ANNUAL REPORT 2017
THANACHART BANK PUBLIC COMPANY LIMITED
DIGITAL INNOVATION
CONTENTS 001 002 012 016 018 033 053 065 090 104 106 107 116 140 147 150 151 153 155 291 304
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 2017 Annual Report
“Investors can learn more on the issuing company’s annual statement (Form 56-1) Shown in www.sec.or.th or the Bank’s website: www.thanachartbank.co.th”
FOUR STRATEGIC FOCUSES FOR THE BUSINESS OPERATION IN
2018 1 2 3 4
Consistent Investment and Development of Technological Systems and Infrastructure: This is the key driving force in advancing Thanachart Group forward. Thanachart Group is committed to provide a full range of digital banking services geared towards the changing lifestyle of customers. The Company also strives to develop new innovations, service customers with more efficiency, and provide customers with complete, convenient, fast, and secure services that will help to create a better customer experience. Process Enhancement: To meet the needs of diverse customers, Thanachart Group integrates technology for efficiency and security in customer servicing and managing operating costs. People Development: Thanachart Group aspires that its employees be professional leaders. This is achieved through the construction of an employee knowledge base and the leveragement of employees’ qualifications to concur with the complexity of the digital financial environment and the changing needs of customers. Work Collaboration: To achieve corporate goals, Thanachart Group expects employees to be committed and earnest workers.
VISION OF THANACHART GROUP
THREE ITEMS FOR THE BUSINESS PHILOSOPHY
To be the best at providing fully integrated solutions to our customers’ complete financial needs by offering the highest quality products, services, and advice.
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
2017
2016
2015
2014
2013
2017
2016
2015
2014
2013
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
52,445 24,884 27,561 11,750 39,311 19,515
53,879 27,290 26,589 24,948 51,537 20,408
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
50,542 26,489 24,053 22,079 46,132 17,692
5,935 5,808 13,135 11,962
8,007 11,452
Operating results (THB million) Interest income Interest expenses Net interest income Non-interest income Total income(1) Non-interest expenses Bad debt and doubtful accounts(2) Net income(3)
6,244 6,251 8,592 13,810 12,434 10,743
7,122 11,497 9,922 15,385
7,181 11,110 7,918 14,113
Operating performance Basic earnings per share (THB) Return on average assets (ROAA) (Percent) Return on average equity (ROAE) (Percent) Interest spread(4) (Percent) Cost to income ratio net insurance premium income(5) (Percent)
2.28
2.05
1.90
1.80
2.79
2.17
1.97
2.03
1.44
2.56
1.42
1.29
1.11
0.98
1.51
1.42
1.31
1.24
0.82
1.46
10.68 3.06
10.27 3.03
9.83 2.84
9.93 2.68
17.08 2.62
10.95 3.05
10.64 3.02
11.39 2.83
8.60 2.66
16.91 2.66
48.68
51.00
49.75
49.64
39.60
48.12
50.18
47.50
50.34
38.35
711,675 1,009,557 755,586 873,349 134,290
690,907 950,511 725,966 824,391 124,488
713,446 754,370 790,017 980,972 1,008,890 1,038,349 741,145 787,189 811,308 863,281 902,726 941,109 116,226 104,977 96,218
665,505 954,460 737,812 830,074 124,385
651,613 906,868 712,329 791,283 115,585
676,001 938,834 726,002 830,784 108,050
714,436 967,216 773,578 871,614 95,602
750,494 990,724 799,186 901,572 89,152
Statement of financial position (THB million) Loans Total assets Deposits and borrowings Total liabilities Shareholders’ equity(6)
Definition and Formula (1) Total income = Net interest income + Non-interest income (2) Including loss on debt restructuring (3) Excluding non-controlling interest (4) Interest spread = Yield - Cost of fund Yield = Interest income / Average earning assets Earning assets = Interbank and money market from interest bearing + net investment + loans Cost of fund = Interest expenses / Average paying liabilities Paying liabilities = Total deposits + interbank and money market from interest bearing + total borrowings (5) Cost to income ratio = Non-interest expenses / Total income (6) Excluding non-controlling interest
As at and for the year ended 31 December
Consolidated Financial Statements 2017
2016
2015
2014
Separate Financial Statements 2013
2017
2016
2015
2014
2013
Asset quality Loans to deposits and borrowings ratio (Percent) 94.19 95.17 96.27 95.83 97.38 90.20 91.48 93.11 92.35 NPL-gross to total loans (Percent) 2.30 2.29 2.84 4.09 4.36 1.94 1.90 2.20 2.97 NPL-net to total loans (Percent) 1.19 1.07 1.26 2.02 2.25 1.19 1.05 1.15 1.61 Coverage ratio (Percent) 134.07 151.16 119.42 85.52 83.36 139.80 151.64 127.41 90.64 Total allowance to BOT regulation (Percent) 172.91 192.38 159.33 133.38 127.87 191.59 202.23 171.94 138.16 Non-performing loans (NPL) (THB million) 18,108 16,434 21,681 32,761 36,377 14,413 12,893 15,986 22,595 Capital measures Tier I capital ratio (Percent) 14.81 13.27 12.04 10.70 Total capital ratio (Percent) 18.94 19.15 17.92 15.83 Risk weighted assets (THB million) 662,905 682,373 682,245 724,209 Common share information Common shares outstanding (Million shares) - Average-basic 6,065 6,065 5,641 5,514 5,514 6,065 6,065 5,641 5,514 - End of period 6,065 6,065 6,065 5,514 5,514 6,065 6,065 6,065 5,514 Book value (THB) 22.46 20.80 19.41 19.25 17.64 20.51 19.06 17.82 17.34 Dividends per share (THB) 0.40 0.75 0.62 0.45 Other information Employees 13,702 14,553 14,719 14,806 15,358 11,533 12,305 12,468 12,676 Branches 523 592 614 617 Exchange booth 36 45 49 51
93.91 3.07 1.66 89.18 138.38 24,394
9.47 14.80 747,992
5,514 5,514 16.17 0.45
13,286 621 54
Innovative vision success With our prudent and comprehensive vision and commitment, driven by innovation, we aim to bring the organization and customers to , together.
success
smart
spirit
Professional synergy
EXPERIENCE With the cooperation of
experts from every field,
we deliver more than just a financial experience.
excellence
EXPERT
Customer captivation
capability To meet the needs of all lifestyles in the digital era, we deliver unlimited
financial innovation
that provides benefits and convenience in all financial transactions, in order to meet the needs of customers.
create
continue
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community enrichment
gain
mindful of the economic stability and Thai way of life; therefore, We are
for almost half a century, we have cultivated the concepts of
passed on the cultural identity and culture of giving back to society. financial philosophy, and
give
grow
012
ANNUAL REPORT 2017
Message from the Board of Directors
Dear Shareholders, In 2017 the global economy showed continued resilience underpinned by the recovery in purchasing power, investment, and production in the United States, China, Japan, and the European Union. This benefited the Thai economy with exports showing strong growth year over year, along with further expansion of the tourism sector and continued Government investment in infrastructure. Overall, the Thai commercial banking sector demonstrated solid loan growth but with some deterioration in credit quality that impacted profitability amongst the large banks. Capital positions remained robust as the sector approaches international financial reporting standards for financial instruments (IFRS 9). Operating models and investment plans were influenced by the Government’s Thailand 4.0 strategy, in particular the National e-Payment agenda, as well as further tightening of credit card & personal loan underwriting requirements, and increased regulation surrounding the sale of
securities and insurance products. All of these developments impacted the sector’s productivity ratios in 2017, and the banking industry addressed these circumstances with increased investment in technology coupled with a record number of branch closures. Thanachart Bank executed a customer centric strategy focused on becoming the Main Bank for our customers. This was supported by channel and product optimization with corresponding improvements in productivity being used to invest in our digital capabilities. As a result, in 2017 our consolidated net profit grew for the 12th consecutive quarter to THB 13,810 million, an increase of 11% from the previous year and representing top quartile earnings growth in the sector. Total assets grew 6.2% driven by gains in our retail and SME portfolios while maintaining our market-leading position in auto loans. Credit quality continued to improve with loan loss impairment dropping year-over-year despite our growth, and our 2.3% NPL ratio was amongst
013
THANACHART BANK PUBLIC COMPANY LIMITED
(Mr. Banterng Tantivit) Chairman of the Board of Directors
the best in the industry. In terms of efficiency, we led the sector in cost-to-income ratio improvement and generated top quartile improvement in operating leverage. Our capital adequacy ratio remained strong at 18.9%, and Tier 1 Capital was 14.8%. Our mission to better serve our customers led to the launch of a number of innovative products and services including Thanachart Cash Your Book in our auto business, the rollout of the new Diamond-series credit cards for our high value retail customers, as well as the “Thanachart Justice League Chibi” card issued with Freever Lite Savings Accounts to facilitate payments and transfers. As part of our National e-Payments strategy, we enabled merchants to install electronic data capture (EDC) terminals and recently launched a QR code payment system. This will reduce their cash carry costs, help prevent incidents of fraud, and improve digital integration across the industry.
Our ability to drive growth through customer focused innovation was clear amongst our subsidiaries as well; • Thanachart Securities Public Company Limited launched T-Wealth research, focusing on asset allocation for investors based on their risk appetite and suitability. • Thanachart Fund Management Company Limited launched a number of new products including T-PrimePlusAI, which mainly invests in large market-capitalization stocks while providing health protection benefits. • Thanachart Insurance Public Company Limited developed the Thanachart Club DD application which offers immediate response to insurance claims 24 hours a day.
014
ANNUAL REPORT 2017
(Mr. Suphadej Poonpipat) Chairman of the Executive Committee
Overall, 2017 was the best year on record for our bank and its subsidiaries, marked by numerous awards and recognition from industry including;
• “Thailand Capital Markets Deal of the Year - Lead Underwriter on Banpu Power Public Company Limited IPO” - IFR ASIA Magazine
• “Most Admired Company” - University of the Thai Chamber Commerce and Business + Magazine
• “Best Asset Management Company in 2017” - SET Awards 2017
• “No.1 Brand in Thailand in 2016-2017 for Auto Hire Purchase Loan and Auto Re-Finance” - Marketeer Magazine
• “Most Outstanding Non-Life Insurance Company 2016” - Office of Insurance Commission
• “Auto Loan Product of the Year” - Asian Banker Magazine
• “Award for media promoting moral education, the Millionaire’s Son viral clip from the Rethink campaign” - the Department of Religious Affairs, the Ministry of Culture and Suan Sunandha Rajabhat University
• “Best Bond, Ministry of Finance, Lao People’s Democratic Republic 14 billion baht multi-tranche bond” Asset Magazine • “Best Securities Company Awards - Retail Investors” - SET Awards 2017
• “Thailand Energy Award 2017” - Ministry of Energy
015
THANACHART BANK PUBLIC COMPANY LIMITED
(Mr. Somjate Moosirilert) Chief Executive Officer and President
We also continue to prioritize the strength of our internal controls, including effective Anti-Corruption measures. In 2017 Thanachart Group led the sector with 14 companies being recognized as Certified Companies under the Private Sector Collective Action Coalition against Corruption (CAC) Program. In 2018 the Thai banking sector will continue to face opportunities and challenges due to changing customer preferences, government policies, regulatory focus, and the evolving global interest rate environment. We will remain focused on the customer - delivering enhanced and innovative customer experiences enabled by continued improvements in productivity. These efforts will include increasing main bank customer penetration through our auto business, growing our high value customer base through an updated wealth offering, and investing further in technology to improve the customer experience across the retail bank and our subsidiaries. We will also introduce an enterprise Risk Appetite Framework, enhance system availability and security, and
increase diligence on market conduct and sales practices, all as part of our ongoing efforts to be among the market leaders in maintaining the trust and confidence of our customers. Our people continue to be the most critical element of our success, and the coming year will bring additional focus on talent development and performance management. These efforts will include industry benchmarking, increased use of digital training, and updated KPI to support achievement of our medium and long term goals. We would like to take this opportunity to extend our sincerest gratitude to you, our partners, customers and team for your support and confidence in Thanachart Bank. Together we have consistently delivered strong sustainable growth, and our performance culture and customers focus have us well positioned for continued success in 2018.
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ANNUAL REPORT 2017
Board of Directors Thanachart Bank Public Company Limited
Mr. Banterng Tantivit Chairman
Mr. Suphadej Poonpipat
Vice Chairman Chairman of the Executive Committee Member of the Succession Committee
Dr. Thanachart Numnonda
Independent Director Chairman of the Audit Committee
Mr. Narong Chivangkur Note: * Mr. Adil Aziz Chaudhry resigned from his directorship on 31 December 2017 and the Bank’s Board of Director has appointed Mr. Alexander Kwai Lap Choi as the Bank’s Director in replacement, effective on 1 January 2018.
Independent Director Chairman of the Nomination and Remuneration Committee Chairman of the Succession Committee
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THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Somjate Moosirilert
Ms. Suvarnapha Suvarnaprathip
Mr. William George Said
Assoc Prof. Dr. Somjai Phagaphasvivat
Ms. Mookda Pairatchavet
Mr. Rod Michael Reynolds
Independent Director Member of the Audit Committee
Independent Director Member of the Audit Committee Member of the Nomination and Remuneration Committee Member of the Succession Committee
Mr. Walter Tas
Mr. Adil Aziz Chaudhry*
Mr. Alexander Kwai Lap Choi*
Director Member of the Executive Committee Chairman of the Risk Management Committee Chief Executive Office and President
Director
Director Vice Chairperson of the Executive Committee
Director
Director Member of the Executive Committee Vice Chairman of the Risk Management Committee Chief Operating Officer Director Member of the Nomination and Remuneration Committee Member of the Succession Committee Director
018
ANNUAL REPORT 2017
Management Discussion and Analysis Economics Outlook and Competition in Banking Industry In 2017, the Thai economy showed a 3.9 growth, an increase from 3.3 percent in the previous year, following the Report of the Office of the National Economic and Social Development Board (NESDB). This was mainly due to export and tourism sectors which have been thriving consistently throughout the year, following a recovering global economics. Private consumption showed promising sign especially in durable goods, which have been growing consistently in line with expanding car sale volume as the automotive market improved. Private investment also experienced growth from the previous year due to the favorable growth in export sector, resulting in a gradual increase in production in some areas of manufacturing sector. However, the driver from government sector has slowed down. Overall, the Thai economy has been showing healthy growth throughout 2017. Inflation rate has been increasing gradually. Consequently, the Monetary Policy Committee of the Bank of Thailand (“BOT”) issued a resolution to maintain the same policy rate at 1.50 percent per annum in order to further the economic growth in the future. For 2018, the NESDB has estimated GDP growth of 3.6 - 4.6 percent for the Thai economy. Government sector is the main key driver both in forms of spending and investment. The private sector is predicted to continue the improving trend both in consumption and investment while export sector is forecasted to grow, following the growth of global economies. Loan volume of commercial banking industry in 2017 grew when compared to the previous year, following the improving economic conditions, especially in the latter half of the year. Deposits also grew in line with the loan growth. For 2018, loan volume is forecasted to maintain its healthy trend while deposits are expected to be more competitive and will put upward pressure on the cost of fund for the industry.
Major Events in 2017 • On 5 April 2017, the Annual General Meeting of Shareholders of 2017 issued a resolution to approve dividend payments for shareholders of Thanachart Bank Public Company Limited (“the Bank”) at THB 0.40 per share, equivalent to THB 2,426 million. Together with the interim dividend payment of THB 0.35 per share equivalent to THB 2,123 million, the dividend payment of the year 2016 totaled to THB 0.75 per share equivalent to THB 4,549 million, or 38.03 percent of 2016 net profit in the bank-only financial statements or 36.58 percent of 2016 net profit in consolidated financial statements. Dividends were paid on 25 April 2017. • On 20 July 2017, the Bank early redeemed unsecured subordinated debentures of THB 8,497 million, maturing in 2022 with the issuer’s right to early redeem. The early redemption was because from 20 July 2017 onwards, such subordinated debentures could not be fully counted as the capital according to the BOT’s notification No. SorNorSor. 7/2015 Re: Components of Capital. • The Bank’s Board of Directors No. 8/2017 dated 17 August 2017 issued a resolution for an interim dividend payment from the operating results in the first six-month period of 2017 at THB 0.40 per share, an equivalent of THB 2,426 million or 36.30 percent of first half of 2017 net profit in the bank only financial statements or 36.74 percent in consolidated financial statements. This is in accordance with the dividend payout policy and dividends were paid on 15 September 2017.
019
THANACHART BANK PUBLIC COMPANY LIMITED
• During 6-9 October 2017, the Bank sold 17,722,000 shares of MBK Public Company Limited (“MBK”), equivalent to 1.0376 percent of MBK’s total issued and paid-up shares. Consequently, the Bank has a 3.46 percent shareholding of MBK’s total issued and paid-up shares, and the Bank and subsidiaries’ shareholding was 9.90 percent of MBK’s total issued and paid-up shares. The share sale was carried out to reduce the shareholding portion in MBK in accordance with the extended conditions of the BOT, following MBK’s reduction of registered paid-up capital by reducing shares in the treasury stock project. • On 19 October 2017, the Bank early redeemed unsecured subordinated debentures of THB 4,019 million, maturing in 2022 with the issuer’s right to early redeem. The early redemption was because from 19 October 2017 onwards, such subordinated debentures could not be fully counted as the capital according to the BOT’s notification No. SorNorSor. 7/2015 Re: Components of Capital.
Consolidated Financial Statements were of the Bank and its subsidiaries as follows: Subsidiaries directly held by the Bank Thanachart Securities Public Company Limited Thanachart Insurance Public Company Limited Thanachart Fund Management Company Limited Thanachart Broker Company Limited Thanachart Group Leasing Company Limited Thanachart Management and Services Company Limited Thanachart Training and Development Company Limited TS Asset Management Company Limited Security SCIB Services Company Limited Ratchthani Leasing Public Company Limited Subsidiary indirectly held by the Bank National Leasing Company Limited
020
ANNUAL REPORT 2017
Overall Operating Result (Analysis comparing performance of 2017 and 2016 based on consolidated financial statements) (Unit: THB million)
Statement of Comprehensive Income
Variance Increase/ Percentage (Decrease)
2017
2016
Interest income Interest expenses Net interest income Net fees and service income Other operating income (1) Net operating income Other operating expenses (2)
44,366 14,956 29,410 5,897 6,675 41,982 20,437
44,886 16,174 28,712 5,904 5,749 40,365 20,585
(520) (1,218) 698 (7) 926 1,617 (148)
(1.16) (7.53) 2.43 (0.12) 16.11 4.01 (0.72)
Profit before impairment loss of loans   and debt securities
21,545
19,780
1,765
8.92
6,244
6,251
(7)
(0.11)
15,301
13,529
1,772
13.10
932
691
241
34.88
14,369 13,810 559
12,838 12,434 404
1,531 1,376 155
11.93 11.07 38.37
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: (1) Operating income deducted by insurance expense. (2) Excluding insurance expense.
2.28 6,064.86
2.05 6,064.86
021
THANACHART BANK PUBLIC COMPANY LIMITED
Operating Results for the Year 2017
The Bank and its subsidiaries’ net profit grew for the 12th consecutive quarter, resulting in a net profit of THB 13,810 million in 2017, up by THB 1,376 million or 11.07 percent compared to the previous year. This was contributed by the customer centric strategy, focusing on becoming the Main Bank by delivering quality services across all channels and offering the right products to customers, combined with enhanced efficiency to propel sustainable growth to the organization’s core business. Pre-provision operating profit (PPOP) increased in line with the core business performance that showed robust growth potential. In addition, the Bank was able to continuously maintain the strength of asset quality, liquidity and capital, exhibiting the stability and competitiveness. Total income of the Bank grew by 4.01 percent due to higher net interest income and non-interest revenue year-on-year. The net interest income increased by 2.43 percent from more loans and improved interest spread. The non-interest revenue increased by 7.89 percent from net gains on investments and net insurance income. On the other hand, operating expenses decreased 0.72 percent due to lower costs for premises and more efficient spending. As a result, the pre-provision operating profit (PPOP) increased by THB 1,765 million or 8.92 percent year-on-year. Bad debt and double debt expenses decreased by 0.11 percent thanks to maintenance of asset quality amid total loan growth. The Bank’s total asset expanded consistently throughout the year at 6.21 percent year-on-year following the total loan growth of 3.01 percent from retail and SME loans. Asset quality remained strong due to prudent risk management policy while deposits surged by 5.87 percent. NPLs on consolidated financial statements increased THB 1,674 million from the previous year, resulting in NPL ratio at 2.30 percent, close to the previous year-end. The coverage ratio was 134.07 percent and the reserve to required reserve as of 31 December 2017 was 172.91 percent.
On separate financial statements, NPL ratio was 1.94 percent close to last year, with coverage ratio at 139.80 percent. The reserve to required reserve ratio was 191.59 percent. Capital adequacy ratio of the Bank ended at 18.94 percent, lower compared to 19.15 percent at the end of 2016 as a result of the early redemption of the unsecured subordinated debentures counted as Tier II capital. The Bank’s Tier I capital was 14.81 percent, higher than 2016 at 13.27 percent. Summary of key operating results in 2017 compared to 2016: • Net interest income increased by 2.43 percent and interest spread widened to 3.06 percent. • Non-interest income increased by 7.89 percent mainly from net gains on investments and net insurance premium income. • Total income increased by 4.01 percent from improvement in net interest income and non-interest revenue. • Operating expenses decreased by 0.72 percent due to lower costs for premises and more efficient spending. • Pre-provision operating profit (PPOP) increased by THB 1,765 million or 8.92 percent from higher income and lower operating expenses. • Bad debt and double debt expenses decreased by 0.11 percent thanks to efficient debt quality management. • Net profit increased by THB 1,376 million or 11.07 percent.
022
ANNUAL REPORT 2017
Net Interest Income
(Unit: THB million)
Net Interest Income
Interest Income Interbank and Money Market Items Investments for trading Investments for debts securities Loans Hire Purchase and Financial Leases Interest Expenses Deposits Interbank and Money Market Items Fund Contributed to FIDF and DPA Debts Issued and Borrowing Borrowing Fee Net Interest Income
Variance Increase / Percentage (Decrease)
2017
2016
44,366
44,886
(520)
(1.16)
1,365 25 3,143 17,759 22,074
1,307 30 3,504 18,337 21,708
58 (5) (361) (578) 366
4.44 (16.67) (10.30) (3.15) 1.69
14,956
16,174
(1,218)
(7.53)
8,699 792 3,348 2,110 7
9,526 741 3,326 2,576 5
(827) 51 22 (466) 2
(8.68) 6.88 0.66 (18.09) 40.00
29,410
28,712
698
2.43
In 2017, the Bank and its subsidiaries’ net interest income totaled THB 29,410 million, an increase of THB 698 million or 2.43 percent from last year. • Interest income was THB 44,366 million, decreased by THB 520 million or 1.16 percent due to a decline in yield on earning assets following lowered loan rate in line with the market rate. • Interest expenses were THB 14,956 million, decreased by THB 1,218 million or 7.53 percent, a result of cost of deposit management according to the Bank’s liquidity management strategy. Consequently, interest spread in 2017 was at 3.06 percent, an increase from 3.03 percent last year. The details are shown in the table below. (Unit: THB million)
4Q16
1Q17
2Q17
3Q17
4Q17
2016
2017
Average Policy Interest Rate
1.50
1.50
1.50
1.50
1.50
1.50
1.50
Yield Cost of Fund Interest Spread
5.00 1.89 3.11
4.93 1.88 3.05
4.95 1.89 3.06
4.96 1.87 3.09
4.87 1.85 3.02
5.06 2.03 3.03
4.93 1.87 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)
2017
2016
5,897
5,904
(7)
(0.12)
548 1,113
491 714
57 399
11.61 55.88
200 2,928 464 1,422
207 2,688 400 1,249
(7) 240 64 173
(3.38) 8.93 16.00 13.85
6,675
5,749
926
16.11
12,572
11,653
919
7.89
Non-interest income of the Bank and its subsidiaries in 2017 totaled THB 12,572 million, an increase of THB 919 million or 7.89 percent from last year. This was mainly due to higher gains on investments and net insurance premiums. • Net fee and service income totaled THB 5,897 million, a decrease of THB 7 million or 0.12 percent mainly due to lower brokerage fee in line with the market conditions, whereas insurance commission and fund management fees improved. • Other Operating income totaled THB 6,675 million, an increase of THB 926 million or 16.11 percent from the same period last year. The surge was mainly due to gains on investments which increased by THB 399 million, higher net insurance premium income of THB 240 million and other income from gains on NPA sale. Due to reasons above, non-interest income ratio in 2017 was 29.95 percent, an improvement from 28.87 percent in the previous year.
Other Operating Expenses
(Unit: THB million)
Variance Increase / Percentage (Decrease)
2017
2016
Employee’s Expenses Premises and Equipment Expenses Taxes and Duties Directors’ Remuneration Other Expenses
11,981 2,806 726 53 4,871
11,647 3,051 757 46 5,084
334 (245) (31) 7 (213)
2.87 (8.03) (4.10) 15.22 (4.19)
Total Other Operating Expenses
20,437
20,585
(148)
(0.72)
Other Operating Expenses
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ANNUAL REPORT 2017
In 2017, other operating expenses of the Bank and its subsidiaries totaled THB 20,437 million, down by THB 148 million or 0.72 percent from last year. The decrease was due to lower premises and equipment expenses and more efficient spending. As a result, the cost to income ratio in 2017 was 48.68, down from last year’s 51.00.
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)
2017
2016
6,244
6,251
(7)
(0.11)
0.79
0.87
(0.08)
(9.20)
In 2017, the Bank and its subsidiaries had THB 6,244 million in impairment losses of loans and debt securities, a decrease of THB 7 million or 0.11 percent from last year. Credit cost was at 0.79 percent, a decrease from 0.87 percent last year from an effective risk management and maintenance of strong asset quality amid loan growth.
Income Tax As of 31 December 2017, the Bank had remaining tax losses of THB 4,742 million from investments in liquidated subsidiaries, equivalent to a tax benefit of THB 948 million, based on a 20 percent corporate income tax rate.
Financial Position of the Bank and Its Subsidiaries’ Statement of Financial Position
Assets Cash Interbank and money market items - net Investments - net Loans to customers 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
(Unit: THB million)
Variance from 2016 Increase / Percentage (Decrease)
31 December 2017
31 December 2016
11,453 94,651 167,368 711,675 589
12,077 47,476 175,081 690,907 620
(624) 47,175 (7,713) 20,768 (31)
(5.17) 99.37 (4.41) 3.01 (5.00)
(24,034) 2,793 8,622 20,202 16,238 1,009,557
(24,618) 3,112 9,546 20,649 15,662 950,512
584 (319) (924) (447) 576 59,045
(2.37) (10.25) (9.68) (2.16) 3.68 6.21
025
THANACHART BANK PUBLIC COMPANY LIMITED
Assets As of 31 December 2017, the Bank and its subsidiaries’ total assets totaled THB 1,009,557 million, an increase of THB 59,045 million or 6.21 percent from the end of 2016. The key changes are as follows: • Net interbank and money market items were in the amount of THB 94,651 million, a surge of THB 47,175 million or 99.37 percent from the end of last year, due to liquidity management. • Net investments totaled THB 167,368 million, a drop of THB 7,713 million or 4.41 percent from the end of last year, mainly due to appropriate return management. • Loans totaled THB 711,675 million, an increase of THB 20,768 million or 3.01 percent from the end of last year, due to retail and SME loan growth, especially hire purchase loans which grew by 7.43 percent from process improvement and the recovering automotive market. The Bank still remained the new car market leader. The ratio of retail to corporate and commercial loans was 71 to 29. (Unit: THB million)
Statement of Financial Position
Liabilities and Equity Deposits Interbank and money market items Liability payable on demand Debt issued and borrowing Provisions Insurance contracts liabilities Other liabilities Total liabilities Equity attributable to owner of the Bank Non-controlling interests of the subsidiaries Total Liabilities and Equity
31 December 2017
716,278 82,424 1,989 39,308 3,638 5,475 24,237 873,349 134,290 1,918 1,009,557
31 December 2016
676,557 65,834 1,986 49,409 3,579 4,937 22,089 824,391 124,489 1,632 950,512
Variance from 2016 Increase / Percentage (Decrease)
39,721 16,590 3 (10,101) 59 538 2,148 48,958 9,801 286 59,045
5.87 25.20 0.15 (20.44) 1.65 10.90 9.72 5.94 7.87 17.52 6.21
Liabilities and Equity The Bank and its subsidiaries’ total liabilities as of 31 December 2017 totaled THB 873,349 million, an increase of THB 48,958 million or 5.94 percent from the end of 2016. The key items are as follows: • Deposits totaled THB 716,278 million, an increase of THB 39,721 million or 5.87 percent from the end of last year. The majority of deposit increase was from more long-term fixed deposits, which was the Bank’s deposit restructure along with the hire purchase loan growth. As a result, the CASA to deposit portion was 42.93 percent, down from last year at 45.58 percent. • Debt issued and borrowings totaled THB 39,308 million, a decrease of THB 10,101 million or 20.44 percent, which was mainly due to early redemptions of unsecured subordinated debentures.
026
ANNUAL REPORT 2017
Total equity as of 31 December 2017 was in the amount of THB 136,208 million, an increase of THB 10,087 million or 8.00 percent from the end of 2016. The details are as follows: • The shareholders’ equity of the Bank was THB 134,290 million, an increase of THB 9,801 million or 7.87 percent. This was primarily due to a profitable operating results of the Bank and its subsidiaries in 2017 which totaled THB 13,810 million, revaluation surplus on investments which increased by THB 926 million, share of other comprehensive income of associate which increased by THB 105 million, and THB 4,852 million in dividend payment. • Equity attributable to non-controlling interests was in the amount of THB 1,918 million, an increase of THB 286 million or 17.52 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 2017, the Bank and its subsidiaries’ loan to customers and accrued interest receivables totaled THB 712,264 million, increased from the previous year by THB 20,737 million or 3.00 percent. Hire purchase loans expanded by 7.43 percent, contributed by process improvement and the recovering automotive market. Other retail loans grew by 0.66 percent. Housing loans grew by 1.02 percent. Corporate and commercial loans declined 2.17 percent from the previous year. The retail to corporate and commercial loan ratio was 71 percent to 29 percent. In addition, the Bank managed NPLs and maintained the strength of asset quality. In 2017, 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 1,092 accounts whose accounting outstanding pre-restructuring was THB 2,377 million. At the end of 2017, the Bank and its subsidiaries had 8,703 restructured accounts, and the principle and accrued interest amounted to THB 10,820 million.
Loan diversification
At the end of 2017, hire purchase loans accounted for 52.15 percent, followed by corporate and commercial loans of 30.32 percent, housing loans of 14.42 percent, and others of 3.10 percent. Structure Loans (ล้านบาท)
800,000
4.04% 10.66%
3.94% 11.00%
3.10% 11.14%
20.35%
3.95% 10.75% 19.18%
19.42%
18.51%
19.18%
14.76%
14.71%
14.89%
14.76%
14.75%
14.42%
50.58%
50.55%
50.01%
51.23%
51.11%
51.81%
52.15%
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
4.03% 10.38%
4.10% 10.60%
21.18%
400,000 200,000
600,000
0
4.18% 10.76%
20.42%
4.14% 10.73% 19.82%
13.44%
14.30%
50.97%
1Q16
HP
Housing
Corporate
SME
Others
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 2017, 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 667,571 million, increased from the previous year by THB 13,892 million or 2.13 percent. Allowance for doubtful account records as of 31 December 2017, was 21,718 million and total allowance for doubtful accounts to total loans and accrued interest receivable was 3.25 percent.
Borrowers classified by the BOT’s regulations (Unit: THB million)
Loans and accrued interest receivables 31 December 31 December 2017 2016
Allowance for doubtful accounts 31 December 31 December 2017 2016
Normal Special mention Substandard Doubtful Doubtful of loss
624,828 26,304 5,938 2,672 7,829
613,276 25,506 4,258 3,362 7,277
3,310 2,336 2,219 823 3,013
2,985 2,150 1,644 906 3,100
Total
667,571
653,679
11,701
10,785
10,017
11,707
Total allowance for doubtful accounts
21,718
22,492
3.25
3.44
Additional allowance for doubtful accounts
Ratio of total allowance for doubtful accounts to loans and accrued interest receivables (percentage)
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 2017 was at THB 18,108 million, an increase of THB 1,674 million or 10.19 percent from the end of last year as a result of a default of corporate loan. However, the NPL ratio of the Bank and its subsidiaries was maintained at 2.30 percent, similar to at the end of last year. For Bank only, NPLs increased by THB 1,519 million from the end of last year. Consequently, NPL ratio of the Bank was at 1.94 percent, an increase from 1.90 percent at the end of last year. Coverage ratio of the Bank and its subsidiaries as of 31 December 2017 was at 134.07 percent, down from 151.16 percent at the end of December 2016. The Bank and its subsidiaries had an excess reserve of THB 10,237 million according to BOT’s regulations, and a reserve to required reserve ratio of 172.91 percent as of 31 December 2017, a drop from 192.38 percent at the end of December 2016. Coverage ratio of the Bank as of 31 December 2017 was at 139.80 percent, down from 151.64 percent at the end of December 2016. The Bank had an excess reserve according to BOT’s regulations of THB 9,632 million and a reserve to required reserve ratio of 191.59 percent, a reduction from 202.23 percent at the end of December 2016.
028
ANNUAL REPORT 2017
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 subsidiaries
31 December 2017
31 December 2016
31 December 2017
31 December 2016
14,412 20,149 1.94 1.19 191.59 139.80
12,893 19,550 1.90 1.05 202.23 151.64
18,108 24,278 2.30 1.19 172.91 134.07
16,434 24,841 2.29 1.07 192.38 151.16
* Including revaluation allowance for debt restructuring
Consolidated Financial Statement Non-performing Loans (THB Million) and NPL Ratio (Percent) of TBANK and its Subsidiaries 16,434
15,636
15,652
16,087
Coverage Ratio (Percent) and Reserve to Required Reserve (Percent) of TBANK and its Subsidiaries
18,108 192.38%
198.15%
2.29%
2.21%
2.16%
2.11%
2.30%
151.16%
156.82%
4Q16
1Q17
2Q17
3Q17
4Q17
4Q16
1Q17
Non-performing Loans
179.82%
174.55%
172.91%
146.81%
146.41%
134.07%
2Q17
3Q17
4Q17
Coverage Ratio Reserve to Required Reserve
NPL Ratio
Separate Financial Statement Non-performing Loans (THB Million) and NPL Ratio (Percent) of TBANK 12,893
12,130
12,057
12,496
Coverage Ratio (Percent) Reserve to Required Reserve (Percent) of TBANK 14,412 202.23%
211.14%
1.90%
1.82%
1.76%
1.74%
1.94%
151.64%
4Q16
1Q17
2Q17
3Q17
4Q17
4Q16
Non-performing Loans
NPL Ratio
200.61%
192.49%
158.41%
156.24%
155.19%
1Q17
2Q17
3Q17
Coverage Ratio Reserve to Required Reserve
191.59%
139.80% 4Q17
029
THANACHART BANK PUBLIC COMPANY LIMITED
2. Investments in securities In 2017, the Bank and its subsidiaries had a total amount of investment in securities of THB 167,368 million. A major portion of approximately 73.88 percent was in government and state enterprises securities, followed by 14.71 percent in private debt securities. After adding (deducting) allowance for change in values and impairment, net investment decreased from 2016 of THB 175,081 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 2017
Percentage
31 December 2016
Percentage
9,119 113,782 42
5.48 68.37 0.03
7,166 125,033 62
4.09 71.29 0.03
232 24,009 240
0.14 14.43 0.14
0 22,076 205
0.00 12.59 0.12
0 10,441 0
0.00 6.27 0.00
0 11,465 0
0.00 6.54 0.00
1,749 3,147
1.05 1.89
1,613 3,910
0.92 2.23
0 3,662 166,423 955 (10)
0.00 2.20 100.00
0 3,843 175,373 (217) (75)
0.00 2.19 100.00
167,368
175,081
Liquidity As of 31 December 2017, loans to deposits and debt issued and borrowings ratio of the Bank and its subsidiaries was 94.19 percent, an improvement from 95.17 percent at the end of 2016, due to liquidity management in coherent with market condition. The Bank maintained its strong liquidity with a high level of liquid and low risk assets portion. As of 31 December 2017, according to the consolidated financial statements, liquid assets portion which includes cash, interbank and money market items and short-term investments was 14.38 percent of total assets, an increase from 9.77 percent at the end of 2016. 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 2017 was higher than the 70-percent criteria prescribed by the BOT.
030
ANNUAL REPORT 2017
At the end of 2017, the Bank and its subsidiaries had net cash flows from operating activities of THB 2,615 million, from investment activities of THB 14,195 million, and used in financing activities of THB 17,434 million, attributed to a net decrease in cash of THB 624 million. At the end of 2017, the Bank had an amount of THB 11,453 million in cash and cash equivalents. Key items consisted of the followings: - Cash flows from operating activities mainly stemmed from increases in cash received from interest of THB 41,277 million, deposits of THB 39,721 million and interbank and money market items (liabilities) of THB 16,457 million, offset by surges of THB 47,352 million interbank and money market items (assets) and loans of THB 33,546 million. - Cash flows from investing activities were largely a result of a decrease in investment in investment securities of THB 10,271 million. - Cash flows used in financing activities were spent on repayment of borrowing of THB 22,825 million and cash received from borrowings was of THB 12,724 million. (Unit: THB million)
Major changes items
2017
2016
Net cash flows from operating activities Net cash flows from (used in) investing activities Net cash flows used in financing activities
2,615 14,195 (17,434)
26,182 3,657 (31,099)
Net decrease in cash Cash at beginning of the year
(624) 12,077
(1,260) 13,337
Cash at end of the year
11,453
12,077
Relations between sources and uses of funds In 2017, the Bank and its subsidiaries’ sources of fund from deposits and borrowings were of THB 716,278 million and THB 39,308 million, respectively. Use of fund in giving credits was THB 711,675 million and investments before adjustment was of THB 166,423 million. List of sources and uses of major fund by remaining tenor to 31 December 2017, the record date of the financial statement, are as follows: Type
At call
Less than 1 year
THB million
Percent
THB million
Deposits 307,595 Borrowing 392
40.71 0.05
365,947 3,493
48.43 0.46
42,736 35,423
5.66 4.69
40.76 369,440
48.89
78,159
Sources of fund
Total sources of fund 307,987
Percent
Over 1 year THB million
Percent
Unspecified THB million
Total
Percent
THB million
Percent
0 0
0.00 0.00
716,278 39,308
94.80 5.20
10.35
0
0.00
755,586 100.00
Uses of fund Loans(1) Investment
39,792 5
4.53 0.00
195,223 37,333
22.24 476,660 4.25 120,552
54.28 13.73
0 8,533
0.00 0.97
711,675 166,423
Total uses of fund
39,797
4.53 232,556
26.49 597,212
68.01
8,533
0.97
878,098 100.00
Note:
(1)
Loan at call includes stop-accrued loans
81.05 18.95
031
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 2017, sources of funds consisted of a major portion of deposits reaching maturity in less than 1 year of 48.43 percent and deposits at call of 40.71 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 54.28 percent and loans with remaining tenors of less than 1 year of 22.24 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 2017, the Bank and its subsidiaries’ total commitments totaled THB 83,196 million, decreased by THB 252 million (0.30 percent) from THB 83,448 million at the end of December 2016. The drop was largely a result of reduction in aval to bills as shown in the table below. (Unit: THB million)
31 December 2017
31 December 2016
Variance from 2016 Increase / Percentage (Decrease)
Aval to bills Liability under unmatured import bills Letter of credits Loan guarantee Other obligations Committed (but not drawn) overdraft Others
115 270 1,045 2,291
629 637 1,479 1,188
(514) (367) (434) 1,103
(81.72) (57.61) (29.34) 92.85
23,832 55,643
24,244 55,271
(412) 372
(1.70) 0.67
Total
83,196
83,448
(252)
(0.30)
Capital Adequacy As of 31 December 2017, the Bank’s capital according to Basel III totaled THB 125,527 million, of which an amount of THB 98,209 million was Tier I capital and THB 27,318 million was Tier II capital. The capital adequacy ratio was at 18.94 percent compared to 19.15 percent at the end of 2016, comprising 14.81 percent of Tier I capital and 4.13 percent of the Tier II capital. However, the capital adequacy ratio was well over the minimum requirement of BOT of not below 9.75 percent. Details were as follows:
Capital Adequacy Ratio 31 December 2017 THB million Percentage
Tier I capital Total capital funds
98,209 125,527
14.81 18.94
31 December 2016 THB million Percentage
90,561 130,673
13.27 19.15
032
ANNUAL REPORT 2017
Operating Results of Subsidiaries Thanachart Securities Public Company Limited Average daily trading volume of Thanachart Securities Public Company Limited in 2017 was THB 3,388 million, with a market share of 3.78 percent, compared to last year’s average daily trading volume of THB 3,921 million, with a market share of 4.17 percent. The trading volume could be divided into 59.56 percent of retail, 28.02 percent of institutions, and 12.42 percent of foreign investors. Net profit for the year ended 31 December 2017 amounted to THB 609 million, a decline of 8.01 percent comparing with the previous year’s net profit of THB 662 million. Total income was THB 2,004 million, a decrease of 7.09 percent due to a drop of 17.26 percent in total brokerage income. On the other hand, profits and gains from financial instruments of this period were THB 306 million, a surge of 46.41 percent. Additionally, fee and service income was THB 160 million, an increase of 18.52 percent. Total operating expenses amounted to THB 1,253 million, a decrease of 6.49 percent, in line with the cost control measures and lower income. As of 31 December 2017, the company maintained its liquidity ratio (Net Liquid Capital Rules: NCR) at 44.10 percent, higher than the minimum requirement regulated by the Securities and Exchange Commission (SEC) of 7.00 percent of general indebtedness and securities pledged.
Thanachart Fund Management Company Limited As of 29 December 2017, Thanachart Fund Management Company Limited had asset under management of THB 228,589 million, an increase of THB 39,581 million or 20.94 percent from the end of 2016. Assets under management comprised of 88.33 percent mutual funds, 6.79 percent provident funds, and 4.89 percent private funds. As of 29 December 2017, Mutual fund business of the company ranked 8th with market share of 4.01 percent, Private fund business ranked 12th with market share of 1.33 percent, while provident fund business ranked 13th with market share of 1.43 percent. For operating results of 2017, the company had a net profit of THB 426 million, an increase of THB 71 million or 20.00 percent from the previous year. This was due to increases in fund management fees.
Thanachart Insurance Public Company Limited In 2017, Thanachart Insurance Public Company Limited had total insurance premium of THB 7,506 million, an increase of THB 1,086 million or 16.92 percent when
compared with that of 2016. The increase in total insurance premium was higher than that of the Thai insurance industry which is expanded by 3.67 percent. For operating results of 2017, the company had a net profit of THB 1,051 million, an increase of THB 46 million or 4.58 percent comparing to that of the year 2016. This was due to higher premiums and effective operating expense management. Nevertheless, the main factors affecting the company’s performance and contributing to the company’s net profit were a focus on the profitable products as well as efficient management of operating expenses and productivity enhancement across all functions.
TS Asset Management Company Limited In 2017, TS Asset Management Company Limited restructured and sold non-performing loans in accordance with the policy and business plan of Thanachart Group continuously. As a result, on 31 December 2017, the company’s total assets were THB 2,509 million, a decrease of THB 142 million or 5.36 percent from the end of the previous year. For the operating result of the year 2017, the company had a net profit of THB 210 million, an increase of THB 21 million from the previous year. Net interest income was THB 93 million. Non-interest income was THB 299 million. Non-interest expenses were THB 65 million.
Ratchthani Leasing Public Company Limited At the end of 2017, Ratchthani Leasing Public Company Limited still had a strong financial structure. The company’s total assets were THB 39,492 million, an increase of THB 6,127 million or 18.36 percent from the end of the previous year. The company had hire purchase loans and leasing in the amount of THB 38,598 million, a surge of THB 5,851 million or 17.87 percent from the same period last year. The Hire purchase loans accounted for 97.74 percent of the total assets. Total liabilities and shareholders’ equity were THB 33,865 million and THB 5,627 million, respectively. Net profit for the year 2017 amounted to THB 1,126 million, an increase from the previous year of THB 245 million or 27.81 percent, maintaining solid performance. Total income amounted to THB 3,307 million, an increase of THB 322 million or 10.79 percent. Financial costs were THB 882 million, down from last year by THB 65 million or 6.86 percent. This was a result of its ability to acquire lower costs of borrowings to support lending. During the year 2017, provision expenses amounted to THB 523 million, an increase of THB 27 million or 5.44 percent due to the company’s normal reserve of THB 243 million and additional general provision of THB 280 million to accommodate the change in provisioning method in line with the new accounting standard in 2019.
033
THANACHART BANK PUBLIC COMPANY LIMITED
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 Derivative 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 Ltd., 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. 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.
034
ANNUAL REPORT 2017
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 (“National Leasing”) which dissolved on 31 October 2017 and is undergoing liquidation.
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 (“TBROKE”) operates a brokerage business of life and non-life insurance. The Company introduces or offers products of life and non-life insurance companies under Thanachart Group’s customer and the general public. The Company also operates other businesses associated with life and non-life insurance industries as well as servicing annual car tax renewal. 4. Security SCIB Services Company Limited (“SCIB Services”) (formerly known as “SCIB Services Company Limited”) provides general services to TBANK and companies 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.
Business Policy and Strategies of Thanachart Group In 2018, Thanachart Group continually strives for development by offering exceptional customer experiences as Main Bank to customers. This is accomplished in an efficient manner through integrated financial services capable of offering a wide range of quality products and services that cater to the financial needs of the customers. To achieve this goal, Thanachart Group has set up its vision “To be the best at providing fully integrated solutions to our customers’ complete financial needs by offering the highest quality products, services, and advice”. This vision is comprised of three major fundamentals which are, providing fully integrated financial services (Universal Banking) for the best customer value through customer centricity (Customer Centric), developing products and services to satisfy different customer groups, and the harmonious collaboration between all departments to provide excellent services to customers (Collaboration). The endeavor and accomplishment from the three major fundamentals has not only resulted in Thanachart Group’s success as an integrated financial services group, but are also keys that drive Thanachart Group to become one of Thailand’s leading banks, growing sustainably. 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
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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. Besides this, 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. In 2018, Thanachart Group has 4 strategic focuses to create quality financial products and services to meet the needs of customers of different lifestyles, as follows: 1. Consistent Investment and Development of Technological Systems and Infrastructure: This is the key driving force in advancing Thanachart Group forward. Thanachart Group is committed to provide a full range of digital banking services geared towards the changing lifestyle of customers. The Company also strives to develop new innovations, service customers with more efficiency, and provide customers with complete, convenient, fast, and secure services that will help to create a better customer experience. 2. Process Enhancement: To meet the needs of diverse customers, Thanachart Group integrates technology for efficiency and security in customer servicing and managing operating costs. 3. People Development: Thanachart Group aspires that its employees be professional leaders. This is achieved through the construction of an employee knowledge base and the leveragement of employees’ qualifications to concur with the complexity of the digital financial environment and the changing needs of customers.
4. Work Collaboration: To achieve corporate goals, Thanachart Group expects employees to be committed and earnest workers.
