Table of Contents
Vision and Mission
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2
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Message from the Chairperson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Message from the Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Board of Directors’ Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Chief Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Leadership Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Organization Chart
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
Thai Economy and Banking Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Management Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Strategy and Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Risk Management and Key Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Corporate Governance and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Shareholders Structure
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111
Statement of The Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Report of the Nomination, Remuneration and Corporate Governance Committee
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113
Board of Directors’ Responsibility for Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Report of Independent Auditor
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117
Financial Statements and Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Basel II Pillar III Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Company Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Investment of TMB in Other Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 TMB Branches in Bangkok Metropolitan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 TMB Branches in Upcountry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 TMB Overseas Branches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 TMB Currency Exchange Service Offices
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
267
TMB Supply Chain and Business Center
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
271
Main Correspondent Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272
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Vision and Mission
Annual Report  2010
Our Vision:
To be the lead bank with w financial sol Our Mission:
01
02
Understand our customers and offer high quality financial services
Create shareholder value
designed to meet their needs and aspirations
shareholder returns
with appropriate and sustainable
TMB Bank PCL
Vision and Mission
| 
ding Thai orld-class lutions 03
04
Trust in employees and provide opportunities
Create value to society
to develop and perform to their full capabilities
accepted standards of good corporate governance
as well as reward them based on their performance
while operating our business with internationally
3
4
Financial Highlights
|
Annual Report 2010
Financial Highlights financial highlights
(Unit: THB million)
2010
2009
2008
2007
2006
(Restated)
(Restated)
(Restated)
(Restated)
18,499
20,481
29,242
33,813
36,159
6,240
8,074
13,359
17,282
20,970
12,259
12,407
15,883
16,531
15,189
Bad debts and doubtful accounts
1,654
2,627
5,076
30,983
13,013
Net interest income after provision
10,605
9,780
10,807
(14,452)
2,176
6,966
10,077
6,647
6,434
6,209
14,346
17,859
17,114
35,459
20,430
3,225
1,998
340
(43,477)
(12,045)
14
33
87
132
200
9
20
106
136
113
3,202
1,945
147
(43,745)
(12,358)
Loans and Accrued Interest Receivable
363,742
369,063
427,582
468,921
546,152
Total Assets
589,592
543,142
601,573
622,026
751,810
Deposits
413,116
407,776
450,297
465,462
568,467
Total Liabilities
539,737
496,385
556,939
577,641
703,877
49,772
46,682
44,543
43,751
47,422
83
75
91
634
511
0.07
0.05
0.01
(2.60)
(0.86)
(Consolidated Financial Statements)
Selected income statements items Interest and dividend income Interest expenses Net income from interest and dividend
Non-interest income Non-interest expenses Net income (loss) before income tax Income tax Minority interests Net income
Selected balance sheets items
Shareholders' Equity Minority Interests Basis earning per share (THB)
Net income and ROE
Net interest income (NII) and NIM
THB million
THB million
10,000 0.3% 0 -10,000 -20,000
147
-25.1%
4.3%
6.6%
20% 0%
1,945
3,202
-20%
-60%
-30,000 -96.0% -43,745
-50,000 2006
15,000
15,189
7%
16,531 15,883
6% 12,407 12,259
12,000
-40%
-12,358
-40,000
18,000
2007
█ Net income (LHS)
2008
2009
ROE (RHS)
2010
5% 4%
9,000 2.1%
2.4%
2.6%
2.2%
2.2%
3%
-80%
6,000
-100%
3,000
1%
-120%
0
0%
2%
2006
█ NII (LHS)
2007
2008
NIM (RHS)
2009
2010
TMB Bank PCL
Financial Highlights
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(Unit: THB million)
2010
2009
2008
2007
2006
Key financial ratio Profitability Return on equity (ROE)
6.6%
4.3%
0.3%
-96.0%
-25.1%
Return on assets (ROA)
0.6%
0.3%
0.0%
-6.4%
-1.7%
74.6%
79.4%
76.0%
152.5%
95.5%
2.3%
2.2%
2.6%
2.4%
2.1%
Loan to deposit ratio (LDR)
87.9%
90.3%
94.2%
99.9%
95.2%
% current and saving accounts to total deposits (CASA)
46.3%
49.5%
38.6%
41.6%
25.9%
Tier I
11.3%*
12.3%*
12.3%
10.5%
7.3%
Capital adequacy ratio (CAR)
16.6%*
17.0%*
16.8%
14.4%
10.4%
8.3%
12.7%
14.3%
16.1%
11.3%
57.0%
57.7%
65.8%
68.1%
51.3%
2.3%
2.5%
2.2%
3.0%
0.5%
1.15
1.09
1.03
1.02
2.59
8,750
8,236
9,039
8,700
9,077
455
483
470
470
464
2,300
2,257
1,949
1,714
1,751
Cost to Income Net interest margin (NIM)
Liquidity
Capital adequancy
Asset quality Consolidated NPL ratio NPL coverage % excess reserve to performing loan Book value per share (BVPS) Number of employees Number of branches Number of ATMs Note: * based on Basel II’s criteria
Tier I and CAR
CASA and LDR
18%
16.8%
16% 10.4%
10%
60% 50%
12.3%
12.3%
10.5%
8% 6%
16.6%
14.4%
14% 12%
17.0%
40% 11.3%
30%
7.3%
20%
4%
10%
2% 0%
0 2006
CAR
2007
Tier I
2008
2009
2010
102% 100% 49.5% 46.3% 98% 41.6% 38.6% 96% 95.2% 94% 94.2% 92% 90.3% 25.9% 90% 87.9% 88% 86% 84% 82% 80% 99.9%
2006
█ CASA (LHS)
2007
2008
2009
LDR (RHS)
2010
5
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Message from the Chairperson
Message from THE CHAIRPERSON
Annual Report 2010
TMB Bank PCL
Message from the Chairperson
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7
The year 2010 marked an important milestone for Thailand and
and consumer behaviors. At the same time, TMB reinforces its
TMB Bank. Thailand emerged from one of the most difficult
contribution to the community through the “FAI-FAH” program
political crises to strongly record positive GDP growth of 7.8%
which joins forces of our employees and inspired contributors
compared to a contraction of 2.3% a year earlier. TMB Bank
from the society to build better life skills for inner-city children
not only staged a strong 64.6% earnings growth with the
and teenagers.
2010 earnings reaching THB 3.2 billion, but also cleaned up our retained losses to close out the legacy from the previous
Good corporate governance is of our utmost priority. In 2010 the
financial crisis.
Board of Directors further improved the corporate governance framework for TMB to ensure strong supervisory roles while
In both cases, the country and TMB emerged stronger having
supporting the best practices of the market. We are again
endured critical challenges. TMB built its strength on the
pleased to report that in 2010, TMB received the highest score
success of the transformation plan’s “Lay the Foundation” phase
of “Excellent” from the Thai Institute of Directors Association
during 2008 – 2009. Our 4.2% net growth in performing loans
supported by Securities and Exchange Commission and the
and simultaneous reduction in non-performing loans (NPL) of
Stock Exchange of Thailand, reflecting our intention to continue
an additional THB 18 billion representing 8.3% of consolidated
to make the difference for all our stakeholders.
total loans set TMB on the path to the asset quality level of the Thai market. In line with the new transformation phase
We thank our shareholders for their continued trust and support
“Differentiate and Grow with Quality” which started in 2010,
through this historic transformation journey of TMB. We are
TMB has invested in the capability to acquire quality customers
grateful to our valuable customers for giving us the opportunity
to further enlarge the foundations of our sustained growth. The
to make the difference in their lives and aspirations. We are
results are already evident in the success of our campaigns
certain that with relentless dedication from TMB staff and
throughout the year.
management, our future vision of ‘the leading Thai bank with world-class financial solutions’ is within reach.
Our 2010 achievements in product innovations, improvements in service and rise in brand consideration enabled TMB to contribute even more to our customers and the Thai market. TMB won the coveted FIIA (Financial Insights Innovation Awards) for our product innovations which significantly shifted market
Saowanee Kamolbutr Chairperson
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Message from the Chief Executive Officer
MESSAGE FROM The CHIEF EXECUTIVE OFFICER
Annual Report 2010
TMB Bank PCL
Message from the Chief Executive Officer
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9
When individuals and businesses trust a financial institution with
159% of Bank of Thailand requirements. At the same time,
their money, they find reassurance in strength. A strong bank
TMB minimized the formation of NPLs through strong risk
as a partner means stability, peace of mind and confidence
management capabilities. TMB also cleaned up retained losses
in the future.
of THB 101.6 billion and share discounts of THB 303.0 billion. The result — a healthy balance sheet with the ability to pay
Starting from our already solid foundation, TMB is getting
dividends for the first time in 14 years upon approval from the
stronger every day. By strengthening our team of over
Bank of Thailand, the Board of Directors, and shareholders.
8,600 employees, TMB is continually improving its financial strength — certainly a key measure for any bank. But there is
TMB is committed to sustained profitability, which is vitally
much more to what makes us a strong and solid bank. With
important to our investors and stakeholders and helps
customer centricity as our main focus to drive business, we
strengthen the overall Thai banking sector. Our firm financial
gain in-depth understanding of customers’ needs which allow
foundation further cements the trust-based relationships
us to effectively create and deliver innovative products and
that we continue to build with our customers. As a top-tier
services. With more efficient systems and real innovations,
financial institution with a solid reputation, TMB can fully
our operational strength is increasing. TMB is also asserting
contribute in its role amid the increasingly inter-connected
its presence in the highly competitive Thai market by
financial system.
strengthening the brand. We are even playing our part to build a stronger community.
2010 was a year of measured loan growth for TMB with total performing loans increasing by approximately 4.2% from
Financial strength
2009. SME, Retail unsecured lending, and Trade Financing,
In 2010, TMB enjoyed continued earnings momentum. We
in particular, grew by 13%, 40%, and 300% respectively.
reached over THB 3.20 billion in net profits with 64.6% growth
Growth in SME and Retail unsecured lending are examples
compared to 2009. This was the third consecutive year of
of TMB’s diversification of its portfolio which has in the past
growing profits since our recapitalization in December 2007.
been dominated by Wholesale customers. During 2010, the
This trend alone is a sure sign of TMB’s increasing strength.
Bank simultaneously took actions to strengthen the loan book by reducing exposure to lower quality customers by
There are many factors behind TMB’s stronger earnings. Higher
approximately THB 18.05 billion. Excluding those actions
NIM and core non-interest income, coupled with lower risk
the bank-wide performing loan growth would have been
costs, were the major drivers of the Bank’s improved profits.
more than 10%.
During 2010, we emphasized quality growth and managed down NPLs and NPAs through resolutions and sales. Our
Meanwhile, the Bank’s fee-generating ability has improved
NPL ratio has dropped from 14.3% in 2008, 12.7% in 2009
substantially. Enhancements to Trade Finance and Capital
to 8.3% in 2010, with a strong loan loss reserve equal to
Markets resulted in dramatically higher business volumes
10
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Message from the Chief Executive Officer
Annual Report 2010
from Wholesale customers whilst Retail banking saw higher
comprehensive revamp of HR management. We launched the
income from Bancassurance, currency exchange service and
TMB Way culture to ensure all of our people remained focused
deposit related fees. Disregarding large one-off items, the core
on making things better and easier for customers.
non-interest income grew by 10.16% year-on-year. Our staff has been aligned through the TMB WAY, which At the end of 2010, Fitch Ratings revised TMB’s outlook
ensures a common culture and language throughout the Bank. It
to stable from negative. The rating took into account our
focuses TMB staff on our core values which include customer-
sizeable domestic franchise, solid capital, improving
centricity, integrity, high performance, open communications and
profitability and asset quality. Fitch also noted that TMB’s
risk management. The Bank recognizes and rewards individuals
overall risk management had improved, with tougher credit
and teams who live the TMB WAY in their work. The monthly
policies and standards and a more comprehensive risk
“Chief Recognition Award” recognized outstanding applicants
management system.
who were then considered for the annual TMB WAY Awards. The coveted CEO Recognition Award, the grand prize, goes
Strength in product innovations
to cross-functional initiatives.
TMB led the market in product innovations during 2010. Some of our unique products included the ‘No Fee Savings Account’,
At TMB, we cultivate high performance and groom talent to
‘No Limit Debit Card’, ‘No Asset OD’, and ‘3X Express Loans’.
succeed. Our annual TMB Way Award 2010 showcased more
Our innovations in deposit products won the coveted 2010 FIIA
than two hundred initiatives of excellence. Individuals across
(Financial Insights Innovation Awards) for customer engagement,
the Bank regularly collaborate to achieve breakthroughs for
beating out competitors across Asia Pacific.
customers, including the 2010 winner “15 Day SME Approval and Disbursement” which has helped to drive TMB’s return to the
With a strong focus on being customer-centric, TMB also
top tier for SME customers. As people are our most important
improved service levels during the year. We enhanced our retail
asset, TMB has created an environment where people can be
call center platform to seamlessly integrate correspondence.
the best they can be.
TMB’s new Corporate e-banking portals allow our customers to directly interface with the Bank across core corporate banking
These efforts of the past year resulted in tangible improvements
products. We also were first to market the best supply chain
in employee engagement scores. The 2010 Employee
solutions that clearly set TMB apart from our competitors.
Engagement score by Gallup showed a dramatic increase from 13th percentile in 2009 to 70 th percentile in 2010, compared
TMB will continue to lead the way with new innovations.
to Gallup’s global organizational data. Employee engagement
We will soon roll out retail loan origination systems that will
at TMB is now at a level closer to the world-class threshold.
let us provide retail approval in a matter of hours, not days.
According to Gallup, our improvement of employee engagement
Key to our sustained delivery of high-quality financial services
scores in just one year normally takes other organizations to
is a robust technology platform that is supported by a high
achieve in four.
performance staff base that lets TMB quickly and efficiently develop innovative products that exceed customer expectations
Building a stronger brand
as well as enhance their quality of life.
The essence of the TMB brand is its people. During late 2010, we introduced TMB staff across Thailand to a comprehensive
Developing a stronger team
campaign called “Make THE Difference.” To be launched in
TMB has been undergoing a journey of transformation into
the first quarter of 2011, it will guide our staff to focus heavily
a customer-centric organization since 2008. This included a
on TMB’s goal of delivering the best customer service in the
TMB Bank PCL
Message from the Chief Executive Officer
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11
business while challenging the norms of the banking industry
for change in their own communities. The FAI-FAH program
with unmatched product innovations that set trends and add
will expand in 2011 with two more locations. Besides FAI-FAH,
value to customers.
TMB other social contribution programs include scholarships for undergraduate students in finance and banking related fields,
The TMB brand represents a promise of excellence to our
scholarships to military official’s children, donations to victims
customers. A strong brand will keep our existing customers
of natural disasters, project loans to energy and environment
fulfilled and attract new ones to TMB resulting in our
management projects, and cooperation with the World Bank,
strengthening market presence. Our brand grew in strength
Ministry of Finance and Ministry of Industry in managing the
during 2010. A survey conducted in September 2010, compared
Ozone Project Trust Fund (OPTF).
with the results of the previous year, showed TMB’s brand consideration jumped from 31% to 79%, while brand rejection
Strong corporate governance
dropped to 2% from 29%.
TMB Bank is committed to high standards of corporate governance. Good corporate governance is the bedrock
What has been done this year has gained traction. People are
of TMB with its efficiency and transparency, management
recognizing just how much we are accomplishing. TMB has
policies and systems that create trust and confidence amongst
been featured in numerous events and studies about corporate
its shareholders, investors, and other stakeholders (clients,
transformation. Our innovative no-fee products have set new
including in particular depositors, employees, regulators
benchmarks for the market and efforts are being made to
and society).
broaden the use of electronic banking throughout Thailand. In 2010, the Board of Directors enhanced the Corporate TMB’s CEO and Chiefs held 46 ‘Make THE Difference’
Governance Framework of TMB to reflect these philosophies
Management Roadshows across the country throughout 2010
while ensuring that our path toward the future aspirations are
and in the beginning of 2011. They met with small groups of
strongly governed on behalf of the shareholders.
staff in informal sessions that encouraged two-way dialogues. The goal was to engage staff with our ‘Make THE Difference’
With strong corporate governance based on local and
philosophy and introduce brand DNA (being genuine, simple &
international best practices, TMB remains true to operational
easy and intelligent, with a “Why Not?” attitude). We will
practices that deliver the greatest value to our customers,
officially launch this brand positioning in Q1 2011.
employees, shareholders and society while sustaining our long-term growth.
Helping to strengthen the community As a good corporate citizen, TMB is also involved in strengthening the communities with innovative CSR programs. Our flagship program, called “FAI-FAH,” kicked off in early 2010. Using the arts as a learning tool, over 100 TMB volunteers are helping 150 children in lower-income communities to become catalysts
Mr. Boontuck Wungcharoen Chief Executive Officer
• •
Make THE Difference
Question:
WHY MAKE THE DIFFERENCE? Answer:
There are big advantages to being a smaller-sized bank. TMB isn’t a large bank in terms of either size or assets but this gives us the ability to differentiate our approach towards financial services. By constantly challenging the status quo, TMB is committed to capturing the hearts and minds of consumers — an effect of viewing size in a completely different way. Size matters. TMB is small enough to be nimble and responsive to the needs of customers. And yet, we are a solid financial institution that creates products and services that start trends in the marketplace. When people ask how TMB is truly different, we simply offer this: at TMB, we believe in opening up a realm of possibilities for our customers. We create financial products and services in a market that had previously been underserved. That’s the kind of difference that allows us to make the difference — the TMB difference.
Boontuck Wungcharoen Chief Executive Officer
• •
Financial Performance
Question:
WHAT DIFFERE CAN MAKE TH DIFFERENCE
DIFFERENCE HE E ?
• •
Financial performance
Answer: Facts, figures, and graphs alone don’t tell the whole story . It is the will to create a positive difference that enables TMB to produce financial solutions which excite customers and provide them with
real, tangible benefits that they have never seen before . Our goal is not only to provide good services and better products, but also to make things possible for our customers . We believe each challenge requires a tailor-made approach that results in unique offers and market breakthroughs exceeding customer expectations .
3.2 BILLION IN NET PROFIT
TMB turned THB 3.2 billion net profit in 2010, marking three consecutive years of profits and continued growth with higher NIM and core non-interest income.
2008 2009 2010
3.2 billion
64.6%
GROWTH WITH CONTINUED EARNINGS MOMENTUM Resuming quality growth with 64.6% increase in net profit as compared to the previous year.
• •
People
Question:
HOW DO 8,6 EMBRACE ONE ONE DNA?
00 PEOPLE ONE CULTURE,
• •
People
Answer: Definitely, they have to do so with conviction and commitment. Big changes have taken place within TMB. All of us now share one customercentric culture through the “TMB Way.” This common culture provides TMB with a platform to ensure everything we do for our customers share the same
DNA of common values. These changes have come about from opening our channels of communication to listen to concerns of the staff and then together finding creative solutions that are based on expertise and trust. It is the respect for the staff’s individual contributions as well as their interaction within group dynamics that allow our vision to be translated into real actions — actions that translate into the power within all of our employees to Make THE Difference for all of our stakeholders.
70 th
PercenTile eMPloyee engageMenT score TMB’s employee engagement score compared to Gallup global organization database showed a dramatic increase from 13th percentile in 2009 to 70th percentile in 2010, which is now closer to the world-class threshold.
46
eMPloyee roaDshoWs anD coUnTing A total of 46 nationwide roadshow events with the management meeting all 8,600 TMB employees.
• •
People
> Our DNA
Make THE Difference At TMB, we believe in our people’s potential to Make THE Difference in order to enhance the quality of our customers’ lives through our products and services
“Why not? ” Attitude
Genuine
Always find solutions to turn
Real and authentic
impossibilities into possibilities
• Challenge market norms
• Be open and transparent
• Break through the status quo
• Provide customers with what they really need
• Act courageously to Make THE Difference for all stakeholders
• Put customers’ best interest as a priority • Take ownership in protecting customers’ interests
▼ ▼ > Our Culture
TMB Way TMB’s cultural values is the foundation that ensures consistency of character throughout our entire employee base
Customer Centricity
Open Communications
High Performance
TMB’s business is service-related and as such, our customers are very important to us. Working hand-in-hand to create the best experience possible, everyone at TMB is responsible for protecting customers’ interests as if they were their own — sometimes even challenging the status quo to ensure complete mid- and long-term satisfaction.
All TMB staff can communicate freely and are encouraged to both creatively and courageously offer suggestions while taking constructive feedback. In this culture of open learning, both personal expression and group progression are nurtured alongside responsive and timely communication to achieve faster as well as better results.
Working passionately as a team, at TMB we are able to keep in mind mutual achievement rather than individual gain. And by together being committed to and responsible for each and every single task, we are able to help achieve a standard of work that is beyond normal expectations and of true benefit to all related parties — TMB, its stakeholders, employees, and society at large.
Intelligent
Simple & Easy
Sharp and in-depth knowledge
Honest, open, and clear
• Apply knowledge in products and services for our customers’ benefit
• Focus on solutions rather than problems
• Demonstrate strong expertise
• Provide information to customers as necessary
• Be aware of and deeply understand our target customers’ needs
• Deliver convenient and speedy services that exceed customers’ expectations
• Communicate with simple language
• Keep learning
Risk Management
Integrity
Essential to our business, risk management is the responsibility of all our employees — but it is our ability to balance risk against opportunity that has set us apart. In every department, from the very beginning, our staff strive to understand the exact circumstances of each of our accounts so as to pre-empt and then mitigate risk in a responsible way. Effective risk management will enhance customers’ confidence in their business achievement and trust in TMB.
Integrity and honesty are the two key characteristics that dictate if a customer will return to our bank. By consistently delivering what is promised, correcting faults as well as admitting them and also pointing out what is wrong elsewhere, we are able to generate an ongoing atmosphere of transparency and trust.
• •
Products and Services
Question:
HOW DO WE INVENTORS O OF BANKERS
MAKE OUT ERS?
• •
products and Services
Answer: Inventors know that when conditions change, previously successful solutions could become obsolete . If bankers are to indeed become inventors, we need to proactively find successful solutions that provide our customers with real benefits to pre-empt
new challenges before they arise.
At TMB, we constantly push ourselves to make the right difference for our customers — asking the right questions before consumers do, eliminating redundancies and unnecessary processes, breaking through industry barriers, and offering more benefits to consumers . In sum, we have transformed ourselves from bankers to inventors in Thailand’s dynamic financial market .
Fiia
aWarD for cUsToMer eMgageMenT TMB innovation in deposit products won the coveted 2010 FIIA for customer engagement, beating strong competition across Asia Pacific.
branD consiDeraTion
79% 2009 2010
31%
79%
As a market leader in product innovations with several successful financial products, TMB brand consideration dramatically jumped from 31% to 79% in the year 2010, while brand rejection simultaneously dropped from 29% to 2%.
• •
products and Services
Simple questions from our customers
TMb and our ‘Make the Difference’ philosophy offer answers with tangible, real-world benefits.
TMB
no fee
Savings account
Customers have gotten accustomed to being charged fees for using their own money: withdrawals, bill payments, and funds transfers . At TMB, we asked “why?” Why do customers need to be charged fees to access their own money? TMB chose to Make THE Difference by answering the question that other banks failed to mention . Customers enrolled in the TMB No Fee Savings Account are exempt from having to pay such fees .
TMB
no liMit debit card
TMB
UP & UP
term deposit
Why pay a fee to withdraw your own money, especially if you are withdrawing from the ATM of a different bank or from an ATM in a different province? AT TMB, we felt this was not in the customers’ best interest . The TMB No Limit Debit Card — the only card that removes unnecessary limitations by allowing customers to withdraw from any banks’ ATM in any province, without being charged a fee .
Occasionally, customers need the flexibility to withdraw money from their term deposit accounts before maturity . Why then must customers surrender the interest accumulated during the time their money stayed in the account? TMB invented Up & Up Term Deposit that allows customers to withdraw without being penalized . Even if customers withdraw their funds before the fixed period of time, the accumulated interest on the account will not be forfeited . With the TMB Up & Up Term Deposit account, your interest will be calculated based on the time of your withdrawal .
TMB
so Chill
Why pay such high interest rates for withdrawing cash using your credit card from an ATM?
credit card
TMB offers a credit card for financially-savvy customers, giving them the freedom to choose their preferred benefit program . TMB So Chill is a low-interest rate credit card that allows our customers to make cash withdrawals from ATMs without having to pay penalties or fees .
TMB
Why must payroll accounts be limited to only direct deposit and withdrawals?
3d
Salary
TMB created a payroll account with additional benefits to give customers the freedom to choose which attributes best suit their lifestyle .
TMB
Every business owner wants their business to grow and expand . But if opportunities for growth are stagnated because of low collateral and lack of working capital, what’s a business owner to do?
sMe 3X
express credit
TMB believes in the potential of our SME customers and offers support by providing a business loan up to three times the value of a customer’s collateral . Eliminating the obstacles to growth and maximizing the potential of every business — that’s how TMB makes the difference .
TMB
sUPPlY Chain & Business portal
As a business expands, the amount of transactions expand along with it, too . But having more suppliers involved does not mean that business needs to be more complicated . TMB understands and would like to help smoothen financial transactions for our corporate customers with the TMB Supply Chain and Business Portal program, created to help facilitate financial transactions between buyer and seller and to best maximize the effectiveness of their business .
• •
Corporate Social Responsibility
Question:
HOW DO WE PEOPLE TO M DIFFERENCE
EMPOWER MAKE THE E ?
• •
corporate Social responsibility
Answer: Every individual possesses the power to make the difference . Once one feels a sense of empowerment to make a positive change in themselves and their community, the world opens itself up for the taking .
TMB is committed to empowering anyone on this quest for the greater social good through nurturing the imagination and offering up expertise and support . We believe that once the mind is ignited, the body will take on the rest of the journey to pave the way towards a better society .
