Goodwill is tested for impairment annually or when circumstances indicate that the carrying value may be impaired. 4.15 Receivable from/payable to Clearing House Receivable from/payable to Clearing House comprise the net balance receivable/payable in respect of securities trades settled and derivatives business. These also include amounts pledged with Thailand Clearing House as security for derivatives trading.
203
THANACHART BANK PUBLIC COMPANY LIMITED
4.16 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. 4.17 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. 4.18 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.
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ANNUAL REPORT 2018
4.19 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.
4.20 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 of
effective, throughout the period of insurance
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.
205
THANACHART BANK PUBLIC COMPANY LIMITED
4.21 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. 4.22 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. 4.23 Financial derivatives The Bank and its subsidiaries have entered into derivative financial instruments in order to manage risk of the Bank and its subsidiaries and in response to customer needs. Financial derivative contracts which were originated for trading purposes are recorded as offbalance items. Gains or losses arising from changes in the fair value of the contracts are recognised as part of profit or loss in the statement of comprehensive income. The fair values of the contracts are based on the quoted market prices. If the fair value of financial derivatives cannot be determined with reference to market price, it is determined using valuation techniques and models, in which the variables used, are derived from observable 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
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ANNUAL REPORT 2018
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. 4.24 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. 4.25 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.
207
THANACHART BANK PUBLIC COMPANY LIMITED
4.26 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. 4.27 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.
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ANNUAL REPORT 2018
4.28 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. 4.29 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. 4.30 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.
209
THANACHART BANK PUBLIC COMPANY LIMITED
4.31 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. 5.
Significant accounting judgements and estimates The preparation of financial statements in conformity with Thai Financial Reporting Standards at times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows:
5.1
Recognition and derecognition of assets and liabilities In considering whether to recognise or to derecognise assets or liabilities, the management is required to make judgement on whether significant risk and rewards of those assets or liabilities have been transferred, based on their best knowledge of the current events and arrangements.
5.2
Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables are intended to adjust the value of loans for probable credit losses. The management uses the BOT’s and SEC’s regulations regarding the provision of allowance for doubtful accounts
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ANNUAL REPORT 2018
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. 5.3
Allowance for impairment of investments in securities The Bank and its subsidiaries review an impairment of investments in securities when indication of impairment exists. The determination of what is indication of impairment requires the management’s judgement.
5.4
Assessment of investment funds as structured entities In determining whether the funds to which a subsidiary provides asset management services are structured entities, the management is required to use judgement, taking into consideration the voting rights and other similar rights afforded to other parties, including the rights to remove the subsidiary as fund manager, liquidate the funds, or redeem holdings in the funds, and determining whether such rights are the dominant factor when deciding who controls the funds.
5.5
Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgement, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk of counterparty, liquidity, correlation and longerterm volatility of financial instruments. Change in assumptions about these factors could affect the fair value and disclosures of fair value hierarchy.
5.6
Allowance for impairment of properties foreclosed The Bank and its subsidiaries assess allowance for impairment of properties foreclosed when net realisable value falls below the book value. The management uses the BOT’s regulation and judgement to estimate impairment losses, taking into consideration the latest appraisal value, the type and the nature of the assets.
5.7
Land, premises and equipment and depreciation In determining depreciation of premises and equipment, the management is required to make estimates of the useful lives and salvage values of the premises and equipment, and to review these estimated useful lives and salvage values when there are any changes. 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 15 to the financial statements.
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THANACHART BANK PUBLIC COMPANY LIMITED
In addition, the management assesses whether there are indicators of the impairment of land, premises and equipment, and record impairment losses in the year when it is determined that the recoverable amounts are lower than the carrying amounts. This requires judgements in terms of forecasting future revenues and expenses relating to the assets subject to the review. 5.8
Goodwill and intangible assets The initial recognition and measurement of goodwill and intangible assets, and subsequent impairment testing, require management to exercise judgement as to the recoverable amount to be generated by the asset, using the discounted cash flows method, and including the selection of a suitable discount rate in order to determine the present value of that cash flow. The estimated cash flows may differ as a result of competitive forces, or changes in revenue trends, cost structures, and the discount rate, industry circumstances or related market conditions.
5.9
Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that future taxable profit will be available against which the temporary differences and unused tax losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimated future taxable profits.
5.10 Finance lease/Operating lease In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgement regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. 5.11 Unearned premium reserve Unexpired risk reserve is calculated under an actuarial method, which reflects the best estimate of losses expected to be incurred over the remaining period of the insurance. 5.12 Loss reserve and outstanding claims At the end of each reporting date, the subsidiary estimates loss reserves and outstanding claims in two parts; loss incurred for which the claims advice has been received from the insured, and loss incurred but not reported (IBNR). The IBNR reserve is calculated using an international standard actuarial method. The main assumptions underlying these techniques relate to historical claims experience, including development of estimates of paid and incurred losses, average costs per claim, and claim numbers. Such estimates require the management to exercise judgement in order to reflect the best estimates available at that time.
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ANNUAL REPORT 2018
5.13 Post-employment benefits under defined benefit plans Obligations under the defined benefit plan are determined by using actuarial technique. Such determination is made based on various assumptions, including discount rate, future salary increase rate, staff turnover rate, and mortality rate, based on their best knowledge of current situation. 5.14 Litigation and contingent liabilities The Bank and its subsidiaries have contingent liabilities as a result of litigation and contingent liabilities as a result of transfer of business and transfer of non-performing assets. The management has used judgement to assess of the results of such transactions, and in case where they believe that there will be no losses, no provisions are recorded as at the end of the reporting period. 6.
Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2018 At call
2017
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
6,634
-
6,634
5,434
800
6,234
408
32,385
32,793
344
23,058
23,402
-
39,150
39,150
1
36,890
36,891
850
16,567
17,417
798
17,997
18,795
7,892
88,102
95,994
6,577
78,745
85,322
Add: Accrued interest receivables
-
38
38
-
21
21
Less: Deferred revenues
-
-
-
-
(3)
(3)
Less: Allowance for doubtful accounts
-
-
(244)
(244)
Commercial banks Specialised financial institutions Other financial institutions Total
Total domestic items
(160)
(160)
7,892
87,980
95,872
6,577
78,519
85,096
1,307
30
1,337
1,397
7,794
9,191
70
-
70
45
-
45
289
-
289
283
-
283
1,666
30
1,696
1,725
7,794
9,519
-
-
-
-
36
36
Total foreign items
1,666
30
1,696
1,725
7,830
9,555
Total
9,558
88,010
97,568
8,302
86,349
94,651
Foreign US Dollar Euro Others Total Add: Accrued interest receivables
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THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2018 At call
2017
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
6,634
-
6,634
5,433
800
6,233
233
30,475
30,708
202
21,827
22,029
-
37,500
37,500
-
35,500
35,500
Other financial institutions
2,300
16,567
18,867
3,518
17,997
21,515
Total
9,167
84,542
93,709
9,153
76,124
85,277
Add: Accrued interest receivables
-
27
27
-
19
19
Less: Deferred revenues
-
-
-
-
(3)
(3)
(244)
(271)
Commercial banks Specialised financial institutions
Less: Allowance for doubtful accounts Total domestic items
(15)
(160)
(175)
(27)
9,152
84,409
93,561
9,126
75,896
85,022
1,307
30
1,337
1,397
7,794
9,191
70
-
70
45
-
45
289
-
289
283
-
283
1,666
30
1,696
1,725
7,794
9,519
-
-
-
-
36
36
1,666
30
1,696
1,725
7,830
9,555
10,818
84,439
95,257
10,851
83,726
94,577
Foreign US Dollar Euro Others Total Add: Accrued interest receivables Total foreign items Total
As at 31 December 2018, the Bank had loan to a subsidiary company, which was a financial institution, of Baht 1,450 million in the separate financial statements (2017: Baht 2,720 million). 7.
Derivatives As at 31 December 2018 and 2017, 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.
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ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2018
2017 Fair value/Adjustments
Fair value/Adjustments on an accrual basis
on an accrual basis
Notional
Liabilities
amount*
Liabilities
amount*
460
527
78,516
2
-
137
530
585
85,137
128
32
9,592
1,144
1,128
282,096
1,848
1,785
271,684
-
-
21,530
-
-
20,530
Derivatives for trading
111
104
5,014
139
138
7,931
Derivatives for banking book
284
334
17,426
243
325
10,425
4
4
1,216
1
3
2,303
2,005
2,097
405,935
2,889
2,868
407,602
Assets
Assets
Notional
Types of risk Foreign exchange rate Derivatives for trading Derivatives for banking book Interest rate Derivatives for trading Derivatives for banking book Foreign exchange rate and interest rate
Others Derivatives for trading Total
* Disclosed only in case that the Bank and its subsidiaries have an obligation to pay
(Unit: Million Baht) Separate financial statements 2018
2017
Fair value/Adjustments
Fair value/Adjustments
on an accrual basis
Notional
Liabilities
amount*
460
527
78,516
2
-
1,144
on an accrual basis Liabilities
amount*
530
585
85,137
137
128
32
9,592
1,128
282,096
1,848
1,785
271,684
-
-
21,530
-
-
20,530
Derivatives for trading
111
104
5,014
139
138
7,931
Derivatives for banking book
284
334
17,426
243
325
10,425
2,001
2,093
404,719
2,888
2,865
405,299
Assets
Assets
Notional
Types of risk Foreign exchange rate Derivatives for trading Derivatives for banking book Interest rate Derivatives for trading Derivatives for banking book Foreign exchange rate and interest rate
Total
* Disclosed only in case that the Bank has an obligation to pay
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THANACHART BANK PUBLIC COMPANY LIMITED
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 accrued interest receivables under the caption of other assets or accrued interest payables, as the case maybe. Below are the proportions of trading derivatives transactions classified by counterparty, determined based on the notional amount, as at 31 December 2018 and 2017. Consolidated financial statements Counterparties
Financial institutions
2018
2017
2018
2017
Percent
Percent
Percent
Percent
93.52
93.32
93.83
93.91
6.48
6.68
6.17
6.09
100.00
100.00
100.00
100.00
Third parties Total
8.
Investments
8.1
Classified by type of investments
Separate financial statements
(Unit: Million Baht) Consolidated financial statements 2018
Separate financial statements
2017
2018
2017
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
Fair value
cost
cost
Fair value
12,300
12,317
9,119
9,127
12,300
12,317
9,119
9,127
693
694
232
232
693
694
263
263
1,079
958
1,749
1,713
-
-
-
-
14,072
13,969
11,100
11,072
12,993
13,011
9,382
9,390
Fair value
cost
Fair value
Trading securities Government and state enterprises securities Private debt securities Domestic marketable equity securities
Add (less): Allowance for change in value Net
(103)
(28) 11,072
13,969
18
8
13,011
9,390
Available-for-sale securities Government and state enterprises securities
100,009
99,720
113,782
113,978
99,391
99,102
110,482
110,673
Private debt securities
21,361
21,340
24,009
24,336
16,811
16,779
21,052
21,339
Foreign debt securities
17,385
17,203
10,441
10,430
17,385
17,203
10,441
10,430
4,461
4,610
2,744
3,203
2,386
2,213
1,302
1,290
3
3
403
415
-
-
200
206
143,219
142,876
151,379
152,362
135,973
135,297
143,477
143,938
Domestic marketable equity securities Unit trusts
Add (less): Allowance for change in value Net
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ANNUAL REPORT 2018
(343) 142,876
983 152,362
(676) 135,297
461 143,938
(Unit: Million Baht) Consolidated financial statements 2018
Separate financial statements
2017
2018
2017
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
cost
Fair value
cost
Fair value
Fair value
cost
Fair value
Held-to-maturity debt securities Government and state enterprises securities
381
387
42
49
-
-
-
-
Private debt securities
220
247
240
273
508
541
485
531
Net
601
634
282
322
508
541
485
531
General investment Unit trusts
-
25
-
25
3,639
3,636
3,621
3,619
1
1
1
1
3,640
3,662
3,622
3,645
Domestic non-marketable equity securities Foreign non-marketable equity securities
(8)
Less: Allowance for impairment Net Total investments - net
8.2
(10)
(8)
(10)
3,632
3,652
3,614
3,635
161,078
167,368
152,430
157,448
Classified by remaining period of debt securities (Unit: Million Baht) Consolidated financial statements 2018
2017
Due within
Due within
Less than
1-5
Over
1 year
years
5 years
5
53,927
46,075
2
100,009
Private debt securities
-
1,865
14,962
4,534
Foreign debt securities
-
-
17,385
Total
5
55,792
78,422
-
6
5
55,798
77,948
4,512
-
338
-
Private debt securities
-
30
Total
-
Total debt securities
5
At call
Less than
1-5
Over
1 year
years
5 years
5
22,796
90,839
142
113,782
21,361
-
872
18,213
4,924
24,009
-
17,385
-
4,249
5,863
329
10,441
4,536
138,755
5
27,917
114,915
5,395
148,232
-
33
442
37
512
138,263
5
27,950
115,357
5,432
148,744
43
381
-
-
-
42
42
40
150
220
-
40
50
150
240
368
40
193
601
-
40
50
192
282
56,166
77,988
4,705
138,864
5
27,990
115,407
5,624
149,026
Total
At call
Total
Available-for-sale securities Government and state enterprises securities
Add (less): Allowance for change in value Total
(474)
(24)
(492)
Held-to-maturity debt securities Government and state enterprises securities
217
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements
At call
2018
2017
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 5
53,478
45,908
-
99,391
5
20,833
89,644
-
110,482
Private debt securities
enterprises securities
-
701
11,660
4,450
16,811
-
670
15,622
4,760
21,052
Foreign debt securities
-
-
17,385
-
17,385
-
4,249
5,863
329
10,441
Total
5
54,179
74,953
4,450
133,587
5
25,752
111,129
5,089
141,975
-
3
-
32
404
31
467
5
54,182
74,473
4,424
133,084
5
25,784
111,533
5,120
142,442
Private debt securities
-
-
270
238
508
-
13
73
399
485
Total
-
-
270
238
508
-
13
73
399
485
Total debt securities
5
54,182
74,743
4,662
133,592
5
25,797
111,606
5,519
142,927
Add (less): Allowance for change in value Total
(480)
(26)
(503)
Held-to-maturity debt securities
8.3
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 2018 and 2017, 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 2018 Banking and finance sector
2017 1
9.
Investments in subsidiary and associated companies
9.1
Separate financial statements
Separate financial statements 2018
1
2017 1
1
As at 31 December 2018 and 2017, 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:
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ANNUAL REPORT 2018
(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 2018
2017
2018
TS Asset Management Co., Ltd.
2,000
2,000
100
Thanachart Securities Plc.
1,500
1,500
Ratchthani Leasing Plc.
3,020
Thanachart Insurance Plc.
2017
2018
2017
2018
2017
100
2,000
2,000
250
330
100
100
1,858
1,858
1,245
660
2,416
65.18
65.18
1,201
1,201
47
331
740
740
100
100
867
867
750
751
Thanachart Group Leasing Co., Ltd.
360
360
100
100
400
400
-
14
Thanachart Broker Co., Ltd.
100
100
100
100
104
104
100
90
Thanachart Fund Management Co., Ltd.
100
100
75
75
97
97
420
287
10
10
100
100
5
5
-
-
6
6
100
100
6
6
-
-
5
5
100
100
5
5
15
22
6,543
6,543
2,827
2,485
Subsidiary companies
Security Scib Services Co., Ltd. Thanachart Management and Services Co., Ltd. Thanachart Training and Development Co., Ltd. Total investments in subsidiary companies
(5)
Less: Allowance for impairment
(5)
Total investments in subsidiary companies - net
6,538
6,538
618
632
43
51
618
632
43
51
7,156
7,170
2,870
2,536
Associated company MBK Plc.
1,695
1,708
3.41
3.46
Total investment in the associated company Total investments in subsidiary and associated companies
In May 2018, the Bank sold its investment in 1,290,700 ordinary shares of MBK Plc. at a price of Baht 29 million, and recognised gains on disposal of Baht 16 million in the consolidated financial statements and Baht 15 million in the separate financial statements.
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THANACHART BANK PUBLIC COMPANY LIMITED
9.2
Details of investments in subsidiaries that have non-controlling interests (Unit: Million Baht) Other comprehensive income (loss) Proportion of
Accumulated
Dividend paid to
Profit allocated to
allocated to
equity interest held
balance of
non-controlling
non-controlling
non-controlling
by non-controlling
non-controlling
interests during
interests during
interests during
interests
interests
the years
the years
the years
Company’s name
2018
2017
2018
2017
2018
(%)
(%)
Ratchthani Leasing Plc.
34.82
34.82
2,401
1,835
25
Thanachart Fund Management
25.00
25.00
106
140
83
2017
2018
2017
2018
2017
177
591
452
-
-
96
163
107
-
(1)
Co., Ltd.
9.3
Summarised financial information, before eliminating intercompany transactions, of subsidiaries that have non-controlling interests are as follows: Summarised information about financial position (Unit: Million Baht) Thanachart Fund (1)
Ratchthani Leasing Plc. 2018
2017
Management Co., Ltd. 2018
2017
Total assets
47,252
39,160
658
542
Total liabilities
40,357
33,889
235
214
(1)
Presents in the amount after adjustment for the effect of differences in accounting policies.
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 31 December Thanachart Fund Ratchthani Leasing Plc. 2018
Management Co., Ltd.
2017
2018
2017
Net operating income
2,855
2,334
1,160
845
Profit for the year
1,698
1,299
655
426
-
-
1,299
655
Other comprehensive income (loss) Total comprehensive income (1)
220
(1)
(1) 1,697
Presents in the amount after adjustment for the effect of differences in accounting policies.
ANNUAL REPORT 2018
(2) 424
Summarised information about cash flow (Unit: Million Baht) For the years ended 31 December Thanachart Fund Ratchthani Leasing Plc. 2018 Cash flow from (used in) operating activities
2018
(8,715)
(11)
(5)
2,246
Net increase (decrease) in cash
9.4
2017
(2,236)
Cash flow used in investing activities Cash flow from (used in) financing activities
Management Co., Ltd.
(1)
8,724
2017
888
413
(328)
(20)
(560)
(383)
4
-
10
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 2018 and 2017 is as follows: (Unit: Million Baht) 2017
2018 Cash flows from operating activities Profit before income tax
123
108
Adjustments to reconcile profit before income tax to net cash provided by (paid for) operating activities Bad debt and doubtful account (reversal)
(61)
(2)
Decrease in allowance for impairment of property foreclosed and other assets
(27)
(6)
Increase in provisions Interest income - net
-
1
(82)
(148)
Cash received from interest income
82
148
Cash paid for corporate income tax
(36)
(15)
(1)
86
Profit (loss) from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Loans to customers
278
333
Properties foreclosed
275
347
Other assets
1
(20)
7
(20)
Increase (decrease) in operating liabilities Other liabilities
560
726
Cash paid for dividend
(250)
(330)
Net cash flows used in financing activities
(250)
(330)
Net increase in cash and cash equivalents
310
396
Cash and cash equivalents at beginning of the year
586
190
Cash and cash equivalents at end of the year
896
586
Net cash flows from operating activities Cash flows from financing activities
221
THANACHART BANK PUBLIC COMPANY LIMITED
9.5
Investment in the associated company in consolidated financial statements As at 31 December 2018 and 2017, investment in the 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 surplus from the change
Paid-up share
Percentage
capital
of holding (%)
Company’s name
MBK Plc. (operating
2018
2017
1,695
1,708
2018 9.90
2017
Value of investment Cost method 2018
9.90
2017
Equity method
in the ownership
Share of other
interests in
comprehensive
Dividend
Share of profit
income during
during the
subsidiaries
income during
the years
years
of the associate
the years
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
884
891
2,437
2,258
125
123
299
200
-
41
4
76
884
891
2,437
2,258
125
123
299
200
-
41
4
76
in property rental, hotel and services businesses) Total investment in the associated company
The Bank and its subsidiaries classified investment in MBK Plc. as investment in the associated company since the Parent company, the Bank and its subsidiaries had significant influence in that company. 9.6
Summarised financial information of the associated company a)
Summarised financial information of MBK Plc. as at 30 September 2018 and 2017 and for the years then ended are as follows: Summarised information about financial position (Unit: Million Baht) 30 September 2018 Total assets Total liabilities Other equity items of the associated company Net assets Shareholding percentage (%) Share of net assets Elimination entries Goodwill
(1)
30 September 2017
52,119
46,668
(27,201)
(23,830)
221
193
25,139
23,031
9.90
9.90
2,489
2,280
(323)
(296)
271
274
2,437
2,258
Carrying amounts of the associate based on equity method (1)
222
Presents in the amount after adjustment for the effect of differences in accounting policies.
ANNUAL REPORT 2018
(1)
Summarised information about comprehensive income (Unit: Million Baht) For the year ended 30 September 2018 Revenue Profit for the year Other comprehensive income Total comprehensive income for the year (1)
(1)
2017
12,688
10,351
3,020
1,864
76
1,060
3,096
2,924
Presents in the amount after adjustment for the effect of differences in accounting policies.
The share of profit from investment in MBK Plc. accounted for under the equity method was determined based on financial statements of MBK Plc. that were prepared for periods different from those of the Bank, due to limited information available. However, they are financial statements prepared for the same length of time and based on the principle of consistency. Therefore, share of profit of the associate under the equity method for the year ended 31 December 2018 was determined based on financial statements that were prepared with reference to financial statements for the year ended 30 September 2018 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 2018 is not materially different from the income for the year ended 31 December 2018. On 26 July 2018, MBK Plc. decreased its registered share capital by 13,037,000 shares. As a result, the issued and paid-up share capital decreased from 1,707,960,000 shares to 1,694,923,000 shares and the shareholding of the Bank and its subsidiaries increased from 9.82 percent to 9.90 percent. The Bank and its subsidiaries recognised the effect of changes in the shareholding of Baht 14 million in retained earnings. b)
The fair value of investment in the associated company As at 31 December 2018 and 2017, the fair value of investment in the associated company which is listed on the Stock Exchange of Thailand is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
MBK Plc.
3,440
2017
3,263
2018
1,186
2017
1,141
223
THANACHART BANK PUBLIC COMPANY LIMITED
10.