Shareholding Structure of Thanachart Group Policy on Division of Operational Functions among Member Companies of Thanachart Group Being a parent company of Thanachart Financial Conglomerate with a controlling interest (i.e. owning more than fifty percent of issued and paid-up capital), TCAP has adopted the following policies and approaches in managing the member companies of the Group as follows:
Business policies TCAP and the Bank are responsible for establishing annual key business policies of Thanachart Group. Each subsidiary is required to formulate business plans and budgets for 3-5 years and submit them to the parent company for consideration, in order to ensure that they are in alignment with the established key business policies. The business plans and budgets are also subject to evaluation and review regularly. The objective is to ensure that the business plans and budgets are in line with the changing business conditions.
Supervision of subsidiaries
The directors and high-ranking executives of TCAP and the Bank are assigned to be the members of the Board of Directors of the subsidiaries. The arrangement not only enables TCAP and the Bank to assist the subsidiaries in establishing their policies and in determining their future direction, but also ensures the close supervision of the subsidiaries’ business operations. Importantly, the Chief Executive Officers of the subsidiaries are required to present a monthly performance report to the Executive Committee and the matters in the Executive Committee Meeting are than reported to the Bank’s Board of Directors.
Centralizing of support services It is a policy of the Thanachart Group to centralize specific functions of the support services into one company which, then, is responsible for providing such services to all other member companies of the Group. The purpose is to maximize benefits within the existing resources including
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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 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.
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Chart of Shareholding Structure of Thanachart Group As of 31 December 2017 Thanachart Capital Public Company Limited
Scotia Netherlands Holding B.V.
Commercial Banking Business
Asset Management Business
Life Insurance Business 16.56%
48.99%
50.96%
Thanachart Bank Public Company Limited
100.00% NFS Asset Management Company Limited
83.44%
51.00%
MAX Asset Management Company Limited
MBK Life Assurance Public Company Limited
51.00% TM Broker Company Limited
Supporting Business
Financial Business 100.00% Thanachart Securities Public Company Limited
Securities Business
75.00% 100.00%
Asset Management Business
Thanachart Insurance Public Company Limited
100.00% TS Asset Management Company Limited
100.00% Thanachart Group Leasing Company Limited
Leasing Business
65.18% Ratchthani Leasing Public Company Limited
Notes:
MT Service 2016 Company Limited
49.00%
Thanachart Management and Service Company Limited
100.00%
Thanachart Fund Management Company Limited
Insurance Business
100.00%
51.00%
MBK Public Company Limited 49.00% 49.00%
Thanachart Broker Company Limited
100.00% Thanachart Training and Development Company Limited
100.00% Security Scib Services Company Limited
100.00% National Leasing Company Limited
25.00% Government Savings Bank
1. The above shareholding structure includes shares held by the related parties. 2. On 9 May 2012, the Bank of Thailand granted approval for Scotiabank to adjust the shares holding structure of Thanachart Group, which holds 48.99 percent of issued shares via Scotia Netherlands Holdings B.V., the registered juristic person in Netherlands. 3. The National Leasing Company Limited dissolved on 31 October 2017 and is undergoing liquidation.
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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 2017, 2016, and 2015 are follows: Table of income structures of the Bank and its subsidiaries As of December 31 2017 2016 2015 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
1,365 25 3,143 17,759 22,074
1,307 30 3,504 18,337 21,708
3.24 1,580 0.07 73 8.68 3,761 45.43 19,474 53.78 23,329
3.98 0.19 9.49 49.13 58.85
Total Interest Income Interest Expenses
44,366 105.68 44,886 14,956 35.63 16,174
111.20 48,217 40.07 20,536
121.64 51.81
Net Interest Income
29,410
70.05 28,712
71.13 27,681
69.83
5,897 548 1,113
14.04 1.31 2.65
5,904 491 714
14.63 1.22 1.77
5,475 658 1,533
13.81 1.66 3.87
200
0.48
207
0.51
169
0.43
2,928 464 1,422
6.97 1.11 3.39
2,689 400 1,249
6.66 0.99 3.09
2,552 295 1,275
6.44 0.75 3.21
Non-interest Income Net Fees and Service Income Gains on Trading and Foreign Exchange Transactions Gains on Investments Shares of Profit from Investments in Associated Companies Accounted for Equity Method Insurance Premium/Life Insurance Premium Income - Net Dividend Income Other Income
3.25 0.06 7.49 42.30 52.58
Total Non-interest Income
12,572
29.95 11,654
28.87 11,957
30.17
Net Operating Income
41,982 100.00 40,366
100.00 39,638
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 2017, the Bank had a total of 523 branches, 36 foreign exchange booths (18 in-branches and 18 stand-alone), 1,727 ATMs (Automatic Teller Machines), 1 Recycling Machine, 25 CDMs (Cash Deposit Machine), 75 Multi-Function Machines, and 97 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 2017, the Bank maintained the focus on expanding its customer base and strived to develop products that matched demands of every customer segment; mostly transaction-based such as withdrawals, transfers, and payments, including developing new transactional channels such as PromptPay and QR Code for utmost benefits to the customers as customer satisfaction would lead to Main Bank customers.
To meet the changing lifestyle of customers in electronic financial transactions, the Bank developed the e-SAVINGS account, a savings account that allowed customers to manage their accounts anytime and anywhere through Thanachart Connect Mobile Apps. Customers also received higher interests with an e-Savings account. In addition, the Thanachart Smart Solution campaigns educated customers on how to manage money through two savings products: e-Savings account and Freever account, which enabled them to benefit from higher interests and save on fees. This year the Bank was still committed in building its Main Bank customer base by offering Freever accounts as the main product to customers. Freever accounts allowed customers to save on withdrawal fees, transfer fees, bill payment fees, and debit card fees. Furthermore, during the second half of the year, the Bank promoted Ultra Savings once again to offer a variety of savings products, catering to the different needs of customers. Group 2 Lending Products 2.1 Corporate Loan Characteristics Corporate Loans are used to meet capital requirements or enhance financial liquidity of businesses. Customers can choose a variety of corporate loan services. 1) Wholesale Banking: products and services have been developed to accommodate requirements of corporate customers; various forms of credit facilities such as flexible loans, financial aid program for business operators in the 3 southern border provinces, letters of guarantee for biddings, contracts, performances and payments of utilities, E-GP, namely electronic letters of guarantee and payments of bidding documents under e-Government Procurement of the Comptroller General’s Department, project finance, and financial advisory service. These also include the debt and capital market aspect which is debenture issuance and fundraising to be listed in the Stock Exchange of Thailand. Customers are also offered risk management products
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such as Interest Rate SWAP (IRS), Forward Contract and Foreign Currency SWAP to hedge against volatile interest or exchange rates. Moreover, Cash Management is offered to meet individual demands. 2) Commercial Banking: commercial banking customers are offered flexible and diverse loans based on each customer’s needs. The range of loans includes Top-Up facilities, which are additional limits for O/D customers to use as working capital, letters of guarantee for enterprises or individuals who need to guarantee performance for public and private companies. E-GP is also available. It offers electronic letters of guarantee and payments for e-bidding under e-Government Procurement of the Comptroller General’s Department. The Bank also supports the financial aid program for business operators in the 3 southern border provinces, Portfolio Guarantee Scheme and the SME Soft Loan Program, and SME Machine Fund. 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 offered to small businesses. The loans can be term-loans, overdrafts (O/D), promissory notes (P/N) and letters of guarantee (L/G). Underwriting and operational processes will be in line with the retail lending policy. Moreover, 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 According to a great and dispersed number of SME customers throughout the country, operational and credit policies have been designed to mirror those of retail borrowers and lent products to meet customers’ requirements. Competition-wise, although the SME loan market has a high market value, the competition is also intense. Therefore, other than tending to and catering to the existing customer base, the Bank is also focusing on acquiring new customers through lending programs such as the SME Dai Jai loan for small businesses. Moreover, public relations, marketing activities, sale promotions are held continuously to boost the loan outstanding.
For Corporate Banking and Commercial Banking, the Bank still keeps its focus on retaining good relationships and offering integrated financial products, e.g. loans, trade finance, and cash management to suit the demands of each customer. 2.2 Automobile SMEs Characteristics The Bank offers this product to car related entrepreneurs who have short-term financial needs with the proceeds of the loans to be used as their working capital or for enhancing their liquidity position as well as those who have long-term financial needs with the proceeds of the loans to be used for business expansion or reducing funding cost for example fleet and financial lease. Competitive Strategies The Bank concentrates on providing loan services to its long lasting business partners in automobile hire purchase sector. Database has been used to develop the tools for considering and screening credit extension and ensuring appropriate risk control (credit scoring). Emphasis is also placed on development of products and processes that suit the respective groups of customers and their credit access channels, for example, customers via automobile manufactures, new and used automobile customers via automobile hire purchase businesses, or used automobile business operators via automobile auction companies. For the fleet financial lease sector, the Bank focuses on providing services through its long lasting high potential and financially sound customer, as well as developing information system to expand the capabilities of its sale channels countrywide. 2.3 Trade Finance Characteristics The Bank provides a full range of trade finance products and services including Import Letter of Credit (L/C), Trust Receipt, Collection Agency of D/P and D/A for oversea buyers, Packing Credit, Export Bills Purchased / Discounted, Export Bills for Collection, Letter of Guarantee, Stand-by L/C, and Oversea Money Transfer.
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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 three types of automotive hire purchase loans. The new car and used car loans are offered through dealers and the loan of sale and lease back or “Thanachart Cash Your Car” is offered through the branch channel. Cash Your Car product can serve customers’ need for cash with higher limit and longer installment period than the normal personal loans. The product also allows customers to choose the installment period and amount to suit their debt service ability. In 2017, the Bank developed the new “Thanachart Cash Your Book” product, a loan for car owners who needed cash for personal use or liquidity enhancement. Thanachart Cash Your Book requires customers to put their vehicle registration book as collateral; however, the customer still has car ownership and can use the car normally. Cash Your Book product also offers an effective interest rate. In addition, the Bank developed a new application score to aid in loan approval consideration for customers without history with the National Credit Bureau under an appropriate risk control. This helps to filter and monitor the quality of the applicant more effectively.
Competitive Strategies The domestic new car sales in 2017 when compared to 2016 had a growth rate at 13.38 percent. The Bank obtained more strategic partnerships with leading carmakers and launched promotional campaigns which led to its higher new car market share. As for the used car lending, the Bank improved its underwriting policy, as well as process and enhanced efficiency of its debt quality control. The Bank also continues to focus on offering Cash Your Car to the existing customers via over 500 branches nation-wide. Cash Your Car was also promoted to first-car buyers. Furthermore, a “Cash back for disciplined installment payment” campaign is launched aiming to provide advices to customers on borrowing needs as well as to offer benefit to customers who pay on time throughout the installment period that they will regain an entire amount of the interest paid during the last year of installment period. 2.5 Secured Personal 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.
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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: - 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. 7) Unsecured Flash O/D is an overdraft amount with no collateral. The Bank provides the service to important customers with the investment purpose. Competitive Strategies Products under unsecured personal loans defined competitive strategies on product development, marketing campaign, distribution channel, and appropriate 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),
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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 e-Wallet service providers in issuing Visa or MasterCard-branded prepaid cards to enable e-wallets to make payments for goods and services at worldwide merchants who accept Visa or MasterCard. The prepaid cards can be categorized into 2 groups as follows: 1. Virtual prepaid cards are in an electronic form on e-Wallet applications. Cardholders can use the virtual prepaid card to make payments for goods and services for online merchants only. 2. Physical prepaid cards are prepaid cards that cardholders can use to pay for goods and services both at physical and online merchants with Visa or MasterCard logos. These 2 types of prepaid cards are suitable to the young generation, teenagers, students, and those without access to credit cards. Competitive Strategies New payments services have been emerging from both existing and new service providers, resulting in intensifying competition, especially electronic payments. Therefore, the Bank focuses on forging business alliance to improve its services and keep up with the digital trends, 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: 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.
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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 capital costs than card payment costs. 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 2017, the Thai economy continued to grow steadily at 3.9 percent, up from 3.3 percent in 2016 and 3.0 percent in 2015, higher than the projected rate. Crucial factors that contributed to the economic expansion in the past year were simultaneous recovery of the global economies, especially those of Thailand’s trading partner countries such as the United States of America (“USA”), the European Union, China and Japan, etc. The recuperation promoted Thailand’s exports of goods to grow significantly as export values in US dollars surged by as high as 9.7 percent compared to 0.1 percent in 2016. Tourism expanded continuously in aspects of revenue and number of foreign tourists, especially Chinese and Russian. Consumption of durable goods improved, especially car purchases and private investments in machinery and equipment to support production for exports that still showed a strong growth potential. Nevertheless, the government expenditures which used to materially propel the economy in the past 2 years started to weaken partially because of delays in budget disbursements, procurement issues, postponed project biddings and adjustments on construction plans, etc.
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The overall stability of the Thai economy maintained a strong momentum. The headline inflation in 2017 was low at 0.7 percent, a slight increase from the year before as a result of rising crude oil prices in the global market and raised excise taxes in categories of liquor and tobacco, and sugar-sweetened beverages. The unemployment rate increased to some extent but remained modest at 1.18 percent. In terms of foreign stability, Thailand’s international reserves were at a high level compared to short-term offshore debts. Thailand’s balance on current accounts continued to have a surplus due to robust exports and tourism. However, capital and financial accounts saw net deficits because Thai investors invested consistently overseas. Nevertheless, operating a commercial banking business in 2018 will face all-round challenges, especially from external and internal factors that will impact Thailand’s economic and money market growth, including entrepreneurs’ business in general. Such factors, for instance, are the policy rate hike by the US Federal Reserves (FED) and Asian central banks, uncertainty of execution of monetary and fiscal policies of key economies such as USA, Europe, Japan and China, USA’s protectionist measures, NAFTA renegotiation, and the United Kingdom’s withdrawal from the European Union (BREXIT). Also included are geopolitical conflicts in the Korean Peninsula and the Middle East, potential price surge of global crude oil prices in response to global economic growth and a shared agreement among the Organization of Petroleum Exporting Countries (OPEC) and Non-OPEC to extend the oil supply cut to the end of 2018, BOT’s policy rate increase, the National e-Payment project, financial technology, changing consumer behaviors in pace with the rapidly advancing digital technology, household and SME debts, changes in the regulatory requirements such as baht and financial account control measures, IFRS 9, Basel III, consumer protection laws, and Foreigners’ Working Management Emergency Decree. Amid such economic, social and technological changes, the Thai economy in 2018 will continue to grow with key reinforcements from the accelerated investments in transport and logistics infrastructure projects and Eastern Economic Corridor project of the government. Added to the key reinforcements are higher private investments in sectors related to government policies and to accommodate the export expansion, the trend of continuous growth of the global economy and economies in trade partner countries which back Thailand’s export sector, and well as tourism. Generally,
this presents a good opportunity for the commercial banking industry in supporting loans and financial services to associated sectors that will generate cash to be passed on to other associated businesses, and stimulate the country’s economic activities. However, if the export and tourism were to continue to be crucial factors propelling the Thai economy sustainably, every sector involved must urgently adjust to elevate the competitiveness; solving structural problems that undermine the competitiveness, promoting and elevating the quality of tourist attractions in accordance with the potential and suitability. Moreover, the Thai economic expansion in 2018 is supported by BOT’s relaxed implementation of monetary policies to accommodate the economic expansion and to adjust the inflation rate into the next inflation targeting.
Industry and Competition Outlook In 2017, commercial banks in general recognized opportunities and challenges from financial innovations and digital technology, changing financial behaviors of consumers in the digital age, the government’s implementation of Thailand 4.0 and an upgraded electronic payment system. Consequently, the commercial banks prioritized revamping their business models and financial services to support the government’s policy that will bring Thailand into a cashless society, and allocated great investments in digital technology in order to apply financial technology to the financial services. This was a bid to deliver better customer experience and lower the cost of transactions. The technology included a QR Code payment system, Digital Banking, technological application, new financial research and innovations, and partnerships with FinTechs and tech startups. Nevertheless, although the Thai economy showed signs of steady recovery and the business sectors had a higher demand for loans, some entrepreneurs, particularly small and medium sized ones and households with low income did not fully enjoy advantages of the economic recovery and had less debt service ability. Therefore, the commercial banks in general put an emphasis on monitoring loan quality by being more cautious and prudent when approving loans in order to handle the pressure from nonperforming loans (NPLs) and added strength by heightening provisions for doubtful accounts to be sufficient according to the International Financial Reporting Standard 9 (IFRS 9) that will be enforced in 2019. The focus was also on reengineering operating processes and appropriate cost management.
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Last year, although faced with surrounding challenges, the commercial banks in general still maintained strong financial stability as reflected in the increased capital adequacy ratio of the entire industry from 18.04 percent in 2016 to 18.19 in 2017, and remained a significant source of funds in the Thai economy. Loans in the commercial banking system grew from THB 11,925,460 million in 2016 to THB 12,457,878 million in 2017, or 4.46 percent. However, as it was necessary for many major banks to materially increase their provisions for doubtful accounts, the total net profit of the entire commercial banking system in 2017 dropped by 5.65 percent from THB 198,523 million in 2016 to THB 187,297 million in 2017. In 2018, the accelerated implementation of the government projects such as transport and logistics infrastructures to enhance the national competitiveness and the development of the Eastern Economic Corridor, as well a demand for more investments of the business sectors in correlation with the continuous expansion of the Thai and global economies will improve the loan volume of the entire commercial banking system. The growing demand for loans will cause the liquidity the market to be tighter, resulting in a likely competition among the commercial banks to raise deposits in support of the loan growth. However, the commercial banks will continue prioritizing asset quality. Generally, the commercial banks still concentrate on operating based on customer centricity and leveraging the big data of customers in analyzing and processing in order to identify the customer insight in aspects of behaviors and the customer journey along their financial transactions. This will be beneficial to formulation of strategies and product and service design, as well as the channel development in response to each customer segment in a bid to deliver excellent customer experience. Furthermore, the commercial banks will continue to invest in digital technology to support the government’s policy in the development of the National e-Payment, which is a key foundation to transform Thailand into a cashless society, enhancing operational efficiency and elevating the quality of customer service. This also includes the development of financial innovation and channels that match changing customer requirements and behaviors, allowing them to performs a variety of transactions conveniently, quickly and hassle-free at a lower cost with confidence in data security and privacy. Simultaneously, the commercial banks will also
focus on people development and productivity enhancement with an emphasis on strengthening skills and knowledge to each personnel group in accordance with the changing business model.
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. Apart from the focus on developing financial products and services that match the needs of each customer segment, the Bank provides a variety of convenient channels for each customer segment; the branch network, phone and digital as an online banking service “Thanachart iNet” and an online mobile application “Thanachart Connect”. These channels are continuously improved. The online banking service through Thanachart Connect has new functions for the ease of transactions for customers, such as fund transfers and bill payments by scanning a QR code at the payment point, e-Wallet top-up services, fund transfers using mobile or identification card numbers through Thanachart PromptPay without account numbers required, adding favorites for fund transfers or payments with no one-time passwords (OTPs) required, fund subscriptions, redemptions and switching, checking fund performances anytime, anywhere, credit card and other loan payments, etc.
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In light of branch channel development, the Bank has further revamped the branch model in response to the changing customer behaviors as they have become more open to use technology in their daily lives. 2 pilot branches were launched; “Thanachart Express”, which is a cashless branch, that has automatic machines for all financial transactions: transfers, withdrawals, disbursements, account balance updates, with convenience, speed and security. Financial advisors are also there to provide integrated advice to customers, “Thanachart Next”, a branch that provides a full range of services. It has counters, automatic machines, and an area provided for customers who are interested in finance, investments, deposits and funds. The branch is equipped with tools to fully explore the Bank’s information as well as experts who give professional advice, reinforcing the Bank’s Main Bank policy. In 2017, the Bank was considered one of the banks with high potential and readiness to grow with strength, stability and sustainability. Risk management was prudent and the quality of liquid assets and capital remained consistently positive at a better level than the industry. The Bank and its subsidiaries had total assets of THB 1,009,557 million, or a 6.21 percent increase from the previous year and loans were THB 711,675 million, or a 3.01 percent increase from the year before. The net profit in 2017 was THB 13,810 million, an 11.07 percent increase from last year. In addition, the Bank’s deposits were THB 716,278 million, a 5.87 percent growth. Considering risk management and asset quality, the Bank’s non-performing loan (NPL) ratio was 2.30 percent, similar to last year. The capital adequacy ratio was 18.94 percent, higher than the industry average. The Liquidity coverage ratio (LCR) remained above 100 percent, higher than the BOT’s requirement. For enhancement of efficiency and quality of services, the Bank has improved and modified its infrastructure and operating processes, heightened competitiveness of the employees to know and understand financial products and services, and to be ready to give professional advice and deliver excellent experience to customers. Accomplishments of the Bank and subsidiaries in 2017 In 2017 was another year where the Bank and the subsidiaries earned a number of accomplishments as seen in awards given by various organizations:
• Most Admired Company Award from the Thai Chamber of Commerce University and Business+ magazine; • No.1 Brand Thailand 2016-2017 Award in Auto Hire Purchase Loan and Auto Re-Finance (Cash Your Car) from Marketeer magazine; • Auto Loan Product of the Year from the Asian Banker magazine; • Awards from issuance of bonds of the Ministry of Finance, Lao’s People Democratic Republic: Regional Awards from IFR Asia magazine, Best Bond award, Ministry of Finance, Lao People’s Democratic Republic, 14 billion baht multi-tranche bond from The Asset magazine, and the Best Foreign Currency Sovereign Bond Deal in Southeast Asia from Alpha Southeast Asia; • SET AWARDS 2017 in the category of Best Securities Company Award - Retail Investors, Outstanding Derivatives House Award and Outstanding Deal of the Year Award from the Stock Exchange of Thailand; • SET AWARDS 2017 in the category of Best Asset Management Company Award and Outstanding Asset Management Company Award for the 5th consecutive year from the Stock Exchange of Thailand; • 10 quality awards from Asiamoney Brokers Poll 2017: 1st rank in Best Small Cap Analyst and 3rd rank in Best Local Brokerage, and ranked among the top three in 8 more awards from Asiamoney; • Awards from being the lead underwriter in an IPO deal of Banpu Power Plc.: Thailand Capital Markets Deal of the Year from IFR ASIA magazine Best IPO Deal of The Year 2016 in Southeast Asia from Alpha Southeast Asia magazine, and Best Country Deals 2016 (Thailand) by Global Capital Asia and Asiamoney; • Best RMF Morningstar Awards 2017 from Morningstar Research (Thailand); • The 1st Prime Minister’s Insurance Award of the year 2016 from the Office of Insurance Commission for the 2nd consecutive year, and the company previously received the award for 6 years in a row. Social responsibility • Moral promotion media award for the Millionaire’s Son advertisement under the ReThink project in a bid to change spending behaviors and instill a saving discipline, given by the Department of Religious Affairs, Ministry of Culture and Suan Sunandha Rajabhat University;
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Energy;
• Thailand Energy Awards 2017 from the Ministry of
• Promotion of Employment of the Disabled Award from the Ministry of Labor; • The Runner Up, Suriyasasidhorn Hanging Calendar Award in the category of honoring the Royal Institution, and the Creative Design Innovation Award from the Public Relations Association of Thailand.
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 2017, the company had a total of 30 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, co-underwriter, 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. Equity-Linked Notes are issued and sold for customers in order to increase an opportunity of investment and spread of risks. Competition and Market Outlook 1. In 2017, the Thai economy showed signs of continued, rapid recovery from 2016 as the SET index picked up by 13.70 percent and closed at 1,753.71 points with the average trading volume of THB 4.78 billion daily, down by 4.95% compared to 2016’s THB 5.02 billion average trading volume per day. The SET index subjected to limit moves throughout the first quarter of 2017 due to the indecision in the economic growth, especially in private consumption and domestic investment, occurred from the kingdom grief and the government’s policy to regulate the “zero-dollar tours” which resulted in a smaller number of tourists. Nevertheless, the SET index initially picked up at the end of Q3, backed by the advocating factors from both domestic and foreign as follows: The key domestic factors accommodated an increase in the SET index were: 1) the overall economy showed signs of advancement in 2017; such advancement was dispersive as seen by the recuperation of the tourism industry which presented a solid growth by hitting the new high with the number of 35 million tourists in 2017, an increase from 2016’s 32.6 million tourists, after the impact from “zero-dollar tours” alleviated, the export industry upturn, the acceleration of capital-goods imports which were the indicating index of domestic investment tendencies, and private consumptions especially for consumer durables which considerably thrived. Public investment was, however, sluggish yet expected to gradually grow afterwards. 2) BOT’s financial policies contributed to the economic expansion as
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policy rate remained at 1.50 percent throughout 2017 while the pressure from inflation remained low, GDP. 3) the operating results of listed companies skyrocketed and hit the new high in 2017; most analysts continuously augmented profit estimation and fair value from Q3/2017 onwards, resulted in a drop of the tightened fair price. 4) there was a high domestic liquidity owing to the current account surplus of more than USD 4 billion for the second consecutive year, equivalent to about 10 percent of the GDP. 5) the political situation in the country became stabilized in comparison with the past years which helped boost the continuity of the public infrastructure investment project and the Eastern Economic Corridor (EEC); this brought about the hope that the election would proceed as scheduled in 2018 as well. The foreign factors accommodated an increase in the SET index were: 1) the global economic upbeat, especially the economies of developed countries such as the United States, Europe, and Japan; 2) the concern over Europe’s political stability resolved after the election results of many countries went in accordance with the market predictions; 3) the policy rate of the Federal Reserve of the United States of America mounted bit by bit while the asset normalization did not affect the liquidity in the global money marketcapital market; as for the European Central Bank (ECB), the Quantitative Easing (QE) policy period had been extended to September 2018 with the credit line of EUR 3 billion per month; and 4) the approval of the U.S. tax reform legislation during year-end 2017 was another factor boosted the purchasing power of the world’s largest economy and the growth of the U.S. listed companies’ profits in 2018. As for 2018, the Thai economy is expected to accelerate by more than 4 percent as driven by the public investment which has seen larger lump sum from 2018 on out due to the completion of many infrastructure investment projects biddings, consistently thriving exports which are in line with strong global economies, continual growth in the tourism industry, and the private investment which will start continuing its recovery once the EEC becomes apparent at the beginning of 2018 onwards.
The Stock Exchange of the Thailand (SET) disclosed information that, during January 2017 to November 2017, the IPO values of listed companies were THB 426.349 billion, a 170 percent increase compared to the end of 2016; the majority of which were from fund raising in the primary market. As of December 2017, SET’s market capitalization was THB 17.59 trillion, a 17 percent increase from 2016. MAI’s market capitalization was THB 338.836 billion, a 20 percent decrease from the end of 2016. Nonetheless, this was partly due to the shift of the EA stock from MAI to SET; EA’s market capitalization was THB 114.7 billion as at the date of the shift, which was equivalent to 27 percent of MAI. The market share of TNS is 3.78 percent, ranked th 9 among 38 securities companies. In 2017, the competition remained intense and the main customer target was retail investors owing to the constant relocation of investment consultants in the previous year. In addition, the overall competition was geared towards offering not only investment consultants of higher qualification but also new products and innovations to investors e.g. a fund trading system via an application called “FundConnext”, presenting investment facts via LINE Application, and offering Block Trading products to investors. 2. There are 42 members in total in the Thailand Futures Exchange (TFEX). In 2017, total trading volumes were 78,990,574 contracts, an increase of 13.68 percent from 2016. The majority of the trading volumes were from single stock futures and SET50 Index Futures with a number of 17,275 investor accounts from 2016. TNS’s market share was 5.92 percent, or the 4th among all 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.
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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 29 December 2017, there were a total of 23 fund management companies, with total assets under management of THB 4,649,894.23 million (excluding Vayupak Fund, Foreign Funds, Property Fund for Resolving Financial Institution Problem and Property and Loan Fund), an increase of 9.91 percent from 2017. During 2017, there were 551 newly issued funds, accounting for THB 1,184,510 million of net assets. Among the newly issued funds, 395 were debt securities with both domestic and foreign investment, which accounted for THB 1,065,101 million of net asset value or 89.92 percent of total net asset value of the newly issued funds during 2017, 82.38 percent of funds issued by TFUND in 2017 were both domestic and offshore bonds. As of 29 December 2017, TFUND’s assets under management were THB 228,589.63 million, an increase of THB 39,581.36 million or 20.94 percent from 2017. The increase of assets under management was from mutual funds offered to the general public of THB 42,030.45 million or 26.29 percent. Assets under management comprised of 88.33 percent mutual funds, 4.89 percent private funds, and 6.79 percent provident funds.
Insurance Business Non-life insurance business is operated by Thanachart Insurance Public Company Limited (“TNI”), which offers all types of non-life insurance services. Characteristics TNI offers all types of insurance services e.g. fire, automobile, marine, and miscellaneous. In addition, the company also operates investment businesses. Competition and Market Outlook In 2017, the Thai non-life insurance business saw growth in direct premiums compared with the same period of 2016 at 3.67 percent. Total direct premiums were THB 219.581 billion. The non-life insurance market structure of 2017 showed that the automobile insurance dominated up to 58 percent of the total market value, followed by the miscellaneous insurance with the market share of 35 percent. Fire and marine insurance gained market shares of 5 percent and 2 percent respectively. TNI focuses on products of high standard, service quality, productivity, efficiency and integrity as well as development of new products in order to offer new policies which are more coherent with economic and social conditions and responsive to customers with equitable premium rates. The company also constantly adjusts its progressive competitive strategy to be coherent with ever-changing conditions by ways of increasing sales channels, expanding the customer base, and maintaining existing customers. In addition, in 2017 TNI has developed an application called “Thanachart Club DD” version 2 so as to elevate aftersales services, build excellent customer relationship, and promote good driving habits by using customers’ driving habits together with their insurance claims as the indicators in earning points for rewards redemption, which are befitting to all customers’ lifestyles. As much as 98 percent of all customers are those with a policy claim limit not exceeding THB 5 million. The customers mostly select automobile, personal accident, and fire insurance and these customers mainly are the Bank’s lending customers as well as customers from the company’s marketing campaigns.
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Customers with sum insured of over THB 5 million are private organizations that operate many areas of 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 2017 direct premium forecast, the Thai non-life insurance industry is expected to grow at 4.5 percent in 2018 with total premiums of THB 229.462 billion.
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 high purchase business and financial leasing. THANI focuses on both new and used car markets, especially commercial cars such as pickups, taxis, tail trailers and large trucks, and personal cars. Moreover, the company also offers credit for both new and used cars at 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. 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 The overall domestic leasing and hire purchase business showed signs of growth in 2017 as compared to previous years, despite the fierce competition in the industry. The reason was that financial institutions, commercial banks, as well as leasing and hire purchase business of car manufacturers and dealers, carried out their marketing activities with a focus on credit for new and used personal cars. This resulted in the increase expansion of some manufacturers to credit for used cars. However, these manufacturers were not considered to be direct competitors of the company’s targeted market was not quite aggressive as compared to the market of personal cars.
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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 2017, 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: 1. Deposits as at the end of 2017 were in the amount of THB 716,278 million. 2. Borrowings were in the amount of THB 39,308 million, of which THB 20,000 million were Tier 2 subordinated debentures, THB 18,284 million were non-subordinated debentures, THB 631 million were promissory notes, and THB 393 million were structured notes.
Funding or lending to related parties
The Bank extended loans to parent companies, subsidiaries, and related companies in Thanachart Group. At the end of 2017, it extended loans to THANI, the Bank’s subsidiary, for business operations under Thanachart Group Policy amounting to THB 1,570 million, decreased by THB 1,610 million from the end of 2016. There was remaining balance of THB 3,180 million. The aforementioned loan outstanding balance accounted for 0.24 percent of total loans at the end of 2017. All lending and borrowing transactions were conducted under the permission of the BOT.
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Risk Factors An overview of the Risk Management
In 2017, the Thai economy continuously improved from the previous year despite the lower than projected inflation rate due mainly to the growths of export and tourism which were in continuation of the global economic recovery. Similarly, the government spending was another factor advocating Thai economic growth together with the private consumer sector, of which the expansion was at a satisfactory level. The total loans of commercial banks in 2017 continued to expand from last year as the Thai economic outlook picked up. Nonetheless, the NPL ratio jumped as compared to the previous year owing to the drop of debt service coverage ratio in some business units. Yet, considering the overall commercial banking industry, commercial banks were able to strongly maintain their financial stability as reflected in high capitals and reserves. As for 2018, the Thai economy tends to recover more strongly than the previous year thanks to the key drivers emerged from large government investments and the recovery of private investments as well as the global economic expansion triggering positive impacts to the export sector. Risk factors of various areas need to be closely monitored e.g. purchasing power diversification, household debts, the U.S. Federal Reserve’s interest rate hikes; these can affect the Bank’s risks in different aspects such as marketing 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 Bank of Thailand (“BOT”)’s capital supervisory measures of Basel III framework. This allows the Bank and its subsidiaries to efficiently manage the capital and have a strong capital status to firmly support the business growth. Nevertheless, the Board of Directors and executives of the Bank closely oversee, monitor, and develop the risk management system regularly to ensure that the measures are updated and in line with the ever-changing internal and external risk factors. The Bank strategically establishes an 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. Risk Management Committee has a role in establishing strategic plans and developing the risk management procedure as well as considering appropriate risk management policies and guidelines to be proposed to the Executive Committee and the Bank’s Board of Directors for consideration and approval. Audit Committee has a role in determining the supervisory guidelines for the operation to comply with measures of related authorities as well as assessing the effectiveness and sufficiency of the risk management process and internal control system.
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The Committees at the Operation Level: Asset and Liability Management Committee has a role in supervising the structure of the Bank’s assets and liabilities to be appropriate for characteristics of the business and in line with the Bank’s risk management policy. Investment Portfolio Committee 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 2017 Board of Directors Audit Committee
Risk Management Committee Chief Risk Officer
Executive Committee
Compliance
Risk Policy and Capital Markets
Credit Risk Management
Retail Risk Management
Chief Audit
Chief Executive Officer and President
Special Risk Management
Asset and Liability Management Committee
Investment Portfolio Committee
Credit Committee
Chief Operating 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 Bank puts in writing all the established policies and guidelines regarding the risk management that specify responsibilities of related units as the operational guidelines for the employees. Moreover, the Bank has established a four-step guideline for risk management namely: 1) identification of the characteristics of risks and risk factors, 2) development of appropriate tools and models for risk measurement, 3) control of risks within acceptable limits and 4) monitoring of risk status in order to properly manage any possible risks in a timely manner. • The determination of size and proportion of different risk values by the use of risk calculation tools and models allows the Bank to perceive the degree of severity from 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 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. Under such goal, the Bank pursues proper risk management on overall credit portfolios with close monitoring and comprehensive assessment to report to the assigned committees on a regular basis. The purpose is to mitigate exogenous risks that may adversely affect any particular group of business excessively financed by the Bank.
056
ANNUAL REPORT 2017
Credit status, as of 31 December 2017 and 31 December 2016 classified by business types was as follows: Business type
2017 Debt balance Percentage (THB Million)
2016 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
7,495 80,925 47,289 58,752
1.05 11.37 6.64 8.26
14,070 78,054 47,686 59,990
2.04 11.30 6.90 8.68
97,541 4,116 370,986 29,194 15,377
13.71 0.58 52.13 4.10 2.16
97,689 3,536 345,294 28,590 15,998
14.14 0.51 49.98 4.14 2.31
Total loans
711,675
100.00
690,907
100.00
The overall credit data showed that the portion of hire purchase lending granted by the Bank and its subsidiaries increased from 49.98 percent as of 31 December 2016 to 52.13 percent of total loan outstanding as of 31 December 2017. 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 2017 and 31 December 2016 were as follows: Loan classification
Substandard Doubtful Doubtful of loss Total
2017 Debt balance Percentage (THB Million)
2016 Debt balance Percentage (THB Million)
5,935 2,672 7,829
36.11 16.26 47.63
4,252 3,362 7,277
28.55 22.58 48.87
16,436
100.00
14,891
100.00
057
THANACHART BANK PUBLIC COMPANY LIMITED
The NPLs of the Bank and its subsidiaries jumped from THB 14,891 million as of 31 December 2016 to THB 16,436 million as of 31 December 2017. As for the overview, the non-performing loans accounted for 2.31 percent of total loan outstanding, increased from 2.16 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
2017 Debt balance Percentage (THB Million)
2016 Debt balance Percentage (THB Million)
Agricultural and mining 65 0.40 351 Manufacturing and commerce 4,805 29.23 3,164 Real estates and construction 1,870 11.38 2,169 Public utilities and services 1,318 8.02 1,263 Personal consuming Housing loans 3,457 21.03 2,204 Hire purchase 3,532 21.49 4,588 Other 1,237 7.53 1,128 Others 152 0.92 24 Total loans
16,436
10.00
2.36 21.25 14.57 8.48 14.80 30.81 7.58 0.15
14,891
100.00
Troubled Debt Restructuring (Unit: THB Million)
Number of debtors (persons) Outstanding principal and accrued interest receivables Loans not fully covered by collateral Revaluation allowance for debt restructuring Total loans and accrued interest receivables Restructured debts to total loans (percentage)
2017
2016
8,703 10,820 3,543 1
13,857 14,354 5,773 2
712,264
691,527
1.52
2.08
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 2017, accounted for the amount of principal and the accrued interest receivables totaling THB 10,820 million or 1.52 percent of total loan outstanding and accrued interest receivables. The total value of the restructured debt based on net collaterals would amount to THB 3,543 million approximately.
058
ANNUAL REPORT 2017
1.3 Risks from Collaterals For collateralized loans, the Bank has established a procedure of quality analysis and classification for each type of collateral by taking into account the liquidity and risk of the collateral type. The analysis result is one of the key factors used to classify credit risk level. The value of collaterals, either immovable or movable, will be appraised in accordance with the BOT’s guideline. The main types of collaterals of the Bank consisted of deposits and bills of exchange, marketable securities, non-listed securities, immovable commercial property, immovable housing property, vehicles, machinery, etc. The Bank has determined the price appraisal guidelines, standards, and frequency for each type of collateral. Furthermore, the Bank required that the appraisal price report is prepared to ensure clear and adequate data/ information as well as analysis required for reasonable price setting. In case the collateral is devalued or impaired by aging or usage, its impairment costs must be considered by the concerned unit. With reference to the BOT’s notification regarding the valueless and non-callable assets in December 2006 stipulating that the provision setting was to be in line with the IAS39, cars 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 at 44 percent 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 2017, the Bank and its subsidiaries’ obligations in the form of avals and guarantees for loans amounted to THB 25,709 million or 2.55 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-for-sales investment portfolio to decline. The Bank has developed risk measurement tools based on the Value-at-Risk (VaR) model to estimate the maximum loss amount at a certain confidence level and over a given asset holding period. The Bank also determines the various limits of transactions in order to control risk to remain in an acceptable level; for example, Position Limit and Loss Limit. The Risk Control Unit, separated from the front office and the back office, has the duty of risk control and reporting on the status of the limits to the Board of Directors, departments and executives associated to the risk management. For prompt risk management, the Bank assigns the 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.
059
THANACHART BANK PUBLIC COMPANY LIMITED
As of 31 December 2017, the trading investments and available-for-sale securities classified by type of investment were as follows: Fair Value (THB Million) 2017
2016
9,127 232 0 1,713
7,171 0 0 1,597
11,072
8,768
Available-for-sale securities Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities
113,978 24,336 10,430 3,618
124,678 22,174 11,434 3,992
Total available-for-sale securities
152,362
162,278
Total trading and available-for-sale securities
163,434
171,046
Trading securities Government and state enterprise securities Private debt securities Foreign debt securities Domestic marketable equity securities Total trading securities
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. 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.
060
ANNUAL REPORT 2017
Details of financial assets and liabilities as of 31 December 2017, 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
Financial assets Cash - Interbank and money market items 995 Derivatives assets - Investments - Loans to customers 220,379 Receivables from purchase and sale of securities - Receivables from clearing house - Total financial assets
221,374
Financial liabilities Deposits 305,123 Interbank and money market items 16,956 Liability payable on demand - Derivatives liabilities - Debt issued and borrowings 4 Payables from purchase and sale of securities - Payables to clearing house - Total financial liabilities
322,083
0-3 months
At call
- 750 - - 4,573 - -
3 - 12 months
1-5 years
Over 5 years
- - - - 79,073 6,963 500 - - - - - 25,260 13,366 113,647 5,587 44,916 25,860 239,859 175,970 - -
- -
- -
- -
5,323 149,249 46,189 354,006 181,557 51 129,188 233,578 41,264 1,699 39,070 20,759 1,118 - - - - - - - - 627 393 3,100 15,184 - -
- -
- -
- -
- 1,115 - - 20,000 - -
2,377 168,651 257,437 57,566 21,115
No interest
Total
11,453 6,557 2,889 8,563 118
11,453 94,838 2,889 166,423 711,675
3,127 343
3,127 343
33,050 990,748 7,074 716,278 1,707 82,424 1,989 1,989 2,868 2,868 - 39,308 2,318 1,269
2,318 1,269
17,225 846,454
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.
061
THANACHART BANK PUBLIC COMPANY LIMITED
As of 31 December 2017, the Bank and its subsidiaries had assets and liabilities in foreign currencies of THB 36,544 million and THB 17,277 million, respectively, equaled to net assets of THB 19,267 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 476 million or 0.05 percent of total assets.
3. Liquidity Risk Liquidity risk arises from the inability of the Bank and its subsidiaries to repay their debts or obligations upon the delivery date due to the lack of ability to convert assets into cash or to mobilize adequate funds or to mobilize funds at an acceptable cost. This could adversely affect the current and future earnings and capital of the Bank and its subsidiaries. The liquidity risk management mechanism starts with the assessment of the cash flows and liquidity position over particular time horizons of the Bank when the different levels of funds may be required to accommodate deposit withdrawal, reduce other types of the Bank’s liabilities or increase the Bank’s assets by using the Liquidity Gap Analysis. Various liquidity ratios and “What if” scenarios to evaluate the sufficiency of the cash flow liquidity depending on customer behavior in extending contracts upon maturity and estimate the need of liquidity in various “What if” scenarios depending on the economic climate and extraordinary situations that may happen to the Bank and the financial institution system. Meanwhile, the Bank and its subsidiaries developed an emergency plan in case of a liquidity problem and there will be a revision of the significant occurrences that affect working operations. In this regard, the Bank and its subsidiaries have assigned ALCO, controlling and managing the liquidity risk with two weekly 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)
2017
Percentage
2016
Percentage
Deposits Interbank and money market items Debt issued and borrowings
716,278 82,424 39,308
85.47 9.84 4.69
676,557 65,834 49,409
85.45 8.31 6.24
Total
838,010
100.00
791,800
100.00
Capital Fund Classified by Maturities
(Unit: THB Million)
2017
Percentage
2016
Percentage
Less than 1 year More than 1 year
757,856 80,154
90.44 9.56
716,431 75,369
90.48 9.52
Total
838,010
100.00
791,800
100.00
As of 31 December 2017, deposits and borrowings of the Bank and its subsidiaries amounted to THB 838,010 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.
062
ANNUAL REPORT 2017
The financial assets and liabilities of the Bank and its subsidiaries as of 31 December 2017 classified by maturity date were as follows:
(Unit: THB Million)
Items
The maturity date of financial instruments Less than More than Not At call 1 year 1 year specified
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
11,453 8,302 - 5 39,792 - -
- 86,036 1,069 37,333 195,223 3,127 343
- 500 1,820 120,552 476,660 - -
- - - 8,533 - - -
11,453 94,838 2,889 166,423 711,675 3,127 343
Total financial assets
59,552
323,131
599,532
8,533
990,748
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
307,595 20,362 1,989 - 392 - -
365,947 59,828 - 1,319 3,493 2,318 1,269
42,736 2,234 - 1,549 35,423 - -
- - - - - - -
716,278 82,424 1,989 2,868 39,308 2,318 1,269
Total financial liabilities
330,338
434,174
81,942
-
846,454
Commitments Aval to bill Guarantees of loans Liability under unmatured import bills Letter of credits Other commitments
2 87 48 250 38,221
100 2,204 222 795 39,177
13 - - - 2,077
- - - - -
115 2,291 270 1,045 79,475
Total commitments
38,608
42,498
2,090
-
83,196
063
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 events. This also includes legal risks such as litigations, exploitation by the government and also damage from settlements outside the courtroom. Such risks can pose adverse impact on other risks, especially strategic risk and reputation risk. The Bank has established policies and guidelines to ensure the prevention and monitoring of this type of risk. As the internal control system is an important tool in controlling and preventing potential risk that may occur, the Bank has implemented an efficient internal control system as follows: • Regarding the organization of the Bank’s structure, the Bank has specified the roles, the scope of duties and responsibilities for each position, based on a system of check and balance. The Front Office where all the transactions take place is separated from the Middle Office, comprised of the Risk Control Unit and the Back Office. • Establish the transaction-supporting units which are independent and have expertise in their respective fields of work such as information technology unit, legal and appraisal unit in order to prevent any possible errors that may arise. • Put operational procedures and regulations related to all types of transaction, staff manuals as well as the authority ranks for approval in writings as a guideline to set the same standards for all internal operations within the organization. • Establish the Audit Committee and the Risk Management Committee to control, monitor, and assess the risks of the Bank. The committees are responsible for examining and correcting the pitfalls in order to create soundness and efficiency in the Bank’s operation. • Improve the management of the information technology system and information security system in order to enhance its potential to accommodate business expansion and gain credibility from the customers in the aspect of data and technology. A particular focus is given to the prevention of damages from unauthorized access to the Bank’s information.
• Formulate the Business Continuity Plan which consists of an emergency plan, a plan for backup systems, and a business recovery plan to prevent disruption in business operation. In addition, the drills are essential to test the readiness and to consistently improve the plans for its effective implementation. The Bank also employs the services of the third party to operate some group activities as per the direction of the work operations of financial institutions at present and in the future. The Bank determines policies in order to manage the risk that may occur from outsourcing. These policies have to also be subject to regulations of BOT and must be beneficial to the internal control of the Bank as well. In the measurement and assessment of operational risk, the Bank determines a principle, form or condition of the process used in the measurement and assessment of risk in the Bank. In the determination of this process, the Bank considers the circumstantial factors such as supervising guidelines of the government units associated with the Bank, state and complexity of the business, the capability of the Bank in accepting risk, probability, likelihood or frequency as well as the impact or severity of risk that has happened or may happen. As per BOT’s specification for commercial banks to maintain funds in proportion to risk-weighted assets in terms of credit, market and operation according to Basel III guidelines, the Bank has employed the Basic Indicator Approach to calculate operational risks. In addition, to monitor operational risk, the Bank determines a policy for executives of each department to be responsible for monitoring the risk by considering this as a part of their regular duties. This will help promptly identify all risks and problems that occur in order to respond to the changes in an appropriate and timely manner, not damaging to the Bank. Nevertheless, to be informed of the result of business operations and problems that occur, as well as trends and changes in information of risk factors, the Bank organizes a filing and reporting of the information associated with operational risk management such as information on data loss, key risk indicators and important risk points to be continually and regularly reports to the Board of Directors, the Risk Management Committee and the executives to use in the determination of policies, to develop a sufficient risk management system and to be a tool in aiding the Bank to evaluate the capability and efficiency of the internal control system.