 
150
chilDren ParTiciPaTe in oUr fai-fah PrograM Since the inception of the FAI-FAH program in April 2009, 150 children have joined the program so far and it continues to grow .
A survey conducted by ACNielsen in 2010 found that 99% of parents in the communities surveyed rated FAI-FAH as extremely useful (73%) or useful (27%)
• •
Corporate Social Responsibility
TMB volunteers, FAI-FAH children and community members joined hands to paint new walls for the Tawalsak Community in July 2010
TMB volunteers enjoying “Community Clean-up Rally� at three communities (Uthairat, Tawalsak and Wat Pai Tun)
TMB volunteers take part in the FAI-FAH Festival organized to give inner-city children an opportunity to demonstrate their new skills
Empowering children through arts and life skills
36
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Board of Directors
Annual Report 2010
boarD of direCtors
07
05
09
12 04 10
02
06
01 Mrs. saowanee kaMolbUtr
11 08
01
Chairperson
02 general PraYUt Chan-o-Cha Director
03
07 Mr. kritsda UdYanin Director
08 Mr. VaUghn nigel riChtor Director
TMB Bank PCL
03 DR. VijiT Supinit Director
09 Mr. Amorn Asvanunt Director
Board of Directors
04 Mr. Philippe G.J.E.O. Damas Director
10 Mr. Christopher John King Director
05 Mr. Aviruth Wongbuddhapitak Director
11 Mr. Tara Tiradnakorn Director
| 
06 Mr. Willem Frederik Nagel Director
12 Mr. Boontuck Wungcharoen Director and Chief Executive Officer
37
38
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Board of Directors’ Profile
BOARD OF DIRECTORS’ PROFILE
MRS. SAOWANEE KAMOLBUTR Age 58 Shareholding in TMB: 0%
Chairperson of the Board Education - Master of Public Administration, Thammasat University - Bachelor of Public Administration, Thammasat University - National Defence College - Senior Executive Program Certificate, Capital Market Academy (CMA) - Senior Executive Program (Kellogg - Sasin) - Senior Executive Program (SES 39) - The Management Development Program, Wharton School - Director Certification Program, Role of the Compensation Committee, Role of the Chairman Program and Financial Institutions Governance Program, Thai Institute of Directors Association Work Experience May 2010 – Present Director, Provincial Waterworks Authority Oct 2009 – Present Deputy Permanent Secretary, Ministry of Finance Apr 2009 – Present Director, Don Muang Tollway Plc 2008 – Present Executive Director, Neighbouring Countries Economic Development Cooperation Agency (Public Organization) (NEDA) Oct 2008 – Sep 2009 Inspector-General, Ministry of Finance 2004 – Oct 2008 Member of the Board, Member of the Audit Committee and Chairman of Labor Relation Committee, Thailand Institute of Scientific and Technological Research (Tistr) 2007 – Sep 2008 Principal Advisor on Performance Improvement, Ministry of Finance 2007 – Apr 2008 Member of the Audit Committee, KTB Leasing Co., Ltd. 2005 – Apr 2008 Director, KTB Leasing Co., Ltd. 2004 – Mar 2007 Deputy Director – General, Revenue Department
Annual Report 2010
TMB Bank PCL
gENERAL PRAyuT ChAN-O-ChA Age 57 Shareholding in TMB: 0%
Director of the Board (appointed on October 7, 2010)
Education - Bachelor of Science, Chulachomklao Royal Military Academy - Diploma, RTA Command and General Staff College - National Defence College - Director Certification Program, Thai Institute of Directors Association Work Experience Oct 2010 - Present Commander-in-Chief, Royal Thai Army 2009 - Sep 2010 Deputy Commander-in-Chief, Royal Thai Army 2008 - 2009 Chief of Staff, Royal Thai Army 2007 - Apr 2010 Independent Director and Chairman of the Corporate Governance Committee, Thai Oil Plc . 2006 - 2008 Independent Director, Metropolitan Electricity Authority 2006 - 2008 1st Army Area Commanding General, Royal Thai Army 2006 - 2007 Member of the National Legislative Assembly, Parliament
Board of Directors’ Profile
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39
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Board of Directors’ Profile
DR. VIJIT SuPINIT Age 69 Shareholding in TMB: 0%
Director of the Board Chairman of the Audit Committee Independent Director Education - Honorary Doctorate Degree of Philosophy (Economics), Ramkhamhaeng University - MA (Economics), Yale University, USA - BA (Economics) (Honors), The University of Manchester, UK - Southend College of Technology, UK - National Defence College - Senior Executive Program Certificate, Capital Market Academy (CMA) - Director Accreditation Program, Audit Committee Program and Role of the Chairman, Thai Institute of Directors Association Work Experience Apr 2008 – Present Chairman, Securities and Exchange Commission (SEC) 2007 – Present Dean, Graduate school of Management (MBA) Siam University 2006 – Present Chairman, G Steel Public Co ., Ltd . 2006 – Present Advisor, Thai – Laos Association for Friendship 2005 – Present Board member, Capital Market Development Fund Foundation 1998 – Present Director, Institute of Social and Economic Policy 1993 – Present Director, Wat Kaew Pichitre Foundation 1990 – Present Director, Puey Ungphakorn Foundation 2006 – 2007 Consultant, Bangkok Commercial Asset Management Co ., Ltd . 2005 – 2007 Chairman, Stock Exchange of Thailand Foundation 2004 – 2007 Chairman, Thailand Future Exchange Co ., Ltd . 2003 – 2007 Chairman, Asset Management Corporation of the Ministry of Finance 2003 – 2007 Chairman, Stock Exchange of Thailand 2003 – 2007 Chairman, Thailand Securities Depositories Co ., Ltd . 2003 – 2007 Chairman, Settrade .com Co ., Ltd . 2003 – 2007 Chairman, Family Knowhow Co ., Ltd . 2003 – 2007 Member, The National Corporate Governance Committee 1993 – 1996 Chairman, Export and Import Bank of Thailand 1990 – 1996 Governor & Chairman of the Court of Directors, Bank of Thailand
Annual Report 2010
TMB Bank PCL
Board of Directors’ Profile
MR. PhILIPPE g.J.E.O. DAMAS Age 60 Shareholding in TMB: 0.0028%
Director of the Board Chairman of the Board of Executive Directors Member of the Nomination, Remuneration and Corporate Governance Committee Education - MBA (Accounting & International Finance), Columbia University, New York, USA - Military Service, Belgian Army - Advanced Automatics, Ecole Nationale de l’Aéronautique et de l’Espace, Toulouse, France - Ingénieur Civil Electricien Mécanicien, Université Libre de Bruxelles, Brussels, Belgium - Directors Refresher Program, ING Vysya Bank Ltd . (India) Work Experience Mar 2011– Present Independent Director, METROCOM Bank in Kazakhstan 2006 – Present Vice Chairman of the Board, ING Vysya Bank Ltd . (India) 2006 – Present Director, ING Mauritius 2001 – Present Director, ING Asia Private Bank (Singapore) Nov 2008 – Nov 2009 CEO, Retail and Banking Asia, ING Group (Singapore) 2005 – 2008 CEO, Retail Banking Asia, Global Private Banking & ING Trust, ING Group (Singapore)
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41
42
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Board of Directors’ Profile
Annual Report 2010
MR. AVIRuTh WONgBuDDhAPITAk AGE 62 Shareholding in TMB: 0%
Director of the Board Chairman of the Nomination, Remuneration and Corporate Governance Committee Member of the Audit Committee Independent Director Education - MBA, New York University, USA - BA in Accountancy, Chulalongkorn University - Director Certification Program and The Board’s Roles in Setting Effective Compensation Policy, Thai Institute of Directors Association Work Experience Aug 2010 – Present Director, Advanced Wireless Network Co., Ltd. Mar 2010 – Present Director, Siam Bioscience Marketing Co., Ltd. Aug 2009 – Present Director, Siam Bioscience Co., Ltd. 2008 – Present Advisor, Crown Property Bureau 2008 – Present Director, China Town Community Development Co., Ltd. 2008 – Present Director, Siam Pioneer Therapeutics Co., Ltd. 2007 – Present Director, Ladawan Palace Co., Ltd. 2006 – Present Advisor, Siam Cement Plc . 2006 – Present Director & Chairman of the Audit Committee, Advance Info Service Plc . 2003 – Present Director & Member of the Executive Committee, Thai Plastic and Chemicals Plc . 2003 – Present Director, CPB Equity Co., Ltd. 2003 – Present Director, CPB Property Co., Ltd. 1995 – Present Director & Chairman of the Executive Committee, Deves Insurance Plc . 1995 – Present Director, NAVA 84 Co., Ltd. 2003 - Jul 2009 Member of the Executive Committee, CPB Equity Co., Ltd. 2007 – Jun 2009 Chairman of the Board of Director, Thai Marble Co., Ltd. 2006 – 2009 Expert Member of Board of Director and Expert Member of Investment Committee, Government Pension Fund 2007 – 2008 Director, Thai Airways International Plc . 2005 – 2008 Assistant Director General, Crown Property Bureau 2001 – 2008 Chairman, IT One Co ., Ltd .
TMB Bank PCL
Board of Directors’ Profile
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43
MR. WILLEM FREDERIk NAgEL Age 54 Shareholding in TMB: 0%
Director of the Board Chairman of the Risk Management Committee Member of the Credit Committee Education - Master of Economics, University of Amsterdam, Netherlands - Bachelor Degree, University of Amsterdam, Netherlands - Corporate Governance, Indian Institute of Management Centre for Corporate Governance & Citizenship Work Experience Jan 2010 – Present CEO & Board Member, ING Bank A.S. (Turkey) 2006 – Present Commissioner, PT ING Securities Indonesia 2008 – Jan 2010 Chairman, ING Asia Private Bank Ltd. (Singapore) 2005 – Jan 2010 Director, ING Vysya Bank Ltd. (India) 2005 – Jan 2010 Chairman of Risk Management Review Committee, ING Vysya Bank Ltd. (India) 2005 – Jan 2010 Director, ING Asia Private Bank Ltd. (Singapore) 2005 – Dec 2009 CEO & Head of Wholesale Banking, Asia, ING Bank N.V. (Singapore)
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Board of Directors’ Profile
MR. kRITSDA uDyANIN AGE 51 Shareholding in TMB: 0%
Director of the Board Chairman of the Credit Committee Member of the Board of Executive Directors Member of the Nomination, Remuneration and Corporate Governance Committee Education - MSc . (Fiscal Studies), University of Bath, UK - MA (Economics), Thammasat University - BA (Economics), Chulalongkorn University - National Defence College - Executive Program, Kellogg School of Management, USA - Senior Executive Program Certificate, Capital Market Academy (CMA) - Director Certification Program, Director Accreditation Program and Role of the Compensation Committee, Thai Institute of Directors Association Work Experience Apr 2009 – Present Director, National Credit Bureau Co ., Ltd . 2007 – Present Chairman, Secondary Mortgage Corporation 2007 – Present Financial Policy Advisor, Fiscal Policy Office, Ministry of Finance 2005 – Dec 2009 Director, ACL Bank Plc . 2007 – Mar 2009 Advisor, National Credit Bureau Co ., Ltd . 2005 – 2007 Deputy Director-General, Fiscal Policy Office, Ministry of Finance
Annual Report 2010
TMB Bank PCL
Board of Directors’ Profile
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45
Mr. Amorn Asvanunt Age 62
Mr. Vaughn Nigel Richtor
Shareholding in TMB: 0%
Age 55
Director of the Board Member of the Board of Executive Directors Member of the Credit Committee Member of the Risk Management Committee
Shareholding in TMB: 0%
Director of the Board Member of the Board of Executive Directors Education -- BA (Honors) First Class (Business Studies), London Southbank, UK -- Corporate Finance Diploma, London Business School, UK -- General Management Program Cedep and Management in International Banking Cedep, Insead, Fountainbleu, France -- Directors Colloquium on Corporate Governance, International Financial Reporting Standards (IFRS) and its implications on Indian Banking Sector and Director’s Liabilities and Competition Law from ING Vysya Bank India -- Legal Developments in Corporate Governance, Accounting and Finance Developments, Developments in Directors and Officers, Insurance and Regulator Update - APRA from ING Direct Australia Work Experience Feb 2010 – Present Non Executive Director, Member of Audit Committee and Risk Committee, ING Bank (Australia) Ltd. Jan 2010 – Present CEO, ING Banking Asia Sep 2009 – Present Member of Corporate Governance Committee, Member of Board Credit Committee, Chairman of Risk Management and Review Committee, ING Vysya Bank Ltd. (India) Jun 2009 – Present Non Executive Director, ING Vysya Bank Ltd. (India) 1997 – Present Member of Leadership Council, ING Group N.V. Feb 2006 – Apr 2009 Managing Director & CEO, ING Vysya Bank Ltd. (India) 1997 – Feb 2006 Chief Executive, ING Bank (Australia) Ltd.
Eduation -- MBA, Bowling Green State University, Ohio, USA -- BA (Accountancy), Chulalongkorn University -- Stanford-NUS Executive Program, Stanford University and National University of Singapore -- Changing Organizational Behavior Program, Wharton School, University of Pennsylvania, USA -- Director Accreditation Program and CEO Performance Evaluation, Thai Institute of Directors Association Work Experience Jun 2009 – Present Director, Drafting Committee for Specialized Financial Institution Development Plan (2009 – 2013), Ministry of Finance Mar 2006 – Present Member of the Audit Committee, Sahacogen (Chonburi) Plc 2005 – Present Independent Director, Krungdhep Sophon Plc 2003 – Present Member of the Audit Committee, I.C.C International Plc 2003 – Present Chairman of the Audit Committee, People’s Garment Plc 2003 – Present Member of the Audit Committee, Far East DDB Plc 1988 – Present Independent Director, BNH Medical Center Co., Ltd. 2003 – Mar 2006 Chairman of the Audit Committee, Sahacogen (Chonburi) Plc
46
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Board of Directors’ Profile
Annual Report 2010
MR. TARA TIRADNAkORN Age 54 Shareholding in TMB: 0%
MR. ChRISTOPhER JOhN kINg Age 66 Shareholding in TMB: 0%
Director of the Board Member of the Audit Committee Member of the Nomination, Remuneration and Corporate Governance Committee Independent Director Education - Bachelor of Laws (LL .B) (Honors), University of Bristol, UK - Postgraduate Practical Certificate in Law, University of Singapore - Director Certification Program, Thai Institute of Directors Association Work Experience Jun 2009 – Present Director, Kingfisher Holdings Ltd . Jun 2009 – Present Director, Southeast Asian Packaging And Canning Ltd . Jun 2009 – Present Director, Oceanic Cannery Co ., Ltd . Jun 2009 – Present Director, KF Foods Ltd . 2005 – Present Director, Singer Thailand Plc 1992 – Present Director, Thivatharn Ltd .
Director of the Board Member of the Risk Management Committee Independent Director Education - Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University - M .S . (Chemical Engineering), Stanford University, USA - B .Eng . (Chemical Engineering), (first-class honors, gold medal), Chulalongkorn University - Senior Executive Program Certificate, Capital Market Academy (CMA) - Program for Global Leadership, Harvard Business School, USA - Director Accreditation Program and Director Certification Program, Thai Institute of Directors Association Work Experience 2007 – Present Member, Petroleum Institute of Thailand (PTIT) Foundation Jan 2010 – Jun 2010 Director, Exploration and Production Standing Committee, Petroleum Institute of Thailand 2008 – Jun 2010 President, Chevron Petroleum (Thailand) Ltd . 2008 – Jun 2010 Director, Chevron Electricity (Thailand) Co ., Ltd . 2007 – Jun 2010 Director, Chevron Energy Development (Thailand) Ltd . 2006 – Jun 2010 Director, Tri Energy Co ., Ltd . 2006 – Jun 2010 President and Director, Chevron Pattani Ltd . 2006 – Jun 2010 Vice President and Director, Chevron Asia South Ltd . 2006 – Jun 2010 Member ot the Advisory Board, Asia Institute and Technology (AIT) 2006 – Jun 2010 President, Chevron Offshore (Thailand) Co ., Ltd . 2006 – Jun 2010 President, Chevron Block B8/32 (Thailand) Ltd . 2005 – Jun 2010 Director, Chevron Offshore (Thailand) Co ., Ltd . 2005 – Jun 2010 Director, Chevron Block B8/32 (Thailand) Ltd . 2005 – Jun 2010 Member of Management Committee, Chevron Corporation, USA 2005 – Jun 2010 President, Chevron Thailand Exploration and Production, Ltd . 2005 – Jun 2010 Director, B8/32 Partners Ltd . 2004 – Jun 2010 Advisory Council, Sasin Graduate Institute of Business Administration, Chulalongkorn University Council 2004 – Jun 2010 Member, Council of Trustees, Petroleum Institute of Thailand 1998 – Jun 2010 Director, Chevron Thailand Exploration and Production, Ltd . 2008 – Dec 2009 Chairman, Exploration and Production Standing Committee, Petroleum Institute of Thailand 2006 – Jun 2009 Vice President and Director, Chevron New Ventures (Thailand) Ltd . -(this company was dissolved)
TMB Bank PCL
Board of Directors’ Profile
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47
MR. BOONTuCk WuNgChAROEN Age 54 Shareholding in TMB: 0%
Director of the Board and Chief Executive Officer Member of the Board of Executive Directors Member of the Credit Committee Member of the Risk Management Committee Education - MBA (Finance and International Business), New York University, USA - B .Eng . (Chemical Engineering), Chulalongkorn University - Director Accreditation Program, Thai Institute of Directors Association Work Experience Jul 2008 – Present Chief Executive Officer, TMB Bank PCL 1982 – Present Director, Benjaboon Enterprise Co ., Ltd . 1999 – 2007 Executive Vice President, KASIKORNBANK PCL
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Chief Officers
Annual Report 2010
Chief Officers
04 06
07
05
02
01 Mr. Boontuck wungcharoen Chief Excetive Officer
01
02 Mr. Bart F.m. Hellemans Chief Risk Officer
03 Mr. SIMON Patrick Andrews Chief Operating Officer
03
04 Mr. Michal jan Szczurek Chief Retail Banking Officer
07 Mr. Thanomsak Chotikaprakai Chief Financial Officer
05 Mr. Piti Tantakasem Chief Wholesale Banking Officer
06 Mr. Sayam Prasitsirigul Chief SME Banking Officer
TMB Bank PCL
Chief Officers
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49
Mr. Boontuck Wungcharoen
Mr. Bart F.M. Hellemans
Mr. Simon Patrick Andrews
Mr. Michal Jan Szczurek
Director of the Board Member of the Board of Executive Directors Member of the Risk Management Committee Member of the Credit Committee Chief Executive Officer
Chief Risk Officer
Chief Operating Officer
Chief Retail Banking Officer
Age 55
Age 45
Age 39
Education
Education
Education
Work Experience
Work Experience
(Appointed on July 14, 2008)
2008 – Present Chief Risk Officer,
2009 – Present Chief Operating
Work Experience
Age 54
TMB Bank Pcl.
Officer, TMB Bank PCL
2009 – Present Chief Retail
2005 – 2008 Managing Director,
2005 – 2009 Risk Director, ING
Banking Officer, TMB Bank PCL
Head Credit Capitals, ING Bank,
DIRECT (UK)
2004 – 2009 Vice President
Amsterdam, The Natherlands
1994 – 2005 Head of Direct
of the Management Board ,
2003 – 2005 Managing Director,
Sales and Operations, ING
ING Bank Slaski
ING Vysya Bank Ltd.
DIRECT (Australia)
1998 – 2009 Vice President
Education -- MBA in Finance and International Business from New York University, USA -- B.Eng., Chemical Engineering from Chulalongkorn University
-- Bachelor in Applied Economics, -- MBA in Banking and Finance, University of Technology,
Sciences University of Warsaw
Belgium
Sydney, AUS
and Columbia University,
of the Management Board ,
Director and BBL representative,
ING Nationale-Nederlanden
The Vysya Bank Ltd.
Poland Life Insurance Company
2008 – Present Chief Executive Officer, TMB Bank PCL 1999 – 2007 Senior Executive Vice President, at Kasikornbank PCL
Mr. Piti Tantakasem
Mr. Sayam Prasitsirigul
Mr. Thanomsak Chotikaprakai
Chief Wholesale Banking
Chief SME Banking Officer
Chief Financial Officer
Age 41
Age 47
Age 40
Education
Education
Education
-- MBA in Finance from The
-- Master of Business
Peter F. Drucker Center, The
Administration, University of
Management from
Claremont Graduate School,
Eastern Michigan, USA
Bangkok University
California, USA
-- Ph.D. in Strategic
Work Experience
and The University of
Work Experience
2009 – Present Chief Financial
Nebraska, Thailand,
2008 – Present Chief SME
officer, TMB Bank PCL
Lincoln, NE, USA
Banking Officer, TMB Bank PCL
1996 – 2009 Director & Chief
Work Experience
2007 – 2008 First Vice
Financial Officer, Standard
2008 – Present Chief
President, Head of Supply Chain
Chartered Bank (Thai)
Wholesale Banking Officer,
Financing and Head of Cash
1991 – 1996 Business Planning &
TMB Bank PCL
Management Department at
Analysis Manager,
2007 – 2008 First Senior
KASIKORNBANK PCL
American Express (Thai) Co.,Ltd.
Vice President, Segment
1989 – 1991 Manager, J. Film
Head of Large Corporate
Process Co., Ltd.
Clients at KASIKORNBANK PCL
Poland
1999 – 2002 Deputy Managing
Work Experience
Officer
-- Master Of Science, Economic
Catholic University of Leuven,
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Leadership Team
LEADERSHIP TEAM
EXECUTIVE Standing – from left to right
Paradai Theerathada Corporate Communications Group
Dr. Agapol Na Songkhla Strategy and Transformation Group
Peera Chinwannabutr Audit Group
M.L. Ayuth Jayant Corporate Governance Group Seated
Boontuck Wungcharoen Chief Executive Officer
FINANCE From left to right
Waewalai Wattana Financial Control Group
Thanomsak Chotikaprakai Chief Financial Officer
Arwiwan Tangtrongchit Financial Planning and Analysis Group
Apiradee Lamsam Balance Sheet Management Group
Annual Report 2010
TMB Bank PCL
OPERATIONS Standing – from left to right
Saipin Kittipornpimol Information Technology Group
Jean-Pierre Nelissen Project and Process Management
Montree Thirasakthana MIS Seated – from left to right
Chompoonoot Pathomporn Corporate Services Group
Simon Patrick Andrews Chief Operating Officer
RISK MANAGEMENT From left to right
Wipaporn Techamaitrechit Risk Analytics and Policy Group
M.L. Siriwan Kasemsant Compliance Group
Chamaree Ananatsiri Independent Credit Review
Bart Hellemans Chief Risk Officer
Martin Alan Searle Consumer & SME Credit Group
Surakiat Wongwasin Operational Risk Management Group
Fabienne Leone Louise Marie Libert Credit Risk Intelligence Group
Utoomphorn Kunakorn Wholesale Credit and Restructuring Group
Somsak Woravijak Legal Group
Oranuj Tantimedh Market Risk Management Group
Leadership Team
|
51
52
|
Leadership Team
RETAIL BANKING From left to right
Ouracha Pongwattan Unsecured Lending Business Group
Pradit Leosirikul Branch Banking Group
Willem Feyo Alexander Baron Van Heemstra Secured Lending Business Group
Kamolwan Imruthaicharoenchok Bank Assurance
Kanchana Rojvatunyu Retail Marketing Group
Michal Szczurek Chief Retail Banking Offi cer
Luecha Sukrasebya Alternative Channel Group
Tamara Van Den Ban Deposit & Payment Products Management Group
SME BANKING Standing – from left to right
Panicha Buraparat SME Portfolio Management and Sale Service
Piti Krasaesian Medium SME Segment Group
Paphon Mangkhalathanakun Small SME Segment Group
Phongsak Tantbirojn Supply Chain Solutions Seated
Sayam Prasitsirigul Chief SME Banking Offi cer
Annual Report 2010
TMB Bank PCL
WHOLESALE BANKING Standing – from left to right
Vallapa Posyanond Corporate Banking Relationship Management Group
Saranya Phuphatana Capital Market Group
Sakda Pongcharoenyong Corporate Banking Relationship Management Group
Chaowapat Lertwongsatien Corporate Marketing Management
Patchanee Vongsilpawattana Transactional Banking Group Seated – from left to right
Sandra Yiu Lending & Structured Products Group
Sopon Kluaymai Na Ayudhaya Military Business Relationship Management Group
Vikran Paovarojkit Corporate Banking Relationship Management Group
Dr. Piti Tantakasem Chief Wholesale Banking Officer
Leadership Team
|
53
54
| 
Organization Chart
Annual Report  2010
ORGANIZATION CHART
Board of Directors
Nomination, Remuneration and Corporate Governance Committee
Credit Committee
Chief Executive Officer
Chief Retail Banking Officer (CRBO)
Chief SME Banking Officer (CSBO)
Chief Wholesale Banking Officer (CWBO)
Branch Banking Group
Medium SME Segment Group
Corporate Banking Relationship Management Group 1
Strategy and Transformation Group
Retail Marketing Group
Small SME Segment Group
Corporate Banking Relationship Management Group 2
Human Resource Group
Wealth Management Group
SME Portfolio Management & Sale Service
Alternative Channels Group
Military Business Relationship Management Group
Corporate Governance Group
Lending & Structured Products Group 1
Corporate Communications Group
Supply Chain Solutions Unsecured Lending Business Group
Secured Lending Business Group Deposit & Payment Products Management Group
Lending & Structured Products Group 2 Transactional Banking Group
Capital Markets Group Direct Business Credit Product Business Planning & Analysis
Corporate Marketing Management Corporate Portfolio and Profitibility Management
TMB Bank PCL
Board of Executive Directors
Organization Chart
Risk Management Commitee
| 
Audit Committee
Audit Group
Chief Risk Officer (CRO)
Chief Financial Officer (CFO)
Chief Operating Officer (COO)
Wholesale Credit and Restructuring Group
Financial Control Group
Information Technology Group
Consumer and SME Credit Group Market Risk Management Group Operational Risk Management Group Risk Analytics and Policy Group Credit Risk Intelligence Group
Compliance Group
Legal Group
Independent Credit Review
Macroprudential Risk
Financial Planning and Analysis Group Balance Sheet Management Group Performance Measurement
Operations and Services Group Corporate Services Group
MIS
Project and Process Management
55
56
|
Thai Economy and Banking Industry
Annual Report 2010
Thai Economy and Banking Industry
2010 Economic Review
Thai exports will face a challenging year ahead as the
The path of the Thai economy in 2010 reverted to a
global recovery will still be patchy. The U.S. economy will
remarkable growth at 7.8%. This was mainly driven by the
see moderate improvement but will remain weak from high
strong performance of exports and was aligned with a robust
household leverage and the lingering housing market slump,
recovery across Thailand’s trading partners in Asia and other
while the Euro-zone will be crippled by the sovereign crisis
emerging markets. Private consumption and investment
that may spread across the region. A similar outlook is
also partly contributed to growth, expanding continually as
predicted for Japan with its prolonged sluggish economy and
remnants of the political crisis abated.
minimal monetary and fiscal policy headroom.