Loans to customers and accrued interest receivables
10.1 Classified by loan type (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Loans to customers Overdrafts Loans Notes receivables Hire purchase receivables Financial lease receivables Others Less: Deferred revenues
16,370
16,668
16,370
16,668
272,137
262,029
269,987
259,202
38,390
56,178
39,419
57,747
486,588
425,948
432,787
381,032
2,167
1,710
1,540
1,166
181
153
181
153
(66,157)
(55,127)
(60,683)
(50,463)
749,676
707,559
699,601
665,505
645
589
646
589
750,321
708,148
700,247
666,094
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 - Individual Approach
(8,110)
(7,962)
(4,752)
(4,424)
- Collective Approach
(7,090)
(5,820)
(7,090)
(5,820)
(8,438)
(10,237)
(7,820)
(9,632)
(1)
(1)
(1)
(1)
2) Excess provision Less: Revaluation allowance for debt restructuring Loans to customers and accrued interest receivables - net
726,682
684,128
680,584
646,217
3,791
4,101
-
-
31
15
-
-
3,822
4,116
-
-
-
-
Securities business receivables Credit balances receivables Other receivables Total securities business receivables Less: Allowance for doubtful accounts Securities business receivables - net
(13)
(14)
3,809
4,102
-
-
730,491
688,230
680,584
646,217
Loans to customers and accrued interest receivables - net
224
ANNUAL REPORT 2018
10.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2018
2017
Domestic
Foreign
741,979
Baht US Dollar
Total
Domestic
Foreign
-
741,979
695,860
-
695,860
5,519
4,538
10,057
8,555
5,570
14,125
92
1,370
1,462
161
1,529
1,690
747,590
5,908
753,498
704,576
7,099
711,675
Other currencies Total*
Total
* Total loans net of deferred revenues (Unit: Million Baht) Separate financial statements 2018
2017
Domestic
Foreign
688,082
Baht US Dollar
Total
Domestic
Foreign
-
688,082
649,690
-
649,690
5,519
4,538
10,057
8,555
5,570
14,125
92
1,370
1,462
161
1,529
1,690
693,693
5,908
699,601
658,406
7,099
665,505
Other currencies Total*
Total
* Total loans net of deferred revenues
10.3 Classified by type of business and loan classification (Unit: Million Baht) Consolidated financial statements 2018 The Bank and a subsidiary company which is a financial institution Other subsidiary
Special
Sub-
Normal
mention
standard
Doubtful
6,495
14
37
10
26
6,582
-
6,582
Manufacturing and commerce
69,123
222
570
517
3,842
74,274
365
74,639
Real estate and construction
46,427
138
202
41
1,545
48,353
62
48,415
Public utilities and services
52,444
110
285
142
928
53,909
128
54,037
97,621
1,126
1,506
852
1,862
102,967
55
103,022
-
-
-
-
-
-
3,822
3,822
343,579
25,510
1,433
1,422
694
372,638
47,996
420,634
29,009
615
565
187
675
31,051
63
31,114
Others
11,066
15
-
-
152
11,233
-
11,233
Total*
655,764
27,750
4,598
3,171
9,724
701,007
52,491
753,498
Agricultural and mining
Doubtful of loss
companies
Total
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
225
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2017 The Bank and a subsidiary company which is a financial institution Other
Normal Agricultural and mining
Special
Sub-
mention
standard
subsidiary
Doubtful Doubtful
of loss
companies
Total
Consolidated
7,141
289
30
11
24
7,495
-
7,495
Manufacturing and commerce
75,475
313
2,534
273
1,998
80,593
332
80,925
Real estate and construction
45,286
94
262
150
1,458
47,250
39
47,289
Public utilities and services
57,038
285
257
85
976
58,641
111
58,752
92,778
1,251
897
827
1,733
97,486
55
97,541
-
-
-
-
-
-
4,116
4,116
304,052
23,433
1,312
1,145
1,075
331,017
39,969
370,986
27,259
627
497
181
559
29,123
71
29,194
Others
15,223
2
146
-
6
15,377
-
15,377
Total*
624,252
26,294
5,935
2,672
7,829
666,982
44,693
711,675
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
(Unit: Million Baht) Separate financial statements 2018 Special Normal Agricultural and mining
mention
Doubtful Substandard
Doubtful
of loss
Total
6,462
14
37
10
9
6,532
Manufacturing and commerce
69,099
202
547
517
3,329
73,694
Real estate and construction
46,416
138
190
36
1,320
48,100
Public utilities and services
52,145
110
253
139
463
53,110
Housing loans
97,582
1,112
1,490
847
1,815
102,846
Hire purchase
343,216
25,475
1,431
1,420
693
372,235
29,005
611
551
184
617
30,968
Others
12,094
15
-
-
7
12,116
Total*
656,019
27,677
4,499
3,153
8,253
699,601
Personal consuming
Others
* Total loans net of deferred revenues
226
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements 2017 Special Normal Agricultural and mining
mention
Doubtful Substandard
Doubtful
of loss
Total
7,105
289
30
5
12
7,441
Manufacturing and commerce
75,433
286
2,497
269
1,155
79,640
Real estate and construction
45,265
81
247
144
1,192
46,929
Public utilities and services
56,570
285
247
73
483
57,658
Housing loans
92,729
1,243
881
802
1,682
97,337
Hire purchase
303,734
23,409
1,311
1,143
1,074
330,671
27,254
619
482
180
496
29,031
Others
16,789
2
1
-
6
16,798
Total*
624,879
26,214
5,696
2,616
6,100
665,505
Personal consuming
Others
* Total loans net of deferred revenues
10.4 Non-performing loans As at 31 December 2018 and 2017, 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 financial statements 2018
2017
Separate financial statements 2018
2017
Non-performing loans (excluding accrued interest receivables) Banking business
15,911
14,417
15,905
14,412
45
14
-
-
1,582
2,019
-
-
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. 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) Consolidated financial statements 2018 Banking business Securities business
2017
Separate financial statements 2018
2017
21,897
21,394
21,891
21,389
45
14
-
-
227
THANACHART BANK PUBLIC COMPANY LIMITED
The subsidiary company engaged in the asset management business recognises income from loan on a cash basis. 10.5 Debt restructuring During the years 2018 and 2017, the Bank and its subsidiaries (which engaged in asset management and securities business) have entered into debt restructuring agreements with their debtors as follows: Consolidated financial statements For the years ended 31 December Fair value of
Number of Type of restructuring
debtors
Outstanding
Outstanding
Type of assets
assets to be
balance before
balance after
to be
transferred under
transferred
agreement
restructuring
(1)
restructuring
(1)
Million Baht
Million Baht
2,347
2,337
Million Baht
2018 Modification of repayment conditions
1,163
Transfer of assets and/or ordinary shares and/or modification of repayment conditions Total
Land and 2
56
56
1,165
2,403
2,393
1,090
2,317
2,316
buildings
64
2017 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of repayment conditions Total
Land, buildings 2
60
59
1,092
2,377
2,375
and cars
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivables)
228
ANNUAL REPORT 2018
49
Separate financial statements For the years ended 31 December Fair value of
Number of Type of restructuring
debtors
Outstanding
Outstanding
Type of assets
assets to be
balance before
balance after
to be
transferred under
transferred
agreement
restructuring
(1)
restructuring
(1)
Million Baht
Million Baht
2,252
2,242
Million Baht
2018 Modification of repayment conditions
1,133
Transfer of assets and/or ordinary shares and/or modification of repayment conditions Total
Land and 1
4
4
1,134
2,256
2,246
1,074
2,210
2,209
buildings
4
2017 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of repayment conditions Total
Land, buildings 2
60
59
1,076
2,270
2,268
and cars
49
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivables)
Counting from the end of the year, the remaining periods to maturity of receivables which entered into debt restructuring agreements during the years 2018 and 2017, are summarised below. Consolidated financial statements 2018
2017 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
375
796
398
1,016
Due within the year
278
645
262
850
Less than 5 years
203
263
264
204
5 - 10 years
210
420
121
193
10 - 15 years
37
132
20
52
Over 15 years
62
137
27
60
1,165
2,393
1,092
2,375
Total
229
THANACHART BANK PUBLIC COMPANY LIMITED
Separate financial statements 2018
2017 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
375
796
397
1,013
Due within the year
256
543
253
779
Less than 5 years
197
234
263
202
5 - 10 years
208
416
119
189
10 - 15 years
36
120
17
25
Over 15 years
62
137
27
60
1,134
2,246
1,076
2,268
Total
Supplemental information for the years 2018 and 2017 relating to restructured loans is as follows: (Unit: Million Baht) Consolidated financial statements 2018
2017
Separate financial statements 2018
2017
Interest income recognised in the statements of comprehensive income Cash repayment from receivables Properties foreclosed received for debts settlement
658
858
582
727
2,608
3,487
2,297
3,020
73
73
13
73
9
-
9
-
Loss on debt restructuring (net of allowance for doubtful accounts as previously recorded)
As at 31 December 2018 and 2017, the Bank and its subsidiaries have the following restructured receivables balances (principal and accrued interest receivable): Restructured receivables Outstanding balances, Number of receivables 2018
Thanachart Bank Plc. TS Asset Management Co., Ltd.
2017
Outstanding balances
net of collateral
2018
2017
2018
2017
Million Baht
Million Baht
Million Baht
Million Baht
6,430
8,465
7,829
8,240
1,532
1,772
190
238
1,926
2,580
1,180
1,771
10.6 Hire purchase/Financial lease receivables As at 31 December 2018 and 2017, 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.
230
ANNUAL REPORT 2018
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 2018 Amounts due under lease agreements Less than 1 year *
1 - 5 years
Over 5 years
Total
Gross investment in the lease
116,687
324,323
47,745
488,755
Less: Unearned finance income
(21,221)
(41,495)
(3,438)
(66,154)
95,466
282,828
44,307
422,601
Present value of minimum lease payments receivables Allowance for doubtful accounts
(10,493)
Hire purchase/Financial lease receivables - net
412,108
* Included non-performing receivables (Unit: Million Baht) Consolidated financial statement as at 31 December 2017 Amounts due under lease agreements Less than 1 year *
1 - 5 years
Over 5 years
Total
Gross investment in the lease
113,895
287,236
26,527
427,658
Less: Unearned finance income
(18,815)
(34,899)
(1,409)
(55,123)
95,080
252,337
25,118
372,535
Present value of minimum lease payments receivables Allowance for doubtful accounts
(9,525) 363,010
Hire purchase/Financial lease receivables - net * Included non-performing receivables
(Unit: Million Baht) Separate financial statement as at 31 December 2018 Amounts due under lease agreements Less than 1 year *
1 - 5 years
Over 5 years
Total
Gross investment in the lease
113,836
284,140
36,351
434,327
Less: Unearned finance income
(21,227)
(37,512)
(1,942)
(60,681)
92,609
246,628
34,409
373,646
Present value of minimum lease payments receivables Allowance for doubtful accounts Hire purchase/Financial lease receivables - net
(7,972) 365,674
* Included non-performing receivables
231
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statement as at 31 December 2017 Amounts due under lease agreements Less than 1 year *
1 - 5 years
Over 5 years
Total
Gross investment in the lease
111,117
244,760
26,321
382,198
Less: Unearned finance income
(18,802)
(30,267)
(1,390)
(50,459)
92,315
214,493
24,931
331,739
Present value of minimum lease payments receivables Allowance for doubtful accounts
(7,224) 324,515
Hire purchase/Financial lease receivables - net * Included non-performing receivables
10.7 Classified by classification As at 31 December 2018 and 2017, the Bank and its financial institution subsidiary (asset management business) classified and made allowances against their loans in accordance with the BOT’s guidelines as summarised below. (Unit: Million Baht) Consolidated financial statements
(1)
Net balance used in making Loans and accrued interest
allowance for doubtful
Allowance for doubtful
receivables
accounts
accounts
2018
2017
2018
2017
656,396
624,828
437,436
416,556
4,127
3,310
27,759
26,304
25,868
23,844
2,438
2,336
Substandard
4,602
5,938
2,359
2,977
1,617
2,219
Doubtful
3,171
2,672
1,947
1,490
1,155
823
Doubtful of loss
9,724
7,829
3,959
3,651
3,562
3,013
701,652
667,571
471,569
448,518
12,899
11,701
8,218
10,017
21,117
21,718
Normal Special mention
Total
Additional allowance for possible uncollectability debts Total (1)
232
2018
Only the Bank and a subsidiary company subject to BOT’s regulations; and after deducting intragroup transactions.
ANNUAL REPORT 2018
2017
(Unit: Million Baht) Separate financial statements Net balance used in making Loans and accrued interest
allowance for doubtful
Allowance for doubtful
receivables
accounts
accounts
2018
2017
2018
2017
656,652
625,455
438,168
417,646
4,134
3,321
27,686
26,224
25,861
23,829
2,438
2,336
Substandard
4,503
5,699
2,333
2,785
1,590
2,027
Doubtful
3,153
2,616
1,947
1,484
1,155
816
Doubtful of loss
8,253
6,100
2,921
2,381
2,525
1,744
700,247
666,094
471,230
448,125
11,842
10,244
7,820
9,632
19,662
19,876
Normal Special mention
Total
2018
Additional allowance for possible uncollectability debts Total
2017
Percentage of allowance for doubtful accounts The Banks’ hire purchase receivablespersonal consumer (2) 2018
2017
2018
2017
Normal
0.93
0.71
1
1
Special mention
9.60
10.03
2
2
Substandard
47.57
40.67
100
100
Doubtful
42.88
39.66
100
100
Doubtful of loss
42.75
40.60
100
100
(2)
10.8
Other loans
These percentages are average rates used in setting up allowance for doubtful accounts
Loans to companies which have settlement problems As at 31 December 2018 and 2017, 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:
233
THANACHART BANK PUBLIC COMPANY LIMITED
Consolidated financial statements Allowance for doubtful accounts provided Number of debtors 2018
1. Listed companies possible to
2017
Debt balances
Collateral value
in the accounts
2018
2017
2018
2017
2018
2017
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
5
4
200
205
2
1
3
2
30
32
302
554
195
310
107
244
970
940
7,765
7,809
4,273
4,180
3,594
3,583
delisting from the SET 2. Non - listed companies with similar operating results and financial position to listed companies possible to delisting from the SET 3. Companies which have loan settlement problems or have defaulted on the repayment
Separate financial statements Allowance for doubtful accounts provided Number of debtors 2018
1. Listed companies possible to
2017
Debt balances
Collateral value
in the accounts
2018
2017
2018
2017
2018
2017
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
3
3
199
204
-
-
3
2
28
30
300
553
195
310
105
243
335
372
5,360
4,874
3,801
3,631
1,560
1,243
delisting from the SET 2. Non - listed companies with similar operating results and financial position to listed companies possible to delisting from the SET 3. Companies which have loan settlement problems or have defaulted on the repayment
10.9
Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission As at 31 December 2018 and 2017, 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:
234
ANNUAL REPORT 2018
(Unit: Million Baht) Debt balances net of allowance Allowance for doubtful accounts
Debt balances 2018 Normal
2017
2018
for doubtful accounts
2017
2018
2017
3,777
4,102
-
-
3,777
4,102
Substandard
33
1
1
1
32
-
Doubtful
12
13
12
13
-
-
3,822
4,116
13
14
3,809
4,102
Total
Allowance for doubtful accounts for substandard loans set aside by the subsidiary is higher than the minimum amount required by the SEC, and takes into account uncertainties as to collateral value and the risk from collection of such receivables. 10.10
Hire purchase/financial lease receivables of subsidiaries classified by aging As at 31 December 2018 and 2017, 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) 2018
2017
46,761
38,793
Overdue 91 - 365 days
831
811
Overdue more than 1 year
179
168
Debtors under legal actions
781
679
48,552
40,451
2,521
2,301
Current or overdue not over 90 days
Total Allowance for doubtful accounts provided in the accounts
11.
Allowance for doubtful accounts (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2018 The Bank and a subsidiary company which is a financial institution Other Special
Sub-
Normal
mention
standard
3,310
2,336
817
102
Bad debts recovery
-
-
Bad debts written-off
4,127
Balance - beginning of the year
subsidiary
Doubtful
General
Doubtful
of loss
provision
Total
823
3,013
10,017
21,718
2,315
24,033
332
5,057
(1,799)
3,907
320
4,227
-
-
1,033
-
1,033
12
1,045
-
-
-
(5,541)
-
(5,541)
(113)
(5,654)
2,438
1,617
1,155
2,219
companies Consolidated
Increase (decrease) during the year
Balance - end of the year
(602)
3,562
8,218
21,117
2,534
23,651
235
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2017 The Bank and a subsidiary company which is a financial institution Other Special
Sub-
Normal
mention
standard
2,985
2,150
1,644
325
186
575
Bad debts recovery
-
-
-
-
1,050
Bad debts written-off
-
-
-
-
(7,565)
3,310
2,336
2,219
823
Balance - beginning of the year
subsidiary
Doubtful
General
Doubtful
of loss
provision
Total
906
3,100
11,707
22,492
2,124
24,616
(83)
6,428
(1,690)
5,741
289
6,030
-
1,050
9
1,059
-
(7,565)
companies Consolidated
Increase (decrease) during the year
Balance - end of the year
3,013
10,017
21,718
(107) 2,315
(7,672) 24,033
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2018 Special Normal
mention
3,321
2,336
813
102
Bad debts recovery
-
-
Bad debts written-off
4,134
Balance - beginning of the year
Substandard 2,027
Doubtful
Doubtful
General
of loss
provision
Total
816
1,744
9,632
19,876
339
5,314
(1,812)
4,319
-
-
1,000
-
1,000
-
-
-
(5,533)
-
(5,533)
2,438
1,590
1,155
Increase (decrease) during the year
Balance - end of the year
(437)
2,525
7,820
19,662
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2017 Special mention
Normal Balance - beginning of the year
Substandard
2,998
2,151
1,619
323
185
408
Doubtful
Doubtful
General
of loss
provision
877
1,773
(61)
5,141
9,883
Total 19,301
Increase (decrease) during the year
(251)
5,745
Bad debts recovery
-
-
-
-
1,050
-
1,050
Bad debts written-off
-
-
-
-
(6,220)
-
(6,220)
3,321
2,336
2,027
816
Balance - end of the year
236
ANNUAL REPORT 2018
1,744
9,632
19,876
12.
Revaluation allowance for debt restructuring (Unit: Million Baht) Consolidated financial statements 2018
13.
Separate financial statements
2017
2018
2017
Balance - beginning of the year
1
2
1
2
Amortised during the year
-
(1)
-
(1)
Balance - end of the year
1
1
1
1
Classification of assets As at 31 December 2018 and 2017, 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 2018 Loans to customers and
Normal
Interbank and
accrued
money market
interest
items
receivables
Properties Investments
foreclosed
Other assets
Total
85,449
656,396
-
-
142
741,987
Special mention
-
27,759
-
-
109
27,868
Substandard
-
4,602
-
-
11
4,613
Doubtful
-
3,171
-
-
9
3,180
Doubtful of loss
-
9,724
902
324
315
11,265
85,449
701,652
902
324
586
788,913
Total
(Unit: Million Baht) Consolidated financial statements 2017 Loans to customers and
Normal
Interbank and
accrued
money market
interest
items
receivables
Properties Investments
foreclosed
Other assets
Total
76,154
624,828
-
-
187
701,169
Special mention
-
26,304
-
-
116
26,420
Substandard
-
5,938
-
-
11
5,949
Doubtful
-
2,672
-
-
9
2,681
Doubtful of loss
-
7,829
299
358
297
8,783
76,154
667,571
299
358
620
745,002
Total
237
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2018 Loans to customers and
Normal
Interbank and
accrued
money market
interest
items
receivables
Properties Investments
foreclosed
Other assets
Total
86,899
656,652
-
-
142
743,693
Special mention
-
27,686
-
-
109
27,795
Substandard
-
4,503
-
-
11
4,514
Doubtful
-
3,153
-
-
9
3,162
Doubtful of loss
-
8,253
907
310
312
9,782
86,899
700,247
907
310
583
788,946
Total
(Unit: Million Baht) Separate financial statements 2017 Loans to customers and
Normal
Interbank and
accrued
money market
interest
items
receivables
Properties Investments
foreclosed
Other assets
Total
78,874
625,455
-
-
187
704,516
Special mention
-
26,224
-
-
116
26,340
Substandard
-
5,699
-
-
11
5,710
Doubtful
-
2,616
-
-
9
2,625
Doubtful of loss
-
6,100
304
316
291
7,011
78,874
666,094
304
316
614
746,202
Total
238
ANNUAL REPORT 2018
14.
Properties foreclosed (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2018 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
1,842
68
(311)
1,599
447
6,043
(5,870)
620
535
203
(105)
633
368
134
(171)
331
3,192
6,448
(6,457)
3,183
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
(399)
(601) 5,847
2,793
632 (5,825)
(368) 2,815
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2017 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
2,249
8
(415)
1,842
418
4,787
(4,758)
447
736
67
(268)
535
97
506
(235)
368
3,500
5,368
(5,676)
3,192
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
(388) 3,112
(466) 4,902
455 (5,221)
(399) 2,793
239
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2018 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
745
5
(114)
636
345
5,490
(5,338)
497
325
199
(45)
479
368
134
(171)
331
1,783
5,828
(5,668)
1,943
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
(316) 1,467
(565) 5,263
571 (5,097)
(310) 1,633
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2017 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
902
7
(164)
745
329
4,277
(4,261)
345
429
57
(161)
325
97
506
(235)
368
1,757
4,847
(4,821)
1,783
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
240
ANNUAL REPORT 2018
(313) 1,444
(417) 4,430
414 (4,407)
(316) 1,467
15.
Land, premises and equipment (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2018 Revaluation basis
Cost basis
Land
Buildings and
Furniture,
Assets
building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2018 Additions Transfers/disposals
5,591
2,224
7,321
67
2
15,205
-
-
182
5
106
293
(763)
(9)
(16)
(1,079)
(126)
(165)
5,465
2,059
6,740
63
92
14,419
1 January 2018
-
788
5,664
52
-
6,504
Transfers/disposals
-
(142)
(766)
(9)
-
(917)
Depreciation for the year
-
121
630
6
-
757
31 December 2018
-
767
5,528
49
-
6,344
1 January 2018
57
22
-
-
-
79
31 December 2018
57
22
-
-
-
79
5,408
1,270
1,212
14
92
7,996
31 December 2018 Accumulated depreciation
Allowance for impairment
Net book value 31 December 2018
Depreciation charged for the years ended 31 December 2017
835
2018
757
241
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2017 Revaluation basis
Cost basis
Land
Buildings and
Furniture,
Assets
building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2017 Additions Transfers/disposals
5,974
2,389
7,432
72
12
15,879
-
1
337
8
71
417
(448)
(13)
(81)
(1,091)
(383)
(166)
5,591
2,224
7,321
67
2
15,205
1 January 2017
-
738
5,438
58
-
6,234
Transfers/disposals
-
(75)
(479)
(11)
-
(565)
Depreciation for the year
-
125
705
5
-
835
31 December 2017
-
788
5,664
52
-
6,504
68
25
6
-
-
99
-
-
(6)
-
-
(6)
31 December 2017 Accumulated depreciation
Allowance for impairment 1 January 2017 Decrease during the year Transfers/disposals
(11)
(3)
-
-
-
(14)
31 December 2017
57
22
-
-
-
79
5,534
1,414
1,657
15
2
8,622
Net book value 31 December 2017
242
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2018 Revaluation basis
Cost basis
Land
Buildings and
Furniture,
Assets
buildings
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2018 Additions Transfers/disposals 31 December 2018
5,517
2,094
6,166
10
1
13,788
-
-
165
-
98
263
(255)
(4)
(16)
(443)
(126)
(42)
5,391
2,052
6,076
6
83
13,608
1 January 2018
-
775
4,609
8
-
5,392
Transfers/disposals
-
(19)
(261)
(4)
-
(284)
Depreciation for the year
-
111
590
1
-
702
31 December 2018
-
867
4,938
5
-
5,810
1 January 2018
-
-
-
-
-
-
31 December 2018
-
-
-
-
-
-
5,391
1,185
1,138
1
83
7,798
Accumulated depreciation
Allowance for impairment
Net book value 31 December 2018
Depreciation charged for the years ended 31 December 2017
776
2018
702
243
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2017 Revaluation basis
Cost basis
Land
Buildings and
Furniture,
Assets
buildings
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2017
5,889
2,211
6,241
14
11
14,366
-
-
313
-
67
380
(388)
(4)
(77)
(958)
Additions Transfers/disposals 31 December 2017
(372)
(117)
5,517
2,094
6,166
10
1
13,788
1 January 2017
-
690
4,364
11
-
5,065
Transfers/disposals
-
(29)
(416)
(4)
-
(449)
Depreciation for the year
-
114
661
1
-
776
31 December 2017
-
775
4,609
8
-
5,392
1 January 2017
-
-
5
-
-
5
Decrease during the year
-
-
(5)
-
-
(5)
31 December 2017
-
-
-
-
-
-
5,517
1,319
1,557
2
1
8,396
Accumulated depreciation
Allowance for impairment
Net book value 31 December 2017
As at 31 December 2018 and 2017, the Bank and its subsidiaries have building, office equipment and vehicles which have been fully depreciated but are still in use, with gross carrying amounts before deducting accumulated depreciation and allowance for impairment of approximately Baht 3,931 million and Baht 3,649 million, respectively (separate financial statements: Baht 3,514 million and Baht 3,247 million, respectively). As at 31 December 2018 and 2017, the Bank and its subsidiaries have no vehicles acquired under financial lease agreements. The Bank and its subsidiaries arranged for an independent professional appraiser to appraise the value of land in 2015, using the market approach. Had the land been carried in the financial statements on a historical cost basis, its net book value as of 31 December 2018 and 2017 would have been as follows:
244
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018 Land
2017
3,992
2018
4,088
2017
3,978
4,074
Assumptions used in the valuation are summarised below. Result to fair value Consolidated
Separate
where as an increase
financial statements
financial statements
in assumption value
Price per square wah (Baht)
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 years ended 31 December 2018 and 2017 are summarised below. (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018 Balance - beginning of the year Transfer out during the year Balance - end of the year
2017
1,544 (51) 1,493
2018
1,601 (57) 1,544
2017
1,541 (51) 1,490
1,598 (57) 1,541
Surplus on revaluation of assets can neither be offset against deficit nor used for dividend distribution.