064
ANNUAL REPORT 2017
5. Strategic Risk This type of risk arises from the inappropriate formulation of strategies, business planning and implementation which are not compatible with internal setups and external environment, resulting in an adverse impact on earnings, capital or the existence of the Bank and its subsidiaries. In managing the strategic risk, the Bank formulates strategies for the next three years which are reviewed annually or when there is an external event that may impact the achievement of the Bank’s business goals. The Executive Committee is responsible for regular monitoring and evaluating the performance of the work units upon the established targets stated in the annual operation plan.
6. Regulatory Risk The regulatory risk arises from non-compliance of laws, regulations, requirements, standards, and practice guidelines regulated the Bank’s transactions, which could cause serious financial loss, reputational damage, or state of being intervened. Any amendment or change in regulations, laws, or requirements made by the authorities such as the Bank of Thailand, the Securities and Exchange Commission, the Stock Exchange of Thailand, the Office of Insurance Commission, the Anti-Money Laundering Office, and others may affect the business strategies and operations of the Bank and its subsidiaries. The Bank established the team of Compliance, reporting directly to both the Audit Committee and the CEO and President, to monitor and ensure compliance of Bank and its subsidiaries under the financial group with the laws and requirements of the regulators and business ethics; provide consultations; educate executives and staff; and enable the executives to perform and manage regulatory risks efficiently, without redundancy with other internal units or special task forces such as the anti-money laundering, coordination and monitoring, official regulators.
To manage regulatory risks, the Compliance would evaluate the risks in activities taking into account the internal and external factors that may impact the Bank and its subsidiaries, including direction of regulatory supervision, official audit result, business policy, inquiries, complaints, internal control and systems involved the matter. The Risk Based Approach (RBA) was employed to determine impact and probability of incident and used as a guideline for the Control and Monitor process to ensure compliance. The Compliance’s duties also include following up with the found issues and propose recommendations on corrective actions.
7. Risk from Capital 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. As of 31 December 2017, the Bank’s capital totaled THB 125,527 million, of which THB 98,209 million was common equity Tier I capital and Tier I capital while Tier II capital was THB 27,318 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 14.81 percent, 14.81 percent, and 18.94 percent, respectively, higher than the BOT’s minimum requirements at 5.75 percent, 7.25 percent, and 9.75 percent, respectively.
065
THANACHART BANK PUBLIC COMPANY LIMITED
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 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 2017, 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 • Thanachart Group treats its employees in line with the established standards and the related laws. Importantly, it has adopted not only a human resource policy and clear regulations but also refrain from human rights violations such as employment of children in any work. Not less importantly, the Group has put in place a process of checking candidates’ various qualifications before employment. • 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. They are provided with the same opportunities and compensation as those of normal employees. Moreover, in 2017 the Bank 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. 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.
066
ANNUAL REPORT 2017
• 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 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 cares about the health of all its employees, mainly because employees’ quality of life is the main driver of workplace productivity. To ensure that employees have most convenient access to this area of services, the Group has come up with a number of programs to promote employee wellness. As a protective measure, it inculcates the awareness of the importance of health and supports activities that promote employee health. In this connection, the following guidelines have been developed: • 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. • Health promotion guidelines Employees are given welfare benefits that cover their medical expenses when they are ill. The Group has put in place a sick room for treating or giving sick employees medical services. Physicians from hospitals are invited to share their health knowledge with employees. Importantly, the Group has made available first aid kits including supplies and equipment for preliminary treatment of sick employees to prevent their illness from worsening.
Safety, Occupational Health and Work Environment Thanachart Group recognizes its important responsibility for employees’ occupational health and safety in the workplace. Emphasis is placed on creating a healthy workplace environment for employees. In this connection, the Group has established policies and practice guidelines on safety, occupational health and work environment in compliance with the related laws. Moreover, to ensure that employees have knowledge and recognize the importance of such matters, it has established a committee on safety, occupational health and work environment. In particular, it organizes a training course and activities aiming at sharing safety knowledge with employees. As well, it ensures that the related policies are properly implemented and that employees who are ill or injured get appropriate medical treatment.
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Human Resource Development As Thanachart Group is determined to operate its business and grow in a sustainable manner, it recognizes the importance of enhancing the potential and quality of its employees at all levels in a continuous manner. In this connection, the Group has adopted a human resource concept called ‘Thanachart’s People Development Model 70:20:10’ whereby on-the-job learning and development accounts for 70 percent, supervisors’ support to employees’ development (such as coaching) accounts for 20 percent, while training and development courses in diverse forms which are tailored specifically for trainees and are designed to meet training objectives accounts for the remaining 10 percent. Thanachart Group always keeps executives and employees at all levels informed of the above concept.
Practice Guidelines on Training
Thanachart Group has been gradually building up a solid foundation for training and development. To begin with, for newly recruited personnel, their training and development focus on key skills that are essential for fulfilling tasks which employees in each job role must perform. Development is aimed at raising the bar to advance their respective professions. These include product knowledge, customer service skills, work processes, and work systems which are based on compliance with the regulations imposed by the authorities concerned and the code of professional ethics. The objective is to prepare workforce with strong potential for further growth in the organization and for supporting implementation of the organization’s business strategies. To develop the Group’s human resources, the following activities were implemented in 2017. 1. In relation to corporate training, the Group organized training activities which were aimed at providing all employees with skills in all areas in order to improve their all-around competence. These included thinking skills, people management skills, performance management skills, and communication skills. 2. To develop employee potential, training activities were organized, taking into account the employees’ roles and responsibilities. In this connection, the activities focused on raising customer service standards so that customers received services which met their needs and were also in line with the customers’ acceptable level of risk (Customer Focus). Importantly, the activities were not only aligned with
the Group’s strategic vision but were also appropriate and transparent in line with the requirements and regulations imposed by the authorities concerned. The activities included the following: 2.1 Product knowledge training activities were organized, aiming at providing employees with knowledge and understanding of various products and services 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 meet customer needs (Customer Solutions) in an accurate, timely and efficiently 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 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 content after training. Among others, the trainings included courses on the Anti-Money Laundering Act, Counter-Terrorism
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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 anti-corruption 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. With regard to leadership and management development, as high-level executives played a key role in implementing the organization’s policies and strategies, Thanachart Group organized training activities aiming at enhancing, accelerating and maintaining potential, abilities and capacity of its executives in the area of business and human resource management for improving productivity. Emphasis was placed on thinking and decision-making skills, communication skills, and leadership skills, among others. As well, its executives were encouraged to participate in training activities and seminars organized by various professional organizations. The objective was for them to broaden their perspectives and to build networking relationships with various organizations. 4. In an effort to build a learning organization, Thanachart Group developed an integrated learning format which made use of a wide range of channels. The objective was to make its human resource development the most efficient possible. The related elements were as follows: 4.1 Coaching: Supervisors are 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: Thanachart 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: Thanachart Group also promoted e-learning through its corporate intranet. In 2017, several training courses were developed for the e-learning system which allowed employees to access and learn from available training materials 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, 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 efficiently. In addition to the above elements, Thanachart Group has communicated with its employees, ensuring that they have knowledge and understanding of various products as well as entitlements and welfare benefits that each employee will receive from the organization. In this connection, all new employees are required to attend a one-day orientation training program which covers product knowledge, core values, organizational structure, compliance with the Anti-Money Laundering Act and the Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing Act as well as information on employee entitlements and welfare benefits. The objective is for new employees to have an overview of the Group’s business, direction, and various strategies so that they could adjust themselves to Thanachart Group and establish good relationships with colleagues and the organization. The orientation also serves as an important foundation for retaining 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 Course held in 2017 The Bank and other member Companies of Thanachart Group Number of Courses
Courses
TBANK
Other members of Thanachart Group
Number of Participating Groups Number of Participating Employees TBANK
Other members of Thanachart Group
TBANK
Other members of Thanachart Group
In-house Learning Public Learning E-learning
170 160 17
107 185 6
786 209 16
245 207 6
35,895 599 94,951
3,911 1,019 9,634
Total
347
298
1,011
458
131,445
14,564
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:
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.
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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 2017, the number of the employees taking part in the survey accounted for 98.88 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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Employee Information Number of Thanachart Group’s Employees by Level Permanent Employees by Level
Gender
Number of Employees 2017 2016 2015
High-level Executives (from SVP to CEO)1 Male Female Total
82 22
70 25
64 26
104
95
90
Executives (from AVP to FVP)2
454 451
455 453
466 454
905
908
920
4,577 8,299
4,595 8,390
4,750 8,375
Total
12,876
12,985
13,125
Grand Total
13,885
13,988
14,135
Male Female
Total Employees (from O to SM)3
Male Female
Remarks: 1 Position from Senior Vice President (SVP) to Chief Executive Officer (CEO) 2 Position from Assistant Vice President (AVP) to First Vice President (FVP) 3 Position from Officer (O) to Senior Manager (SM)
Temporary Employees
Male Female Total
Number of Employees 2017
69 78 147
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Number of Thanachart Group’s Employees by Location Temporary by Location
Gender
Number of Employees 2017 2016 2015
Headquarters Male Female Total
3,730 5,003
3,662 4,962
3,323 4,210
8,733
8,624
7,533
Domestic Branches
1,383 3,769
1,458 3,906
1,957 4,645
Total
5,152
5,364
6,602
Grand Total
13,885
13,988
14,135
Male Female
Remark: Thanachart Group has no overseas branch.
Number of New Employees and Former Employees Types of Employees
Gender
Number of Employees 2017 2016 2015
New Employees Male Female Total
423 979
510 1,293
725 1,769
1,402
1,803
2,494
Former Employees
803 1,471
664 1,305
940 1,666
2,274
1,969
2,606
Male Female
Total
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
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
2015
8,772
8,868
8,855
337
313
318
320
313
293
95
100
92
296
297
286
In this connection, the number of employees disclosed in this part of the report only in 2017 included those of (1) THANI, (2) SSV, (3) MBK LIFE, (4) TM Broker, and (5) MTS.
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THANACHART BANK PUBLIC COMPANY LIMITED
2. Environmental Protection Environmental Management Thanachart Group recognizes the importance of environmental protection. In this connection, it has been implementing environmental protection activities earnestly in a continuous manner. As well, it establishes a committee responsible for applying various technologies in the workplace and developing innovations for the purpose of managing energy in Thanachart Group’s buildings. The objective is to ensure that energy is being used properly and efficiently as well as in the best interest of the organization. The Group pays great attention to energy conservation. In particular, it uses standards, rules and energy management technologies as tools for conserving energy. The related activities receive strong support from the Group’s executives who are dedicated to energy conservation. Emphasis is placed on ensuring that all units in the organization participate in the energy conservation in the best interest of both the organization and the staff themselves. The Group also encourages employees to acquire knowledge of energy conservation. For example, arrangements have made for employees to pay field visits to organizations which are successful in energy conservation. The objective is for them to properly apply what they learn to the energy management of Thanachart Group’s buildings.
1
2
3
4
5
6
7
8
9
10
Inculcating Conservation of Energy Consciousness Thanachart Group has established an ant power group consisting of representatives of each unit. Members of the group participate in energy conservation activities in Thanachart Group’s various buildings on a regular basis. The objectives are to provide participants with related knowledge and to inculcate the conservation of energy consciousness in them in a sustainable manner. Dissemination of the Body of Knowledge and Technologies to Achieve Sustainability Thanachart Group organized an “Energy Day” fair under the “Use What You Have and Add Value” project. The objectives were to preserve environment and to fight global warming. At the fair, the body of knowledge of energy conservation was disseminated to various work units, both inside and outside the organization. There were activities inculcating the conservation of energy consciousness, answering questions
1 - 7 8 - 10
Training the energy conservation at Thanachart Group’s building An “Energy Day” fair under the “Use What You Have and Add Value” project
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about energy conservation and introducing energy-saving devices to fair participants. The fair also featured Soi Dao (or seizing stars) which was a game of lucky draw. All the income from the activity was donated not only to a pool of funds belonging to the Paper Ranger Project, through which handmade notebooks were given to poor children, but also to the Yuvabadhana Foundation’s society of sharing (PanKan). Used items were also donated to PanKan Shop, whose donation boxes were placed at Thanachart Group’s buildings. In this connection, there were 4,036 items which were donated. The total value of the donations amounted to THB 167,310, from which scholarships were awarded to 23 scholars of the Yuvabadhana Foundation in 2017.
Energy Management Thanachart Group pays close attention to energy management in a continuous manner. It has adopted a clear energy conservation policy and environment protection measures aiming at encouraging all employees to participate in reducing energy consumption. In fact, energy consumption reduction is regarded as part of employees’ responsibilities. As a result, Thanachart Group is about to manage energy in an efficient manner. 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 2016 and 2015 in the Three Designated Buildings Building
Suanmali Petchburi Wongsawang
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)
2016
2015
3,860,000.00
3,852,000.00
2,246.91
2,242.25
3,027,000.00
3,323,000.00
1,762.02
1,934.32
1,466,000.00
1,508,000.00
853.36
877.81
Thanks to continued dedication to energy management, Thanachart Group’s Suanmali Building won an outstanding award at Thailand Energy Awards (TEA) 2017. The Group implemented various energy conservation measures, both non-monetary and partly monetary. These included, among others, switching off air coolers fifteen minutes earlier than usual, seasonally adjusting chilled water temperature set points on chillers, turning off office lights during lunch breaks, installation of ozone generators for water treatment systems in cooling towers, as well as replacement of 36W fluorescent tubes with 18W LED tubes. As a result, TBANK was able to reduce its annual electricity consumption by 1,000,000 kWh or about THB 3 million per year. In consequence, Suanmali Building was given an outstanding energy conservation award in the category of building/factory control among over 262 entries nationwide, proposed by the Department of Alternative Energy Development and Efficiency, the Ministry of Energy.
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THANACHART BANK PUBLIC COMPANY LIMITED
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 switch is 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.
11
12
• 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
11 - 12 Winning an outstanding award at Thailand Energy Awards (TEA) 2017
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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 and contain 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 a training course 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. Water and Waste Management
• Water Management Plans: Thanachart Group has formulated plans in relation to formats and processes for managing water used by the organization, which includes tap water and treated water. The objective is to maximize water use efficiency. Wastewater discharged from buildings to outside must meet quality standards imposed by the related laws or other requirements.
• Wastewater that could not be re-used: Wastewater is regularly measured and assessed to determine suitability for disposal. Wastewater to be discharged must meet the quality standards stipulated in the ministerial regulations. The objective is to ensure that the environment and ecosystem will not be adversely affected. 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 use. The efforts also indirectly help preserve the environment. In this connection, the following are 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 use 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 use 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 use. Among others, they are encouraged to reuse waste paper within the office.
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THANACHART BANK PUBLIC COMPANY LIMITED
3. Fair Business Practice Priority Areas
Code of Conduct
Practice Guidelines
- In 2017, Thanachart Group has implemented the following activities in relation to the code of conduct: 1) The Group organized a training course on the code of conduct every month for all new staff members who were required to sign an acknowledgement of the code. As for the existing staff members, the Group organized a training course on knowledge and mind development. 2) The Group developed CG E-learning resources which were distributed via the Intranet system. The arrangement enabled staff members to study and learn on their own. 3) The Group posted on the Bank’s website (www.thanachartbank.co.th) additional practice guidelines, including procedure for filing complaints, guidelines on avoiding copyright infringement, human resource practice guidelines, and fair practice guidelines and responsibility to lenders, among others. 4) The Group made arrangements for all executives and staff members at every level to sign an agreement to adhere to the code of conduct and to avoid taking any action in pursuit of business benefits that give rise to a conflict of interest with Thanachart Group. 5) Assessment forms were prepared for all of Thanachart Group’s staff members at every level. The objectives were to develop, test, and measure the level of knowledge and understanding in relation to the compliance with the good principles of corporate governance and the code of ethics. The assessment was carried out twice a year. 6) Thanachart Group organized seminars for trading partners, and business representatives to learn about the Group’s corporate governance policy, 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 - In selecting trading partners, the Group has adopted a clear policy of not supporting Trading Partners 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 - Thanachart Group not only publicizes details of its products and services but also Information about Its Products provides customers and consumers in general with clear user manuals related to the and Services. 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. - The 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 Call 1770) and TBANK’s Facebook Page (www.facebook.com/thanachartbank).
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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 2017, 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 operation is 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.
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 2017 • 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 encourages its suppliers and service providers to pay close attention to the conduct of business affairs in a socially and environmentally responsible
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manner. The objective is to raise the standards and broaden the scope in order to achieve sustainable procurement. Emphasis is placed on developing operating procedures in collaboration with trading partners in various forms and on managing costs in a systematic manner. It is expected that trading partners will benefit from the concepts which will 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 will be able to operate their businesses in a stable and sustainable manner as well. • TBANK has 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 are in line with TBANK’s code of business ethics as well as its code of conduct for staff members. The main objective is to achieve sustainable development across the supply chain. • TBANK manages its relationships with suppliers and service providers (Supplier Relationship Management) in a systematic manner as the relationships have impacts on its overall business performance. All parties concerned cooperate with one another in developing products and services that cater to the business needs. The cooperation not only enhances TBANK’s competitiveness but also facilitates the business expansion of suppliers and service providers. • TBANK is 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 enables all parties to achieve several goals in concrete terms. An example is the purchase of various products from charitable organizations, which could be used as mementoes on various occasions. As another example, TBANK and a number trading partners jointly develop various print media by using environmentally friendly print materials. Other example is 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 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 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.
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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 paper jam-packed with a higher degree of opacity for high performance. Apart from being thick, smooth, slippery and white, both sides of the paper could be printed. Projects on Renovation and Redecoration of Branches and Office Buildings Thanachart Group has established guidelines for procuring construction raw materials for renovating and decorating 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 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 Compound (VOC) 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. Office Furniture Procurement Projects Thanachart Group has established guidelines for office furniture procurement, whose 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.
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.
CSR in Process towards Other Stakeholders 1. “Rethink” Campaign Program TBANK has been implementing the “ReThink” campaign program for three years since 2015. It recognizes the importance of sharing financial knowledge and inculcating financial discipline in members of the general public in the Thai society. In so doing, it helps lay the foundation for their future financial security and sustainable happiness. The campaign is introduced under the slogan “Rethink, know how to use money and find happiness”. The concept is developed from the sufficiency economy philosophy conceived and developed by His Majesty King Bhumibol Adulyadej. In 2017, TBANK publicized the program in numerous formats via various channels throughout the year. Among others, these included development of nuggets of financial wisdom, which could be applied to everyday life. In this connection, video clips about role models in the society, who prepared effective financial plans and budgets were developed and broadcasted on TV and social media sites including YouTube and Facebook of TBANK. Moreover, in order to make financial discipline and personal finance easy to understand in very stage of life, TBANK developed both print books and ebooks, aiming at inculcating in members of the general public a wake-up call on the importance of changing spending habits, living within one’s means, and disciplining oneself into saving money. Taking into account the change in the target groups’ information acquisition behavior in the digital world, TBANK also introduced and presented intermittently contents, advice and knowledge about personal financial management throughout the year via its other communication channels for public relations, which included Facebook, Line and website (www.thanachartcsr.com).
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In this connection, TBANK’s program produced a 3-minute video clip titled ‘A rich man’s sons’, which went viral. It was about a story of an ordinary family consisting of a father and his children who lived a very simple life but full of happiness, mainly because the father inculcated positive attitudes and perspective of self-sufficient lifestyle in his children. The video which was distributed through TBANK’s various channels in 2015 was selected as “a PR clip for promoting moral conduct” and also won an honorable plaque of Prime Minister Gen. Prayut Chan-o-cha.
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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 the other focuses on giving different types of aid to victims of road traffic crashes. The program has been implemented since 2013. In 2017, TNI implemented the “Drive DD United Season 3” program. 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, with an opportunity to participate in submitting their entries in a video clip contest under three different themes namely, (a) thinking consciously, (b) innovation for saving all lives, and (c) driving slower on the road. Realizing that these students belong to the age group with the highest road traffic accident rate, the contest allows them to use the power of young generation not only in thinking but also in turning thought into action. Importantly, 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
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13 - 15 “Rethink” Campaign Program 16 - 17 “Thanachart Insurance - Yes, We Safe” Project
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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, 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.
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 2017, the Group took part in the following CSR and environmental protection activities in order to promote and develop society in various areas. 1. Campaigns and promotion of Thai cultural identity and Buddhism: Thanachart Group participated in promoting activities related to Thai cultural identity, local traditions, and Buddhism, with participation of people living in the communities, employees, and members of the general public. 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. Promotion of education and educational development: Thanachart Group participated in the activities aiming at filling in education gaps as well as developing and streamlining the country’s educational systems so that they not only could produce quality children and youth but also raised their potential to the levels on a par with international standards. They were also provided with opportunities to enhance their competitiveness. The efforts laid a strong foundation for the country’s strengths and competitiveness. 4. 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. 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 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.
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Campaigns and Promotion of Thai Cultural Identity and Buddhism Presentation of Royal Kathin Robes in 2017 Thanachart Group has been hosting the presentation of Royal Kathin Robes for eleven years. The Group started hosting the presentation of Royal Kathin Robes back in 2006 at Wat Kaew Korawaram in Krabi Province. Since then, the activity has been implemented on a yearly basis. It is a corporate social responsibility activity which is aimed at promoting Thai cultural identity and Buddhism. In 2017, Thanachart Group was graciously bestowed by His Majesty King Maha Vajiralongkorn Bodindradebayavarangkun to offer the Royal Robes at Wat Sao Tong Thong which was a royal temple in Lopburi Province. In this connection, member companies of Thanachart Group, their customers, business counterparts, executives, and staff members as well as members of the general public jointly donated THB 10,326,176.65 in good faith to the temple as part of the funds to be used for the construction of a multi-purpose hall, in which monks could perform religious rites. In addition, the Group gave scholarships not only to needy students with good academic records and good behavior but also to schools in the vicinity. “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 46th Annual Contest of “Thanachart Initiates and Fulfills Thai Identity” Project in 2017. The ceremony was held in Suanmali Hall of TBANK’s Suanmali Building. In this connection, Her Royal Highness graciously attended two previous 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 2017 marked the 46th 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, the project helps inspire and inculcate in Thai youth the love of Thai culture. The love makes them cherish the culture and helps keep it as part of Thai society forever. Both Thai language and Thai manners are widely recognized as unique characteristics of Thai identity. 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 2017, there were more than 4,000 students from every region participating in the contests and in this year there was still the Thai manners contests for hearingimpaired 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 hearing-impaired 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 3rd consecutive year of the implementation. Furthermore, in 2017 an additional activity was implemented, aiming at encouraging children, young people, teachers and parents not only to recognize the importance of the preservation of Thai cultural identity but also to participate more actively in the project. In particular, TBANK held Beloved School Video Clip Contest whose particular topic was “Before Going on Stage”. The contest covered two areas including using Thai manners and reading aloud Thai.
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Thanachart Group’s online media channels were mainly used for promoting the public relations activity. There were more than 50 schools participating in the contest. 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. In this connection, in 2017, the museum started creating an additional room for the exhibition on “Our Greatest King” in honor and appreciation of the fathomless kindness of Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej. The exhibition placed emphasis on presenting the relationship between the Garuda and the multifarious duties of Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej. The exhibition room would be completed in 2018.
Activities Related to Sustenance and Preservation of Local Traditions The activity related to sustenance and preservation of local traditions was originally introduced because Thanachart Group 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 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 promotion and public relations. In 2017, the activities organized in relation to the sustenance and preservation of local traditions were as follows: 1. Chinatown Chinese New Year Celebration in Bangkok, 2. Sustenance of 101 st Thai tradition festival, representing a new century of faith, Nakhon Sawan Province, 3. Commemoration marking the 42nd anniversary of the dealth of Luang Pu Tim Issariko, Wat Lahanrai, Rayong Province, 4. Candle festival for the Buddhist Lent in 2017 in Ubon Ratchathani Province, 5. Lotus throwing festival (held on the 14th day of 11th lunar month) in Samut Prakan Province, 6. Sustenance of vegetarian tradition and culture, Phuket Province, 7. Conservation of Yi Peng festival in Chiang Mai Province.
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Promotion and Support of Implementation of Activities for Charity Annual Red Cross Fair TBANK participated in the sale of Red Cross lottery tickets as well as the Red Cross Fair which was held annually. The participation in the annual fair could be traced back to the year 1976 when Bangkok Metropolitan Bank was the only commercial bank which was invited to join the Red Cross Fair, at which the bank used the name of “Bangkok Metropolitan Bank’s 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, it is still the only commercial bank with a booth at the Annual Red Cross Fair in Suan Amporn Park.
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In 2017, the Red Cross Fair organizer announced cancellation of the Annual Red Cross Fair for 2017 to pay a final tribute and farewell to Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej who was the Patron of the Thai Red Cross Society. However, TBANK continued issuing and selling Red Cross lottery tickets. The proceeds of the sale worth THB 6,300,000 were humbly presented to Her Royal Highness Princess Maha Chakri Siridhorn, Executive Vice President of the Council of the Thai Red Cross Society, for supporting the Society.
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Bridge-of-merit Project Thanachart Group is determined to play a part in supporting the work of charitable organizations in a sustainable manner. This could be traced back to the “Thanachart Initiates and Fulfills…Merit Saving Exposition” project implemented in 2009. Charitable organizations were invited to participate in the exposition, open their booths and publicize the work of their organizations. The implementation of the project received good responses from customers, members of the public and charitable organizations. As a result, in 2011 TBANK decided to establish a project called “the bridge-of-merit” to carry on its support to the work of charitable organizations in a sustainable manner. The main objectives of the project were to fill the gaps between givers and recipients and to serve as the bridge linking
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18 - 19 Presentation of Royal Kathin Robes in 2017 20 - 23 “Thanachart Initiates and Fulfills Thai Identity” Project
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givers and recipients. In this connection, customers and members of the general public could make donations to charitable organizations through ATMs, bank counters, Automatic Deposit Machines (ADMs) or through the Internet without any service fee to be charged. The charitable organizations wishing to participate in the project must have the main objectives of helping different groups of the underprivileged and of addressing social problems. Importantly, their work in the past must be well received by the public. Currently, there are 18 charitable organizations participating in the “bridge-of-merit” project. These organizations include the following: 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, 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. Phradabos Foundation, 13. Phrakhruba Noi Khemmapunyo Foundation, 14. Khum Klao Foundation Under the Royal Patronage, 15. Soka Gakkai Thailand, 16. Phra Mahathat Napaphol Phumsiri Foundation, 17. The King’s Scholarship for Thai Monks, and 18. Queen Sirikit Center for Breast Cancer Foundation. Support to Chakri Naruebodindra Medical Institute, Ramathibodi Foundation Recognizing the importance of participation in the development of public health service systems and in the opening up of opportunities for people to have access to health care as well as treatment and protection against diseases, TCAP, TBANK, TFUND, TNI, TNS, and TBROKE jointly donated cash in the amount of THB 3,200,000 as a partial support to the project of Chakri Naruebodindra Medi-
cal Institute, Ramathibodi Foundation. The objectives were 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 disease, health care, and public health services with high standards. Apart from being a center for medical studies, the Institute places emphasis on establishing learning networks and providing academic services in relation to health promotion for people living in the country’s eastern region. Supporting activities of the Foundation for Slum Child Care In 2017, TBANK delivered the money which TBANK, customers, members of the general public, and employees donated to support the activities of the Foundation for Slum Child Care under the royal patronage of Her Royal Highness Princess Galyani Vadhana Krom Luang Naradhiwas Rajanagarindra. In this connection, the Foundation for Slum Child Care is a foundation participating in Bridge-of-Merit Project which has been giving assistance to children, families and communities that are facing with problems. Strong emphasis was placed on participation of parents, children and members of the communities. In addition, TBANK gave its support by making available a location to host the Foundation’s family camping activity titled “Parent School” at TBANK’s training center in the municipal area of Tambon Bangpu, Samut Prakan Province. More than 30 families participated in the activity. Blood Donation in Honor of the Royal Father and Mother The activity has been implemented by the Network Hub 2 of the northeastern region (Khon Kaen) continuously for thirteen years. The implementation 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 tribute to Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej. 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 2017, more than 800 people donated 280,000 cc of blood to the Thai Red Cross Society.
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Promotion of Education and Educational Development “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 is based on reuse of office equipment such as tables, cabinets, chairs, and computers, which are no longer used and are still in a good condition. They have been to various educational institutes, government agencies, associations, foundations, and temples. The purpose was to make best use of the available office equipment. In 2017, there were more than 1,400 items given to 70 organizations.
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In the Area of Environment Protection Management Other Corporate Social Responsibility Activities 1. Project on “Jointly Showing Compassion for Mentally Ill Patients of Srithanya Hospital” Members of the Group jointly hosted a luncheon for about 100 mentally ill patients. The objective was to give moral support and encouragement to them so that they would recover from mental illness.
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2. Activities aiming at alleviating the sufferings of flood victims: 2.1 Collaborating with the Friends in Need (of “Pa”) Volunteers via Thanachart Group’s Project titled “Pon Ploy Pueng Pa Products of Communities Hit by Floods”, the Group promoted sale of products produced by business operators in the communities in the provinces hit by floods. The products were sold not only to executives and employees of the Group but also to people living close to Suanmali Building. All the proceeds arising from the sale were given to the Friends in Need (of “Pa”) Volunteers Foundation for forwarding to the flood victims. 2.2 Thanachart Group gave aid packages and drinking water to help alleviate sufferings of flood victims in Nakhon Si Thammarat Province, Songkhla Province, Surat Thani Province, Chumphon Province, Sakon Nakhon Province, Mukdahan Province and Ubon Ratchathani Province.
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24 - 25 Garuda Museum by TBANK 26 - 27 Annual Red Cross Fair
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3. Thanachart Group hosted a luncheon for 350 abandoned children who were taken care of by Pakkred Babies Home Orphanage. 4. Under its “Belonging to the Same Nation” Project, Thanachart Group donated 100 shirts to the Department of Children and Youth, the Ministry of Social Development and Human Security, for forwarding to children 15 to 18 years of age in five southernmost provinces including Pattani Province, Yala Province, Narathiwat Province, Songkla Province and Satun Province. 5. Under its “Thanachart Takes Kids to See a Movie” Project, Thanachart Group took more than 250 underprivileged children of Duang Prateep Foundation, Red Building Community (Sor So Group), the Rangsit Babies’ Home (Ban Dek On Rangsit) and Buddhapanya Volunteer Group respectively to see “Car 3 Driven to win”, a film about a four-wheel car in pursuit of championship glory. 6. Under the “Each sharing spirit of Thanachart means a life saved at Yensira” Project, Thanachart Group donated essential items to patients including both Buddhist Thais and Muslim Thais, from 14 southern provinces, who were hospitalized at Yensira Building, Songkhla Province. 7. Under the “Join hands to give things to underprivileged children” Project, Thanachart Group gave cash and computers to children at Ban Narai School, Nakhon Ratchasima Province.
Thanachart Group’s corporate social responsibility activities are not limited to only four areas including preservation of Thai identity and culture as well as religion, encouragement and support for charitable activities, promotion and development of education, and environmental management, as mentioned earlier. Not only as a final tribute and farewell to Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej but also in appreciation of His Majesty the King’s fathomless kindness, Thanachart Group already implemented various activities as follows: 1. As part of the activity to “jointly growing yellow marigolds in appreciation of His Majesty the King’s fathomless kindness”, executives, employees and customers of TBANK participated in growing marigolds together. In particular, 150,000 marigold seeds were first distributed in August 2017. Those receiving the seeds were expected to grow the seeds into plants so that their flowers began to bloom at the same time during the royal cremation ceremony for Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej. In addition, efforts were made to line 9,999 marigold plants up in shape of the number 9 in Thai in honor of His Majesty the late King. In this connection, executives and employees of Thanachart Group participated in the activity in unison.
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2. Thanachart Group gave support in the form of more than 250,000 bottles of water for people attending the Royal Cremation Ceremony of His Majesty King Bhumibol Adulyadej. The bottles of water were given to agencies responsible for giving services, managing activities and ensuring orderliness during the ceremony. Among others, these agencies included the Office of the Permanent Secretary, the Prime Minister’s Office, the media center for the royal cremation ceremony, Siriraj Hospital, and Wat Pathum Wanaram.
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3. Under the “Follow the Father’s Footsteps and Fulfill His Royal Aspirations” Project, Thanachart Group gave desks and chairs, learning kits, as well as scholarships to needy students with good academic records. As well, it renovated children’s playground, library, as well as educational media of Ban Na Yang School (Videspariyatrajrangsun), Phetchaburi Province.
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4. Under the activity titled “Thanachart Performs Good Deeds in Recognition of His Majesty the King’s Great Kindness”, employees of Thanachart Group jointly donated blood to the Thai Red Cross Society every three months in tribute to Phrabat Somdet Phra Poraminthara Maha Bhumibol Adulyadej.
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Blood Donation in Honor of the Royal Father and Mather “Things Given by Elders Used by Juniors” Project Project on “Jointly growing yellow marigolds in appreciation of His Majesty the King’s fathomless kindness”
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CORPORATE GOVERNANCE Corporate Governance Policy The Board of Directors had put in place written Corporate Governance Policy (“the Policy”) since 2003, with an annual review to conform with the principle of corporate assessment issued by the Thai Institute of Directors Association (IOD: CGR), and the code of good corporate governance of 2017 (CG Code) for listed companies issued by the Securities and Exchange Commission (“SEC”). The Bank also established the reporting process on business compliance with corporate governance principles of the Bank and improved the business ethics so as to be in accordance with the 2016 Banking Industry Code of Conduct, as well as codes of conduct for directors, executives, and staffs, in order to establish a framework for all personnel of the Bank. The Bank had disclosed the Policy as well as business codes of conduct and codes of conduct for directors, executives, employees and staffs. The Policy can be accessed via the Bank’s website: www.thanachartbank.co.th and Thanachart Group’s intranet system, which was intended to be the communication channel with staffs of the Group at every level and every stakeholder about corporate governance established and practice by the Board of Directors. In 2017, 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 issued by the Thai Institute of Directors Association (IOD) and the and the code of good corporate governance of (CG Code) for listed companies issued by SEC; 2. Requirement for companies under Thanachart Group to revise the Policy in alignment with the Bank; 3. Training on the Corporate Governance Policy and codes of conduct for newly recruited employees of all levels; 4. Requirement for Thanachart Group’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 Thanachart Group at all levels, 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 codes 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 among the personnel at all levels so that they are informed and responsible in their duties under the codes of conduct and Thanachart stakeholders’ etiquette. In addition, Thanachart Group continuously promoted corporate governance and reinforced corporate social responsibility (CG & CSR projects) through its policies and various activities among Thanachart Group’s employees consistently. The objective was to encourage practical learning in the units pursuant to corporate governance through internal communication channels under the “Thanachart Corporate Governance and Morality Initiation” project, advocating awareness and understanding of the Policy and ethics, in compliance with the foundation of values, morality, and professional ethics. This was communicated through easily accessible format such as short films. Cooperation was made with the Office of the National Anti-Corruption Commission (“ONACC”) 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
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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 was determined to develop concrete anti-corruption measures to be a part of the organizational culture, especially the staff development to publicize to the general public that Thanachart Group was a “Virtuous, Transparent, and Anti-Corruption Organization”.
Board of Directors and Sub-Committees Board of Directors The Board of Directors’ composition, duties and responsibilities are as follows: Composition of the Board of Directors The Bank has specified the number of the Board of Directors to be in accordance with the rule of law and harmonize with the type and size of the business so that the Board of Directors shall be effective. Moreover, of the total number of the Board members, not more than a half shall be executive directors and at least one-third shall be directors who are independent of the management and do not have any vested interest in or any connection with the Bank’s business and in fair proportion of the investment of each shareholders group. As of 31 December 2017, 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. Adil Aziz Chaudhry 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.; 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;
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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 2017, 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 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 Bank of Thailand (“BOT”); 2. Authorized to approve investments aimed at generating earnings for the Bank in compliance with the Financial Institutions Businesses Act as well as the rules and regulations of the BOT; 3. To manage business operations in line with the Bank’s business objectives as well as managing liquidity, risks and the interest rate structures; 4. Authorized to make purchases, take transfers, and dispose of the Bank’s assets in an amount up to 5 percent of the Bank’s share capital;
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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 2017, the members of the Audit Committee were as follows:
1. Dr. Thanachart Numnonda Chairma (Independent Director) 2. Assoc. Prof. Dr. Somjai Phagaphasvivat Member (Independent Director) 3. Ms. Mookda Pairatchavet Member (Independent Director) Ms. Patcharee Leekitwattana Secretary (Acting) Roles and Responsibilities of the Audit Committee 1. Financial Reporting • To review the Bank’s financial reports and the disclosure of information therein, and to evaluate the appropriateness of significant accounting policies; • To review the accountability of material transactions in financial reports, including complex or irregular transactions and transactions requiring an exercise of discretion. 2. Internal Control and Risk Management • To review the Bank’s internal control, including the internal control of its information technology system, sufficient anti-corruption measures, as well as the guidelines for communicating the significance of internal control and risk management throughout the Bank; • To ensure that the internal auditors’ and the auditors’ recommendations on internal control are implemented by the management; • To review the supervision of the policies and duties relating to risk management of the Bank, so as to ensure its adequacy. 3. Internal Audit • To review and approve the internal audit charter, annual plan as well as necessary personnel and resources for the performance of duties; • To review the audit reports and recommendations of the auditors, as well as to follow up the results of the implementation of such recommendations; • To ensure that the Internal Audit Group complies with the internal audit standards; • To evaluate the independence of the Internal Audit Group.
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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 SET in the Bank’s annual report; • 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.
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The Nomination and Remuneration Committee Recognizing the importance of good corporate governance, the Board of Directors has therefore appointed the Nomination and Remuneration Committee to propose policy, forms, and criteria relating to nomination and remuneration of directors and Sub-Committee’s directors, Chief Executive Officer and President, and executives to ensure that the nomination and payments of remuneration are in line with the related law, the organization’s visions, missions, and long-term strategies. As of 31 December 2017, 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);
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 Stock Exchange of Thailand (“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 2017, 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 Membe (Independent Director) 4. Mr. Rod Michael Reynolds Member (Non-Executive Director)
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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 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 2017, 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. Mrs. Pittimart Sanguansook Member
5. Mr. Lalit Dodampe Gamage Dharmaseri Member 6. Mrs. Vijitra Thumpothong Member 7. Mr. Suwat Chritamara Secretary Roles and Responsibilities of the Risk Management Committee 1. To propose policy on overall management of the Bank to the Board of Directors for approval. In the regard, monitoring and auditing standards must be established to ensure that the risk management policy is strictly adhered to; 2. To formulate risk management strategies in accordance with the risk management policy and to ensure that the Bank’s risks are appropriately measured, monitored, and maintained at an appropriate level; 3. To review the adequacy of risk management policy, including the effectiveness of the risk management system and the adherence to the established policy; 4. To establish risk management measures which aim at preventing possible losses from occurring and finding resolutions; 5. To assess both internal and external factors that might have material impact on the Bank’s financial positions. The assessment results will be taken into account in the adjustment of the Bank’s overall risk management policy; 6. To determine and instruct business units under the Risk Management Committee for the development of more efficient risk managing, controlling, and monitoring mechanisms; 7. To consider and appoint a committee or an officer, as well as delegate the authority to the appointed committee or officer under roles and responsibilities of the Risk Management Committee; 8. To monitor and control the risk management conduct of committee and/or business units to ensure that they adhere to the established policy; 9. To report the committee’s performance to the Audit Committee regularly on areas that need improvement, ensuring that the improvements are in line with the established risk management policy and strategies.
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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 2017, the members of the Asset and Liability Management Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Ms. Suvarnapha Suvarnaprathip Member 4. Mr. William George Said Member 5. Mr. Piyaphong Artmangkorn Member 6. Mr. Sanong Kumnuch Member 7. Mr. Ziad El-Hoss Member 8. Ms. Wisarnsri Nilodom Member 9. Mr. Praphan Anupongongarch Member 10. Mr. Lalit Dodampe Gamage Dharmaseri Member 11. Representative of Risk Control Department Secretary Roles and Responsibilities of the Asset and Liability Management Committee 1. To formulate the Bank’s liquidity, interest rate, and exchange rate risk management plans under the policy established by the Executive Committee; 2. To manage the Bank’s liquidity and exchange rate risks in accordance with the trends of the money market and capital market conditions; 3. To manage the Bank’s interest rate structure and determine the rate of interest both floating and fixed interest rates in order to prevent any adverse impacts from interest rate volatility; 4. To approve investments in bonds and private debt instruments within budget limits;
5. To approve the principles and policies in specifying and paying interest rate; 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; 8. To report on the performance of liquidity, interest rate and exchange rate management to the Risk 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 2017, the members of the Investment Portfolio Committee were as follows: 1. Mr. Suphadej Poonpipat Chairman 2. Mr. Somjate Moosirilert Vice Chairman 3. Ms. Suvarnapha Suvarnaprathip Member 4. Mr. William George Said Member 5. Mr. Piyaphong Artmangkorn Member 6. Representative of Risk Control Department Secretary R oles and Responsibilities of the Investment Portfolio Committee 1. To determine investment policies as well as to consider and approve investment plans; 2. To approve investments within the scope of authority specified by the Bank, which must be complied within established position limits and VaR limits and to examine investment proposals that exceed its approval authority before proposing them to the Executive Committee which has higher approval authority; 3. To review the investment performance and determine guidelines aimed at improving investment performance;
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4. To acknowledge and delegate the approving authority to the respected committee or individuals under the roles and responsibilities of the Investment Portfolio Committee; 5. To manage the market risk arising from changes in prices of investment portfolios; 6. To establish and review the ratio of provisioning or determine the impairment value of the securities invested. The Credit Committee T he Executive Committees has established the Credit Committee to enhance the efficiency of the Bank’s credit approval process. As of 31 December 2017, the members of the Credit Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson 3. Mr. William George Said Member 4. Mr. Ziad El-Hoss Member 5. Ms. Wisarnsri Nilodom / Mr. Yuthyong Sudharatna Member * 6. Mr. Wuttichai Suraratchai Member 7. Mr. Noel Singh Member** 8. Representative of Risk Control Department Secretary * Attends only when his/her agendas are presented ** Retirement effective from 8 November 2017 Roles and Responsibilities of the Credit Committee 1. To regulate operating plan and credit approval procedures, management and corporate governance under the policy of the Executive Committee and the Board of Directors; 2. To establish covenants and conditions of credit lines and approve new credit lines as well as adjust conditions on credit lines within the delegated authority,
taking into account the credit risk assessments within the scope specified by the Bank’s Executive Committee or Board of Directors; 3. To establish the authority on credit approval to a person or a group of persons within delegated authority of the Credit Committee; 4. To consider the approval of the retail credit policies, which include credit risk, market risk, legal risk, and operational risk; 5. To manage the level of credit risk and qualities of loans under the Bank’s acceptable risk level, in terms of business prioritization by clearly monitoring the end to end process; 6. To screen credit applications which exceed the scope of authorization of the Credit Committee in order to propose them to the Bank’s Executive Committee or Board of Directors for approval. In case of urgency, the Credit Committee may propose credit applications to the aforementioned committee without screening; 7. To report credit approval results, credit risk management and loan qualities to the Bank’s Executive Committee or Board of Directors. The Management Committee T he Executive Committee has established the Management Committee to enhance the efficiency of Thanachart Group’s businesses and collaboration between executives. As of 31 December 2017, the members of the Management Committee were as follows: 1. Mr. Somjate Moosirilert Chairman 2. Mr. William George Said Member 3. Mr. Sanong Kumnuch Member 4. Mr. Anuwat Luengtaweekul Member 5. Mr. Praphan Anupongongarch Member 6. Ms. Wisarnsri Nilodom Member 7. Dr. Sutut Chitmonkongsuk Member
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8. Mr. Ziad El-Hoss Member 9. Mr. Lalit Dodampe Gamage Dharmaseri Member 10. Mrs. Vijitra Thumpothong Member 11. Mr. Kriangkrai Phurivitvattana Member 12. Mr. Yuthyong Sudharatna Member 13. Mrs. Pittimart Sanguansook Member 14. 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 T he 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:
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Executive Directors • Being involved with day-to-day management of the Bank and overseeing and ensuring that the management implements the policies established by the Board of Directors; • Numbering not more than a half of the total Board members. Independent Directors (applicable to public limited companies or as required by the authority) • Not holding more than 0.5 percent of the Bank’s paid-up registered capital; • Qualifications are in accordance with the criteria set by the BOT, SET, SEC, or other governing bodies; • Not exhibiting any characteristics that violate the criteria for Independent directors set out by the Capital Market Supervisory Board; • Numbering not less than one-third of the total Board members; • At least 1 independent director that has banking experience. 6. The Chairman of the Board of Directors and Chief Executive Officer and President shall not be the same person and must be exhibited in the annual report and on the Bank’s website; 7. Each director should assume a director position in not more than 5 listed companies. If over, the director should be confident that he/she can allocate sufficient time in taking a director role of the Bank. Anyhow, the director position of other companies shall not conflict with the rules and regulations of other governing bodies. Director Nomination Procedures The Nomination and Remuneration Committee selects and examines the candidates with appropriate qualifications for appointment as directors, and to propose qualified candidates to the Bank’s Board of Directors or the Annual General Meeting of Shareholders (depending on the situation) for approval to fill in any vacancies due to the completion of directorship tenure and for other cases as specified in the Nomination and Remuneration policy and the charter of the Nomination and Remuneration Committee. The directorship must conform to the Articles of Association of the Bank and other related laws, and receive the approval from the BOT as per the Financial Institution Business Act B.E. 2551. In addition, to enhance the good corporate governance relating to the Annual General Meeting of Shareholders specifically in regards to the protection of shareholders’ right to propose agenda, and nominate qualified candidate(s) to be appointed as director(s). The shareholders can nominate qualified candidate(s) whom have been approved by the Nomination and Remuneration Committee not less than 3 months prior to the Annual General Meeting day, and submit the documents with the details of qualifications, and the consent letter from the nominee(s). Currently, the directors are from 2 groups of major shareholders as follows: Company
Number of Director (person)
1. Thanachart Capital Public Company Limited
4
2. Scotia Netherlands Holdings B.V.
4
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Director Appointment Criteria and Methods According to the Bank’s Articles of Association and the good corporate governance policy, the director appointment criteria and methods are as follows: 1. In case of the appointment of a new director to replace the one who is retired by rotation, the approval from the shareholders’ meeting is required. According to Article 18 of the Bank’s Articles of Association which specifies the criteria and methods as follows: (1) A shareholder shall have one vote per share; (2) At the election of the directors, the shareholders’ meeting may vote for the directors, either one candidate at a time or candidates consisting in a group or by any other method as it deems expedient. However, at each voting time, a shareholder must exercise his right according to the number of votes specified under (1) and his votes may not be distributed howsoever to elect any other person; (3) At the election of the directors, the votes shall be decided by majority. In case of an equality of vote, the Chairman of the meeting shall have a casting vote. 2. In case of the appointment made during the directorship tenure due to a vacancy, the Board of Directors is able to approve the director’s appointment as selected and proposed by the Nomination and Remuneration Committee. According to Articles 21 and 23 of the Bank’s Articles of Association which states that if the office of director is vacant otherwise than by completion of a vacating director’s term of office, the Board of Directors, by votes of not less than three-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.