Rising exports and private spending led to improved capacity
On the capital market front, foreign funds flow will continually
utilization and more production in the real sector. This was
be tilted towards emerging Asia and Thailand, especially in the
supported by exceptionally low interest rates and a lax
debt market. This will put upward pressure on the Thai baht and
monetary policy. Overall in 2010, the Thai economy proved
result in an appreciation path of between 30 – 28.5 THB/USD.
itself to be resilient in light of the recent baht appreciation
Against the backdrop of rising global commodity prices such as
and massive domestic floods in agricultural areas.
energy and agriculture products, core inflation, which excludes raw food and energy, is projected to notch up to 2 – 3%. As
2011 Economic Outlook
a result, the Bank of Thailand’s policy rate is expected to be
The upward momentum of the Thai economy will likely be
lifted from 2% as of end 2010 to 3-3.25% by year-end 2011.
carried forward into 2011. However, given the 2010 impressive turnaround, economic growth is projected to moderate around
Banking Industry in 2010
3.6% owing partly to high base from the previous year. Even
The Thai banking industry significantly expanded from the year
though exports will still feature as the critical engine of
2009. During 2010, total assets increased by 13% to around
growth, more emphasis will be on private consumption, which
THB 11.7 trillion. In line with a strong economic performance,
is expected to gain further traction as the market sentiment
total loans rose 11% to THB 7.4 trillion, whereas total deposits
continually improves. Pre-election government policies,
grew 5% to THB 7.4 trillion as well. The loan-to-deposit ratio
ranging from the public’s welfare subsidy to nation-wide
consequently edged up to 98% on an average. Nonetheless,
minimum wage increase, will also support this year’s growth.
there is still ample liquidity in Thai commercial banks, which stands at THB 1.2 trillion. This comes from alternative financing
% change on previous year
sources, specifically the issuances of bills of exchange and debentures by commercial banks. The total industry-wide capital adequacy ratio slightly rose from the previous year to 16.2%. Retail loans, accounting for 24% of total system-wide loans, grew remarkably around 18.3% year-on-year. Corporate lending, accounting for 43% of total loans, expanded 10.8%, while SME loans increased 9.6%. On a sectoral basis, loans to construction and manufacturing sectors rose 6%. For service sectors including restaurant, hotel, and transportation, loan outstanding grew 4%.
2006
█ Net export █ Investment
2007
2008
2009
█ Change in stock █ Consumption
Source: NESDB and TMB Analytics
2010P
2011F
Loans to retail-wholesale commerce and agricutural sectors expanded significantly at 10% and 12%, respectively. In contrast,
GDP growth
real estate lending contracted at 3%.
TMB Bank PCL
Thai Economy and Banking Industry
In December 2010, total non-performing loans decreased by THB64,000 million from 2009-end. Gross NPL ratio also dropped to 3.57%. The sectors that feature a high NPLs were construction and real estate, manufacturing, and retail-wholesale commerce, with a NPL ratio around 10%, 8%, and 5% respectively (data as of September 2010).
|
Thai Banking System: Total Deposits 7.5
10%
7.0
8% 6%
6.5
4% 6.0
Industry-aggregate operating performance of 2010 resulted in THB 123,000 million in net profit, growing at 33% year-on-year. Net interest income plus dividends increased 9%, while
5.5
during the latter half of the year.
Thai Banking System: Total Assets
0%
5.0
fee-based income grew 15%. Net interest margin (NIM) improved marginally to 3.10%, driven by interest rate up-cycle
2%
-2% Dec 06 Dec 07 Dec 08 Dec 09 Dec 10
█ Deposits (trln. Baht)
% Growth YTD
Thai Banking System: Total NPL
13.0
14%
0.50
8%
12.0
12%
0.45
7%
0.40
6%
0.35
5%
0.30
4%
11.0
10%
10.0
8%
9.0
6%
8.0
4%
7.0 6.0
2%
0.25
3%
5.0
0%
0.20
2%
Dec 06 Dec 07 Dec 08 Dec 09 Dec 10
█ Assets (trln. Baht)
Dec 06 Dec 07 Dec 08 Dec 09 Dec 10
█ Gross NPL (trln. Baht)
% Growth YTD
Thai Banking System: Total Loans 8.0
Thai Banking System: Fee Income 15%
6.0
10%
4.0
5%
2.0
0%
-
Dec 06 Dec 07 Dec 08 Dec 09 Dec 10
█ Loans (trln. Baht)
% Growth YTD
% NPL ratio
110
18%
100
14%
90
12%
80
10%
70
8%
60
6%
50
4%
40
2% 2006
2007
2008
2009
█ Fee and service income (bln. Baht)
2010 % Growth YoY
57
58
|
Thai Economy and Banking Industry
Trend of Commercial Banks in 2011
Annual Report 2010
3 . The government and Bank of Thailand have recently
Four important factors that could potentially affect the
put more emphasis on microfinance lending, a part of
landscape of the Thai banking industry are:
the Financial Sector Master Plan Phase II (2010-2014). The Thai Post office, with its large branch network, has
1 . On August 11, 2011, the current unlimited coverage of the
been identified as one of the main channels to disperse
state’s deposit protection guarantee will be downgraded
micro-loans and will start lending in 2011, supported
to a maximum guarantee of THB 50 million per individual
by non-commercial state banks. This will lead to more
and per bank. The reduction in coverage will induce
competition in the consumer lending segment.
large-scale deposit accounts to be relocated across banks. Since 66% of deposit accounts that exceed THB 50 million
4 . Following pressure from the government in the second
baht are concentrated on large commercial banks, while
half of 2010, commercial banks agreed to reduce the fees
medium-sized banks and small banks carry only 24%
for certain electronic fund transfers. The government has
and 10%, respectively, the impact will likely fall on major
made it clear that going forward it will continue to work
players in the banking industry. Competition for deposit
with banks to further reduce bank charges for customer
financing by commercial banks is likely to be stiff going
transactions and this will result in lower fee income.
forward. Overall this year will see more competition among commercial 2 . To counter pressure on the baht, the Bank of Thailand has
banks on both loan and deposit fronts. Total loans are
put in place a measure that provides incentive for the private
projected to grow at 8% from the previous year. Total deposits
sector to invest abroad. This will effectively imply increasing
will register a smaller growth figure no more than 5% as
the amount of commercial banks’ facilities that have foreign
depositors will be covered less by the state deposit protection
exposure. Commercial banks’ credit underwriting will be
guarantee and will be presented with more diverse choices
concerned more with issues of country risks.
of saving alternatives.
TMB Bank PCL
Management Discussion and Analysis
|
59
Management Discussion and Analysis
Executive summary
Together with growing quality loans, the Bank managed
In 2010, TMB enjoyed continued earnings momentum. Net
to lower the number of Non-performing loans (NPLs) and
profit of the Bank and its subsidiaries were recorded at
Non-performing assets (NPAs) through resolutions and sales.
THB 3,202 million, an increase of 64.6% from 2009 and ROE
Our NPL ratio has dropped continuously from 14.3% in 2008,
improved from 4.3% to 6.6%. This is the third consecutive year
12.7% in 2009 to 8.3% in 2010, with a strong loan loss reserve
of growing profits since our recapitalization in December 2007.
equal to 159% of the Bank of Thailand requirements. At the same time, TMB minimized the formation of NPLs through our
There are many factors behind TMB’s earnings growth. A
strong risk management capabilities. Foreclosed properties
higher net interest margin (NIM) and improvement of core
declined from THB 19,260 million in 2008, to THB 11,132 million
non-interest income, coupled with lower risk costs, were the
in 2009 and THB 6,436 million in 2010. During 2010, TMB also
major drivers of the Bank’s improved profits. In 2010, NIM
cleaned up retained losses and share discounts by adjusting
was enhanced from 2.26% in the previous year to 2.31%
the equity account. This resulted in a healthy balance sheet
while the core non-interest income grew by 10%. The Bank’s
and the ability to pay dividends after approval from the Board
fee-generating ability has improved on the back of enhanced
of Directors and shareholders, and upon relevant regulations
trade finance and higher income from retail banking products.
of the Bank of Thailand.
The gain on exchange rose 26.9%, driven by higher exchange volume at the Bank’s retail booth, better currency trading and
The Bank’s financial position continued to improve during the
a growing trade finance business.
year. The Bank’s Tier I capital and Capital Adequacy Ratio (CAR) in 2010 was 11.3% and 16.6%, which was comfortably
During 2010, the Bank emphasized quality growth. Performing
higher than the Bank of Thailand’s minimum requirement of
loans increased by 4.2% from 2009, or 5.5% if the impact of
4.25% and 8.50% respectively. The Bank also continued to
the settlement with BAM was excluded. In addition, the Bank
maintain a strong liquidity position with a high allocation
simultaneously took actions to strengthen its loan book quality
to liquid and low risk earning assets as well as retaining a
by reducing the exposure in low quality loans. Excluding these
healthy loan to deposit ratio of 87.9%.
actions the bank-wide performing loan growth would have been more than 10%.
Figure 1: 2010 operating performance Consolidated net profit and ROE
Tier I and Capital adequacy ratio
3,500
18%
3,202
3,000 2.500 1,945
2,000
6.6%
1,500 1,000
4.3%
500 THB million
2009
██ Net profit (LHS)
20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
17.13% 16.59%
16% 14% 12%
12.31% 11.33%
10%
2010
2009 ROE (RHS)
Note: Consolidated financial statements
CAR Note: Bank-only
Tier I
2010
|
60
Management Discussion and Analysis
Annual Report 2010
Figure 2: 2010 operating performance (continued) Total loans and loan growth
Non-performing loans (NPL) and gross NPL ratio
400,000
55,000
5% 368,092 363,177 -1.3%
350,000
0%
54,095 12.7%
14% 12%
50,000
10% 8.3%
45,000 -5%
6%
40,000
300,000 -10% -13.2% -15%
250,000 THB million
2009
2010
██ Total loan (LHS)
Loan growth (RHS)
8%
36,047 35,000
4% 2%
30,000
0% 2009
THB million
██ NPL (LHS)
2010
Gross NPL ratio (RHS)
Note: Consolidated financial statements
Note: Consolidated financial statements
Figure 3: 2010 operating performance (continued) Loan to deposit ratio
Deposit breakdown
100%
100%
10.5%
9.6%
39.0%
36.6%
50.5%
53.8%
80%
90%
90.3% 87.9%
60% 40%
80%
20% 0%
70%
2009
2010
Loan to deposit ratio Note: Consolidated financial statements
2009
█ Current
2010
█ Savings █ Fixed
Note: Bank-only
Discussion of operating performance
growth momentum which was mainly due to the improvement
TMB Bank and its subsidiaries reported a net profit of
of core non-interest income on the back of better fee income
THB 3,202 million in 2010, an increase of 64.6% or THB 1,257
and gain on exchange, lower non-interest expense and a
million from a net profit of THB 1,945 million in 2009. The
decrease in loan loss provisioning from better quality of
Bank’s return on equity (ROE) also rose to 6.6% in 2010 from
loan portfolio. The core operating performance improved as
4.3% in 2009. This better profitability reflected an earnings
highlighted below.
TMB Bank PCL
Management Discussion and Analysis
Figure 4: Consolidated net profit
Figure 5: Return on Equity
3,500
8%
3,202
3,000
61
6.6%
2,500 2,000
|
6%
1,945
4.3%
1,500
4%
1,000 500
2%
THB million
2009
2010
2009
2010
██ Net profit
██ Return on equity
Note: Consolidated financial statements
Note: Consolidated financial statements
Figure 6: Consolidated income statements Change 2010
2009
Amount
%
18,499
20,481
(1,982)
-9.7%
6,240
8,074
(1,834)
-22.7%
Net income from interest and dividend (NII)
12,259
12,407
(148)
-1.2%
Bad debts and doubtful accounts (reversal)
1,654
2,628
(973)
-37.0%
(Unit: THB million)
Interest and dividend income Interest expenses
NII after provision Non-interest income Non-interest expenses Net income (loss) before income tax - Income tax - Minority interests in net profit Net profit
10,605
9,780
825
8.4%
6,966
10,077
(3,111)
-30.9%
14,346
17,858
(3,512)
-19.7%
3,225
1,999
1,226
61.3%
14
33
(20)
-58.4%
9
20
(11)
-55.4%
3,202
1,945
1,257
64.6%
Note: Consolidated financial statements
Total interest income and expenses
Figure 7: Total interest income and expenses
Total interest and dividend income of the Bank and its subsidiaries was THB 18,499
25,000
million, a decrease of THB 1,982 million or 9.7% from 2009. The decrease was mainly due to lower interest on loans which declined by 9.7% to THB 15,810 million in 2010, as a result of a loan portfolio rebalance. Investment income also decreased by THB 320 million or 14.3% due to lower investment portfolio. Total interest expenses amounted to THB 6,240 million in 2010, a decline of THB 1,834 million or 22.7% mainly due to a reduction in interest on deposits which decreased by THB 1,483 million or 25.5% and in interest from short-term borrowing which decreased by THB 231 million or 42.1%.
20,481
18,499
20,000 15,000 10,000
8,074 6,240
5,000 0 THB million
2009
2010
█ Total interest income █ Total interest expense Note: Consolidated financial statements
62
|
Management Discussion and Analysis
Annual Report 2010
Net interest income
Provisions for loan losses
Net interest income (NII) of the Bank and its subsidiaries was
Due to efficient NPL resolution, loan loss provisions for 2010
THB 12,259 million in 2010, a slight decline of THB 148 million
declined by THB 973 million or 37.0% from THB 2,628 million
or 1.2% from 2009. This was mainly due to the reduction in
to THB 1,654 million. The decrease was mainly due to a lower
loan volume which was a result of loan portfolio rebalance
provision for NPLs as well as lower general provision.
and lower investment income. However, net interest margin (NIM) improved from 2.26% in 2009 to 2.31% in 2010 mainly due to a reduction in cost of fund.
Figure 8: Net interest income and net interest margin (NIM) 15,000
Figure 9: Provisions for loan losses
5%
3,000
3%
2,000
2%
1,000
1%
0
12,407 12,259 10,000
5,000
1,654
2.31%
2.26%
0 THB million
2,628
2009
2010
██ Net interest income (LHS)
THB million
2009
2010
██ Loan loss provision
Net interest margin (RHS) Note: Consolidated financial statements
Note: Consolidated financial statements
Figure 10: Net interest income Change (Unit:THB million)
2010
2009
Amount
%
Interest on loans
15,810
17,506
(1,697)
-9.7%
771
737
34
4.7%
1,918
2,238
(320)
-14.3%
18,499
20,481
(1,982)
-9.7%
4,344
5,827
(1,483)
-25.5%
93
158
(65)
-41.1%
318
549
(231)
-42.1%
1,486
1,540
(54)
-3.5%
6,240
8,074
(1,834)
-22.7%
12,259
12,407
(148)
-1.2%
Interest on interbank and money market items Investment income Total interest and dividend income Interest on deposits Interest on interbank and money market items Interest on short-term borrowings Interest on long-term borrowings Total interest expenses Net interest and dividend income Note: Consolidated financial statements
TMB Bank PCL
Management Discussion and Analysis
Non interest income
Figure 11: Non-interest income
The Bank and its subsidiaries reported a non-interest income of THB 6,966 million, a decrease of THB 3,111 million or 30.9% from 2009, mainly due to lower extra-gain
12,000
from buy-back hybrid tier I securities and an unwinding interest rate swap. However, 10,077
core non-interest income, which included fee income and gain on exchange, rose by 10% to THB 6,087 million. The consolidated fee income was THB 4,803 million,
10,000
or an increase of 6.4% from last year, and was mainly driven by trade finance, card business, sales of Bancassurance and mutual funds. Gain on exchange increased by 26.9% due to an increase in exchange volume at retail booths, better currency
8,000
trading and a growing trade finance business.
6,966
6,000 2009
THB million
2010
██ Non-interest income Note: Consolidated financial statements
Figure 12: Non interest income Change (Unit:THB million)
Gain/loss on investments Share of profit (loss) using the equity method
2010
2009
Amount
%
157
14
143
1030.8%
36
95
(59)
-62.3%
4,803
4,514
289
6.4%
337
425
(88)
-20.7%
- Others
4,466
4,089
377
9.2%
Gain on exchange
1,284
1,012
273
26.9%
0
0
0
N/A
686
4,443
(3,757)
-84.6%
6,966
10,077
(3,111)
-30.9%
Fees and service income - Acceptances, avals and guarantees
Gain on sale of assets Other income Total non-interest income Note: Consolidated financial statements
|
63
64
|
Management Discussion and Analysis
Annual Report 2010
Non interest expenses Non-interest expenses for the Bank and its subsidiaries in 2010 was THB 14,346
Figure 13: Non-interest expenses
million, a decrease of THB 3,512 million or 19.7% from 2009, and was mainly due to lower personnel expenses, lower impairment of foreclosed properties and lower
18,000
17,858
loss on provisions of obligations from transferred non-performing assets. Personnel expenses dropped 10.4% year-on-year, mainly due to the absence of the
16,000
mutual-separation early retirement program expense of THB 1.3 billion which was booked in 2009. However, it was offset by the additional early retirement program
14,346
expense of THB 165 million and a higher marketing cost of THB 302 million, and the 14,000
extra expense of a service staff conversion program. Loss on impairment of properties foreclosed decreased by THB 1,789 million or 65.4% year-on-year, mainly because in 2009, the Bank executed THB 4.4 billion
12,000
worth of NPA sales which resulted in a THB 1,551 million loss in impairment of
THB million
properties foreclosed. Loss on provisions of obligation decreased by THB 1,148
██ Non-interest expense
million or 371.2% mainly due to a reversal of loss on provisions of obligations of
Note: Consolidated financial statements
2009
2010
THB 831 million from the settlement with BAM on the NPLs transferred.
Figure 14: Non-interest expenses Change (Unit: THB million)
2010
2009
Amount
%
Personnel expenses
5,861
6,543
(682)
-10.4%
Premises and equipment expenses
2,907
2,688
219
8.1%
628
672
(44)
-6.5%
1,424
1,333
91
6.8%
Taxes and duties Fees and service expenses Directors’ remuneration
30
27
3
11.5%
948
2,737
(1,789)
-65.4%
Contributions to the DPA
1,613
1,745
(132)
-7.6%
Loss on provisions of obligations from transferred non-performing assets
(839)
309
(1,148)
-371.2%
Loss on provisions of obligations - others
(547)
(380)
(168)
N/A
Other expenses
2,321
2,183
138
6.3%
14,346
17,858
(3,512)
-19.7%
Loss on impairment of properties foreclosed and other assets
Total non-interest expenses Note: Consolidated financial statements
TMB Bank PCL
Management Discussion and Analysis
|
65
Discussion of financial position
its loan book quality by reducing the exposure to lower quality
Assets
loans. Excluding the actions the bank-wide performing loan
As of 31 December 2010, total assets of the Bank and its
growth would have been more than 10%.
subsidiaries were THB 589,592 million, an increase of 8.6% from THB 543,142 million as of 31 December 2009. The
In terms of a loan mix (bank-only basis), as of 31 December
increase was mainly due to a rise in interbank & money
2010, corporate, small & medium enterprises (SME) and retail
market and investment. Loans remained the biggest items
loans accounted for 51.2%, 29.6% and 19.1% of total loans
accounting for 65.2% of the Bank’s earning assets, compared
respectively, while term loans including promissory notes,
with 69.2% in 2009. Investment and interbank & money market
overdrafts and trade finance represented a 72.7%, 15.1% and
represented a 17.0% and 15.2% share of the Bank’s earning
8.8% share of total loans respectively.
assets respectively. * The bank had an early settlement of NPLs transferred to BAM.
Figure 15: Composition of the Bank’s earning assets 100.0%
BAM replaced the promissory note of THB 19,712 million, which has been booked as performing loans with the promissory note of
65.2%
69.2%
THB 15,681 million. Therefore, performing loans of the bank declined
80.0%
by THB 4.0 billion.
60.0%
Note: 1) Corporate loans are loans to customers that have a total annual
40.0% 17.0%
15.4%
20.0% 0.0%
12.5%
15.2%
2.8%
2.6%
2009
█ Cash
█ Interbank
revenue of over THB 500 million. 2) SME loans are loans to customers that have a total annual revenue of less than THB 500 million including owner operator 3) Consumer loans are loans to individual persons.
2010
█ Investments █ Loans
Note: Consolidated financial statements
Loans As of 31 December 2010, total loans of the Bank and its
Figure 16: Total loans 400,000
subsidiaries were THB 363,177 million, a decline by 1.3% from
368,092 363,177
31 December 2009, mainly due to (1) the THB 18 billion reduction in NPLs, which largely resulted from the THB 9.3 billion NPL
350,000
sale in 2Q10, the NPL resolution and write-off, (2)*the THB 4.0 million performing loan reduction from an early settlement of NPL transferred to the Bangkok Commercial Asset Management
300,000
(BAM) in December 2010. However, the decline was offset by an increase in performing loans from all customer segments. 250,000
Performing loans increased by 4.2%, or 5.5% if the impact of
THB million
2009
2010
early settlement of NPLs transferred with BAM was excluded.
██ Total Loan
During 2010, the Bank simultaneously took actions to strengthen
Note: Consolidated financial statements
66
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Management Discussion and Analysis
Figure 17: Loan breakdown by customer group
Annual Report 2010
Investment Consolidated net investments were THB 94,538 million as of 31
DEC 10
December 2010, an increase by 15.0% from THB 82,194 million as of 31 December 2009. The increase was from long-term
Retail 19.1%
investment in government bonds. Short-term investment was Corporate 51.2%
THB 46,249 million, representing 48.9% of total investments, while long-term investment was THB 48,289 or 51.1% of total investments. The majority of the Banks’ investment was debt
SME 29.6%
instruments, which were mostly government bonds. Total allowance for investments in debt and equity securities, based on the bank-only financial statements was at THB 1,090 million and THB 1,293 million as of 31 December 2010 and 31
DEC 09
December 2009, respectively.