245
THANACHART BANK PUBLIC COMPANY LIMITED
16.
Goodwill and Intangible assets (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2018 Membership fees for
Goodwill
Intangible
Thailand
Computer
assets from
Futures
software
business
Computer
Exchange
under
combination
software
and others
development
Total
Cost 1 January 2018
17,951
4,100
3,061
8
174
25,294
Additions
-
-
87
-
180
267
Transfers/disposals
-
-
159
-
(159)
31 December 2018
17,951
4,100
3,307
8
195
25,561
1 January 2018
-
3,423
1,630
8
-
5,061
Amortisation for the year
-
315
364
-
-
679
31 December 2018
-
3,738
1,994
8
-
5,740
1 January 2018
-
-
30
-
-
30
31 December 2018
-
-
30
-
-
30
17,951
362
1,283
-
195
19,791
-
1.25
0 - 9.99
-
-
-
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2018 Remaining amortisation period (years)
Amortisation expenses for the years ended 31 December
246
2017
707
2018
679
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2017 Membership fees for
Goodwill
Intangible
Thailand
Computer
assets from
Futures
software
business
Computer
Exchange
under
combination
software
and others
development
Total
Cost 1 January 2017
17,951
4,100
2,801
8
176
25,036
Additions
-
-
116
-
145
261
Transfers/disposals
-
-
144
-
(147)
31 December 2017
17,951
4,100
3,061
8
174
25,294
1 January 2017
-
3,040
1,310
7
-
4,357
Transfers/disposals
-
-
-
-
Amortisation for the year
-
383
323
1
-
707
31 December 2017
-
3,423
1,630
8
-
5,061
1 January 2017
-
-
30
-
-
30
31 December 2017
-
-
30
-
-
30
17,951
677
1,401
-
174
20,203
(3)
Accumulated amortisation
(3)
(3)
Allowance for impairment
Net book value 31 December 2017
247
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2018 Intangible assets from
Goodwill
Computer
business
Computer
software under
combination
software
development
Total
Cost 1 January 2018
17,941
3,613
2,753
158
24,465
Additions
-
-
73
147
220
Transfers/disposals
-
-
132
(132)
31 December 2018
17,941
3,613
2,958
173
24,685
1 January 2018
-
2,936
1,430
-
4,366
Amortisation for the year
-
315
337
-
652
31 December 2018
-
3,251
1,767
-
5,018
1 January 2018
-
-
30
-
30
31 December 2018
-
-
30
-
30
17,941
362
1,161
173
19,637
-
1.25
0 - 9.95
-
-
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2018 Remaining amortisation period (years)
Amortisation expenses for the years ended 31 December 2017
685
2018
652
248
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2017 Intangible assets from
Goodwill
Computer
business
Computer
software under
combination
software
development
Total
Cost 1 January 2017
17,941
3,613
2,515
176
24,245
Additions
-
-
95
125
220
Transfers/disposals
-
-
143
(143)
31 December 2017
17,941
3,613
2,753
158
24,465
1 January 2017
-
2,553
1,128
-
3,681
Amortisation for the year
-
383
302
-
685
31 December 2017
-
2,936
1,430
-
4,366
1 January 2017
-
-
30
-
30
31 December 2017
-
-
30
-
30
17,941
677
1,293
158
20,069
-
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2017
As at 31 December 2018 and 2017, 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 544 million and Baht 338 million, respectively (separate financial statements: Baht 440 million and Baht 268 million, respectively). 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 has 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
4 11
249
THANACHART BANK PUBLIC COMPANY LIMITED
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. 17.
Deferred tax assets/ liabilities and income tax
17.1
Deferred tax assets/ liabilities As at 31 December 2018 and 2017, deferred tax assets and liabilities are as follows: (Unit: Million Baht) Separate financial statements
Consolidated financial statements 2018 Deferred tax assets Deferred tax liabilities
2017 768
2018 713
2017 -
-
(1,320)
(1,056)
(1,184)
(939)
(552)
(343)
(1,184)
(939)
Net
The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2018
2017
Deferred tax assets Non-accrued interest income
71
67
1,069
1,225
Employee benefits
540
534
Provisions
229
188
68
82
Fees income received in advance
351
363
Late payment fee income
171
175
Insurance contract liabilities
296
295
Others
491
341
3,286
3,270
Assets transferred as a result of business combination
(1,087)
(1,108)
Deferred commission fee and direct expenses charged on hire purchase
(2,088)
(1,685)
(72)
(135)
(591)
(685)
(3,838)
(3,613)
(552)
(343)
Allowance for doubtful accounts - general provision/other assets
Accrued expenses
Deferred tax assets Deferred tax liabilities
Intangible assets Others Deferred tax liabilities Net
250
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements 2018
2017
Deferred tax assets Non-accrued interest income
71
67
Allowance for doubtful accounts - general provision/other assets
584
787
Employee benefits
488
486
Provisions
229
188
53
65
Fees income received in advance
351
363
Late payment fee income
171
175
Others
334
173
2,281
2,304
(1,087)
(1,108)
(1,966)
(1,583)
(72)
(135)
(340)
(417)
Deferred tax liabilities
(3,465)
(3,243)
Net
(1,184)
(939)
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 Intangible assets Others
17.2 Income tax Income tax expenses for the years ended 31 December 2018 and 2017 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Current income tax: Corporate income tax charge
2,032
864
985
-
10
4
-
-
473
64
471
11
2,515
932
1,456
11
Adjustment in respect of income tax from previous year Deferred tax: Relating to origination and reversal of temporary differences Income tax expense reported in statements of comprehensive income
251
THANACHART BANK PUBLIC COMPANY LIMITED
The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2018 and 2017 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Deferred tax relating to gains (losses) on changes in value of available-for-sale investments
(265)
238
(227)
175
Deferred tax relating to actuarial gains (losses) on defined benefit plan
(1)
(47)
-
-
7
-
(46)
Deferred tax relating to share of other comprehensive income of the associated company
(266)
198
-
(227)
129
Reconciliations between income tax expenses and the product of accounting profit multiplied by the applicable tax rates for the years ended 31 December 2018 and 2017 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
Accounting profit before tax Applicable tax rate
2017
2018
2017
17,973
15,301
15,366
13,147
20%
20%
20%
20%
3,595
3,060
3,073
2,629
10
4
-
-
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
(1,090)
(2,132)
(1,617)
(2,618)
Income tax expenses reported in statements of comprehensive income
252
ANNUAL REPORT 2018
2,515
932
1,456
11
18.
Other assets (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018 Accrued premium insurance income
2018
2017
470
275
-
-
1,700
1,397
1,210
981
Accrued interest and dividend income receivables
394
651
1,012
626
VAT refundable
962
690
670
521
91
107
91
107
Other receivables - VAT paid in advance for customers
251
248
193
197
Deposits
248
246
254
249
Estimated insurance claims recoveries
259
248
-
-
64
343
-
-
Prepaid expenses
475
438
114
137
Deposits from derivative contracts
337
525
337
525
Reinsurance assets
707
405
-
-
Others
2,352
2,058
1,977
1,719
Total
8,310
7,631
5,858
5,062
Other receivables
Prepaid leasehold rights
Receivable from clearing house
Less: Allowance for impairment Other assets - net
19.
2017
(417)
(390) 7,241
7,893
(344)
(323)
5,514
4,739
Deposits
19.1 Classified by type of deposits (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Current
12,770
11,961
12,853
12,039
Saving
352,170
295,567
353,303
296,481
85,460
142,505
85,460
142,505
- Less than 6 months
44,024
36,529
44,170
36,965
- 6 months and up to 1 year
41,832
63,772
42,235
63,852
215,904
165,944
215,924
165,965
752,160
716,278
753,945
717,807
Certificates of deposit Fixed deposits
- Over 1 year Total deposits
253
THANACHART BANK PUBLIC COMPANY LIMITED
19.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2018 Domestic Baht
2017
Foreign
Total
Domestic
Foreign
Total
751,528
1
751,529
714,538
1
714,539
US Dollar
490
29
519
1,523
31
1,554
Other currencies
109
3
112
182
3
185
752,127
33
752,160
716,243
35
716,278
Total
(Unit: Million Baht) Separate financial statements 2018 Domestic Baht
Foreign
Total
Domestic
Foreign
Total
753,313
1
753,314
716,067
1
716,068
US Dollar
490
29
519
1,523
31
1,554
Other currencies
109
3
112
182
3
185
753,912
33
753,945
717,772
35
717,807
Total
20.
2017
Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2018 At call
2017
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
413
-
413
418
372
790
3,520
12,310
15,830
1,929
21,596
23,525
32
7,440
7,472
47
12,525
12,572
Other financial institutions
17,802
15,322
33,124
15,472
12,077
27,549
Total domestic items
21,767
35,072
56,839
17,866
46,570
64,436
177
13,921
14,098
274
15,263
15,537
Euro
1
-
1
1
-
1
Baht
485
532
1,017
2,221
229
2,450
Total foreign items
663
14,453
15,116
2,496
15,492
17,988
22,430
49,525
71,955
20,362
62,062
82,424
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
254
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements 2018 At call
2017
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
413
-
413
418
372
790
322
-
322
203
10,850
11,053
32
6,740
6,772
47
12,025
12,072
Other financial institutions
17,911
15,430
33,341
15,638
12,268
27,906
Total domestic items
18,678
22,170
40,848
16,306
35,515
51,821
177
13,921
14,098
274
15,263
15,537
Euro
1
-
1
1
-
1
Baht
485
532
1,017
2,221
229
2,450
Total foreign items
663
14,453
15,116
2,496
15,492
17,988
19,341
36,623
55,964
18,802
51,007
69,809
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
As at 31 December 2018, interbank and money market items in the consolidated financial statements included loans of a subsidiary company of Baht 2,690 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 (2017: included loans of a subsidiary company amounting to Baht 2,550 million).
255
THANACHART BANK PUBLIC COMPANY LIMITED
256
ANNUAL REPORT 2018
Promissory notes
Promissory notes
14
15
16
Total debt issued and borrowings
Unsubordinated debentures
Structured notes
13
Year 2018
Unsubordinated debentures
10 Year 2018
Year 2018
Unsubordinated debentures
9
Year 2018
Year 2017 Year 2017
Unsubordinated debentures
8
Unsubordinated debentures
Year 2017
Unsubordinated debentures
7
Unsubordinated debentures
Year 2016
Unsubordinated debentures
6
11
Year 2016
Unsubordinated debentures
5
12
Year 2014 Year 2015
Unsubordinated debentures
Unsubordinated debentures
Year 2015
Year 2014
3
Tier II
Subordinated instruments issued under
Tier II
Subordinated instruments issued under
period
4
2
1
Type of borrowings
Issue
Year 2019 - 2021
At call
Year 2019
Year 2020
Year 2021
Year 2021
Year 2020
Year 2020
Year 2020
Year 2019
Year 2019
Year 2019
Year 2018
Year 2018
Year 2025
Year 2024
maturity
Year of
2.90, 3.30
0.20 - 2.50
2.80
2.30, 2.50
2.31, 2.70
2.28 - 2.80
2.58
2.39 - 2.88
2.52
2.95, 3.00
2.70, 2.88
3.00, 3.10
4.75
4.65
6.00
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
(Baht)
(Percent per annum)
per unit
Interest rate
Face value
140
1,110
1,970
3,865
70
10,060
2,000
1,735
1,700
-
-
7,000
13,000
units)
(Thousand
2018
-
-
-
-
70
10,060
2,000
1,735
1,700
1,100
2,000
7,000
13,000
units)
(Thousand
2017
Issuance unit
239 39,308
43,079
392
393
-
-
-
-
70
9,979
2,000
1,735
1,400
1,100
2,000
7,000
13,000
289
334
276
140
1,110
1,970
3,815
70
10,010
2,000
1,735
1,400
-
-
7,000
12,930
2017
financial statements
Consolidated
2018
As at 31 December 2018 and 2017, the balance of domestic debt issued and borrowings, stated in Baht, are as follows:
Debt issued and borrowings
Instrument
21.
20,005
-
5
-
-
-
-
-
-
-
-
-
-
-
-
7,000
13,000
2018
20,005
-
5
-
-
-
-
-
-
-
-
-
-
-
-
7,000
13,000
2017
financial statements
Separate
(Unit: Million Baht)
Instruments 1) and 2) are name-registered, Tier II capital, subordinated, unsecured instruments with no instrument holder’s representative, paying interest quarterly. 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 Bank has a call option to early redeem these instruments at par if the conditions specified are met. Instruments 3) are name-registered, unsubordinated, unsecured debentures with debenture holders’ representative, paying interest quarterly. The subsidiary has to comply with the terms and conditions as specified in the loan agreement, such as maintenance of a debt to equity ratio. Instruments 4) - 5) and 7) - 8) and 10) - 11) are name-registered, unsubordinated, unsecured debentures with no debenture holders’ representative, paying interest semi-annually. 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. Instruments 6) and 9) and 12) - 13) are name-registered, unsubordinated, unsecured debentures with no debenture holders’ representative, paying interest quarterly. The subsidiary has to comply with the terms and conditions specified in the loan agreement, such as maintenance of a debt to equity ratio. 22.
Provisions (Unit: Million Baht) Consolidated financial statements 2018 Obligations from
Balance as at 1 January 2018
Loss from
Employee
off-balance
litigation
benefits
items
361
2,699
Others
167
411
-
-
Total 3,638
Employee benefits for staff transferred to related companies
-
(1)
(1)
Increase during the year
272
189
4
689
Utilised
(27)
(142)
(13)
(335)
(517)
(7)
(13)
(24)
(355)
(399)
134
410
Reversal of provisions Balance as at 31 December 2018
599
2,732
1,154
3,875
257
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2017 Obligations from
Balance as at 1 January 2017 Increase during the year Utilised Reversal of provisions Balance as at 31 December 2017
Loss from
Employee
off-balance
litigation
benefits
items
365
2,423
434
357
3,579
40
833
30
1,433
2,336
(36)
(557)
(7)
(247)
(847)
(290)
(1,132)
(1,430)
(8) 361
2,699
Others
167
411
Total
3,638
(Unit: Million Baht) Separate financial statements 2018 Obligations from
Balance as at 1 January 2018
Loss from
Employee
off-balance
litigation
benefits
items
361
2,430
Others
Total
167
411
-
-
3,369
Employee benefits for staff transferred to related companies
-
(2)
(2)
Increase during the year
272
156
4
689
Utilised
(27)
(132)
(13)
(335)
(507)
(7)
(13)
(24)
(355)
(399)
134
410
Reversal of provisions Balance as at 31 December 2018
599
2,439
1,121
3,582
(Unit: Million Baht) Separate financial statements 2017 Obligations from
Balance as at 1 January 2017
Loss from
Employee
off-balance
litigation
benefits
items
365
2,185
434
357
3,341
-
1
-
-
1
40
797
30
1,433
2,300
(36)
(553)
(7)
(247)
(843)
(290)
(1,132)
(1,430)
Others
Total
Employee benefits for staff transferred from subsidiary Increase during the year Utilised Reversal of provisions Balance as at 31 December 2017
258
ANNUAL REPORT 2018
(8) 361
2,430
167
411
3,369
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
2018
2017
2018
2017
Defined benefit obligation at the beginning of the year
2,337
2,152
2,068
1,914
Employee benefits for staff transferred to/from related companies
(1)
-
(2)
1
Included in profit or loss: Current service cost Interest cost
165
145
140
122
75
72
66
64
Past service cost and gains or losses arising from the payment of benefits
(55)
(198)
(48)
(195)
- Demographic assumptions changes
(2)
95
(5)
98
- Financial assumptions changes
(7)
95
(4)
83
- Experience adjustments
13
46
7
47
(45)
(66)
Included in other comprehensive income: Actuarial (gain) loss arising from
Benefits paid
(55)
Defined benefit obligation at the end of the year
(70)
2,470
2,337
2,177
2,068
As at 31 December 2018 and 2017, the Bank and its subsidiaries expect to pay Baht 60 million and Baht 55 million, respectively, in long-term employee benefits during the next one year (separate financial statements: Baht 51 million and Baht 45 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
2018
2017
2018
2017
Discount rate
2.66 - 3.35
2.71 - 3.13
3.13
3.11
Future salary increase rate
5.00 - 5.36
5.00 - 5.98
5.00
5.00
Average staff turnover rate
0.00 - 50.00
0.00 - 42.86
0.00 - 25.39
0.00 - 26.10
(depending on age)
259
THANACHART BANK PUBLIC COMPANY LIMITED
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 2018 and 2017 are summarised below: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
Decrease 0.25%
63
62
56
55
Future salary increase rate
Increase 0.25%
61
60
54
53
Average staff turnover rate
Decrease 0.25%
56
55
49
49
Change
Discount rate
(depending on age)
As at 31 December 2018 and 2017, the weighted average durations of the liabilities for long-term employee benefit obligation of the Bank and its subsidiaries are 11, 14, 16 and 22 years and 11, 14, 16 and 20 years, respectively (separate financial statements: 16 years and 16 years, respectively). On 13 December 2018, the National Legislative Assembly passed a resolution approving the draft of a new Labour Protection Act, which is in the process being published in the Royal Gazette. The new Labour Protection Act stipulates additional legal severance pay rates for employees who have worked for an uninterrupted period of twenty years or more. Such employees are entitled to receive compensation at a rate of not less than that of the last 400 days. This change is considered a postemployment benefits plan amendment and the Bank and its subsidiaries have additional liabilities for long-term employee benefits of Baht 729 million (separate financial statements: Baht 654 million). The Bank and its subsidiaries will reflect the effect of the change by recognising past services costs as expenses in the income statement of the period in which the law is effective. 23.
Insurance contract liabilities (Unit: Million Baht) Consolidated financial statements 2018
2017
Insurance
Insurance
contract
Reinsurance
liabilities
assets
Net
contract
Reinsurance
liabilities
assets
Net
Loss reserves and outstanding claims
260
1,590
(153)
1,437
1,684
(132)
1,552
Premium reserves
4,139
(554)
3,585
3,791
(273)
3,518
Total
5,729
(707)
5,022
5,475
(405)
5,070
ANNUAL REPORT 2018
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. (Unit: Million Baht) Consolidated financial statements 2018 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%
170
157
(157)
(126)
Ultimate loss ratio
- 2%
(169)
(156)
156
125
Loss adjustment expenses
+ 2%
12
12
(12)
(10)
Loss adjustment expenses
- 2%
(12)
(12)
12
10
(Unit: Million Baht) Consolidated financial statements 2017 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%
161
157
(157)
(126)
Ultimate loss ratio
- 2%
(158)
(154)
154
123
Loss adjustment expenses
+ 2%
13
13
(13)
(10)
Loss adjustment expenses
- 2%
(13)
(13)
13
10
261
THANACHART BANK PUBLIC COMPANY LIMITED
23.1 Loss reserve and outstanding claims (Unit: Million Baht) Consolidated financial statements 2018
2017
Balance - beginning of the year
1,684
1,558
Claims expenses for the year
4,192
3,862
280
152
Change in loss reserve and outstanding in claim and assumption Claims expenses paid during the year Balance - end of the year
(4,566)
(3,888)
1,590
1,684
23.2 Unearned premium reserve (Unit: Million Baht) Consolidated financial statements 2018
2017
Balance - beginning of the year
3,791
3,379
Premium written for the year
7,987
7,506
(7,639)
(7,094)
4,139
3,791
Premium earned for the current year Balance - end of the year
23.3 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. 24.
Other liabilities (Unit: Million Baht) Consolidated financial statements 2018
2018
2017
Other payables
2,067
1,837
1,715
1,611
Suspense cash received from account receivables
2,044
1,959
1,912
1,857
Insurance premium payable
402
303
221
261
Income received in advance
1,759
1,830
1,731
1,795
989
390
557
-
Corporate income tax payable Others Total other liabilities
262
2017
Separate financial statements
ANNUAL REPORT 2018
4,085
3,964
837
836
11,346
10,283
6,973
6,360
25.
Other components of equity (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Surplus from business combination under common control Surplus on revaluation of assets Less: The effect of deferred tax liabilities Net surplus on revaluation of assets
(123) 1,493
(123) 1,544
(299)
(309)
-
-
1,490
1,540
(298)
(308)
1,194
1,235
1,192
1,232
82
603
84
576
762
871
133
174
844
1,474
217
750
Revaluation surplus (deficit) on investments Revaluation surplus on investments Available-for-sale investments Debt instruments Equity instruments Total Revaluation deficit on investments Available-for-sale investments Debt instruments
(597)
(112)
(587)
(109)
Equity instruments
(516)
(303)
(306)
(180)
(1,113)
(415)
(893)
(289)
(676)
461
Total Total revaluation surplus (deficit) on investments Add (less): The effect of deferred tax liabilities Net revaluation surplus (deficit) on investments
(269)
1,059
69
(197)
135
(92)
(200)
862
(541)
369
593
590
-
-
(59)
(59)
-
-
534
531
-
-
40
41
-
-
(4)
(4)
-
-
36
37
-
-
1,441
2,542
651
1,601
Share of other comprehensive income of the associate Less: The effect of deferred tax liabilities Net share of other comprehensive income of the associate Share of surplus from the change in the ownership interests in subsidiaries of the associate Less: The effect of deferred tax liabilities Net share of surplus from the change in the ownership interests in subsidiaries of the associate Total
263
THANACHART BANK PUBLIC COMPANY LIMITED
26.
Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Bank is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. On 23 August 2018, the Board of Directors of the Bank passed a resolution to allocate amounting Baht 345 million of net income to statutory reserve, and on 31 December 2018, the Bank additional allocated Baht 351 million of net income for the year 2018 to the statutory reserve, a total of Baht 696 million (2017: Baht 657 million).
27.
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 2018 and 2017, 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) 2018
2017
Tier I capital Common Equity Tier I capital Issued and fully paid-up share capital
60,649
60,649
Share premium
2,101
2,101
Statutory reserve
4,603
3,936
56,092
49,600
1,141
1,164
Retained earnings - unappropriated Other components of equity - Revaluation surplus on land - net Other components of equity - Revaluation deficit on investments in equity securities - net
(139)
(5)
Other components of equity - Revaluation surplus (deficit) on investments in debt securities - net
Less: goodwill Less: intangible assets
264
(402)
299
124,045
117,744
(17,941)
(17,941)
(1,623)
(1,594)
Total Common Equity Tier I capital
104,481
98,209
Total Tier I capital
104,481
98,209
ANNUAL REPORT 2018
(Unit: Million Baht) 2018
2017
Tier II capital Reserve for assets classified as normal Subordinated debentures
7,448
7,318
20,000
20,000
27,448
27,318
Less: Cross holding of financial instruments included in tier II capital between commercial bank and the company operating financial business or supporting business
(70)
-
Total Tier II capital
27,378
27,318
Total capital funds
131,859
125,527
On 23 August 2018, the Board of Directors of the Bank passed a resolution to allocate amounting Baht 345 million of net income for the six-month period ended 30 June 2018 to statutory reserve. The remaining net income of Baht 3,465 million was allocated as capital funds of the Bank. As at 31 December 2018 and 2017, 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: 2018
2017 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)
19.45
10.375
18.94
9.75
Total Common Equity Tier I to risk-weighted
15.42
6.375
14.81
5.75
15.42
7.875
14.81
7.25
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 2018 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 2019. In addition, the Bank will disclose the maintaining Liquidity Coverage Ratio as at 31 December 2018 in accordance with the Notification of the Bank of Thailand No. Sor Nor Sor. 2/2018, dated 25 January 2018, Re: Public Disclosure of Liquidity Coverage Ratio on its website at www.thanachartbank.co.th, within April 2019.
265
THANACHART BANK PUBLIC COMPANY LIMITED
28.
Dividends During the years ended 31 December 2018 and 2017, the Bank has dividends payments as follows: Dividends
Interim dividends on net income for the first half of the year 2018 Dividends on net income for the year 2017
Approved by
Dividends paid
Dividend per share
Million Baht
Baht
The Board of Directors of the Bank on 23 August 2018
the first half of the year 2017 Dividends on net income for the year 2016
Shareholders on 25 April 2018
3,154
0.52
6,247 The Board of Directors of the Bank on 17 August 2017
2,426
0.40
2,426
0.40
Annual General Meeting of the Shareholders on 5 April 2017
Total
29.
0.51
Annual General Meeting of the
Total Interim dividends on net income for
3,093
4,852
Interest income Interest income for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht)
Interbank and money market items
Separate
financial statements
financial statements
2018
2018
2017
2017
1,743
1,365
1,739
1,378
108
25
108
26
2,631
3,143
2,509
3,031
Loans to customers
17,551
17,759
17,245
17,425
Hire purchase and financial lease
24,255
22,074
21,204
19,422
Total interest income
46,288
44,366
42,805
41,282
Investments and trading transactions Investments in debt securities
266
Consolidated
ANNUAL REPORT 2018
30.
Interest expenses Interest expenses for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht)
Deposits Interbank and money market items
Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
9,071
8,699
9,085
8,710
997
792
768
593
3,482
3,348
3,482
3,348
-
369
-
369
571
617
-
18
1,104
1,106
1,105
1,106
15
18
-
-
10
7
-
-
15,250
14,956
14,440
14,144
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
31.
Fees and service income Fees and service income for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Fees and service income Acceptance, aval and guarantees
200
202
200
202
1,251
1,323
-
-
893
886
893
886
Hire purchase fee income
1,603
1,547
1,449
1,396
Insurance brokerage fee income
2,030
1,851
2,481
2,107
Management fees
1,463
1,024
-
-
Credit card fee
1,187
1,065
1,188
1,066
Others
1,588
1,202
1,615
1,215
Total fees and service income
10,215
9,100
7,826
6,872
Fees and service expenses
(3,588)
(3,203)
(3,361)
(2,929)
Net fees and service income
6,627
5,897
4,465
3,943
Brokerage fee from securities/derivatives ATM and electronic banking services
267
THANACHART BANK PUBLIC COMPANY LIMITED
32.
Gains on trading and foreign exchange transactions Gains (losses) on trading and foreign exchange transactions for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2018
2017
Separate financial statements 2018
2017
Foreign exchange and derivatives contract relating to foreign exchange
352
277
352
277
Derivatives contract relating to interest rate
(12)
64
(12)
64
Debt securities
(72)
94
(72)
94
(520)
(51)
-
-
Others
609
164
-
-
Total
357
548
268
435
Equity securities
33.
Gains (losses) on investments Gains (losses) on investments for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2018
2017
Separate financial statements 2018
2017
Gains (losses) on disposal Available-for-sale securities General investments Investments in the associated company
(125)
823
(166)
768
-
23
-
23
16
202
15
177
2
65
2
65
22
-
22
-
Reversal of losses on impairment General investments General on capital refund General investments Total
34.
(85)
1,113
(127)
1,033
Insurance premium income Insurance premium income for the years ended 31 December 2018 and 2017 consisted of the following:
268
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2018 Gross premium written
7,899
7,483 (459)
(969)
Less: Premium ceded to reinsurers Net insurance premium income
6,930
Less: Unearned premium reserve increase from prior year
7,024
(67)
(181) 6,843
6,863
Total
35.
2017
Insurance expenses Insurance expenses for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2018 Gross claim and loss adjustment expenses
4,103
3,658
Less: Claims recovery from reinsurers
(398)
(56)
Commissions and brokerage expenses
244
219
(281)
(132)
257
226
3,925
3,915
Less: Refundable commission and brokerage expenses from reinsurers Other underwriting expenses Total
36.
2017
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 30 million (separate financial statements: Baht 24 million) to the Bank’s and its subsidiaries’ directors, which were approved by the Annual General Meeting of Shareholders of the Bank and its subsidiaries.
37.
Impairment losses of loans and debt securities Impairment losses of loans and debt securities for the years ended 31 December 2018 and 2017 consisted of the following:
269
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2018
Separate financial statements
2017
2018
2017
Impairment losses of loans Loans to customers
4,825
Interbank and money market items
6,223
(84)
4,561
22
5,912
(96)
24
Amortisation of revaluation allowance for debts -
6,244
4,741
Total
38.
(1)
-
restructured during the year
(1)
4,465
5,935
Components of other comprehensive income Components of other comprehensive income for the years ended 31 December 2018 and 2017 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Other comprehensive income Transactions that will be reclassified subsequently to profit or loss Available-for-sale investments: Unrealised gains (losses) during the year
(1,453)
1,987
(1,303)
1,642
Less: Reclassification of adjustment for the realised gains that included in profit or loss
125 (1,328)
Share of other comprehensive income of the associate Other comprehensive income for the year (loss)
4 (1,324)
(823)
166
(768)
1,164
(1,137)
874
76
-
-
1,240
(1,137)
874
Impact from related income tax Income tax - (gains) losses on changes in value of available-forsale investments Income tax - share of other comprehensive income of the associate Impact from related income tax
265
(238)
227
-
(7)
-
265
(245)
227
(175)
995
(910)
699
(1,059)
(175) -
Transactions that will never be reclassified subsequently to profit or loss Actuarial gains (losses) on defined benefit plan
(4)
(236)
2
(228)
Other comprehensive income for the year (loss)
(4)
(236)
2
(228)
Income tax - actuarial (gains) losses on defined benefit plan
1
47
-
46
Impact from related income tax
1
47
-
46
(3)
(189)
2
(182)
Other comprehensive income for the year - net of related income tax (losses)
270
ANNUAL REPORT 2018
(1,062)
806
(908)
517
39.
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)
40.
Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
14,703
13,810
13,911
13,135
2.42
2.28
2.29
2.17
6,065
6,065
6,065
6,065
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 2 - 15 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 2018, the Bank and its subsidiaries contributed Baht 420 million to the fund (separate financial statements: Baht 360 million) (2017: Baht 417 million in the consolidated financial statements and Baht 359 million in the separate financial statements).
41.
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.
271
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2018
2018
2017
Transfer pricing policy (For the year 2018)
2017
Transactions occurred during the years Parent company Purchase of debt securities Sales of debt securities Income on supporting service
1,286
266
1,286
266
At market price
743
697
743
697
At market price
6
6
6
6
At the rate agreed under the service contract
Other income
2
2
-
-
Interest expenses
6
-
6
-
At interest rate of 0.40 - 1.25 percent per annum
Rental expenses
6
5
5
5
At the rate agreed under the rental contract
Other expenses
38
39
38
39
3,183
2,473
3,183
2,473
As declared
Purchase of debt securities
-
-
3,157
5,376
At market price
Sales of debt securities
-
-
3,414
6,964
At market price
(Related gain (loss))
-
-
(1)
1
Purchase/sales of forward
-
exchange contracts
-
-
5
8
-
-
245
202
Dividend payment Subsidiary companies
Interest income
At market price At interest rate of 1.70 - 2.40 percent per annum
Dividend income
-
-
2,827
2,485
As declared
Fee and service income
-
-
1,310
1,078
At the rate agreed under the service contract
Income on supporting service
-
-
195
228
At the rate agreed under the service contract
Other income
272
ANNUAL REPORT 2018
-
-
24
35
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2018
2017
2018
2017
-
-
83
89
Transfer pricing policy (For the year 2018)
Transactions occurred during the years (continued) Interest expenses
At interest rate of 0.13 - 1.55 and 1.85 percent per annum
Fee and service expense
-
-
69
-
At the rate agreed under the service contract
Other expenses
-
-
184
171
Dividend income
-
-
43
51
Other income
-
1
-
-
Interest expenses
1
-
1
-
Associated company As declared
At interest rate of 0.40 and 1.25 percent per annum
Rental expenses
88
106
59
77
At the rate agreed under the rental contract
Other expenses
4
10
1
7
Purchase of debt securities
5,876
10,328
5,876
10,328
At market price
Sales of debt securities
5,237
10,871
5,237
10,871
At market price
-
2
-
2
20,310
58,439
20,305
58,431
228
215
228
215
Related parties
(Related gain) Purchase/sales of forward exchange contracts Interest income
At market price At interest rate of 1.30 - 4.95 and 6.08 - 7.65 percent per annum
Dividend income Fee and service income
48
43
24
21
3
3
3
3
As declared At the rate agreed under the service contract
Income on supporting service
5
5
5
5
At the rate agreed under the service contract
Other income Interest expenses
3
6
-
-
350
228
350
228
At interest rate of 0.13 - 2.92 percent per annum
Rental expenses
158
177
81
105
At the rate agreed under the rental contract
Insurance expense
26
4
-
-
At the rate agreed under the service contract
Other expense Dividend payment
42
47
29
31
3,061
2,377
3,061
2,377
As declared
273
THANACHART BANK PUBLIC COMPANY LIMITED
The outstanding balances of the above transactions during the years ended 31 December 2018 and 2017 have been shown at the average balance at the end of each month as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018
2018
2017
2017
Parent company Deposits
526
129
526
129
Interbank and money market items (assets)
-
-
3,069
2,831
Loans to customers
-
-
1,688
1,467
Deposits
-
-
1,612
1,329
Interbank and money market items (liabilities)
-
-
252
305
177
75
177
75
65
213
65
213
Loans to customers
5,757
6,360
5,573
5,941
Deposits
1,953
1,695
1,953
1,695
13,075
13,782
13,075
13,782
443
470
443
470
Subsidiary companies
Associated company Deposits Related companies Interbank and money market items (assets)
Interbank and money market items (liabilities) Debt issued and borrowings
As at 31 December 2018 and 2017, the significant outstanding balances of the above transactions are as follows: (Unit: Million Baht) Consolidated financial statements 2018 Assets
Liabilities
Interbank
Loans to
Interbank
and money
customers and
and money
Debt issued
market
interest
market
and
Other
items
receivables
items
borrowings
liabilities
Other assets
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
3
26
-
-
199
-
-
-
26
327
-
-
2
-
11
5,575
53
1,586
13,054
400
114
1,348
11
5,575
82
1,939
13,054
400
315
1,348
Associated company MBK Plc. Related companies Other related companies
274
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2017 Assets
Liabilities
Loans to Interbank
customers
Interbank and money
Debt issued
market
and
Other
items
borrowings
liabilities
and money
Investments
and
market
- debt
interest
Other
items
securities
receivables
assets
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
-
1
24
-
-
-
-
-
-
-
26
56
-
-
2
-
301
591
5,838
41
1,674
13,220
470
94
698
301
591
5,838
68
1,754
13,220
470
96
698
Associated company MBK Plc. Related companies Other related companies
(Unit: Million Baht) Separate financial statements 2018 Assets
Liabilities
Interbank
Loans to
Interbank
and money
customers
and money
Debt issued
market
and interest
market
and
Other
items
receivables
items
borrowings
liabilities
Other assets
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
3
26
-
-
199
-
-
-
-
405
-
-
1
-
Thanachart Securities Plc.
1,450
-
649
-
192
-
4
30
Thanachart Insurance Plc.
-
-
56
132
-
70
126
50
Thanachart Broker Co., Ltd.
-
-
4
213
-
-
-
-
TS Asset Management Co., Ltd.
-
-
-
896
-
-
1
-
Ratchthani Leasing Plc.
-
1,030
-
120
-
-
-
30
Other subsidiary companies
-
-
79
34
33
-
29
-
-
-
18
327
-
-
1
-
11
5,575
19
1,586
13,054
400
59
1,348
1,461
6,605
828
3,739
13,279
470
420
1,458
Subsidiary companies Thanachart Group Leasing Co., Ltd.
Associated company MBK Plc. Related companies Other related companies
275
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017 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
24
-
-
-
-
-
-
-
-
335
-
-
1
-
Thanachart Securities Plc.
2,720
-
-
9
-
311
-
4
500
Thanachart Insurance Plc.
-
-
-
96
155
-
-
138
50
Thanachart Broker Co., Ltd.
-
-
-
17
216
-
-
-
-
Subsidiary companies Thanachart Group Leasing Co., Ltd.
TS Asset Management -
-
-
-
586
-
-
1
-
Ratchthani Leasing Plc.
Co., Ltd.
-
31
1,570
-
134
-
-
-
30
Other subsidiary companies
-
-
-
82
118
54
-
10
-
-
-
-
18
56
-
-
1
-
301
591
5,497
20
1,674
13,220
470
66
698
3,021
622
7,067
243
3,298
13,585
470
221
1,278
Associated company MBK Plc. Related companies Other related companies
As at 31 December 2018, the Bank has loans to Ratchthani Leasing Plc. amounting to Baht 1,030 million, carrying interest at rate of 2.10 percent per annum (2017: loans to Ratchthani Leasing Plc. amounting to Baht 1,570 million at interest rates of 1.85 percent per annum). As at 31 December 2018, the Bank and its subsidiaries have investments amounting to approximately Baht 871 million (Baht 361 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 (2017: Baht 947 million in the consolidated financial statements, and Baht 383 million in the separate financial statements). As at 31 December 2018 and 2017, 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 financial statements 2018 Loans to customers Deposits
276
ANNUAL REPORT 2018
2017
Separate financial statements 2018
2017
103
88
96
79
1,204
1,527
1,204
1,527
Directors and management’s remuneration During the years 2018 and 2017, the Bank and its subsidiaries paid the following benefits to their key management personnel, including directors, totaled 113 persons and 121 persons, respectively (the separate financial statements: 43 persons and 46 persons, respectively): (Unit: Million Baht) Separate financial statements
Consolidated financial statements 2018 Short-term employee benefits Post-employment benefits
42.
2017
2018
2017
645
656
338
342
14
16
7
8
659
672
345
350
Financial information classified by operating segment
42.1 Financial position and results of operations classified by business activity The financial position as at 31 December 2018 and 2017, and the operating results for the years then ended, classified by domestic and foreign operations, are as follows: (Unit: Million Baht) Consolidated financial statements 2018 Domestic
Foreign
operations
operations
1,046,370
28,079
(27,837)
1,046,612
Interbank and money market items (assets)
111,337
14,068
(27,837)
97,568
Investments
147,132
13,946
-
161,078
2,437
-
-
2,437
Loans to customers and accrued interest receivables
730,491
-
-
730,491
Deposits
752,160
-
-
752,160
Interbank and money market items (liabilities)
71,955
27,837
Debt issued and borrowings
43,079
-
Total assets
Investment in the associated company
Eliminations
(27,837) -
Total
71,955 43,079
(Unit: Million Baht) Consolidated financial statements 2017 Domestic
Foreign
operations
operations
1,009,241
23,728
(23,412)
1,009,557
Interbank and money market items (assets)
103,179
14,884
(23,412)
94,651
Investments
158,577
8,791
-
167,368
2,258
-
-
2,258
Loans to customers and accrued interest receivables
688,230
-
-
688,230
Deposits
716,278
-
-
716,278
Interbank and money market items (liabilities)
82,424
23,412
Debt issued and borrowings
39,308
-
Total assets
Investment in the associated company
Eliminations
(23,412) -
Total
82,424 39,308
277
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2018
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
46,179
785
(676)
46,288
(15,250)
(676)
676
(15,250)
30,929
109
-
31,038
Net fees and service income
6,627
-
-
6,627
Net insurance income
2,938
-
-
2,938
Other operating income
2,636
-
-
2,636
(20,525)
-
-
(20,525)
Impairment losses of loans and debt securities
(4,741)
-
-
(4,741)
Profit before income tax
17,864
109
-
17,973
Income tax
(2,515)
-
-
(2,515)
Profit before non-controlling interests
15,349
109
-
15,458
Interest expenses Net interest income
Other operating expenses
(Unit: Million Baht) Consolidated financial statements 2017
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
44,295
368
(297)
44,366
(14,956)
(297)
297
(14,956)
29,339
71
-
29,410
Net fees and service income
5,897
-
-
5,897
Net insurance income
2,928
-
-
2,928
Other operating income
3,773
-
3,747
Interest expenses Net interest income
Other operating expenses
(26)
(20,437)
-
-
(20,437)
Impairment losses of loans and debt securities
(6,244)
-
-
(6,244)
Profit before income tax
15,256
45
-
15,301
-
-
45
-
Income tax Profit before non-controlling interests
278
ANNUAL REPORT 2018
(932) 14,324
(932) 14,369
(Unit: Million Baht) Separate financial statements 2018 Domestic
Foreign
operations
operations
Total assets
983,882
Interbank and money market items (assets) Investments
Eliminations
Total
28,079
(27,837)
984,124
109,026
14,068
(27,837)
95,257
138,484
13,946
-
152,430
Investments in subsidiary and associated companies
7,156
-
-
7,156
Loans to customers and accrued interest receivables
680,584
-
-
680,584
Deposits
753,945
-
-
753,945
Interbank and money market items (liabilities)
55,964
27,837
Debt issued and borrowings
20,005
-
(27,837) -
55,964 20,005
(Unit: Million Baht) Separate financial statements 2017 Domestic
Foreign
operations
operations
Total assets
954,144
23,728
(23,412)
954,460
Interbank and money market items (assets)
103,105
14,884
(23,412)
94,577
Investments
148,657
8,791
-
157,448
Investments in subsidiary and associated companies
7,170
-
-
7,170
Loans to customers and accrued interest receivables
646,217
-
-
646,217
Deposits
717,807
-
-
717,807
Interbank and money market items (liabilities)
69,809
23,412
Debt issued and borrowings
20,005
-
Eliminations
(23,412) -
Total
69,809 20,005
279
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2018 Domestic
Foreign
operations
operations
42,696
785
(676)
42,805
(14,440)
(676)
676
(14,440)
28,256
109
-
28,365
Net fees and service income
4,465
-
-
4,465
Other operating income
4,786
-
-
4,786
(17,784)
-
-
(17,784)
Impairment losses of loans and debt securities
(4,465)
-
-
(4,465)
Profit before income tax
15,258
109
-
15,367
Income tax
(1,456)
-
-
(1,456)
Profit for the year
13,802
109
-
13,911
Interest income Interest expenses Net interest income
Other operating expenses
Eliminations
Total
(Unit: Million Baht) Separate financial statements 2017 Domestic
Foreign
operations
operations
41,211
368
(297)
41,282
(14,144)
(297)
297
(14,144)
27,067
71
-
27,138
Net fees and service income
3,943
-
-
3,943
Other operating income
5,728
-
5,702
Interest income Interest expenses Net interest income
Other operating expenses
(26)
Eliminations
Total
(17,702)
-
-
(17,702)
Impairment losses of loans and debt securities
(5,935)
-
-
(5,935)
Profit before income tax
13,101
45
-
13,146
-
-
45
-
Income tax Profit for the year
(11) 13,090
(11) 13,135
42.2 Financial positions and results of operations classified by business type Identification of the Bank’s operating segments The Bank’s operating segments are identified in accordance with the Bank’s organisation structure, which is determined based on the Bank’s management policies. The three operating segments identified are as follows:
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ANNUAL REPORT 2018
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 three segments described above 2) the securities and fund management 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:
281
THANACHART BANK PUBLIC COMPANY LIMITED
282
ANNUAL REPORT 2018 314 3,491 (698) 2,793
(4,854) 10,338 (2,067) 8,271
Impairment losses of loans and debt securities
Profit before income tax
Income tax
Profit before non-controlling interest
882
-
3,813
(1,518)
5,056
-
24,451
and SME
(14,315)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Banking business
2,847
1,309
1,538
75
(1,951)
3,313
-
101
and others
Investment
Treasury &
1,247
(300)
1,547
-
(1,224)
2,564
-
207
business
management
and fund
Securities
1,042
(252)
1,294
-
(999)
154
1,934
205
business
insurance
Non-life
77
(46)
123
62
(57)
36
-
82
business
management
Asset
For the year ended 31 December 2018
1,758
(431)
2,189
(391)
(907)
1,146
-
2,341
businesses
Other
(2,577)
(30)
(2,547)
53
446
(3,888)
1,004
(162)
Eliminations
15,458
(2,515)
17,973
(4,741)
(20,525)
9,263
2,938
31,038
Consolidated
(Unit: Million Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
283
2,680 (536) 2,144
8,802 (1,760) 7,042
Profit before income tax
Income tax
Profit before non-controlling interest
3,949
2,285
1,664
(1,322)
(1,514)
4,371
-
129
and others
Investment
Treasury &
1,035
(250)
1,285
-
(1,292)
2,408
-
169
business
management
and fund
Securities
536,719 482,118
As at 31 December 2018
As at 31 December 2017
Assets for segment
Retail
205,354
266,988
269,994
and others
and SME
177,411
Investment
Treasury & Corporate
Banking business
business
business
12,306
13,452
14,494
insurance
management
9,557
Non-life
1,051
(251)
1,302
-
(958)
175
1,899
186
business
and fund
Securities
Non-life insurance
Assets for segment of the Bank and its subsidiaries as at 31 December 2018 and 2017 are as follows:
(802)
(3,811)
Impairment losses of loans and debt securities
665
-
4,302
(1,485)
4,609
-
22,707
and SME
(14,703)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Banking business
2,745
2,573
business
management
Asset
50
(58)
108
2
(68)
26
-
148
business
management
Asset
For the year ended 31 December 2017
40,453
48,496
businesses
Other
1,226
(298)
1,524
(515)
(888)
1,041
-
1,886
businesses
Other
14,369
(932)
15,301
(6,244)
(20,437)
9,644
2,928
29,410
Consolidated
(13,859)
(12,632)
Eliminations
1,009,557
1,046,612
Consolidated
(Unit: Million Baht)
(2,128)
(64)
(2,064)
204
471
(3,651)
1,029
(117)
Eliminations
(Unit: Million Baht)
42.3 Major customers During the years 2018 and 2017, the Bank and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues. 43.