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
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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. Every 6 months, related transactions with the subsidiaries are required to be reported to the Bank’s Executive Committee and the Board of Directors respectively. Moreover, units performing transactions are obligated to submit the information to Compliance for further gathering of information of internal and related transactions. The gathered information will be then reported to related committees. Public disclosure of transactions is also required in accordance with the regulator’s principles as well as the accounting standard. For the establishment of internal control and mechanism for monitoring subsidiaries, the Bank has set authority levels for significant transactions and types of counterparties, e.g. loan grants, investments, obligations or transactions similar to loan grants to subsidiaries or related parties. If a subsidiary wishes to participate in the transaction, it must seek approval from an authorized person in consistency with the established approval levels. In addition, the Board of Directors has assigned the Bank’s Audit Committee and Audit team to cover the operations of the subsidiaries to ensure alignment to the Bank’s policies. The Audit team must summarize the overall auditing of the subsidiaries for acknowledgement of the Audit Committee and further report to the Board of Directors. Significant issues, i.e. conflicts of interest, frauds, corruptions, and violations of laws, must be reported to the Board of Directors in detail for improvement within a period of time deemed appropriate by the Audit Committee.
(2) Agreements between the Bank and other shareholder(s) in regards to the management of subsidiaries and associated companies - None -
The Controls of the Use of Internal Information The Bank has specified the 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: • 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.
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Auditors’ Fee The Audit Committee considers the appointment of auditors and compensation to propose for the Board of Directors’ approval and determines of auditors’ fee to propose to the Board of Directors and the shareholders for approval during the Annual General Meeting of Shareholders. According to the 24th Annual General Meeting of Shareholders held on 5 April 2017, the shareholders considered and approved the appointment of EY Office Limited as the auditor of the Bank. The BOT approved the 3 auditors as follows: 1. Ms. Ratana Jala Certified Auditor No. 3734 and/or 2. Ms. Somjai Khunapasut Certified Auditor No. 4499 and/or 3. Ms. Rachada Yongsawadvanich Certified Auditor No. 4951 The 2017 auditors’ fee charged by EY Office Limited, the office which audited the accounting of the Bank and its subsidiaries, for the Bank’s accounting audit conducted by Ms. Ratana Jala, Certified Auditor No. 3734; details were as follows: (1) Audit Fee 1.1 Audit Fee of the Bank of THB 11,200,000. 1.2 Audit Fee of 10 Subsidiaries of THB 6,345,000. (2) Non - Audit Fee The Bank and its subsidiaries paid THB 830,000 for the non-audit fee as follows: 2.1 Audit of electronic money transfer system as required by the BOT in an amount of THB 380,000. 2.2 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 450,000.
Other Practices In Accordance With Good Corporate Governance In accordance with the good corporate governance policy of the Bank.
Related Transactions Details of related transactions are shown in the notes to financial statements No. 41 Related party transactions.
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INTERNAL CONTROL AND RISK MANAGEMENT The Bank recognizes the importance of internal control by constantly emphasizing that a good internal control procedure will enable the bank to conduct business effectively, achieve goals and help prevent damage that may derive from the operation and exploitation of their executives and employees. In addition to the focus on internal control procedure, the Bank recognizes that recommendations from external auditors and inspectors from the Bank of Thailand (“BOT”) will help the development of the internal control system to be effective. The internal control system is summarized as follows:
1. Organization and Environment The Bank establishes organizational structure to support appropriate organization’s goals, determine, assign and authority level duty and responsibility of staff and executives in a clear written form. Internal control is in place, dividing duties of the worker, approver, controller and evaluator apart. In order to prevent conflicts of interests and to balance the influence of each other as well as to ensure the Bank’s in appropriate business operations and good governance, and to issue policies, procedures and operation manuals in writing, as well as the appointment of the Audit Committee to consider the adequacy of internal control system and subcommittees to consider and make decisions on banking matters effectively. The Board of Directors determines clear and measurable targets for business operations and follows up to ensure the progress and achievement. In addition, the Bank has established Corporate Governance Policy, Codes of Conduct, Anti-Corruption Policy, measures, as well as related rules and regulations to be the practice guidelines for the directors, executives, and employees. The self-evaluation is also conducted annually to raise awareness and recognition of good governance among all employees. Communication system and channels are established for customers and staff to express their opinions, make complaint regarding the Bank’s services, and blow the whistle, along with the protection measure for the fraud and corruption whistle-blower via Bank’s channels and fair treatment for the accused.
2. Risk Assessment The Board of Directors delegates its authority to the Risk Management Committee and the Risk Management Unit to consider and ensure that the Bank has effective risk management for all areas, in line with the purpose of the business operations. Policies and guidelines for risk management were established and published on the Intranet, which all directors, executives, and employees were to comply with. Evaluation procedures for external factor changes that may impact business operations, internal controls, and financial report, as well as measures to cope with changes adequately, were well established. Significant risks related to Bank’s business operating were reported to the Audit Committee on a quarterly basis and Risk Management Committee will report meeting resolution to the Bank’s Executive Committee and Board of Directors on a monthly basis.
3. The Operational Control The Bank establishes appropriate internal control activities for all levels covering all processes. Explicit authorization and level of approval authority are in place. As for the related transactions, the Bank has established in Good Corporate Governance Policy the practice guidelines to prevent conflicts of interests prohibiting the related persons to partake in the approving process. Regarding giving credits or investment, recognized as the Bank’s core business, policies were formulated to regulate lending to major shareholders or related parties, and investing in certain businesses with related interest,
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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.
The Board of Directors Meeting No. 2/2018 on 22 February 2018, 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 Bank’s external auditor opinion.
4. Information And Communication System
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 (Whistle-blower hotline) is also provided for internal as well as external persons/units to report information concerning fraud or corruption.
5. Monitoring and Tracking System The Bank provides the performance monitoring and reporting process to report on business units’ performance target to the Board of Directors on a monthly basis and review goals every six months. The Audit, reporting directly to the Audit Committee, is responsible for monitoring and reviewing units and processes, evaluating the effectiveness and efficiency of internal control systems and risk management system of the Bank as well as the Financial Business Group, and reporting on significant issues as well as following up corrective actions to ensure such issues are corrected appropriately. End-to-end Process audit and Continuous Control and Monitoring audit are performing to control and monitor irregular transactions. 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.
Head of Internal Audit The Bank assigned Mrs. Vijitra Thumpothong as Head of Internal Audit and responsible for Bank internal audit. As she has been working in internal audit area for commercial banking for over ten years, she possesses the knowledge and professionalism in banking operations. Thus, she is suitable to perform the task. When considering the appointment, evaluation, demotion, transfer, and layoff, the Head of Internal Audit must obtain the approval from the Audit Committee. The scope of duty of Mrs. Vijitra Thumpothong was changed to Human Resources, effective from 9 October 2017. At present, the Audit Committee has appointed Ms. Patcharee Leekitwattana as Acting Head of Internal Audit, effective from 23 November 2017, to oversee the Bank’s internal audit operations. As she had over 10 years of experience in internal audit in the commercial banking industry, she possessed solid knowledge and expertise in the Bank’s activities and operations. Thus, she was deemed suitable to carry out such duties. The appointment of the Bank’s Acting Head of Internal Audit was approved by the Audit Committee.
Head of Compliance The Bank assigned Ms. Kavita Boonpochanasoontorn as Head of Compliance to be in charge of rules and regulations, which align with the operating business.
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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 2017 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 2017, the Nomination and Remuneration Committee convened ten meetings to process the following matters; 1. To select and nominate appropriate persons to be appointed as directors replacing the directors resigning to the Bank’s Board of Directors. 2. To review and nominate appropriate persons to be appointed as directors replacing the directors retiring by rotation for the year 2017 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 2018 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 2017 remuneration packages were proposed for approval at the Bank’s Board of Directors’ meeting and the Annual General Meeting of Shareholders for the year 2017. 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 2017 were as follows: Name 1. Mr. Banterng Tantivit 2. Mr. Suphadej Poonpipat 3. Dr. Thanachart Numnonda 4. Mr. Narong Chivangkur 5. Assoc. Prof. Dr. Somjai Phagaphasvivat 6. Ms. Mookda Pairatchavet 7. Mr. Rod Michael Reynolds 8. Mr. Walter Tas 9. Mr. Adil Aziz Chaudhry 10. Ms. Suvarnapha Suvarnaprathip 11. Mr. Somjate Moosirilert 12. Mr. William George Said Directors retired from position in 2017 1. Mr. Kiettisak Meecharoen 2. Mr. Sataporn Jinachitra 3. Mr. Peter Clifford Bessey
Chairman Vice Chairman Director Director Director Director Director Director Director Director Director Director
Executive Director
Non-Executive Director -
Independent Director -
Director Director Director
-
-
Position
Notes: 1) 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. 2) Changes during the course of 2017: • 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. • Mr. Peter Clifford Bessey resigned from directorship and Mr. William George Said was appointed as a director since 5 August 2017. • 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.
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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 2017, the Board of Directors convened 12 general meetings. In the Board of Directors meeting, all directors are encouraged to express their opinions freely and vote independently. The Chairman of the Board of Directors shall provide opportunities to all directors to express their opinions before adopting any resolution. The observations and comments from directors made at the venue are documented in writing. The minutes are to be certified by the Board of Directors and made available for inspection by the Board and related parties.
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Table of directors’ meeting attendance in 2017
List of TBANK’s Directors
1. Mr. Banterng Tantivit 2. Mr. Suphadej Poonpipat 3. Dr. Thanachart Numnonda 4. Mr. Narong Chivangkur 5. Assoc. Prof. Dr. Somjai Phagaphasvivat 6. Ms. Mookda Pairatchavet 7. Mr. Rod Michael Reynolds 8. Mr. Walter Tas 9. Mr. Adil Aziz Chaudhry 10. Ms. Suvarnapha Suvarnaprathip 11. Mr. Somjate Moosirilert 12. Mr. William George Said Directors retired from position in 2017 1. Mr. Kiettisak Meecharoen 2. Mr. Sataporn Jinachitra 3. Mr. Peter Clifford Bessey
Nomination and Risk Remuneration Management Committee Committee (12 Meetings) (37 Meetings) (12 Meetings) (10 Meetings) (12 Meetings) Board of Directors
Executive Committee
Audit Committee
12/12 12/12 9/9 12/12 12/12 9/9 11/12 9/12 11/12 11/12 12/12 4/5
36/37 33/37 35/37 15/17
9/9 12/12 9/9 -
10/10 7/7 9/10 -
12/12 5/5
3/3 3/3 7/7
20/20
3/3 3/3 -
3/3 -
7/7
Notes: Changes during the course of 2017: • 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. • Mr. Peter Clifford Bessey resigned from directorship and Mr. William George Said was appointed as a director since 5 August 2017. • 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.
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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 collective performance evaluation and the individual performance evaluation. The evaluation forms are in line with that of the Stock Exchange of Thailand whose evaluation scope entails purposes of the directors’ duties in 4 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 Bank reports the summary of self-evaluation and suggestions to the Board of Directors Meeting. Each director also receives individual self-assessment results.
Executives As of 31 December 2017, 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 Chairman of the Executive Committee 2. Ms. Suvarnapha Suvarnaprathip Vice Chairperson of the Executive Committee 3. Mr. Somjate Moosirilert Chief Executive Officer and President 4. Mr. William George Said Chief Operating Officer 5. Mr. Piyaphong Artmangkorn Executive Vice President, Investment Management 6. Mr. Anuwat Luengtaweekul Executive Vice President, Retail and Small Business Distribution 7. Mr. Sanong Kumnuch Executive Vice President, Retail and Small Business Banking
8. Mr. Ziad El-Hoss Executive Vice President, Chief Risk Officer 9. Ms. Wisarnsri Nilodom Executive Vice President, Wholesale Banking 10. Mr. Praphan Anupongongarch Executive Vice President, Automotive Lending 11. Dr. Sutut Chitmonkongsuk Executive Vice President, Chief Digital Officer 12. Mrs. Sasima Taweeskulchai Executive Vice President, Special Asset Management 13. Mr. Ricky Jon Yakabowich Executive Vice President, Shared Services 14. Mr. Wuttichai Suraratchai Executive Vice President, Credit Risk Management 15. Mr. Kanoksri Rojmeta Executive Vice President, Retail and Small Business Distribution 3 (North) 16. Mrs. Vijitra Thumpothong Executive Vice President, Chief Human Resources Officer 17. Mr. Kriangkrai Phurivitvattana Executive Vice President, Office of Executive Committee Chairman and CEO 18. Mr. Wichak Praditavanij Executive Vice President, Non-Branch Channels 19. Mr. Songwut Chaowalit Executive Vice President, Retail and Small Business Distribution 1 (BKK 1) 20. Mr. Pompet Rasanon Executive Vice President, Sales Network - Automotive Lending 21. Mr. Lalit Dodampe Gamage Dharmaseri Executive Vice President, Treasury and Debt Capital Markets 22. Mr. Wisoot Tangadunrat Executive Vice President, Client Relationship Management (Real Estate) 23. Mr. Yuadrith Dhiantravan Executive Vice President, Retail Risk Management 24. Mrs. Teranuj Koomsap Executive Vice President, Retail and Small Business Product Development 25. Mr. Tirachart Chiracharasporn Executive Vice President, Product and Marketing Management - Automotive Lending
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2 6. Mr. Taweesak Songsithichoke Executive Vice President, Business Transformation 27. Mr. Smart Saensuk Executive Vice President, Investment Banking 28. Mr. Paul Alan DeWolfe Executive Vice President, Customer Experience and Distribution Strategy 29. Mr. Yuthyong Sudharatna Senior Vice President, Commercial Banking 30. Ms. Patcharee Leekitwattana Senior Vice President, Acting Chief Auditor 31. Mrs. Pittimart Sanguansook Senior Vice President, Chief Financial Officer 32. Mr. Premsak Chitprapaporn First Vice President, Finance Notes: 1. Number 3 - 11 and 31 - 32 are executive officers and the top four after the President as defined by the SEC. 2. Number 1 - 31 are those with management authority under Sections 4 and 25 of the Financial Institution Business Act B.E. 2551. 3. The changes during 2017 were as follows: 3.1 Mr. Enghug Nontikarn retired from Executive Vice President, Treasury and Debt Capital Markets on 1 January 2017. 3.2 Mrs. Anisa Choocharn resigned from Executive Vice President, Non-Branch Channels and CEM on 15 January 2017. 3.3 Mr. Boonlerd Sinsombat resigned from Executive Vice President, Information Technology on 8 February 2017. 3.4 Mr. Lalit Dodampe Gamage Dharmaseri, Executive Vice President, Treasury & Debt Capital Markets, was appointed as Acting Executive Vice President, Treasury & Debt Capital Markets, effective on 17 February 2017. 3.5 Mrs. Noossara Roonsamrarn, Executive Vice President, Corporate Banking Team 1, retired early, effective on 1 March 2017. 3.6 Dr. Sutut Chitmonkongsuk was appointed as Executive Vice President, Chief Digital Officer, effective from 16 April 2017. 3.7 Mr. Yuthyong Sudharatna was appointed as Head of Commercial Banking (Senior Vice President), effective from 16 April 2017. 3.8 Mr. Sanong Kumnuch 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 16 June 2017. 3.9 Mr. Anuwat Luengtaweekul had new work scope due to the revised organizational structure, from Executive Vice President, Chief Financial Officer, to Executive Vice President, Retail and Small Business, effective from 16 June 2017. 3.10 Mrs. Pittimart Sanguansook has been appointed as Chief Financial Officer (Senior Vice President), effective from 27 June 2017.
3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18
Mr. Peter Clifford Bessey, Deputy Chief Executive Officer, completed his secondee duty at the Bank as assigned by the Bank of Nova Scotia, effective on 5 August 2017. Mr. William George Said changed the name of the position and scope due to the revised organizational structure, from Chief Administrative Officer, to Chief Operating Officer, effective from 5 August 2017. Mr. Premsak Chitprapaporn had new work scope due to the revised organizational structure, from First Vice President, Accounting, to First Vice President, Finance, effective from 16 August 2017. Mrs. Chanaporn Chantaprateep resigned from Executive Vice President, Human Resources on 4 September 2017. Mrs. Vijitra Thumpothong had new work scope due to the revised organizational structure, from Executive Vice President, Chief Auditor, to Executive Vice President, Chief Human Resources Officer, effective from 9 October 2017. Mr. Paul Alan DeWolfe has been appointed as Executive Vice President, Customer Experience and Distribution Strategy, effective from 30 October 2017. Mr. Noel Singh, Executive Vice President, Wholesale Banking Product, completed his secondee duty at the Bank as assigned by the Bank of Nova Scotia, effective on 8 November 2017. Ms. Patcharee Leekitwattana has been appointed as Senior Vice President, Acting Chief Auditor, effective from 23 November 2017.
On 1 January 2018, 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. Piyaphong Artmangkorn retired from Executive Vice President, Investment Management on 1 January 2018. 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.
Corporate Secretariat The Bank has assigned the Office of the Chairman Committee and the CEO to administer corporate secretariat tasks to be compliant with the principles of good corporate governance as well as to ensure continuity and effectiveness of the Bank’s operation.
Executive Vice President, Office of Executive Committee Chairman and CEO
Management Committee
Credit Committee
Investment Portfolio Committee 1
Executive Vice President, Customer Experience & Distribution Strategy
Executive Vice President, Retail and Small Business Product Development
Wholesale Banking
7 Executive Vice President,
Notes: 1. No. 1 to 11 are executives according to the SEC’s notification. 2. From 17 February 2017 until present, Acting Executive Vice President, Treasury & Debt Capital Markets. 3. On 1 January 2018, the position of Executive Vice President, Investment Management was cancelled and the unit was transferred to be under Treasury & Debt Capital Markets.
Executive Vice President, Non-Branch Channels
5 Executive Vice President, Retail and Small Business Distribution
Automotive Lending
6 Executive Vice President,
Senior Vice President, Commercial Banking
Investment Management
8 Executive Vice President, 3
Chief Executive Officer and President
Executive Committee
11
First Vice President, Finance
Senior Vice President, Chief Financial Officer
Senior Vice President, Collections and Recoveries
Senior Vice President, Compliance
Executive Vice President, Chief Human Resources Officer 10
Executive Vice President, Business Transformation
Executive Vice President, Shared Services Executive Vice President, 2 Treasury and Debt Capital Markets
Chief Digital Officer
9 Executive Vice President,
2 Chief Operating Officer
Senior Vice President, Acting Chief Auditor
3 Executive Vice President, Risk Management
Risk Management Committee
Succession Committee
Asset and Liability Management Committee
Audit Committee
Board of Directors
Nomination and Remuneration Committee
4 Executive Vice President, Retail and Small Business Banking
as at 31 December 2017
Management Structure of the Bank
ANNUAL REPORT 2017
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The Remuneration of Directors and Executives (1) Financial remuneration (a) Remuneration of the Board of Directors each year As of 31 December 2017, the Bank has remunerated 3 panels of the Board of Directors, the Audit Committee, and the Nomination and Remuneration Committee totaling THB 39,798,836.56. The remuneration was paid in the forms of monthly compensation, meeting stipends, and performance allowance (based on the performance in 2016), which can be summarized as follows: Table of the remuneration of the Board of Directors Type of remuneration List of Directors
Annual compensation Meeting stipends Performance allowance Total (THB per year) (THB per year) (THB per year) (THB per year)
1. Mr. Banterng Tantivit 2. Mr. Suphadej Poonpipat 3. Dr. Thanachart Numnonda 4. Mr. Narong Chivangkur 5. Assoc. Prof. Dr. Somjai Phagaphasvivat 6. Ms. Mookda Pairatchavet 7. Mr. Rod Michael Reynolds 8. Mr. Walter Tas 9. Mr. Adil Aziz Chaudhry 10. Ms. Suvarnapha Suvarnaprathip 11. Mr. Somjate Moosirilert 12. Mr. William George Said Directors retired from position in 2016 1. Mr. Alberto Jaramillo Directors retired from position in 2017 1. Mr. Kiettisak Meecharoen 2. Mr. Sataporn Jinachitra 3. Mr. Peter Clifford Bessey
1,466,000.00 733,000.00 576,333.33 733,000.00 733,000.00 576,333.33 733,000.00 733,000.00 730,903.23 733,000.00 733,000.00 316,612.90
690,000.00 345,000.00 270,000.00 345,000.00 345,000.00 270,000.00 315,000.00 260,000.00 315,000.00 315,000.00 345,000.00 120,000.00
3,462,559.78 1,731,279.88 1,731,279.88 1,731,279.88 1,731,279.88 1,731,279.88 1,300,825.05 1,731,279.88 1,731,279.88 -
5,618,559.78 2,809,279.88 846,333.33 2,809,279.88 2,809,279.88 846,333.33 2,779,279.88 2,724,279.88 2,346,728.28 2,779,279.88 2,809,279.88 436,612.90
-
-
283,816.37
283,816.37
156,666.67 156,666.67 416,387.10
75,000.00 75,000.00 195,000.00
1,731,279.88 1,731,279.88 1,731,279.88
1,962,946.55 1,962,946.55 2,342,666.98
Total
9,526,903.22
4,280,000.00
22,360,000.00
36,166,903.22
Notes: 1) Mr. Alberto Jaramillo resigned from his directorship at the Bank on 1 March 2016. 2) Changes during the course of 2017: • 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. • Mr. Peter Clifford Bessey resigned from directorship and Mr. William George Said was appointed as a director since 5 August 2017. • 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.
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Table of the remuneration of the Audit Committee Type of remuneration List of Directors
1. Dr. Thanachart Numnonda 2. Assoc. Prof. Dr. Somjai Phagaphasvivat 3. Ms. Mookda Pairatchavet Directors retired from position in 2017 1. Mr. Kiettisak Meecharoen 2. Mr. Sataporn Jinachitra Total Notes: 1) 2)
Monthly compensation (THB per year)
Meeting stipends (THB per year)
Total (THB per year)
532,000.00 448,666.67 354,666.67
270,000.00 225,000.00 180,000.00
802,000.00 673,666.67 534,666.67
141,000.00 94,000.00 1,570,333.34
90,000.00 45,000.00 810,000.00
231,000.00 139,000.00 2,380,333.34
Mr. Kiettisak Meecharoen and Mr. Sataporn Jinachitra resigned by rotation at the Annual General Meeting of Shareholders No. 24/2017 on 5 April 2017. Changes to the Audit Committee were approved under conditions of the Annual General Meeting of Shareholders No. 24/2017 on 5 April 2017 in 1).
Table of the remuneration of the Nomination and Remuneration Committee Type of remuneration List of Directors
1. Mr. Narong Chivangkur 2. Mr. Rod Michael Reynolds 3. Ms. Mookda Pairatchavet Directors retired from position in 2017 1. Mr. Sataporn Jinachitra Total
Monthly compensation (THB per year)
Meeting stipends (THB per year)
Total (THB per year)
239,400.00 159,600.00 159,600.00
309,000.00 183,000.00 126,000.00
548,400.00 342,600.00 285,600.00
558,600.00
75,000.00 693,000.00
75,000.00 1,251,600.00
Notes: 1) Mr. Sataporn Jinachitra resigned by rotation at the Annual General Meeting of Shareholders No. 24/2017 on 5 April 2017. 2) Changes to the Nomination and Remuneration Committee were approved under conditions of the Annual General Meeting of Shareholders No. 24/2017 on 5 April 2017 in 1).
115
THANACHART BANK PUBLIC COMPANY LIMITED
The remuneration of independent director of the subsidiaries None of the Bank’s independent directors sits as an independent director of the subsidiaries. (b) 2017 total remuneration, number of executive directors and executives, and forms of remuneration In 2017, 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 15 executives directors and executives (including 4 executives changed during the past year), a total remuneration paid amounted to THB 149,079,981.00. - With reference to the BOT’s guideline, which as in accordance with Sections 4 and 25 of the Financial Institution Business Act B.E. 2551, there are 38 of those with management authority (including 7 executives changes during the past year), a total remuneration paid amounted to THB 292,406,685.00.
(2) Other remuneration (if any) Other remuneration of Directors There is no other compensation paid to the directors. Other remuneration of executive directors and executives The Bank provides provident fund to executives in a rate of 3 or 5 or 7 or 10 percent of the salary depending on years of service of the person. In 2017, provident fund was paid in compliance with the regulations as follows: - By the SEC’s definition, there were 15 executives directors and executives (including 4 executives changed during the past year), a total provident fund paid amounted to THB 5,150,629.00. - With reference to the BOT’s guideline, which as in accordance with Sections 4 and 25 of the Financial Institution Business Act B.E. 2551, there are 38 of those with managing authority (including 7 executives changed during the past year), a total provident fund paid amounted to THB 11,112,623.00.
116
ANNUAL REPORT 2017
BOARD OF DIRECTORS AND MANAGEMENT TEAM
Mr. Banterng Tantivit
Chairman (Non-Executive Director) Date of Appointment
22 April 2002
Age
73 years
Education
• Master of Science (Finance) in Management, Massachusetts Institute of Technology, U.S.A. • Bachelor of Science in Electrical Engineering, Massachusetts Institute of Technology, U.S.A.
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Directors Accreditation Program (DAP), Class 25/2004
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2015 - 2017 2003 - 2015 2001 - 2015 2012 - 2014 2005 - 2013 2006 - 2012
• Director, Dusit Thani Public Company Limited • Chairman, Plan Estate Company Limited • Advisor, Patum Rice Mill and Granary Public Company Limited • Advisor, Dusit Thani Public Company Limited • Chairman, Thanachart Insurance Public Company Limited • Chairman, Thanachart Life Assurance Public Company Limited • Vice Chairman, Thanachart Insurance Public Company Limited
Position(s) in Other Listed Companies 2006 - Present 1994 - Present
• Chairman, Thanachart Capital Public Company Limited • Chairman, MBK Public Company Limited • Chairman of the Executive Committee, MBK Public Company Limited
Position(s) in Other Legal Entities 2016 - Present 2006 - Present 2003 - Present 1987 - Present
• Director, Lam Sai Village Company Limited • Director, Siam Piwat Holding Company Limited • Chairman, MBK Resort Public Company Limited • Director, Siam Piwat Company Limited • Director, B.V. Holding Company Limited • Director, Deebuk Company Limited • Director, Thai Farming Company Limited
117
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Suphadej Poonpipat
Vice Chairman, Chairman of the Executive Committee, and Member of the Succession Committee (Executive Director) Date of Appointment Age Education Training Program Related to Roles, Duties, and Skills of Directorship Percentage of Shareholding in TBANK Family Relationship with Director and Management Experience(s) in the Past 5 Years 2011 - 2017 2011 - 2015 2003 - 2015 2002 - 2015 2012 - 2014 2005 - 2013 2003 - 2013 2011 - 2012 Position(s) in Other Listed Companies 2016 - Present 2015 - Present 2012 - Present 2010 - Present 2007 - Present 2006 - Present 2004 - Present 2003 - Present 1994 - Present Position(s) in Other Legal Entities 2015 - Present 2014 - Present 2007 - Present 2006 - Present 2005 - Present 2003 - Present
1 September 2005 67 years • Master of Science in Agricultural Economics, University of Wisconsin, U.S.A. • Bachelor of Business Administration and Accounting, Chulalongkorn University Thai Institute of Directors Association • Certificate, Role of the Chairman Program (RCP), Class 28/2012 • Certificate, Role of the Compensation Committee (RCC), Class 15/2012 • Certificate, Financial Institutions Governance Program (FGP), Class 4/2012 • Certificate, Directors Accreditation Program (DAP), Class 8/2004 Thanachart Bank Public Company Limited • Development of anti-corruption standards of Thailand (2017) • Anti Corruption for Executives, Class 1/2014 Capital Market Academy, the Stock Exchange of Thailand • Certificate, Leadership Program, Class 8/2009 Ernst & Young Office Limited with Thanachart Training and Development Company Limited • Overview and Principles of International Accounting Standards No. 39 (IAS39) (2009) Thanachart Training and Development Company Limited with SASIN • Thailand in the New Global Landscape (2009) None None • Chairman of the Executive Committee, Patum Rice Mill and Granary Public Company Limited • Director, DMS Property Investment Private Limited • Director, Plan Estate Company Limited • Member of the Compensation and Nomination Committee, MBK Public Company Limited • Vice Chairman, Thanachart Insurance Public Company Limited • Chairman of the Executive Committee, Thanachart Life Assurance Public Company Limited • Director, Thanachart Life Assurance Public Company Limited • Vice Chairman, Patum Rice Mill and Granary Public Company Limited • Chairman of the Good Corporate Governance Committee, Patum Rice Mill and Granary Public Company Limited • Chairman of the Compensation and Nomination Committee, MBK Public Company Limited • Chairman, Patum Rice Mill and Granary Public Company Limited • Chief Executive Officer, Thanachart Capital Public Company Limited • Vice Chairman and Chairman of the Executive Committee, Thanachart Capital Public Company Limited • Director, Royal Orchid Hotel (Thailand) Public Company Limited • Vice Chairman, MBK Public Company Limited • Chairman of the Risk Management Committee, Thanachart Capital Public Company Limited • Vice Chairman of the Executive Committee, MBK Public Company Limited • Director, MBK Public Company Limited • Chairman, DMS Property Investment Private Limited • Chairman, MBK Life Assurance Public Company Limited • Chairman, Thanachart Insurance Public Company Limited • Director, Thai Royal Orchid Real Estate Company Limited • Director, Siam Piwat Holding Company Limited • Director and Chairman of the Executive Committee, Thanachart Insurance Public Company Limited • Chairman, MBK Resort Public Company Limited • Director, Siam Piwat Company Limited
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ANNUAL REPORT 2017
Dr. Thanachart Numnonda
Chairman of the Audit Committee (Independent Director) Date of Appointment
5 April 2017
Age
52 years
Education
• Doctor of Philosophy in Engineering, University of Auckland, New Zealand • Master of Engineering (Electrical and Electronic), University of Auckland, New Zealand • Bachelor of Engineering (Electrical Engineering), Khon Kaen University
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Driving Company Success with IT Governance (ITG), Class 4/2017 • Certificate, Role of the Chairman Program (RCP), Class 41/2017 • Certificate, Directors Certification Program (DCP), Class 242/2017 • Certificate, Advanced Audit Committee Program (AACP), Class 25/2017 • Certificate, Directors Accreditation Program (DAP), Class 121/2015
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2015 - 2017
• President, The Association of Thai ICT Industry
Position(s) in Other Listed Companies 2016 - Present 2015 - Present
• Chairman and Chairman of the Audit Committee, SiamEast Solutions Public Company Limited • Independent Director and Member of the Audit Committee, Humanica Public Company Limited • Independent Director and Member of the Audit Committee, Vintcom Technology Public Company Limited
Position(s) in Other Legal Entities 2013 - Present
• Director, IMC Outsourcing (Thailand) Company Limited • Committee of UBU Council, Ubon Ratchathani University
119
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Narong Chivangkur
Chairman of the Nomination and Remuneration Committee and Chairman of the Succession Committee (Independent Director) Date of Appointment
22 April 2002
Age
73 years
Education
• Higher Diploma in Business and Marketing, Assumption Commercial College
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Driving Company Success with IT Governance (ITG), Class 4/2017 • Certificate, Boards that Make a Difference (BMD), Class 5/2017 • Certificate, Board Matters and Trends (BMT), Class 1/2016 • Certificate, Advanced Audit Committee Program (AACP), Class 24/2016 • Certificate, Ethical Leadership Program (ELP), Class 3/2016 • Certificate, Anti-Corruption Executive Program (ACEP), Class 3/2012 • Certificate, Role of the Nominations and Governance Committee (RNG), Class 1/2011 • Certificate, Financial Institutions Governance Program (FGP), Class 2/2011 • Certificate, Audit Committee Program (ACP), Class 32/2010 • Certificate, Financial Statement for Directors (FSD), Class 4/2009 • Certificate, Successful Formulation & Execution of Strategy (SFE), Class 2/2008 • Certificate, Role of the Compensation Committee (RCC), Class 4/2007 • Certificate, Chartered Director Class (CDC), Class 1/2007 • Certificate, Corporate Governance and Social Responsibility (CSR), Class 1/2007 • Certificate, Directors Certification Program (DCP), Class 34/2003 • Certificate, Director Examination, Class 11/2003 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 Pennsylvania State University • Advanced Executive Development Program (1987) Rochester Institute of Technology, New York, U.S.A. • Financial Management Program (1986) Asian Institute of Management, Philippines • Management Development Program (1982)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2005 - 2014 2003 - 2012
None
• Director, Momchailai Development Company Limited • Director, Momentum IM Company Limited
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities
None
120
ANNUAL REPORT 2017
Assoc. Prof. Dr. Somjai Phagaphasvivat Member of the Audit Committee (Independent Director) Date of Appointment
26 March 2009
Age
71 years
Education
• Doctorado de Estado, Facultad de Ciencia Politica, Universidad Complutense de Madrid, Spain • Diplome d’Etudes Superieures (Economic Integration), Universite de Nancy, France • Licenciatura, Facultad de Ciencia Politica y Economica, Universidad Complutense de Madrid, Spain • Bachelor of Arts, Chulalongkorn University
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Directors Accreditation Program (DAP), Class 34/2005
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2007 - 2016 1996 - 2013 2004 - 2012
• Director and Chairman of the Audit Committee, Thai Hua Rubber Public Company Limited • Director and Chairman of the Audit Committee, The Krungthep Thanakom Company Limited • Member of the Audit Committee, Amarin Printing and Publishing Public Company Limited • Chairman of the Audit Committee, SEAFCO Public Company Limited
Position(s) in Other Listed Companies 2016 - Present 2015 - Present 2013 - Present 2008 - Present 2004 - Present 1996 - Present 1991 - Present
• Chairman of Corporate Governance Committee, Supalai Public Company Limited • Independent Director, Supalai Public Company Limited • Chairman, SEAFCO Public Company Limited • Chairman of the Audit Committee, Amarin Printing and Publishing Public Company Limited • Chairman of the Audit Committee, Lee Feed Mill Public Company Limited • Independent Director, SEAFCO Public Company Limited • Independent Director, Amarin Printing and Publishing Public Company Limited • Independent Director, Lee Feed Mill Public Company Limited
Position(s) in Other Legal Entities
None
121
THANACHART BANK PUBLIC COMPANY LIMITED
Ms. Mookda Pairatchavet
Member of the Audit Committee, Member of the Nomination and Remuneration Committee, and Member of the Succession Committee (Independent Director) Date of Appointment
5 April 2017
Age
58 years
Education
• Master of Business Administration, Management, Wagner College, Staten Island, New York, U.S.A. • Bachelor of Business Administration (Accounting), Assumption University
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Directors Certification Program (DCP), Class 242/2017
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2002 - 2015
None
• General Manager, Thailand Foods MU, Pepsi-Cola (Thai) Trading Company Limited
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2016 - Present
• Managing Director, AMA Managemet and Consulting Company Limited
122
ANNUAL REPORT 2017
Mr. Rod Michael Reynolds
Member of the Nomination and Remuneration Committee and Member of the Succession Committee (Non-Executive Director) Date of Appointment
15 January 2013
Age
60 years
Education
• Master of Business Administration, the Schulich School of Business, York University, Toronto, Canada • Bachelor of Science in Engineering, Queen’s University, Ontario, Canada
Training Program Related to Roles, Duties, and Skills of Directorship
Euromoney Training • Euromoney Asia Corporate Governance Program (2012)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 1983 - 2016 2012 - 2015 2009 - 2013
None
• Various executive positions, The Bank of Nova Scotia • Senior Independent Director, C.H. Bailey Public Limited Company • Director, Tulsa Inspection Resources Limited Liability Company
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2017 - Present 2016 - Present 2009 - Present
• Director, Bouldergate Limited • Director, Aileron Project Limited • Director, Logarithmics Limited
123
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Walter Tas
Director (Non-Executive Director) Date of Appointment
1 March 2015
Age
46 years
Education
• Master of Arts, Economics and Business Administration, Vrije Universiteit Amsterdam, The Netherlands • Bachelor of Commerce - Economics, Hogeschool voor Economische Studies, Amsterdam, The Netherlands
Training Program Related to Roles, Duties, and Skills of Directorship
Hong Kong Institute of Bankers • 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 Regulations 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)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2014 - 2016 2011 - 2014
None
• Vice President, CFO & Corporate Development, Asia Pacific, The Bank of Nova Scotia • Vice President, Strategic Transactions and Review, The Bank of Nova Scotia
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2017 - Present 2016 - Present 2014 - Present
• Director, The Bank of Nova Scotia Asia Limited, Singapore • Director, Scotia Securities Asia Limited • Chief Operating Officer & CFO, Global Banking and Markets, Asia Pacific, The Bank of Nova Scotia • Director, Scotiabank (Hong Kong) Limited, Hong Kong
124
ANNUAL REPORT 2017
Mr. Adil Aziz Chaudhry Director (Non-Executive Director) Date of Appointment
1 April 2016
Age
60 years
Education
• Master of International Law and Banking, Asian Studies, Columbia University in the City of New York • Bachelor of Arts, English and Political Science, Rutgers University, New Brunswick, U.S.A.
Training Program Related to Roles, Duties, and Skills of Directorship
Institute of Banking and Finance Singapore (IBF) • Capital Markets and Financial Advisory Services Examination (CMFAS Exam) Module 1B - Rules and Regulations for Dealing in Securities (2016) National Association of Securities Dealers (NASD) • Series 7 Exam (General Securities Representative Examination) (1986)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2004 - 2017
None
• Vice President and Head Regional Credit Markets, The Bank of Nova Scotia Asia Limited, Singapore
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities
None
Note: Mr. Adil Aziz Chaudhry resigned from his directorship on 31 December 2017.
125
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Alexander Kwai Lap Choi Director (Non-Executive Director) Date of Appointment
1 January 2018
Age
61 years
Education
• High School, Raimondi College, Hong Kong
Training Program Related to Roles, Duties, and Skills of Directorship
The Bank of Nova Scotia • Certificate, the Fundamentals of Coaching Excellence (2007) Institut Bank-Bank Malaysia • Certificate, Law of Negotiable Instruments (1988)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2007 - 2017 1997 - 2007
• Vice President & Regional Head, Global Wholesale Operations, Asia Pacific, The Bank of Nova Scotia, Pacific Regional Office, Hong Kong • Vice President & Head of Operations, Deputy Chief Executive, Scotiabank Singapore Branch, The Bank of Nova Scotia, Singapore
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities
None
Note: Mr. Alexander Kwai Lap Choi has assumed his directorship since 1 January 2018.
126
ANNUAL REPORT 2017
Ms. Suvarnapha Suvarnaprathip
Vice Chairperson of the Executive Committee (Executive Director) Date of Appointment
22 April 2002
Age
72 years
Education
• Bachelor of Economics, Monash University, Australia
Training Program Related to Roles, Duties, and Skills of Directorship
Thai Institute of Directors Association • Certificate, Directors Accreditation Program (DAP), Class 20/2004 Ernst & Young Office Limited with Thanachart Training and Development Company Limited • Overview and Principles of International Accounting Standards No. 39 (IAS39) (2009) Thanachart Training and Development Company Limited with SASIN • Thailand in the New Global Landscape (2009) Banker Trust, New York, U.S.A. • Certificate, Executive Commercial Lending Training Program
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2005 - 2013
• Director and Member of the Executive Committee, Thanachart Life Assurance Public Company Limited
Position(s) in Other Listed Companies 2009 - Present 2005 - Present
• Vice Chairperson of the Executive Committee, Thanachart Capital Public Company Limited • Director and Vice Chairperson of the Risk Management Committee, Thanachart Capital Public Company Limited
Position(s) in Other Legal Entities 1991 - Present • Director, Seacon Development Public Company Limited
127
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Somjate Moosirilert
Member of the Executive Committee, Chairman of the Risk Management Committee, and Chief Executive Officer and President (Executive Director) Date of Appointment Age Education Training Program Related to Roles, Duties, and Skills of Directorship Percentage of Shareholding in TBANK Family Relationship with Director and Management Experience(s) in the Past 5 Years 2015 - 2017 2014 - 2016 2011 - 2016 2011 - 2015 2010 - 2014 2009 - 2012 Position(s) in Other Listed Companies 2013 - Present 2010 - Present 2009 - Present Position(s) in Other Legal Entities 2017 - Present 2016 - Present 2014 - Present 2013 - Present 2011 - Present 2010 - Present 2009 - Present
29 October 2009 61 years • Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Business Administration, Thammasat University Thai Institute of Directors Association • Certificate, Corporate Governance for Capital Market Intermediaries (CGI), Class 15/2016 • Certificate, Role of the Chairman Program (RCP), Class 5/2001 Thanachart Bank Public Company Limited • Development of anti-corruption standards of Thailand 2017 • Anti Corruption for Executives, Class 1/2014 Thai Listed Companies Association, the Stock Exchange of Thailand • Certificate, TLCA Leadership Development Program (LDP) (2012) Capital Market Academy, the Stock Exchange of Thailand • Certificate, Leadership Program, Class 5/2007 Judicial Training Institute • Certificate in the program for Senior Executives on Justice Administration, Class 9/2005 None None
• Advisor, Thai Listed Companies Association • Member of the Steering Committee, Sasin Graduate Institute of Business Administration of Chulalongkorn University • Director, The Thai Bankers’ Association • Director and Vice Chairman, Thai Listed Companies Association • Chairman and Chairman of the Executive Committee, Siam City Life Assurance Public Company Limited • Governor, The Stock Exchange of Thailand • Member of the Risk Management Committee, Thanachart Capital Public Company Limited • Senior Executive Vice President, Thanachart Capital Public Company Limited • Director and Member of the Executive Committee, Thanachart Capital Public Company Limited • Vice Chairman, Thai Listed Companies Association • Advisor, The Thai Bankers’ Association • Vice Chairman, Thanachart Insurance Public Company Limited • Chairman, Thanachart Fund Management Company Limited • Chairman of the Executive Committee, Thanachart Securities Public Company Limited • Vice Chairman of the Executive Committee, Thanachart Insurance Public Company Limited • Chairman and Chairman of the Executive Committee, TS Asset Management Company Limited • Chairman of the Executive Committee, Thanachart Fund Management Company Limited • Director, Thanachart Fund Management Company Limited • Director and Member of the Executive Committee, Thanachart Insurance Public Company Limited • Advisory Board, Association of Thai Securities Companies • Chairman, Thanachart Securities Public Company Limited
128
ANNUAL REPORT 2017
Mr. William George Said
Member of the Executive Committee, Vice Chairman of the Risk Management Committee, and Chief Operating Officer (Executive Director) Date of Appointment
5 August 2017
Age
45 years
Education
• Master of Business Administration, Queen’s University, Kingston, Canada • Bachelor of Commerce, Dalhousie University, Nova Scotia, Canada
Training Program Related to Roles, Duties, and Skills of Directorship
Thanachart Bank Public Company Limited • 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 • Anti-money Laundering and Terrorism and Proliferation of Weapons of Mass Destruction Financing (2017) • Leadership Transformation (2017) • Cyber Security for the Board of Directors (2017)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2016 - 2017 2015 - 2016 2011 - 2015
None
• Executive Vice President, Chief Administrative Officer (CAO), Thanachart Bank Public Company Limited • Managing Director, Structural Cost Transformation, Scotiabank • Managing Director and Head of Greater China, Scotiabank
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2017 - Present
• Director, Thanachart Securities Public Company Limited
129
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Piyaphong Artmangkorn
Executive Vice President, Investment Management Date of Appointment
1 September 2005
Age
60 years
Education
• Master of Public Administration (Taxation), University of Southern California, U.S.A. • Bachelor of Economics, Thammasat University
Training Program
Thai Institute of Directors Association • Certificate, Directors Accreditation Program (DAP), Class 21/2004 Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years
None
Position(s) in Other Listed Companies 2006 - Present • Member of the Executive Committee, MBK Public Company Limited 1998 - Present • Director, MBK Public Company Limited Position(s) in Other Legal Entities 2017 - Present 2016 - Present
• Member of the Executive Committee, Thanachart Fund Management Company Limited • Director, Thanachart Fund Management Company Limited
Note: Mr. Piyaphong Artmangkorn retired from Executive Vice President, Investment Management on 1 January 2018.