Retail 18.4% Corporate 50.2% SME 31.4%
Figure 19: Investments 100,000 80,000
94,538
█ Current
82,194
471 48,289
60,000
22,358
DEC 10
investments
█ Investments in 59,365 46,249
20,000
Trade finance 8.8%
█ Long-term
Figure 18: Loan breakdown by type 40,000
investments
subsidiaries and associated companies
0 Loans and RPN 72.7%
OD 15.1%
THB million
2009
2010
Note: Consolidated financial statements
Others 3.4%
Interbank and Money market As of 31 December 2010, net interbank & money market
DEC 09
Trade finance 7.6% OD 10.1% Others 2.5%
was THB 84,625 million, an increase of THB 18,010 million or 27.0% due mainly to an increase in private repurchase items Loans and RPN 79.7%
according to liquidity management. Asset quality As of 31 December 2010, the Bank and its subsidiaries’ non-performing loans (NPLs), classified as substandard, doubtful and doubtful loss, were THB 36,047 million compared
TMB Bank PCL
Management Discussion and Analysis
|
67
to THB 54,095 million as of 31 December 2009. The reduction
The Bank’s net properties foreclosed were THB 6,436 million
was mainly due to the THB 9.3 billion NPLs sale in 2Q10,
as of 31 December 2010, a substantial decline from THB 11,132
and a resolution of major NPLs and NPL write-offs. NPL ratio
million in 2009, which was mainly due to the on-going
as of 31 December 2010 dropped to 8.3% from 12.7% in
properties foreclosed sales during the year. The Bank will
2009. Total allowance for doubtful accounts and revaluation
continue to reduce the properties foreclosed with a stringent
allowance for debt restructuring was at THB 20,546 million
policy in foreclosing properties.
with NPL coverage ratio of 57.0% compared to 57.7% in 2009. Figure 20: Non-performing loans (NPL) and NPL ratio
Figure 21: Loan loss allowance and NPL coverage
60,000
40,000
50,000
16%
54,095
14% 12.7%
12%
40,000
36,047
30,000
8% 6%
10,000
4%
2009
80%
15,000
70%
10,000
2010
██ Non-performing loans (LHS) NPL ratio (RHS) Note: Consolidated financial statements
4%
31,208
11,132
30,000
2.0%
10% 8.3%
20,000
THB million
Figure 22: Properties foreclosed and % to total assets
20,546
20,000
60%
57.7%
50%
2009
2010
██ Loan loss allowance (LHS) NPL coverage (RHS) Note: Consolidated financial statements
2%
6,436
5,000
1.1%
57.0%
10,000
THB million
3%
1,000
1% 0%
THB million
2009
2010
██ Property foreclosed (LHS) % properties foreclosed to total assets (RHS) Note: Consolidated financial statements
Funding and liquidity
such as “Quick interest” and “Up and Up”. Total borrowings as
Total liabilities of the Bank and its subsidiaries as of 31
of 31 December 2010 increased to THB 62,104 million or 22.6%
December 2010 were THB 539,737 million, an increase by
year-on-year mainly due to the issuance of the THB 11,131
8.7% from 2009, mainly driven by a rise in interbank and
million bill of exchange (BE) in 4Q10.
money market. Deposits increased by 1.3% from 2009, mostly from term deposits, to THB 413,115 million at the end of the
During the year, the Bank continued to maintain its strong
year. Deposits remained the largest composition of interest-
liquidity position with a high allocation to liquid and low-risk
bearing liabilities, representing 83.0% of total interest-bearing
earning assets. As of 31 December 2010, total liquid assets
liabilities, with 12.5% for borrowings and 4.5% for interbank
(cash, interbank & money market and short-term investment)
& money market.
represented 26.1% of the total earning assets, compared to 26.5% as of 31 December 2009. Most of these investments
Current and saving accounts (CASA), represented 46.4% of
were in government bonds. With strong liquidity, the Bank’s
total deposits in 2010, a decline from 49.6% in 2009. The
loan to deposit ratio was at 87.9% as of 31 December 2010
decline was mainly due to the rise in fixed deposits which was
compared to 90.3% as of 31 December 2009.
a result from the success of innovative term deposit products
|
68
Management Discussion and Analysis
Figure 23: Breakdown of interest-bearing liabilities 100.0%
5.5% 5.4% 2.1%
Annual Report 2010
Figure 24: Total deposit and % CASA 5.2% 7.3% 4.5%
80.0%
Figure 25: Loan to deposit ratio
450,000
60% 407,776
100%
413,115
90.3%
400,000 49.6%
50%
87.9%
46.4%
60.0% 40.0%
87.0%
83.0%
350,000
40%
300,000
30%
250,000
20%
20.0%
80%
60%
0.0% 2009
2010
2009
THB million
2010
2009
2010
40% Loan to deposit ratio % CASA (RHS) ██
█ Deposit █ Interbank and money market █ ST borrowing █ LT borrowing
██ Total deposit (LHS)
Note: Consolidated financial statements
Note: Consolidated financial statements
Note: Consolidated financial statements
Shareholders’ equity and capital adequacy
The Bank’s capital position remained strong during the
As of 31 December 2010, the consolidated shareholders’
year, with the capital adequacy ratio (CAR) under Basel II
equity rose to THB 49,855 million or 6.6%, an increase from
calculation at 16.59% and Tier I capital ratio at 11.33%, which
2009, mainly due to the net profit for the period.
were comfortably above the Bank of Thailand’s minimum requirement of 8.5% and 4.25% of CAR and Tier 1 capital,
With the shareholders’ approval at the Extraordinary General
respectively. The decrease of CAR was due to higher risk
Meeting on 24 June 2010, the Bank adjusted shareholders’
weighted assets partly offset by capital increase of Tier 2. In
equity accounts. A par value reduction from THB 10 to THB 0.95
April 2010, the Bank issued subordinated debenture of THB 8.0
and reserves were used to offset the write-down of retained
billion to replace redemption in subordinated debenture of
losses and share discount. This clean-up resulted in flexibility
THB 4.9 billion in March 2010, therefore increasing net capital
for the Bank to pay a dividend (subject to relevant laws).
by about THB 3.1 billion.
Figure 26: Tier I capital and BOT’s minimum requirement
Figure 27: Capital adequacy ratio and BOT’s minimum requirement
14%
18%
12%
12.31% 11.33%
14%
10% 8%
10%
6% 4%
17.13% 16.59%
8.50% 4.25%
4.25%
8.50%
6%
2% 0%
2% 2009
2010
██ Tier I Capital BOT minimum requirement Note: Bank-only
2009
2010
██ CAR BOT minimum requirement Note: Bank-only
TMB Bank PCL
Management Discussion and Analysis
|
69
Note: Restated financial statement
cost method and 2) re-classified from investment in associated
The financial statement of the Bank and its subsidiaries for
company to general investment. This was in line with the
the year ended 2009 have been restated in relation to the
substance of transaction. The impact to the 2009 financial
recognition of investment in two property funds, The Column
statement can be summarized as below.
Property fund and Siam Resort fund 1) from equity method to Impact from restated financial statement 31 December 2009
Balance Sheet (unit: million baht) Asset
Consolidated Restated
Previously reported
22,358
21,226
472
-101,559
Bank only Restated
Previously reported
1,132
21,694
20,562
1,132
2,114
-1,642
605
1,737
-1,132
-101,048
-511
-101,742
-101,742
-
Change
Change
Investment Long-term investment — net Investments in subsidiaries and associated companies — net Liabilities and Shareholders’ equity Retained earnings Unappropriate (deficit)
31 December 2009
Profit and Loss (unit: million baht) Restated
Consolidated
Bank only
Previously reported
Previously reported
Change
Restated
Change
Interest and dividend income Investment
2,238
2,165
73
-
-
-
95
267
-172
-
-
-
2,333
2,432
-99
-
-
-
Non-interest income Share of profits from investment in associated companies Net
70
|
Strategy and Business
Annual Report 2010
Strategy and Business
Our vision and strategic intent
Be “the Leading Thai
▶▶
Main bank with sustained profitability
bank with world-class
▶▶
Value long-term relationships
financial solutions”
▶▶
Cultivate customer centricity
▶▶
Realize benefits of partnerships
How we deliver: TMB Strategy
Deposit-led Strategy
TMB aims to establish strong relationships with customers through transactional deposit accounts, allowing TMB to better understand customers and use that understanding to provide value-added services addressing their financial needs.
Service and
TMB believes that customer-centric service is central to building sustainable business
Operational Excellence
relationships. The Bank is therefore focused on improving end-to-end service and operational excellence through our processes and people across channels in ways that reflect the TMB brand values.
Value-Added
TMB aims to provide alternative financial services that are matched with customers’ needs
Financial Services
and that have been overlooked by others. In particular, we strategically invest to unlock the benefits of Supply Chain Solutions for both customers and the Bank, where customers can better manage financing and transactions whilst allowing TMB to improve the risk-return of the whole value chain.
Supported by our ways of working
TMB Brand,
Rooted in the core DNAs:
“Make THE Difference”
▶▶
Genuine – Offer financial services that put customers’ best interests first
▶▶
Simple and Easy – Make banking easy for customers
▶▶
Intelligent – Understand our customers well in order to provide products that cater to their financial needs
▶▶
Why Not Attitude – Challenge market norms with creative and innovative financial solutions that are beneficial to customers
TMB Bank PCL
Strategy and Business
|
Key Performance Indicators
Leading Thai bank with world-class financial solutions
Deposit-led Strategy
Service and Operational Excellence
Valued-Added Services
ROE (Consolidated)
Deposit market share (2) (Bank only)
Customer engagement (percentile)
Core non-interest income/total income (consolidated) (5)
8%
80%
30%
8% 6% 4%
6.6% 4.2%
2% 0%
2009 2010
TMB brand consideration (1)
100% 80% 60% 40% 20% 0%
79% 56%
6%
60%
4%
40%
2%
20%
0%
2009 2010
0%
59%
63%
20%
24% 18%
10% 2009 2010
0%
2009 2010
8%
6.0%
5.9%
6% 4% 2%
2009 2010
80%
0%
2009 2010
Retail performing loans market share (4) (Bank only) 70%
60%
3%
2.3%
2.1%
2%
40% 0%
6.1%
Wholesale and SME performing loans market share (3) (Bank only)
Employee engagement (percentile)
20%
6.1%
13%
2009 2010
1% 0%
2009 2010
It’s the only bank I would consider + It’s one of only 2 or 3 banks I would consider + It’s one of several banks I would consider TMB deposits includes B/E (3) Wholesale + SME Performing Loans (Excluding Loans to Financial Institutions) / Commercial Banks Total Loans (Excluding Loans to Individuals and Financial Institutions) (4) Retail Performing Loans / Commercial Banks Total Loans to Individuals (5) Core Non-Interest Income = Fees & Service + Gain on Exchange (1)
(2)
71
72
|
Strategy and Business
Annual Report 2010
TMB TRANSFORMATION PROGRAm To deliver our strategic business model, the Bank follows
The Transformation program will affect every aspect of
a three-stage plan to transform it into a customer-centric,
the Bank, enhancing value for all stakeholders, including
high-performance organisation.
customers, shareholders, employees and Thai society.
Stage:
Status:
01
Key Highlights: ▶▶
Re-organization
Complete
▶▶
Branch transformation
▶▶
Improved overall asset quality
▶▶
End-to-end process
▶▶
Dramatic improvement in employee engagements
Improvement
Laying the Foundation
02
▶▶
HR transformation
▶▶
Enhanced risk management
▶▶
Ensure service &
On Track
operational excellence
▶▶
Significant increase in customer engagement
Provide innovative financial
▶▶
TMB products become industry-standard e.g.
▶▶
products that match
Differentiation and Quality Growth
03
customers’ needs ▶▶
Enhance service channels
▶▶
TMB brand enhancement
▶▶
New standards for customer service
▶▶
New standards for financial management
Market Leadership ▶▶
TMB group offering
SME 3X Express Credit, Up&Up Term Deposit ▶▶
TMB brand consideration on par with top banks
2012 onwards
TMB Bank PCL
Strategy and Business
|
73
WHOLESALE Banking 2010 Performance Highlights Our intent: ▶▶
Wholesale banking remains a key contributor to TMB revenue,
Differentiated proposition as a Thai local bank with
with wholesale loans making up approximately 50% of the Bank’s
global reach and capabilities through our strategic
total loan book. In 2010, the team successfully increased our
partners
customer-base by approximately 300 new active relationships.
▶▶
Establish long-term relationships with our customers
Meanwhile, substantial moves have been taken to rebalance the
▶▶
Become a trusted partner, with friendly, efficient
Wholesale loan book, lowering exposure to higher risk segments
services
of the market. Excluding this rebalancing effort, the performing loan book would have expanded by more than 15% from 2009.
How we plan to deliver ▶▶
▶▶
▶▶
Leverage strategic partners in terms of network,
Trade Finance and Capital Markets are considered two key
infrastructure and products
value added services, and TMB has taken major steps to
Build relationships through practical sector-based
ensure the products meet the requirements of our customers.
solutions and excellence in transactional banking.
So far the results have been very encouraging with Trade
Increase penetration of TMB supply chain solutions
Finance business volumes up 290% compared with 2009
as a key value added service
following the release of new services such as “Trade on Demand” and “Document Preparation”. Similarly for Capital
Introduction
Markets, the Bank worked with our strategic partners to
Wholesale Banking covers the large corporate segment of the
release several competitive products resulting in volume
market and is divided into 2 sub-segments, allowing TMB to
growth of 165% year-on-year.
better serve the differing requirements of each: The Bank’s latest value added service, “Supply Chain Solutions”, ▶▶
Corporate banking — Companies with an annual turnover between THB500 and 5,000 million.
▶▶
Large corporate banking — Companies with an annual turnover over THB5,000 million.
Such customers encompass all areas of the Thai economy and TMB offers a wide spectrum of financial services through the main service channel of a dedicated Relationship Manager (RM) supported by strong e-channels, corporate call-centre and the branch/ATM network.
which enables the Bank’s customers to more efficiently manage their cash flow and balance sheet, was successfully launched and has gained the support of 17 major Thai business chains together with 500 dealers, resulting in new credit limits of THB6,000 million. As a further demonstration of TMB’s commitment to understand and better serve our customer’s needs, the Bank opened 16 Supply Chain and Business Centers in key business areas around Thailand to provide better accessibility and convenience. Together with Trade Finance and Capital Markets, these initiatives have boosted
Such services include:
non-interest income by approximately 15% over 2009.
▶▶
Working capital and medium to long term funding
▶▶
Operating and deposit bank accounts
Plans for 2011
▶▶
Cash Management
▶▶
▶▶
Trade Finance
▶▶
Supply Chain Solutions
▶▶
Capital Markets products
▶▶
Investment Banking
▶▶
Agent and Securities Services
▶▶
Global Network Services
Work closely with TMB’s partners to bring more value to our customers by access to global networks, services and products
▶▶
Acquire new customers through excellence in transactional banking services and TMB sector-based solutions
▶▶
Improve our accessibility through e-channels, corporate call center and increased nationwide coverage
74
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Strategy and Business
Annual Report 2010
SME Banking 2010 Performance Highlights Our intent:
From our research and by listening to customers, insufficient
▶▶
Become the leading SME bank in Thailand
collateral can be a major barrier for many customers applying
▶▶
Generate real value by focusing on customer
for credit at commercial banks. In response to this, TMB
centricity — understanding customer businesses
launched the “3x Express Credit” at the beginning of 2010 to
and needs
provide a source of sufficient funding for SMEs. The product itself was very well received by customers (and quickly
How we plan to deliver ▶▶
▶▶
adopted by several competitors) and it signified TMB’s strong
SME customers will receive a high level of service
purpose of intent to provide innovative solutions to challenges
normally reserved for corporate segment customers
faced by SMEs. In the second half of the year “OD No Asset”
Provide innovative funding options, a key pain point
was released, cementing TMB’s place in the SME market.
for SME businesses ▶▶
Effectively serve and support our customers through
In terms of our service capabilities, over 250 relationship
the physical branch network or via convenient
and business development managers were recruited during
alternative channels
2010 to greatly improve our customer-to-service staff ratio. Furthermore, in a bid to maximise customer facetime and service quality, all non-service related tasks which used to be performed by RMs have been moved to the back-office.
Introduction TMB has given strategic priority to the SME segment due in part
As of 2010, in addition to the extensive branch network,
to the importance of SMEs to the Thai economy and also due
50 SME business zone offices are now in place across the
to the belief that the segment remains under served. The Bank
country in strategic areas to allow convenient accessibility
categorizes SME customers into two sub-segments to reflect
for our customers to perform their transactions. SMEs are
the inherently different banking requirements of each:
also able to securely access and make transactions on their
▶▶
Small enterprises with annual sales not exceeding THB50 million
▶▶
Medium enterprises with annual sales between THB50 and 500 million
account via alternative channels such as TMB Internet banking and electronic cards. Knowledge is a vital tool for customers to succeed in their business and in 2010, TMB arranged many academic seminars
While the products and services required by SMEs are largely
for SME customers throughout Thailand to share information
similar as for wholesale customers, TMB has conducted
on topics such as economic conditions and forecasts,
in-depth research and spent time listening to customers
accounting management systems and even how SMEs can
so that we now believe we have a greater understanding of
benefit from AFTA and AEC. The feedback from the events
the challenges and real needs of Thai SMEs. The Bank has
was overwhelmingly positive and allowed customers to view
outlined a customer value proposition based on the following
TMB as a trusted partner.
key requirements: Plans for 2011 ▶▶
Sufficient Funding
▶▶
Relationship
▶▶
Service and Accessibility
▶▶
Knowledge
▶▶
Continue to release customer-centric products to help SMEs with their funding requirements
▶▶
Expand our physical and alternative channels to provide even better accessibility for customers and improve our service
TMB Bank PCL
Strategy and Business
|
75
Retail Banking 2010 Performance Highlights Our intent:
Retail banking showed a strong performance in meeting the
▶▶
Become the first choice transactional bank
objective to be the first choice transactional bank. In 2010, the
▶▶
Build customer value by offering products correctly
number of new transactional accounts (Current and Savings)
matched to their individual needs
accelerated by more than 25% over 2009, bringing the total number of retail customers to over 5 million. Furthermore, in
How we plan to deliver: ▶▶
▶▶
▶▶
▶▶
reaction to our ongoing improvements to alternative channels,
Provide transactional convenience at fair prices to
the number of Internet-banking transactions increased by
acquire active customers
250%, and ATM-based transactions were up 35% year-on-year.
Offer superior alternative channels with best-in-class accessibility, functionality and efficiency
TMB continued to release innovative savings products and
Fully understand the needs of customers through
provide new flexible savings options for our customers, such
strong segment management and market intelligence
as “Up and Up TD” and “Quick Interest TD”. The products
Offer right service at the right time through excellent
have been successful in attracting new deposits and, as
campaign management
another sign of their success, have since been emulated by several of TMB’s competitors. In another demonstration of how TMB strives to provide
Introduction
financial services linked to customer needs, “TMB So Chill”
Retail banking offers a variety of deposit and other financial
credit card is a brand new unsecured lending concept,
services via a network of 455 branches and 2,300 ATMs
addressing the gap in the market between credit cards and
supported by TMB Internet Banking, TMB M-Banking and
personal loans. Other unsecured loans such as “Ready Cash”
the TMB Call Center (1558). To respond to the evolving
and “Cash 2 Go” showed growing momentum with sales
needs of retail customers with the highest possible service
increasing 24% over 2009.
levels, the Bank first divides the segment into three major groups: Affluent, Middle Income and Mass, and then further
Efforts to enhance customer experience has resulted in several
differentiates customers by their individual status or life-stage.
developments such as the use of an ID Card Reader for our bank branches and the ability to provide “No-Slip Service”
Under the strong segment management model, TMB provides
which won a Financial Insights Innovation Award for customer
retail bank services including the following:
engagement. The TMB call center (1558), a key channel with
▶▶
Current, savings and deposit accounts
▶▶
Home mortgage loans
▶▶
Unsecured consumer credit such as personal loans and credit cards
▶▶
Currency exchange
▶▶
Asset management under TMB Asset Management Co., Ltd
(“TMBAM”) and ING Funds (Thailand) Co., Ltd
(“ING FUNDS”)
▶▶
Life and non-life insurance through partnership with ING Life Limited and other non-life insurance companies
which customers communicate with the Bank, was thoroughly upgraded, significantly improving the capabilities and service quality. Plans for 2011 ▶▶
Continue to focus on our key customer value proposition which is best-in-class transactional banking together with providing services and products to match customer needs in terms of lifestyle, lifecycle and wealth.
▶▶
Target 35% growth in high margin loans and 15% growth in deposits.
76
|
Risk Management and Key Risk Factors
Annual Report 2010
Risk Management and Key Risk FActors
Risk Management at TMB
TMB’s approaches to risk management is founded on solid
Risk management is essential to TMB’s business to being able
risk governance where the Board of Directors holds ultimate
to create shareholder value with appropriate and sustainable
responsibility of bank-wide risk management. The Board has
shareholder returns. Management of the Bank’s major risks
delegated risk management related authorities to relevant risk
include credit, operational, market, liquidity and strategic
committees whose responsibilities are to set up, promote the
risks, as well as other risk factors. TMB manages these risks
implementation, review, oversee and monitor the management
on the basis that the risks must be identified, assessed and
of all risks, such as risk strategies, comprehensive policies,
measured for both normal and stress situations, continuously
frameworks and standards as well as several aggregate risk
monitored and that control mechanism have been set as
tolerance and risk concentration levels, across the Bank and
well as initiate risk mitigation strategies, and reporting in
subsidiaries with appropriate quality of coverage and to ensure
a timely manner and with transparently risk management
that proper action is taken by the responsible line managers
information.
at the appropriate level.
Board of Directors
Credit Committee Credit Underwriting Committee (CUC)
Chief Executive Officer
Risk Management Committee Risk Policy Committee (RPC)
Chief Risk Officer (CRO)
Credit Restructuring Committee 1 (CRC1)
Wholesale Credit and Restructuring Group
Credit Restructuring Committee 2 (CRC2)
Consumer and SME Credit Group Risk Analytics and Policy Group
Operational Risk Committee (ORC) Asset and Liability Management Committee (ALCO)
Credit Risk Intelligence Group
Strategy and Transformation Group
Market Risk Management Group Operational Risk Management Group Compliance Group Legal Group Independent Credit Review Macroprudential Risk
TMB has embedded risk management into the Bank’s daily
In recent years, TMB has improved and continues to improve
business activities and strategic planning with the objective to
its risk management capabilities with investments in people,
optimize risks and returns as well as promote risk management
processes, measurement tools and systems and more
culture where all employees look for risks, consider their
importantly, provides several training modules to improve risk
impacts and apply appropriate risk mitigation strategies.
knowledge of employees to being at par with best practices.
TMB Bank PCL
Risk Management and Key Risk Factors
|
77
Credit Risk Management
on loan types or debtor types and loss given default based
TMB’s credit risk management objective is to maximize the
on collateral types.
Bank’s risk-adjusted return by maintaining credit risk exposure within acceptable level and build a sustainable competitive
Impairment in value of physical collateral
advantage by integrating credit risk management into business
A substantial portion of TMB’s loan portfolio is secured by physical
activities and strategic planning.
collateral and other assets, the value of which may be affected by the overall economic conditions of Thailand. A downturn
Realizing the importance of effectiveness and timeliness of
in the real estate market could result in the principal amount
risk management in a changing business environment, TMB
of loans secured by real estate exceeding the loan-to-value
has improved its credit risk management governance, policies,
proportion compared to that at the time of origination. Any
guidelines and standards to reflect regulatory and business
decline in the value of collaterals securing loans may result
environment changes as well as lesson-learnt from the past
in an increase in the Bank’s allowance for doubtful accounts.
experience. The Bank has proactively set up risk pre-defined
TMB manages collateral value impairment risk by establishing
set of minimum performance criteria of credit portfolio to
collateral assessment policy and procedures which are in
ensure that the Bank’s business grows within acceptable
accordance with BOT’s regulation. The reappraisal frequency
boundaries of risk. For credit decision making, the Bank has
is also driven by level of risk based on loan performance.
continued to improve its risk measurement tools by using the most accurate possible quantitative assessment of credit risk
Credit concentration
to which TMB is exposed. The Bank also developed an early
Concentration risk in credit portfolios is an important aspect
warning system for effective credit risk monitoring. In addition,
of credit risk management. TMB manages and monitors
the Bank has conducted the exercises to assess credit quality
credit concentration with respect to industries, countries and
and capital impact in various stress circumstances.
borrowers by establishing the Bank-wide industry diversification threshold, country limits and names concentration and
Key Credit Risk Factors
single exposure limits to manage both existing and potential
Credit quality
exposures within acceptable level to ensure appropriate di-
TMB manages quality of credit portfolio by monitoring and
versification of the portfolio and avoid excessive credit risk
reviewing status of the borrowers and/or counterparties
exposure in certain industries or countries. In addition, TMB
regularly. Early warning system is in place to detect customers
sets risk-based Single Exposure Limit to manage the maximum
that may be moving toward adverse classification or further
exposure for single obligor and related lending.
deterioration performance. Special attention is paid to problem exposures, which are subject to more frequent review and
Operational Risk Management
reporting. Dedicated Debt Restructuring team and Credit
TMB believes that effective operational risk management leads
Restructuring Committees are established to restructure
to more stable business processes and lower operational
problem loan in an effective manner and to provide advice
costs. Therefore, Operational Risk Management Framework
on debt restructuring conditions. TMB sets aside loan loss
has been developed and updated regularly to ensure that the
provision adequately in accordance with guidelines from the
operational risk are properly identified, assessed, monitored,
Bank of Thailand (BOT). TMB also takes additional excess
reported, analyzed and controlled in a systematic and
provisions for performing loan as a further cushion for losses
consistent manner. The Framework consist of an Operational
expected as a result of future events or operation for loss
Risk Management Structure applying the three lines of defense
incurred but not yet recognized (IBNR) using probability of
risk governance model, and aligning with the COSO risk
default based on risk level and exposure at default based
management framework.
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Risk Management and Key Risk Factors
Annual Report  2010
In order to promote risk management culture within the Bank
involved in the market risk management of the Bank: the Asset
and subsidiaries, all Business and Support Units have primarily
and Liability Management Committee (ALCO) and the Market
responsibilities and accountabilities for their own operational
Risk Management Group (MRMG).
risk management and control. The Bank has appointed a number of Unit Operational Risk Managers (UORM) in the Business
The Business Units undertaking business activities that involve
and Support Units who, with support from and reporting to the
market risks are responsible for ensuring that they abide by
Operational Risk Management Group, take on/carry out the
the standards/guidelines set out in the policies. The MRMG
operational risk management responsibilities of their respective
ensures that the risk levels stay within the approved limits,
units. While, Audit Group provides specific recommendations
and that any foreseeable major impending risks or adverse
for improving the governance, risk & control framework.
events are escalated to the appropriate authorities to take the necessary and timely actions. The Capital Markets Group
Operational Risk Management Tools and Mitigating Techniques
(CMG) is responsible for managing and trading the portfolio
The Bank has established the risk appetite level for operational
to optimize the return on the funds invested.
risk utilizing the potential loss (probability and impact) concept. The level is determined based on consideration of
Liquidity Risk
the historical loss data of the bank, the financial strength,
Liquidity risk is the risk that the Bank or any one of its
and the overall operational risk management environment.Â
subsidiaries cannot meet its financial liabilities when they
For potential loss over a threshold amount, the bank will take
come due, at reasonable costs and in a timely manner. The
further mitigating action to bring down the potential loss level
liquidity risk management framework is determined by the
to within threshold.
ALCO which has to be approved by the Board of Directors. The Balance Sheet Management Group (BSMG) is assigned
Several policies, minimum standards, and guidelines have
to maintain a sound liquidity profile.
been established and updated regularly to manage various operational risks covering on all key processes. Various tools
The liquidity risk management function is delegated to the
are used to identify, assess, control and report of operational
Market Risk Management Group (MRMG), which joins with
risk such as Risk & Control Self-Assessment (R&CSA), Control
BSMG in bearing the responsibility for liquidity risk stress
Self Assessment (CSA), Key Risk Indicator (KRI), and Incident
testing. The liquidity positions are stress tested under various
Management Report. In addition, the Bank has put in place
scenarios to assess whether the Bank can withstand a
programs/mechanisms that help mitigate operational Risk such as
prolonged period of stress.