Encumbrance of assets As at 31 December 2018 and 2017, the Bank and its subsidiaries have the assets, which are subject to restriction, presented at book value as follows: (Unit: Million Baht) Consolidated financial statements 2018
2017
Separate financial statements 2018
2017
Interbank and money market items (assets) Guarantee placed with the registrar
750
770
-
-
2
3
-
-
Guarantee placed with the registrar
18
18
-
-
Placed with court for stay of execution
14
30
6
6
18
24
3
19
802
845
9
25
Placed with court for stay of execution Investments in securities
Properties foreclosed Immovable assets subject to purchase or sell agreements with clients but currently being settled in installments or through transfer of ownership
44.
Commitments and contingent liabilities As at 31 December 2018 and 2017, significant commitments and contingent liabilities consisted of:
44.1 Commitments (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2018 Aval to bills
2017
2018
2017
303
115
303
115
2,402
2,291
2,402
2,291
Liability under unmatured import bills
283
270
283
270
Letter of credits
759
1,045
759
1,045
Committed (but not drawn) overdraft
22,341
23,832
22,341
23,832
Others
61,018
55,643
60,994
55,604
87,106
83,196
87,082
83,157
Guarantees of loans
Other obligations
Total
284
ANNUAL REPORT 2018
In addition, the Bank and its subsidiaries have commitments in respect of foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and gold futures contracts, as mentioned in Note 7 to the financial statements. 44.2 As at 31 December 2018, the Bank and its subsidiaries have commitments to pay the service fees in relation to properties foreclosed, computer system services and other services, including commitments in respect of office rental and related service fees under long-term contracts, as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
Other
Parent
Other
Parent
Subsidiary
Year
parties
company
parties
company
companies
2019
1,855
12
1,747
12
69
2020
1,348
6
1,288
5
-
2021 onward
1,361
-
1,127
-
-
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. 44.3 Commitments of SCIB from transfer of business from Bangkok Metropolitan Bank Public Company Limited and transfer of non-performing assets to Sukhumvit Asset Management Company Limited SCIB entered into a business transfer agreement with Bangkok Metropolitan Bank Plc. (“BMB”), effective from 1 April 2002, and transferred its assets and those of BMB to Petchburi Asset Management Co., Ltd. (“PAM”), before they were transferred to Sukhumvit Asset Management Co., Ltd. (“SAM”). Subsequently, SCIB transferred its entire business, including commitments and agreements with PAM and SAM, to Thanachart Bank, effective from 1 October 2011. Thanachart Bank thus has commitments as a result of such transfer. However, the commitments of FIDF to SCIB have been transferred to/assumed by Thanachart Bank as the purchaser of SCIB’s shares from the Financial Institutions Development Fund (“FIDF”). As at 31 December 2018, 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 other assets in the statements of financial position. The remaining relates 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,
285
THANACHART BANK PUBLIC COMPANY LIMITED
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 2018, 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 452 million, as disclosed under contingent liabilities in Note 45 to the financial statements.
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 2018, 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. 45.
Contingent liabilities/Litigation (a)
As at 31 December 2018, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 2,179 million (separate financial statements: Baht 1,963 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 452 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.
286
ANNUAL REPORT 2018
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.
46.
Letter of guarantees As at 31 December 2018, the Bank and its subsidiaries had letter of guarantees issued by banks on behalf of the Bank and its subsidiaries, amounting approximately Baht 29 million, placed for electricity usage of the branches (separate financial statements: Baht 29 million).
47.
Financial instruments Financial instruments are any contracts which give rise to both a financial assets of one enterprise and a financial liability or equity instruments of another enterprise.
47.1 Credit risk Credit risk is the risk that the party to a financial instrument will fail to fulfill an obligation, causing the Bank and its subsidiaries to incur a financial loss. The amount of maximum credit risk exposure is the carrying amount of the financial assets less provision for losses as stated in the statements of financial position and the risk of commitments from avals, guarantees of loans, other guarantees and derivative contracts. In addition, the Bank and its subsidiaries manage credit risk by the means of careful consideration of credit approval process, analysis of risk factors and the ability to service debt of customers, and a credit review process, which examines and reviews the quality of the loan portfolio so as to prevent and provide a remedy for problem loans in the future. 47.2 Market risk Market risk is the risk that changes in interest rates, foreign exchange rates and securities prices may have an effect on the Bank and its subsidiaries’ foreign currency position and investment status. As such, market risk consists of interest rate risk, foreign exchange risk and equity/commodity position risk. a)
Interest rate risk
Interest rate risk is the risk that the value of financial instrument will fluctuate as a result of changes in market interest rates. The Bank and its subsidiaries manage the changes in interest rate risk by means of an appropriate structuring of holdings in assets and liabilities with different repricing dates, taking into account the direction of market interest rates, in order to generate a suitable yield while maintaining risk at acceptable levels. Such management is under the supervision of the Asset and Liabilities Management Committee.
287
THANACHART BANK PUBLIC COMPANY LIMITED
As at 31 December 2018 and 2017, financial assets and liabilities classified by types of interest rate are as follows: (Unit: Million Baht) Consolidated financial statements 2018
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
11,019
11,019
1,184
88,982
7,524
97,690
Derivatives assets
-
-
2,005
2,005
Investments
-
152,343
9,189
161,532
213,035
540,241
222
753,498
Receivables from purchase and sale of securities
-
-
2,742
2,742
Other assets - receivable from clearing house
-
-
64
64
362,047
383,036
7,077
752,160
17,956
52,695
1,304
71,955
Liability payable on demand
-
-
1,163
1,163
Derivatives liabilities
-
-
2,097
2,097
Debt issued and borrowings
4
43,075
-
43,079
Payables from purchase and sale of securities
-
-
1,518
1,518
Other liabilities - payable to clearing house
-
-
795
795
Interbank and money market items
Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
(1)
The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
288
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2017
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
11,453
11,453
995
87,286
6,557
94,838
-
-
2,889
2,889
-
157,860
8,563
166,423
220,379
491,178
118
711,675
Receivables from purchase and sale of securities
-
-
3,127
3,127
Other assets - receivable from clearing house
-
-
343
343
305,123
404,081
7,074
716,278
16,956
63,761
1,707
82,424
Liability payable on demand
-
-
1,989
1,989
Derivatives liabilities
-
-
2,868
2,868
Debt issued and borrowings
4
39,304
-
39,308
Payables from purchase and sale of securities
-
-
2,318
2,318
Other liabilities - payable to clearing house
-
-
1,269
1,269
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
289
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2018
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
11,012
11,012
1,062
86,872
7,471
95,405
-
-
2,001
2,001
-
147,083
6,013
153,096
207,063
492,316
222
699,601
-
-
1,091
1,091
363,180
383,604
7,161
753,945
18,007
36,623
1,334
55,964
Liability payable on demand
-
-
1,163
1,163
Derivatives liabilities
-
-
2,093
2,093
Debt issued and borrowings
4
20,001
-
20,005
Payables from purchase and sale of securities
-
-
759
759
Interbank and money market items Derivatives assets Investments (1)
Loans to customers
Receivables from purchase and sale of securities Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued (Unit: Million Baht) Separate financial statements 2017
Transactions
Floating
Fixed
Non-
interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
11,445
11,445
918
87,385
6,490
94,793
-
-
2,888
2,888
-
151,838
5,151
156,989
213,437
451,950
118
665,505
-
-
34
34
306,037
404,618
7,152
717,807
17,076
51,007
1,726
69,809
Liability payable on demand
-
-
1,989
1,989
Derivatives liabilities
-
-
2,865
2,865
Debt issued and borrowings
4
20,001
-
20,005
Payables from purchase and sale of securities
-
-
44
44
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Receivables from purchase and sale of securities Financial liabilities Deposits Interbank and money market items
(1) The outstanding balances of loans to customers which have floating interest rates or fixed interest rates include loans on which interest recognition is discontinued
290
ANNUAL REPORT 2018
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 2018 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
850
86,032
2,100
-
-
88,982
1.38 - 2.18
-
58,455
12,829
75,940
5,119
152,343
1.33 - 2.45
6,440
36,361
19,484
241,170
236,786
540,241
6.50 - 7.14
18
127,523
212,007
43,488
-
383,036
1.60
Interbank and money market items
920
38,257
11,281
1,749
488
52,695
1.88 - 1.95
Debt issued and borrowings
330
2,476
3,124
17,215
19,930
43,075
1.00 - 5.53
Investments Loans to customers Financial liabilities Deposits
(Unit: Million Baht) Consolidated financial statements 2017 Weighted
Repricing or maturity date
Transactions
At call
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items Investments Loans to customers
750
79,073
6,963
500
-
87,286
0.35 - 2.11
-
25,859
12,767
113,647
5,587
157,860
1.90 - 3.05
4,573
44,916
25,860
239,859
175,970
491,178
6.40 - 7.39
51
129,188
233,578
41,264
-
404,081
1.60
1,699
39,070
20,759
1,118
1,115
63,761
1.44 - 1.90
388
393
3,100
15,423
20,000
39,304
1.00 - 5.53
Financial liabilities Deposits Interbank and money market items Debt issued and borrowings
291
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2018 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
2,300
84,572
-
-
-
86,872
2.18
-
57,686
11,616
72,702
5,079
147,083
2.01
6,442
35,844
17,933
205,458
226,639
492,316
6.49
18
127,786
212,311
43,489
-
383,604
1.60
Interbank and money market items
-
23,295
11,091
1,749
488
36,623
1.90
Debt issued and borrowings
1
-
-
-
20,000
20,001
5.53
Investments Loans to customers Financial liabilities Deposits
(Unit: Million Baht) Separate financial statements 2017 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
3,470
78,523
5,392
-
-
87,385
2.01
-
24,338
12,096
109,916
5,488
151,838
1.90
5,405
44,776
24,088
202,125
175,556
451,950
6.39
51
129,697
233,606
41,264
-
404,618
1.60
Interbank and money market items
-
38,520
10,353
1,018
1,116
51,007
1.45
Debt issued and borrowings
1
-
-
-
20,000
20,001
5.53
Investments Loans to customers Financial liabilities Deposits
292
ANNUAL REPORT 2018
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 2018 and 2017 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements For the years ended 31 December 2018
2017
Average
Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
87,303
1,743
2.00
59,373
1,365
2.30
Investments and trading operations
9,602
108
1.12
7,171
25
0.34
132,209
2,631
1.99
156,769
3,143
2.00
710,914
41,806
5.88
681,140
39,833
5.85
707,163
12,553
1.78
683,219
12,047
1.76
Interbank and money market items
70,952
997
1.41
67,200
792
1.18
Debt issued and borrowings
41,912
1,700
4.06
46,914
2,117
4.51
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
(Unit: Million Baht) Separate financial statements For the years ended 31 December 2018 Average
2017 Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
87,480
1,739
1.99
60,555
1,378
2.28
Investments and trading operations
9,602
108
1.12
7,171
26
0.36
126,087
2,509
1.99
150,794
3,031
2.01
660,221
38,449
5.82
637,606
36,847
5.78
708,746
12,567
1.77
684,535
12,058
1.76
Interbank and money market items
57,247
768
1.34
56,514
593
1.05
Debt issued and borrowings
20,005
1,105
5.53
28,749
1,493
5.19
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
293
THANACHART BANK PUBLIC COMPANY LIMITED
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 2018 and 2017 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements 2018 Australian US Dollar
Euro
Yen
Dollar
Others
Foreign currency in the statement of financial position Cash
192
94
21
14
43
1,337
70
79
29
181
Investments
17,386
-
-
-
-
Loans to customers and accrued interest receivables
10,103
51
30
1,377
10
Other assets
296
-
-
-
-
Total assets
29,314
215
130
1,420
234
519
23
1
31
57
Interbank and money market items
14,098
1
-
-
-
Total liabilities
14,617
24
1
31
57
Net
14,697
191
129
1,389
177
Guarantees of loans
800
1
-
-
-
Liability under unmatured import bills
196
3
27
-
-
Letter of credits
609
48
18
-
3
Others
544
5
-
-
-
Interbank and money market items
Deposits
Foreign currency commitments
294
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2017 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign currency in the statement of financial position Cash
81
56
8
7
24
9,227
45
99
26
158
Investments
10,442
-
-
-
-
Loans to customers and accrued interest receivables
14,167
67
87
1,535
8
Other assets
507
-
-
-
-
Total assets
34,424
168
194
1,568
190
1,554
14
60
41
70
Interbank and money market items
15,537
1
-
-
-
Total liabilities
17,091
15
60
41
70
Net
17,333
153
134
1,527
120
Guarantees of loans
930
1
-
-
-
Liability under unmatured import bills
202
7
12
-
-
Letter of credits
813
109
19
4
4
Others
567
5
-
-
1
Interbank and money market items
Deposits
Foreign currency commitments
(Unit: Million Baht) Separate financial statements 2018 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign currency in the statement of financial position Cash
192
94
21
14
43
1,337
70
79
29
181
Investments
17,386
-
-
-
-
Loans to customers and accrued interest receivables
10,103
51
30
1,377
10
Other assets
296
-
-
-
-
Total assets
29,314
215
130
1,420
234
519
23
1
31
57
Interbank and money market items
14,098
1
-
-
-
Total liabilities
14,617
24
1
31
57
Net
14,697
191
129
1,389
177
Guarantees of loans
800
1
-
-
-
Liability under unmatured import bills
196
3
27
-
-
Letter of credits
609
48
18
-
3
Others
544
5
-
-
-
Interbank and money market items
Deposits
Foreign currency commitments
295
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign currency in the statement of financial position Cash
81
56
8
7
24
9,227
45
99
26
158
Investments
10,442
-
-
-
-
Loans to customers and accrued interest receivables
14,167
67
87
1,535
8
Other assets
507
-
-
-
-
Total assets
34,424
168
194
1,568
190
1,554
14
60
41
70
Interbank and money market items
15,537
1
-
-
-
Total liabilities
17,091
15
60
41
70
Net
17,333
153
134
1,527
120
Interbank and money market items
Deposits
Foreign currency commitments Guarantees of loans
930
1
-
-
-
Liability under unmatured import bills
202
7
12
-
-
Letter of credits
813
109
19
4
4
Others
567
5
-
-
1
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 2018 Australian US Dollar
Euro
Yen
Others
Dollar
Foreign exchange contracts - Bought
40,304
214
225
1
674
- Sold
37,035
348
346
1,378
828
2,378
-
-
-
-
19,962
-
-
-
-
- Bought
66,154
-
-
-
-
- Sold
66,154
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
296
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2017 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
43,563
845
170
54
553
- Sold
49,685
985
303
1,575
661
3,827
-
-
-
-
14,431
-
-
-
-
- Bought
64,098
-
-
-
-
- Sold
64,098
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Separate financial statements 2018 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
40,304
214
225
1
674
- Sold
37,035
348
346
1,378
828
2,378
-
-
-
-
19,962
-
-
-
-
- Bought
66,154
-
-
-
-
- Sold
66,154
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
(Unit: Million Baht) Separate financial statements 2017 Australian US Dollar
Euro
Yen
Dollar
Others
Foreign exchange contracts - Bought
43,563
845
170
54
553
- Sold
49,685
985
303
1,575
661
3,827
-
-
-
-
14,431
-
-
-
-
- Bought
64,098
-
-
-
-
- Sold
64,098
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
297
THANACHART BANK PUBLIC COMPANY LIMITED
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.
47.3 Liquidity risk Liquidity risk is the risk that the Bank and its subsidiaries will be unable to liquidate their financial assets and/or procure sufficient funds to discharge their obligations in a timely manner, resulting in the Bank and its subsidiaries incurring a financial loss. The Bank and its subsidiaries manage liquidity risk by means of appropriate structuring of shortterm and long-term sources of capital. In addition, the Bank and its subsidiaries have a policy to maintain liquidity to ensure that they have 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 2018 and 2017 are as follows:
298
ANNUAL REPORT 2018
(Unit: Million Baht) Consolidated financial statements 2018
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
11,019
-
-
-
11,019
9,558
88,132
-
-
97,690
-
670
1,335
-
2,005
5
69,153
83,190
9,184
161,532
40,314
187,153
526,031
-
753,498
-
2,742
-
-
2,742
-
64
-
-
64
364,977
342,847
44,336
-
752,160
22,430
47,288
2,237
-
71,955
1,163
-
-
-
1,163
-
703
1,394
-
2,097
334
5,600
37,145
-
43,079
Payables from purchase and sale of securities
-
1,518
-
-
1,518
Other liabilities - payable to clearing house
-
795
-
-
795
2
291
10
-
303
Guarantees of loans
87
2,315
-
-
2,402
Liability under unmatured import bills
57
226
-
-
283
Letter of credits
31
728
-
-
759
37,732
43,857
1,770
-
83,359
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Receivables from purchase and sale of securities Other assets - receivable from clearing house Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings
Commitments Aval to bill
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
299
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2017
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
11,453
-
-
-
11,453
8,302
86,036
500
-
94,838
-
1,069
1,820
-
2,889
5
37,333
120,552
8,533
166,423
39,792
195,223
476,660
-
711,675
-
3,127
-
-
3,127
-
343
-
-
343
307,595
365,947
42,736
-
716,278
20,362
59,828
2,234
-
82,424
1,989
-
-
-
1,989
-
1,319
1,549
-
2,868
392
3,493
35,423
-
39,308
Payables from purchase and sale of securities
-
2,318
-
-
2,318
Other liabilities - payable to clearing house
-
1,269
-
-
1,269
2
100
13
-
115
Guarantees of loans
87
2,204
-
-
2,291
Liability under unmatured import bills
48
222
-
-
270
250
795
-
-
1,045
38,221
39,177
2,077
-
79,475
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Receivables from purchase and sale of securities Other assets - receivable from clearing house Financial liabilities Deposits Interbank and money market items Liability payable on demand Derivatives liabilities Debt issued and borrowings
Commitments Aval to bill
Letter of credits Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
300
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements 2018
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
11,012
-
-
-
11,012
Interbank and money market items
10,833
84,572
-
-
95,405
-
666
1,335
-
2,001
5
67,171
79,912
6,008
153,096
34,922
184,658
480,021
-
699,601
-
1,091
-
-
1,091
366,193
343,414
44,338
-
753,945
19,341
34,386
2,237
-
55,964
1,163
-
-
-
1,163
Derivatives liabilities
-
699
1,394
-
2,093
Debt issued and borrowings
5
-
20,000
-
20,005
Payables from purchase and sale of securities
-
759
-
-
759
2
291
10
-
303
Guarantees of loans
87
2,315
-
-
2,402
Liability under unmatured import bills
57
226
-
-
283
Letter of credits
31
728
-
-
759
37,732
43,857
1,746
-
83,335
Derivatives assets Investments Loans to customers
(1)
Receivables from purchase and sale of securities Financial liabilities Deposits Interbank and money market items Liability payable on demand
Commitments Aval to bill
Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
301
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
11,445
-
-
-
11,445
Interbank and money market items
10,878
83,915
-
-
94,793
-
1,068
1,820
-
2,888
5
35,172
116,690
5,122
156,989
34,486
192,762
438,257
-
665,505
-
34
-
-
34
308,587
366,484
42,736
-
717,807
18,802
48,873
2,134
-
69,809
1,989
-
-
-
1,989
Derivatives liabilities
-
1,316
1,549
-
2,865
Debt issued and borrowings
5
-
20,000
-
20,005
Payables from purchase and sale of securities
-
44
-
-
44
2
100
13
-
115
Guarantees of loans
87
2,204
-
-
2,291
Liability under unmatured import bills
48
222
-
-
270
250
795
-
-
1,045
38,221
39,177
2,038
-
79,436
Derivatives assets Investments Loans to customers
(1)
Receivables from purchase and sale of securities Financial liabilities Deposits Interbank and money market items Liability payable on demand
Commitments Aval to bill
Letter of credits Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
302
ANNUAL REPORT 2018
47.4 Fair value As at 31 December 2018 and 2017, 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 2018 Book value
Fair value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
1,719
1,719
-
1,719
-
156,845
156,845
5,568
151,277
-
Land, premises and equipment - land
5,408
5,408
-
-
5,408
Derivatives liabilities
1,763
1,763
2
1,761
-
Cash
11,109
11,109
11,109
-
-
Interbank and money market items (assets)
97,568
97,568
8,708
62,689
26,171
286
315
-
315
-
4,233
8,642
-
634
8,008
730,491
739,712
-
317,817
421,895
2,742
2,742
-
2,742
-
64
64
-
64
-
752,160
752,334
369,124
383,210
-
71,955
71,956
19,260
33,275
19,421
1,163
1,163
1,163
-
-
334
480
-
480
-
43,079
43,355
-
43,355
-
1,518
1,518
-
1,518
-
795
795
-
795
-
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) Liability payable on demand Derivatives liabilities Debt issued and borrowings Payables from purchase and sale of securities Other liabilities - payable to clearing house
303
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2017 Book value
Fair value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
2,518
2,518
-
2,518
-
163,434
163,434
4,916
158,518
-
Land, premises and equipment - land
5,534
5,534
-
-
5,534
Derivatives liabilities
2,511
2,511
-
2,511
-
Cash
11,453
11,453
11,453
-
-
Interbank and money market items (assets)
94,651
94,651
7,504
54,798
32,349
371
529
-
529
-
3,934
8,010
-
355
7,655
688,230
696,177
-
324,376
371,801
3,127
3,127
-
3,127
-
343
343
-
343
-
716,278
716,495
312,197
404,298
-
82,424
82,427
18,663
46,920
16,844
1,989
1,989
1,989
-
-
357
360
-
360
-
39,308
40,174
-
40,174
-
Payables from purchase and sale of securities
2,318
2,318
-
2,318
-
Other liabilities - payable to clearing house
1,269
1,269
-
1,269
-
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) Liability payable on demand Derivatives liabilities Debt issued and borrowings
304
ANNUAL REPORT 2018
(Unit: Million Baht) Separate financial statements 2018 Book value
Fair value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
1,715
1,715
-
1,715
-
148,308
148,308
2,213
146,095
-
Land, premises and equipment - land
5,391
5,391
-
-
5,391
Derivatives liabilities
1,759
1,759
-
1,759
-
Cash
11,012
11,012
11,012
-
-
Interbank and money market items (assets)
95,257
95,257
8,533
59,118
27,606
286
315
-
315
-
4,122
8,501
-
541
7,960
680,584
689,316
-
314,910
374,406
1,091
1,091
-
1,091
-
753,945
754,119
370,341
383,778
-
55,964
55,965
19,342
33,383
3,240
1,163
1,163
1,163
-
-
334
480
-
480
-
20,005
20,278
-
20,278
-
759
759
-
759
-
Investments
Financial assets and liabilities for which fair value are disclosed
Derivatives assets Investments Loans to customers Receivables from purchase and sale of securities Deposits Interbank and money market items (liabilities) Liability payable on demand Derivatives liabilities Debt issued and borrowings Payables from purchase and sale of securities
305
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017 Book value
Fair value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
2,517
2,517
-
2,517
-
153,328
153,328
1,290
152,038
-
Land, premises and equipment - land
5,517
5,517
-
-
5,517
Derivatives liabilities
2,508
2,508
-
2,508
-
Cash
11,445
11,445
11,445
-
-
Interbank and money market items (assets)
94,577
94,577
7,360
52,175
35,042
371
529
-
529
-
4,120
8,174
-
564
7,610
646,217
653,659
-
321,702
331,957
34
34
-
34
-
717,807
718,025
313,189
404,836
-
69,809
69,810
18,802
47,111
3,897
1,989
1,989
1,989
-
-
357
360
-
360
-
20,005
20,722
-
20,722
-
44
44
-
44
-
Investments
Financial assets and liabilities for which fair value are disclosed
Derivatives assets Investments Loans to customers Receivables from purchase and sale of securities Deposits Interbank and money market items (liabilities) Liability payable on demand Derivatives liabilities Debt issued and borrowings Payables from purchase and sale of securities
Valuation techniques and inputs used for fair value measurement Cash
- The fair value is assumed to approximate its book value in the statement of financial position.