130
ANNUAL REPORT 2017
Mr. Anuwat Luengtaweekul
Executive Vice President, Retail and Small Business Distribution Date of Appointment
1 June 2009
Age
54 years
Education
• Master of Business Administration, Rangsit University • Bachelor of Science (Accounting), Kasetsart University
Training Program
Thai Institute of Directors Association • Certificate, Role of the Compensation Committee (RCC), Class 21/2016 • How to Measure the Success of Corporate Strategy (HMS), Class 4/2014 • Certificate, Successful Formulation and Execution of Strategy (SFE), Class 3/2009 • Certificate, Directors Certification Program (DCP), Class 24/2002 • Certificate, Board and Performance Evaluation Program Thanachart Bank Public Company Limited • Anti Corruption for Executives, Class 1/2014 Association of Finance Companies • Financers’ Executive Development Program, Class 9/1994
Percentage of Shareholding in TBANK None Family Relationship with Director and Management
None
Experience(s) in the Past 5 Years 2009 - 2017
• Executive Vice President, Chief Financial Officer, Thanachart Bank Public Company Limited
Position(s) in Other Listed Companies 2016 - Present 2012 - Present 2010 - Present
• Independent Director and Member of the Audit Committee, Information and Communication Networks Public Company Limited • Member of the Nomination and Remuneration Committee, Ratchthani Leasing Public Company Limited • Director, Ratchthani Leasing Public Company Limited
Position(s) in Other Legal Entities
None
131
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Sanong Kumnuch
Executive Vice President, Retail and Small Business Banking Date of Appointment
12 February 2015
Age
56 years
Education
• Master of Business Administration (Finance), University of the Thai Chamber of Commerce • Bachelor of Laws, Sukhothai Thammathirat Open University • Bachelor of Accountancy, Ramkhamhaeng University
Training Program
Association of Investment Management Companies • Securities Investment Consultant Tutoring PacRim Group • Leadership Greatness The Bank of Thailand • Anti-Corruption for Executives Grid Business Solutions Limited • The Leadership Grid The Continuing Education Center Chulalongkorn University • Psychology of Leadership for Executives
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2010 - 2015
None
• Executive Vice President, Thanachart Bank Public Company Limited
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2016 - Present
• Director, Thanachart Fund Management Company Limited
132
ANNUAL REPORT 2017
Mr. Ziad El-Hoss
Executive Vice President, Chief Risk Officer Date of Appointment
12 February 2015
Age
62 years
Education
• Master of Business Administration, The American University of Beirut, Lebanon
Training Program
Canadian Securities Course The Bank of Nova Scotia • Anti-Corruption • Anti-Money Laundering • Operational Risk • Integrity & Privacy • Global Sanctions • Information & Cyber Security • Managing High Risk Customers
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2013 - 2015 2008 - 2013
None
• Executive Vice President, Chief Risk Officer, Thanachart Bank Public Company Limited • Vice President, The Bank of Nova Scotia
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2015 - Present
• Vice Chairman and Vice Chairman of the Executive Committee, TS Asset Management Company Limited
133
THANACHART BANK PUBLIC COMPANY LIMITED
Ms. Wisarnsri Nilodom
Executive Vice President, Wholesale Banking Date of Appointment
12 February 2015
Age
54 years
Education
• Master of Business Administration, SASIN Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Accountancy, Chulalongkorn University
Training Program
Capital Market Academy, The Stock Exchange of Thailand • Certificate, Leadership Program, Class 21 (CMA 21) The National Defence College • Diploma, The National Defence Course for the Joint State - Private Sectors, Class 24 • Certificate of Achievement, Advanced Security Management Program (ASMP 5) The Bank of Thailand • Anti-Corruption for Executives Thanachart Bank Public Company Limited • Security officials in the executive management Course, Class 2/2014 • BANK GUARANTEE and STAND BY L/C and International Regulations, Class 3/2013 • Knowledge of the Money Laundering Act and the Terrorism Financing Act for Branch Executives
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2013 - 2015 1999 - 2013
None
• Executive Vice President, Thanachart Bank Public Company Limited • Executive Vice President, Standard Chartered Bank (Thai) Public Company Limited
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities 2015 - Present
• Director and Shareholder, CSR Alliance (Thailand) Company Limited • Director and Shareholder, Money M Company Limited
134
ANNUAL REPORT 2017
Mr. Praphan Anupongongarch
Executive Vice President, Automotive Lending Date of Appointment
9 September 2016
Age
54 years
Education
• Master of Business Administration, 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
Training Program
Thai Institute of Directors Association • Certificate, Successful Formulation and Execution of Strategy (SFE), Class 22/2014 • Certificate, Directors Certification Program (DCP), Class 173/2013
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2014 - 2016 2010 - 2014
None
• Executive Vice President, Automotive Lending, Thanachart Bank Public Company Limited • Executive Vice President, Secured Lending and Deposits, Thanachart Bank Public Company Limited
Position(s) in Other Listed Companies 2011 - Present • Director and Member of the Executive Committee, Ratchthani Leasing Public Company Limited Position(s) in Other Legal Entities 2010 - Present
• Director, Thanachart Insurance Public Company Limited
135
THANACHART BANK PUBLIC COMPANY LIMITED
Dr. Sutut Chitmonkongsuk
Executive Vice President, Chief Digital Officer Date of Appointment
16 April 2017
Age
56 years
Education
• Ph.D. Business Administration, English Program, Institute of International Studies, Ramkhamhaeng University • Master of Business Administration, Assumption University of Thailand • Bachelor of Science (Statistics), Ramkhamhaeng University
Training Program
Standard Chartered Bank • Certified Core Credit Curriculum (2009) Financial Planner Association of Singapore (FPAS) • Certified Financial Planner (CFP) (2007)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2013 - 2017 2012 - 2013
None
• Executive Vice President, Commercial Banking, Thanachart Bank Public Company Limited • Senior Vice President, Transaction Banking, Thanachart Bank Public Company Limited
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities
None
136
ANNUAL REPORT 2017
Mrs. Pittimart Sanguansook
Senior Vice President, Chief Financial Officer Date of Appointment
27 June 2017
Age
53 years
Education
• Bachelor of Accounting, Thammasat University • High Diploma in Auditing, Thammasat University
Training Program
Thailand Securities Institute, The Stock Exchange of Thailand • Certificate, Strategic CFO in Capital Markets Program (2016) The Bank of Nova Scotia, Canada • IFRS Update (2013)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2016 - 2017 2014 - 2016 2008 - 2013
None
• Senior Vice President, Finance, Thanachart Bank Public Company Limited • Senior Vice President, Accounting, Thanachart Bank Public Company Limited • Vice President, Citibank
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities
None
137
THANACHART BANK PUBLIC COMPANY LIMITED
Mr. Premsak Chitprapaporn First Vice President, Finance Date of Appointment
16 August 2017
Age
41 years
Education
• Master of Accountancy, Chulalongkorn University • Bachelor of Accounting, Thammasat University
Training Program
Federation of Accounting Professions under The Royal Patronage of His Majesty The King • Certificate, Professional Controller (2017) The Bank of Nova Scotia, Canada • IFRS Update (2013)
Percentage of Shareholding in TBANK None Family Relationship with Director and Management Experience(s) in the Past 5 Years 2016 - 2017 2011 - 2016
None
• First Vice President, Accounting, Thanachart Bank Public Company Limited • Vice President, Financial Analysis and Data Management & BNS Support, Thanachart Bank Public Company Limited
Position(s) in Other Listed Companies None Position(s) in Other Legal Entities
None
E
G
H
Dr. Sutut Chitmonkongsuk
Mrs. Pittimart Sanguansook
Mr. Premsak Chitprapaporn
Notes: XXX Chairman A Chief Executive Officer G Senior Vice President
E
X/C
Mr. William George Said
Mr. Praphan Anupongongarch
X/B
Mr. Somjate Moosirilert
E
X //
Ms. Suvarnapha Suvarnaprathip
Ms. Wisarnsri Nilodom
X
Mr. Adil Aziz Chaudhry
E
X
Mr. Walter Tas
Mr. Ziad El-Hoss
X
Mr. Rod Michael Reynolds
Mr. Sanong Kumnuch
X
Ms. Mookda Pairatchavet
E
X
Assoc. Prof. Dr. Somjai Phagaphasvivat
E
X
Mr. Narong Chivangkur
Mr. Anuwat Luengtaweekul
X
Dr. Thanachart Numnonda
E
XX ///
Mr. Suphadej Poonpipat
Mr. Piyaphong Artmongkorn
XXX
Mr. Banterng Tantivit
Name
As of 31 December 2017
TBANK
3
XXX ///
4
5
X
X/
X
XX //
X/
X
7
XX Vice Chairman B Chief Executive Officer and President H First Vice President
X
6
Subsidiary Companies
X / D XXX /// XXX /// XX // XXX ///
X //
XX /// A
XXX
Parent Company 1 2 8
Related Companies
X
X X
XXX X
X
X
X
X
X XXX
X
XXX
XXX
X XXX
X
X
X
X
XXX
X
X XA X
X
X X
X
F
X
X
X
X
X
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 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 Authorized Person Management Power
X/
XX //
XXX ///
9
Associated Company
The Information of the Executives and Authorized Persons’ Position in Subsidiary, Associated, and Related Companies
ANNUAL REPORT 2017
138
139
THANACHART BANK PUBLIC COMPANY LIMITED
List of Parent Company, Subsidiary, Associated, and Related Companies Parent Company 1. Thanachart Capital Public Company Limited
Subsidiary Companies 1. Thanachart Securities Public Company Limited 2. Thanachart Fund Management Company Limited 3. Thanachart Insurance Public Company Limited 4. TS Assets Management Company Limited
5. Ratchthani Leasing Public Company Limited 6. Thanachart Management and Services Company Limited 7. Thanachart Training and Development Company Limited
Associated Company 9. MBK Public Company Limited
Related Companies 10. Siam Piwat Holding Company Limited 11. MBK Resort Public Company Limited 12. Siam Piwat Company Limited 13. B.V. Holding Company Limited 14. Deebuk Company Limited 15. Thai Farming Company Limited 16. Lam Sai Village Company Limited 17. Patum Rice Mill and Granary Public Company Limited 18. Royal Orchid Hotel (Thailand) Public Company Limited 19. DMS Property Investment Private Limited 20. MBK Life Assurance Public Company Limited 21. Thai Royal Orchid Real Estate Company Limited 22. SiamEast Solutions Public Company Limited 23. Humanica Public Company Limited 24. Vintcom Technology Public Company Limited 25. IMC Outsourcing (Thailand) Company Limited
26. Supalai Public Company Limited 27. SEAFCO Public Company Limited 28. Amarin Printing & Publishing Public Company Limited 29 . Lee Feed Mill Public Company Limited 30. AMA Management and Consulting Company Limited 31. Bouldergate Limited 32. Aileron Project Limited 33. Logarithmics Limited 34. The Bank of Nova Scotia Asia Limited, Singapore 35. Scotia Securities Asia Limited 36. Asia Pacific, The Bank of Nova Scotia 37. Scotiabank (Hong Kong) Limited, Hong Kong 38. Seacon Development Public Company Limited 39. Information and Communication Networks Public Company Limited 40. CSR Alliance (Thailand) Company Limited 41. Money M Company Limited
140
ANNUAL REPORT 2017
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
Type of shares
Total number Total number Percent of of paid-up of share held TBANK’s shares shareholding1
1
Thanachart Securities PCL. 444 MBK Tower, 14th, 18th, and 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok10330 Tel. +66 (0) 2217-8888, 2217-9595
Securities
Ordinary 1,500,000,000 1,499,999,930 share
100.00
2
Thanachart Insurance PCL. 999/1 the Nine Tower, Rama 9 Road, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9300 Fax. +66 (0) 2308-9333
Non-life Insurance
Ordinary share
74,000,000
73,999,434
100.00
3
Thanachart Management and Services Co., Ltd. 2 Suan Mali Building, 2nd Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1569 Fax. +66 (0) 2220-2522
Services
Ordinary share
600,000
599,993
100.00
4
Thanachart Training and Development Co., Ltd. 2 Suan Mali Building, M Floor, Chalerm Khet 4 Road, Wat Thep Sirin, Pom Prap Sattru Phai, Bangkok 10110 Tel. +66 (0) 2220-2222 Ext. 1018 Fax. +66 (0) 2220-2300
Training
Ordinary share
500,000
499,993
100.00
5
Thanachart Group Leasing Co., Ltd. 444 MBK Tower, 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000 Fax. +66 (0) 2217-8098
Leasing
Ordinary share
36,000,000
35,999,994
100.00
6
National Leasing Co., Ltd. 2 444 MBK Tower, 19th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330 Tel. +66 (0) 2217-8000
Leasing
Ordinary share
600,000
599,994
100.00
7
Security SCIB Services Co., Ltd. 1091/230 New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5061-2 Fax. +66 (0) 2651-6611
Services
Ordinary share
100,000
99,998
100.00
141
THANACHART BANK PUBLIC COMPANY LIMITED
No.
Company / Location
8
TS Asset Management Co., Ltd. 1101 Petchburi Building, 9th Floor, New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400 Tel. +66 (0) 2208-5000 Fax. +66 (0) 2253-6130
9
Thanachart Broker Co., Ltd. 999/3, 999/4 the Nine Tower D 4th Floor, Tower E, 3rd and 4th Floors, Tower F, 4th Floor, Rama 9 Road, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9700 Ext. 2235 Fax. +66 (0) 2308-9775
10
Type of Business
Type of shares
Non-performing Ordinary asset share management
Total number Total number Percent of of paid-up of share held TBANK’s shares shareholding1 200,000,000 199,999,997
100.00
Life and Non-life insurance broker
Ordinary share
10,000,000
9,999,000
99.99
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
Mutual fund management
Ordinary share
10,000,000
7,499,993
75.00
11
Ratchthani Leasing Pcl. 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
Leasing
Ordinary 2,416,227,209 1,574,951,400 share
65.18
12
Thoon Ruam Kan Co., Ltd. 3 133/2 Sot Sukhumvit 21, Sukhumvit Road, Klong toey, Bangkok 10110
Others
Ordinary share
240,000
80,000
33.33
13
Siam Media and Communication Co., Ltd. 3 18 Building 2 West SCB Park Plaza, 17th-22nd Floor, Ratchadapisek Road, Lad Yao, Chatuchak, Bangkok 10900
Communication Ordinary share
7,000,000
1,633,800
23.34
14
High Press Steal Pipe Industry Co., Ltd. 3 36/4 Moo 2, Soi Wat Mahawong, Phuchaosmingprai Road, Samrong, Prapha Daeng, Samut Prakarn 10130
Industrial pipe Ordinary manufacturing share
500,001
70,470
14.09
15
Puen Pob Paet Co., Ltd. 3 444 MBK Tower, 9th Floor, Phayathai Road, Wangmai, Pathumwan, Bangkok 10330
Medical Clinic Ordinary share
100,000
9,998
10.00
16
Crystal City Development Co., Ltd. 419 Sathupradit Road, Chong Nonsi, Yannawa, Bangkok 10120
Construction
750,000
75,000
10.00
Ordinary share
142
ANNUAL REPORT 2017
No.
Company / Location
Type of Business
Type of shares
Total number Total number Percent of of paid-up of share held TBANK’s shares shareholding1
17
Metropolitan Industrial Leasing Co., Ltd. 81/42 Moo 5, Surasak, Sriracha, Chonburi 20110 Tel. +66 (0) 3804-8052 Fax. +66 (0) 3804-8053
Leasing
Ordinary share
2,500,000
250,000
10.00
18
Sahakol Chassis Co., Ltd. 1418/6-8 Phaholyotin Road, Lad Yao, Chatuchak, Bangkok 10900
Vehicle
Ordinary share
45,000,000
4,500,000
10.00
19
Siam Tire Cord Co., Ltd. 46/1 Moo 9, Bangna - Trad Road, K.M. 39, Bangprakong, Chachoengsao, 24180
Textiles and apparel
Ordinary share
20,000
2,000
10.00
20
Soonvijai Development Co., Ltd. 3 1740 New Petchburi Road, Bangkapi, Huay Klang, Bangkok 10310
Construction
Ordinary share
13,000
1,300
10.00
21
Modular Samko Co., Ltd. 3 155 Moo 14, Sukhumvit Sai Kao Road, Bangpakong, Chachoengsao 24130
Household
Ordinary share
3,500,000
350,000
10.00
22
Siam Euro Leasing Co., Ltd. 3 20/22 Soi Prommitr, Sukhumvit Road, Klong Tan Nuea, Watthana, Bangkok 10110
Finances and Securities
Ordinary share
13,000,000
1,300,000
10.00
23
Siam City Real Estate Services Co., Ltd. 3 62 Thaniya Building, 1st Floor, Silom Road, Suriyawong, Bangrak, Bangkok 10500
Construction
Ordinary share
1,000,000
100,000
10.00
Notes: 1 Shareholding percentage has shown included the shareholding of related companies. 2 The Bank indirectly held shares through TGL which was in line with 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.
143
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) 2009-9476 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
Bondholders’ Representative: Debenture TBANK24DA และ TBANK25NA None
144
ANNUAL REPORT 2017
Auditor:
Miss Ratana Jala Certified Public Accountant (Thailand) No. 3734 EY Office Limited 193/136-137 Lake Rajada Office Complex, 33rd Floor, New Ratchadaphisek Road, Klongtoey, Bangkok 10110 Tel. +66 (0) 2264-0777 Fax. +66 (0) 2264-0789-90 Website www.ey.com
Legal Advisor:
None
Advisor or management under the management agreement:
None
145
THANACHART BANK PUBLIC COMPANY LIMITED
Companies in Thanachart Group Thanachart Capital Public 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
Thanachart Bank Public Company Limited 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
Thanachart Securities Public Company Limited 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.tnsitrade.com
Thanachart Fund Management Company Limited th
th
231 MBK Life Building, 5 - 7 Floor, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. +66 (0) 2126-8300 Fax. +66 (0) 2253-8398 Registration No. 0105535049696 Website: www.thanachartfund.com
Thanachart Insurance Public Company Limited 999/1 The Nine Tower, Rama 9 Road, Suanluang, Suanluang, Bangkok 10250 Tel. +66 (0) 2308-9300 Fax. +66 (0) 2308-9333 Registration No. 0107555000473 Website: www.thanachartinsurance.co.th
MBK Life Assurance Public Company Limited 231 MBK Life Building, Rachadamri Road, Lumpini, Pathumwan, Bangkok 10330 Tel. 0-2252-5070 Fax. 0-2252-7155 Registration No. 0107555000481 Website: www.mbklife.co.th
NFS Asset Management Company Limited 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
MAX Asset Management Company Limited 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
146
ANNUAL REPORT 2017
TS Asset Management Company Limited th
1101 Petchburi Building, 9 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 Training and Development 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
Ratchathani Leasing Public Company Limited
Thanachart Broker Company Limited
Thanachart Group Leasing Company Limited
TM Broker Company Limited
National Leasing Company Limited
Security SCIB Services Company Limited
th
77/35-36 Sinn Sathorn Tower, 11 UP Floor, Krung Thonburi Road, Klong Ton Sai, Klong San, Bangkok 10600 Tel. +66 (0) 2431-9000 Fax. +66 (0) 2431-9099 Registration No. 0107545000209 Website: www.ratchthani.com th
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 444 MBK Tower, 19th 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
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
999/3, 999/4 The Nine Tower D 4th Floor, Tower E 3rd - 4th Floor, Tower F 4th Floor, Rama 9 Road, Suanluang, Suanluang, Bangkok 10250 Tel. +66 (0) 2685-0200, +66 (0) 2308-9700 Fax. +66 (0) 2685-0333, +66 (0) 2308-9775 Registration No. 0105540075314 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 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
MT Services 2016 Company Limited 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
147
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 31 August 2017 (the latest closing date of the suspended share-transfer register) were as follows: Rank 1 2 3 4 5 6 7 8 9 10
List of Shareholders Thanachart Capital Public Company Limited 1 Scotia Netherlands Holdings B.V. 2 Mr. Thung-ngern Pum-ngern Ms. Kittama Tolieng Mr. Sathit Mujarintangkur Ms. Piengjai Hanphanit Mr. Kobchai Chirathivat Mr. Thanawat Charoenthassanont Mr. Pinit Laosoontorn Mr. Somyos Jittipralangsri By receivership of Legal Execution Department of Thai Finance and Securities PCL. Other Shareholders
Number of Shares
Percentage of Shareholding
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
11
Source:
Report of the Bank’s major shareholders as of 31 August 2017 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”).
148
ANNUAL REPORT 2017
Name list of the company’s major shareholders as at 9 October 2017 (the latest closing date of the suspended share-transfer register) were as follows:
Number of Shares Rank
Name of shareholders
Ordinary shares Preferred shares
Total Shares
Percentage of shareholding
1
Thai NVDR Company Limited
207,023,456
-
207,023,456
17.159
2
MBK Public Company Limited
129,914,400
-
129,914,400
10.768
3,400,000
-
3,400,000
0.282
PRIMACY ELEGANCE INVESTMENTS LIMITED 3
STATE STREET BANK EUROPE LIMITED
59,995,469
-
59,995,469
4.973
4
Thanachart Capital Public Company Limited
41,350,000
-
41,350,000
3.427
5
23,327,600
-
23,327,600
1.934
6
NORTRUST NOMINEES LIMITED-NTO SEC LENDING THAILAND CL AC CHASE NOMINEES LIMITED
20,273,100
-
20,273,100
1.680
7
STATE STREET BANK AND TRUST COMPANY
19,545,675
-
19,545,675
1.620
8
STATE STREET EUROPE LIMITED
17,255,882
-
17,255,882
1.430
9
THE BANK OF NEW YORK (NOMINEES) LIMITED
15,993,490
-
15,993,490
1.326
10
HSBC (SINGAPORE) NOMINEES PTE LTD
15,018,200
-
15,018,200
1.245
653,369,215
13,216
653,382,431
54.156
1,206,466,487
13,216
1,206,479,703
100.000
Thai Shareholders
861,075,388
13,156
861,088,544
71.372
Foreign Shareholders
345,391,099
60
345,391,159
28.628
Other Shareholders
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. 2) The shares of the fourth largest shareholder (Thanachart Capital Public Company Limited) were obtained from the repurchase of shares under the Treasury Stock Program during 10 February 2015 to 9 August 2015. 3) 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.
149
THANACHART BANK PUBLIC COMPANY LIMITED
(2) Shareholders’ Agreement TCAP and Scotiabank mutually established the Shareholders’ Agreement with the key condition requiring each party’s representatives to contribute to the Bank’s management as directors and executives of the Bank as well as directors of the Bank’s key subsidiaries. Moreover, any resolution made by the Board of Directors and the Shareholders Meeting on significant issues shall be compliant with the Bank’s Articles of Association aiming to achieve the common goal of both shareholders via the Bank’s management.
Dividend Payment Policy Dividend Payment Policy of 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 Subsidiary Companies The Bank has not fixed a dividend payout ratio for its subsidiaries. Their dividend payments shall depend on the operating results of each company. 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
2012*
2013
2014
2015***
2016
Paid in
2013
2014
2015
2016
2017
(THB)
1.24
2.56
1.44
2.03
1.97
Interim dividend payment per share for the performance during the first half of the year (THB) Dividend payment per share for the performance during the second half of the year (THB)
-
-
-
0.22
0.35
0.37
0.45
0.45
0.40
0.40
29.76
**17.58
31.34
32.83
38.03
Earnings per share
Dividend Payout Ratio
Notes:
* ** ***
(Percentage)
Net profit from restated separate financial statements. The dividend payout ratio represented 17.58 percent of the net profit based on the Bank’s separate financial statements. (in case of excluding profit from extraordinary item, the dividend payout ratio represented 32.17 percent) During 2015, the Bank called up additional paid-up share capital of 551,197,267 shares at THB 10 and registered additional share capital. The Bank has issued and paid-up share capital totaling THB 60,648,621,700.
However, on 15 September 2017, the Bank paid an interim dividend for the year 2017 at the rate of THB 0.40 per share, out of unappropriated retained earnings which is subject to 23 percent and 20 percent corporate income tax.
150
ANNUAL REPORT 2017
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 2017 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
151
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
Mrs. Vijitra Thumpothong, Executive Vice President, Audit, served as the secretary of the Audit Committee until 8 October 2017. At present, Ms. Patcharee Leekitwattana who represented the Chief Auditor served as the secretary of the Audit Committee, effective 23 November 2017 onwards. The Audit Committee was responsible for carrying out the duties as assigned by the Bank’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 2017, 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 the Bank 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 the Bank management in order to ensure the independence of the auditors’ duties and comments. • Internal Control and Internal Audit Reviewing the Bank’s internal control system and internal audit are efficient, as well as sufficient anti-corruption measures, inclusive of whistle-blowing processes, independent scrutiny, and protection of the whistle-blowers to ensure they will not be in predicament and that the accused are treated fairly. Consulting with the internal auditors in planning and approving the annual audit plan, considering the adequacy and appropriateness of personnel in the performance and independence of internal audit by monitoring and evaluating the monthly performance, assessing the ability of officers in order to improve auditing knowledge and efficiency, and considering examination report of the BOT’s and the auditor in order to assess the adequacy of the internal control system. • Regulatory Compliance Reviewed the performance of the Bank to comply with laws and regulations, such as the SEC, SET, IOC and BOT and acknowledged changes of any rules or regulations that affected operation and ensured the adjustment of operations in response to those changes.
152
ANNUAL REPORT 2017
• Risk Management The Audit Committee has focused on risk management and is aware that any change in economy, politics and society will significantly affect the risk management of the Bank. We have meetings with the risk management group in order to make sure that of the Bank has appropriate, adequate and effective oversight. • Audit Committee’s Charter Approved the amendment in the Audit Committee’s Charter to make it up-to-date and more appropriate and evaluation of the performance of the Audit Committee including the results of the evaluation which showed that audit compliance as set forth in the Charter and performance were in line with the best practices that strengthened good governance effectively. • Independent Auditor Consider and make recommendations on the appointment of the auditor of the Bank by considering qualifications, capabilities, experiences, independence and quality of previous works and the remuneration of the auditors in line with responsibility by the Board of Directors to propose to the shareholders 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
153
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 2017, 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 2017, 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.
154
ANNUAL REPORT 2017
Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Thai Standards on Auditing, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: • 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.
EY Office Limited Bangkok: 22 February 2018
Ratana Jala Certified Public Accountant (Thailand) No. 3734
155
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 2017 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Assets Cash
11,452,983
12,076,997
11,444,929
12,072,227
Interbank and money market items - net
6
94,651,333
47,475,583
94,576,963
47,465,946
Derivatives assets
7
2,889,208
3,564,235
2,888,037
3,563,917
Investments - net
8
167,367,984
175,081,237
157,447,597
167,275,226
Investments in subsidiary and associated companies - net
9
2,258,030
2,253,187
7,170,077
7,359,391
Loans to customers and accrued interest receivables
10 766,801,166
739,078,351
715,967,834
695,679,822
589,074
619,974
589,271
620,272
Total loans to customers and accrued interest receivables
767,390,240
739,698,325
716,557,105
696,300,094
Less: Deferred revenue
(55,126,638)
(48,171,212)
(50,462,785)
(44,066,834)
Loans to customers Accrued interest receivables
Allowance for doubtful accounts
11
(24,033,034)
(24,615,884)
(19,876,541)
(19,300,696)
Revaluation allowance for debt restructuring
12
(977)
(1,976)
(977)
(1,976)
Net loans to customers and accrued interest receivables Customers' liability under acceptances
688,229,591
666,909,253
646,216,802
632,930,588
9,824
9,544
9,824
9,544
Properties foreclosed - net
14
2,792,566
3,111,894
1,467,300
1,443,860
Land, premises and equipment - net
15
8,621,914
9,546,383
8,396,204
9,295,669
Goodwill and intangible assets - net
16
20,202,569
20,649,159
20,069,209
20,533,529
Deferred tax assets
17
712,880
790,631
-
-
3,126,779
1,125,862
33,771
-
7,241,183
7,917,733
4,738,848
4,917,923
1,009,556,844
950,511,698
954,459,561
906,867,820
Receivables from purchase and sale of securities Other assets - net
18
Total assets
The accompanying notes are an integral part of the financial statements.
156
ANNUAL REPORT 2017
STATEMENT OF FINANCIAL POSITION (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2017 (Unit: Thousand Baht)
Note
Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Liabilities and equity Deposits
19
716,277,964
676,556,502
717,807,077
677,807,238
Interbank and money market items
20
82,424,434
65,834,486
69,809,251
56,155,845
1,988,656
1,986,425
1,988,656
1,986,425
Liability payable on demand Derivatives liabilities
7
2,867,633
4,912,489
2,864,594
4,912,407
Debt issued and borrowings
21
39,307,788
49,408,917
20,005,158
34,522,128
9,824
9,544
9,824
9,544
Banks' liability under acceptances Provisions
22
3,638,175
3,578,928
3,369,306
3,340,786
Deferred tax liabilities
17
1,055,733
867,710
939,460
799,034
Payables from purchase and sale of securities
2,318,019
2,366,288
43,710
1,000,000
Accrued interest payables
2,355,530
2,053,948
2,241,760
1,969,591
Accrued expenses
5,346,583
5,113,739
4,635,555
4,400,753
Insurance contracts liabilities
23
5,475,413
4,936,796
-
-
Other liabilities
24
10,283,135
6,765,334
6,359,724
4,379,393
873,348,887
824,391,106
830,074,075
791,283,144
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
2,541,962
1,556,365
1,601,478
947,584
26
4,258,534
3,601,763
4,258,534
3,601,763
64,740,444
56,581,148
55,776,158
48,286,013
134,290,256
124,488,592
124,385,486
115,584,676
1,917,701
1,632,000
-
-
136,207,957
126,120,592
124,385,486
115,584,676
1,009,556,844
950,511,698
954,459,561
906,867,820
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.
157
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 2017 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note
Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Profit or loss Interest income
29
44,365,707
44,885,834
41,281,638
41,843,450
Interest expenses
30
(14,955,982)
(16,174,138)
(14,143,950)
(15,295,196)
29,409,725
28,711,696
27,137,688
26,548,254
9,099,941
8,814,210
6,872,021
6,423,610
(3,203,316)
(2,909,701)
(2,928,872)
(2,642,782)
Net interest income Fees and service income Fees and service expenses Net fees and service income
31
5,896,625
5,904,509
3,943,149
3,780,828
Gains on trading and foreign exchange transactions
32
548,281
491,315
434,648
435,055
Gains on investments
33
1,112,547
714,390
1,033,212
616,243
199,874
206,567
-
-
6,843,080
6,035,644
-
-
464,413
399,846
2,838,259
2,828,821
Other operating income
1,421,869
1,248,887
1,396,517
1,247,569
Total operating income
45,896,414
43,712,854
36,783,473
35,456,770
(3,914,975)
(3,346,848)
-
-
41,981,439
40,366,006
36,783,473
35,456,770
11,981,266
11,646,882
10,135,215
9,889,374
52,752
45,641
39,799
33,995
2,806,371
3,051,097
2,506,797
2,728,323
725,823
757,490
708,046
732,235
4,870,854
5,083,583
4,312,096
4,407,919
20,437,066
20,584,693
17,701,953
17,791,846
6,243,714
6,251,266
5,934,973
5,808,275
15,300,659
13,530,047
13,146,547
11,856,649
Share of profit from investments accounted for under equity method 34
Insurance income Dividend income
35
Insurance expenses Net operating income Other operating expenses Employee's expenses
36
Directors' remuneration 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
17.2
Profit for the year
The accompanying notes are an integral part of the financial statements.
(931,525) 14,369,134
(691,423) 12,838,624
(11,110) 13,135,437
105,118 11,961,767
158
ANNUAL REPORT 2017
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2017 (Unit: Thousand Baht except earnings per share expressed in Baht)
Note Other comprehensive income
Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
38
Transactions that will be reclassified subsequently to profit or loss Gains (losses) on changes in value of available-for-sale investments
1,164,360
Share of other comprehensive income of the associate Income tax relating to components of other comprehensive income
(1,454,017)
75,755
153,392
(245,307)
275,449
874,586 (174,917)
(1,438,751) 287,750
Transactions that will never be reclassified subsequently to profit or loss Surplus on revaluation of assets
-
1,605,507
-
1,602,581
Share of other comprehensive income of the associate
-
199,361
-
-
Actuarial gains (losses) on defined benefit plan Income tax relating to components of other comprehensive income Total other comprehensive income
Total comprehensive income
(235,693)
16,041
(228,008)
(11,894)
46,845
(344,233)
45,602
(318,137)
805,960
451,500
517,263
121,549
15,175,094
13,290,124
13,652,700
12,083,316
13,810,325
12,434,329
13,135,437
11,961,767
558,809
404,295
14,369,134
12,838,624
14,616,960
12,886,025
13,652,700
12,083,316
558,134
404,099
15,175,094
13,290,124
2.17
1.97
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)
The accompanying notes are an integral part of the financial statements.
2.28
2.05
The accompanying notes are an integral part of the financial statements.
60,648,622
-
Transferred to retained earnings
Balance as at 31 December 2017
-
Other comprehensive income for the year (loss)
-
-
-
26
-
Profit for the year
subsidiaries of the associate
Surplus from the change in the ownership interests in
Transfer of retained earnings to statutory reserve
Decrease in non-controlling interests of the subsidiaries
-
60,648,622
28
Balance as at 1 January 2017
Dividend paid
60,648,622
Balance as at 31 December 2016
-
Other comprehensive income for the year (loss)
Transferred to retained earnings
-
-
-
-
60,648,622
share capital
Share premium
2,100,694
-
-
-
-
-
-
-
2,100,694
2,100,694
-
-
-
-
-
-
-
2,100,694
(123,379)
-
-
-
-
-
-
-
(123,379)
(123,379)
-
-
-
-
-
-
-
(123,379)
common control
combination under
fully paid-up
-
26
28
Note
business
Surplus from
Issued and
Profit for the year
Transfer of retained earnings to statutory reserve
Decrease in non-controlling interests of the subsidiaries
Dividend paid
Effect of share capital reduction of the associate
Balance as at 1 January 2016
For the year ended 31 December 2017
Statements of changes in equity
Thanachart Bank Public Company Limited and its subsidiaries
-
-
-
-
-
-
1,234,813
(45,775)
-
-
-
-
-
-
1,280,588
1,280,588
(3,700)
1,284,288
of assets
revaluation
Surplus on
862,541
-
926,628
-
-
-
-
-
(64,087)
(64,087)
-
(1,163,229)
-
-
-
-
-
1,099,142
of investments - net
changes in value
Surplus on
Share of
531,393
(30)
68,180
-
-
-
-
-
463,243
463,243
-
317,477
-
-
-
-
-
145,766
associate
income of the
other comprehensive
36,594
-
-
-
36,594
-
-
-
-
-
-
-
-
-
-
-
-
-
subsidiaries of the associate
ownership interests in
the change in the
Share of surplus from
Consolidated financial statements Other components of equity
STATEMENTS OF CHANGES IN EQUITY
Retained earnings
4,258,534
-
-
-
-
656,771
-
-
3,601,763
3,601,763
-
-
-
598,089
-
-
-
3,003,674
64,740,444
45,805
(188,173)
13,810,325
-
(656,771)
-
(4,851,890)
56,581,148
56,581,148
3,700
13,160
12,434,329
(598,089)
-
(4,548,646)
(74,538)
49,351,232
statutory reserve Unappropriated
Appropriated -
1,917,701
-
(675)
558,809
-
-
(272,433)
-
1,632,000
1,632,000
-
(196)
404,295
-
(237,075)
-
-
1,464,976
interests
Non-controlling
136,207,957
-
805,960
14,369,134
36,594
-
(272,433)
(4,851,890)
126,120,592
126,120,592
-
451,500
12,838,624
-
(237,075)
(4,548,646)
(74,538)
117,690,727
Total
(Unit: Thousand Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
159
Share premium
The accompanying notes are an integral part of the financial statements.
Balance as at 31 December 2017 60,648,622
-
Transferred to retained earnings 2,100,694
-
-
-
-
Profit for the year
Other comprehensive income for the year (loss)
-
-
26
Transfer of retained earnings to statutory reserve
-
-
2,100,694
28
60,648,622
Balance as at 1 January 2017
2,100,694
-
Dividend paid
60,648,622
Balance as at 31 December 2016
-
Transferred to retained earnings
-
-
-
Profit for the year
Other comprehensive income for the year (loss)
-
-
26
Transfer of retained earnings to statutory reserve
-
2,100,694
-
60,648,622
share capital -
-
-
-
1,232,590
(45,775)
-
-
-
-
1,278,365
1,278,365
(3,700)
1,282,065
of assets
revaluation
fully paid-up
28
Note
368,888
-
699,669
-
-
-
(330,781)
(330,781)
-
(1,151,001)
-
-
-
820,220
investments - net
in value of
Surplus on changes Appropriated -
4,258,534
-
-
-
656,771
-
3,601,763
3,601,763
-
-
-
598,089
-
3,003,674
55,776,158
45,775
(182,406)
13,135,437
(656,771)
(4,851,890)
48,286,013
48,286,013
3,700
(9,515)
11,961,767
(598,089)
(4,548,646)
41,476,796
Unappropriated
Retained earnings
statutory reserve
Separate financial statements Other components of equity Surplus on
Issued and
Dividend paid
Balance as at 1 January 2016
For the year ended 31 December 2017
Statements of changes in equity (continued)
Thanachart Bank Public Company Limited and its subsidiaries
STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
124,385,486
-
517,263
13,135,437
-
(4,851,890)
115,584,676
115,584,676
-
121,549
11,961,767
-
(4,548,646)
108,050,006
Total
(Unit: Thousand Baht)
ANNUAL REPORT 2017
160
161
THANACHART BANK PUBLIC COMPANY LIMITED
STATEMENT OF CASH FLOWS Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows For the year ended 31 December 2017 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Cash flows from operating activities Profit before income tax
15,300,659
13,530,047
13,146,547
11,856,649
-
-
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
(199,874)
(206,567)
Depreciation and amortisation
1,565,248
1,598,545
1,483,021
1,513,763
Impairment losses of loans and debt securities
6,243,714
6,251,266
5,934,973
5,808,275
Increase in provisions
670,798
673,302
643,360
647,521
Amortisation of premiums on investment in debt securities
378,502
244,296
389,580
247,196
Decrease in allowance for impairment of investments
(65,057)
Gain from disposal of investment in the associate company Decrease (increase) in allowance for change in value of investment
(202,207) 16,194
(2,603)
(102,976)
-
(176,746)
9,104
(3,400)
(2,576) (2,648)
Increase (decrease) in allowance for impairment of properties foreclosed Decrease in allowance for impairment of land, premises and equipment
10,693 (5,436)
(143,629) (753)
2,865 (5,436)
781 -
Loss from revaluation of land
-
13,640
-
13,640
Decrease in allowance for impairment of intangible assets
-
(18,244)
-
(18,244)
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 Unrealised loss on exchange Increase (decrease) in allowance for impairment of other assets Decrease in other income receivable Decrease in fees and rental received in advance Decrease in deferred income Increase in accrued expenses
Net interest income Dividend income Cash received from interest income Cash paid for interest expenses Cash paid for corporate income tax
(735) 13,561
(10) (26,650)
(735) 14,926
(10) (27,976)
348
43,864
-
43,515
1,455,894
299,496
1,455,894
299,496
35,051
10,623
25,831
(21,387)
139,931
21,256
220,981
14,231
(170,182)
(159,697)
(170,182)
(159,697)
(28,358)
(47,014)
(28,358)
(47,014)
145,776
227,177
147,734
176,817
25,304,520
22,317,449
22,977,879
20,342,332
(29,788,228)
(28,955,992)
(27,527,268)
(26,795,450)
(2,838,259)
(2,828,821)
41,277,382
(464,413)
41,271,745
(399,846)
38,288,334
38,348,905
(12,360,712)
(14,400,790)
(12,163,949)
(14,236,481)
(1,102,869)
(961,995)
(238,195)
(205,624)
Income from operating activities before changes in operating assets and liabilities
The accompanying notes are an integral part of the financial statements.
22,865,680
18,870,571
18,498,542
14,624,861
162
ANNUAL REPORT 2017
STATEMENT OF CASH FLOWS (CONTINUED) Thanachart Bank Public Company Limited and its subsidiaries Statements of cash flows (continued) For the year ended 31 December 2017 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2017
2017
2016
2016
Cash flows from operating activities (continued) Decrease (increase) in operating assets Interbank and money market items
(47,351,560)
10,225,051
(47,273,212)
9,566,089
(2,320,459)
(5,606,659)
(2,215,790)
(4,103,253)
Derivatives assets
1,111,356
2,427,331
1,112,209
2,427,625
Loans to customers
(33,546,069)
10,082,618
(24,680,242)
13,087,388
5,627,179
6,369,275
4,803,224
5,099,419
Investments in trading securities
Properties foreclosed Receivables from purchase and sale of securities Other assets
(2,000,917) 488,542
(119,584)
(33,771)
-
(204,783)
(115,303)
274,108
Increase (decrease) in operating liabilities Deposits
39,721,462
7,052,370
39,999,839
7,232,017
Interbank and money market items
16,456,575
(20,032,334)
13,520,032
(22,722,242)
2,231
(215,156)
2,231
(215,155)
Liability payable on demand Derivatives liabilities
(1,744,879)
(2,495,400)
Payables from purchase and sale of securities
(48,268)
293,775
Insurance contract liabilities
538,618
143,526
Other liabilities Net cash flows from operating activities
2,815,787
(609,112)
(1,747,837) (956,290) 1,280,622
(2,488,883) 1,000,000 (417,977)
2,615,278
26,181,489
2,194,254
23,363,997
10,271,390
715,291
11,890,167
(1,196,051)
366,060
-
366,060
-
3,782,104
3,875,519
3,684,714
3,752,462
464,393
399,444
2,838,259
2,828,821
(419,357)
(967,345)
12,781
70,891
(282,307)
(436,441)
Cash flows from investing activities Decrease (increase) in investments in securities held for investment Cash received from disposal of investment in the associate 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
The accompanying notes are an integral part of the financial statements.
14,195,064
3,657,359
(381,748) 8,444 (241,108) 18,164,788
(878,963) 66,237 (399,656) 4,172,850
163
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 2017 (Unit: Thousand Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Cash flows from financing activities Cash received from borrowings
12,723,572
13,689,312
(22,824,701)
(35,921,484)
(14,516,969)
(28,904,361)
Cash paid for interest from borrowings
(2,208,904)
(2,746,973)
(1,617,481)
(2,013,519)
Cash paid for dividend
(4,851,890)
(5,882,916)
(4,851,890)
(5,882,916)
(272,433)
(237,070)
(17,434,356)
(31,099,131)
(20,986,340)
(28,800,796)
(624,014)
(1,260,283)
(627,298)
(1,263,949)
Cash paid for borrowings
Cash paid for dividend to non-controlling interests Net cash flows used in financing activities Net decrease in cash
-
-
8,000,000
-
Cash at beginning of the year
12,076,997
13,337,280
12,072,227
13,336,176
Cash at end of the year
11,452,983
12,076,997
11,444,929
12,072,227
-
-
-
-
4,793,307
5,207,030
4,283,733
4,669,225
33,680
61,632
32,833
60,250
7,672,186
6,708,749
6,219,709
6,588,906
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.
164
ANNUAL REPORT 2017
NOTES TO FINANCIAL STATEMENTS Thanachart Bank Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2017 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 523 operational branches (2016: 592 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.
165
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
2017
2016
Thanachart Securities Plc.
Securities business
100.00
100.00
Thanachart Insurance Plc.
Non-life insurance
100.00
100.00
Thanachart Fund Management Co., Ltd.
Fund management
75.00
75.00
Thanachart Broker Co., Ltd.
Non-life insurance
100.00
100.00
Hire purchase
100.00
100.00
Thanachart Management and Services Co., Ltd.
Services
100.00
100.00
Thanachart Training and Development Co., Ltd.
Training services
100.00
100.00
TS Asset Management Co., Ltd.
Non-performing
100.00
100.00
Services
100.00
100.00
Hire purchase and
65.18
65.18
100.00
100.00
Subsidiaries directly held by the Bank
broker Thanachart Group Leasing Co., Ltd.
asset management Security Scib Services Co., Ltd. Ratchthani Leasing Plc.
leasing business Subsidiary indirectly held by the Bank National Leasing Co., Ltd.
b)
In liquidation process
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 2017 and 2016 and for the years then ended, after eliminating significant intercompany transactions, are as follows: (Unit: Million Baht) Net operating income Total assets 2017
for the years
2016
2017
2016
39,019
32,779
2,378
2,006
2,528
3,221
178
329
Thanachart Insurance Plc.
12,784
11,236
3,291
3,090
Thanachart Securities Plc.
11,447
9,307
1,762
1,914
Ratchthani Leasing Plc. TS Asset Management Co., Ltd.
166
ANNUAL REPORT 2017
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 2016) and new accounting treatment guidance which are effective for fiscal years beginning on or after 1 January 2017. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Bank’s and its subsidiaries’ financial statements.
167
THANACHART BANK PUBLIC COMPANY LIMITED
3.2
Financial reporting standards that will become effective in the future During the current year, the Federation of Accounting Professions issued a number of 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 management of the Bank and its subsidiaries believe that the revised financial reporting standards will not have any significant impact on the financial statements when they are initially applied.
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.
168
ANNUAL REPORT 2017
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 programs 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.
169
THANACHART BANK PUBLIC COMPANY LIMITED
g)
Insurance premium income Premium income consists of direct premium and reinsurance premium less premium of cancelled policies and premiums refunded to policy holders, and adjusted with unearned premium reserve. Direct premium income is recognised on the date the insurance policy comes into effect. For long-term insurance policies with coverage periods of longer than 1 year, related premium are recorded as unearned items, and recognised as income over the coverage period. Reinsurance premium income is recognised as income when the reinsurer places the reinsurance application or the statement of accounts.
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.
170
ANNUAL REPORT 2017
Investments in held-to-maturity debt securities are stated at amortised cost. Premiums/ discounts on debt securities are amortised/accreted by the effective rate method with the amortised/accreted amount presented as an adjustment to the interest income. Investments in non-marketable equity securities, which are classified as general investments, are stated at cost net of allowance for impairment (if any). The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of debt securities is determined using the yield rates quoted by the Thai Bond Market Association, other markets, or yield rate of government bond adjusted by an appropriate risk factor, as the case may be. The fair value of unit trusts is determined from their net asset value. The 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.
171
THANACHART BANK PUBLIC COMPANY LIMITED
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.
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.
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ANNUAL REPORT 2017
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. 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.
173
THANACHART BANK PUBLIC COMPANY LIMITED
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 on the net present value of future cash flows over the remaining period to maturity, recognising adjustments against impairment losses of loans accounts. In cases where the troubled debt restructuring involves the transfer of assets or equity, the Bank and its subsidiaries record the assets or equity interest received as a result of debt restructuring at their fair value (based on the value appraised by internal appraisers or external independent appraisers) providing this does not exceed the amount of principal legally claimable from the debtor (including interest of which recognition has ceased until the restructuring date). Any excess of the fair value of the assets over the book value is recognised as gain on restructuring or interest income in part of profit or loss in the statements of comprehensive income, as the case may be. Losses arising from debt restructuring through waivers of part of principal or recorded accrued interest receivable are recognised as losses in part of profit or loss in the statements of comprehensive income when incurred.
4.9
Recognition and amortisation of customers’ assets Assets which customers have placed with the subsidiary company for securities trading, in term of cash accounts and credit balance accounts, including amounts which customers have placed as security for derivative trading, are recorded as assets and liabilities of the subsidiary company for internal control purpose. As at the reporting date, the subsidiary company eliminates those amounts which there are no guarantee obligations from both assets and liabilities and present only those assets which belong to the subsidiary company.
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ANNUAL REPORT 2017
4.10 Property foreclosed Property foreclosed is stated at the lower of cost (fair value with reference to appraisal value, providing this does not exceed the legally claimable amount of debt) or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. Gains on disposal of property foreclosed are recognised as income in part of profit or loss in the statements of comprehensive income on the disposal date, unless the purchase is made with a loan from the Bank. In such cases, gains are recognised in accordance with the BOT’s guideline. Losses on disposal and impairment losses are recognised as expenses in part of profit or loss in the statement of comprehensive income. 4.11 Land, premises and equipment and depreciation a)
Land 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.
175
THANACHART BANK PUBLIC COMPANY LIMITED
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.
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.
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ANNUAL REPORT 2017
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. 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.
177
THANACHART BANK PUBLIC COMPANY LIMITED
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. 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.
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ANNUAL REPORT 2017
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. 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.
179
THANACHART BANK PUBLIC COMPANY LIMITED
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 off-balance items. Gains or losses arising from changes in the fair value of the contracts are recognised as part of profit or loss in the statement of comprehensive income. The fair values of the contracts are based on the quoted market prices. If the fair value of financial derivatives cannot be determined with reference to market price, it is determined using valuation techniques and models, in which the variables used, are derived from observable market factors and adjusted to reflect counterparty credit risk. Other financial derivative contracts (forward foreign currency contracts, interest rate swap contracts and cross currency and interest rate swap contracts) which were not originated for trading purposes are recorded as off-balance items, and presented on an accrual basis. Foreign currency components are translated at the period-end exchange rate, in the same manner as the hedged items, with unrealised gains or losses on translation recognised as part of profit or loss in the statement of comprehensive income. Interest rate components are presented on an accrual basis, in the same manner as the hedged assets or liabilities, with gains or losses recorded to interest income and interest expense over the terms of the contracts. Receivables and payables under foreign exchange contracts are presented at the net amount in the statement of financial position.
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ANNUAL REPORT 2017
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.
181
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.
182
ANNUAL REPORT 2017
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.
183
THANACHART BANK PUBLIC COMPANY LIMITED
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. 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:
184
ANNUAL REPORT 2017
5.1
Recognition and derecognition of assets and liabilities In considering whether to recognise or to derecognise assets or liabilities, the management is required to make judgement on whether significant risk and rewards of those assets or liabilities have been transferred, based on their best knowledge of the current events and arrangements.
5.2
Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables Allowance for doubtful accounts for loans and allowance for impairment of investment in receivables are intended to adjust the value of loans for probable credit losses. The management uses the BOT’s and SEC’s regulations regarding the provision of allowance for doubtful accounts and judgements to estimate losses on outstanding loans when there is any doubt about the borrower’s capability to repay the principal and the interest. The allowances for loan losses are determined through a combination of specific reviews, probability of default, value of collateral and current economic conditions.
5.3
Allowance for impairment of investments in securities The Bank and its subsidiaries review an impairment of investments in securities when indication of impairment exists. The determination of what is indication of impairment requires the management’s judgement.
5.4
Assessment of investment funds as structured entities In determining whether the funds to which a subsidiary provides asset management services are structured entities, the management is required to use judgement, taking into consideration the voting rights and other similar rights afforded to other parties, including the rights to remove the subsidiary as fund manager, liquidate the funds, or redeem holdings in the funds, and determining whether such rights are the dominant factor when deciding who controls the funds.