Product and Service Approval Process (PSAP), Action Tracking, Outsourcing/Insourcing Risk Management, and Business
Contingency Plan
Continuity Plan and Disaster Recovery Plan (BCP/DRP).
The Bank has a contingency plan, which establishes procedures and actions for managing liquidity in crisis
Market Risk
situations. The plan is regularly reviewed and tested to ensure
Market risk exposures
that the Bank is well prepared for a potential liquidity crisis.
Market risks comprise of both price and liquidity risks. Price risk is the potential loss due to fluctuations in interest rates,
For other companies in TMB Financial Business Group, which
foreign exchange rates, equity and commodity prices.
include Phayathai Asset Management Company Limited (PAMC), TMB Asset Management Company Limited (TMBAM)
Market Risk Management Structure
and Designee for ETA Contract Limited (Designee), the Bank
Two entities independent from the Business Units are directly
has established policies to define minimum guidelines in
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managing market (price) risk and liquidity risk leaves certain
Bank and the IMF on Thailand’s compliance to the FATF’s 40
discretion to subsidiaries to develop their own policies in line
Recommendations. The Bank continuously take action in
with their business.
ensuring compliance and perform due diligence in customer screening and monitoring.
Risks from material changes in the regulations that govern the Bank and its business activities.
In ensuring effective compliance risk management, Compliance
Key regulatory non compliance risks of the Bank lie in
Group implement various tools such as compliance checklists,
compliance to Financial Institutions’ Businesses Act, Bank
advisory and regulatory updates, monitoring and review
of Thailand’s Regulations and Notifications, The Securities
programs and management reports as well as compliance
and Exchanges Act, the Securities Laws and Regulations as
training to Business Units and their staff on regular basis.
issued by the Stock Exchange of Thailand, the Securities and Exchange Commission, the Anti Money Laundering Laws and
Strategic Risk
their Royal Decrees.
TMB is aware of the strategic risk resulting from the strategic plans, business plans, strategic implementations, and controls
In 2010, the material changes in banking regulations lie in the
which are considered inappropriate and inconsistent with both
Notifications issued by the Bank of Thailand for compliance
internal and external business environments.
with Basel II Pillar II, in particular Internal Capital Adequacy Assessment Process (ICAAP). The Bank has actively and
TMB’s vision is to become “the leading Thai bank with world
continuously taken actions to complete requirements within
class financial solutions” with “Customer Centric Organization”
required time lines. The Bank’s activities and achievements
and has implemented a Deposit-Led Strategy to ensure a strong
are mentioned in other sections of this Annual Report. For
foundation for sustainable growth. In order to achieve our
securities laws, material changes that impact the Bank are
vision, TMB has developed a clear 5-year strategic plan to
in compliance to for client suitability requirements to be
achieve market leadership which is updated on annual basis.
performed in Selling Agent Business in assessing the risk appetite of the customers who buy and sell mutual fund
In order to manage the strategic risk, TMB has improved the
units from the licensed staff of the Bank so as to protect
process of performance tracking and strategic control. Regular
their interests and invested funds from mis-selling and mis-
meetings of the management team and business units are held
presentation. Compliance has actively been working with the
to review the performance together with remedial planning in
responsible Business Units in preparing for the new regulation
case of target shortfalls. A strategic risk dashboard has been
that will be effective in 2011 to ensure full compliance.
developed and is produced regularly to keep management informed and aware of the changing strategic risk status. A
On Anti-Money Laundering, the material changes is in the issue
self assessment of strategic risk is also evaluated with priority
of The Anti-Money Laundering Act (No. 3) B.E. 2552 (2009)
by management.
declared on 22
nd
July 2009 and enacted on 19 November th
2009 which requires business operators in other 9 professions
In all, TMB is strongly determined to maintain a high level
to report cash transactions to the Anti-Money Laundering
of strategic risk management. Starting from the process of
Office (AMLO). According to this laws, the Bank will have
strategic planning, organization restructuring, staffing and
to report electronic fund transfer transactions to AMLO.
project implementation as well as the performance monitoring,
The emphasis of AMLO is still on compliance with Know-
all managed to be in line with the Bank’s key strategies. In
Your-Customer (KYC) and Customer Due Diligence (CDD) in
addition, the strategic plan itself is reviewed regularly to ensure
order to be prepare for the next assessment by the World
it is consistent with the changing business environment.
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Corporate Governance and Management
Corporate Governance Report
investment in the Bank’s important projects including corporate branding, communications, public relations as well
TMB Bank Public Company Limited (“the Bank”) is committed
as business continuity plan, consider business strategy of
to high standards of good corporate governance which means
subsidiaries and review the Bank’s performance.
that the Bank has efficient, transparent, and able-to-beaudited management systems to build trust and confidence
The Board of Directors has put best efforts in ensuring the policy
among its shareholders, investors, and other stakeholders
is implemented and review, improvement and modification are
(clients, employees, customers, business partners, creditors
undertaken to update and align with the changing situations
regulators and society). Good corporate governance is means to
so that the implementation creates maximum benefits for the
increase value and encourage sustainable growth of the Bank.
Bank, shareholders and all stakeholders.
Corporate governance refers to the set of relationships
In 2010, the Bank continued its commitment to the transparent
among groups of persons, namely the Board of Directors, the
and fair operations under good corporate governance, on-
management, the shareholders, and all stakeholders. In this
going development of which will be pursued. According to
regard, good corporate governance structure enable the Bank
the Corporate Governance Report of Thai Listed Company
to set business objectives and goals, including the methods
2010, the Bank received the highest score with “excellent”
and process of achieving the objectives and goals and
continuously, ranked by the Thai Institute of Directors. In the
monitoring & measuring performance whether the set goals
previous year, the banking business had been in compliance
are reached or not. Corporate governance provides proper
with the principles of good corporate governance as per the
incentives for the Board and management to pursue objectives
SET’s guidelines which are summarized as follows:
that are in the interests of the Bank and its stakeholders and acilitates effective performance monitoring and measurement.
1. Rights of shareholders Shareholders are the owners of the Bank. They control the Bank
The Board of Directors of the Bank has approved the
by appointing the directors to act as the representatives of all
“Corporate Governance Policy” as written guidelines and
the shareholders to make decisions on significant corporate
announced to all bank personnel from the Board of Directors,
changes. The Bank complies with the recommendations of the
management to bank staff for their acknowledgement and
SET for listed companies on shareholder rights, encourages
on-going compliance. In addition, the Board of Directors
shareholders to exercise their rights, and is committed to the
has approved the TMB Corporate Governance Framework
equal treatment of all shareholders.
to scope and allocate role and responsibilities of the Board of Directors, the board committees, Chief Executive Officer
The Bank facilitates all shareholders to ensure they
(CEO) and management more precisely. CEO has power and
can fully exercise their basic rights, i.e. to buy, sell
duty to manage the Bank’s activities in accordance with
and transfer of securities they hold, and safeguarded
policies, strategies and plans as assigned by the Board of
the interests of all shareholders, comprising majority
Directors. The Bank also has Chief Executive Committee (CEC)
shareholders, minority shareholders, and institutions on an
comprising CEO and Chiefs as members to manage and run
equitable basis in the access to accurate and updated
the Bank’s daily business as per the short-term and long-term
information of the Bank.
strategies, oversee the review of business operation to achieve goal and strategy, propose for the Board’s approval business
The annual general meeting of shareholders has been
plan and annual budget, control number of manpower to be
determined to be held annually within four months from the
in line with the staff member plan, consider and approve
end of the fiscal year (December 31). In case of any special
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issue that needs to be proposed as an urgent and necessary
32,158,724,297 shares or 73.88 % of the total shares sold,
case, and where the approval of the shareholders’ meeting
and eight directors attending the meeting.
is required pursuant to the applicable conditions, rules or laws, the Bank will call an extraordinary general meeting of
The meeting procedures conformed to the good corporate
shareholders on a case by case basis.
governance principles as below:
Agenda and related documents in regard to annual shareholder
Before the meeting
meeting will be sent to shareholder in advance, of which the
Shareholders had full access to necessary information on the
procedure will be in accordance with regulation in terms of
meeting date, location, and the agenda in advance on the
timing and sufficiency of information to ensure sufficient time
Bank’s website so that they would have adequate time to
for shareholders to review the information. For the shareholders
study the information before receiving the documents. The
who cannot attend the meeting by themselves, the Bank
Bank had assigned Thailand Securities Depository Co., Ltd.
designates independent director of which shareholders can
(TSD), its share registrar, to send out to all shareholders the
appoint to attend in the meeting and perform on their behalf
invitation notice, with details stipulated therein regarding the
as their proxies.
meeting date, time and venue, as well as complete information necessary for the meeting. The invitation notice stated the
The Bank has a policy to arrange the shareholders’ meeting
objectives and rationale as well as the opinions of the Board
with efficiency and transparency and in compliance with
of Directors on each item, accompanied by complete and
relevant regulations and regulatory requirements. Meeting
sufficient details for the consideration of each tem and for
agenda and documents are to be delivered to the shareholders
the decision to vote on each item. Shareholders were clearly
in advance, with sufficient information provided to support
informed which item would be for consideration and which one
the shareholders’ consideration and decision to vote on
for acknowledgement. Moreover, in the invitation notice, the
each agenda with their full use of rights. On the meeting
shareholders were informed of the details regarding necessary
date, appropriate registration procedure has been prepared
evidence documents to be brought to the meeting.
by the Bank, with facilities provided by Bank staff for the shareholders and proxies.
A proxy form was also enclosed so that the shareholders could use in appointing any of the Bank’s designated independent
In 2010, two meetings of shareholders were arranged,
directors or other persons as their proxies in case they could
consisting of:
not attend the meeting.
1. The 2010 Annual General Meeting of Shareholders (AGM)
During the meeting
which was held on Friday, April 23, 2010, at the Auditorium,
The meeting was arranged with transparency, fairness and
7 Floor, TMB Head Office with altogether 1,805 shareholders
equitable treatment of all shareholders. Appropriate registration
and proxies, holding a total number of 30,207,428,507 shares
procedure was prepared by the Bank, with facilities provided
or 69.88% of the total shares sold, and nine directors attending
by Bank staff, classified by type of attendees, i.e. shareholders
the meeting.
attending in person and proxies attending on shareholders’
th
behalf. This aimed at ensuring rapid and accurate registration 2. The Extraordinary General Meeting of Shareholders (EGM)
procedure. Voting card was available for each attendee to
No. 1/2553 which was held on Thursday, June 24, 2010, at
vote on each item on the agenda. Moreover, the Bank also
the Auditorium, 7th Floor, TMB Head Office with altogether
provided shuttle bus service at various spots and sufficient
1,619 shareholders and proxies, holding a total number of
parking space to serve the shareholders.
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Annual Report 2010
At the 2010 AGM, the Chairperson of the Board of Directors
The meeting minutes and detailed votes on all items, as well
served as Chairperson of the meeting, and Chairperson of each
as essence of shareholders’ inquiries, clarifications of the
Board committee, namely the Board of Executive Directors,
Board of Directors & CEO and resolutions were recorded
Audit Committee; Nomination, Remuneration and Corporate
completely and accurately by the Company Secretary.
Governance Committee, together with the Chief Executive Officer, were also present at the meeting to clarify and answer
After the meeting
questions of relevant issues. Before the beginning of the
After the meeting, the minutes of the meeting that would be
meeting, the Chairperson assign Company Secretary clearly
proposed for adoption at the next meeting were submitted
informed the meeting of the voting and counting methods. For
to the relevant authority within the specified period, and made
more convenience to the shareholders, a simultaneous English
available to the shareholders on the Bank website including
translation was provided by Bank staff for foreign shareholders.
the systematic filing for monitoring and reference.
In this regard, the shareholders’ right to study of the Bank’s information memorandum would not be undermined, such
Furthermore, the Bank recorded the meeting into DVD for the
as no abrupt distribution of additional document with key
shareholders who could not attend the meeting by notifying
information during the meeting, no addition of new items on
them via the Bank’s website to request the DVD free of charge.
the agenda or change in the key information without prior notice to the shareholders, no prohibition of meeting attendance of
From such operation, the Thai Investors Association
late attendees, and so on.
qualitatively assessed the 2010 Annual General Meeting of the Bank at “Excellent and recognized as Good Example”
The Chairperson proceeded with the meeting in order of the items on the agenda. In consideration of certain items on
2. Equitable treatment of shareholders
the agenda in which directors who joined the meeting have
The Bank has been determined to conducting business
interests or have relation thereto, e.g. election of directors to
under good corporate governance principles to assure all
replace those who retire by rotation, the Chairperson informed
shareholders, i.e. majority shareholders, minority shareholders,
the meeting thereof and such directors would abstain from
investors and institutions, Thai and foreign alike, of their rights
joining the consideration and voting thereon. The Chairperson
to fair and equitable treatment as follows:
also encouraged the shareholders to cast votes and raise questions and comments. Importance was given to all the
Right to attend the shareholders’ meeting
recommendations or comments made by the shareholders,
For each shareholder’s meeting, all shareholders will have
with all questions comprehensively clarified and all useful
equitable right to attend the meeting. Opportunity is opened
suggestions brought into account. The vote casting and the
to those who are unable to attend the meeting in person to
vote counting were undertaken openly and transparently. At
appoint proxies to attend and vote at the meeting on their
the 2010 AGM, Weerawong, Chinnavat & Peangpanor Ltd.,
behalf. The Bank has arranged to have its independent
legal consultant, was invited to witness the vote counting on
directors who do not have interests in the business on the
all agenda items.
agenda be available for the appointment as proxies. The shareholders may appoint other persons as their proxies.
In addition, assessment forms of shareholders’ meeting were disseminated to gather feedbacks and comments from the
Right to vote at the shareholders’ meeting
shareholders to improve and develop shareholders’ meetings
At each meeting of shareholders, the Bank specifies that
in the future to be more efficient and maximize benefits for
the rights to vote shall be accordance with the amount of
the shareholders.
shares held by the shareholders, with one share equivalent
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to one vote. The voting shall be carried out rapidly and the
The consideration of the transactions that may involve
counting of the votes shall be transparently disclosed, with
conflicts of interest or the connected transactions or the
one share equivalent to one vote. The majority votes will be
related transactions has been made stringently in accordance
considered as the resolution except for special resolutions
with the regulatory and international standards, as well as
of certain cases set forth by the laws requiring the votes
in its normal business operation course and criteria. These
of at least three-fourths of the votes of all the shareholders
transactions have been treated the same as those made
attending the meeting and having the rights to vote. As regards
with outside parties. Stakeholders in any transaction shall
the voting method, the shareholders can vote to agree, not
not participate in the consideration and approval of such
agree, or abstain from on each agenda in the voting cards.
transaction. The information is disclosed transparently under
The Bank collects the voting cards form the shareholders
corporate governance practice.
on every agenda that needs to be voted for resolution and vote counting by barcode system. The Bank will notify to the
The Bank exercises caution to prevent the Bank, directors
shareholders the voting result on every item once the counting
and/or its employees from using customers’ information or
is finished, divided into approval votes, dissenting votes and
secret to conduct business in competition with the customers’
abstentions, as well as invalid ballots. The resolution of the
business, and not to support any employees’ activities that will
meeting according to the voting result on each item will be
lead to conflict of interest including prevent them from abuse
recorded in writing and all ballots will be kept for further
of their duty and authority for personal benefits. In this case,
examination.
the Bank formulate relevant procedures include Trading and Investment of TMB’s financial instruments by employee, and
Right to appoint directors individually
Trading of securities on the Watch List/Restricted List and
At each meeting of shareholders, the Bank has an agenda
Blackout Period by employees, and directors also.
item concerning the election of the Bank’s directors. The shareholders are allowed to vote for the election of
In the monitoring of the use of inside information, the Bank
directors one by one which is the practice in conformity
requires that all directors, management and relevant officers
with good corporate governance that shareholders have
comply fully with the rules and regulations regarding securities
the right to choose the person/s that they deem having
trading and disclosure of their securities holding. They must
proper qualifications to perform duties as directors so as to
also acknowledge the prohibitions and penalties relating to the
safeguard the shareholders’ interests. This will enable the
use of inside information for their personal or others’ benefits
Bank to have directors from diversified fields to represent
and the premature disclosure of information to the general
the shareholders. The Bank also has an agenda on directors’
public.
remuneration to be proposed for consideration and approval on an annual basis.
Right to propose to the meeting agenda items and nominate candidates for directors
Management of conflicts of interest
The Bank has realized the importance of the rights and the
The Bank has scrupulously placed importance to the
equitable treatment of shareholders which are part of corporate
management of conflicts of interest of the Bank and its
governance practice. It has allowed the shareholders to propose
subsidiaries on a transparent and fair basis, disclosed
issues for the meeting agenda and nominate candidates for
information and transactions in a complete and timely manner,
directors in advance. The Bank has clearly posted on its
and also overseen the directors, executives and staff at all
website as well as through the SET informing the shareholders
levels to concern and comply with regulatory requirements
of such right and procedure as well as the Bank’s criteria and
regarding conflict of interest.
timeframe within which they are to make proposals.
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3. Role of stakeholders
Customers: The Bank has taken the customer centricity
The Bank has realized the importance of equitably treating all
strategy in its business operations to provide the customers
stakeholders, comprising shareholders, employees, customers,
with diversified services and products that can well respond
business partners, creditors, investors, government authorities,
to their needs and create maximum customer satisfaction.
the society, and other relevant parties. The Bank has put in place the system to handle customers’ complaints and resolve
Business partners: The Bank gives importance to operate
their problems with prudence and fairness. Customer information
business with partners in long-term and sustainable way
is to be kept confidential in compliance with the agreements
as the good business alliances. The Bank has determined
made with business partners. The Bank‘s business operations
clear policy for partner treatment regarding all kinds of
are based on fair and ethical competition. The employees have
procurement of materials, hardware, employment, leasing and
been treated fairly and equally. Training has been provided to
hire purchase. The practices have been orderly and strictly in
enhance staff’s knowledge and efficiency, and fair compensation
compliance with criteria for fair treatment and mutual ultimate
scheme has been mapped out. The Bank has also promoted
benefits in terms of quality, price, terms and conditions of
corporate governance culture within the organization.
services and products. The Bank’s guidelines on partner treatment are as follows:
To ensure all stakeholders’ full access to their rights, the Bank has laid down guidelines for all stakeholders as follows:
1 . Procurement officers and those related to procurement process shall per form duty impar tially, honestly, independently and transparently regarding contact and
Guidelines for stakeholders
coordination with suppliers.
Shareholders: The Bank has targeted to achieve satisfactory
2 . Procurement officers and relevant persons, including
operational performance, with consistent growth of returns,
their direct family members, who have direct or indirect
which will boost the Bank’s value contributed to the shareholders
vested interest with procurement and employment, for
in form of higher share price and attractive dividend payment,
example, employee, director, partner or advisor of the sale
as well as complete and transparent information disclosure in
company, shall not participate in considering the specific
line with regulatory requirements and standards.
procurement whether there is remuneration or not. 3 . Procurement officers and relevant persons, including their
Employees: Employees are the most valuable resources and
direct family members, shall not obtain any personal gain
important factor for the Bank’s success so the Bank has
of commission, fee or token of appreciation from suppliers.
focused on developing and creating good work culture and
4 . In case of receiving presents and/or gifts, procurement
environment and encouraging team work. Employees are
officers and relevant persons, including their direct
treated with politeness and their individuality is respected.
family members, shall comply with the regulation
The consideration of employment, promotion and rotation of
“Accepting Gifts.”
employees are based on fair treatment and use of human resources for the Bank’s optimum benefits.
5 . Procurement officers and relevant persons, including their direct family members, should not be the one borrowing from or lending to the existing suppliers or suppliers who
Moreover, the Bank is determined to promote the employees’
are making an offer to the Bank.
development and training so that the employees can work with
6 . Procurement officers and persons related to procurement
skills and knowledge that will create the maximum benefits
shall not disclose names of the persons selecting supplier,
for the Bank. Employees also have opportunity of career-path
price, offer or technical information of procurement apart
with satisfactory and proper returns to stimulate their
from public information of the selection team to those not
work contribution.
being directly responsible or other suppliers to prevent non-
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transparent supplier selection and to provide fair treatment
to do and learn from activities of interest, e.g. arts, music,
to all suppliers making price proposal to the Bank.
recreation, and academic skills improvement, and etc.
Creditors: The Bank has policy to strictly honor and comply
Corporate Social Activities of 2010
with conditions with creditors. Loan and interest payment
▶▶
FAI-FAH, TMB’s CSR program for community children:
are monitored to ensure complete and timely payment to all
“FAI-FAH” is TMB’s innovative and interactive CSR
creditors. Loan conditions are rigorously complied with without
program designed to provide economically-disadvantaged
any mismatched fund allowed. Besides, the Bank operates
community youth a “third place” that integrates work and
business in the way to build confidence for creditors in the
play through fun and experiential activities such as arts,
Bank’s good financial status and debt serviceability as well
music, singing, cooking, etc. as well as other life-skills
as report the complete and accurate information to creditors.
that maybe beneficial to the children’s lives and future professions. The program is free of charge for children age
Investors: The Bank has been committed to disclosure of
12-17 living in lower-income communities.
correct, complete and sufficient information to timely serve investors’ decision making.
▶▶
Scholarships for military officials’ children: The Bank has granted scholarships to military officials’ children for 47
Government agencies: The Bank has been determined to
consecutive years. To ensure the scholarships are broadly
strictly carry out business in compliance with the relevant laws,
distributed, the Bank provides funds to all military units for
rules, regulations and criteria of the authorities.
allocation to their staff’s children as deemed appropriate. Recipients were from Office of the Permanent Secretary for
Corporate social responsibility: The Bank has recognized the
Defence, Royal Thai Military, Royal Thai Army, Royal Thai
significance of corporate social responsibility (CSR). With a
Navy, and Royal Thai Air Force.
strong commitment to and awareness of its accountability to the society, the Bank has supported various activities relating
▶▶
Undergraduate scholarships: The Bank deems it one of the
to the promotion of social quality in many respects and has
crucial duties of a financial institution such as the Bank to
followed up the results of which for further improvement.
create young promising personnel in financial and banking
In addition, Corporate Branding and Social Responsibility
field. The Bank has granted scholarships to undergraduate
was established under Corporate Communications Group
students in finance and banking related fields, such as
to be responsible for social and environmental projects
economics, business administration, commerce, accounting,
and activities and ensure of continual proceeding and their
and management, of state colleges throughout the country.
contribution to the entire society. Realizing significance of Thai youth development, TMB has promoted opportunities
▶▶
Donations to victims of disaster: Due to the flooding
for adolescents to develop their creativity and make good use
disaster in north-eastern provinces in October 2010, the
of their free time through art, music, skill training, and other
Bank provided emergency assistance by donating food
various activities. TMB’s “Fai Fah” project (the place for art
to the victims living nearby TMB branches. In addition,
learning and youth-development activities has received very
the Bank made donation to Rajaprajanugroh Foundation
good cooperation from not only the Bank’s staff and valuable
under the Royal Patronage and opened “TMB for victims
customers but also many volunteered lecturers, artists, and
of inundation” account for donations from clients, TMB
others, who have devoted their times continuously passing
employees and the public. All donations were deposited
on knowledge to young people. The project encourages the
in saving account which will be delivered to organizations
youth to spend their free time after school and during holidays
that provide support to victims of disaster.
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Corporate Environment Activities of 2010 ▶▶
Annual Report 2010
ensure all stakeholders are able to communicate, report, or
Efficient energy and environment management project:
complain about improper deeds. These include violations of
TMB recognizes the importance of national economic and
laws and regulations, misconduct and unethical behaviors,
industrial development in parallel with the promotion of
embezzlement, frauds committed by employees or external
efficient energy and environment management. To that
parties that may have impact on the interests of the Bank,
effect, the Bank has responded to the government policy
either financially or non financially. The stakeholders can
to enhance support entrepreneurs by encouraging their
report or make complaints either in writing or through the
investments in energy conservation projects, which will
Bank’s website at www.tmbbank.com. The complaints will
help to save their energy costs, boost their income, and
be forwarded to relevant units for quick investigation and
strengthen their competitiveness.
correction. After that, the whistleblowers, whose identities and complaints will be kept confidential, will get notified of
In 2010, the Bank in cooperation with the Institute of
the Bank’s operation.
Industrial Energy promoted energy conservation among manufacturers. The Bank has granted Baht 2,000 – 3,000
4. Disclosure and Transparency
Million loan to industrial manufacturers to invest in energy
The Bank has ensured transparent and adequate disclosure
conservation initiatives and alternative energy.
of information to support investment decision. The Board of Directors is responsible for reporting the Bank’s operating
Moreover, the Bank has been entrusted with the task of
results and significant events in each year for shareholders’
managing the energy and environment funds/projects and
acknowledgement, and confirming the completeness and
acting as a channel to funnel financial supports from the
accuracy of its financial report submitted to the shareholders in
government sector and international organizations in the form
conformity with the generally accepted accounting standards.
of soft loans and grants to entrepreneurs across the country
Notes to financial statements are made available in the annual
such as Cooperation with the World Bank, the Ministry of
report. The Bank also provides in the annual report the Board
Finance and the Ministry of Industry in managing the Ozone
of Directors’ responsibility for financial statements and report
Project Trust Fund (OPTF) to comply with the requirements
of the independent auditor.
under the Vienna Treaty and Montreal Protocol, of which Thailand has been an associate member, on the reduction and
In addition to the disclosure of financial report and other
phase-out of ozone-layer depleting substances. The Bank
information as prescribed by the law, the Bank has emphasized
implemented OPTF projects for a number of industries
on the disclosure of essential news and information to
such as fire extinguishing substances, garments, air-
timely serve the shareholders, investors and the public. To
conditioning services for automobiles, refrigerator/chiller
this effect, Investor Relations unit has been set up under
repair services, etc. The program has been ongoing for
Strategy and Transformation Group to clearly take charge of
over 15 years and the Bank is currently reviewing its role
disclosing information to the parties concerned. Its policy is
to continue cooperation with the World Bank for the next
to disseminating both financial and non-financial information
phase of the environmental projects concerning ozone
to both Thai and non-Thai shareholders, investors, analysts
depleting products.
and credit rating agencies, with accuracy, completeness, transparency and timeliness, and in accordance with the
Whistle blowing or complaints
relevant laws and regulations so that those stakeholders will
The Board of Directors has approved in writing the Whistle
receive useful information for their investment decisions. This
Blowing Policy and the Audit Committee has performed
will help build up confidence, good image and reliability to the
its duties in supervising the whistleblower procedures to
Bank among the investors and concerned parties.