Interbank and money market items (asset)
- The fair value is assumed to approximate their book value in the statement of financial position due to their 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 4.23 to the financial statements.
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ANNUAL REPORT 2018
Investments
- The fair value of marketable securities is based on the latest bid price of the last working day of the year.
- The fair value of debt securities is determined using the yield rates quoted by the Thai Bond Market Association or on other markets.
- The fair value of unit trusts is determined from their net asset value, as mentioned in Note 4.3 to the financial statements.
- The fair value of investments in non-marketable equity securities is determined using common valuation techniques such as the market approach, cost approach or income approach, as well as book value or adjusted book value. Loans to customers
- The fair value of floating rate loans is assumed to approximate their book value, net of allowance for doubtful debt and allowance for debt restructuring.
- The fair value of fixed rate loans is determined by discounting the expected future cash flows at the interest rate of similar loans, net of allowance for doubtful debt and deferred revenue.
- The fair value of fixed rate loans for which revenue recognition has discontinued is assumed to approximate their book value, net of allowance for doubtful debt or to approximate the amount expected to be derived from their sale. 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 and sale of securities
- The fair value is assumed to approximate their book values in the statement of financial position due to their short-term nature.
Receivable from and payable 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.
307
THANACHART BANK PUBLIC COMPANY LIMITED
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 statement of financial position date remaining to maturity is determined by discounting the expected future cash flows at the Bank’s interest rate for similar deposits. Interbank and money market items (liabilities)
- The fair value of interbank and money market items payable on demand, 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 statement 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 current year, the Bank and its subsidiaries did not transfer any items among fair value hierarchy levels.
308
ANNUAL REPORT 2018
47.5 Financial derivatives The Bank and its subsidiaries engage in financial derivatives activities as required in the normal course of their business to manage risk and to meet their clients’ needs. These financial derivatives include foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and commodity futures contracts. The Bank and its subsidiaries have set a policy and limit to mitigate related risk, and require risk reporting for the various types of risk, as a control over financial derivative activities. The Bank and its subsidiaries manage the credit risk associated with financial derivatives on the basis of the credit limits granted to customers in general. The same credit approval process as used when granting loans to a customer is adopted for financial derivative customers, as a result the Bank and its subsidiaries are able to maintain overall risk at an acceptable level. As at 31 December 2018 and 2017, 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 2018
2017
Less than
Over
1 year
1 year
Less than
Over
Total
1 year
1 year
Total
Foreign exchange contracts - Bought
41,418
-
41,418
45,185
-
45,185
- Sold
39,935
-
39,935
53,209
-
53,209
- Bought
276
2,102
2,378
1,412
2,415
3,827
- Sold
438
19,524
19,962
5,680
8,751
14,431
- Paid fixed interest rate
32,174
129,237
161,411
38,084
116,132
154,216
- Paid floating interest rate
33,349
108,866
142,215
39,358
98,641
137,999
- Received fixed interest rate
33,349
108,266
141,615
39,358
98,041
137,399
- Received floating interest rate
32,174
129,837
162,011
38,084
116,732
154,816
53
-
53
239
-
239
876
-
876
1,668
-
1,668
9
-
9
1
-
1
278
-
278
396
-
396
Cross currency and interest rate swap contracts
Interest rate swap contracts
Future contracts - Bought - Sold Derivative warrants - Sold Other - Sold
309
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2018
2017
Less than
Over
1 year
1 year
Less than
Over
Total
1 year
1 year
Total
Foreign exchange contracts - Bought
41,418
-
41,418
45,185
-
45,185
- Sold
39,935
-
39,935
53,209
-
53,209
- Bought
276
2,102
2,378
1,412
2,415
3,827
- Sold
438
19,524
19,962
5,680
8,751
14,431
- Paid fixed interest rate
32,174
129,237
161,411
38,084
116,132
154,216
- Paid floating interest rate
33,349
108,866
142,215
39,358
98,641
137,999
- Received fixed interest rate
33,349
108,266
141,615
39,358
98,041
137,399
- Received floating interest rate
32,174
129,837
162,011
38,084
116,732
154,816
Cross currency and interest rate swap contracts
Interest rate swap contracts
48.
Events after the reporting period On 25 February 2019, the Board of Directors of the Bank passed a resolution to propose the payment of a dividend of Baht 0.581 per share to the ordinary shareholders, or a total of Baht 3,524 million, to be considered by the Annual General Meeting of Shareholders.
49.
Approval of financial statements These financial statements were authorised for issue by the Bank’s Board of Directors on 25 February 2019.
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ANNUAL REPORT 2018
BRANCHES OF TBANK Information as of 31 December 2018
HEAD OFFICE
Charoen Nakhon Soi 36 Branch Tel. +66 (0) 2862 5011-3 Fax. +66 (0) 2862 5017
Central World Branch Tel. +66 (0) 2646 1346-9 Fax. +66 (0) 2646 1350
BANGKOK
Charoen Phon Branch Tel. +66 (0) 2215 6628-30 Fax. +66 (0) 2215 6627
Don Mueang Branch Tel. +66 (0) 2929 7004, 2566 1950-1 Fax. +66 (0) 2566 3425
Chit Lom Branch Tel. +66 (0) 2251 5821-3 Fax. +66 (0) 2658 5504
Charn Issara Tower II Branch Tel. +66 (0) 2308 2955-7, 2718 1834 Fax. +66 (0) 2308 2950
The Avenue Chaengwattana Branch Tel. +66 (0) 2573 0673-5 Fax. +66 (0) 2573 0677
Phetburi Branch Tel. +66 (0) 2208 5000 ext. 5099, 5108 Fax. +66 (0) 2208 5118
Chok Chai 4 Branch Tel. +66 (0) 2931 0895-7 Fax. +66 (0) 2931 0798
The Nine (Thanon Rama IX) Branch Tel. +66 (0) 2319 1662-4 Fax. +66 (0) 2718 7869
Suan Mali Branch Tel. +66 (0) 2220 2222 ext. 2106-7, 2112 Fax. +66 (0) 2224 3810, 2226 2437
Seacon Square Branch Tel. +66 (0) 2721 8548-50 Fax. +66 (0) 2721 8551
The Paseo (Lat Krabang) Branch Tel. +66 (0) 2346 4103-4, 2346 4109 Fax. +66 (0) 2346 4111
Crystal Design Center Branch Tel. +66 (0) 2102 2410-2 Fax. +66 (0) 2102 2413
Seacon Square Srinagarindra Branch Tel. +66 (0) 2721 9955 Fax. +66 (0) 2721 8321
The Mall 3 Ramkhamhaeng Branch Tel. +66 (0) 2314 2627 Fax. +66 (0) 2314 7277
Khlong Chan Branch Tel. +66 (0) 2377 1364, 2377 1368-9 Fax. +66 (0) 2377 3609
Central Bang Na Branch Tel. +66 (0) 2398 9572-3 Fax. +66 (0) 2398 9574
The Mall Tha Phra Branch Tel. +66 (0) 2477 7321-3 Fax. +66 (0) 2477 7324
Khlong Toei Branch Tel. +66 (0) 2240 0161, 2249 2633 Fax. +66 (0) 2249 4789
Central Pin Klao Branch Tel. +66 (0) 2884 9680-3 Fax. +66 (0) 2884 9684
The Mall Bangkapi Branch Tel. +66 (0) 2375 1575 Fax. +66 (0) 2375 1686
Charan Sanitwong 13 Branch Tel. +66 (0) 2864 1560-3 Fax. +66 (0) 2864 1566
Central Rama II Branch Tel. +66 (0) 2872 4770 Fax. +66 (0) 2872 4769
The Mall Bang Khae Branch Tel. +66 (0) 2803 8310 Fax. +66 (0) 2803 8305
Charan Sanitwong 35 Branch Tel. +66 (0) 2411 0511, 2411 0605 Fax. +66 (0) 2411 0607
Central Rama III Branch Tel. +66 (0) 2211 8260 Fax. +66 (0) 2211 8190
Trok Chan Branch Tel. +66 (0) 2211 1286, 2211 4511 Fax. +66 (0) 2211 4653
Charan Sanitwong 86/2 Branch Tel. +66 (0) 2435 6809, 2435 6808-10 Fax. +66 (0) 2435 6807
Central Plaza Grand Rama IX Branch Tel. +66 (0) 2160 2950-2 Fax. +66 (0) 2160 2954
Talat Bang Khae Branch Tel. +66 (0) 2801 1005-6 Fax. +66 (0) 2801 1007
Chamchuri Square Branch Tel. +66 (0) 2160 5254-6 Fax. +66 (0) 2160 5258
Central Ram Inthra Branch Tel. +66 (0) 2552 7462, 2552 7467-8 Fax. +66 (0) 2970 5518
Talat Phlu Branch Tel. +66 (0) 2466 7404, 2466 7423 Fax. +66 (0) 2465 1767
Cha Ru Mueang Branch Tel. +66 (0) 2214 1488, 2214 1739 Fax. +66 (0) 2214 2038
Central Lat Phrao Branch Tel. +66 (0) 2937 1280-2 Fax. +66 (0) 2937 1283
Talat Ying Charoen Branch Tel. +66 (0) 2552 8043, 2552 8045 Fax. +66 (0) 2972 3161
Tel. Fax
+66 (0) 2217 8000 +66 (0) 2217 8333
BANGKOK AND VICINITIES
311
THANACHART BANK PUBLIC COMPANY LIMITED
Talat Saphan Mai Don Mueang Branch Tel. +66 (0) 2521 1670, 2521 0612-3 Fax. +66 (0) 2521 0611 Talat Samrae Branch Tel. +66 (0) 2472 2045-50 Fax. +66 (0) 2472 2052 Tao Pun Branch Tel. +66 (0) 2587 7292, 2587 7284-5 Fax. +66 (0) 2587 7379 TOYOTA BUZZ Kaset-Nawamin Branch Tel. +66 (0) 2561 0069-71 Fax. +66 (0) 2561 0073 Thanon Kanchanaphisek (Thawi Watthana) Branch Tel. +66 (0) 2447 9206-8 Fax. +66 (0) 2447 9209 Thanon Romklao Housing Branch Tel. +66 (0) 2543 9200-1, 2543 9191 Fax. +66 (0) 2543 9192 Thanon Chan Branch Tel. +66 (0) 2285 5360, 2285 5368 Fax. +66 (0) 2285 5361 Thanon Chalong Krung Branch Tel. +66 (0) 2327 8111-3 Fax. +66 (0) 2327 8114 Thanon Nang Linchi Branch Tel. +66 (0) 2286 1971, 2286 1898 Fax. +66 (0) 2286 1939 Thanon Borom Rat Chonnani Branch Tel. +66 (0) 2446 8061-4 Fax. +66 (0) 2446 8065 Thanon Burapha (Phahurat) Branch Tel. +66 (0) 2221 2069, 2221 5239 Fax. +66 (0) 2221 5128 Thanon Rama II (Thon Buri Housing 3) Branch Tel. +66 (0) 2451 4402, 2451 4409 Fax. +66 (0) 2451 4882
Thanon Phrasumen (Bang Lamphu) Branch Tel. +66 (0) 2281 6821, 2281 6332 Fax. +66 (0) 2281 7457 Thanon Phatthanakan 22 Branch Tel. +66 (0) 2318 7241-2, 2318 7620 Fax. +66 (0) 2318 7393 Thanon Petchaburi Tat Mai Branch Tel. +66 (0) 2254 0252-4 Fax. +66 (0) 2254 0255 Thanon Mangkon Branch Tel. +66 (0) 2225 3331, 2225 3863 Fax. +66 (0) 2225 8364 Thanon Sathon Tai (Thai CC Tower) Branch Tel. +66 (0) 2675 5697-9, 2675 5700 Fax. +66 (0) 2675 5701 Thanon Sirindhorn Branch Tel. +66 (0) 2434 5028-9 Fax. +66 (0) 2434 5661 Thanon Ekkachai (Bang Bon 5) Branch Tel. +66 (0) 2450 3741-3 Fax. +66 (0) 2450 3744 Thong Lo Branch Tel. +66 (0) 2381 8421-2, 2381 8364-5 Fax. +66 (0) 2381 8423 Thong Lo Soi 17 Branch Tel. +66 (0) 2185 2756, 2185 2758-61 Fax. +66 (0) 2185 2757 Tha Din Daeng Branch Tel. +66 (0) 2863 1283-5 Fax. +66 (0) 2863 1289 Thewet Branch Tel. +66 (0) 2628 7240-4, 2628 7247 Fax. +66 (0) 2282 8810 Tesco Lotus Rama II Branch Tel. +66 (0) 2415 9130-2 Fax. +66 (0) 2892 8004
Thanon Rama II (Soi 3) Branch Tel. +66 (0) 2427 1552-3 Fax. +66 (0) 2427 1551
Tesco Lotus Phet Kasem 81 Branch Tel. +66 (0) 2489 2087-9 Fax. +66 (0) 2812 4073
Thanon Rama IX Branch Tel. +66 (0) 2246 7829-30 Fax. +66 (0) 2246 8473
Tesco Lotus Wang Hin Branch Tel. +66 (0) 2578 6194-6 Fax. +66 (0) 2578 6197
312
ANNUAL REPORT 2018
Thaniya Branch Tel. +66 (0) 2236 3520-1, 2236 9129 Fax. +66 (0) 2236 9119 Nawamin 42 Branch Tel. +66 (0) 2375 1281-2, 2375 1284 Fax. +66 (0) 2375 1285 Nawamin 66 Branch Tel. +66 (0) 2519 5724, 2519 4616 Fax. +66 (0) 2519 4627 Nang Loeng Branch Tel. +66 (0) 2281 0842, 2281 2169 Fax. +66 (0) 2281 2322 Na Na Nuea Branch Tel. +66 (0) 2252 0709, 2252 6540 Fax. +66 (0) 2253 5668 Bang Khun Non Branch Tel. +66 (0) 2424 9778-9, 2433 6028-9 Fax. +66 (0) 2434 9772 Bang Khlo Branch Tel. +66 (0) 2289 4223, 2289 4236 Fax. +66 (0) 2289 4159 Bang Sue Branch Tel. +66 (0) 2587 0616, 2587 0686 Fax. +66 (0) 2585 9659 Bang Na Branch Tel. +66 (0) 2398 0182-4 Fax. +66 (0) 2398 0185 Bang Na-Trat Km. 4 Branch Tel. +66 (0) 2399 2841-3 Fax. +66 (0) 2399 2845 Bang Bon Branch Tel. +66 (0) 2899 8533-5 Fax. +66 (0) 2899 8540 Bang Pakok Branch Tel. +66 (0) 2427 7527-9 Fax. +66 (0) 2872 3245 Bang Mod Branch Tel. +66 (0) 2428 6913-5 Fax. +66 (0) 2428 6994 Bang Rak Branch Tel. +66 (0) 2234 4227-9 Fax. +66 (0) 2630 9027
Bamrung Mueang Branch Tel. +66 (0) 2214 0607-8 Fax. +66 (0) 2216 9798
Pin Klao Branch Tel. +66 (0) 2435 4273-4, 2435 7374 Fax. +66 (0) 2435 4518
Mah Boon Krong Branch Tel. +66 (0) 2048 5712-4 Fax. +66 (0) 2048 5717
BigC Don Mueang Branch Tel. +66 (0) 2551 0638-9 Fax. +66 (0) 2551 0642
Rama III Branch Tel. +66 (0) 2682 7322-6, 2682 7328-9 Fax. +66 (0) 2682 7327
Min Buri Branch Tel. +66 (0) 2517 8014-5, 2517 9321 Fax. +66 (0) 2517 8016
BigC Bang Na Branch Tel. +66 (0) 2396 0482, 2396 0484-5 Fax. +66 (0) 2396 0500
Rama IV Branch Tel. +66 (0) 2249 4201-3, 2671 0260 Fax. +66 (0) 2249 4204
Union Mall Lat Phrao Branch Tel. +66 (0) 2511 0236, 2511 0246 Fax. +66 (0) 2511 0268
BigC Bang Bon Branch Tel. +66 (0) 2416 9969-71 Fax. +66 (0) 2416 9974
Phran Nok Branch Tel. +66 (0) 2418 0785, 2418 0787 Fax. +66 (0) 2418 0786
BigC Sukhaphiban 3 (Ramkhamhaeng) Branch Tel. +66 (0) 2916 3584-5, 2916 3603 Fax. +66 (0) 2916 3607
Phahon Yothin Soi 6 Branch Tel. +66 (0) 2279 9874-5 Fax. +66 (0) 2279 9895
Ratchada Phisek (Glas Haus Building) Branch Tel. +66 (0) 2693 9811 Fax. +66 (0) 2693 9820
BigC Sukhaphiban 5 Branch Tel. +66 (0) 2153 1513-4, 2153 1566 Fax. +66 (0) 2153 1567 BigC Ekkamai Branch Tel. +66 (0) 2714 8274-7 Fax. +66 (0) 2714 8268 Bobae Tower Branch Tel. +66 (0) 2628 1693-5, 2628 1690 Fax. +66 (0) 2628 1696 Pracha Chuen Branch Tel. +66 (0) 2585 6811, 2585 9656-7 Fax. +66 (0) 2585 2666 Pracha Uthit Branch Tel. +66 (0) 2873 4721-3, 2873 5848 Fax. +66 (0) 2873 5849 Pracha Uthit (Huai Khwang) Branch Tel. +66 (0) 2934 4181-3 Fax. +66 (0) 2934 4184 Pratu Nam Branch Tel. +66 (0) 2208 0072, 2208 0074-5 Fax. +66 (0) 2208 0076 Prawet Branch Tel. +66 (0) 2322 2223, 2722 1371-2 Fax. +66 (0) 2322 8943 Pak Khlong Talat Branch Tel. +66 (0) 2221 7511, 2222 7467 Fax. +66 (0) 2222 4794
Ratchada Phisek-Tha Phra Branch Tel. +66 (0) 2878 8845-7 Fax. +66 (0) 2878 8852
Phatthanakan Branch Tel. +66 (0) 2015 2600-2 Fax. +66 (0) 2015 2604
Ratchada-Huai Khwang Branch Tel. +66 (0) 2694 1489-91, 2694 1495 Fax. +66 (0) 2694 1496
Paradise Park Branch Tel. +66 (0) 2325 9073-4 Fax. +66 (0) 2325 9075 P.B. Tower (Khlong Tan) Branch Tel. +66 (0) 2381 3114-5, 2381 3121-2 Fax. +66 (0) 2381 3124 Phet Kasem Branch Tel. +66 (0) 2456 0337-42 Fax. +66 (0) 2454 4116 Phet Kasem 69 Branch Tel. +66 (0) 2809 3034-8 Fax. +66 (0) 2809 3041 Phloen Chit Center Branch Tel. +66 (0) 2656 8403-7 Fax. +66 (0) 2656 8400 Platinum Pratu Nam Branch Tel. +66 (0) 2121 9683-5 Fax. +66 (0) 2121 9687 Fashion Island Branch Tel. +66 (0) 2947 6402-5 Fax. +66 (0) 2947 6410 Money Park Branch Tel. +66 (0) 2686 3960-62 Fax. +66 (0) 2686 3959
Ratchadamnoen Klang Branch Tel. +66 (0) 2226 3083-5, 2621 2185 Fax. +66 (0) 2621 2186 Ratchadamri Branch Tel. +66 (0) 2251 4314, 2251 4348-9 Fax. +66 (0) 2251 4316 Ratchawong Branch Tel. +66 (0) 2224 5705, 2224 5870 Fax. +66 (0) 2224 5792 Ratcha Wat Branch Tel. +66 (0) 2241 0868, 2243 6183 Fax. +66 (0) 2241 1483 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, 2519 0824-5 Fax. +66 (0) 2519 0826
313
THANACHART BANK PUBLIC COMPANY LIMITED
Ram Inthra (Km. 7) Branch Tel. +66 (0) 2510 9610, 2510 9882 Fax. +66 (0) 2510 9197