5.5
Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgement, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk of counterparty, liquidity, correlation and longer-term volatility of financial instruments. Change in assumptions about these factors could affect the fair value and disclosures of fair value hierarchy.
185
THANACHART BANK PUBLIC COMPANY LIMITED
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. 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.
186
ANNUAL REPORT 2017
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. 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.
187
THANACHART BANK PUBLIC COMPANY LIMITED
6.
Interbank and money market items (assets) (Unit: Million Baht) Consolidated financial statements 2016
2017 At call
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
5,434
800
6,234
3,606
5,500
9,106
344
23,058
23,402
245
2,875
3,120
1
36,890
36,891
1
3,450
3,451
798
17,997
18,795
2
22,196
22,198
6,577
78,745
85,322
3,854
34,021
37,875
Add: Accrued interest receivables
-
21
21
-
24
24
Less: Deferred revenues
-
(3)
(3)
-
(2)
(2)
Less: Allowance for doubtful accounts
-
(244)
(244)
-
(222)
(222)
Commercial banks Specialised financial institutions Other financial institutions Total
Total domestic items
6,577
78,519
85,096
3,854
33,821
37,675
1,397
7,794
9,191
1,368
8,068
9,436
45
-
45
32
-
32
283
-
283
262
-
262
1,725
7,794
9,519
1,662
8,068
9,730
-
36
36
-
71
71
Total foreign items
1,725
7,830
9,555
1,662
8,139
9,801
Total
8,302
86,349
94,651
5,516
41,960
47,476
Foreign US Dollar Euro Others Total Add: Accrued interest receivables
188
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements 2016
2017 At call
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
5,433
800
6,233
3,605
5,500
9,105
202
21,827
22,029
136
970
1,106
-
35,500
35,500
-
3,000
3,000
Other financial institutions
3,518
17,997
21,515
2,502
22,196
24,698
Total
9,153
76,124
85,277
6,243
31,666
37,909
Add: Accrued interest receivables
-
19
19
-
5
5
Less: Deferred revenues
-
(3)
(3)
-
(2)
(2)
(244)
(271)
(222)
(247)
Commercial banks Specialised financial institutions
Less: Allowance for doubtful accounts Total domestic items
(27)
(25)
9,126
75,896
85,022
6,218
31,447
37,665
1,397
7,794
9,191
1,368
8,068
9,436
45
-
45
32
-
32
283
-
283
262
-
262
1,725
7,794
9,519
1,662
8,068
9,730
-
36
36
-
71
71
1,725
7,830
9,555
1,662
8,139
9,801
10,851
83,726
94,577
7,880
39,586
47,466
Foreign US Dollar Euro Others Total Add: Accrued interest receivables Total foreign items Total
As at 31 December 2017, the Bank had loan to a subsidiary company, which was a financial institution, of Baht 2,720 million in the separate financial statements (2016: Baht 2,500 million).
189
THANACHART BANK PUBLIC COMPANY LIMITED
7.
Derivatives As at 31 December 2017 and 2016, the notional amount and the fair value of trading derivatives, and the adjustments made on an accrual basis for hedging derivatives (banking book), were classified by type of risk as follow. (Unit: Million Baht) Consolidated financial statements 2017
2016
Fair value/Adjustments
Fair value/Adjustments
on an accrual basis Assets
Notional
Liabilities
amount*
on an accrual basis Assets
Notional
Liabilities
amount*
Types of risk Foreign exchange rate Derivatives for trading
530
585
85,137
642
698
85,966
Derivatives for banking book
128
32
9,592
44
103
11,076
1,848
1,785
271,684
2,505
2,485
309,647
-
-
20,530
-
-
1,000
Derivatives for trading
139
138
7,931
373
335
9,693
Derivatives for banking book
243
325
10,425
-
1,291
11,430
1
3
2,303
-
-
1,713
2,889
2,868
407,602
3,564
4,912
430,525
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 2017
2016 Fair value/Adjustments
Fair value/Adjustments on an accrual basis Assets
Notional
Liabilities
amount*
on an accrual basis Assets
Notional
Liabilities
amount*
Types of risk Foreign exchange rate Derivatives for trading
530
585
85,137
642
698
85,966
Derivatives for banking book
128
32
9,592
44
103
11,076
1,848
1,785
271,684
2,505
2,485
309,647
-
-
20,530
-
-
1,000
Interest rate Derivatives for trading Derivatives for banking book Foreign exchange rate and interest rate Derivatives for trading
139
138
7,931
373
335
9,693
Derivatives for banking book
243
325
10,425
-
1,291
11,430
2,888
2,865
405,299
3,564
4,912
428,812
Total
* Disclosed only in case that the Bank has an obligation to pay
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ANNUAL REPORT 2017
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 2017 and 2016. Consolidated financial statements Counterparties
Financial institutions
2017
2016
2017
2016
Percent
Percent
Percent
Percent
93.32
93.04
93.91
93.43
6.68
6.96
6.09
6.57
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 2017
Separate financial statements
2016
2017
2016
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
Fair value
cost
Fair value
cost
Fair value
cost
Fair value
Trading securities Government and state enterprises securities Private debt securities Domestic marketable equity securities
Add (less): Allowance for change in value Net
9,119
9,127
7,166
7,171
9,119
9,127
7,166
7,171
232
232
-
-
263
263
-
-
1,749
1,713
1,613
1,597
-
-
-
-
11,100
11,072
8,779
8,768
9,382
9,390
7,166
7,171
(28)
(11)
11,072
8,768
8
5
9,390
7,171
Available-for-sale securities Government and state enterprises 113,782
113,978
125,033
124,678
110,482
110,673
121,883
121,556
Private debt securities
securities
24,009
24,336
22,076
22,175
21,052
21,339
21,069
21,155
Foreign debt securities
10,441
10,430
11,465
11,434
10,441
10,430
11,465
11,434
2,744
3,203
3,907
3,988
1,302
1,290
1,876
1,735
Domestic marketable equity securities Unit trusts
Add (less): Allowance for change in value Net
403
415
3
3
200
151,379
152,362
162,484
162,278
143,477
983 152,362
(206) 162,278
461 143,938
206 143,938
-
-
156,293
155,880
(413) 155,880
191
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements
Separate financial statements
2016
2017
2017
2016
Cost/
Cost/
Cost/
Cost/
Amortised
Amortised
Amortised
Amortised
cost
cost
Fair value
cost
Fair value
cost
Fair value
Fair value
Held-to-maturity debt securities Government and state enterprises 42
49
62
67
-
-
-
-
Private debt securities
securities
240
273
205
237
485
531
474
508
Net
282
322
267
304
485
531
474
508
General investment Unit trusts
25
24
25
24
3,636
3,780
3,619
3,762
1
39
1
39
3,662
3,843
3,645
3,825
Domestic non-marketable equity securities Foreign non-marketable equity securities
(10)
Less: Allowance for impairment Net Total investments - net
8.2
(75)
(10)
(75)
3,652
3,768
3,635
3,750
167,368
175,081
157,448
167,275
Classified by remaining period of debt securities (Unit: Million Baht) Consolidated financial statements
At call
2017
2016
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
22,796
90,839
142
113,782
261
18,927
105,011
834
125,033
Private debt securities
enterprises securities
-
872
18,213
4,924
24,009
-
1,630
16,126
4,320
22,076
Foreign debt securities
-
4,249
5,863
329
10,441
-
3,592
7,512
361
11,465
Total
5
27,917
114,915
5,395
148,232
261
24,149
128,649
5,515
158,574
-
33
442
512
-
78
5
27,950
115,357
148,744
261
24,227
Add (less): Allowance for change in value Total
37 5,432
(227) 128,422
(138) 5,377
(287) 158,287
Held-to-maturity debt securities Government and state enterprises securities
-
-
-
42
42
-
20
-
42
62
Private debt securities
-
40
50
150
240
-
20
35
150
205
Total
-
40
50
192
282
-
40
35
192
267
Total debt securities
5
27,990
115,407
5,624
149,026
261
24,267
128,457
5,569
158,554
192
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements
At call
2017
2016
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
20,833
89,644
-
110,482
261
17,040
104,582
-
121,883
Private debt securities
enterprises securities
-
670
15,622
4,760
21,052
-
1,440
15,819
3,810
21,069
Foreign debt securities
-
4,249
5,863
329
10,441
-
3,592
7,512
361
11,465
Total
5
25,752
111,129
5,089
141,975
261
22,072
127,913
4,171
154,417
-
32
404
31
467
-
76
5
25,784
111,533
5,120
142,442
261
22,148
127,685
4,051
154,145
Private debt securities
-
13
73
399
485
-
-
84
390
474
Total
-
13
73
399
485
-
-
84
390
474
Total debt securities
5
25,797
111,606
5,519
142,927
261
22,148
127,769
4,441
154,619
Add (less): Allowance for change in value Total
(228)
(120)
(272)
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 2017 and 2016, investments in securities in which the Bank and its subsidiaries hold not less than 10 percent of the equity of the investee, but which are not treated as subsidiary or associated companies, separated by industry as follows: (Unit: Million Baht) Consolidated financial statements 2016
2017 Banking and finance sector
1
Separate financial statements 2017
2
2016 1
2
193
THANACHART BANK PUBLIC COMPANY LIMITED
9.
Investments in subsidiary and associated companies
9.1
Separate financial statements As at 31 December 2017 and 2016, investments in subsidiary and associated companies in the separate financial statements stated under the cost method, consist of investment in ordinary shares of the following subsidiary and associated companies: (Unit: Million Baht) Separate financial statements Value of investment Paid-up share
Percentage of
under the
Dividend income
capital
holding (%)
cost method
for the years
Company’s name 2017
2016
TS Asset Management Co., Ltd.
2,000
2,000
100
Thanachart Securities Plc.
1,500
1,500
Ratchthani Leasing Plc.
2,416
Thanachart Insurance Plc.
2017
2016
2017
2016
2017
2016
100
2,000
2,000
330
700
100
100
1,858
1,858
660
480
2,416
65.18
65.18
1,201
1,201
331
283
740
740
100
100
867
867
751
600
Thanachart Group Leasing Co., Ltd.
360
360
100
100
400
400
14
52
Thanachart Broker Co., Ltd.
100
100
100
100
104
104
90
100
Thanachart Fund Management Co., Ltd.
100
100
75
75
97
97
287
257
10
10
100
100
5
5
-
-
6
6
100
100
6
6
-
-
5
5
100
100
5
5
22
18
6,543
6,543
2,485
2,490
Subsidiary companies
Security Scib Service Co., Ltd. Thanachart Management and Services Co., Ltd. Thanachart Training and Development Co., Ltd. Total investments in subsidiary companies
(5)
Less: Allowance for impairment
(5)
Total investments in subsidiary companies - net
6,538
6,538
632
821
51
51
632
821
51
51
7,170
7,359
2,536
2,541
Associated company MBK Plc.
1,708
1,708
3.46
4.50
Total investment in an associated company Total investments in subsidiary and associated companies
In October 2017, the Bank sold its investment in 17,722,000 ordinary shares of MBK Plc. at a price of Baht 366 million, and recognised gains on disposal of Baht 202 million in the consolidated financial statements and Baht 177 million in the separate financial statements.
194
ANNUAL REPORT 2017
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 by
balance of
non-controlling
non-controlling
non-controlling
non-controlling
non-controlling
interests during
interests during
interests during
interests
interests
the years
the years
the years
Company’s name
2017
2016
(%)
(%)
2017
2016
2017
2016
2017
2016
2017
2016
Ratchthani Leasing Plc.
34.82
34.82
1,835
1,560
177
151
452
315
-
-
Thanachart Fund Management
25.00
25.00
83
72
96
86
107
89
(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.
Management Co., Ltd.
2017
2016
Total assets
39,160
32,856
542
457
Total liabilities
33,889
28,376
214
169
(1)
Presents in the amount after adjustment for the effect of differences in accounting policies.
2017
2016
195
THANACHART BANK PUBLIC COMPANY LIMITED
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 31 December Thanachart Fund Management (1)
Ratchthani Leasing Plc.
Co., Ltd.
2016
2017
2017
2016
Net operating income
2,334
1,959
845
736
Profit for the year
1,299
906
426
355
-
-
426
355
Other comprehensive income (loss) Total comprehensive income (1)
1,299
(1) 905
Presents in the amount after adjustment for the effect of differences in accounting policies.
Summarised information about cash flow (Unit: Million Baht) For the years ended 31 December Thanachart Fund Management Ratchthani Leasing Plc. 2017 Cash flow from (used in) operating activities Cash flow used in investing activities Cash flow from (used in) financing activities Net increase (decrease) in cash
Co., Ltd.
2016
(8,715)
2017 413
363
(50)
(20)
(23)
8,724
(2,533)
(383)
(342)
4
4
(5)
2,587
2016
10
(2)
196
ANNUAL REPORT 2017
9.4
Cash flow information of an asset management company that is a subsidiary Cash flow information of TS Asset Management Company Limited, a subsidiary, for the years ended 31 December 2017 and 2016 is as follows: (Unit: Million Baht) 2016
2017 Cash flows from operating activities Profit before income tax
108
148
Adjustments to reconcile profit before income tax to net cash provided by (paid for) operating activities Bad debt and doubtful account (reversal)
(2)
16
Decrease in allowance for impairment of property foreclosed and other assets
(6)
(146)
Increase in provisions Interest income - net Cash received from interest income Cash paid for interest expense
1
1
(148)
(297)
148
300
-
(4)
(15)
(6)
86
12
Loans to customers
333
663
Properties foreclosed
347
862
Other assets
(20)
10
Cash paid for corporate income tax Income from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets
Decrease in operating liabilities Interbank and money market items
-
(691)
(20)
(21)
726
835
Dividend paid
(330)
(700)
Net cash flows used in financing activities
(330)
(700)
Net increase in cash and cash equivalents
396
135
Cash and cash equivalents at beginning of the year
190
55
Cash and cash equivalents at end of the year
586
190
Other liabilities Net cash flows from operating activities Cash flows from financing activities
197
THANACHART BANK PUBLIC COMPANY LIMITED
9.5
Investment in associated company in consolidated financial statements As at 31 December 2017 and 2016, investment in an associated company, which presented under the equity method, in the consolidated financial statements consists of investment in ordinary shares of the following company which operates in Thailand: (Unit: Million Baht) Share of surplus from the change
Company’s name
MBK Plc. (operating
Paid-up share
Percentage
capital
of holding (%)
2017
2016
1,708
1,708
2017 9.90
2016
Share of other
interests in
comprehensive
Share of profit
subsidiaries
income during
Equity method during the years
during the years
of the associate
the years
2017
2017
Value of investment Cost method
in the ownership
Dividend income
2017
2016
2017
2016
2017
891
984
2,258
2,253
123
123
200
207
41
-
76
352
891
984
2,258
2,253
123
123
200
207
41
-
76
352
10.94
2016
2016
2016
2017
2016
in property rental, hotel and services businesses) Total investment in an associated company
The Bank and its subsidiaries classified investment in MBK Plc. as investment in an associated company since the Parent company, the Bank and its subsidiaries had significant influence in that company. 9.6
Summarised financial information of an associated company a)
Summarised financial information of MBK Plc. as at 30 September 2017 and 2016 and for the years then ended are as follows: Summarised information about financial position (Unit: Million Baht) 30 September 2017 Total assets Total liabilities Other equity items of an associated company Net assets Shareholding percentage (%) Share of net assets Elimination entries Goodwill
30 September 2016
46,668
44,626
(23,830)
(22,672)
193
(936)
23,031
21,018
9.90
10.94
2,280
2,299
(296)
(348)
274
302
2,258
2,253
Carrying amounts of the associate based on equity method
198
ANNUAL REPORT 2017
Summarised information about comprehensive income (Unit: Million Baht) For the years ended 30 September (1) 2017 Revenue
2016
10,351
12,654
Profit for the year
1,864
2,046
Other comprehensive income
1,060
3,495
Total comprehensive income for the year
2,924
5,541
(1)
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 2017 was determined based on financial statements that were prepared with reference to financial statements for the year ended 30 September 2017 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 2017 is not materially different from the income for the year ended 31 December 2017. b)
The fair value of investment in an associated company As at 31 December 2017 and 2016, the fair value of investment in an associated company which is listed on the Stock Exchange of Thailand is as follows: (Unit: Million Baht)
MBK Plc.
Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
3,263
2,690
1,141
1,107
199
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
2016
2017
2017
2016
Loans to customers Overdrafts Loans Notes receivables Hire purchase receivables Financial lease receivables Others Less: Deferred revenues
16,668
17,261
16,668
17,261
262,029
260,596
259,202
256,078
56,178
62,527
57,747
65,708
425,948
393,273
381,032
355,248
1,710
1,744
1,166
1,245
153
141
153
141
(55,127)
(48,171)
(50,463)
(44,067)
707,559
687,371
665,505
651,614
589
620
589
620
708,148
687,991
666,094
652,234
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
(7,962)
(7,030)
(4,424)
(3,773)
- Collective Approach
(5,820)
(5,645)
(5,820)
(5,645)
(10,237)
(11,927)
(9,632)
(9,883)
(1)
(2)
(1)
(2)
2)
Excess provision
Less: Revaluation allowance for debt restructuring Loans to customers and accrued interest receivables - net
684,128
663,387
646,217
632,931
4,101
3,508
-
-
15
28
-
-
4,116
3,536
-
-
-
-
Securities business receivables Credit balances receivables Other receivables Total securities business receivables Less: Allowance for doubtful accounts Securities business receivables - net
(14)
(14)
4,102
3,522
-
-
688,230
666,909
646,217
632,931
Loans to customers and accrued interest receivables - net
200
ANNUAL REPORT 2017
10.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2016
2017 Domestic
Foreign
695,860
Baht US Dollar
Total
Domestic
Foreign
-
695,860
671,638
-
671,638
8,555
5,570
14,125
11,916
6,455
18,371
161
1,529
1,690
120
778
898
704,576
7,099
711,675
683,674
7,233
690,907
Other currencies Total*
Total
* Total loans net of deferred revenues (Unit: Million Baht) Separate financial statements 2017
2016
Domestic
Foreign
649,690
Baht US Dollar
Total
Domestic
Foreign
-
649,690
632,345
-
632,345
8,555
5,570
14,125
11,916
6,455
18,371
161
1,529
1,690
120
778
898
658,406
7,099
665,505
644,381
7,233
651,614
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 2017 The Bank and a subsidiary company which is a financial institution Other
Normal Agricultural and mining
Special
Sub-
Doubtful
mention
standard
Doubtful
subsidiary Total
of loss
companies
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
Personal consuming Housing loans
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
Securities business Hire purchase Others
* Total loans net of deferred revenues
201
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2016 The Bank and a subsidiary company which is a financial institution Other Special
Sub-
Doubtful
subsidiary
Normal
mention
standard
Doubtful
Agricultural and mining
13,704
14
299
35
17
14,069
1
14,070
Manufacturing and commerce
74,383
206
937
424
1,803
77,753
301
78,054
Real estate and construction
45,370
111
362
887
920
47,650
36
47,686
Public utilities and services
58,275
349
183
50
1,030
59,887
103
59,990
94,087
1,344
570
517
1,117
97,635
54
97,689
-
-
-
-
-
-
3,536
3,536
284,130
22,826
1,363
1,264
1,961
311,544
33,750
345,294
26,760
636
534
184
410
28,524
66
28,590
Others
15,970
3
4
1
19
15,997
1
15,998
Total*
612,679
25,489
4,252
3,362
7,277
653,059
37,848
690,907
Total
of loss
companies
Consolidated
Personal consuming Housing loans Securities business Hire purchase Others
* Total loans net of deferred revenues
(Unit: Million Baht) Separate financial statements 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
202
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements 2016 Special Normal
Doubtful
mention
Substandard
Doubtful
of loss
Total
Agricultural and mining
13,681
14
293
7
13
14,008
Manufacturing and commerce
72,977
204
926
421
875
75,403
Real estate and construction
45,311
105
359
883
650
47,308
Public utilities and services
57,641
339
173
40
518
58,711
Housing loans
94,015
1,331
541
499
1,048
97,434
Hire purchase
283,917
22,813
1,362
1,263
1,960
311,315
26,747
631
518
180
342
28,418
Others
18,992
3
4
-
18
19,017
Total*
613,281
25,440
4,176
3,293
5,424
651,614
Personal consuming
Others
* Total loans net of deferred revenues
10.4 Non-performing loans As at 31 December 2017 and 2016, the Bank and its subsidiaries (securities and asset management businesses) had non-performing loans classified in accordance with the Notification of the BOT and SEC (debtors classified as substandard, doubtful and doubtful of loss) as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
14,417
12,895
14,412
12,893
14
14
-
-
2,019
1,996
-
-
Non-performing loans (excluding accrued interest receivables) Banking business Securities business Asset management business
The above definition of non-performing loans does not include overdue loans which have been already restructured and are now qualified for classification as Normal or Special mention debt.
203
THANACHART BANK PUBLIC COMPANY LIMITED
Additionally, the Bank and its subsidiary engaged in the securities business had loans for which income recognition under an accrual basis has been discontinued, as follows: (Unit: Million Baht)
Banking business Securities business
Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
21,394
21,100
21,389
21,097
14
14
-
-
The subsidiary company engaged in the asset management business recognises income from loan on a cash basis. 10.5 Debt restructuring During the years 2017 and 2016, 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
2,317
2,316
Million Baht
2017 Modification of repayment conditions
1,090
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
1,943
5,451
5,406
and cars
49
2016 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of repayment conditions Total
Land and 8
167
160
1,951
5,618
5,566
buildings
(1) Presents the outstanding balance per the books of account (principal plus accrued interest receivables)
195
204
ANNUAL REPORT 2017
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
2,210
2,209
Million Baht
2017 Modification of repayment conditions
1,074
Transfer of assets and/or ordinary Land, buildings
shares and/or modification of repayment conditions Total
2
60
59
1,076
2,270
2,268
1,917
3,532
3,513
and cars
49
2016 Modification of repayment conditions Transfer of assets and/or ordinary shares and/or modification of repayment conditions Total
Land and 6
35
32
1,923
3,567
3,545
buildings
32
(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 2017 and 2016, are summarised below. Consolidated financial statements 2017
2016 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
398
1,016
899
947
Due within the year
262
850
218
787
Less than 5 years
264
204
562
2,744
5 - 10 years
121
193
172
646
10 - 15 years
20
52
42
322
Over 15 years
27
60
58
120
1,092
2,375
1,951
5,566
Total
205
THANACHART BANK PUBLIC COMPANY LIMITED
Separate financial statements 2017
2016 Outstanding
Periods
Outstanding
Number of
balances after
Number of
balances after
debtors
restructuring
debtors
restructuring
Million Baht
Million Baht
Past due after restructuring
397
1,013
895
885
Due within the year
253
779
208
445
Less than 5 years
263
202
555
1,159
5 - 10 years
119
189
166
624
10 - 15 years
17
25
41
312
Over 15 years
27
60
58
120
1,076
2,268
1,923
3,545
Total
Supplemental information for the years 2017 and 2016 relating to restructured loans is as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017
2017
2016
Interest income recognised in the statements of comprehensive income Cash repayment from receivables
858
972
727
695
3,487
5,173
3,020
3,075
73
215
73
52
-
-
-
-
Properties foreclosed received for debts settlement Loss on debt restructuring (net of allowance for doubtful accounts as previously recorded)
As at 31 December 2017 and 2016, the Bank and its subsidiaries have the following restructured receivables balances (principal and accrued interest receivable): Restructured receivables Outstanding balances, Number of receivables 2017
Thanachart Bank Plc. TS Asset Management Co., Ltd.
2016
Outstanding balances
net of collateral
2017
2016
2017
2016
Million Baht
Million Baht
Million Baht
Million Baht
8,465
13,532
8,240
10,093
1,772
2,850
238
325
2,580
4,261
1,771
2,923
206
ANNUAL REPORT 2017
10.6 Hire purchase/Financial lease receivables As at 31 December 2017 and 2016, hire purchase/financial lease receivables of the Bank and its subsidiaries, which are engaged in the hire purchase and financial lease businesses, mostly comprise hire purchase agreements or financial lease agreements for cars, trucks and motorcycles. The terms of the agreements are generally between 3 and 7 years and they carry interest at fixed rates stipulated in the agreements. (Unit: Million Baht) Consolidated financial statement as at 31 December 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) Consolidated financial statement as at 31 December 2016 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Over 5 years
Total
Gross investment in the lease
115,575
260,267
19,175
395,017
Less: Unearned finance income
(17,546)
(29,592)
(1,016)
(48,154)
98,029
230,675
18,159
346,863
Present value of minimum lease payments receivables Allowance for doubtful accounts Hire purchase/Financial lease receivables - net * Included non-performing receivables
(9,609) 337,254
207
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
(Unit: Million Baht) Separate financial statement as at 31 December 2016 Amounts due under lease agreements Less than 1 year*
1 - 5 years
Gross investment in the lease
112,924
224,662
Less: Unearned finance income
(17,492)
(25,576)
95,432
199,086
Over 5 years 18,907 (982)
Total 356,493 (44,050)
Present value of minimum lease payments receivables Allowance for doubtful accounts Hire purchase/Financial lease receivables - net * Included non-performing receivables
17,925
312,443 (7,499) 304,944
208
ANNUAL REPORT 2017
10.7 Classified by classification As at 31 December 2017 and 2016, 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
2017
2016
2017
2016
624,828
613,276
416,556
404,054
3,310
2,985
26,304
25,506
23,844
23,188
2,336
2,150
Substandard
5,938
4,258
2,977
2,443
2,219
1,644
Doubtful
2,672
3,362
1,490
1,656
823
906
Doubtful of loss
7,829
7,277
3,651
4,267
3,013
3,100
667,571
653,679
448,518
435,608
11,701
10,785
Additional allowance for possible uncollectability debts
10,017
11,707
Total
21,718
22,492
Normal Special mention
Total
(1)
2017
2016
Only the Bank and a subsidiary company subject to BOT’s regulations; and after deducting intragroup transactions.
(Unit: Million Baht) Separate financial statements Net balance used in making Loans and accrued interest
allowance for doubtful
Allowance for doubtful
receivables
accounts
accounts
2017
2016
2017
2016
625,455
613,878
417,646
405,407
3,321
2,998
26,224
25,457
23,829
23,183
2,336
2,151
5,699
4,182
2,785
2,419
2,027
1,619
Doubtful
2,616
3,293
1,484
1,627
816
877
Doubtful of loss
6,100
5,424
2,381
2,940
1,744
1,773
666,094
652,234
448,125
435,576
10,244
9,418
9,632
9,883
19,876
19,301
Normal Special mention Substandard
Total
2017
Additional allowance for possible uncollectability debts Total
2016
Percentage of allowance for doubtful account The Banks’ hire purchase receivablespersonal consumer 2017 Normal
(2)
Other loans
2016
2017
2016
0.71
0.62
1
1
Special mention
10.03
9.50
2
2
Substandard
40.67
39.96
100
100
Doubtful
39.66
39.12
100
100
Doubtful of loss
40.60
40.39
100
100
(2)
These percentages are average rates used in setting up allowance for doubtful accounts
209
THANACHART BANK PUBLIC COMPANY LIMITED
10.8
Loans to companies which have settlement problems As at 31 December 2017 and 2016, loans of the Bank and its subsidiaries (which engaged in asset management and hire purchase and financial lease businesses) in the consolidated financial statements and the separate financial statements included amounts due from companies with weak financial positions and poor operating results, as follows: Consolidated financial statements Allowance for doubtful accounts provided Number of debtors 2016
2017
1. Listed companies possible to
Debt balances
Collateral value
in the accounts
2017
2016
2017
2016
2017
2016
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
4
6
205
217
1
7
2
32
24
554
478
310
365
244
940
901
7,809
8,349
4,180
2
delisting from the SET 2. Non - listed companies with
112
similar operating results and financial position to listed companies possible to delisting from the SET 3. Companies which have loan
3,836
3,583
4,354
settlement problems or have defaulted on the repayment
Separate financial statements Allowance for doubtful accounts provided Number of debtors 2017
1. Listed companies possible to
2016
Debt balances
Collateral value
in the accounts
2017
2016
2017
2016
2017
2016
Million
Million
Million
Million
Million
Million
Baht
Baht
Baht
Baht
Baht
Baht
3
5
204
216
-
6
2
2
30
22
553
476
310
365
243
111
372
340
4,874
3,909
3,631
2,942
1,243
967
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
210
ANNUAL REPORT 2017
10.9
Classification of securities business receivables in accordance with the Notification of the Securities and Exchange Commission As at 31 December 2017 and 2016, a subsidiary company operating in the securities business classified securities business receivables and accrued interest receivables, and provided related allowance for doubtful accounts, in accordance with the Notification of the Securities and Exchange Commission (SEC), as follows: (Unit: Million Baht) Debt balances net of allowance Allowance for doubtful accounts
Debt balances 2016
2017 Normal
2016
2017
2016
4,102
3,522
-
-
4,102
3,522
1
1
1
1
-
-
13
13
13
13
-
-
4,116
3,536
14
14
4,102
3,522
Substandard Doubtful Total
2017
for doubtful accounts
Allowance for doubtful accounts for substandard loans set aside by the subsidiary is higher than the minimum amount required by the SEC, and takes into account uncertainties as to collateral value and the risk from collection of such receivables. 10.10 Hire purchase/financial lease receivables of subsidiaries classified by aging As at 31 December 2017 and 2016, 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) 2017
2016
38,793
32,663
Overdue 91 - 365 days
811
813
Overdue more than 1 year
168
170
Debtors under legal actions
679
545
40,451
34,191
2,301
2,110
Current or overdue not over 90 days
Total Allowance for doubtful accounts provided in the accounts
211
THANACHART BANK PUBLIC COMPANY LIMITED
11.
Allowance for doubtful accounts (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 subsidiary
Special
Sub-
Normal
mention
standard
2,985
2,150
1,644
325
186
575
Bad debts recovery
-
-
-
-
1,050
-
1,050
Bad debts written-off
-
-
-
-
(7,565)
-
(7,565)
3,310
2,336
2,219
823
Balance - beginning of the year
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
companies Consolidated
Increase (decrease) during the year
Balance - end of the year
3,013
10,017
21,718
9 (107) 2,315
1,059 (7,672) 24,033
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 The Bank and a subsidiary company which is a financial institution Other
Balance - beginning of the year
Special
Sub-
Normal
mention
standard
2,873
2,297
1,649
Doubtful
General
Doubtful
of loss
provision
1,291
6,081
9,641
23,832
1,844
25,676
2,297
2,066
3,938
349
4,287
subsidiary Total
companies Consolidated
Increase (decrease) during the year
112
(147)
(5)
(385)
Bad debts recovery
-
-
-
-
1,355
-
1,355
7
1,362
Bad debts written-off
-
-
-
-
(6,633)
-
(6,633)
(76)
(6,709)
2,985
2,150
1,644
906
Balance - end of the year
3,100
11,707
22,492
2,124
24,616
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2017 Special Normal Balance - beginning of the year
mention
Substandard
Doubtful
Doubtful
General
of loss
provision
877
1,773
(61)
5,141
9,883
Total
2,998
2,151
1,619
19,301
323
185
408
Bad debts recovery
-
-
-
-
1,050
-
1,050
Bad debts written-off
-
-
-
-
(6,220)
-
(6,220)
3,321
2,336
2,027
816
Increase (decrease) during the year
Balance - end of the year
1,744
(251)
9,632
5,745
19,876
212
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Special
Balance - beginning of the year
Normal
mention
2,880
2,296
Substandard
Doubtful
1,543
Doubtful
General
of loss
provision
1,207
Total
3,695
8,521
20,142
3,312
1,362
4,393
Increase (decrease) during the year
118
76
(330)
Bad debts recovery
-
-
-
-
1,355
-
1,355
Bad debts written-off
-
-
-
-
(6,589)
-
(6,589)
2,998
2,151
1,619
877
Balance - end of the year
12.
(145)
1,773
9,883
19,301
Revaluation allowance for debt restructuring (Unit: Million Baht) Consolidated financial statements 2017 Balance - beginning of the year
13.
Separate financial statements
2016
2017
2016
2
4
2
4
Amortised during the year
(1)
(2)
(1)
(2)
Balance - end of the year
1
2
1
2
Classification of assets As at 31 December 2017 and 2016, 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 2017 Loans to Interbank and
customers and Properties
money market accrued interest receivables
items
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
Normal
Total
213
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2016 Loans to Interbank and
customers and
money market accrued interest items Normal
receivables
Properties Investments
foreclosed
Other assets
Total
26,213
613,276
-
-
213
639,702
Special mention
-
25,506
-
-
115
25,621
Substandard
-
4,258
-
-
13
4,271
Doubtful
-
3,362
-
-
10
3,372
Doubtful of loss
-
7,277
1,115
356
258
9,006
26,213
653,679
1,115
356
609
681,972
Total
(Unit: Million Baht) Separate financial statements 2017 Loans to Interbank and
customers and
money market accrued interest items Normal
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
(Unit: Million Baht) Separate financial statements 2016 Loans to Interbank and
customers and Properties
money market accrued interest items Normal
receivables
Investments
foreclosed
Other assets
Total
28,713
613,878
-
-
213
642,804
Special mention
-
25,457
-
-
115
25,572
Substandard
-
4,182
-
-
13
4,195
Doubtful
-
3,293
-
-
10
3,303
Doubtful of loss
-
5,424
1,120
313
255
7,112
28,713
652,234
1,120
313
606
682,986
Total
214
ANNUAL REPORT 2017
14.
Properties foreclosed (Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2017 Balance -
Balance -
beginning
end of 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
of the year Assets transferred for settlement of debts Immovable assets External appraiser Movable assets Assets from purchase by bid on the open market Immovable assets External appraiser Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
(466)
(388) 3,112
4,902
455 (5,221)
(399) 2,793
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 Balance -
Balance -
beginning
end of
of the year
Additions
Disposals
the year
3,195
204
(1,150)
2,249
604
5,173
(5,359)
418
736
156
(156)
736
90
29
(22)
97
4,625
5,562
(6,687)
3,500
Assets transferred for settlement of debts Immovable assets External appraiser Movable assets Assets from purchase by bid on the open market Immovable assets External appraiser Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
(532) 4,093
(940) 4,622
1,084 (5,603)
(388) 3,112
215
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2017 Balance -
Balance -
beginning
end Additions
Disposals
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
of the year
of the year
Assets transferred for settlement of debts Immovable assets External appraiser Movable assets Assets from purchase by bid on the open market Immovable assets External appraiser Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
(313)
(417) 4,430
1,444
414
(316)
(4,407)
1,467
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Balance -
Balance -
beginning
end
of the year
Additions
Disposals
1,112
34
(244)
902
483
4,635
(4,789)
329
464
70
(105)
429
90
29
(22)
97
2,149
4,768
(5,160)
1,757
of the year
Assets transferred for settlement of debts Immovable assets External appraiser Movable assets Assets from purchase by bid on the open market Immovable assets External appraiser Non-used branches External appraiser Total properties foreclosed Less: Allowance for impairment Properties foreclosed - net
(312) 1,837
(681) 4,087
680 (4,480)
(313) 1,444
216
ANNUAL REPORT 2017
15.
Land, premises and equipment (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
(383)
1 (166)
7,432
72
12
15,879
337
8
71
417
(448)
(13)
(81)
(1,091)
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
Depreciation charged for the years ended 31 December 2016
831
2017
835
217
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 Revaluation basis
Cost basis
Land
Buildings and
Furniture,
Assets
building
fixtures and
under
improvement
equipment
Vehicles
installation
Total
Cost 1 January 2016 Additions Appraisal increase
4,432
2,375
6,884
87
56
13,834
-
15
696
4
137
852
1,606
-
-
-
-
1,606
-
-
-
Appraisal decrease
(14)
-
Transfers/disposals
(50)
(1)
(148)
(19)
(181)
(14) (399)
5,974
2,389
7,432
72
12
15,879
1 January 2016
-
625
5,034
70
-
5,729
Transfers/disposals
-
(302)
(18)
-
(326)
Depreciation for the year
-
119
706
6
-
831
31 December 2016
-
738
5,438
58
-
6,234
68
26
6
-
-
100
(1)
-
-
-
(1)
68
25
6
-
-
99
5,906
1,626
1,988
14
12
9,546
31 December 2016 Accumulated depreciation
(6)
Allowance for impairment 1 January 2016 Decrease during the year 31 December 2016
-
Net book value 31 December 2016
218
ANNUAL REPORT 2017
(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 Additions Transfers/disposals 31 December 2017
5,889
2,211
6,241
14
11
14,366
-
-
313
-
67
380
(388)
(4)
(77)
(958)
(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
Depreciation charged for the years ended 31 December 2016
764
2017
776
219
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Revaluation basis
Cost basis Buildings and
Furniture,
Assets
building
fixtures and
under
Land
improvement
equipment
4,350
2,224
5,624
31
56
12,285
-
-
667
-
106
773
1,603
-
-
-
-
1,603
-
-
-
-
Vehicles
installation
Total
Cost 1 January 2016 Additions Appraisal increase Appraisal decrease
(14)
Transfers/disposals
(50)
31 December 2016
(13)
(50)
(17)
(151)
(14) (281)
5,889
2,211
6,241
14
11
14,366
1 January 2016
-
581
3,909
26
-
4,516
Transfers/disposals
-
(197)
(16)
-
(215)
Depreciation for the year
-
111
652
1
-
764
31 December 2016
-
690
4,364
11
-
5,065
1 January 2016
-
-
5
-
-
5
31 December 2016
-
-
5
-
-
5
5,889
1,521
1,872
3
11
9,296
Accumulated depreciation
(2)
Allowance for impairment
Net book value 31 December 2016
As at 31 December 2017 and 2016, 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 3,649 million and Baht 3,429 million, respectively (separate financial statements: Baht 3,247 million and Baht 3,007 million, respectively). As at 31 December 2017, the Bank and its subsidiaries have no vehicles acquired under financial lease agreements (2016: net book value of vehicles acquired under financial lease agreements in the consolidated and separate financial statements were Baht 4 million and Baht 3 million, respectively).
220
ANNUAL REPORT 2017
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 2017 and 2016 would have been as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017 Land
4,088
2017
4,326
2016
4,074
4,312
Assumptions used in the valuation are summarised below. Result to fair value
Price per square wah (Baht)
Consolidated financial
Separate
where as an increase
statements
financial statements
in assumption value
6,300 - 1,000,000
8,000 - 1,000,000
Increase in fair value
Surplus on revaluation of assets Movements in surplus on revaluation of assets arising from revaluation of land of the Bank and its subsidiaries during the years ended 31 December 2017 and 2016 are summarised below. (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017 Balance - beginning of the year Increase during the year Transfer out during the year Balance - end of the year
2017
2016
1,601
-
1,598
-
-
1,606
-
1,603
(57) 1,544
(5) 1,601
(57) 1,541
(5) 1,598
Surplus on revaluation of assets can neither be offset against deficit nor used for dividend distribution.
221
THANACHART BANK PUBLIC COMPANY LIMITED
16.
Intangible assets (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
-
2.25
0 - 9.99
-
-
(3)
Accumulated amortisation
(3)
(3)
Allowance for impairment
Net book value 31 December 2017 Remaining amortisation period (years)
Amortisation expenses for the years ended 31 December 2016
738
2017
707
222
ANNUAL REPORT 2017
(Unit: Million Baht) Consolidated financial statements For the year ended 31 December 2016 Membership fees for
Goodwill
Intangible
Thailand
Computer
assets from
Futures
software
business
Computer
Exchange
under
combination
software
and others
development
Total
Cost 1 January 2016
17,951
4,100
2,382
8
270
24,711
Additions
-
-
180
-
279
459
Transfers/disposals
-
-
239
-
(373)
(134)
31 December 2016
17,951
4,100
2,801
8
176
25,036
1 January 2016
-
2,589
1,112
7
-
3,708
Transfers/disposals
-
-
(89)
-
-
(89)
Amortisation for the year
-
451
287
-
-
738
31 December 2016
-
3,040
1,310
7
-
4,357
1 January 2016
-
-
49
-
-
49
Decrease during the year
-
-
(19)
-
-
(19)
31 December 2016
-
-
30
-
-
30
17,951
1,060
1,461
1
176
20,649
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2016
223
THANACHART BANK PUBLIC COMPANY LIMITED
(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
-
2.25
0 - 9.97
-
-
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2017 Remaining amortisation period (years)
Amortisation expenses for the years ended 31 December 2016
720
2017
685
224
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements For the year ended 31 December 2016 Intangible assets from
Goodwill
Computer
business
Computer
software under
combination
software
development
Total
Cost 1 January 2016
17,941
3,613
2,080
265
23,899
Additions
-
-
161
261
422
Transfers/disposals
-
-
274
(350)
(76)
31 December 2016
17,941
3,613
2,515
176
24,245
1 January 2016
-
2,102
891
-
2,993
Transfers/disposals
-
-
(32)
-
(32)
Amortisation for the year
-
451
269
-
720
31 December 2016
-
2,553
1,128
-
3,681
1 January 2016
-
-
49
-
49
Decrease during the year
-
-
(19)
-
(19)
31 December 2016
-
-
30
-
30
17,941
1,060
1,357
176
20,534
Accumulated amortisation
Allowance for impairment
Net book value 31 December 2016
As at 31 December 2017 and 2016, 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 338 million and Baht 174 million, respectively (separate financial statements: Baht 268 million and Baht 88 million, respectively).
225
THANACHART BANK PUBLIC COMPANY LIMITED
Goodwill The Bank and its subsidiaries allocated goodwill acquired through business combinations to the cash generating unit (CGU) for annual impairment testing, on the assumption that the CGU is the consolidated financial statements of the Bank and its subsidiaries. The recoverable amount of the CGU have been determined based on value in use calculation using cash flow projections for the consolidated operating results of the Bank and its subsidiaries covering a five-year period. Key assumptions used in value in use calculation are summarised below: Rate (Percentage) Terminal growth rate Discount rate
4 11
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.
226
ANNUAL REPORT 2017
17.
Deferred tax assets/ liabilities and income tax
17.1 Deferred tax assets/ liabilities As at 31 December 2017 and 2016, deferred tax assets and liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2017
Deferred tax assets Deferred tax liabilities Net
Separate financial statements
2016
713
2017
791
2016
-
-
(1,056)
(868)
(939)
(799)
(343)
(77)
(939)
(799)
The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Million Baht) Consolidated financial statements 2017
2016
Deferred tax assets Non-accrued interest income
67
64
1,225
929
Employee benefits
534
480
Provisions
188
231
82
100
Fees income received in advance
363
369
Late payment fee income
175
178
Insurance contract liabilities
295
306
Others
341
482
3,270
3,139
(1,108)
(1,104)
(1,685)
(1,379)
Intangible assets
(135)
(212)
Others
(685)
(521)
(3,613)
(3,216)
(343)
(77)
Allowance for doubtful accounts - general provision/other assets
Accrued expenses
Deferred tax assets Deferred tax liabilities Assets transferred as a result of business combination Deferred commission fee and direct expenses charged on hire purchase
Deferred tax liabilities Net
227
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017
2016
Deferred tax assets Non-accrued interest income
67
64
Allowance for doubtful accounts - general provision/other assets
787
513
Employee benefits
486
437
Provisions
188
231
65
82
Fees income received in advance
363
369
Late payment fee income
175
178
Others
173
264
2,304
2,138
(1,108)
(1,104)
(1,583)
(1,294)
Intangible assets
(135)
(212)
Others
(417)
(327)
(3,243)
(2,937)
(939)
(799)
Accrued expenses
Deferred tax assets Deferred tax liabilities Assets transferred as a result of business combination Deferred commission fee and direct expenses charged on hire purchase
Deferred tax liabilities Net
As at 31 December 2017, the Bank has tax losses totaling Baht 4,742 million arising from investment in a subsidiary company that has already completed the liquidation process, which will expire by 2020. The Bank has not recognised deferred tax assets in respect of these losses because management’s assessment is that there is uncertainty regarding their future benefit.
228
ANNUAL REPORT 2017
17.2 Income tax Income tax expenses for the years ended 31 December 2017 and 2016 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2017
2016
2016
Current income tax: Corporate income tax charge
864
825
-
-
4
2
-
-
64
(136)
11
(105)
932
691
11
(105)
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 (income)
The Bank has no income tax expenses for the year ended 31 December 2017 because it has unused tax losses resulting from the liquidation of a subsidiary company. The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2017 and 2016 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2017
2016
2016
Deferred tax relating to surplus on revaluation of assets
-
321
-
321
Deferred tax relating to gain (loss) on changes in value of available-for-sale investments
238
(291)
175
(288)
Deferred tax relating to actuarial gain (loss) on defined benefit plan
(47)
3
(46)
(3)
7
35
-
-
198
68
129
30
Deferred tax relating to share of other comprehensive income of associated company
229
THANACHART BANK PUBLIC COMPANY LIMITED
Reconciliations between income tax expenses and the product of accounting profit multiplied by the applicable tax rates for the years ended 31 December 2017 and 2016 are as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017 Accounting profit before tax Applicable tax rate
2016
2017
2016
15,301
13,530
13,147
11,857
20%
20%
20%
20%
3,060
2,706
2,629
2,371
4
2
-
-
Accounting profit before tax multiplied by applicable tax rate Adjustment in respect of income tax from previous year Effects of non-taxable revenue and non-deductible expenses - net
(2,017)
(2,132)
(2,618)
(2,476)
Income tax expenses reported in statements of comprehensive income (income)
18.
691
932
11
(105)
Other assets (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017 Accrued premium insurance income
2016
2017
2016
275
254
-
-
1,397
1,191
981
804
Accrued interest and dividend income receivables
651
892
626
870
VAT refundable
690
297
521
259
Prepaid leasehold rights
107
162
107
162
248
255
197
205
Deposits
246
271
249
274
Estimated insurance claims recoveries
248
230
-
-
Receivable from clearing house
343
1,332
-
-
Prepaid expenses
438
373
137
92
Deposits from derivative contracts
525
1,034
525
1,034
Reinsurance assets
405
200
-
-
Others
2,058
1,782
1,719
1,515
Total
7,631
8,273
5,062
5,215
Other receivables
Other receivables - VAT paid in advance for customers
Less: Allowance for impairment Other assets - net
(390) 7,241
(355) 7,918
(323) 4,739
(297) 4,918
230
ANNUAL REPORT 2017
19.
Deposits
19.1 Classified by type of deposits (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017
2017
2016
Current
11,961
11,427
12,039
11,471
Saving
295,567
296,978
296,481
297,417
Certificates of deposit
142,505
125,493
142,505
125,493
- Less than 6 months
36,529
39,442
36,965
39,942
- 6 months and up to 1 year
63,772
93,129
63,852
93,129
165,944
110,088
165,965
110,355
716,278
676,557
717,807
677,807
Fixed deposits
- Over 1 year Total deposits
19.2 Classified by currency and country (Unit: Million Baht) Consolidated financial statements 2017 Domestic Baht US Dollar Other currencies Total
2016
Foreign
Total
Domestic
Foreign
Total
714,538
1
714,539
675,363
1
675,364
1,523
31
1,554
837
30
867
182
3
185
317
9
326
716,243
35
716,278
676,517
40
676,557
(Unit: Million Baht) Separate financial statements 2017 Domestic Baht US Dollar Other currencies Total
2016
Foreign
Total
Domestic
Foreign
Total
716,067
1
716,068
676,613
1
676,614
1,523
31
1,554
837
30
867
182
3
185
317
9
326
717,772
35
717,807
677,767
40
677,807
231
THANACHART BANK PUBLIC COMPANY LIMITED
20.