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In 2010, the Bank met and provided information to concerned
of opinions and balance of management power. The members
parties on the following occasions:
are professionals from diversified fields of knowledge, expertise and backgrounds, which have essentially contributed
Types of meeting
Number of times
Number of companies
Number of persons
One-on-one meeting
24
34
44
Teleconference call
6
7
9
Group analyst and Investor Meeting
3
88
109
Non-deal Roadshow
5
69
73
Total
38
198
235
to the consideration and resolution of meeting issues. They have attached importance and devoted their time to the Bank’s business, through the Board of Directors’ meetings and those of Board committees to ensure efficiency in the business operations with optimum benefits to the Bank. The Board of Directors plays a key role in drawing up the Bank’s vision and mission, and formulate its policies, targets, and direction in the operations, both short-term and long-term, to be in line with the economic conditions and cope with the competitive environment. These policies are practical
In addition, the Bank arranged for information dissemination
and adjustable amidst the complex and rapidly changing
through the following channels:
business circumstances. There are clear guidelines set out
▶▶
The Stock Exchange of Thailand
for evaluation of operational performance. Besides, the Board
▶▶
The Office of the Securities and Exchange Commission
has supervised to ensure that the management has run the
▶▶
Ministry of Commerce
business in line with the policies and plans set forth and in
▶▶
Newspapers/magazines
an effective, efficient, and transparent manner. The Board
▶▶
Television
has also monitored the Bank’s management of risk to ensure
▶▶
Electronics media: TMB website (http://www.tmbbank.com)
acceptable risk level, and its audit and internal control systems
▶▶
News release and press conference
in conformity with the laws and regulatory requirements.
▶▶
Questions and answers through E-mail and call center Another important role of the Board is to seek, promote, and
Investor relations contact:
develop the employee competence and ethics with suitable
Investor Relations, Strategy and Transformation Group
compensation scheme drawn up to be competitive with those
Floor 28, TMB Head Office
in the financial market and support the Bank’s business
Tel. 02-299-1178 | Fax. 02-299-1211
expansion for the utmost benefits of not only the Bank, but
E-mail address: ir @ tmbbank.com
also the shareholders and all other stakeholders.
Website: http://www.tmbbank.com Structure of the Board of Directors Shareholders Services Contact:
As of December 31, 2010, the Board of Directors was composed
Corporate Secretariat and Shareholder Services
of 12 members as follows:
Floor 28, TMB Head Office
▶▶
1 executive director
Tel. 02-299-2769, 02-299-1406 | Fax. 02-299-2758
▶▶
7 non-executive directors
▶▶
4 independent directors
5. The Responsibilities of the Board of Directors
TMB Board of Directors is composed of independent directors,
The Board structure has been established with clear and
non-executive directors, and executive directors. It is thus a
transparent scope of responsibilities, not allowing any person
diversified composition that allows for independent expression
or group of persons to have unlimited power. To enable an
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appropriate check and balance, one-third of the total number
be distributed to the directors in advance so that they can
of the directors are independent directors pursuant to the
study the information to support their decision making. In
regulatory criteria and with the qualifications as required by the
addition, each director may propose items to be put in the
relevant laws or regulations. The qualifications of independent
agenda for the meeting, and fully and independently express
directors defined by the Bank are more rigorous than those
their opinions. The directors with conflict of interest in any
by the SEC. In this respect, independent directors are able
agenda item shall not participate and exercise their voting
to express their opinions on an independent and impartial
right on such item. To allow for independent consideration, the
basis to bring about the best benefits to the Bank as well as
Chairperson will process the comments and make conclusion
to prevent conflicts of interest.
on the consideration results of the meeting.
In order to relieve the Board of Directors’ burden in scrutinizing
After every Board meeting, the Secretary to the Board is
and considering essential businesses of the Bank, a number
responsible for preparation of the meeting minutes which are
of Board committees have been set up by the approval of the
to be adopted in the first agenda item at the next meeting.
Board of Directors to be tasked with overseeing and ensuring
The adopted meeting minutes shall be filed and kept in an
the Bank’s transparent and effective business operations. The
orderly manner available for use as reference and inspection
Board committees shall have the authority to make decision
at all times.
on behalf of the Board subject to the Board’s delegation of authority, duty and responsibility. The Bank’s Board committees
Appointment of Company Secretary
comprise the Board of Executive Directors; the Audit
The Board of Directors has appointed M.L.Ayuth Jayant,
Committee; the Risk Management Committee; the Nomination,
Executive Vice President, Head of Corporate Governance
Remuneration and Corporate Governance Committee; the
Group to hold position of Company Secretary.
Credit Committee; and others as deemed necessary. The Company Secretary’s roles and responsibilities are to The qualified persons to be appointed as members in each
perform duty in compliance with laws and best practices
Board committee are selected by taking into account the
including follow up activities of the Board of Directors and
appropriate qualifications, capabilities, experience, and also
the Bank’s to be in line with relevant laws and regulations. The
relevant regulatory. The responsibilities of each committee are
Company Secretary is also to support the Board of Directors,
clearly defined. Meetings have been held regularly. Committee
management, and the Bank to implement operation in line
members have devoted their time to the supervision of the
with good corporate governance and other best practice to
Bank’s business operations to ensure that they are in line with
make sure that the Bank’s operation is under relevant legal
the plans and consistently submission of the reports of which
framework and good corporate governance.
for the Board’s acknowledgement. The Company Secretary has roles and responsibilities as Board of Directors’ meeting
follows:
The Board of Directors’ meeting is held regularly on a monthly basis. The meeting date shall be set in advance so that the
1. For the Bank
Board members are able to plan the attendance of the meeting.
(1) To monitor and supervise the Bank’s overall operation with
Besides normal meetings, special meeting sessions may be
relevant laws and regulatory requirements
arranged as deemed necessary. The meeting agenda shall
(2) To file and keep the Bank’s important documentation such
be determined by the Chief Executive Officer and endorsed
as certificate, memorandum & articles of association,
by the Chairperson of the Board. Meeting documents shall
shareholder register, licenses and power of attorney, etc.
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(3) To push for guidelines so that the Bank shall formulate
nomination process. The Nomination, Remuneration and
policies, comply with good corporate governance and
Corporate Governance Committee shall be in charge of
conduct regular review.
seeking, screening and nominating qualified candidates to the Board for endorsement before proposal to the shareholders’
2. For the Board
meeting for election of directors. The candidates, besides
(1) To advice the Board of Directors and management on laws
having qualifications as prescribed by the regulatory criteria
and regulations relevant to their duties
and the Bank’s regulations, shall have knowledge, expertise
(2) To oversee and conduct meetings of the Board and board
and experience in the business arena, and leadership, visionary
committees established by the Board of Directors to be in
and strategic thinking skills and competence, as well as be
line with laws, regulations, articles of association, charters,
able to contribute their time for the best benefits and the firm
and best practices
and sustainable growth of the Bank’s business operations.
(3) To perform the Board’s secretary and board committees’ secretary as assigned including Chief Executive Committee,
In case of any directorship vacancy for reasons other than
record accurate and complete minutes, inform to relevant
retirement by rotation, the Board shall appoint a person as
management the resolution and follow up the resolution
replacement upon consideration and endorsement by the
implementation
Nomination, Remuneration and Corporate Governance Committee.
(4) To oversee the changes of directors and examine director’s
The replacing director shall hold office only for the remaining
qualifications in case of appointment of new directors in
term of office of the director whom he has replaced. Except
line with regulatory requirements, including propose the
the remaining duration of the director’s term in less than two
issue to the Bank of Thailand for endorsement
months, the replacement must be elected at a general meeting
(5) To review director’s qualifications during the directorship
of the shareholders.
period to ensure that the qualifications are always in line with regulatory requirements
Independent director nomination criteria
(6) To oversee insider information practices of directors
The Bank has been aware that independent directors take a
(7) To facilitate directors’ training and development
vital role in safeguarding the interests of the Bank and the
(8) To provide Board’s performance assessment
minority shareholders. To enhance independence of the Board
(9) To arrange Directors and Officers Liability Insurance (D&O
of Directors and manage conflicts of interest pursuant to the
Insurance) for the directors and management.
regulatory criteria and the corporate governance principles, the Board has formulated criteria for nomination of independent
3. For the Shareholders
directors from professionals of diversified fields with proper
(1) To conduct shareholders’ meeting to be in line with laws,
qualifications and experience who can deliver independent
articles of association and good corporate governance
opinions and have fairness in the performance of duty.
principle, including perform duty of secretary to the
The Nomination, Remuneration and Corporate Governance
shareholders’ meeting.
Committee shall make preliminary consideration of the
(2) To oversee the right of shareholders and create good relationship with shareholders.
nomination of independent directors before submission to the Board meeting or the shareholders’ meeting (as the case may be) for appointment thereof. The basic qualifications of
Nomination and appointment of directors and
an independent director shall be as defined by the Bank and
executives officers
more stringent than that under the criteria set by the Securities
Director nomination criteria
and Exchange Commission and in accordance with corporate
The Bank has put in place a definite and transparent director
governance practices.
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Corporate Governance and Management
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Senior executive officers nomination criteria
1.1) Board and Board committee members who are
In the appointment of executive officers from the level of heads
external persons will receive retaining fee, committee fee
of function groups upward, the Nomination, Remuneration
and attendance fee.
and Corporate Governance Committee shall screen and
1.2) Board and Board committee members who are Bank
nominate either internal or external individuals with proper
employees will receive no remuneration.
90
qualifications to the Board for consideration and appointment. The nomination procedures shall be in conformity with the
2 . Remuneration for executives will be based on the Bank’s operating results and the individual performance.
Bank’s regulations and criteria. Internal control and audit system The appointment of executive officers from the level of heads
The Bank has put emphasis on internal control at both the
of departments downward has been delegated to the authority
management and the operation levels to ensure that interests
of the management in selecting and appointing individuals as
of the customers and the Bank are appropriately taken care
considered appropriate.
of. The Board has regularly monitored the adequacy of the internal control and audit system by assigning the Audit
For certain executive positions where definite terms of office
Committee to examine and ensure proper internal control and
are specified, the Nomination, Remuneration and Corporate
audit in line with the Bank’s policies and regulations, as well
Governance Committee shall proceed with the nomination at
as relevant regulatory requirements.
least six months before the end of such terms of office. In addition, the Bank has the Audit Group in place to take charge Remuneration for directors and executive officers
of considering and evaluating the Bank’s internal control and report
The Bank has a policy on determining the remuneration for
the results of which to the Audit Committee on a regular basis.
directors and executives on a transparent and appropriate manner and to be attractive to capable individuals to join
Monitoring of the use of inside information
the Bank or stay on with the Bank. The remuneration paid is considered based on the experience, proficiency and dedication
Directors’ and executives’ trading of securities issued by the Bank
of work, together with the performance and contribution of
The Bank has drawn up practices for the transactions of the
such directors or executives to the Bank. The remuneration
Bank’s securities by setting blackout period for the directors
for directors and executives may be set to be on a par with that
and executive officers in compliance with the regulatory
of other institutions in the same industry, and is subject to the
requirements. In this respect, the directors, chief executive
approval by the shareholders. Disclosure of the remuneration
officer, chiefs, and department head or the equivalent in Finance
shall be made in the annual report pursuant to the regulatory
Control Group, and Financial Planning and Analysis Group are
requirement. The criteria for remuneration are as follows:
duty-bound to disclose and report to the SEC the Bank-issued
1 . For the members of the Board of Directors and the Board
securities holdings by them, their spouses and minor children,
committees appointed by the Board to monitor and
as well as any changes thereof, such as sell, buy, transfer or
supervise the Bank’s operations to be in line with the
acceptance of transfer of those securities in the report format
policies set forth, comprising the Board of Executive
and within the period of time specified by the SEC.
Directors, the Audit Committee, the Risk Management Committee, and the Nomination, Remuneration and
Directors’ Code of Conduct
Corporate Governance Committee, the remuneration has
The Board of Directors plays an important role as the persons
been determined as follows:
who lead the Bank to the business sustainability, determine the Bank’s policies and guide the Bank’s staff to behave in
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the right direction and monitor the Bank’s operations to be in
Personal businesses and transactions
compliance with good corporate governance principles. The
The directors shall not engage in any businesses similar to and/
directors’ code of conduct is established by the Board of
or competing with the Bank’s businesses, neither for the benefit
Directors which covers high level of ethics so that they can
of their own nor for the benefit of other parties both directly
be the good role models for the Bank’s staff of all levels, with
and indirectly. In addition, the directors shall not be directors
the following key principles:
of the companies or the public companies whose businesses are similar to and/or compete with those of the Bank.
Loyalty and integrity
The directors shall perform their duty with loyalty and integrity,
Business judgment rule
and shall not use their status as a director to seek personal gain,
The directors shall perform with the duty of honesty and
shall neither discriminate nor support any particular person/
care, and on the basis of sufficiently informed decision and
group. In addition, in order to safeguard against the conflicts
resolution as well as rational decision on a par with that of a
of interest, the directors shall not either directly or indirectly
financial and banking professional.
participate or be involved in the decision making regarding transactions or other business dealings by which the directors
Business ethics and code of conduct
themselves and the relevant persons may gain or loss. Besides,
The Bank has a code of conduct and business ethics that
the directors shall monitor to ensure that there is no intervention
addresses compliance with laws, reporting of violations of the
in any decision making which will cause damage to the Bank.
code or of laws or regulations; employment; confidentiality of information; protection and proper use of TMB assets; conflicts
Confidentiality of information
of interest; related and connected party transactions; personal
The directors shall ensure that the Bank’s confidential
securities and other financial transactions. Each director and
information and customer information is not given either
TMB’s staff is expected to be familiar with and to follow the
inadvertently or deliberately to third parties, and shall not use
code of conduct.
the information to seek personal gain or to obtain benefits for other persons/ businesses without the Bank’s consent or
The Bank is determined to run its business with integrity and
permission by laws, while in office or within 1 year after having
ethics. Besides the corporate governance policy, the Bank
completed term of office.
has instituted a written code of conduct,. The core issues addressed and covered by its code of conduct are integrity,
Disclosure of interests
information confidentiality, conflicts of interest, abuse of
The directors shall carefully and thoughtfully perform their duties
authority, misconduct, and so on. In addition, the Board of
as assigned, based on the principle of performing duties in
Directors has provided the staff handbook written of which
the manner that will cause no conflicts of interest. Therefore,
the latest revision was in 2009 thereby clear classification
they shall disclose their personal information and information
and stipulation have been made for strict and consistent
concerned to their related parties in compliance with the rules
compliance by the staff of all levels.
and regulations of the government and the Bank. The directors shall also disclose the information which may lead to the actual
The Bank has been adhered to business operations in
or the potential conflicts of interest against the Bank’s business.
a straightforward manner under the relevant laws, rules, regulations and standards of the regulators and the Bank
Besides, any dealings between the Bank and the related
itself, in the best interests of the customers, shareholders
persons shall always be at arm’s length to avoid the possibility
and other stakeholders.
of actual or perceived conflicts of interest.
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Enhancement of directors’ performance
Performance self-assessment of the Board
The Bank has a policy to encourage its directors to participate
The Board of Directors provided the Board to conduct
in training courses in order to expand their knowledge in the
performance self-assessment regularly. This aims at allowing
fields related to their responsibilities. The training courses
the Board members to review their roles and duties and the
for directors are provided by Thai Institute of Directors (IOD),
performance of the Board as a whole as well as addressing
such as Directors Certification Program (DCP) and Directors
any problems and obstacles arising under the good corporate
Accreditation Program (DAP), etc. In addition the foreign
governance principles. The self-assessment is undertaken
directors already participated in the professional director
in two tiers below:
training from aboard same as IOD programs to aimed at
1 . Assessment of the whole Board of Directors’ performance.
bolstering their understanding in director’s roles and responsi-
2 . Assessment of the performance of each Board committees,
bilities in compliance with the corporate governance practices.
i.e. the Audit Committee, the Board of Executive Directors,
In addition, the Bank provides knowledge that relevant with
the Credit Committee, the Nomination, Remuneration
the Bank’s business and other related business continually.
and Corporate Governance Committee, and the Risk Management Committee.
Besides, the Bank has prepared the directors’ handbook for directors (including the new director). The contents of the
The self-assessment of the above Board’s and board committees’
handbook cover such significant issues as the relevant rules
performances will be made by all the Board members and
and regulations issued by the regulators and the Bank. The
the members of the Board committees on an individual
Company Secretary will prepare documents and information
committee basis. The secretary of each committee will also
that contribute to the directors’ performance of duties and
join in the assessment.
summarized description of the Bank’s nature of business and operational framework. It is regarded as an orientation for the
Management structure
new directors. Certain significant documents are as below:
TMB’s management structure comprises of the Board of
1 . The Director’s handbook: It covers details on the Bank’s
Directors and other sub-committees which have been appointed
business operations and regulatory requirements applicable
by the Board of Directors, namely the Audit Committee,
to directors and others.
the Board of Executive Directors, the Credit Committee,
2 . Handbook for director of a registered company: It features
the Nomination, Remuneration and Corporate Governance
key information on the role, responsibility and duty of a
Committee and the Risk Management Committee. All the
director and the Board of Directors, guidelines for a director’s
committees aforementioned are responsible for overseeing the
performance of duty, protection of a director’s rights,
Bank’s operations and are tasked to scrutinize crucial issues in
and arrangements of the shareholders’ meeting.
accordance with good corporate governance before submission
3 . Other documents: These include memorandum and articles
to the Board of Directors.
of association, annual report, corporate governance policy, directors’ code of conduct, handbook for directors of
The duties and responsibilities of each board committee
financial institutions, and relevant regulatory letters and
are clearly delineated in writing. Committee members have
notifications, featuring rules, criteria and practices prescribed
profound knowledge, skills, and experience that are aligned
by the relevant regulators, i.e. the BOT, the SEC and the SET.
with their responsibilities. Most of the committee members are
This aims at enhancing directors’ awareness of their roles
not the Bank’s executives with some acting as independent
and responsibilities, and the Bank’s business operations.
directors providing a balance and separation of authorities for
Such handbooks are subject to regular updating and review
governance and management.
to ensure information is current in market practices.
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The composition, appointment, discharge
themselves from decisions when they themselves or someone
or removal of the directors
related to or connected with them have a conflict of interest
The directors are elected by the shareholders at the Annual
that makes them incapable of properly fulfilling their duties to
General Meeting, each for a three year term, with one third
the Bank, and Safeguard corporate reputation.
of the Board retiring each year. A director whose term has expired may be reelected for a further term. If a director leaves
The current size of the Board is 12, of which 4 are classified
the Board before the end of his term, the Board itself has
as independent directors, whose qualifications must
powers to appoint a replacement to serve the remainder of
conform to the Bank and more strength than requirements.
that term. If the remaining duration of the director’s term is
The composition of the Board is subject to regulatory
less than two months the replacement must be elected at
requirements, including those of the Bank of Thailand, the
a general meeting of the shareholders. The Board has the
Securities and Exchange Commission, and the Stock Exchange
responsibility of selecting and nominating suitable candidates
of Thailand.
for election as directors. Nominations may also be made by shareholders, and the Board has established a process for
Selection of independent directors
receiving and reviewing the qualifications of such nominations.
The Bank realizes that the key role of independent directors is in protecting the benefits of the Bank and minority
Setting the criteria for the composition of the Board and
shareholders. The Bank has promoted directors’ independence
for the selection of new directors are Board functions.
and managed conflicts of interest to be in compliance with
The Nomination, Remuneration and Corporate Governance
the principles laid down by the authorities and good corporate
Committee (the “NRCC”) periodically reviews the criteria
governance guidelines. The Board of Directors therefore
for composition of the Board and evaluates potential new
sets a guideline for a selection of independent directors.
candidates for Board membership. The committee then makes
The nominated persons shall be selected from among the
recommendations to the Board, which will then give its opinion
various fields of professions with appropriate qualifications
to the shareholders in advance of a shareholders’ meeting on
and experience. The Nomination, Remuneration and Corporate
candidates nominated for election by that meeting.
Governance Committee then screens qualified persons before proposing to the Board of Directors for further election.
In general, the Board wishes to balance the needs for professional knowledge, business expertise, varied industry
Independent Directors
knowledge, financial expertise business management expertise
TMB Bank Plc. has defined the term “Independent Director”
and independence in position and decision making.
as a director who is independent from any major shareholder, executive, and related person thereof, and is in charge of
With the exception of the Chief Executive Officer, directors
protecting the interests of all the shareholders and stakeholders
are not TMB employees and do not participate in the daily
on an equitable basis. The minimum number of independent
business management of TMB. The Bank’s directors play an
directors is set to be one-third of the total number of directors
important role as the person who lead the Bank to supervise
and not less than three persons.
the Bank’s operations to be incompliance with good corporate governance principles, laws, and resolution of shareholders.
In addition, The qualification set by the Bank is also more
Director must devote the time and attention necessary to
stringent than that under the criteria set by the Securities and
fulfill the obligations of a director. Director exercise their “duty
Exchange Commission (SEC) details of which are as follows:
of loyalty” and “duty of care” to the Bank, avoid conflicts of interest and the appearance of such conflicts, excuse
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(1) Not hold shares in excess of 0.5 percent of total voting
to be liable for debt settlement to another party in an amount
shares of the Bank, or the Bank’s parent company,
equivalent to 3 percent or more of the net tangible assets
subsidiary, associated company, major shareholder, or
of the Bank or twenty million baht or more, whichever is
any person with controlling power over the Bank, whilst
lower. The calculation of the said debt shall accord with
the number of shares held by any related person of that
the calculation of a connected transaction prescribed in the
independent director must also be counted.
Capital Market Supervisory Board’s notification regarding
(2) Not be and have not been a director participating in
criteria on connected transactions mutatis mutandis.
management role, an employee, an officer, an advisor
However, consideration of the said debt shall include the
who receives regular salary, or a person having controlling
debt incurred during the one-year period prior to the date
power over the Bank, the Bank’s parent company,
on which such business relationship takes place.
subsidiary, associated company, subsidiary at the same
(5) Not be and have not been an auditor of the Bank, its
level, or major shareholder, unless such independent
parent company, subsidiary, associated company, major
director has not been a person referred to above for at
shareholder, or a person having controlling power. The
least two years prior to the date of his/her appointment.
independent director shall not be and have not been
(3) Not be a person having relationship either through
a shareholder in material respect, a person having
bloodline or legal registration as the father, mother, spouse,
controlling power, a partner of an auditing firm for which
sibling and child, as well as the spouse of a child of an
the auditor of the Bank, or that of its parent company,
executive, major shareholder, a person having controlling
subsidiary, major shareholder, or a person with controlling
power, or a person to be nominated as the executive
power over the Bank has been working, unless such
or that who has controlling power over the Bank or its
independent director has not been a person referred
subsidiary.
to above for at least two years prior to the date of
(4) Have no or have had no any business relationship with
his/her appointment.
the Bank or its parent company, subsidiary, associated
(6) Not be and have not been a professional advisor, including
company, major shareholder, or person having controlling
legal or financial advisor, who obtains fee more than two
power over the Bank, in a manner that may prevent
million baht a year from the Bank, its parent company,
his/her due and independent use of discretion. The
subsidiary, associated company, major shareholder, or a
independent director shall not be and have not been
person having controlling power. The independent director
a shareholder in material respect or a person who
shall not be and have not been a shareholder in material
has controlling power over the person with business
respect, a person with controlling power, or a partner of
relationship with the Bank, its parent company, subsidiary,
such professional service provider, unless the independent
associated company, major shareholder, or a person
director has not been a person referred to above for at
having controlling power over the Bank, unless such
least two years prior to the date of his/her appointment.
independent director has not been a person referred
(7) Not be a director who has been appointed as a
to above for at least two years prior to the date of
representative of the Bank’s director, the major shareholder,
his/her appointment.
or the shareholder related to the Bank’s major shareholder.
Business relationship in the above paragraph shall cover any
(8) Not engage in the business of the same nature as
ordinary course of business or trade for business engagement
or competing with that of the Bank or its subsidiary. The
purpose, property rent, transaction relevant to asset or
independent director shall not be a partner in material
service, giving or receiving financial assistance in form of
respect in a partnership, or director participating in
loan or guarantee, offering assets as collateral, and any other
management role, an employee, officer, or advisor
similar conduct, which causes the Bank or its counterparty
obtaining regular salary, or a shareholder holding more than
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M.L. Ayuth Jayant is Secretary to the Board.
which engages in the business of the same nature as or competing with that of the Bank or its subsidiary. (9) Not have any characteristics that prevent the director from
The Board meeting is held at minimum on a monthly basis or as deemed necessary.
giving independent opinions on the Bank’s operations. Authorized signatories Board of Directors
Mrs.Saowanee Kamolbutr, Chairperson, or Mr. Boontuck
The Board of Directors as of December 31, 2010 consisted
Wungcharoen, Chief Executive Officer, or any two directors
of 12 members, one holding executive director position,
are authorized to co-sign with the Bank’s seal affixed.
seven holding non executive directors positions, and four independent directors.