Leng Noei Yi Branch Tel. +66 (0) 2221 1248, 2221 3501 Fax. +66 (0) 2223 3211
Song Prapha Branch Tel. +66 (0) 2928 8542-5 Fax. +66 (0) 2928 8546
Ram Inthra (Km. 8) Branch Tel. +66 (0) 2510 6900, 2510 2342 Fax. +66 (0) 2510 9875
Wongwian Yai Branch Tel. +66 (0) 2437 0188, 2437 2596 Fax +66 (0) 2437 5784
Saphan Khwai Branch Tel. +66 (0) 2279 6060-1 Fax. +66 (0) 2616 6747
Phyathai 1 Hospital Branch Tel. +66 (0) 2246 7713-5 Fax. +66 (0) 2246 7716
Wong Sawang Branch Tel. +66 (0) 2058 9900-4 Fax. +66 (0) 2834 9905
Rama VII Bridge (Bang Phlat) Branch Tel. +66 (0) 2423 9011-3 Fax. +66 (0) 2423 9015
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
Sathu Pradit 49 Branch Tel. +66 (0) 2682 0610-8 Fax. +66 (0) 2682 0619
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
Sam Yaek Fai Chai Branch Tel. +66 (0) 2411 3446, 2418 3575-6 Fax. +66 (0) 2411 2321
Vibhavadi Hospital Branch Tel. +66 (0) 2561 5320-2 Fax. +66 (0) 2941 3006
Wat Phra Ya Kai Branch Tel. +66 (0) 2289 3026-7, 2289 5033 Fax. +66 (0) 2289 5032
Sam Pheng Branch Tel. +66 (0) 2222 7396, 2223 2898 Fax. +66 (0) 2225 8468
Samitivej Hospital Sukhumwit 49 Branch Tel. +66 (0) 2712 7013-4 Fax. +66 (0) 2712 7016
Wutthakat Branch Tel. +66 (0) 2466 9981-2, 2466 6160 Fax. +66 (0) 2472 5838
Samrae Branch Tel. +66 (0) 2468 0609, 2468 1008-9 Fax. +66 (0) 2476 5423
Lat Krabang Branch Tel. +66 (0) 2327 2754-6 Fax. +66 (0) 2327 2706
Woeng Nakhon Khasem Branch Tel. +66 (0) 2222 2430, 2221 7201-4 Fax. +66 (0) 2222 6475
Si Kak Phra Ya Si Branch Tel. +66 (0) 2222 4477-8, 2226 2267 Fax. +66 (0) 2225 7036
Lat Phrao Branch Tel. +66 (0) 2512 2343-4, 2938 2433 Fax. +66 (0) 2512 2342
Si Worachak Branch Tel. +66 (0) 2222 1912, 2222 1917 Fax. +66 (0) 2622 9338
Si Phra Ya Branch Tel. +66 (0) 2233 5305-7, 2267 2191-4 Fax. +66 (0) 2233 4174
Lat Phrao 53 Branch Tel. +66 (0) 2539 1167, 2539 1507 Fax. +66 (0) 2539 2261
Siwara Branch Tel. +66 (0) 2538 8466, 2538 8986 Fax. +66 (0) 2538 9378
Si Yaek Kaset Branch Tel. +66 (0) 2579 1340, 2579 3483 Fax. +66 (0) 2579 6794
Lat Phrao 80 Branch Tel. +66 (0) 2933 9172, 2933 9174-5 Fax. +66 (0) 2933 9178
Appeal Court Branch Tel. +66 (0) 2938 3421-6 Fax. +66 (0) 2938 3428
Lat Phrao 118 Branch Tel. +66 (0) 2539 2925-7 Fax. +66 (0) 2530 4348
Sirirat Branch Tel. +66 (0) 2412 4515, 2412 4583-4 Fax. +66 (0) 2866 3218
Si Yaek Chaloem Buri (Yaowarat) Branch Tel. +66 (0) 2221 1236, 2221 7194 Fax. +66 (0) 2225 0580
Lat Phrao Soi 101 Branch Tel. +66 (0) 2187 0162-4 Fax. +66 (0) 2187 0161
Sanam Pao Branch Tel. +66 (0) 2271 0026-8 Fax. +66 (0) 2271 0030
Lam Sa Li Branch Tel. +66 (0) 2734 3047-9 Fax. +66 (0) 2734 3050
Siam Paragon Branch Tel. +66 (0) 2129 4374-7 Fax. +66 (0) 2129 4372
314
ANNUAL REPORT 2018
Si Yaek Ban Khaek Branch Tel. +66 (0) 2465 2115, 2465 5072 Fax. +66 (0) 2465 5071 Silom Branch Tel. +66 (0) 2266 7414, 2266 7417 Fax. +66 (0) 2266 7416 Silom (Thanon Pan) Branch Tel. +66 (0) 2237 9317-20, 2235 5800-2 Fax. +66 (0) 2237 9321
Silom Complex Branch Tel. +66 (0) 2231 3237, 2231 3663-5 Fax. +66 (0) 2235 8833 Sukhumwit 71 Branch Tel. +66 (0) 2391 6067, 2392 5944 Fax. +66 (0) 2392 2534 Sukhumwit Soi 25 Branch Tel. +66 (0) 2259 4727-9 Fax. +66 (0) 2259 4730 Sukhumwit Soi 101/1 (Piyarom Place) Branch Tel. +66 (0) 2332 7060-2 Fax. +66 (0) 2741 8017
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 Siam Kit Building Branch Tel. +66 (0) 2251 6763, 2252 5252 Fax. +66 (0) 2253 9429
Seri Thai 32 Branch Tel. +66 (0) 2376 1043-6 Fax. +66 (0) 2376 1122
Udom Suk Branch Tel. +66 (0) 2398 4024-7 Fax. +66 (0) 2398 4028
Nong Khaem Branch Tel. +66 (0) 2445 4790-2 Fax. +66 (0) 2445 4789
Ekkamai 28 Branch Tel. +66 (0) 2392 2831, 2392 7278-9 Fax. +66 (0) 2392 2832
Huai Khwang Branch Tel. +66 (0) 2692 0061, 2692 2098-100 Fax. +66 (0) 2276 1134
MBK Center Branch Tel. +66 (0) 2048 4752-3 Fax. +66 (0) 2048 4751
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
Anu Wong Branch Tel. +66 (0) 2222 0161-3 Fax. +66 (0) 2225 8931
IT Square Branch Tel. +66 (0) 2576 0104-5 Fax. +66 (0) 2576 0106
Victory Monument Branch Tel. +66 (0) 2354 5120-2 Fax. +66 (0) 2354 9351
VICINITIES
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
Central Chaengwattana Branch Tel. +66 (0) 2193 8114-6 Fax. +66 (0) 2101 0710 Central Rattanathibet Branch Tel. +66 (0) 2525 4736-8 Fax. +66 (0) 2969 7537 Zeer-Rangsit Branch Tel. +66 (0) 2992 6807-9 Fax. +66 (0) 2992 6810 The Mall Ngamwongwan Branch Tel. +66 (0) 2550 1231-3 Fax. +66 (0) 2550 1235 Talat Klang Bang Yai Branch Tel. +66 (0) 2595 0682-4 Fax. +66 (0) 2595 0685 Talat Bang Bua Thong Branch Tel. +66 (0) 2571 3598-9, 2571 3373-5 Fax. +66 (0) 2571 7845 Talat Pak Nam Branch Tel. +66 (0) 2702 8380-4 Fax. +66 (0) 2702 8388 Thanon Samakkhi Branch Tel. +66 (0) 2574 2794-5 Fax. +66 (0) 2574 2793 Tha Nam Phra Pradaeng Branch Tel. +66 (0) 2463 0488, 2463 2228 Fax. +66 (0) 2464 2156
King Kaeo Branch Tel. +66 (0) 2316 1990-2 Fax. +66 (0) 2317 1312 Khru Nai Branch Tel. +66 (0) 2462 8020, 2462 8034 Fax. +66 (0) 2462 6193 Khlong Luang Branch Tel. +66 (0) 2516 1230-2, 2516 1202 Fax. +66 (0) 2516 1203 Chaeng Wattana Branch Tel. +66 (0) 2982 9192-5 Fax. +66 (0) 2982 9441
Jas Urban Srinakarin Branch Tel. +66 (0) 2386 7362-4 Fax. +66 (0) 2043 3082
Thepharak Branch Tel. +66 (0) 2759 6061-4, 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, 2950 1297 Fax. +66 (0) 2950 1157 Tesco Lotus Srinagarindra Branch Tel. +66 (0) 2175 7844-6 Fax. +66 (0) 2759 9054
315
THANACHART BANK PUBLIC COMPANY LIMITED
Nonthaburi Branch Tel. +66 (0) 2526 3453-6 Fax. +66 (0) 2526 3457
Pak Kret Branch Tel. +66 (0) 2960 9928-9, 2583 7246 Fax. +66 (0) 2583 7562
Si Mum Mueang-Rangsit Branch Tel. +66 (0) 2531 9774, 2531 3445 Fax. +66 (0) 2531 9636
Navanakhon Branch Tel. +66 (0) 2909 0620-3, 2909 0626 Fax. +66 (0) 2909 0625
Pu Chao Saming Prai Branch Tel. +66 (0) 2183 2044, 2183 2046-7 Fax. +66 (0) 2183 2043
Nam Daeng Branch Tel. +66 (0) 2385 2511-2, 2385 2920 Fax. +66 (0) 2385 2921
Bang Pu Industrial Estate Branch Tel. +66 (0) 2324 0360, 2324 0364 Fax. +66 (0) 2324 0805
Future Park Rangsit Branch Tel. +66 (0) 2958 5116-8 Fax. +66 (0) 2958 5121
Imperial World Samrong Branch Tel. +66 (0) 2380 2943-5, 2756 9023 Fax. +66 (0) 2756 9024
Bang Kruai Branch Tel. +66 (0) 2447 2897, 2447 5095 Fax. +66 (0) 2883 8619
Huachiew Chalermprakiet University Branch Tel. +66 (0) 2312 6600-5 Fax. +66 (0) 2312 6603
Bang Khru Branch Tel. +66 (0) 2817 5417-9 Fax. +66 (0) 2817 5423 Bang Bo Branch Tel. +66 (0) 2338 1822-3, 2338 1248 Fax. +66 (0) 2708 3242 Bang Pu Branch Tel. +66 (0) 2323 2960-3 Fax. +66 (0) 2323 2964 Bang Yai Branch Tel. +66 (0) 2594 1143, 2594 1152 Fax. +66 (0) 2594 1161 Baan and Beyond Ratchaphruek Branch Tel. +66 (0) 2447 6690-2 Fax. +66 (0) 2447 6693 BigC Bang Phli Branch Tel. +66 (0) 2312 2284, 2312 2300 Fax. +66 (0) 2312 2321 BigC Samut Prakan Branch Tel. +66 (0) 2702 1792-3, 2702 1859 Fax. +66 (0) 2702 1982 BigC Samrong 2 Branch Tel. +66 (0) 2380 1100-2 Fax. +66 (0) 2380 1103 BigC Suk Sawat Branch Tel. +66 (0) 2463 0992-3 Fax. +66 (0) 2463 0980 Pathum Thani Branch Tel. +66 (0) 2581 5766, 2581 6976 Fax. +66 (0) 2581 6925
316
ANNUAL REPORT 2018
Market Village Suvarnabhumi Branch Tel. +66 (0) 2040 3124-6 Fax. +66 (0) 2040 3129 Megabangna Branch Tel. +66 (0) 2105 1681-3 Fax. +66 (0) 2105 1684 Mueang Mai-Bang Phli Branch Tel. +66 (0) 2706 0322-6 Fax. +66 (0) 2706 0329 Rangsit Branch Tel. +66 (0) 2567 1117, 2567 5586 Fax. +66 (0) 2567 6694 Rangsit-Khlong 3 Branch Tel. +66 (0) 2990 8806-8 Fax. +66 (0) 2533 1659 Lam Luk Ka Branch Tel. +66 (0) 2994 5747-9 Fax. +66 (0) 2994 5753 Samut Prakan Branch Tel. +66 (0) 2395 0045, 2702 8086 Fax. +66 (0) 2395 2021 Sam Yaek Phra Pradaeng Branch Tel. +66 (0) 2463 2156-7, 2462 6284 Fax. +66 (0) 2462 5355 Samrong Branch Tel. +66 (0) 2396 0278-80 Fax. +66 (0) 2399 5103 Samrong Nuea Branch Tel. +66 (0) 2384 7141, 2384 7244 Fax. +66 (0) 2384 7678
CENTRAL REGION Krathum Baen Branch Tel. +66 (0) 3447 2422, 3447 2651-2 Fax. +66 (0) 3447 1511 Kanchanaburi Branch Tel. +66 (0) 3451 5096-100 Fax. +66 (0) 3451 5102 Kamphaeng Saen Branch Tel. +66 (0) 3435 1100, 3435 1614 Fax. +66 (0) 3435 1094 Kaeng Khoi Branch Tel. +66 (0) 3624 4176, 3624 5127-8 Fax. +66 (0) 3624 4178 Khao Wang Branch Tel. +66 (0) 3242 5622, 3242 8352 Fax. +66 (0) 3242 8351 Khlong Khru Branch Tel. +66 (0) 3482 7086, 3482 7093 Fax. +66 (0) 3482 7094 Cha-am Branch Tel. +66 (0) 3243 4130-1, 3247 1158 Fax. +66 (0) 3247 1185 Dan Chang Branch Tel. +66 (0) 3559 5497-8 Fax. +66 (0) 3559 5499 Damnoen Saduak Branch Tel. +66 (0) 3225 3810-2 Fax. +66 (0) 3225 3813 Talat Chao Prom Branch Tel. +66 (0) 3524 5162-3 Fax. +66 (0) 3524 5441 Talat Mahachai Branch Tel. +66 (0) 3481 0287-8 Fax. +66 (0) 3481 0467
Talat Suphan Buri Branch Tel. +66 (0) 3551 1330, 3552 3882 Fax. +66 (0) 3552 3881
Tha Yang Branch Tel. +66 (0) 3246 1445-6 Fax. +66 (0) 3246 1447
Pran Buri Branch Tel. +66 (0) 3262 1643, 3262 2373-4 Fax. +66 (0) 3262 2055
Thanon Khun San (Sing Buri) Branch Tel. +66 (0) 3651 1199, 3652 1200-1 Fax. +66 (0) 3652 1202
Tha Ruea-Kanchanaburi Branch Tel. +66 (0) 3456 1130, 3456 2074 Fax. +66 (0) 3456 2073
Pak Phriao Branch Tel. +66 (0) 3621 1833-4, 3622 1286 Fax. +66 (0) 3622 1884
Thanon Sai Phra (Nakhon Pathom) Branch Tel. +66 (0) 3425 5317-9 Fax. +66 (0) 3425 4915
Tha Ruea-Ayutthaya Branch Tel. +66 (0) 3534 1019, 3534 1029 Fax. +66 (0) 3534 1795
Phra Nakhon Si Ayutthaya Branch Tel. +66 (0) 3521 3892-4, 3524 4381 Fax. +66 (0) 3524 2136
Thung Khok Branch Tel. +66 (0) 3556 8086-7 Fax. +66 (0) 3556 8069
Phra Pathom Chedi Branch Tel. +66 (0) 3425 4203-5, 3421 3541 Fax. +66 (0) 3425 9131
Nakhon Chai Si Branch Tel. +66 (0) 3433 1350-1 Fax. +66 (0) 3433 1349
Phutthamonthon Sai 4 Branch Tel. +66 (0) 2420 0444, 2420 5964 Fax. +66 (0) 2813 1116
Nakhon Nayok Branch Tel. +66 (0) 3731 1131, 3731 2609 Fax. +66 (0) 3731 2610
Phetchaburi Branch Tel. +66 (0) 3242 7023-5 Fax. +66 (0) 3241 5455
Nakhon Pathom Branch Tel. +66 (0) 3421 9131 Fax. +66 (0) 3421 9160
Photharam Branch Tel. +66 (0) 3274 7591-4 Fax. +66 (0) 3274 7595
Bang Sai Branch Tel. +66 (0) 3537 5016-7, 3537 5226 Fax. +66 (0) 3537 5144
Pho Hak Branch Tel. +66 (0) 3238 7021-2 Fax. +66 (0) 3238 7023
Bang Pahan Branch Tel. +66 (0) 3538 1023-5 Fax. +66 (0) 3538 1026
Mahachai Mueang Mai Branch Tel. +66 (0) 3481 2620-2 Fax. -
Bang Len Branch Tel. +66 (0) 3439 1026-9 Fax. +66 (0) 3439 1030
Ratchaburi Branch Tel. +66 (0) 3231 1203-5 Fax. +66 (0) 3231 1207
Ban Phaeo Branch Tel. +66 (0) 3448 1088, 3448 0111-2 Fax. +66 (0) 3448 1606
Robinson Suphan Buri Branch Tel. +66 (0) 3545 4360-62 Fax. +66 (0) 3545 4364
Ban Mo Branch Tel. +66 (0) 3620 1141, 3620 1391-2 Fax. +66 (0) 3620 1142
Lop Buri Branch Tel. +66 (0) 3642 1020-2 Fax. +66 (0) 3642 1023
Thong Pha Phum Branch Tel. +66 (0) 3459 9073, 3459 9352 Fax. +66 (0) 3459 9613
BigC Lop Buri 2 Branch Tel. +66 (0) 3678 0731-4 Fax. +66 (0) 3678 0736
Lat Bua Luang Branch Tel. +66 (0) 3537 9290-1 Fax. +66 (0) 3537 9292
Tha Muang Branch Tel. +66 (0) 3461 1119, 3461 2417-8 Fax. +66 (0) 3461 2419
Prachuap Khiri Khan Branch Tel. +66 (0) 3260 4464-7 Fax. +66 (0) 3260 4468
Wat Thian Dat Branch Tel. +66 (0) 2429 0216, 2429 0813 Fax. +66 (0) 2429 0847
Thanon Songphon Branch Tel. +66 (0) 3220 0427, 3221 1900 Fax. +66 (0) 3220 0426 Thanon Bowon Branch Tel. +66 (0) 3451 1022, 3451 4205 Fax. +66 (0) 3451 1597 Thanon Phahon Yothin (Saraburi) Branch Tel. +66 (0) 3621 1166, 3621 2420-1 Fax. +66 (0) 3621 2421 Thanon Ratchawithi (Nakhon Pathom) Branch Tel. +66 (0) 3424 2348, 3425 1080 Fax. +66 (0) 3425 1081 Thanon Setthakit 1 (Om Noi) Branch Tel. +66 (0) 2810 4596-8 Fax. +66 (0) 2810 4605 Thanon Sut Banthat (Saraburi) Branch Tel. +66 (0) 3631 4512, 3631 4256-7 Fax. +66 (0) 3631 5404 Thanon Amarin (Ratchaburi) Branch Tel. +66 (0) 3233 7142, 3232 5802-5 Fax. +66 (0) 3232 5801 Thanon Ekkachai (Samut Sakhon) Branch Tel. +66 (0) 3441 1127, 3442 5205-6 Fax. +66 (0) 3442 5204
317
THANACHART BANK PUBLIC COMPANY LIMITED
Wiset Chai Chan Branch Tel. +66 (0) 3563 2801-4 Fax. +66 (0) 3563 2805
Om Noi Branch Tel. +66 (0) 2420 1450, 2420 2565-6 Fax. +66 (0) 2420 1132
Thanon Nimmanhemin Branch Tel. +66 (0) 5322 5483, 5340 0672-4 Fax. +66 (0) 5340 0675
Si Prachan Branch Tel. +66 (0) 3558 1150, 3558 1160 Fax. +66 (0) 3558 1140
Om Yai Branch Tel. +66 (0) 2420 4920, 2420 4930 Fax. +66 (0) 2811 6538
Salaya Branch Tel. +66 (0) 2441 4557-9 Fax. +66 (0) 2441 4560
Amphawa Branch Tel. +66 (0) 3475 1177-8, 3475 1640-1 Fax. +66 (0) 3475 1642
Thanon Barom Trai Lokanart 2 (Phitsanulok) Branch Tel. +66 (0) 5521 8645-9 Fax. +66 (0) 5521 8648
Samut Songkhram Branch Tel. +66 (0) 3471 1361, 3471 1510 Fax. +66 (0) 3471 5555
Ang Thong Branch Tel. +66 (0) 3561 1099, 3561 2301-3 Fax. +66 (0) 3561 1100
Rojana Industrial Park Ayutthaya Branch Tel. +66 (0) 3571 9710-2 Fax. +66 (0) 3533 1651
U Thong Branch Tel. +66 (0) 3555 1299, 3555 1618 Fax. +66 (0) 3555 1868
Song Phi Nong Branch Tel. +66 (0) 3553 2890-3 Fax. +66 (0) 3553 2894 Sam Chuk Branch Tel. +66 (0) 3557 1644, 3557 1666 Fax. +66 (0) 3557 1099 Sam Phran Branch Tel. +66 (0) 3432 2781, 3432 2783 Fax. +66 (0) 3432 2782 Sing Buri Branch Tel. +66 (0) 3651 1720, 3651 1730 Fax. +66 (0) 3651 2021 Sena Branch Tel. +66 (0) 3520 1035, 3520 1748 Fax. +66 (0) 3520 1749 Nong Khae Branch Tel. +66 (0) 3637 1504, 3637 1517 Fax. +66 (0) 3637 1516 Hua Hin Branch Tel. +66 (0) 3251 1098, 3251 2218 Fax. +66 (0) 3251 2219 Ayutthaya Branch Tel. +66 (0) 3525 2431-4, 3525 2359 Fax. +66 (0) 3525 2437 Ayutthaya Park Branch Tel. +66 (0) 3534 6157-8 Fax. +66 (0) 3534 6159
318
ANNUAL REPORT 2018
NORTHERN REGION Kamphaeng Phet Branch Tel. +66 (0) 5571 3325-6 Fax. +66 (0) 5571 3368 Khuang Sing Branch Tel. +66 (0) 5321 0826-8, 5321 6586 Fax. +66 (0) 5322 2718 Chong Khae Branch Tel. +66 (0) 5626 9163, 5626 9128-30 Fax. +66 (0) 5626 9127 Chai Nat Branch Tel. +66 (0) 5641 6650-3 Fax. +66 (0) 5641 6654 Talat Varorot Branch Tel. +66 (0) 5387 4018-9, 5387 4002 Fax. +66 (0) 5387 4006 Tak Branch Tel. +66 (0) 5551 1275, 5551 1360 Fax. +66 (0) 5551 3486 TaKhli Branch Tel. +66 (0) 5626 1093, 5626 1133 Fax. +66 (0) 5626 2383 Thanon Chang Chlan (Chiang Mai) Branch Tel. +66 (0) 5382 0538-41 Fax. +66 (0) 5382 0543
Thanon Bunyawat Branch Tel. +66 (0) 5421 7444, 5421 8790 Fax. +66 (0) 5422 4667 Thanon Wet Suwan (Nakhon Sawan) Branch Tel. +66 (0) 5622 2998, 5622 7835 Fax. +66 (0) 5623 1462 Thanon Sueksa Charoen (Phetchabun) Branch Tel. +66 (0) 5674 4076-8 Fax. +66 (0) 5672 2415 Thanon Ekathossaros (Phitsanulok) Branch Tel. +66 (0) 5524 3871-2, 5525 9322 Fax. +66 (0) 5524 4268 Tha Phae Branch Tel. +66 (0) 5323 5755-60 Fax. +66 (0) 5323 5757 Tesco Lotus Phitsanulok Branch Tel. +66 (0) 5525 3701-3 Fax. +66 (0) 5525 3705 Nakhon Sawan Branch Tel. +66 (0) 5631 3848 Fax. +66 (0) 5631 3850 Nan Branch Tel. +66 (0) 5471 1095-9 Fax. +66 (0) 5471 1098 Bo Sang Branch Tel. +66 (0) 5333 7004-6 Fax. +66 (0) 5333 7007 BigC Kamphaeng Phet Branch Tel. +66 (0) 5585 3928-30 Fax. +66 (0) 5585 3932 BigC Chiang Mai Branch Tel. +66 (0) 5324 1248-9, 5324 1336 Fax. +66 (0) 5324 1337