Interbank and money market items (liabilities) (Unit: Million Baht) Consolidated financial statements 2017 At call
2016
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
418
372
790
416
2,779
3,195
1,929
21,596
23,525
649
17,478
18,127
47
12,525
12,572
47
3,724
3,771
Other financial institutions
15,472
12,077
27,549
10,813
9,922
20,735
Total domestic items
17,866
46,570
64,436
11,925
33,903
45,828
274
15,263
15,537
118
15,766
15,884
Euro
1
-
1
1
-
1
Baht
2,221
229
2,450
3,610
511
4,121
Total foreign items
2,496
15,492
17,988
3,729
16,277
20,006
20,362
62,062
82,424
15,654
50,180
65,834
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
(Unit: Million Baht) Separate financial statements 2016
2017 At call
Term
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
418
372
790
416
2,779
3,195
203
10,850
11,053
183
8,359
8,542
47
12,025
12,072
47
3,424
3,471
Other financial institutions
15,638
12,268
27,906
11,020
9,922
20,942
Total domestic items
16,306
35,515
51,821
11,666
24,484
36,150
274
15,263
15,537
118
15,766
15,884
Euro
1
-
1
1
-
1
Baht
2,221
229
2,450
3,610
511
4,121
Total foreign items
2,496
15,492
17,988
3,729
16,277
20,006
18,802
51,007
69,809
15,395
40,761
56,156
Commercial banks Specialised financial institutions
Foreign US Dollar
Total
232
ANNUAL REPORT 2017
As at 31 December 2017, interbank and money market items in the consolidated financial statements included loans of a subsidiary company amounting to Baht 2,550 million, consisting of (i) a loan of Baht 800 million, repayable in full within 3 years from the date of the loan drawdown and since April 2015, the term of repayment has been extended to repayable within 75 months from the date of the loan drawdown and carrying interest at a fixed rate per annum, payable monthly, (ii) a loan of Baht 200 million, repayable in full within 3 years from the date of the loan drawdown, and carrying interest at a fixed rate per annum, payable quarterly, and (iii) a loan of Baht 1,550 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 (2016: included loans of a subsidiary company amounting to Baht 1,750 million).
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Unsubordinated debentures
Short-term debentures
Structured notes
7
8
9
10
11
12
13
14
15
16
17
Total debt issued and borrowings
Energy Development and Efficiency
Borrowings - Department of Alternative
Unsubordinated debentures
6
20
Unsubordinated debentures
5
Promissory notes
Unsubordinated debentures
4
Promissory notes
Subordinated instruments issued under Tier II
3
18
Subordinated instruments issued under Tier II
2
19
Subordinated debentures issued under Tier II
1
Type of borrowings
Year 2017
Year 2017
Year 2017
Year 2016
Year 2016
Year 2016
Year 2015
Year 2015
Year 2014
Year 2014
Year 2013
Year 2013
Year 2015
Year 2014
Year 2012
period
Issue
Year 2017
Year 2019 - 2020
At call
Year 2018
Year 2017
Year 2020
Year 2020
Year 2019
Year 2019
Year 2019
Year 2017
Year 2018
Year 2017
Year 2018
Year 2017
Year 2017
Year 2017
Year 2025
Year 2024
Year 2022
Maturity
Year of
0.50
2.90 - 3.30
0.20 - 2.50
1.00
1.65
2.58
2.39 - 2.88
2.52
2.95 - 3.00
2.70 - 3.00
2.60
3.00 - 3.10
3.35
4.75
4.10 - 4.25
4.76
4.70 - 4.80
4.65
6.00
4.70
per annum)
(Percent
Interest rate
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
1,000
1,000
(Baht)
per unit
Face value
70
10,060
2,000
1,735
1,700
-
1,100
-
2,000
-
-
-
7,000
13,000
-
-
-
-
1,735
1,700
770
1,100
200
2,000
940
760
5,000
7,000
13,000
12,516
(Thousand units) (Thousand units)
2016
Issuance unit 2017
-
1 49,409
39,308
189
748
50
2,000
-
-
-
1,735
1,400
770
1,100
200
2,000
940
760
5,000
7,000
13,000
12,516
2016
-
239
392
393
-
70
9,979
2,000
1,735
1,400
-
1,100
-
2,000
-
-
-
7,000
13,000
2017
financial statements
Consolidated
As at 31 December 2017 and 2016, the balance of domestic debt issued and borrowings, stated in Baht, are as follows:
Debt issued and borrowings
Instrument
21.
(Unit: Million Baht)
-
20,005
-
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,000
13,000
2017
34,522
1
-
5
-
2,000
-
-
-
-
-
-
-
-
-
-
-
-
7,000
13,000
12,516
2016
financial statements
Separate
THANACHART BANK PUBLIC COMPANY LIMITED
233
234
ANNUAL REPORT 2017
Instruments 1) are name-registered subordinated, unsecured debentures with debenture holders’ representative, paying interest quarterly. The Bank has a call option to early redeem these debentures at par if the conditions specified are met.
The Bank early
redeemed these debentures in the fourth quarter of 2017. Instruments 2) and 3) 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 4) and 7) 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 5) - 6) and 8) - 11) and 13) - 14) are name-registered, unsubordinated, unsecured debentures with no debenture holders’ representative, paying interest semiannually. 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 12) and 15) 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 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
167
Others
411
Total
3,638
235
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Consolidated financial statements 2016 Obligations from Loss from
Employee
off-balance
litigation
benefits
items
336
2,118
447
393
3,294
64
411
13
658
1,146
Utilised
(20)
(106)
(13)
(230)
(369)
Reversal of provisions
(15)
(13)
(464)
(492)
Balance as at 31 December 2016
365
434
357
Balance as at 1 January 2016 Increase during the year
2,423
Others
Total
3,579
(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
(8) 361
2,430
167
411
3,369
(Unit: Million Baht) Separate financial statements 2016 Obligations from
Balance as at 1 January 2016
Loss from
Employee
off-balance
litigation
benefits
items
336
1,871
Others
447
393
-
-
Total 3,047
Employee benefits for staff transferred to subsidiary Increase during the year
-
(1)
(1)
64
417
13
658
Utilised
(20)
(102)
(13)
(230)
(365)
Reversal of provisions
(15)
(13)
(464)
(492)
Balance as at 31 December 2016
365
434
357
2,185
1,152
3,341
236
ANNUAL REPORT 2017
Long-term employee benefits Provision for long-term employee benefits, which are compensations on employees’ retirement, was as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017
2017
2016
Defined benefit obligation at the beginning of the year
2,152
2,085
1,914
1,838
-
-
1
145
150
122
125
72
69
64
60
(198)
(89)
(195)
(77)
- Demographic assumptions changes
95
25
98
47
- Financial assumptions changes
95
(66)
83
(59)
- Experience adjustments
46
25
47
24
(70)
(47)
(66)
(43)
Employee benefits for staff transferred to/from related companies
(1)
Included in profit or loss: Current service cost Interest cost Past service cost and gains or losses arising from the payment of benefits Included in other comprehensive income: Actuarial (gain) loss arising from
Benefits paid Defined benefit obligation at the end of the year
2,337
2,152
2,068
1,914
As at 31 December 2017 and 2016, the Bank and its subsidiaries expect to pay Baht 55 million and Baht 69 million, respectively, in long-term employee benefits during the next one year (separate financial statements: Baht 45 million and Baht 65 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
2017
2016
2017
2016
Discount rate
2.71 - 3.13
2.71 - 3.51
3.11
3.51
Future salary increase rate
5.00 - 5.98
5.00 - 6.39
5.00
5.00
Average staff turnover rate
0.00 - 42.86
0.00 - 100
0.00 - 26.10
0.20 - 28.22
(depending on age)
237
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 2017 and 2016 are summarised below: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Decrease 0.25%
62
55
55
49
Future salary increase rate
Increase 0.25%
60
54
53
48
Average staff turnover rate
Decrease 0.25%
55
55
49
50
Change
Discount rate
(depending on age)
As at 31 December 2017 and 2016, the weighted average durations of the liabilities for longterm employee benefit obligation of the Bank and its subsidiaries are 11, 14, 16, and 20 years and 10, 15, 16 and 20 years, respectively (separate financial statements: 16 years and 16 years, respectively). 23.
Insurance contract liabilities (Unit: Million Baht) 2016
2017 Insurance
Insurance
contract
Reinsurance
liabilities
assets
Net
contract
Reinsurance
liabilities
assets
Net
Loss reserves and outstanding claims
1,684
(132)
1,552
1,558
(159)
1,399
Premium reserves
3,791
(273)
3,518
3,379
(41)
3,338
Total
5,475
(405)
5,070
4,937
(200)
4,737
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.
238
ANNUAL REPORT 2017
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) 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 expense
+ 2%
13
13
(13)
(10)
Loss adjustment expense
- 2%
(13)
(13)
13
10
(Unit: Million Baht) 2016 Increase/
Increase/
Change in
Change in
Change in net
(decrease) on
(decrease) on
assumption
gross liabilities
liabilities
profit before tax
equity
Ultimate loss ratio
+ 2%
146
145
(145)
(116)
Ultimate loss ratio
- 2%
(141)
(140)
140
112
Loss adjustment expense
+ 2%
11
11
(11)
(9)
Loss adjustment expense
- 2%
(11)
(11)
11
9
23.1 Loss reserve and outstanding claims (Unit: Million Baht) Consolidated financial statements 2017
2016
Balance - beginning of the year
1,558
1,707
Claims expenses for the year
3,862
3,159
152
186
Change in loss reserve and outstanding in claim and assumption Claims expenses paid during the year Balance - end of the year
(3,888) 1,684
(3,494) 1,558
239
THANACHART BANK PUBLIC COMPANY LIMITED
23.2 Unearned premium reserve (Unit: Million Baht) Consolidated financial statements 2016
2017 Balance - beginning of the year
3,379
3,086
Premium written for the year
7,506
6,421
Premium earned for the current year
(7,094)
Balance - end of the year
(6,128)
3,791
3,379
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
Separate
financial statements
financial statements
2017
2016
2017
2016
Other payables
1,837
1,313
1,611
1,074
Suspense cash received from account receivables
1,959
345
1,857
258
Insurance premium payable
303
250
261
266
Income received in advance
1,830
1,875
1,795
1,828
390
381
-
-
3,964
2,601
836
953
10,283
6,765
6,360
4,379
Corporate income tax payable Others Total other liabilities
240
ANNUAL REPORT 2017
25.
Other components of equity (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2017
2016
2016
Surplus from business combination under common control Surplus on revaluation of assets Less: The effect of deferred tax liabilities
(123) 1,544 (309)
(123)
-
-
1,601
1,540
1,598
(320)
(308)
(320)
1,235
1,281
1,232
1,278
Debt instruments
603
530
576
504
Equity instruments
871
725
174
123
1,474
1,255
750
627
Net surplus on revaluation of assets Revaluation surplus (deficit) on investments Revaluation surplus on investments Available-for-sale investments
Total Revaluation deficit on investments Available-for-sale investments Debt instruments
(112)
(814)
(109)
(776)
Equity instruments
(303)
(547)
(180)
(264)
(415)
(1,361)
(289)
(1,040)
Total Total revaluation surplus (deficit) on investments Add (less): The effect of deferred tax liabilities Net revaluation surplus on investments
1,059
(106)
461
(413)
(197)
41
(92)
83
862
(65)
369
(330)
590
514
-
-
(59)
(51)
-
-
531
463
-
-
41
-
-
-
(4)
-
-
-
37
-
-
-
2,542
1,556
1,601
948
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
241
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 17 August 2017, the Bank’s Board of Director passed a resolution to allocate Baht 334 million of net income to statutory reserve, and on 31 December 2017, the Bank additional allocated Baht 323 million of net income for the year 2017 to the statutory reserve, a total of Baht 657 million (2016: Baht 598 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 2017 and 2016, capital funds of the Bank calculated in accordance with the BOT’s regulation regarding “Elements of Capital Funds’ for Commercial Bank Incorporate in Thailand”, consist of the following: (Unit: Million Baht) 2016
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
3,936
3,315
49,600
42,837
1,164
1,272
Retained earnings - unappropriated Other components of equity - Revaluation surplus on land - net Other components of equity - Revaluation deficit on investments in equity securities - net
(5)
(113)
Other components of equity - Revaluation surplus (deficit) on investments in debt securities - net
299
(131)
117,744
109,930
(17,941)
(17,941)
Less: intangible assets
(1,594)
(1,428)
Total Common Equity Tier I capital
98,209
90,561
Total Tier I capital
98,209
90,561
7,318
7,596
Subordinated debentures
20,000
32,516
Total Tier II capital
27,318
40,112
Total capital funds
125,527
130,673
Less: goodwill
Tier II capital Reserve for assets classified as normal
242
ANNUAL REPORT 2017
On 17 August 2017, the Bank’s Board of Director passed a resolution approving the allocation of Baht 334 million from net income for the six-month period ended 30 June 2017 to the statutory reserve. The remaining net income of Baht 3,922 million was allocated as capital funds of the Bank. As at 31 December 2017 and 2016, 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: 2017
2016 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)
18.94
9.75
19.15
9.125
14.81
5.75
13.27
5.125
14.81
7.25
13.27
6.625
Total Common Equity Tier I to risk-weighted assets (percent) Total Tier I to risk-weighted assets (percent)
The Bank disclosed qualitative and quantitative information regarding capital maintenance as at 31 December 2017 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 2018. 28.
Dividends During the years ended 31 December 2017 and 2016, the Bank has dividends payments as follow: Dividends
Interim dividends on net income for the first half of the year 2017 Dividends on net income for the year 2016
Approved by
the first half of the year 2016 Dividends on net income for the year 2015 Total
Dividend per share
Million Baht
Baht
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 Interim dividends on net income for
Total dividends
4,852 The Board of Directors of the Bank on 18 August 2016
2,123
0.35
2,426
0.40
Annual General Meeting of the Shareholders on 5 April 2016
4,549
243
THANACHART BANK PUBLIC COMPANY LIMITED
29.
Interest income Interest income for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht)
Interbank and money market items
Consolidated
Separate
financial statements
financial statements
2017
2017
2016
1,365
1,307
1,378
1,279
25
30
26
30
3,143
3,504
3,031
3,392
Loans to customers
17,759
18,337
17,425
17,852
Hire purchase and financial lease
22,074
21,708
19,422
19,290
Total interest income
44,366
44,886
41,282
41,843
Investments and trading transactions Investments in debt securities
30.
2016
Interest expenses Interest expenses for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017 Deposits Interbank and money market items
2017
2016
8,699
9,526
8,710
9,539
792
741
593
558
3,348
3,326
3,348
3,326
369
590
369
590
617
842
18
173
1,106
1,109
1,106
1,109
18
35
-
-
7
5
-
-
14,956
16,174
14,144
15,295
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
244
ANNUAL REPORT 2017
31.
Fees and service income Fees and service income for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2017
2016
2016
Fees and service income Acceptance, aval and guarantees
202
238
202
239
1,323
1,599
-
-
886
922
886
922
Hire purchase fee income
1,547
1,575
1,396
1,428
Insurance brokerage fee income
1,851
1,448
2,107
1,673
Management fees
1,024
833
-
-
Credit card fee
1,065
907
1,066
908
Others
1,202
1,292
1,215
1,254
9,100
8,814
6,872
6,424
Fees and service expenses
(3,203)
(2,910)
(2,929)
(2,643)
Net fees and service income
5,897
5,904
3,943
3,781
Brokerage fee from securities/derivatives ATM and electronic banking services
Total fees and service income
32.
Gains on trading and foreign exchange transactions Gains on trading and foreign exchange transactions for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Foreign exchange and derivatives contract relating to foreign exchange
277
400
277
416
Derivatives contract relating to interest rate
64
5
64
5
Debt securities
94
14
94
14
Equity securities
(51)
(11)
-
-
Others
164
83
-
-
Total
548
491
435
435
245
THANACHART BANK PUBLIC COMPANY LIMITED
33.
Gains on investments Gains on investments for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
823
709
768
611
23
3
23
3
202
-
177
-
65
2
65
2
1,033
616
Gains on disposal Available-for-sale securities General investments Investments in associated company Reversal of losses on impairment General investments Total
34.
1,113
714
Insurance premium income Insurance premium income for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2017 Gross premium written Less: Premium ceded to reinsurers Net insurance premium income Less: Unearned premium reserve increase from prior year Total
7,483 (459) 7,024 (181) 6,843
2016 6,412 (103) 6,309 (273) 6,036
246
ANNUAL REPORT 2017
35.
Insurance expenses Insurance expenses for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated financial statements 2017 Gross claim and loss adjustment expenses
2016
3,658
3,027
Less: Claims recovery from reinsurers
(56)
(32)
Commissions and brokerage expenses
219
180
(132)
(30)
226
202
3,915
3,347
Less: Refundable commission and brokerage expenses from reinsurers Other underwriting expenses Total
36.
Directors’ remuneration Directors’ remuneration represents the benefits paid to the directors of the Bank and public subsidiary companies in accordance with Section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits payable to directors who hold executive positions but including the payment of remuneration amounting to Baht 25 million (separate financial statements: Baht 22 million) to the Bank’s and its subsidiaries’ directors, which were approved by the Annual General Meeting of Shareholders of the Bank and its subsidiaries.
37.
Impairment losses of loans and debt securities Impairment losses of loans and debt securities for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Impairment losses of loans Loans to customers Interbank and money market items
6,223
6,243
5,912
5,784
22
10
24
26
(1)
(2)
(1)
(2)
Amortisation of revaluation allowance for debts restructured during the year Total
6,244
6,251
5,935
5,808
247
THANACHART BANK PUBLIC COMPANY LIMITED
38.
Components of other comprehensive income Components of other comprehensive income for the years ended 31 December 2017 and 2016 consisted of the following: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017
2017
2016
2016
Other comprehensive income Transactions that will be reclassified subsequently to profit or loss Available-for-sale securities: Unrealised gains (losses) during the year
1,987
(745)
1,642
(828)
(709)
(768)
(611)
(1,454)
874
(1,439)
Less: Reclassification of adjustment for the realised gains that included in profit or loss
(823) 1,164
Share of other comprehensive income of the associate Other comprehensive income for the year (loss)
76 1,240
153 (1,301)
874
(1,439)
Impact from related income tax Income tax - (gains) losses on changes in value of available-for-sale securities
(238)
291
(175)
288
-
-
(175)
288
Income tax - share of other comprehensive income of the associate Impact from related income tax
(7) (245) 995
(15) 276 (1,025)
699
(1,151)
Transactions that will never be reclassified subsequently to profit or loss Surplus on revaluation of assets
-
1,606
-
1,603
Share of other comprehensive income of the associate
-
199
-
-
Actuarial gains (losses) on defined benefit plan
(236)
16
(228)
Other comprehensive income for the year (loss)
(236)
1,821
(228)
(12) 1,591
Impact from related income tax Income tax - surplus on revaluation of assets
-
(321)
-
(321)
-
(20)
-
-
47
(3)
46
3
47
(344)
46
Income tax - share of other comprehensive income of the associate Income tax - actuarial (gains) losses on defined benefit plan Impact from related income tax
(189)
(318)
1,477
(182)
1,273
452
517
122
Other comprehensive income for the year - net of related income tax
806
248
ANNUAL REPORT 2017
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
2017
2016
2017
2016
13,810
12,434
13,135
11,962
2.28
2.05
2.17
1.97
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 2017, the Bank and its subsidiaries contributed Baht 417 million to the fund (separate financial statements: Baht 359 million) (2016: Baht 426 million in the consolidated financial statements and Baht 370 million in the separate financial statements).
249
THANACHART BANK PUBLIC COMPANY LIMITED
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. (Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2017
2016
2017
Transfer pricing policy (For the year 2017)
2016
Transactions occurred during the years Parent company Purchase of debt securities
266
-
266
-
At market price
Sales of debt securities
697
2,019
697
2,019
At market price
6
7
6
7
Income on supporting service
At the rate agreed under the service contract
Other income
2
1
-
-
Rental expenses
5
5
5
5
At the rate agreed under the rental contract
Other expenses
39
38
39
38
2,473
2,318
2,473
2,318
As declared
Purchase of debt securities
-
-
5,376
2,990
At market price
Sales of debt securities
-
-
6,964
3,480
At market price
(Related gain (loss))
-
-
1
-
-
8
993
At market price
-
-
202
122
At interest rate of 1.47 - 2.20 and 7.43
Dividend payment Subsidiary companies
(1)
Purchase/sales of forward exchange contracts Interest income
percent per annum Dividend income
-
-
2,485
2,490
Fee and service income
-
-
1,078
866
As declared At the rate agreed under the service contract
Income on supporting service
-
-
228
277
At the rate agreed under the service contract
Other income
-
-
35
20
Interest expenses
-
-
89
87
At interest rate of 0.13 - 1.70 percent per annum
Other expenses
-
-
171
189
250
ANNUAL REPORT 2017
(Unit: Million Baht) For the years ended 31 December Consolidated
Separate
financial statements
financial statements
2017
2016
2017
2016
Transfer pricing policy (For the year 2017)
Transactions occurred during the years (continued) Associated company Dividend income
-
-
51
51
Other income
1
6
-
-
Interest expenses
-
1
-
1
106
112
77
83
Rental expenses
As declared
At the rate agreed under the rental contract
Other expenses
10
3
7
1
Purchase of debt securities
10,328
2,182
10,328
2,182
At market price
Sales of debt securities
10,871
6,078
10,871
5,979
At market price
2
1
2
1
58,439
106,563
58,431
105,505
215
272
215
272
Related parties
(Related gain) Purchase/sales of forward exchange contracts Interest income
At market price At interest rate of 0.66 - 4.76, 6.14 - 6.65 and 7.28 - 7.68 percent per annum
Dividend income Fee and service income
43
94
21
55
3
4
3
4
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
6
3
-
-
228
165
228
165
At interest rate of 0.05 - 1.65 percent per annum
Rental expenses
177
135
105
71
At the rate agreed under the rental contract
Insurance expense
4
22
-
-
At the rate agreed under the service contract
Other expense Dividend payment
47
49
31
33
2,377
2,229
2,377
2,229
As declared
251
THANACHART BANK PUBLIC COMPANY LIMITED
The outstanding balances of the above transactions during the years ended 31 December 2017 and 2016 have been shown at the average balance at the end of each month as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017
2017
2016
Parent company Loans to customers
-
1
-
-
129
79
129
79
Interbank and money market items (assets)
-
-
2,831
1,850
Loans to customers
-
-
1,467
1,404
Deposits
-
-
1,329
1,275
Interbank and money market items (liabilities)
-
-
305
129
75
135
75
135
213
286
213
286
Loans to customers
6,360
8,394
5,941
8,055
Deposits
1,695
1,586
1,695
1,586
13,782
14,415
13,782
14,415
470
481
470
481
Deposits 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 2017 and 2016, the significant outstanding balances of the above transactions are as follows: (Unit: Million Baht) Consolidated financial statements 2017 Liabilities
Assets Loans to
Interbank
Interbank
and money
Investments
customers
market
- debt
and interest
Other
items
securities
receivables
assets
Deposits
and money
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
-
1
24
-
-
-
-
-
-
-
26
56
-
-
2
-
301
591
5,838
41
1,643
13,220
470
94
698
301
591
5,838
68
1,723
13,220
470
96
698
Associated company MBK Plc. Related companies Other related companies
252
ANNUAL REPORT 2017
(Unit: Million Baht) Consolidated financial statements 2016 Liabilities
Assets Loans to
Interbank
and money
Investments
customers
and money
Debt
market
- debt
and interest
Other
market
issued and
Other
items
securities
receivables
assets
items
borrowings
liabilities
Interbank
Deposits
Commitments
Parent company Thanachart Capital Plc.
-
-
1
2
32
-
-
-
-
-
-
-
32
135
-
-
-
-
250
1,463
9,395
45
1,576
14,537
470
39
1,166
250
1,463
9,396
79
1,743
14,537
470
39
1,166
Associated company MBK Plc. Related companies Other related companies
(Unit: Million Baht) Separate financial statements 2017 Assets Interbank
Liabilities
Loans to
Interbank
Investments
customers
and money
market
- debt
and interest
Other
items
securities
receivables
assets
and money
Deposits
Debt issued
market
and
Other
items
borrowings
liabilities
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
-
-
-
-
-
-
-
-
586
-
-
1
-
Ratchthani Leasing Plc.
-
31
1,570
-
134
-
-
-
30
Other subsidiary companies
-
-
-
82
117
54
-
10
-
-
-
-
18
56
-
-
1
-
301
591
5,497
20
1,643
13,220
470
66
698
3,021
622
7,067
243
3,266
13,585
470
221
1,278
Subsidiary companies Thanachart Group Leasing Co., Ltd.
TS Asset Management Co., Ltd.
Associated company MBK Plc. Related companies Other related companies
253
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2016 Assets Interbank
Liabilities
Loans to
Interbank
Investments
customers
and money
market
- debt
and interest
Other
items
securities
receivables
assets
and money
Deposits
Debt issued
market
and
Other
items
borrowings
liabilities
Commitments
Parent company Thanachart Capital Plc.
-
-
-
2
32
-
-
-
-
Subsidiary companies Thanachart Group Leasing -
-
-
1
350
-
-
-
-
Thanachart Securities Plc.
Co., Ltd.
2,500
-
-
11
-
166
-
6
670
Thanachart Insurance Plc.
-
-
-
91
339
-
-
179
50
Thanachart Broker Co., Ltd.
-
-
-
11
207
-
-
1
-
TS Asset Management -
-
-
-
191
-
-
-
2
Ratchthani Leasing Plc.
Co., Ltd.
-
1,000
3,180
1
68
-
-
1,000
30
Other subsidiary companies
-
-
-
63
110
45
-
14
-
-
-
-
24
135
-
-
-
-
250
1,463
9,053
31
1,576
14,537
470
25
1,166
2,750
2,463
12,233
235
3,008
14,748
470
1,225
1,918
Associated company MBK Plc. Related companies Other related companies
As at 31 December 2017, the Bank has loans to Ratchthani Leasing Plc. amounting to Baht 1,570 million, carrying interest at rate of 1.85 percent per annum (2016: loans to Ratchthani Leasing Plc. amounting to Baht 3,180 million at interest rates of 1.75, 2.00 and 7.68 percent per annum). As at 31 December 2017, the Bank and its subsidiaries have investments amounting to approximately Baht 947 million (Baht 383 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 (2016: Baht 833 million in the consolidated financial statements, and Baht 350 million in the separate financial statements).
254
ANNUAL REPORT 2017
As at 31 December 2017 and 2016, the Bank and its subsidiaries have the following related parties transactions with executive employees of the Bank and companies within Thanachart Group from management level up, including related persons who together with these employees: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017 Loans to customers Deposits
2016
2017
2016
88
125
79
114
1,527
815
1,527
815
Directors and management’s remuneration During the years 2017 and 2016, the Bank and its subsidiaries paid the following benefits to their key management personnel, including directors, totaled 121 persons and 116 persons, respectively (the separate financial statements: 46 persons and 45 persons, respectively): (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017 Short-term employee benefits Post-employment benefits
2016
2017
2016
656
631
342
323
16
16
8
7
672
647
350
330
255
THANACHART BANK PUBLIC COMPANY LIMITED
42.
Financial information classified by operating segment
42.1 Financial position and results of operations classified by business activity The financial position as at 31 December 2017 and 2016, and the operating results for the years then ended, classified by domestic and foreign operations, are as follows: (Unit: Million Baht) Consolidated financial statements 2017
Total assets
Domestic
Foreign
Operations
operations
Eliminations
Total
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
688,230
-
-
688,230
716,278
-
-
716,278
Interbank and money market items (liabilities)
82,424
23,412
Debt issued and borrowings
39,308
-
Investment in an associated company Loans to customers and accrued interest receivables Deposits
(23,412) -
82,424 39,308
(Unit: Million Baht) Consolidated financial statements 2016
Total assets
Domestic
Foreign
Operations
operations
Eliminations
Total
950,286
21,854
(21,628)
950,512
53,308
15,796
(21,628)
47,476
169,068
6,013
-
175,081
2,253
-
-
2,253
666,909
-
-
666,909
676,557
-
-
676,557
Interbank and money market items (liabilities)
65,834
21,628
Debt issued and borrowings
49,409
-
Interbank and money market items (assets) Investments Investment in an associated company Loans to customers and accrued interest receivables Deposits
(21,628) -
65,834 49,409
256
ANNUAL REPORT 2017
(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
(932) 14,324
(932) 14,369
(Unit: Million Baht) Consolidated financial statements 2016
Interest income
Domestic
Foreign
operations
operations
Eliminations
Total
44,811
292
(217)
44,886
(16,174)
(217)
217
(16,174)
28,637
75
-
28,712
Net fees and service income
5,904
-
-
5,904
Net insurance income
2,689
-
-
2,689
Other operating income
3,060
1
-
3,061
(20,585)
-
-
(20,585)
Impairment losses of loans and debt securities
(6,251)
-
-
(6,251)
Profit before income tax
13,454
76
-
13,530
-
-
76
-
Interest expenses Net interest income
Other operating expenses
Income tax Profit before non-controlling interests
(691) 12,763
(691) 12,839
257
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017 Domestic
Foreign
operations
operations
Total assets
954,144
Interbank and money market items (assets) Investments
Eliminations
Total
23,728
(23,412)
954,460
103,105
14,884
(23,412)
94,577
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
-
(23,412) -
69,809 20,005
(Unit: Million Baht) Separate financial statements 2016 Domestic
Foreign
operations
operations
906,642
Eliminations
Total
21,854
(21,628)
906,868
53,298
15,796
(21,628)
47,466
161,262
6,013
-
167,275
Investments in subsidiary and associated companies
7,359
-
-
7,359
Loans to customers and accrued interest receivables
632,931
-
-
632,931
Deposits
677,807
-
-
677,807
Interbank and money market items (liabilities)
56,156
21,628
Debt issued and borrowings
34,522
-
Total assets Interbank and money market items (assets) Investments
(21,628) -
56,156 34,522
258
ANNUAL REPORT 2017
(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
Eliminations
(26)
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
(Unit: Million Baht) Separate financial statements 2016 Domestic
Foreign
operations
operations
41,768
292
(217)
41,843
(15,295)
(217)
217
(15,295)
26,473
75
-
26,548
Net fees and service income
3,781
-
-
3,781
Other operating income
5,127
1
-
5,128
(17,792)
-
-
(17,792)
Impairment losses of loans and debt securities
(5,808)
-
-
(5,808)
Profit before income tax
11,781
76
-
11,857
105
-
-
105
11,886
76
-
11,962
Interest income Interest expenses Net interest income
Other operating expenses
Income tax Profit for the year
Eliminations
Total
259
THANACHART BANK PUBLIC COMPANY LIMITED
42.2 Financial positions and results of operations classified by business type Identification of the Bank’s operating segments The Bank’s operating segments are identified in accordance with the Bank’s organisation structure, which is determined based on the Bank’s management policies. The three operating segments identified are as follows: 1.
Retail banking segment: This serves individual customers, with related products offering such as deposits, housing loans, hire purchase loans, and credit card services.
2.
Corporate and SME segment: This serves business customers, with related products offering such as short-term and long-term loans, and import and export trade financing.
3.
Treasury, investment and other business segment: These deals with money market and investment transactions, transactions with related companies, staff welfare loans and others.
The accounting policies for segment reporting are the same as those applied by the Bank. The Bank allocates only revenue-generating assets based on the type of business. Assets that do not generate revenue are allocated to other business segment. 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 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:
3,949
(536) 2,144
(1,760) 7,042
Income tax
Profit before non-controlling interest
2,285
2,680
8,802
Profit before income tax
1,664
(1,322)
(802)
(3,811)
Impairment losses of loans and debt securities
4,371
-
129
(1,514)
665
-
4,302
and others
(1,485)
4,609
-
22,707
and SME
Investment
Treasury &
(14,703)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Banking business
1,035
(250)
1,285
-
(1,292)
2,408
-
169
business
Securities
1,051
(251)
1,302
-
(958)
175
1,899
186
business
insurance
Non-life
50
(58)
108
2
(68)
26
-
148
business
management
Asset
For the year ended 31 December 2017
1,226
(298)
1,524
(515)
(888)
1,041
-
1,886
businesses
Other
(2,128)
(64)
(2,064)
204
471
(3,651)
1,029
(117)
Eliminations
14,369
(932)
15,301
(6,244)
(20,437)
9,644
2,928
29,410
Consolidated
(Unit: Million Baht)
ANNUAL REPORT 2017
260
4,334
(711) 2,845
(1,270) 4,783
Income tax 1,018
(244)
1,262
2
(1,376)
2,445
-
191
business
Securities
1,005
(239)
1,244
-
(963)
221
1,795
191
business
insurance
Non-life
482,118 457,713
As at 31 December 2017
As at 31 December 2016
Assets for segment
Retail
212,469
205,354
and SME
Corporate
Banking business
236,686
266,988
and others
Investment
Treasury &
9,935
12,306
business
Securities
12,045
13,452
business
insurance
Non-life
Assets for segment of the Bank and its subsidiaries as at 31 December 2017 and 2016 are as follows:
Profit before non-controlling interest
2,086
3,556
6,053
Profit before income tax
2,248
(868)
167
(5,107)
Impairment losses of loans and debt securities
3,984
-
754
(1,622)
519
-
4,443
and others
(1,573)
4,406
-
21,351
and SME
Investment
Treasury &
(14,597)
Other operating expenses
Other operating income
Net insurance income
Net interest income
Retail
Corporate
Banking business
3,047
2,745
business
management
Asset
99
(49)
148
(16)
(162)
30
-
296
business
management
Asset
For the year ended 31 December 2016
34,296
40,453
businesses
Other
991
(252)
1,243
(490)
(849)
1,035
-
1,547
businesses
Other
12,839
(691)
13,530
(6,251)
(20,585)
8,965
2,689
28,712
Consolidated
(15,679)
(13,859)
Eliminations
950,512
1,009,557
Consolidated
(Unit: Million Baht)
(2,236)
(12)
(2,224)
61
557
(3,675)
894
(61)
Eliminations
(Unit: Million Baht)
THANACHART BANK PUBLIC COMPANY LIMITED
261
262
ANNUAL REPORT 2017
42.3 Major customers During the years 2017 and 2016, 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 2017 and 2016, the Bank and its subsidiaries have the assets, which are subject to restriction, presented at book value as follows: (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2016
2017
2017
2016
Interbank and money market items (assets) Guarantee placed with the registrar
782
650
-
-
3
3
-
-
Guarantee placed with the registrar
18
17
-
-
Placed with court for stay of execution
30
399
6
262
-
166
-
-
24
21
19
19
857
1,256
25
281
Placed with court for stay of execution Investments in securities
Properties foreclosed Immovable assets subject to buyback options or first refusal rights Immovable assets subject to purchase or sell agreements with clients but currently being settled in installments or through transfer of ownership
263
THANACHART BANK PUBLIC COMPANY LIMITED
44.
Commitments and contingent liabilities As at 31 December 2017 and 2016, significant commitments and contingent liabilities consisted of:
44.1 Commitments (Unit: Million Baht) Consolidated
Separate
financial statements
financial statements
2017 Aval to bills
2016
2017
2016
115
629
115
629
2,291
1,188
2,291
1,188
270
637
270
637
1,045
1,479
1,045
1,479
Committed (but not drawn) overdraft
23,832
24,244
23,832
24,244
Others
55,643
55,271
55,604
55,234
83,196
83,448
83,157
83,411
Guarantees of loans Liability under unmatured import bills Letter of credits Other obligations
Total
In addition, the Bank and its subsidiaries have commitments in respect of foreign exchange contracts, cross currency and interest rate swap contracts, interest rate swap contracts, and gold futures contracts, as mentioned in Note 7 to the financial statements. 44.2 As at 31 December 2017, 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
2018
1,777
12
1,683
12
70
2019
1,219
6
1,169
5
-
2020 onward
2,128
6
1,865
5
-
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.
264
ANNUAL REPORT 2017
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 2017, 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, 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 2017, 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.
265
THANACHART BANK PUBLIC COMPANY LIMITED
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 2017, 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 2017, the Bank and its subsidiaries have contingent liabilities amounting to approximately Baht 2,669 million (separate financial statements: Baht 2,530 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.
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 2017, 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).
266
ANNUAL REPORT 2017
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.
267
THANACHART BANK PUBLIC COMPANY LIMITED
As at 31 December 2017 and 2016, financial assets and liabilities classified by types of interest rate are as follows: (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
268
ANNUAL REPORT 2017
(Unit: Million Baht) Consolidated financial statements 2016
Transactions
Floating
Fixed
Non-
Interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
12,077
12,077
734
42,088
4,781
47,603
-
-
3,564
3,564
-
165,746
9,627
175,373
225,312
465,456
139
690,907
Receivables from purchase and sale of securities
-
-
1,126
1,126
Other assets - receivable from clearing house
-
-
1,332
1,332
307,104
363,143
6,310
676,557
13,902
50,629
1,303
65,834
Liability payable on demand
-
-
1,986
1,986
Derivatives liabilities
-
-
4,912
4,912
Debt issued and borrowings
4
49,405
-
49,409
Payables from purchase and sale of securities
-
-
2,366
2,366
Other liabilities - payable to clearing house
-
-
2
2
Interbank and money market items Derivatives assets Investments Loans to customers
(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
269
THANACHART BANK PUBLIC COMPANY LIMITED
(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
(Unit: Million Baht) Separate financial statements 2016
Transactions
Floating
Fixed
Non-
Interest
interest
interest
rate
rate
bearing
Total
Financial assets Cash
-
-
12,072
12,072
674
42,232
4,731
47,637
-
-
3,564
3,564
-
161,796
5,962
167,758
217,259
434,227
128
651,614
307,543
363,910
6,354
677,807
14,079
40,761
1,316
56,156
Liability payable on demand
-
-
1,986
1,986
Derivatives liabilities
-
-
4,912
4,912
Debt issued and borrowings
4
34,518
-
34,522
Payables from purchase and sale of securities
-
-
1,000
1,000
Interbank and money market items Derivatives assets Investments Loans to customers
(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
270
ANNUAL REPORT 2017
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 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
750
79,073
6,963
500
-
87,286
0.35 - 2.11
-
25,260
13,366
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
Investments Loans to customers Financial liabilities Deposits Interbank and money market items Debt issued and borrowings
(Unit: Million Baht) Consolidated financial statements 2016 Weighted
Repricing or maturity date
Transactions
At call
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items
-
41,092
496
500
-
42,088
1.36 - 2.76
Investments
-
3,312
28,043
127,656
6,735
165,746
1.89 - 3.86
2,933
49,589
27,392
242,528
143,014
465,456
5.61 - 7.92
92
98,927
232,934
31,190
-
363,143
1.61
Interbank and money market items
449
28,872
17,046
2,779
1,483
50,629
1.10 - 2.11
Debt issued and borrowings
744
50
9,671
6,424
32,516
49,405
1.00 - 5.00
Loans to customers Financial liabilities Deposits
271
THANACHART BANK PUBLIC COMPANY LIMITED
(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
-
23,738
12,696
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
(Unit: Million Baht) Separate financial statements 2016 Repricing or maturity date
Transactions
At call
Weighted
0-3
3 - 12
1-5
Over 5
months
months
years
years
average Total
interest rates Percent
Financial assets Interbank and money market items
2,500
39,732
-
-
-
42,232
2.69
-
2,791
26,448
126,968
5,589
161,796
1.90
5,520
49,436
25,629
211,008
142,634
434,227
6.30
92
99,583
233,046
31,189
-
363,910
1.61
Interbank and money market items
-
28,572
8,927
1,779
1,483
40,761
1.14
Debt issued and borrowings
1
-
2,001
-
32,516
34,518
5.00
Investments Loans to customers Financial liabilities Deposits
272
ANNUAL REPORT 2017
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 2017 and 2016 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements For the years ended 31 December 2016
2017 Average
Average
Average balances
Average
balances
Interest
rate (%)
Interest
rate (%)
Interbank and money market items
59,373
1,365
2.30
49,486
Investments and trading operations
7,171
25
0.34
3,132
156,769
3,143
2.00
159,555
3,504
2.20
681,140
39,833
5.85
681,878
40,045
5.87
683,219
12,047
1.76
667,329
12,852
1.93
Interbank and money market items
67,200
792
1.18
68,325
741
1.09
Debt issued and borrowings
46,914
2,117
4.51
59,719
2,581
4.32
Interest bearings financial assets
Investment in debt securities
1,307 30
2.64 0.95
Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
(Unit: Million Baht) Separate financial statements For the years ended 31 December 2016
2017 Average
Average
Average
Average
balances
Interest
rate (%)
balances
Interest
rate (%)
Interbank and money market items
60,555
1,378
2.28
48,116
1,279
2.66
Investments and trading operations
7,171
26
0.36
3,132
30
0.95
150,794
3,031
2.01
155,115
3,392
2.19
637,606
36,847
5.78
638,266
37,142
5.82
684,535
12,058
1.76
668,484
12,865
1.92
Interbank and money market items
56,514
593
1.05
59,235
558
0.94
Debt issued and borrowings
28,749
1,493
5.19
43,216
1,872
4.33
Interest bearings financial assets
Investment in debt securities Loans to customers/hire purchase and finance leases Interest bearings financial liabilities Deposits
273
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 2017 and 2016 can be summarised as follows: (Unit: Million Baht) Consolidated financial statements 2017 Australian US Dollar
Euro
Yen
Dollar
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
274
ANNUAL REPORT 2017
(Unit: Million Baht) Consolidated financial statements 2016 Australian US Dollar
Euro
Yen
Dollar
Others
Foreign currency in the statement of financial position Cash
77
72
8
9
35
9,507
32
122
21
119
Investments
11,466
-
-
-
38
Loans to customers and accrued interest receivables
18,414
73
43
781
4
Other assets
1,005
-
-
-
-
Total assets
40,469
177
173
811
196
867
36
-
49
241
Interbank and money market items
16,242
1
-
-
-
Total liabilities
17,109
37
-
49
241
Net
23,360
140
173
762
Guarantees of loans
788
-
-
-
-
Liability under unmatured import bills
571
6
19
-
2
1,279
97
63
-
10
686
24
-
-
1
Interbank and money market items
Deposits
(45)
Foreign currency commitments
Letter of credits Others
275
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017 Australian US Dollar
Euro
Yen
Others
Dollar
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
276
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements 2016 Australian US Dollar
Euro
Yen
Dollar
Others
Foreign currency in the statement of financial position Cash
77
72
8
9
35
9,507
32
122
21
119
Investments
11,466
-
-
-
38
Loans to customers and accrued interest receivables
18,414
73
43
781
4
Other assets
1,005
-
-
-
-
Total assets
40,469
177
173
811
196
867
36
-
49
241
Interbank and money market items
16,242
1
-
-
-
Total liabilities
17,109
37
-
49
241
Net
23,360
140
173
762
(45)
Guarantees of loans
788
-
-
-
-
Liability under unmatured import bills
571
6
19
-
2
1,279
97
63
-
10
686
24
-
-
1
Interbank and money market items
Deposits
Foreign currency commitments
Letter of credits Others
277
THANACHART BANK PUBLIC COMPANY LIMITED
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 2017 Australian US Dollar
Euro
Yen
Others
Dollar
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) Consolidated financial statements 2016 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
42,370
1,187
459
26
621
- Sold
53,861
1,353
394
791
585
4,917
-
-
-
-
16,543
-
-
-
-
- Bought
70,013
-
-
-
-
- Sold
70,013
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
278
ANNUAL REPORT 2017
(Unit: Million Baht) Separate 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 2016 Australian US Dollar
Euro
Dollar
Yen
Others
Foreign exchange contracts - Bought
42,370
1,187
459
26
621
- Sold
53,861
1,353
394
791
585
4,917
-
-
-
-
16,543
-
-
-
-
- Bought
70,013
-
-
-
-
- Sold
70,013
-
-
-
-
Cross currency and interest rate swap contracts - Bought - Sold Interest rate swap contracts
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.
279
THANACHART BANK PUBLIC COMPANY LIMITED
47.3 Liquidity risk Liquidity risk is the risk that the Bank and its subsidiaries will be unable to liquidate their financial assets and/or procure sufficient funds to discharge their obligations in a timely manner, resulting in the Bank and its subsidiaries incurring a financial loss. The Bank and its subsidiaries manage liquidity risk by means of appropriate structuring of short-term and long-term sources of capital. In addition, the Bank and its subsidiaries have a policy to maintain liquidity to ensure that it has sufficient liquidity to meet both present and future requirements, under the supervision of the Asset and Liability Management Committee. Counting from the financial position date, the periods to maturity of financial instruments held as at 31 December 2017 and 2016 are as follows: (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.
280
ANNUAL REPORT 2017
(Unit: Million Baht) Consolidated financial statements 2016 Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
12,077
-
-
-
12,077
5,516
41,587
500
-
47,603
-
1,009
2,555
-
3,564
261
31,355
134,416
9,341
175,373
38,343
204,421
448,143
-
690,907
-
1,126
-
-
1,126
-
1,332
-
-
1,332
308,515
335,686
32,356
-
676,557
15,654
45,918
4,262
-
65,834
1,986
-
-
-
1,986
-
1,609
3,303
-
4,912
748
9,721
38,940
-
49,409
Payables from purchase and sale of securities
-
2,366
-
-
2,366
Other liabilities - payable to clearing house
-
2
-
-
2
Aval to bill
4
596
29
-
629
Guarantees of loans
-
1,188
-
-
1,188
40
597
-
-
637
457
1,022
-
-
1,479
41,129
36,031
2,355
-
79,515
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
Liability under unmatured import bills Letter of credits Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
281
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.
282
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements 2016
Transactions
At call
Less than
Over
1 year
1 year
Unspecified
Total
Financial assets Cash
12,072
-
-
-
12,072
7,905
39,732
-
-
47,637
-
1,009
2,555
-
3,564
261
29,238
132,582
5,677
167,758
35,398
202,385
413,831
-
651,614
308,998
336,453
32,356
-
677,807
15,395
37,499
3,262
-
56,156
1,986
-
-
-
1,986
Derivatives liabilities
-
1,609
3,303
-
4,912
Debt issued and borrowings
5
2,001
32,516
-
34,522
Payables from purchase and sale of securities
-
1,000
-
-
1,000
Aval to bill
4
596
29
-
629
Guarantees of loans
-
1,188
-
-
1,188
40
597
-
-
637
457
1,022
-
-
1,479
41,129
36,031
2,318
-
79,478
Interbank and money market items Derivatives assets Investments Loans to customers
(1)
Financial liabilities Deposits Interbank and money market items Liability payable on demand
Commitments
Liability under unmatured import bills Letter of credits Other commitments
(1) The outstanding balances of loans to customers at call included loans for which revenue recognition has been discontinued.