The scope of responsibilities of the Board of Directors is as follows:
Name
Position
1. Mrs. Saowanee Kamolbutr
Chairperson
2. General Prayut Chan-o-cha*
Director
3. Mr. Philippe G.J.E.O. Damas
Director / Chairman of Board of Executive Directors
4. Dr. Vijit Supinit
Independent Director / Chairman of Audit Committee
Policy
(1) To set the overall strategic direction and targets for the Bank, review and approve business policies, operational direction, business plans and yearly budgets. (2) To appoint some of the board members as the board committees in a way that promotes efficiency and strategic discussion and operate the Bank’s business as assigned by the Board of Directors. (3) To approve the scope of responsibility of board committees and their composition as well as other significant changes
5. Mr. Aviruth Wongbuddhapita
Independent director / Chairman of Nomination, Remuneration and Corporate Governance Committee
6. Mr. Willem Frederik Nagel
Director / Chairman of Risk Management Committee
7. Mr. Kritsda Udyanin
Director / Chairman of Credit Committee
8. Mr. Vaughn Nigel Richtor
Director
9. Mr. Amorn Asvanunt
Director
10. Mr. Christopher John King
Independent director
11. Mr. Tara Tiradnakorn
Independent director
12. Mr. Boontuck Wungcharoen
Director / Chief Executive Officer
Remark: *Performing directorship in TMB since October 7, 2010
to their activities. (4) To review the Bank’s Memorandum and Articles of Association and communicate them to the shareholders. (5) To consider plans for capital injection, whenever appropriate. (6) To review and, where permissible or required under applicable regulations, consider approval of connected transactions as prescribed by the SEC and related party credit limits as prescribed by the BOT. (7) To approve all credit limits to single borrower groups for amounts in excess of the amount delegated to management. Management
(1) To oversee management’s operations of the business that enhances the Bank’s competitiveness and operational effectiveness and efficiency with core focus upon the interest of the Bank and shareholders. These operations are in alignment with the Bank’s vision and mission as defined by the Board.
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(2) To ensure management has in place established policies
Annual Report 2010
Human resource
and procedures of risk management with regard to
(1) To approve the employment, appointment, rotation,
approvals, reviews, and practices encompassing credit
re mune ration, disciplina r y ac tion, seve rance of
risk, market risk, investment risk, operational risk,
employment, and resignation of top executives, as well
reputational risk, legal and compliance risk, asset and
as the recommendations of the Nomination, Remuneration
liability management risk, liquidity risk, interest rate risk,
and Corporate Governance Committee.
and others according to the regulations of the Bank of Thailand (BOT).
(2) Select, monitor and where necessar y replace key executives, while ensuring that the Bank has an appropriate
(3) To set approval powers and delegation of authority for
plan for executive succession and that any intended
transactions that are binding for the Bank and for a third
successor(s) will be qualified, fit and proper to manage the
party.
affairs of the Bank.
(4) To effect reporting by Management and the Board
(3) Ensure that the Bank’s compensation and benefits
committees in a timely and appropriate manner on issues
programs are appropriate and consistent with the strategic
to the Board of Directors.
objectives and compliant with relevant regulations.
(5) To follow up meeting minutes and monitor performance of all board committees.
(4) To assess the performance of Chief Executive Officer and Chiefs.
(6) Continuously review the organization structure of the Bank to ensure that management there are clear lines scope of
The delegation of authority and responsibilities of the Board
responsibilities.
of Directors shall not be the delegation or sub-delegation that will allow for the Board of Directors or the persons so
Oversight and internal control
authorized to approve any transactions that they themselves
(1) To ensure high transparency in Bank’s management
or their related parties (as defined in the SEC’s notification or
with checks and balances in place for good corporate
by other concerned authorities) have vested interest or conflict
governance.
of interest with the Bank or any of its subsidiaries, unless it
(2) To consider the Bank’s management report and accounting report on a quarterly basis. (3) To consider to ensure the Bank strictly complies with
is an approval of the transactions that is in accordance with the policies and regulations approved by the shareholders’ meeting or the Board of Directors.
the regulatory rules and requirements such as capital adequacy through a regularly review.
Board Committees
(4) To ensure that the Bank has adequate and effective internal
The Board has found it beneficial to establish certain
control and audit systems and to appoint and supervise
specialized committees to assist the Board in its oversight
the board committees to perform their duties with integrity.
function and to advise the Board on issues requiring specific
(5) To encourage the good corporate governance Policy to
technical expertise. In addition, the Board set composition,
establish codes of best practices and business ethics
accountability, the mandate, and working procedures of each
for the directors, the executives and staff members as
committees in written. The board committees will generally
internal operational guidelines.
report to the Board at the next regularly scheduled Board
(6) Meet regularly with senior management to review
meeting following the committee meeting.
policies, establish communication lines and monitor progress toward corporate objectives and provide sound
Membership on the committees is reviewed each year by
advice to management and recommend sound practices
the Nomination, Remuneration and Corporate Governance
appropriately.
Committee and approved by the full Board, which will also
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97
designate a chair for each committee. The membership of
The delegation of authority and responsibilities of the
each board committee is based on board committee needs,
Board of Executive Directors shall not be the delegation
director experience, interest and availability and evolving legal
or sub-delegation that will allow for the Board of Executive
and regulatory considerations.
Directors or the persons so authorized to approve any transactions that they themselves or their related parties
The board committees of TMB has the following committees:
(as defined in the SEC’s notification or by other concerned authorities) have vested interest or conflict of interest with
Board of Executive Directors
the Bank or any of its subsidiaries, unless it is an approval of the transactions that is in accordance with the policies
Name
Position
1. Mr. Philippe G.J.E.O. Damas
Chairman (Non Executive Director)
2. Mr. Vaughn Nigel Richtor
Committee Member (Non Executive Director)
and regulations approved by the shareholders’ meeting or the Board of Directors. Audit Committee
3. Mr. Kritsda Udyanin
Committee Member (Non Executive Director)
4. Mr. Amorn Asvanunt
Committee Member (Non Executive Director)
5. Mr. Boontuck Wungcharoen
Committee Member / Chief Executive Officer (Executive Director)
M.L. Ayuth Jayant is Secretary to the Board of Executive
Name 1. Dr. Vijit Supinit
Chairman (Independent Director and have significant experience in reviewing financial reports)
2. Mr. Aviruth Wongbuddhapitak Committee Member (Independent Director and have significant experience in reviewing financial reports)
3. Mr. Christopher John King Committee Member
Directors. The Board of Executive Directors’ meeting is usually held
Position
(Independent Director)
Mr. Peera Chinwannabutr is Secretary to the Audit Committee.
twice a month or as deemed necessary and instructed by the Chairperson of the Board of Executive Directors.
The Audit Committee’s meeting is usually held once a month or as deemed necessary and instructed by the Chairperson
The scope of responsibilities is as follows:
of the Audit Committee.
The primary responsibility of the Board of Executive Directors is the detailed review of business performance by business
The scope of responsibilities is as follows:
segment and subsidiaries, starting from endorsement of
(1) To review the Bank’s financial statements to ensure
annual budget and business plan, including capital planning,
accuracy and adequacy.
to performance tracking by business lines, and financial
(2) To review and ensure that the Bank has suitable and efficient
results, including large capital expenditure in relation to
internal control system and internal audit, and reviewing
plan and strategy. In addition the Board of Executive
to ascertain that internal audit function is independence.
Directors monitors progress of the branding and corporate
Hiring, transferring, removal and performance appraisal of
communications programs.
Chief Internal Audit shall be concurred by Audit Committee.
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Annual Report 2010
(3) To review to ensure compliance with the laws and
within 30 days. The Committee also is to report to the
regulations imposed by the SEC, SET and other relevant
Board of Directors so that the board can rectify the issues
regulators including compliance report prepared by the
within the timeline specified by audit committee on the
Bank’s Compliance unit.
following findings or suspected transactions or actions:
(4) To select, nominate and recommend remuneration of the
(a) Conflict of interest;
Bank’s external auditor by taking into account the credibility,
(b) Fraud, possible fraud, or significant deficiency of
adequacy of resources, experience and independence. The
internal control;
Audit Committee shall meet with the External Auditors without
(c) Breaching of the applicable laws and regulations.
the members of the Executive Management being presented
In case where the Board of Directors or Executive Management
as often as it determines but at least once a year.
failed to rectify the issues within the specified timeline,
(5) To approve audit-related and other services engagements with the Bank’s external auditor. (6) To review connected transaction or transaction that may lead to conflict of interest to ensure transactions are
audit committee shall report such deed to the Bank of Thailand, the Office of the Securities and Exchange Commission, the Stock Exchange of Thailand and disclose in the Bank’s annual report.
conducted and disclosed in compliance with the law
(9) To review the appropriateness of corrective measures and
and regulation and that transactions are entered with
actions taken by management in response to the reports
reasonableness for the benefit to the Bank.
or instructions from the Bank of Thailand, the Office of
(7) To prepare audit committee report, signed by the
the Securities and Exchange Commission, the Stock
Chairperson of the audit committee, and disclose it in an
Exchange of Thailand and any other relevant regulators.
annual report of the Bank. The report should at least contain
(10) To review the accuracy and reliability of the financial
the following information;
statements of the Bank’s subsidiaries, and to review
(a) The audit committee’s opinion regarding the accuracy,
compliance with the policies, processes and standards
completeness and integrity of the Bank’s financial statements.
set by the bank for its subsidiaries, including those related
(b) The audit committee’s opinion regarding adequacy of
to internal controls and audit.
the Bank’s internal controls. (c) The audit committee’s opinion regarding compliance to the applicable laws and regulations.
(11) To perform any other duties as delegated by the Board of Directors and agreed by the audit committee. (12) To perform other duties as required by law.
(d) The audit committee’s opinion regarding suitability of the Bank’s External Auditor.
Nomination, Remuneration and
(e) The audit committee’s opinion regarding transaction
Corporate Governance Committee
that may lead to conflict of interest. (f) Number of the meeting held during the year and number of each member’s attendance.
Name
Position
1. Mr. Aviruth Wongbuddhapitak
Chairman (Independent director)
2. Mr. Kritsda Udyanin
Committee Member (Non Executive Director)
3. Mr. Philippe G.J.E.O. Damas
Committee Member (Non Executive Director)
4. Mr. Christopher John King
Committee Member (Independent Director)
(g) Overall opinion arisen from discharging of audit committee’s duties according to the charter. (h) Other information, within the scope of the roles and responsibilities of audit committee, which is deemed to be necessary for shareholders and general investors (8) To commence investigation without delay upon being informed by external auditor of suspicious circumstance and report SEC and external auditor the preliminary result
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99
Mr. Akarin Phureesitr is Secretary to the Committee.
(2) To formulate guidelines and all policies related to good
The meeting of this Committee is usually held four times a year or
(3) To regularly review the relevant policies, principles and
as deemed necessary and instructed by the Chairperson of the
guidelines and make recommendations on the business
Nomination, Remuneration and Corporate Governance Committee.
ethics and code of conduct.
corporate governance principles for the Bank.
(4) To follow up the new development on good corporate The scope of Nomination, Remuneration and Corporate Governance Committee responsibilities is as follows:
governance guidelines of government agencies and
Nomination and remuneration
for bank practices.
(1) To set and review policies, criteria and methodology for nomination of directors and top executives for the Board of Director’s consideration and approval.
international organizations and adopt the suitable ones (5) To supervise and ensure the continuity and sustainability of good corporate governance in the Bank. (6) To report to the Board of Directors the Bank’s good
(2) To screen name list of qualified persons to be appointed as
corporate governance with recommendations for
members of the Board of Directors, senior executives and
improvement and also reports and disclosures on
directors on the board of any company in which the Bank
information of directors to the regulators, shareholders,
holds at least 50% for the Board of Directors’ consideration.
and the public as are required by applicable regulations
(3) To set and review a policy, criteria, and guideline on the
or deemed appropriate
payment of remuneration and other benefits as well as on the amount of remuneration and other benefits for directors
Risk Management Committee
and top executives in a clear and transparent manner for the Board of Director’s consideration and approval. (4) To ensure that the Board members and top executives of the Bank receive remuneration appropriate and
Name
Position
1. Mr. Willem Frederik Nagel
Chairman (Non Executive Director)
2. Mr. Amorn Asvanunt
Committee Member (Non Executive Director)
3. Mr. Tara Tiradnakorn
Committee Member (Independent Director)
4. Mr. Boontuck Wungcharoen
Committee Member / Chief Executive Officer (Executive Director)
5. Mr. Bart F.M.Hellemans
Committee Member / Chief Risk Officer (Management)
commensurate with their roles and responsibilities. (5) To lay down guidelines on performance assessment for the Board members and top executives in relation to annual adjustment of their remuneration based on the scope of their responsibilities and the risks involved and also to increase shareholder’s value in the long term. (6) To advise a succession plan for the top-executive level to the Board of Directors. Corporate governance
(1) To advise the Board of Directors in monitoring and ensuring that the operations of the Bank and its practices and operations - Board of Directors, relevant committees,
Head of Risk Analytics and Policy Group is Secretary to the
the Management and staff members are in compliance
Committee.
with good corporate governance. Moreover, it is to formulate, follow up and communicate the guidelines
The meeting of this Committee is usually held on a monthly basis
on corporate governance practices to the internal and
or as deemed necessary and instructed by the Chairperson
external relevant parties.
of the Risk Management Committee.
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Annual Report 2010
The scope of responsibilities is as follows:
The scope of responsibilities is as follows:
(1) To approve the comprehensive risk management strategies
(1) To consider and approve credits that are beyond the
in a holistic manner.
Management’s approval authority.
(2) To approve significant policies and framework that govern
(2) To consider and approve investments of the usual
the management of risks including risk governance matters
transactions, and debt restructuring that are beyond the
which are required by the authorities to be approved by
Management’s approval authority. (3) To review the medium- and large-sized NPLs.
the Board of Directors. (3) To recommend the risk levels and its concentration for the Board of Directors’ approval.
(4) To set and review the strategies and carry out credit-related development so as to achieve the Bank’s targets and make
(4) To approve the supplemental risk limits as defined in the relevant policies and frameworks.
appropriate recommendations to the Board of Directors. (5) To review credit and investment performance of the Bank.
(5) To review and monitor all risks and risk management including preparedness for Basel II compliance. (6) To approve the appointment, review of committee structure
Other committees/working groups 1. Chief Executive Committee:
and composition, and roles and duties of the management-
To operate short term and long term strategy of the Bank,
level risk management committees.
conduct regular review of progress in achieving long-term
(7) To report the risk management performance and all risk
strategic goals. To propose the Annual Business Plan, Annual
management matters and measures to the Board of
Budget, Capital Budget and control headcount against
Directors and the Audit Committee.
headcount plan to the Board of Directors for consideration and endorsement. To propose investment, main projects of
Credit Committee
the Bank, branding, advertising, corporate communication and approve measures to deal with crisis situations to the Board of
Name
Position
1. Mr. Kritsda Udyanin
Chairman (Non Executive Director)
strategic of subsidiaries and review their performance.
2. Mr. Willem Frederik Nagel
Committee Member (Non Executive Director)
2. Asset and Liability Management Committee:
3. Mr. Amorn Asvanunt
Committee Member (Non Executive Director)
4. Mr. Boontuck Wungcharoen
Committee Member / Chief Executive Officer (Executive Director)
5. Mr. Bart F.M. Hellemans
Committee Member / Chief Risk Officer (Management)
Mr. Jaroonsak Hengtragul is Secretary to the Credit Committee.
Directors for consideration and approval. In addition, to consider
To define and decide on the formulation and execution of asset and liability management policies; and to endorse/approve for all matters relating to the asset and liability management of the Bank. 3. Risk Policy Committee: To assess the integrity and adequacy of the credit management of the Bank ; to review and endorse or approve the Bank’s credit risk policies, credit underwriting standards, credit criteria of products, and guidelines within the delegated authority. 4. Operational Risk Management Committee: To develop tools and techniques for risk identification, approve
The Credit Committee’s meeting is usually held twice a month
operational risk minimum standard and guidelines, set targets
or as deemed necessary and instructed by the Chairperson
for key risk indicators, initiate action on reported incidents or
of the Credit Committee.
events and approval new products.
TMB Bank PCL
5. Credit Underwriting Committee: To consider loans proposed by Wholesale Banking Group
Corporate Governance and Management
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11. Safety, Occupational Health and Work Environment Committee:
and SME Banking Group within its approval authority; and
To consider policy and plan on workplace safety and
to scrutinize the matters within the approval authority of the
safety outside works; to organize projects encouraging and
Board of Directors and the Credit Committee.
supporting safety-related activities; and to define regulations on safety, occupational health and working environment to
6. Appraisal Consideration and Approval Committee:
be in compliance with the regulations of the Ministry of Labor
To approve list of outside independent appraisers; to formulate
and Social Welfare.
appraisal procedures; and to approve the appraisal result of revaluation result conducted by independent external
Board of Directors’ meeting
appraisers and internal appraisers for ever property value.
A whole-year board meeting schedule shall be set in advance so that the directors could plan to attend each meeting.
7. Credit Restructuring Committee 1
Besides normal meetings, special meeting sessions may be
To review and monitor and to consider the issues related to
arranged as deemed necessary with consent from the Board
NPLs and NPAs within it approval authority; and to scrutinize
Chairperson. The meeting agenda shall be set, with clearly-di-
the matters within the approval authority of the Board of
vided session, by the Chief Executive Officer and endorsed by
Directors and the Credit Committee.
the Board Chairperson. The Board Secretary shall deliver an invitation letter together with the meeting agenda and meeting
8. Credit Restructuring Committee 2
documents to the directors at least 7 days in advance of the
To review and monitor and to consider the issues related to
meeting date, except in an urgent case, so that the directors
NPLs and NPAs within it approval authority.
would have sufficient time to study the information. In this regard, the directors may propose other issues to the meeting
9. IT Committee:
as deemed appropriate.
To endorse IT Strategic Plan and Blueprint to ensure proper alignment with corporate plan; to be informed and updated of
In each meeting, the directors will take good time in considering
the Bank and Market crucial banking technology.
each item and expressing independent opinions for the best interest of the Bank. The Chairperson will process the comments
10. Human Resource Committee:
and conclude results of the meeting. The Board Secretary is responsible for preparing the meeting minutes to be adopted
To consider and approve the framework governing the
by the meeting as well as for keeping the meeting minutes for
Bank’s human resources management polices, compensation
future reference and for inspection by concerned parties.
standards, rules and regulations, succession plan, performance review, salary adjustment, bonus and incentive award of
Besides, the directors having related interests to the agenda
employees at below Group Head and Executive level. To
proposed to the meeting shall not join the deliberation of such
approve the governance structure of job grading and function
agenda. The Board of Directors is able to hold a meeting of
title or any issues under HR transformation. To approve
which the Executive Director is not present with consideration
the Bank’s human resource development structure and
of Bank and management performance.
corporate culture. In 2010, there were 15 meetings of the Board of Directors. Details of the meeting attendance of the Board of Directors and board committee members are as follows:
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Annual Report  2010
Meeting attendance of board and committee members in 2010 is tabulated below: (Unit: Times)
Name Board of Board of Credit Audit Nomination, Remuneration Risk Directors Executive Directors Committee Committee and Corporate Management Governance Committee Committee Total no. of meetings in 2010
15
22
21
12
13
1. Mrs. Saowanee Kamolbutr
15/15
2. Gen. Anupong Paojinda (1) (Until September 30, 2010)
1/11
12
3/4 3. Gen. Prayut Chan-o-cha (2) (From October 7, 2010) 4. Mr. Philippe G.J.E.O. Damas
14/15
5. Dr. Vijit Supinit
15/15
11/12
6. Mr. Aviruth Wongbuddhapitak
13/15
12/12
7. Mr. Willem Frederik Nagel
7/15
8/21
8. Mr. Kritsda Udyanin
14/15
17/22
20/21
9. Mr. Vaughn Nigel Richtor
12/15
18/22
10. Mr. Amorn Asvanunt
14/15
21/22
11. Mr. Christopher John King
12/15
12. Mr. Tara Tiradnakorn
14/15
12/12
13. Mr. Boontuck Wungcharoen
13/15
7/12
(1)
17/22
19/22
12/13
13/13
12/13
19/21 10/12
7/12
11/12
10/13
13/21
Not holding a board member position as of December 31, 2010.
(2)
According to the resolution passed by the Board of Directors meeting no. 9/2553 on September 30, 2010, Gen. Prayut Chan-o-cha was appointed as a director. The appointment is effective on October 7, 2010 by BOT.
Notes: (1) Mr. Philippe G.J.E.O. Damas is a director who does not have residence in Thailand.
The Board of Executive Directors meetings no. 2/2553, 4/2553, 13/2553, 17/2553 and 21/2553: Mr. Philippe G.J.E.O. Damas joined the meetings through teleconferencing/videoconferencing system.
(2) Mr. Willem Frederik Nagel is a director who does not have residence in Thailand. The Credit Committee meetings no. 2/2553, 3/2553, 6/2553, 8/2553, 8/2552, 9/2553, 11/2553, 14/2553 and 21/2553, and the Risk Management Committee meetings no. 1/2553, 2/2553 and 3/2553: Mr. Willem Frederik Nagel joined the meetings through teleconferencing/videoconferencing system. (3) Mr. Vaughn Nigel Richtor is a director who does not have residence in Thailand. The Board of Executive Directors meetings no. 2/2553, 4/2553, 5/2553, 7/2553, 11/2553, 15/2553, 17/2553 and 21/2553: Mr. Vaughn Nigel Richtor joined the meetings through teleconferencing/videoconferencing system.
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Remuneration for directors and executives
- Audit Committee
THB 374,400 / year
The Bank has a policy to set the remuneration for directors
- Nomination, Remuneration and
THB 374,400 / year
in an appropriate amount and in accordance with their roles and responsibilities to achieve the Bank’s targets and in line
Corporate Governance Committee - Risk Management Committee
THB 374,400 / year
with relevant regulations and expectation of all stakeholders. The remuneration shall also be set on par with those of other
2. Committee fee
institutions. The Board of Directors can set the remuneration
Chairman
for additional sub committee (if any). The remuneration for
- Board of Directors
THB 1,800,000 / year
the additional sub committee will be included in the amount
- Board of Executive Directors
THB 1,440,000 / year
approved by the AGM.
- Credit Committee
THB 696,000 / year
- Audit Committee
THB 696,000 / year
- Nomination, Remuneration and
THB 696,000 / year
The remuneration is set out in a transparent manner. The Nomination, Remuneration and Corporate Governance
Corporate Governance Committee
Committee is responsible for reviewing the remuneration
- Risk Management Committee
for directors before submission for the Board of Directors’
Member
consideration. The remuneration shall be proposed for
- Board of Directors
THB 384,000 / year
approval from the annual shareholders’ meeting. The
- Board of Executive Directors
THB 422,400 / year
remuneration is set as follows:
- Credit Committee
THB 374,400 / year
- Audit Committee
THB 374,400 / year
- Nomination, Remuneration and
THB 374,400 / year
Monthly fee consist of ▶▶
Retaining fee: Director is entitled to the retaining fee for one
Corporate Governance Committee - Risk Management Committee
position only. ▶▶
THB 696,000 / year
THB 374,400 / year
Committee fee: Director is entitled to the committee fee for every board and committee that he/she sits on.
3. Attendance fee
Attendance fee: Director is entitled to the attendance fee
Chairman
for every meeting where he/she is present.
- Board of Directors
THB 40,000/attendance
- Board of Executive Directors
THB 40,000 / attendance
- Credit Committee
THB 32,400 / attendance
1. Retaining fee
- Audit Committee
THB 32,400 / attendance
Chairman
- Nomination, Remuneration and
THB 32,400 / attendance
▶▶
Cash remuneration
- Board of Directors
THB 1,800,000 / year
- Board of Executive Directors
THB 1,440,000 / year
Corporate Governance Committee - Risk Management Committee
THB 32,400 / attendance
- Credit Committee
THB 696,000 / year
Member
- Audit Committee
THB 696,000 / year
- Board of Directors
THB 30,000 / attendance
- Nomination, Remuneration and
THB 696,000 / year
- Board of Executive Directors
THB 31,200 / attendance
- Credit Committee
THB 24,600 / attendance
- Audit Committee
THB 24,600 / attendance
- Nomination, Remuneration and
THB 24,600 / attendance
Corporate Governance Committee - Risk Management Committee
THB 696,000 / year
Member - Board of Directors
THB 384,000 / year
- Board of Executive Directors
THB 422,400 / year
- Credit Committee
THB 374,400 / year
Corporate Governance Committee - Risk Management Committee
THB 24,600 / attendance
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Annual Report  2010
In 2010, all of the 13 directors received remuneration for serving on the Board of Directors and other committees in a total amount of THB 28,444,400. The details are as follows: Name of director
Details
1. Mrs. Saowanee Kamolbutr
Receiving THB 4,200,000 for serving as Chairperson of the Board of Directors.
2. Gen. Anupong Paojinda (1)
Receiving THB 606,000 for serving on the Board of Directors.
(Until September 30, 2010)
3. Gen. Prayut Chan-o-cha (2)
Receiving THB 282,000 for serving on the Board of Directors.
(From October 7, 2010)
4. Mr. Philippe G.J.E.O. Damas
Receiving THB 5,033,600 for serving on the Board of Directors and as Chairman of the Board of Executive Directors and Member of the Nomination, Remuneration and Corporate Governance Committee.
5. Dr. Vijit Supinit
Receiving THB 2,582,400 for serving on the Board of Directors and as Chairman of the Audit Committee.
6. Mr. Aviruth Wongbuddhapitak Receiving THB 3,256,800 for serving on the Board of Directors and as Chairman of the Nomination, Remuneration and Corporate Governance Committee and Member of the Audit Committee. 7. Mr. Willem Frederik Nagel
Not entitled to receive the monetary remuneration as per the criteria of ING Bank N.V.
8. Mr. Kritsda Udyanin
Receiving THB 4,466,400 for serving on the Board of Directors and as Chairman of the Credit Committee and member of the Board of Executive Directors and Member of the Nomination, Remuneration and Corporate Governance Committee.