BigC Hang Dong Branch Tel. +66 (0) 5344 4030-1 Fax. +66 (0) 5344 4032
San Sai Branch Tel. +66 (0) 5349 1969 Fax. +66 (0) 5349 1728
Khon Kaen Branch Tel. +66 (0) 4332 4321, 4322 6888 Fax. +66 (0) 4332 5919
Pak Nam Pho Branch Tel. +66 (0) 5621 2082, 5621 2847-8 Fax. +66 (0) 5621 3516
San Pa Khoi Branch Tel. +66 (0) 5324 4157, 5324 9167-8 Fax. +66 (0) 5324 1157
Chum Phae Branch Tel. +66 (0) 4331 1684, 4331 2292 Fax. +66 (0) 4331 2395
Fang Branch Tel. +66 (0) 5345 1007-9 Fax. +66 (0) 5338 2041
Sukhothai Branch Tel. +66 (0) 5561 6022, 5562 2465-6 Fax. +66 (0) 5562 2469
Central Plaza Khon Kaen Branch Tel. +66 (0) 4328 8361-3 Fax. +66 (0) 4328 8365
Phran Kratai Branch Tel. +66 (0) 5576 2111-12 Fax. +66 (0) 5576 2113
Nong Ben Branch Tel. +66 (0) 5629 6163-5 Fax. +66 (0) 5629 6166
The Mall Nakhon Ratchasima Branch Tel. +66 (0) 4439 3931-3 Fax. +66 (0) 4439 3934
Phayao Branch Tel. +66 (0) 5443 1124, 5448 2386-8 Fax. +66 (0) 5443 1272
Lom Kao Branch Tel. +66 (0) 5670 8492-93 Fax. +66 (0) 5670 8494
Talat Pak Chong Branch Tel. +66 (0) 4431 3798-9, 4431 3855-6 Fax. +66 (0) 4431 3255
Phichit Branch Tel. +66 (0) 5661 1033, 5661 1651 Fax. +66 (0) 5661 1127
Lom Sak Branch Tel. +66 (0) 5670 1540, 5670 4207 Fax. +66 (0) 5670 4513
Phitsanulok Branch Tel. +66 (0) 5590 9900 Fax. +66 (0) 5530 4279
Hankha Branch Tel. +66 (0) 5645 1040, 5645 1500 Fax. +66 (0) 5645 1499
Thanon Klang Mueang (Khon Kaen) Branch Tel. +66 (0) 4332 2630 Fax. +66 (0) 4332 2386
Phrae Branch Tel. +66 (0) 5452 2004, 5452 2006 Fax. +66 (0) 5452 2005
Hang Dong Branch Tel. +66 (0) 5343 4035-7 Fax. +66 (0) 5343 4038
Phaisali Branch Tel. +66 (0) 5625 9721-2 Fax. +66 (0) 5625 9723
Hang Nam Sakorn Branch Tel. +66 (0) 5643 1232-3 Fax. +66 (0) 5643 1234
Mae Sot Branch Tel. +66 (0) 5553 3311-3, 5553 3319 Fax. +66 (0) 5553 3320
Ha Yaek Phokhun Mengrai (Chiang Rai) Branch Tel. +66 (0) 5374 5244-5 Fax. +66 (0) 5374 5247
Mae Sai Branch Tel. +66 (0) 5373 1675, 5373 1904 Fax. +66 (0) 5373 1905 Lamphun Branch Tel. +66 (0) 5351 0371, 5351 2060 Fax. +66 (0) 5351 0372 Wang Chao Branch Tel. +66 (0) 5555 6059, 5555 6061 Fax. +66 (0) 5555 6063 Sawankhalok Branch Tel. +66 (0) 5564 1478-9, 5564 2512 Fax. +66 (0) 5564 1480
Thanon Mittraphap (Nakhon Ratchasima) Branch Tel. +66 (0) 4425 9003-4, 4425 1376 Fax. +66 (0) 4425 9002 Thanon Si Chan Branch Tel. +66 (0) 4322 7275-8 Fax. +66 (0) 4322 7279
Uttaradit Branch Tel. +66 (0) 5544 1777, 5544 2240 Fax. +66 (0) 5541 4096 Uthai Thani Branch Tel. +66 (0) 5657 1616-9 Fax. +66 (0) 5657 1620
NORTH EASTERN REGION Kalasin Branch Tel. +66 (0) 4381 1028-9 Fax. +66 (0) 4381 6584
Thanon Kuang Heng (Si Sa Ket) Branch Tel. +66 (0) 4561 7861-3 Fax. +66 (0) 4561 7860
Thanon Sappasit Branch Tel. +66 (0) 4524 4315, 4524 4729 Fax. +66 (0) 4524 3193 Thanon Suranari Branch Tel. +66 (0) 4424 2560, 4424 2904 Fax. +66 (0) 4425 6706 Thanon Na Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 1163, 4322 3234 Fax. +66 (0) 4322 1822 Thanon Hai Srok (Roi Et) Branch Tel. +66 (0) 4351 8681-3 Fax. +66 (0) 4351 8677
319
THANACHART BANK PUBLIC COMPANY LIMITED
Thanon Udon Dutsadi Branch Tel. +66 (0) 4224 7574, 4224 7732 Fax. +66 (0) 4224 7510
Roi Et Branch Tel. +66 (0) 4303 3213-5 Fax. +66 (0) 4351 8644
Ubon Ratchathani Branch Tel. +66 (0) 4531 9401-3 Fax. +66 (0) 4531 9405
Tesco Lotus Khorat Branch Tel. +66 (0) 4426 3564, 4426 3567 Fax. +66 (0) 4426 3565
Loei Branch Tel. +66 (0) 4283 0851-3 Fax. +66 (0) 4281 4472
EASTERN REGION
Tesco Lotus Chaiyaphum Branch Tel. +66 (0) 4483 8324-6 Fax. +66 (0) 4481 3352
Wang Sam Mo Branch Tel. +66 (0) 4238 7486-7 Fax. +66 (0) 4238 7488
Nakhon Phanom Branch Tel. +66 (0) 4251 6125-8 Fax. +66 (0) 4251 6129
Warin Chamrap Branch Tel. +66 (0) 4532 2788, 4532 2791-3 Fax. +66 (0) 4532 2790
Nakhon Ratchasima Branch Tel. +66 (0) 4426 9797 Fax. +66 (0) 4426 9790
Sakon Nakhon Branch Tel. +66 (0) 4271 6446-50 Fax. +66 (0) 4271 6451
Nang Rong Branch Tel. +66 (0) 4463 1049, 4463 1586-8 Fax. +66 (0) 4463 1050
Sam Yaek Pak Thong Chai Branch Tel. +66 (0) 4421 3993-5, 4428 1815-6 Fax. +66 (0) 4421 3994
Ban Phai Branch Tel. +66 (0) 4327 4038-40 Fax. +66 (0) 4327 4043
Surin Branch Tel. +66 (0) 4451 4455-8 Fax. +66 (0) 4451 4459
BigC Buri Ram Branch Tel. +66 (0) 4469 0450, 4469 0458 Fax. +66 (0) 4469 0469
Surin Plaza Branch Tel. +66 (0) 4453 8517-20 Fax. +66 (0) 4453 8521
BigC Udon Thani Branch Tel. +66 (0) 4212 8551-3 Fax. +66 (0) 4212 8548
Suwannakhuha Branch Tel. +66 (0) 4237 2515-6 Fax. +66 (0) 4237 2517
Bueng Kan Branch Tel. +66 (0) 4249 1779, 4249 1781 Fax. +66 (0) 4240 3097
Nong Khai Branch Tel. +66 (0) 4241 3505-8 Fax. +66 (0) 4241 3509
Buri Ram Branch Tel. +66 (0) 4460 1555, 4460 2000 Fax. +66 (0) 4460 2123
Nong Bua Lam Phu Branch Tel. +66 (0) 4231 1107, 4231 1166 Fax. +66 (0) 4231 1657
Maha Sarakham Branch Tel. +66 (0) 4372 3627-30 Fax. +66 (0) 4372 2958
Ha Yaek Nampu (Udon Thani) Branch Tel. +66 (0) 4222 1703, 4224 7211-2 Fax. +66 (0) 4224 7209
Mukdahan Branch Tel. +66 (0) 4261 4554 Fax. +66 (0) 4263 1374
Amnat Charoen Branch Tel. +66 (0) 4551 1721-4 Fax. +66 (0) 4551 1726
Yasothon Branch Tel. +66 (0) 4571 4051-6 Fax. +66 (0) 4571 4054
Udon Thani Branch Tel. +66 (0) 4234 2550 Fax. +66 (0) 4234 2398
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Kabin Buri Branch Tel. +66 (0) 3728 0796, 3728 0798 Fax. +66 (0) 3728 0799 Ko Chang Branch Tel. +66 (0) 3955 1026-9 Fax. +66 (0) 3955 1030 Klaeng Branch Tel. +66 (0) 3867 1564-6 Fax. +66 (0) 3867 8002 304 Industrial Park Branch Tel. +66 (0) 3762 2802 Fax. +66 (0) 3762 2803 Chanthaburi Branch Tel. +66 (0) 3960 7463-5 Fax. +66 (0) 3960 7466 Chachoengsao Branch Tel. +66 (0) 3851 5835-7 Fax. +66 (0) 3851 5838 Chon Buri Branch Tel. +66 (0) 3827 6930-6 Fax. +66 (0) 3827 6935 Central Festival Pattaya Beach Branch Tel. +66 (0) 3300 3571-3 Fax. +66 (0) 3804 3194 Central Chon Buri Branch Tel. +66 (0) 3805 3531-3 Fax. +66 (0) 3805 3535 Trat Branch Tel. +66 (0) 3952 2657-9 Fax. +66 (0) 3952 2660 Thanon Khwang (Chanthaburi) Branch Tel. +66 (0) 3932 5925, 3931 1079 Fax. +66 (0) 3932 5926 Thanon Chetchamnong (Chon Buri) Branch Tel. +66 (0) 3828 4317-8 Fax. +66 (0) 3828 4328
Thanon Phraya Satcha (Chon Buri) Branch Tel. +66 (0) 3879 2214-5 Fax. +66 (0) 3879 2216 Thanon Sukhumwit (Chon Buri) Branch Tel. +66 (0) 3879 6066, 3879 5639 Fax. +66 (0) 3827 7841 Thanon Sukhumwit (Rayong) Branch Tel. +66 (0) 3861 4913-4 Fax. +66 (0) 3861 2342 Thanon Surasak 1 (Si Racha) Branch Tel. +66 (0) 3831 1872, 3831 2206-7 Fax. +66 (0) 3831 1871 Tesco Lotus Bo Win Branch Tel. +66 (0) 3811 7133-5 Fax. +66 (0) 3811 7136 Tesco Lotus Pattaya Nuea Branch Tel. +66 (0) 3841 1410, 3841 1316 Fax. +66 (0) 3841 1423 Tesco Lotus Amata Nakhon Branch Tel. +66 (0) 3845 7485-7 Fax. +66 (0) 3845 7489 Na Kluea (Pattaya) Branch Tel. +66 (0) 3822 6060-1 Fax. +66 (0) 3822 6117 Nikhom Phatthana Branch Tel. +66 (0) 3863 6090-1 Fax. +66 (0) 3863 6092 Bang Pla Soi Branch Tel. +66 (0) 3827 1819, 3827 6651 Fax. +66 (0) 3827 6652 Ban Bueng Branch Tel. +66 (0) 3844 3060-1, 3844 4015-6 Fax. +66 (0) 3844 3713 BigC Chachoengsao 2 Branch Tel. +66 (0) 3851 5188, 3851 5190 Fax. +66 (0) 3851 5219 BigC Pattaya Tai Branch Tel. +66 (0) 3837 4270, 3837 4273 Fax. +66 (0) 3837 4463 BigC Rayong Branch Tel. +66 (0) 3861 1535-6 Fax. +66 (0) 3862 2659
BigC Sa Kaeo Branch Tel. +66 (0) 3742 1761-3 Fax. +66 (0) 3742 1765 Prachin Buri Branch Tel. +66 (0) 3721 1300, 3721 3855-9 Fax. +66 (0) 3721 3080 Pluak Daeng Branch Tel. +66 (0) 3865 9768-9 Fax. +66 (0) 3865 9770 Pacific Park (Si Racha) Branch Tel. +66 (0) 3831 3226, 3831 3236 Fax. +66 (0) 3831 3245 Pranom Sarakham Branch Tel. +66 (0) 3855 1005, 3855 1824-5 Fax. +66 (0) 3855 1659 Pattaya Branch Tel. +66 (0) 3867 4173-5 Fax. +66 (0) 3842 9973 Pattaya Nuea Branch Tel. +66 (0) 3842 8901-2, 3842 8905 Fax. +66 (0) 3842 8963 PASSiONE Rayong Branch Tel. +66 (0) 3802 3405-7 Fax. +66 (0) 3802 3409
Saha Pathana Industrial Park (Si Racha) Branch Tel. +66 (0) 3848 1826-8 Fax. +66 (0) 3848 1829 Sattahip Branch Tel. +66 (0) 3843 7321, 3843 7986 Fax. +66 (0) 3843 7717 Nong Mon Branch Tel. +66 (0) 3839 2302, 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, 3841 5884 Fax. +66 (0) 3841 5885 Laem Chabang Branch Tel. +66 (0) 3840 0740-3 Fax. +66 (0) 3840 0745 Laem Thong Bang Saen Branch Tel. +66 (0) 3815 3930-1, 3815 3936 Fax. +66 (0) 3815 3994 Aranyapraphet Branch Tel. +66 (0) 3764 3145-7 Fax. +66 (0) 3764 3148
Map Ta Phut Branch Tel. +66 (0) 3868 2531-3 Fax. +66 (0) 3868 1995
Kabin Buri Industrial (Nongki) Branch Tel. +66 (0) 3745 5428-29, 3745 5420-1 Fax. +66 (0) 3745 5439
Rayong Branch Tel. +66 (0) 3886 4114 Fax. +66 (0) 3886 4115
Harbor Mall Laem Chabang Branch Tel. +66 (0) 3849 3194-6 Fax. +66 (0) 3314 5215
Robinson Chon Buri Branch Tel. +66 (0) 3845 9393-5 Fax. +66 (0) 3845 9397
SOUTHERN REGION Krabi Branch Tel. +66 (0) 7561 1764-6 Fax. +66 (0) 7561 1767
Wang Nam Yen Branch Tel. +66 (0) 3725 1543-7 Fax. +66 (0) 3725 1546
Kantang Branch Tel. +66 (0) 7525 1250, 7525 1640 Fax. +66 (0) 7525 1644
Wang Sombun Branch Tel. +66 (0) 3744 9193-4 Fax. +66 (0) 3744 9195 Sa Kaeo Branch Tel. +66 (0) 3724 1061, 3724 1585-6 Fax. +66 (0) 3724 1062
Ko Tao Branch Tel. +66 (0) 7745 6533-4 Fax. +66 (0) 7745 6784
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THANACHART BANK PUBLIC COMPANY LIMITED
Ko Pha-ngan Branch Tel. +66 (0) 7723 8186-7 Fax. +66 (0) 7737 7052
Thanon Punnakan (Hat Yai) Branch Tel. +66 (0) 7450 0040, 7450 0044-5 Fax. +66 (0) 7450 0089
Tesco Lotus Songkhla Branch Tel. +66 (0) 7430 7937-9 Fax. +66 (0) 7435 2735
Ko Lanta Branch Tel. +66 (0) 7566 8152 Fax. +66 (0) 7566 8151
Thanon Montri Branch Tel. +66 (0) 7621 2993, 7621 5393 Fax. +66 (0) 7621 3149
Nakhon Si Thammarat Branch Tel. +66 (0) 7532 2689-90 Fax. +66 (0) 7532 214
Ko Samui Branch Tel. +66 (0) 7742 1110-1, 7742 0363 Fax. +66 (0) 7742 1112
Thanon Ratsada (Phuket) Branch Tel. +66 (0) 7621 9664, 7625 6873-5 Fax. +66 (0) 7621 9731
Narathiwat Branch Tel. +66 (0) 7351 2013, 7351 4463-5 Fax. +66 (0) 7351 2014
Khao Lak Branch Tel. +66 (0) 7648 5493-4 Fax. +66 (0) 7648 5560
Thanon Ratchadamnoen (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534 2779-80, 7535 6119 Fax. +66 (0) 7535 6741
Ban Don Branch Tel. +66 (0) 7721 0365, 7728 1551-2 Fax. +66 (0) 7721 0366
Khian Sa Branch Tel. +66 (0) 7738 7407-8 Fax. +66 (0) 7738 7409 Central Festival Phuket Branch Tel. +66 (0) 7620 9290, 7620 9292 Fax. +66 (0) 7620 9291 Diana Si Phuwanart Branch Tel. +66 (0) 7446 5316-8 Fax. +66 (0) 7446 5319 Talat Tha Phae (Nakhon Si Thammarat) Branch Tel. +66 (0) 7538 3271, 7538 3316 Fax. +66 (0) 7538 3110
Thanon Si Wichai (Surat Thani) Branch Tel. +66 (0) 7726 4170-1 Fax. +66 (0) 7720 6671 Thalang Branch Tel. +66 (0) 7631 1020, 7631 1432 Fax. +66 (0) 7631 1433 Thap Thiang (Trang) Branch Tel. +66 (0) 7521 8059, 7521 1321 Fax. +66 (0) 7521 1320 Thai Mueang Branch Tel. +66 (0) 7657 1234-7 Fax. +66 (0) 7657 1215
Takua Pa Branch Tel. +66 (0) 7667 4750-1 Fax. +66 (0) 7642 5177
Thung Song Branch Tel. +66 (0) 7541 1087, 7541 1956 Fax. +66 (0) 7541 1054
Thanon Chuti Uthit (Hat Yai) Branch Tel. +66 (0) 7434 6396-8 Fax. +66 (0) 7434 6393
Tesco Lotus Krabi Branch Tel. +66 (0) 7565 0833, 7565 0836-7 Fax. +66 (0) 7565 0834
Thanon Chon Kasem (Surat Thani) Branch Tel. +66 (0) 7728 3627-30 Fax. +66 (0) 7728 4080
Tesco Lotus Chao Fa (Phuket) Branch Tel. +66 (0) 7626 8059-61 Fax. +66 (0) 7621 9248
Thanon Thawi Wong (Hat Patong) Branch Tel. +66 (0) 7634 5684 Fax. +66 (0) 7634 5687 Thanon Thammanun Withi (Hat Yai) Branch Tel. +66 (0) 7423 5549, 7422 0276-7 Fax. +66 (0) 7424 3648
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ANNUAL REPORT 2018
Tesco Lotus Chumphon Branch Tel. +66 (0) 7765 9930-2 Fax. +66 (0) 7765 9933 Tesco Lotus Thung Song Branch Tel. +66 (0) 7541 3003-5 Fax. +66 (0) 7541 3007 Tesco Lotus Phuket Branch Tel. +66 (0) 7625 5472-4 Fax. +66 (0) 7652 3400
Ban Na Doem Branch Tel. +66 (0) 7735 9013, 7735 9015 Fax. +66 (0) 7735 9014 BigC Pattani Branch Tel. +66 (0) 7333 8004, 7331 3982-3 Fax. +66 (0) 7333 8005 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, 7323 1416 Fax. +66 (0) 7323 0914 Pattani Branch Tel. +66 (0) 7333 5950-1, 7333 1851 Fax. +66 (0) 7333 5949 Pak Phanang Branch Tel. +66 (0) 7551 7132, 7551 8023 Fax. +66 (0) 7551 8021 Patong Branch Tel. +66 (0) 7634 4124-6 Fax. +66 (0) 7634 4127 Phang-nga Branch Tel. +66 (0) 7641 1295, 7641 1527-8 Fax. +66 (0) 7641 1326 Phatthalung Branch Tel. +66 (0) 7461 3082, 7461 3951-2 Fax. +66 (0) 7461 1918
Phunphin Branch Tel. +66 (0) 7731 1449, 7731 2368-70 Fax. +66 (0) 7731 1537
Wiang Sa Branch Tel. +66 (0) 7736 1461-2, 7736 3550 Fax. +66 (0) 7725 7268
Huai Yot Branch Tel. +66 (0) 7523 5033-5, 7527 1013 Fax. +66 (0) 7527 1064
Phuket Branch Tel. +66 (0) 7626 1570-5 Fax. +66 (0) 7626 1576
Songkhla Branch Tel. +66 (0) 7431 1638, 7432 3735-6 Fax. +66 (0) 7431 3543
Hat Karon Branch Tel. +66 (0) 7639 6981, 7639 6485-6 Fax. +66 (0) 7639 6980
Mae Nam Branch Tel. +66 (0) 7724 8375, 7733 2259 Fax. +66 (0) 7733 2260
Sadao Branch Tel. +66 (0) 7441 4315-7 Fax. +66 (0) 7446 0501
Hat Chaweng Branch Tel. +66 (0) 7723 0405, 7723 1089-90 Fax. +66 (0) 7742 2051
Yala Branch Tel. +66 (0) 7321 2592, 7321 3375 Fax. +66 (0) 7321 1691
Sam Kong (Phuket) Branch Tel. +66 (0) 7622 2838-40 Fax. +66 (0) 7622 2841
Hat Lamai Branch Tel. +66 (0) 7745 8159-60, 7745 8162-4 Fax. +66 (0) 7745 8161
Yan Ta Khao Branch Tel. +66 (0) 7528 1003, 7528 1101 Fax. +66 (0) 7528 1102
Sai Buri Branch Tel. +66 (0) 7341 1021, 7341 1314-5 Fax. +66 (0) 7341 1138
Hat Yai Branch Tel. +66 (0) 7422 1955-7 Fax. +66 (0) 7422 1959
Ranong Branch Tel. +66 (0) 7781 1198, 7781 1752 Fax. +66 (0) 7781 1751
Surat Thani Branch Tel. +66 (0) 7720 6009-13 Fax. +66 (0) 7721 3560
Hat Yai Nai Branch Tel. +66 (0) 7436 1313-5 Fax. +66 (0) 7425 9704
Robinson Trang Branch Tel. +66 (0) 7559 0128-9, 7559 0120 Fax. +66 (0) 7559 0120
Su-ngai Kolok Branch Tel. +66 (0) 7361 1359, 7361 1002 Fax. +66 (0) 7361 3632
Ao Nang Branch Tel. +66 (0) 7566 1434, 7566 1430-2 Fax. +66 (0) 7566 1433
Robinson Ocean Nakhon Si Thammarat Branch Tel. +66 (0) 7534 1875, 7534 1960-1 Fax. +66 (0) 7534 1876
Lang Suan Branch Tel. +66 (0) 7754 1965, 7758 1417-8 Fax. +66 (0) 7754 1987
Ao Luek Branch Tel. +66 (0) 7561 0739, 7563 4335-7 Fax. +66 (0) 7561 0755
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Summary of Specified Items per Form 56-2 in 2018 Annual Report Items
Page
1. Policy and Overall Business Operation
035
2. Nature of Business Operations
040
3. Risk Factors
056
4. General and Other Key Information
168
5. Shareholders
174
6. Dividend Payment Policy
176
7. Management Structures
120
8. Corporate Governance
102
9. Corporate Social Responsibility
069
10. Internal Control and Risk Management
117
11. Related Transactions
116
12. Financial Highlight
002
13. Management Discussion and Analysis
020
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ANNUAL REPORT 2018
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