283
THANACHART BANK PUBLIC COMPANY LIMITED
47.4 Fair value As at 31 December 2017 and 2016, 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 2017 Fair value
Book 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
284
ANNUAL REPORT 2017
(Unit: Million Baht) Consolidated financial statements 2016 Fair value
Book value
Level 1
Total
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
3,520
3,520
-
3,520
-
171,046
171,046
5,586
165,460
-
Land, premises and equipment - land
5,906
5,906
-
-
5,906
Derivatives liabilities
3,518
3,518
-
3,518
-
Cash
12,077
12,077
12,077
-
-
Interbank and money market items (assets)
47,476
47,476
5,514
19,358
22,604
44
44
-
44
-
4,035
8,008
-
335
7,673
666,909
673,622
-
328,482
345,140
1,126
1,126
-
1,126
-
1,332
1,332
-
1,332
-
676,557
676,767
313,414
363,353
-
65,834
65,866
15,206
34,565
16,095
Liability payable on demand
1,986
1,986
1,986
-
-
Derivatives liabilities
1,394
1,256
-
1,256
-
49,409
50,331
-
50,331
-
2,366
2,366
-
2,366
-
2
2
-
2
-
Investments
Financial assets and liabilities for which fair value are disclosed
Derivatives assets Investments Loans to customers Receivables from purchase and sale of securities Other assets - receivable from clearing house Deposits Interbank and money market items (liabilities)
Debt issued and borrowings Payables from purchase and sale of securities Other liabilities - payable to clearing house
285
THANACHART BANK PUBLIC COMPANY LIMITED
(Unit: Million Baht) Separate financial statements 2017 Fair value
Book 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
286
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements 2016 Fair value
Book value Total
Level 1
Level 2
Level 3
Assets and liabilities measured at fair value Derivatives assets
3,520
3,520
-
3,520
-
163,051
163,051
1,735
161,316
-
Land, premises and equipment - land
5,889
5,889
-
-
5,889
Derivatives liabilities
3,518
3,518
-
3,518
-
Cash
12,072
12,072
12,072
-
-
Interbank and money market items (assets)
47,466
47,466
5,403
16,984
25,079
44
44
-
44
-
4,224
8,171
-
539
7,632
Loans to customers
632,931
639,073
-
327,986
311,087
Deposits
677,807
678,017
313,897
364,120
-
56,156
56,164
15,395
34,565
6,204
Liability payable on demand
1,986
1,986
1,986
-
-
Derivatives liabilities
1,394
1,256
-
1,256
-
34,522
35,336
-
35,336
-
1,000
1,000
-
1,000
-
Investments
Financial assets and liabilities for which fair value are disclosed
Derivatives assets Investments
Interbank and money market items (liabilities)
Debt issued and borrowings Payables from purchase and sale of securities
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,
mentioned in Note 4.23 to the financial statements.
as
287
THANACHART BANK PUBLIC COMPANY LIMITED
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
- The fair value of land is determined using market
equipment - land
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.
288
ANNUAL REPORT 2017
Deposits
- The fair value of payable on demand deposits, floating rate deposits or fixed rate deposits with not more than 1 year from the statement of financial position date remaining to maturity is assumed to approximate their book values. - The fair value of fixed rate deposits with more than 1 year from the statements of financial position date remaining to maturity is determined by discounting the expected future cash flows at the Bank’s interest rate for similar deposits.
Interbank and money market items (liabilities)
- The fair value of interbank and money market items payable on demand, floating rate deposits or fixed rate deposits with not more than 1 year from the statement of financial position date remaining to maturity is assumed to approximate their book values. - The fair value of fixed rate interbank and money market items with more than 1 year from the statement of financial position date remaining to maturity is determined by discounting the expected future cash flows at the market interest rate of debt or the Bank’s announced interest rate for similar deposits.
Liability payable on demand
- The fair value is assumed to approximate its book value in the statement of financial position due to its short-term nature.
Debt issued and borrowings
- The fair value of floating rate or fixed rate debt issues and borrowings with not more than 1 year from the statement of financial position date remaining to maturity is assumed to approximate their book values. - The fair value of fixed rate debt issues and borrowings with more than 1 year from the statements of financial position date remaining to maturity is determined by discounting the expected future cash flows at the market interest rate for similar debt.
During the current year, the Bank and its subsidiaries did not transfer any items among fair value hierarchy levels.
289
THANACHART BANK PUBLIC COMPANY LIMITED
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 2017 and 2016, 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 2017 Less than
Over
1 year
1 year
2016
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
45,185
-
45,185
44,663
-
44,663
- Sold
53,209
-
53,209
56,983
-
56,983
- Bought
1,412
2,415
3,827
699
4,218
4,917
- Sold
5,680
8,751
14,431
4,282
12,261
16,543
- Paid fixed interest rate
38,084
116,132
154,216
41,265
114,131
155,396
- Paid floating interest rate
39,358
98,641
137,999
40,070
115,181
155,251
- Received fixed interest rate
39,358
98,041
137,399
39,070
115,181
154,251
- Received floating interest rate
38,084
116,732
154,816
42,265
114,131
156,396
239
-
239
76
-
76
1,668
-
1,668
1,587
-
1,587
1
-
1
-
-
-
396
-
396
50
-
50
Cross currency and interest rate swap contracts
Interest rate swap contracts
Future contracts - Bought - Sold Derivative warrants - Sold Other - Sold
290
ANNUAL REPORT 2017
(Unit: Million Baht) Separate financial statements 2016
2017 Less than
Over
1 year
1 year
Total
Less than
Over
1 year
1 year
Total
Foreign exchange contracts - Bought
45,185
-
45,185
44,663
-
44,663
- Sold
53,209
-
53,209
56,983
-
56,983
- Bought
1,412
2,415
3,827
699
4,218
4,917
- Sold
5,680
8,751
14,431
4,282
12,261
16,543
- Paid fixed interest rate
38,084
116,132
154,216
41,265
114,131
155,396
- Paid floating interest rate
39,358
98,641
137,999
40,070
115,181
155,251
- Received fixed interest rate
39,358
98,041
137,399
39,070
115,181
154,251
- Received floating interest rate
38,084
116,732
154,816
42,265
114,131
156,396
Cross currency and interest rate swap contracts
Interest rate swap contracts
48.
Events after the reporting period On 22 February 2018, the Board of Directors of the Bank passed a resolution to propose the payment of a dividend of Baht 0.52 per share to the ordinary shareholders, or a total of Baht 3,154 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 22 February 2018.
291
THANACHART BANK PUBLIC COMPANY LIMITED
BRANCHES OF TBANK Information as of 31 December 2017
HEAD OFFICE
Charoen Nakhon Soi 36 Branch Tel. +66 (0) 2862 5010-3, 2862 5016 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 Tha Phra Branch Tel. +66 (0) 2477 7321-3 Fax. +66 (0) 2477 7324
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 Bang Khae Branch Tel. +66 (0) 2803 8310 Fax. +66 (0) 2803 8305
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
Trok Chan Branch Tel. +66 (0) 2211 1286, 2211 4511 Fax. +66 (0) 2211 4653
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
Talat Bang Khae Branch Tel. +66 (0) 2801 1004-6 Fax. +66 (0) 2801 1007
Charan Sanitwong 86/2 Branch Tel. +66 (0) 2435 7205, 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 Phlu Branch Tel. +66 (0) 2466 7404, 2466 7423 Fax. +66 (0) 2465 1767
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 Ying Charoen Branch Tel. +66 (0) 2552 8043, 2552 8045 Fax. +66 (0) 2972 3161
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 Saphan Mai Don Mueang Branch Tel. +66 (0) 2521 1670, 2521 0612-3 Fax. +66 (0) 2521 0611
Tel. +66 (0) 2217 8000 Fax +66 (0) 2217 8333
BANGKOK AND VICNITIES
292
ANNUAL REPORT 2017
Talat Samrae Branch Tel. +66 (0) 2472 2045-50 Fax. +66 (0) 2472 2052
Thanon Phatthanakan 22 Branch Tel. +66 (0) 2318 7241-2, 2318 7620 Fax. +66 (0) 2318 7393
Thaniya Branch Tel. +66 (0) 2236 3520-1, 2236 9129 Fax. +66 (0) 2236 9119
Tao Pun Branch Tel. +66 (0) 2587 7292, 2587 7284-5 Fax. +66 (0) 2587 7379
Thanon Petchaburi Tat Mai Branch Tel. +66 (0) 2254 0252-4 Fax. +66 (0) 2254 0255
Nawamin 42 Branch Tel. +66 (0) 2375 1281-2, 2375 1284 Fax. +66 (0) 2375 1285
TOYOTA BUZZ Kaset-Nawamin Branch Tel. +66 (0) 2561 0069-71 Fax. +66 (0) 2561 0073
Thanon Mangkon Branch Tel. +66 (0) 2225 3331, 2225 3863 Fax. +66 (0) 2225 8364
Nawamin 66 Branch Tel. +66 (0) 2519 5724, 2519 4616 Fax. +66 (0) 2519 4627
Thanon Kanchanaphisek (Thawi Watthana) Branch Tel. +66 (0) 2447 9206-8 Fax. +66 (0) 2447 9209
Thanon Sathon Tai (Thai CC Tower) Branch Tel. +66 (0) 2675 5697-9, 2675 5700 Fax. +66 (0) 2675 5701
Nang Loeng Branch Tel. +66 (0) 2281 0842, 2281 2169 Fax. +66 (0) 2281 2322
Thanon Romklao Housing Branch Tel. +66 (0) 2543 9200-1, 2543 9191 Fax. +66 (0) 2543 9192
Thanon Sirindhorn Branch Tel. +66 (0) 2434 5028-9 Fax. +66 (0) 2434 5661
Thanon Chan Branch Tel. +66 (0) 2285 5360, 2285 5368 Fax. +66 (0) 2285 5361
Thanon Ekkachai (Bang Bon 5) Branch Tel. +66 (0) 2450 3741-3 Fax. +66 (0) 2450 3744
Thanon Chalong Krung Branch Tel. +66 (0) 2327 8111-3 Fax. +66 (0) 2327 8114
Thong Lo Branch Tel. +66 (0) 2381 8421-2, 2381 8364-5 Fax. +66 (0) 2381 8423
Thanon Nang Linchi Branch Tel. +66 (0) 2286 1971, 2286 1898 Fax. +66 (0) 2286 1939
Thong Lo Soi 17 Branch Tel. +66 (0) 2185 2756, 2185 2758-61 Fax. +66 (0) 2185 2757
Thanon Borom Rat Chonnani Branch Tel. +66 (0) 2446 8061-4 Fax. +66 (0) 2446 8065
Tops RCA Branch Tel. +66 (0) 2203 0267-9 Fax. +66 (0) 2641 5121
Thanon Burapha (Phahurat) Branch Tel. +66 (0) 2221 2069, 2221 5239 Fax. +66 (0) 2221 5128
Tha Din Daeng Branch Tel. +66 (0) 2863 1283-5 Fax. +66 (0) 2863 1289
Thanon Rama II (Thon Buri Housing 3) Branch Tel. +66 (0) 2451 4402, 2451 4409 Fax. +66 (0) 2451 4882
Thewet Branch Tel. +66 (0) 2628 7240-4, 2628 7247 Fax. +66 (0) 2282 8810
Thanon Rama II (Soi 3) Branch Tel. +66 (0) 2427 1552-3 Fax. +66 (0) 2427 1551 Thanon Rama IX Branch Tel. +66 (0) 2246 7829-30 Fax. +66 (0) 2246 8473 Thanon Phrasumen (Bang Lamphu) Branch Tel. +66 (0) 2281 6821, 2281 6332 Fax. +66 (0) 2281 7457
Tesco Lotus Phet Kasem 81 Branch Tel. +66 (0) 2489 2087-9 Fax. +66 (0) 2812 4073 Tesco Lotus Rama II Branch Tel. +66 (0) 2415 9130-2 Fax. +66 (0) 2892 8004 Tesco Lotus Wang Hin Branch Tel. +66 (0) 2578 6194-6 Fax. +66 (0) 2578 6197
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
293
THANACHART BANK PUBLIC COMPANY LIMITED
Bamrung Mueang Branch Tel. +66 (0) 2216 9794-7, 2214 0606-8 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
Phatthanakan Branch Tel. +66 (0) 2015 2600-2 Fax. +66 (0) 2015 2604 Paradise Park Branch Tel. +66 (0) 2325 9072-4 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
Ratchada Phisek-Tha Phra Branch Tel. +66 (0) 2878 8845-7 Fax. +66 (0) 2878 8852 Ratchada-Huai Khwang Branch Tel. +66 (0) 2694 1489-91, 2694 1495 Fax. +66 (0) 2694 1496 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
294
ANNUAL REPORT 2017
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) 2834 9999 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
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
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
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
Appeal Court Branch Tel. +66 (0) 2938 3421-6 Fax. +66 (0) 2938 3428
Si Yaek Chaloem Buri (Yaowarat) Branch Tel. +66 (0) 2221 1236, 2221 7194 Fax. +66 (0) 2225 0580
Lat Krabang Branch Tel. +66 (0) 2327 2754-6 Fax. +66 (0) 2327 2706 Lat Phrao Branch Tel. +66 (0) 2512 2343-4, 2938 2433 Fax. +66 (0) 2512 2342 Lat Phrao 53 Branch Tel. +66 (0) 2539 1167, 2539 1507 Fax. +66 (0) 2539 2261 Lat Phrao 80 Branch Tel. +66 (0) 2933 9172, 2933 9174-5 Fax. +66 (0) 2933 9178 Lat Phrao 118 Branch Tel. +66 (0) 2539 2925-7 Fax. +66 (0) 2530 4348 Lat Phrao Soi 101 Branch Tel. +66 (0) 2187 0162-4 Fax. +66 (0) 2187 0161 Lam Sa Li Branch Tel. +66 (0) 2735 2060-3 Fax. +66 (0) 2735 2067
Sirirat Branch Tel. +66 (0) 2412 4515, 2412 4583-4 Fax. +66 (0) 2866 3218 Sanam Pao Branch Tel. +66 (0) 2271 0026-8 Fax. +66 (0) 2271 0030 Siam Paragon Branch Tel. +66 (0) 2129 4374-7 Fax. +66 (0) 2129 4372
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
295
THANACHART BANK PUBLIC COMPANY LIMITED
Silom Complex Branch Tel. +66 (0) 2231 3237, 2231 3663-5 Fax. +66 (0) 2235 8833
On Nuch 52 Branch Tel. +66 (0) 2322 1557-9 Fax. +66 (0) 2322 1556
Jas Urban Srinakarin Branch Tel. +66 (0) 2386 7362-4 Fax. +66 (0) 2043 3082
Sukhumwit 71 Branch Tel. +66 (0) 2391 6067, 2392 5944 Fax. +66 (0) 2392 2534
All Seasons Place Branch Tel. +66 (0) 2250 7611-3 Fax. +66 (0) 2250 7615
Chaeng Wattana Branch Tel. +66 (0) 2982 9192-5 Fax. +66 (0) 2982 9441
Sukhumwit Soi 25 Branch Tel. +66 (0) 2259 4727-9 Fax. +66 (0) 2259 4730
Berli Jucker House (Kluai Nam Thai) Branch Tel. +66 (0) 2381 5065-7 Fax. +66 (0) 2381 5068
Chaeng Wattana (Software Park Building) Branch Tel. +66 (0) 2962 0066, 2962 0415-6 Fax. +66 (0) 2962 0376
Vorawat Building Silom Branch Tel. +66 (0) 2635 1150-2 Fax. +66 (0) 2635 1157
Central Chaengwattana Branch Tel. +66 (0) 2193 8114-6 Fax. +66 (0) 2101 0710
Vibulthani Tower (Rama IV) Branch Tel. +66 (0) 2661 5534-7 Fax. +66 (0) 2661 5539
Central Rattanathibet Branch Tel. +66 (0) 2525 4736-8 Fax. +66 (0) 2969 7537
Seri Thai 32 Branch Tel. +66 (0) 2376 1043-6 Fax. +66 (0) 2376 1122
Siam Kit Building Branch Tel. +66 (0) 2251 6763, 2252 5252 Fax. +66 (0) 2253 9429
Zeer-Rangsit Branch Tel. +66 (0) 2992 6807-9 Fax. +66 (0) 2992 6810
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
The Mall Ngamwongwan Branch Tel. +66 (0) 2550 1231-3 Fax. +66 (0) 2550 1235
Huai Khwang Branch Tel. +66 (0) 2692 0061, 2692 2098-100 Fax. +66 (0) 2276 1134
MBK Center Branch Tel. +66 (0) 2611 4752-4 Fax. +66 (0) 2611 4751
Talat Klang Bang Yai Branch Tel. +66 (0) 2595 0682-4 Fax. +66 (0) 2595 0685
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
Talat Bang Bua Thong Branch Tel. +66 (0) 2571 3598-9, 2571 3373-5 Fax. +66 (0) 2571 7845
Hua Mak Branch Tel. +66 (0) 2314 2627, 2314 0086-7 Fax. +66 (0) 2314 7277
Udom Suk Branch Tel. +66 (0) 2398 4024-7 Fax. +66 (0) 2398 4028
Talat Pak Nam Branch Tel. +66 (0) 2702 8380-4 Fax. +66 (0) 2702 8388
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
Thanon Samakkhi Branch Tel. +66 (0) 2574 2794-5 Fax. +66 (0) 2574 2793
Victory Monument Branch Tel. +66 (0) 2644 7474-6 Fax. +66 (0) 2354 9351
VICNITIES
Tha Nam Phra Pradaeng Branch Tel. +66 (0) 2463 0488, 2463 2228 Fax. +66 (0) 2464 2156
Sukhumwit Soi 66 Branch Tel. +66 (0) 2393 5782 Fax. +66 (0) 2399 2399 Sukhumwit Soi 101/1 (Piyarom Place) Branch Tel. +66 (0) 2332 7060-2 Fax. +66 (0) 2741 8017
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
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
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
296
ANNUAL REPORT 2017
Tesco Lotus Rattana Thibet Branch Tel. +66 (0) 2950 1160, 2950 1297 Fax. +66 (0) 2950 1157
Pathum Thani Branch Tel. +66 (0) 2581 5766, 2581 6976 Fax. +66 (0) 2581 6925
Samrong Branch Tel. +66 (0) 2396 0278-80 Fax. +66 (0) 2399 5103
Tesco Lotus Srinagarindra Branch Tel. +66 (0) 2175 7844-6 Fax. +66 (0) 2759 9054
Pak Kret Branch Tel. +66 (0) 2960 9928-9, 2583 7246 Fax. +66 (0) 2583 7562
Samrong Nuea Branch Tel. +66 (0) 2384 7141, 2384 7244 Fax. +66 (0) 2384 7678
Nonthaburi Branch Tel. +66 (0) 2526 3453-6 Fax. +66 (0) 2526 3457
Pu Chao Saming Prai Branch Tel. +66 (0) 2183 2044, 2183 2046-7 Fax. +66 (0) 2183 2043
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
Phra Pradaeng Branch Tel. +66 (0) 2463 3940-1, 2463 8415-7 Fax. +66 (0) 2463 6897
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
Ha Yaek Pak Kret Branch Tel. +66 (0) 2583 7574, 2583 9144 Fax. +66 (0) 2584 3959
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
Imperial World Samrong Branch Tel. +66 (0) 2380 2943-5, 2756 9023 Fax. +66 (0) 2756 9024
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 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) 2755 0240 BigC Suk Sawat Branch Tel. +66 (0) 2463 0992-3 Fax. +66 (0) 2463 0980
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
Homework Ratchaphruek Branch Tel. +66 (0) 2447 6690-2 Fax. +66 (0) 2447 6693
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
297
THANACHART BANK PUBLIC COMPANY LIMITED
Dan Chang Branch Tel. +66 (0) 3559 5497-8 Fax. +66 (0) 3559 5499 Damnoen Saduak Branch Tel. +66 (0) 3225 3810-2 Fax. +66 (0) 3225 3813 Talat Chao Prom Branch Tel. +66 (0) 3524 4768, 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 Thanon Khun San (Sing Buri) Branch Tel. +66 (0) 3651 1199, 3652 1200-1 Fax. +66 (0) 3652 1202 Thanon Sai Phra (Nakhon Pathom) Branch Tel. +66 (0) 3425 5317-9 Fax. +66 (0) 3425 4915
Thanon Ekkachai (Samut Sakhon) Branch Tel. +66 (0) 3441 1127, 3442 5205-8 Fax. +66 (0) 3442 5204 Thong Pha Phum Branch Tel. +66 (0) 3459 9073, 3459 9352 Fax. +66 (0) 3459 9613 Tha Ruea-Kanchanaburi Branch Tel. +66 (0) 3456 1130, 3456 2074 Fax. +66 (0) 3456 2073 Tha Ruea-Ayutthaya Branch Tel. +66 (0) 3534 1019, 3534 1029 Fax. +66 (0) 3534 1795 Tha Muang Branch Tel. +66 (0) 3461 1119, 3461 2417-8 Fax. +66 (0) 3461 2419 Tha Yang Branch Tel. +66 (0) 3246 1445-6 Fax. +66 (0) 3246 1447 Thung Khok Branch Tel. +66 (0) 3556 8086-7 Fax. +66 (0) 3556 8069
Thanon Songphon Branch Tel. +66 (0) 3220 0427, 3221 1900 Fax. +66 (0) 3220 0426
Nakhon Chai Si Branch Tel. +66 (0) 3433 1350-1 Fax. +66 (0) 3433 1349
Thanon Bowon Branch Tel. +66 (0) 3451 1022, 3451 4205 Fax. +66 (0) 3451 1597
Nakhon Nayok Branch Tel. +66 (0) 3731 1131, 3731 2609 Fax. +66 (0) 3731 2610
Thanon Phahon Yothin (Saraburi) Branch Tel. +66 (0) 3621 1166, 3621 2420-1 Fax. +66 (0) 3621 2421
Nakhon Pathom Branch Tel. +66 (0) 3421 9131 Fax. +66 (0) 3421 9160
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
Bang Sai Branch Tel. +66 (0) 3528 2118, 3537 5226 Fax. +66 (0) 3537 5144 Bang Pahan Branch Tel. +66 (0) 3538 1023-5 Fax. +66 (0) 3538 1026 Bang Len Branch Tel. +66 (0) 3439 1026-9 Fax. +66 (0) 3439 1030 Ban Phaeo Branch Tel. +66 (0) 3448 1088, 3448 0111-2 Fax. +66 (0) 3448 1606
Ban Pong Branch Tel. +66 (0) 3220 0429-31, 3221 1993 Fax. +66 (0) 3221 1035 Ban Mo Branch Tel. +66 (0) 3620 1141, 3620 1391-2 Fax. +66 (0) 3620 1142 BigC Lop Buri 2 Branch Tel. +66 (0) 3678 0731-4 Fax. +66 (0) 3678 0736 Prachuap Khiri Khan Branch Tel. +66 (0) 3260 4464-7 Fax. +66 (0) 3260 4468 Pran Buri Branch Tel. +66 (0) 3262 1643, 3262 2373-4 Fax. +66 (0) 3262 2055 Pak Phriao Branch Tel. +66 (0) 3621 1833-4, 3622 1286 Fax. +66 (0) 3622 1884 Phra Nakhon Si Ayutthaya Branch Tel. +66 (0) 3521 3892-4, 3524 4381 Fax. +66 (0) 3524 2136 Phra Pathom Chedi Branch Tel. +66 (0) 3425 4203-5, 3421 3541 Fax. +66 (0) 3425 9131 Phutthamonthon Sai 4 Branch Tel. +66 (0) 2420 0444, 2420 5964 Fax. +66 (0) 2813 1116 Phetchaburi Branch Tel. +66 (0) 3242 7023-5 Fax. +66 (0) 3241 5455 Photharam Branch Tel. +66 (0) 3274 7591-4 Fax. +66 (0) 3274 7595 Pho Hak Branch Tel. +66 (0) 3238 7021-2 Fax. +66 (0) 3238 7023 Mahachai Mueang Mai Branch Tel. +66 (0) 3481 2620-2 Fax. Ratchaburi Branch Tel. +66 (0) 3231 1203-5 Fax. +66 (0) 3231 1207
298
ANNUAL REPORT 2017
Robinson Suphan Buri Branch Tel. +66 (0) 3545 4360-62 Fax. +66 (0) 3545 4364
Sena Branch Tel. +66 (0) 3520 1035, 3520 1748 Fax. +66 (0) 3520 1749
Talat Varorot Branch Tel. +66 (0) 5387 4018-9, 5387 4002 Fax. +66 (0) 5387 4006
Lop Buri Branch Tel. +66 (0) 3642 1020-2 Fax. +66 (0) 3642 1023
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
Tak Branch Tel. +66 (0) 5551 1275, 5551 1360 Fax. +66 (0) 5551 3486
Lat Bua Luang Branch Tel. +66 (0) 3537 9290-1 Fax. +66 (0) 3537 9292 Wat Thian Dat Branch Tel. +66 (0) 2429 0216, 2429 0813 Fax. +66 (0) 2429 0847 Wiset Chai Chan Branch Tel. +66 (0) 3563 2801-4 Fax. +66 (0) 3563 2805 Si Prachan Branch Tel. +66 (0) 3558 1150, 3558 1160 Fax. +66 (0) 3558 1140 Salaya Branch Tel. +66 (0) 2441 4557-9 Fax. +66 (0) 2441 4560 Samut Songkhram Branch Tel. +66 (0) 3471 1361, 3471 1510 Fax. +66 (0) 3471 5555 Saraburi Branch Tel. +66 (0) 3621 8500 Fax. +66 (0) 3631 6601 Rojana Industrial Park Ayutthaya Branch Tel. +66 (0) 3571 9710-2 Fax. +66 (0) 3533 1651
Ayutthaya Branch Tel. +66 (0) 3525 2431-4, 3525 2359 Fax. +66 (0) 3525 2437 Ayutthaya Park Branch Tel. +66 (0) 3522 9560-1 Fax. +66 (0) 3522 9554 Om Yai Branch Tel. +66 (0) 2420 4920, 2420 4930 Fax. +66 (0) 2811 6538
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 Nimmanhemin Branch Tel. +66 (0) 5322 5483, 5340 0672-4 Fax. +66 (0) 5340 0675
Om Noi Branch Tel. +66 (0) 2420 1450, 2420 2565-6 Fax. +66 (0) 2420 1132
Thanon Barom Trai Lokanart 2 (Phitsanulok) Branch Tel. +66 (0) 5521 8645-9 Fax. +66 (0) 5521 8648
Amphawa Branch Tel. +66 (0) 3475 1177-8, 3475 1640-1 Fax. +66 (0) 3475 1642
Thanon Bunyawat Branch Tel. +66 (0) 5421 7444, 5421 8790 Fax. +66 (0) 5422 4667
Ang Thong Branch Tel. +66 (0) 3561 1099, 3561 2301-3 Fax. +66 (0) 3561 1100
Thanon Wet Suwan (Nakhon Sawan) Branch Tel. +66 (0) 5622 2998, 5622 7835 Fax. +66 (0) 5623 1462
U Thong Branch Tel. +66 (0) 3555 1299, 3555 1618 Fax. +66 (0) 3555 1868
NORTHERN REGION
Song Phi Nong Branch Tel. +66 (0) 3553 2890-3 Fax. +66 (0) 3553 2894
Kamphaeng Phet Branch Tel. +66 (0) 5571 3325-6 Fax. +66 (0) 5571 3368
Sam Chuk Branch Tel. +66 (0) 3557 1644, 3557 1666 Fax. +66 (0) 3557 1099
Khuang Sing Branch Tel. +66 (0) 5321 0826-8, 5321 6586 Fax. +66 (0) 5322 2718
Sam Phran Branch Tel. +66 (0) 3432 2781, 3432 2783 Fax. +66 (0) 3432 2782
Chong Khae Branch Tel. +66 (0) 5626 9163, 5626 9128-30 Fax. +66 (0) 5626 9127
Sing Buri Branch Tel. +66 (0) 3653 0410, 3653 0413 Fax. +66 (0) 3651 2021
Chai Nat Branch Tel. +66 (0) 5641 6650-3 Fax. +66 (0) 5641 6654
Thanon Sueksa Charoen (Phetchabun) Branch Tel. +66 (0) 5674 4076-8 Fax. +66 (0) 5672 2415 Thanon Ekathossaros (Phitsanulok) Branch Tel. +66 (0) 5524 3871-2, 5525 9322 Fax. +66 (0) 5524 4268 Tha Phae Branch Tel. +66 (0) 5323 5755 Fax. +66 (0) 5323 5757 Tesco Lotus Phitsanulok Branch Tel. +66 (0) 5525 3701-3 Fax. +66 (0) 5525 3705 Nakhon Sawan Branch Tel. +66 (0) 5631 3848 Fax. +66 (0) 5631 3850
299
THANACHART BANK PUBLIC COMPANY LIMITED
Nan Branch Tel. +66 (0) 5471 1095-9 Fax. +66 (0) 5471 1098
Mae Sot Branch Tel. +66 (0) 5553 3311-3, 5553 3319 Fax. +66 (0) 5553 3320
Hang Nam Sakorn Branch Tel. +66 (0) 5643 1232-3 Fax. +66 (0) 5643 1234
Bo Sang Branch Tel. +66 (0) 5333 7004-6 Fax. +66 (0) 5333 7007
Mae Sai Branch Tel. +66 (0) 5373 1675, 5373 1904 Fax. +66 (0) 5373 1905
Uttaradit Branch Tel. +66 (0) 5544 1777, 5544 2240 Fax. +66 (0) 5541 4096
BigC Kamphaeng Phet Branch Tel. +66 (0) 5585 3928-30 Fax. +66 (0) 5585 3932
Lamphun Branch Tel. +66 (0) 5351 0371, 5351 2060 Fax. +66 (0) 5351 0372
Uthai Thani Branch Tel. +66 (0) 5657 1616-9 Fax. +66 (0) 5657 1620
BigC Chiang Mai Branch Tel. +66 (0) 5324 1248-9, 5324 1336 Fax. +66 (0) 5324 1337
Wang Chao Branch Tel. +66 (0) 5555 6059, 5555 6061 Fax. +66 (0) 5555 6063
BigC Hang Dong Branch Tel. +66 (0) 5380 4092, 5380 4094 Fax. +66 (0) 5380 4086
Sawankhalok Branch Tel. +66 (0) 5564 1478-9, 5564 2512 Fax. +66 (0) 5564 1480
Pak Nam Pho Branch Tel. +66 (0) 5621 2082, 5621 2847-8 Fax. +66 (0) 5621 3516
San Sai Branch Tel. +66 (0) 5349 1457, 5349 1934 Fax. +66 (0) 5349 1728 San Pa Khoi Branch Tel. +66 (0) 5324 4157, 5324 9167-8 Fax. +66 (0) 5324 1157
Fang Branch Tel. +66 (0) 5345 1007-9 Fax. +66 (0) 5338 2041 Phran Kratai Branch Tel. +66 (0) 5576 2111-12 Fax. +66 (0) 5576 2113 Phayao Branch Tel. +66 (0) 5443 1124,ช5448 2386-8 Fax. +66 (0) 5443 1272 Phichit Branch Tel. +66 (0) 5661 1033,ช5661 1651 Fax. +66 (0) 5661 1127
Sukhothai Branch Tel. +66 (0) 5561 6022, 5562 2465-6 Fax. +66 (0) 5562 2469 Nong Ben Branch Tel. +66 (0) 5629 6163-5 Fax. +66 (0) 5629 6166 Lom Kao Branch Tel. +66 (0) 5670 8492-93 Fax. +66 (0) 5670 8494
NORTH EASTERN REGION Kalasin Branch Tel. +66 (0) 4382 1080-1, 4382 1420 Fax. +66 (0) 4381 6584 Khon Kaen Branch Tel. +66 (0) 4332 4321, 4322 6888 Fax. +66 (0) 4332 5919 Chum Phae Branch Tel. +66 (0) 4331 1684, 4331 2292 Fax. +66 (0) 4331 2395 Central Plaza Khon Kaen Branch Tel. +66 (0) 4328 8361-3 Fax. +66 (0) 4328 8365 The Mall Nakhon Ratchasima Branch Tel. +66 (0) 4439 3931-3 Fax. +66 (0) 4439 3934 Talat Pak Chong Branch Tel. +66 (0) 4431 3798-9, 4431 3855-6 Fax. +66 (0) 4431 3255
Lom Sak Branch Tel. +66 (0) 5670 1540, 5670 4207 Fax. +66 (0) 5670 4513
Thanon Klang Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 8266, 4332 2630 Fax. +66 (0) 4332 2386
Hankha Branch Tel. +66 (0) 5645 1040, 5645 1500 Fax. +66 (0) 5645 1499
Thanon Kuang Heng (Si Sa Ket) Branch Tel. +66 (0) 4561 7861-3 Fax. +66 (0) 4561 7860
Phrae Branch Tel. +66 (0) 5452 2004, 5452 2006 Fax. +66 (0) 5452 2005
Ha Yaek Phokhun Mengrai (Chiang Rai) Branch Tel. +66 (0) 5374 5244-5 Fax. +66 (0) 5374 5247
Thanon Mittraphap (Nakhon Ratchasima) Branch Tel. +66 (0) 4425 9003-4, 4425 1376 Fax. +66 (0) 4425 9002
Phaisali Branch Tel. +66 (0) 5625 9721-2 Fax. +66 (0) 5625 9723
Hang Dong Branch Tel. +66 (0) 5343 4035-7 Fax. +66 (0) 5343 4038
Thanon Si Chan Branch Tel. +66 (0) 4322 7275-8 Fax. +66 (0) 4322 7279
Phitsanulok Branch Tel. +66 (0) 5530 4313 Fax. +66 (0) 5530 4279 Phetchabun Branch Tel. +66 (0) 5672 3103 Fax. +66 (0) 5672 3104
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ANNUAL REPORT 2017
Thanon Sappasit Branch Tel. +66 (0) 4524 4315, 4524 4729 Fax. +66 (0) 4524 3193
Buri Ram Branch Tel. +66 (0) 4460 1555, 4460 2000 Fax. +66 (0) 4460 2123
Nong Khai Branch Tel. +66 (0) 4246 0119-22 Fax. +66 (0) 4246 0199
Thanon Suranari Branch Tel. +66 (0) 4424 2560, 4424 2904 Fax. +66 (0) 4425 6706
Maha Sarakham Branch Tel. +66 (0) 4374 0681-3 Fax. +66 (0) 4372 2958
Nong Bua Lam Phu Branch Tel. +66 (0) 4231 1107, 4231 1166 Fax. +66 (0) 4231 1657
Thanon Na Mueang (Khon Kaen) Branch Tel. +66 (0) 4322 1163, 4322 3234 Fax. +66 (0) 4322 1822
Mukdahan Branch Tel. +66 (0) 4263 1367-70 Fax. +66 (0) 4263 1374
Ha Yaek Nampu (Udon Thani) Branch Tel. +66 (0) 4222 1703, 4224 7211-2 Fax. +66 (0) 4224 7209
Thanon Hai Srok (Roi Et) Branch Tel. +66 (0) 4352 3335-7 Fax. +66 (0) 4352 3339
Yasothon Branch Tel. +66 (0) 4571 4051-6 Fax. +66 (0) 4571 4054
Amnat Charoen Branch Tel. +66 (0) 4551 1721-4 Fax. +66 (0) 4551 1726
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
Udon Thani Branch Tel. +66 (0) 4234 2550 Fax. +66 (0) 4234 2398
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
Ubon Ratchathani Branch Tel. +66 (0) 4531 9401-3 Fax. +66 (0) 4531 9405
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
EASTERN REGION
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
Sang Khom Branch Tel. +66 (0) 4227 6222-4 Fax. +66 (0) 4227 6225
Ban Phai Branch Tel. +66 (0) 4327 4038-40 Fax. +66 (0) 4327 4043
Sam Yaek Pak Thong Chai Branch Tel. +66 (0) 4421 3993-5, 4428 1815-6 Fax. +66 (0) 4421 3994
BigC Buri Ram Branch Tel. +66 (0) 4469 0450, 4469 0458 Fax. +66 (0) 4469 0469
Surin Branch Tel. +66 (0) 4451 4455-8 Fax. +66 (0) 4451 4459
BigC Udon Thani Branch Tel. +66 (0) 4212 8551-3 Fax. +66 (0) 4212 8548
Surin Plaza Branch Tel. +66 (0) 4453 8517-20 Fax. +66 (0) 4453 8521
Bueng Kan Branch Tel. +66 (0) 4249 1779, 4249 1781 Fax. +66 (0) 4240 3097
Suwannakhuha Branch Tel. +66 (0) 4237 2515-6 Fax. +66 (0) 4237 2517
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) 3741 4378-80 Fax. +66 (0) 3741 4381 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
301
THANACHART BANK PUBLIC COMPANY LIMITED
Central Chon Buri Branch Tel. +66 (0) 3805 3531-3 Fax. +66 (0) 3805 3535
Ban Bueng Branch Tel. +66 (0) 3844 3060-1, 3844 4015-6 Fax. +66 (0) 3844 3713
Wang Nam Yen Branch Tel. +66 (0) 3725 1543-7 Fax. +66 (0) 3725 1546
Trat Branch Tel. +66 (0) 3953 1641-3 Fax. +66 (0) 3952 2662
BigC Chachoengsao 2 Branch Tel. +66 (0) 3851 5188, 3851 5190 Fax. +66 (0) 3851 5219
Wang Sombun Branch Tel. +66 (0) 3744 9193-4 Fax. +66 (0) 3744 9195
Thanon Khwang (Chanthaburi) Branch Tel. +66 (0) 3932 5925, 3931 1079 Fax. +66 (0) 3932 5926
BigC Pattaya Tai Branch Tel. +66 (0) 3837 4270, 3837 4273 Fax. +66 (0) 3837 4463
Sa Kaeo Branch Tel. +66 (0) 3724 1061, 3724 1585-6 Fax. +66 (0) 3724 1062
Thanon Chetchamnong (Chon Buri) Branch Tel. +66 (0) 3879 2203-4 Fax. +66 (0) 3879 2178
BigC Rayong Branch Tel. +66 (0) 3887 3094, 3887 3301 Fax. +66 (0) 3862 2659
Saha Pathana Industrial Park (Si Racha) Branch Tel. +66 (0) 3848 1826-8 Fax. +66 (0) 3848 1829
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
BigC Sa Kaeo Branch Tel. +66 (0) 3742 1761-3 Fax. +66 (0) 3742 1765 Prachin Buri Branch Tel. +66 (0) 3721 1300, 3721 3855-9 Fax. +66 (0) 3721 3080 Pluak Daeng Branch Tel. +66 (0) 3865 9768-9 Fax. +66 (0) 3865 9770 Pacific Park (Si Racha) Branch Tel. +66 (0) 3831 3226, 3831 3236 Fax. +66 (0) 3831 3245 Pranom Sarakham Branch Tel. +66 (0) 3855 1005, 3855 1824-5 Fax. +66 (0) 3855 1659 Pattaya Branch Tel. +66 (0) 3872 0334, 3872 0339 Fax. +66 (0) 3842 9973 Pattaya Nuea Branch Tel. +66 (0) 3842 8901-2, 3842 8905 Fax. +66 (0) 3842 8963 PASSiONE Rayong Branch Tel. +66 (0) 3802 3405-7 Fax. +66 (0) 3802 3409 Map Ta Phut Branch Tel. +66 (0) 3868 2531-3 Fax. +66 (0) 3868 1995 Rayong Branch Tel. +66 (0) 3886 4114 Fax. +66 (0) 3886 4115
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) 3722 3505-7 Fax. +66 (0) 3722 3511 Kabin Buri Industrial (Nongki) Branch Tel. +66 (0) 3745 5428-29, 3745 5420-1 Fax. +66 (0) 3745 5439 Harbor Mall Laem Chabang Branch Tel. +66 (0) 3849 3194-6 Fax. +66 (0) 3314 5215
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ANNUAL REPORT 2017
SOUTHERN REGION Krabi Branch Tel. +66 (0) 7563 2838-41 Fax. +66 (0) 7563 2835 Kantang Branch Tel. +66 (0) 7525 1250, 7525 1640 Fax. +66 (0) 7525 1644 Ko Tao Branch Tel. +66 (0) 7745 6533-4 Fax. +66 (0) 7745 6784 Ko Pha-ngan Branch Tel. +66 (0) 7737 7051, 7723 8186-7 Fax. +66 (0) 7737 7052 Ko Lanta Branch Tel. +66 (0) 7566 8152 Fax. +66 (0) 7566 8151 Ko Samui Branch Tel. +66 (0) 7742 1110-1, 7742 0363 Fax. +66 (0) 7742 1112 Khao Lak Branch Tel. +66 (0) 7648 5493-4 Fax. +66 (0) 7648 5560 Khian Sa Branch Tel. +66 (0) 7738 7407-8 Fax. +66 (0) 7738 7409 Central Festival Phuket Branch Tel. +66 (0) 7620 9290, 7620 9292 Fax. +66 (0) 7620 9291 Diana Si Phuwanart Branch Tel. +66 (0) 7446 5316-8 Fax. +66 (0) 7446 5319 Trang Branch Tel. +66 (0) 7522 3240-3 Fax. +66 (0) 7522 3244 Talat Tha Phae (Nakhon Si Thammarat) Branch Tel. +66 (0) 7538 3271, 7538 3316 Fax. +66 (0) 7538 3110 Takua Pa Branch Tel. +66 (0) 7642 5176, 7643 1503-5 Fax. +66 (0) 7642 5177
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) 7629 2116-8 Fax. +66 (0) 7634 5687 Thanon Thammanun Withi (Hat Yai) Branch Tel. +66 (0) 7423 5549, 7435 5396-7 Fax. +66 (0) 7424 3648 Thanon Punnakan (Hat Yai) Branch Tel. +66 (0) 7450 0040, 7450 0044-5 Fax. +66 (0) 7450 0089 Thanon Montri Branch Tel. +66 (0) 7621 2993, 7621 5393 Fax. +66 (0) 7621 3149 Thanon Ratsada (Phuket) Branch Tel. +66 (0) 7621 9664, 7625 6873-5 Fax. +66 (0) 7621 9731 Thanon Ratchadamnoen (Nakhon Si Thammarat) Branch Tel. +66 (0) 7534 2779-80, 7535 6119 Fax. +66 (0) 7535 6741
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 Tesco Lotus Songkhla Branch Tel. +66 (0) 7430 7937-9 Fax. +66 (0) 7435 2735 Nakhon Si Thammarat Branch Tel. +66 (0) 7532 2689-90 Fax. +66 (0) 7532 2144 Narathiwat Branch Tel. +66 (0) 7351 2013, 7351 4463-5 Fax. +66 (0) 7351 2014 Ban Don Branch Tel. +66 (0) 7721 0365, 7728 1551-2 Fax. +66 (0) 7721 0366
Thanon Si Wichai (Surat Thani) Branch Tel. +66 (0) 7720 6488, 7726 4170-1 Fax. +66 (0) 7720 6671
Ban Na Doem Branch Tel. +66 (0) 7735 9013, 7735 9015 Fax. +66 (0) 7735 9014
Thalang Branch Tel. +66 (0) 7631 1020, 7631 1432 Fax. +66 (0) 7631 1433
BigC Pattani Branch Tel. +66 (0) 7333 8004, 7331 3982-3 Fax. +66 (0) 7333 8005
Thap Thiang (Trang) Branch Tel. +66 (0) 7521 8059, 7521 1321 Fax. +66 (0) 7521 1320
BigC Satun Branch Tel. +66 (0) 7472 5251-3 Fax. +66 (0) 7472 5254
Thai Mueang Branch Tel. +66 (0) 7657 1234-7 Fax. +66 (0) 7657 1215
BigC Hat Yai 2 Branch Tel. +66 (0) 7446 9235-7 Fax. +66 (0) 7455 5609
Thung Song Branch Tel. +66 (0) 7541 1087, 7541 1956 Fax. +66 (0) 7541 1054
Betong Branch Tel. +66 (0) 7323 1120, 7323 1416 Fax. +66 (0) 7323 0914
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THANACHART BANK PUBLIC COMPANY LIMITED
Pattani Branch Tel. +66 (0) 7333 5950-1, 7333 1851 Fax. +66 (0) 7333 5949
Ranong Branch Tel. +66 (0) 7781 1198, 7781 1752 Fax. +66 (0) 7781 1751
Lang Suan Branch Tel. +66 (0) 7754 1965, 7758 1417-8 Fax. +66 (0) 7754 1987
Pak Phanang Branch Tel. +66 (0) 7551 7132, 7551 8023 Fax. +66 (0) 7551 8021
Robinson Trang Branch Tel. +66 (0) 7559 0128-9, 7559 0120 Fax. +66 (0) 7522 6157
Huai Yot Branch Tel. +66 (0) 7523 5033-5, 7527 1013 Fax. +66 (0) 7527 1064
Patong Branch Tel. +66 (0) 7629 0585-7 Fax. +66 (0) 7629 0588
Robinson Ocean Nakhon Si Thammarat Branch Tel. +66 (0) 7534 1875, 7534 1960-1 Fax. +66 (0) 7534 1876
Hat Chaweng Branch Tel. +66 (0) 7723 0405, 7723 1089-90 Fax. +66 (0) 7742 2051
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 Phuket Branch Tel. +66 (0) 7626 1570-5 Fax. +66 (0) 7626 1576 Mae Nam Branch Tel. +66 (0) 7724 8375, 7733 2259 Fax. +66 (0) 7733 2260 Yala Branch Tel. +66 (0) 7321 2592, 7321 3375 Fax. +66 (0) 7321 1691 Yan Ta Khao Branch Tel. +66 (0) 7528 1003, 7528 1101 Fax. +66 (0) 7528 1102
Wiang Sa Branch Tel. +66 (0) 7736 1461-2, 7736 3550 Fax. +66 (0) 7725 7268 Songkhla Branch Tel. +66 (0) 7431 1638, 7432 3735-6 Fax. +66 (0) 7431 3543 Sadao Branch Tel. +66 (0) 7441 4315-7 Fax. +66 (0) 7446 0501 Sam Kong (Phuket) Branch Tel. +66 (0) 7622 2838-40 Fax. +66 (0) 7622 2841 Sai Buri Branch Tel. +66 (0) 7341 1021, 7341 1314-5 Fax. +66 (0) 7341 1138 Surat Thani Branch Tel. +66 (0) 7721 4581-7 Fax. +66 (0) 7721 3560 Su-ngai Kolok Branch Tel. +66 (0) 7361 1359, 7361 1002 Fax. +66 (0) 7361 3632
Hat Yai Branch Tel. +66 (0) 7435 4690 Fax. +66 (0) 7435 4696 Hat Yai Nai Branch Tel. +66 (0) 7436 1313-5 Fax. +66 (0) 7425 9704 Hat Karon Branch Tel. +66 (0) 7639 6981, 7639 6485-6 Fax. +66 (0) 7639 6980 Hat Lamai Branch Tel. +66 (0) 7745 8159-60, 7745 8162-4 Fax. +66 (0) 7745 8161 Ao Nang Branch Tel. +66 (0) 7566 1434, 7566 1430-2 Fax. +66 (0) 7566 1433 Ao Luek Branch Tel. +66 (0) 7561 0739, 7563 4335-7 Fax. +66 (0) 7561 0755
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ANNUAL REPORT 2017
SUMMARY OF SPECIFIED ITEMS PER FORM 56-2 IN 2017 ANNUAL REPORT Items
Page
1. Policy and Overall Business Operation
033
2. Nature of Business Operations
038
3. Risk Factors
053
4. General and Other Key Information
140
5. Shareholders
147
6. Dividend Payment Policy
149
7. Management Structures
107
8. Corporate Governance
090
9. Corporate Social Responsibility
065
10. Internal Control and Risk Management
104
11. Related Transactions
103
12. Financial Highlight
002
13. Management Discussion and Analysis
018
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