9. Mr. Vaughn Nigel Richtor
Not entitled to receive the monetary remuneration as per the criteria of ING Bank N.V.
10. Mr. Amorn Asvanunt
Receiving THB 3,790,800 for serving on the Board of Directors, and as member of the Board of Executive Directors, and member of the Credit Committee and the Risk Management Committee.
11. Mr. Christopher John King
Receiving THB 2,368,800 for serving on the Board of Directors, and as member of the Audit Committee and the Nomination, Remuneration and Corporate Governance Committee.
12. Mr. Tara Tiradnakorn
Receiving THB 1,857,600 for serving on the Board of Directors and as member of the Risk Management Committee.
13. Mr. Boontuck Wungcharoen Not entitled to receive the monetary remuneration as per the criteria of TMB. (1)
Not holding a board member position as of December 31, 2010.
(2)
According to the resolution passed by the Board of Directors meeting no. 9/2553 on September 30, 2010, Gen. Prayut Chan-o-cha was appointed as a director. The appointment is effective on October 7, 2010 by Bank of Thailand.
Other benefits No other benefits.
TMB Bank PCL
Other related information and factors effecting
Corporate Governance and Management
| 105
Measures or procedures to approve the making of related transactions The Bank has given importance to the prevention of conflicts of
1. Related transaction
interest and also to related party transactions and connected
Opinion of the Board of Directors on Internal Controls
transactions according to the regulatory requirements. To
The Bank has set its policy and direction with a strong focus
that effect, the Bank requires that its Directors and Senior
on internal control at all levels from the management down
Management at Executive Vice President level and higher to
to the operations to ensure that customers as well as the
disclose their relations or connections in any business with a
Bank’s interests are protected. The Bank has also set up
conflict of interest on a quarterly basis. Moreover, the Policy
Audit Committee, Risk Management Committee, Nomination,
and the Regulation on Doing Business with Persons Having
Remuneration and Corporate Governance Committee to
Possible Conflict of Interests has been issued and enforced
oversee the Bank’s governance, risk management and system
in order to eradicate conflict of interests. Transactions with
of internal control. In addition, Audit Group conducts regular
related parties or connected persons are carried out by the
review of the Bank’s operations and related-party transactions.
Bank on a fair and equitable basis. Therefore, the Bank has
Audit Group reports the audit results to Audit Committee and
set out a policy on pricing and conditions based on the same
the committee reports the results to the Board of Directors.
criteria for the transactions made with clients in general. In addition, the Bank’s Directors and Executives having conflict
The Board of Directors, in its meeting no. 1/2554 on
of interests in such transactions are not allowed neither to
January 27, 2011 which was attended by members, among
participate in the approval thereof, nor to vote in a meeting.
them were all independent directors and members of Audit Committee, acknowledged the internal control assessment
Loans provided to or investments in any entity in which the
report presented by Head of Audit Group. The assessment
Bank, its Directors or Senior Management have conflict of
was conducted based on internal control core components;
interests are subject to the consideration of the project’s
including Control Environment, Risk Assessment, Control
viability, operational performance or feasibility analysis with
Activities, Information and Communication, and Monitoring.
terms, conditions and prices to be the same as those approved for other clients in general. The loan or investment amount
The Board of Directors was updated of the status of the
must be controlled so that it will not exceed an appropriate
internal control systems and is monitoring the efforts of
limit and is subject to unanimous approval of TMB’ s Board
management to improve the internal control environment of
of Directors. The concerned Directors or Executives shall
the Bank. In addition, the Audit Committee had recommended
not participate in the approval of such transaction and the
that the management take expeditious actions to address
approval must be consistent with the regulations of related
deficiencies identified and regularly report progress to the
authorities.
Committee and the Board of Directors. The Board of Directors has emphasized the importance of developing the internal
The Bank has assigned the Audit Committee to prevent and
control systems to be effective and comprehensive. In this
mitigate the conflict of interests. The possible conflict of
regard, the Bank is continuously taking actions to review
interest transactions over threshold values or limits must be
and improve processes on monitoring compliance with the
submitted to Audit Committee for validation and/or approval
regulations and other controls as recommended by auditors,
prior to execution.
Audit Committee and relevant regulators. Information will be disclosed by the Bank concerning its transactions with related parties and connected persons,
106
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including related transactions on a complete and transparent
Legal dispute between Luang Bumrung
basis according to the criteria of the Bank of Thailand, the
Limited Partnership and TMB
Securities and Exchange Commission Office, the Stock
On August 7, 2000, Luang Bumrung Limited Partnership
Exchange of Thailand, and the accounting standards.
(“LBP”) which is a juristic person registered with the Ministry of Commerce, with a registered capital of THB 5 million, was
Persons who may have conflicts of interest to hold more
the plaintiff bringing a lawsuit to the Southern Bangkok Civil
than a 5% of stake in subsidiary company or associated
Court against DBS Thai Danu Bank Plc. (“DTDB”) (which
company instead of direct shareholding by the Bank.
has now merged with TMB, hence all of the rights and
The Bank has no policy to allow any person who may have a
obligations has been transferred to TMB) as the 1st defendant
conflict of interest to hold shares on its behalf, unless such
together with 16 directors with regards to the violation of
shareholding is essential for the Bank to comply with the law.
guarantee agreement, and claimed for compensation of about THB 140.261 billion. The court accepted only the claim against
2. Auditor’s remuneration
DTDB and dismissed the claim against all the directors.
Audit fee The Bank and its subsidiaries companies paid remuneration
Pursuant to the claim by LBP, LBP had contacted and entered
to the following parties:-
into agreement with Bangchak Petroleum Plc. (BCP) regarding
▶▶
▶▶
The external auditor in the previous accounting year
oil purchase. DTDB, Ladprao Branch, by Mrs. Panee Boonnak
amounting to THB 10,425,000.
(Mrs. Panee), is claimed to have issued a letter of guarantee
The audit office of the auditor, individual or business that is
(L/G) to LBP to guarantee the trading of oil with BCP in an
related with the auditor and the audit office of the auditor in
amount of up to THB 200 million. Later, BCP informed LBP that
the previous accounting year amounting to THB 1,238,000.
an account for the trading of oil with LBP could not be opened as, upon examination of the L/G, DTDB was not the issuer
Non-audit fee
of the L/G. DTDB then requested to have the L/G returned
The Bank and its subsidiary companies paid remuneration
to be used in bringing a criminal case against its staff. LBP
for other services, which included the fee for special audit,
deems that DTDB’s denial of being the issuer of the L/G is
summation of gross profit margin on foreign exchange
considered as a violation of the agreement with LBP and has
transactions and foreign money, and information technology
caused damage to LBP.
review on electronic money transfer system to the following parties the external auditor, which payable in the future due
DTDB defended the case that the L/G was fraudulently issued.
to the agreement on incomplete audit services in the previous
Mrs. Panee, DTDB’s Assistant Branch Manager, issued the L/G
accounting year totaling amount of THB 1,670,000.
upon LBP’s request without the due authorization of DTDB. Furthermore, as regards the case which DTDB together with
3. Legal disputes
the public prosecutor were plaintiffs bringing a criminal case
Legal disputes in which TMB is defendant
against Mrs. Panee, the final judgment was passed and the
As of December 31, 2010, TMB Bank Plc. (TMB) or its
court ruled that the L/G was a forgery. Therefore, in informing
subsidiary was involved in one case of legal dispute, which
BCP that DTDB was not the issuer of the L/G, DTDB could
is not yet finalized. This could negatively affect the Bank’s
not be deemed as having violated the agreement and did not
assets in an amount of higher than 5% of its shareholders’
do any harm to LBP.
equity as per financial statements, ending December 31, 2010. Details of the case are summarized as follows:
On December 29, 2004, the Southern Bangkok Civil Court passed a judgment for the red case no. 10000/2547 that the
TMB Bank PCL
Corporate Governance and Management
| 107
L/G used by LBP in the litigation was the L/G fraudulently
against Thai Asset Management Corporation (TAMC) and
issued by Mrs. Panee without the due authorization of DTDB.
Financial Institution Development Fund (FIDF) as the 1st and
Moreover, the final judgment already passed for the case
2nd defendants respectively with regards to the violation of
which DTDB together with the public prosecutor were plaintiffs
promissory notes and aval, claiming for compensation of about
bringing a criminal case against Mrs. Panee regarding the
THB 7.196 billion.
issue of the L/G. The criminal court ruled that such L/G was a forgery and that DTDB was not the issuer of the L/G to
Pursuant to the case that DTDB and the Industrial Finance
LBP. Therefore, DTDB did not have to be liable for the L/G.
Corporation of Thailand (IFCT) entered into asset transfer
The Southern Bangkok Civil Court, in this regard, dismissed
agreements with TAMC. Later, following the Bank’s merger
the claim.
with DTDB and IFCT, all of the rights and obligations under these asset transfer agreements were transferred to the Bank.
On March 15, 2005, LBP appealed this judgment to the Appellate Court, and on August 31, 2005, TMB defended
Later, TAMC sent a letter requesting downward adjustment
the case. The Appellate Court, on May 14, 2010, decided to
of the NPA transfer price comprising machinery and/ or other
uphold the earlier judgment (Case Dismissal).
assets pledged as guarantee on the basis that machinery and/ or other assets pledged as guarantee were not legally
Later, on August 16, 2010, LBP submitted the case further
perfected. TMB did not consent to this request and sent a
to the Supreme Court, including making motions requesting
letter contradicting such downward adjustment. On July 20,
to stay for execution and sue in forma pauperis (court fees
2006, TAMC informed TMB to return three promissory notes
waived). TMB defended the case and its motions on October
totaling about THB 6.525 billion to TAMC, as TAMC would
20, 2010. The Court, on November 15 2010, rejected the
like to adjust the amount and redeem the notes via a partial
LBP’s motion regarding to sue in forma pauperis (court fees
payment. In this respect, TAMC agreed to issue and deliver
waived) and ordered LBP to pay court fees within 15 days
new promissory notes with aval provided by FIDF to TMB.
upon hearing date of rejection in order to continue the case.
Therefore, the Bank returned the promissory notes to TAMC.
LBP, however, appealed the rejection result. The Court has
However, TAMC did not comply with the agreement, i.e. TAMC
not yet to decide the matter.
would not issue and deliver new promissory notes with aval provided by FIDF to TMB.
In this respect, the Bank’s Management deems that the claim against the Bank in the stage of the Supreme Court has little
Moreover, on November 14, 2006, TAMC did not make debt
merit and is unlikely to succeed; therefore, the Bank will not
repayment of about THB 520 million to TMB, refused to make
have to be liable for this case.
a partial payment and revoked one promissory note with aval provided by FIDF for the partial payment of the transfer price
Legal disputes in which TMB is plaintiff
of the NPAs.
Apart from the above case, TMB is still engaged in another case of legal dispute in which the Bank is plaintiff. In this
On April 2, 2007, the Bank therefore initiated legal proceedings
regard, the Bank deems it suitable to inform the investors of
against TAMC and FIDF to the Civil Court to seek the following
the matter. Details of the case are summarized as follows:
relief from the Court. Details are summarized as follows:
Legal dispute between TMB and Thai Asset
1 . TAMC to issue a promissory note of about THB 4.432 billion
Management Corporation (TAMC)
avaled by FIDF with a maturity date on December 31, 2012
On April 2, 2007, TMB brought a lawsuit to the civil court
and with interest to be payable on the last business day
108
| Corporate Governance and Management
Annual Report 2010
of every year to TMB which is entitled to the payment. If
FIDF and delivered to TMB entitling as payee. FIDF and TAMC
TAMC and FIDF fail to do this, they are required to jointly
shall be mutual responsibly for the judicial fees incurred and
pay such amount plus interest from the date of the court
the lawyer fee amount THB 200,000. Other filing claims apart
filing.
from the judgment are dismissed.
2 . TAMC to issue a promissory note of about THB 2.027 billion
The aforesaid judgment has dismissed the filing claim no. 4
avaled by FIDF with a maturity date on October 31, 2011
mentioned hereinabove on the basis that TMB has not right
and with interest to be payable on the last business day
to filing this claim since, on the filing date (April 2, 2007), the
of every year to TMB which is entitled to the payment. If
Promissory Note of THB 520 million being hold by TMB is not
TAMC and FIDF fail to do this, they are required to jointly
honored yet due to its maturity date on February 14, 2013.
pay such amount plus interest from the date of the court filing.
Case is being held in the Appellate Court. TMB appealed case on August 23, 2010. Both FIDF and TAMC made their appeal
3 . TAMC to issue a promissory note of about THB 12 million
file on September 21, 2010 as well.
avaled by FIDF with a maturity date on February 28, 2013 and with interest to be payable on the last business day
4. dividend policy
of every year to TMB which is entitled to the payment. If
The Bank’s policy
TAMC and FIDF fail to do this, they are required to jointly
The Bank has set out a policy on dividend payment from
pay such amount plus interest from the date of the court
financial statements (Bank only). Dividend payment will
filing.
depend on the Bank’s operating performance and relevant legal conditions as well as the capital adequacy and reserve
4 . TAMC and FIDF to jointly pay about THB 520 million
requirements. In addition, the dividend payment must be in line
plus interest calculated from the average deposit interest
with the BOT’s Notification Re: Classification and Provision of
rate until the date of the court filing amounting to about
the Financial Institutions dated August 3, 2008 which stated
THB 15 million, hence a total amount of about THB 535
that as long as financial institutions have not yet written off
million plus interest from the date of the court filing onwards.
the impaired assets or has not yet made full provision for the assets and contingent liabilities whether they are impaired
On April 27, 2010, the Civil Court passed a judgment for
or not, financial institutions are not allowed to pay dividend
the red case no. 1681/2553 that TAMC to issue 3 (three)
nor any other forms of returns to its shareholders; and the
Promissory Notes. The first note amount THB 4,431,879,337.93
BOT’s Notification Re: Regulation for Accounting Treatment
with a maturity date on December 31, 2012. The second
of the Financial Institutions dated August 3, 2008, Section 8:
one amount THB 2,027,134,274.65 with a maturity date on
Dividend Policy, requiring that financial institutions should not
October 31, 2011 and, the third one amount THB 12,002,000
make dividend payments out of the unrealized profit or profit
with a maturity date on February 28, 2013. All ones shall be
that is not based on actual cash flow such as profit from mark
honored at the issuer bank with interest, to be payable on the
to market securities value, or out of any profit derived from
last business day of every year, at rate quarterly calculation
the reclassifying of financial assets or financial institutions
from the arithmetic mean of the average deposit interest rate
should not make dividend payments out of the profit from
weighted on all kind of deposit accounts (including currency
sale of assets, which is not actually completed and which
account) only in Thai Baht provided by Bangkok Bank PLC,
may result in abnormal profit or loss such as profit from sale
Krung Thai Bank PLC, Kasikorn Bank PLC, Siam Commercial
of properties foreclosed where a repurchase option is part of
Bank PLC and Bank of Ayudhya PLC. They shall be avaled by
the agreement.
TMB Bank PCL
Corporate Governance and Management
| 109
5. Control on user of insider information
and ethics to ensure the management and the staff perform
Policy and procedure on insider information
duties with transparency and based on professional code of
TMB is aware of the importance of monitoring the use of
conduct and treat all stakeholders fairly.
inside information, especially non-public information that may impact its share price. As such, TMB has assigned Financial
6. Internal control
Statement Division under Financial Reporting Department
Statement of the Audit Committee
to be the only unit responsible for submitting the financial
In 2010, the Bank’s Audit Committee, served fully by
statements and all financial reports to the SET and the SEC
independent directors who were not the bank’s executives or
after undergoing a correctness and completeness review by
employees of any kind, carried out its responsibilities, within
the Audit Committee and the Board of Executive Directors
its given authority and in accordance with the guidelines
respectively to make sure TMB’s inside information is not
set out by the Stock Exchange of Thailand and the Bank of
prematurely disclosed to the public.
Thailand. Major areas of responsibilities can be summarised as follows.
Additionally, to ensure the control of inside information usage complies with relevant laws and regulations and also good
1. Review the Bank’s financial statements to ensure accuracy
corporate governance principles, TMB has specified policy
on Confidential and Insider Information, Chinese Wall, Insider
2. Review and ensure adequate and efficient internal control.
Trading and Personal Account Dealing to ensure that the
3. Review connected transaction or transaction that may lead
confidential information is efficiently and effectively managed.
to conflict of interest to ensure transactions are conducted
and disclosed in compliance with the law and regulation
TMB has accordingly issued Policy, Regulations and Guidelines
and that transactions are entered with reasonableness for
to prevent its staff with potential access to inside information
the benefit to the Bank.
from exploiting such information for personal benefits and/
4. Review to ensure compliance with the laws and regulations
or the others’ benefits before the information is disclosed
imposed by the SEC, SET and other relevant regulators
to the public by setting a black-out period prohibiting staff,
including compliance report prepared by the Bank’s
who has right or opportunity to access the inside information
Compliance unit..
by nature of their job function / responsibility, from trading
5. Select and propose to the Board of Directors and
on TMB’ s financial instruments until insider information is
disclosed to the public. Compliance Group is responsible for
fee. In addition, the Committee is responsible for reviewing
assisting Management with the implementation, enforcement
the non-audit-related engagements with the Bank’s external
and updating of the aforementioned policy and regulations
auditor.
and also provides for appropriate monitoring mechanism to
6. Closely supervising the Bank’s internal audit function
ensure compliance with the policy as well as relevant laws
including approving internal audit plans and assessing
and regulations.
audit performance to ensure sufficient audit resources and
that all auditing activities were independently and effectively
conducted in accordance with the regulatory requirements.
Penalty Measures
and adequacy.
Shareholder meeting the appointment of bank’s auditor and
The Bank’s punishment for the use of inside information accords with the provisions of the Securities and Exchange
The Audit Committee held twelve meetings in 2010, and the
Act B.E. 2535 and all other relevant rules and regulations of
attendance record of each committee members is reported
the authorities. It has also imposed punishment for employees’
in the Shareholding and Management section in the Annual
disciplinary misconduct regarding business code of conduct
Report. Overall, the Audit Committee gained full co-operation
110
| Corporate Governance and Management
Annual Report 2010
from the Management as well as full access to all information
Details of the Subsidiaries Directors
relevant to the Bank’s operations, necessary for them to
1. Phayathai Asset Management Co., Ltd.
discharge their responsibilities. Relevant executive officers
There are five directors as follows:
were discretionary invited to attend and clarify issues in the
1. Mr. Bart F.M. Hellemans
meetings. The Audit Committee made inquiries and took into
2. Ms. Utoomphorn Kunakorn
account clarifications from the Management and the auditor
3. Mr. Martin Alan Searle
as to the accuracy and adequacy of the financial statements
4. Mr. Anuphun Tungsnga
and the sufficient disclosure of information. The Audit
5. Mrs. Nattaya Booncharoen
Committee is of the opinion in agreement with the auditor that the Bank’s financial report fairly presents accurate and
2. Designee for ETA Contracts Co., Ltd.
reliable information in material aspects in compliance with
There are three directors as follows:
generally accepted accounting principles. In addition, entering
1. Ms. Sawittree Chaichoavalit
into any transactions which may cause conflict of interest
2. Mr. Thawatchai Techawatanawana
was reasonable and most of them were the normal course of
3. Mr. Somsak Koonchareon
business or supporting normal course of business conducted on arm’s length basis. During the year, Audit Committee had
3. TMB Asset Management Co., Ltd.
recommended the Management to rectify the deficiencies in
There are nine directors as follows:
control and operation and tighten internal controls accordingly.
1. Mr. Somjin Sornpaisarn
The Bank’s Board of Directors and the Management had taken
2. Mrs. Sirichan Pipitwitayakul
internal control and audit as well as the principles of good
3. Mr. John Michael Flanders
governance practices very seriously.
4. Mr. Michal Jan Szczurek 5. Mr. Luecha Sukrasebya
Furthermore, the Audit Committee has assessed the
6. Mr. Agapol Na Songkhla
performance and independence of external auditor and agreed
7. Mr. Pradit Leosirikul
to propose the Board of Directors to seek shareholders’
8. Mrs. Kanchana Rojvatunyu
meeting approval on the appointment and remuneration of
9. Ms. Arwiwan Tangtrongchit
the independent auditors of Ernst & Young Office Limited to be the Bank’s independent auditors for the year 2011.
TMB Bank PCL
Shareholders Structure
| 111
Shareholders Structure
Below is the list of the 10 largest shareholders as of the latest share register closing date on June 8, 2010, in order to determine the right to attend the 2010 Extraordinary General Meeting of Shareholders held on June 24, 2010: Major shareholders
Number of ordinary shares
%
1. Ministry of Finance
11,364,272,005
26.11
2. ING Bank N.V.
10,970,893,359
25.20
3. DBS BANK A/C 003
2,977,989,892
6.84
4. Thai NVDR Co., Ltd.
2,745,382,859
6.31
5. JP Morgan Special Situations(Mauritius) Limited
1,560,000,000
3.58
6. Royal Thai Army
596,669,860
1.37
7. State Street Bank and Trust Company for London
425,307,542
0.98
8. Thai Life Insurance Co., Ltd.
334,693,724
0.77
9. Chase Nominees Limited 57
242,839,557
0.56
10. Somers (U.K.) Limited
188,088,200
0.43
Source: Information on the latest share register closing date on June 8, 2010 prepared by Thailand Securities Depository Co., Ltd. may look at www.set.or.th
The number of shares or impacts on
As of June 8, 2010, the latest share register closing date to
shareholders’ voting rights from the issuance
determine the right to attend the Extraordinary General Meeting
of Non-Voting Depository Receipt (NVDR)
of Shareholders no. 1/2010 held on June 24, 2010 Thai NVDR
Non-Voting Depository Receipt (NVDR) is a trading instrument
Co., Ltd. issued NVDRs with TMB shares as reference asset
issued by Thai NVDR Co., Ltd., a subsidiary wholly owned by
amounting to 2,745,382,859 shares or 6.31% of TMB’s issued
Stock Exchange of Thailand (SET). By investing in NVDRs,
and paid-up ordinary shares. However, the issuance of NVDR
investors will receive all financial benefits including dividends,
securities does not fall within the realm of the Bank’s control.
right issues or warrants, as if they had invested in a company’s
Investors may check the information on NVDR shares from
ordinary shares. Unlike ordinary shareholders, NVDR holders are
website of the SET at www.set.or.th/nvdr
not entitled to voting rights in a shareholders’ meeting except for the case of voting to pass a resolution concerning the delisting of shares from the SET. If the Bank’s shares are issued as NVDRs in a great number, its shares with voting rights will decrease and the voting rights of other shareholders will increase.
112
| Statement of The Audit Committee
Annual Report 2010
Statement of The Audit Committee
In 2010, the Bank’s Audit Committee, served fully by
The Audit Committee held twelve meetings in 2010, and
independent directors who were not the bank’s executives or
the attendance record of each committee members is
employees of any kind, carried out its responsibilities, within its
reported in the Management section in the Annual Report.
given authority and in accordance with the guidelines set out
Overall, the Audit Committee gained full co-operation from
by the Stock Exchange of Thailand and the Bank of Thailand.
the Management as well as full access to all information
Major areas of responsibilities can be summarised as follows.
relevant to the Bank’s operations, necessary for them to discharge their responsibilities. Relevant executive officers
1 . Review the Bank’s financial statements to ensure accuracy and adequacy.
were discretionary invited to attend and clarify issues in the meetings. The Audit Committee made inquiries and took into
2 . Review and ensure adequate and efficient internal control.
account clarifications from the Management and the auditor as
3 . Review connected transaction or transaction that may lead
to the accuracy and adequacy of the financial statements and
to conflict of interest to ensure transactions are conducted
the sufficient disclosure of information. The Audit Committee
and disclosed in compliance with the law and regulation
is of the opinion in agreement with the auditor that the Bank’s
and that transactions are entered with reasonableness for
financial report fairly presents accurate and reliable information
the benefit to the Bank.
in material aspects in compliance with generally accepted
4 . Review to ensure compliance with the laws and regulations
accounting principles. In addition, entering into any transactions
imposed by the SEC, SET and other relevant regulators
which may cause conflict of interest was reasonable and most of
including compliance report prepared by the Bank’s
them were the normal course of business or supporting normal
Compliance unit.
course of business conducted on arm’s length basis. During
5 . Select and propose to the Board of Directors and
the year, Audit Committee had recommended the Management
Shareholder meeting the appointment of bank’s auditor
to rectify the deficiencies in control and operation and tighten
and fee. In addition, the Committee is responsible for
internal controls accordingly. The Bank’s Board of Directors and
reviewing the non-audit-related engagements with the
the Management had taken internal control and audit as well
Bank’s external auditor.
as the principles of good governance practices very seriously.
6 . Closely supervising the Bank’s internal audit function including approving internal audit plans and assessing
Furthermore, the Audit Committee has assessed the performance
audit performance to ensure sufficient audit resources
and independence of external auditor and agreed to propose the
and that all auditing activities were independently and
Board of Directors to seek shareholders’ meeting approval on
effectively conducted in accordance with the regulatory
the appointment and remuneration of the independent auditors
requirements.
of Ernst & Young Office Limited to be the Bank’s independent auditors for the year 2011.
Vijit Supinit Chairman of Audit Committee
TMB Bank PCL
Report of the Nomination, Remuneration and Corporate Governance Committee
| 113
Report of the Nomination, Remuneration and Corporate Governance Committee
The Nomination, Remuneration and Corporate Governance
With respect to corporate governance, the committees
Committee of the TMB Bank Public Company Limited
assists to oversee and ensure the Bank’s Conduct as well as
comprises two independent and two non-executive directors.
the practices and operations, to conform to the principles of
In 2010 the Committee held 13 meetings.
good corporate governance. The Committee also prepares and monitors the Company’s Corporate Governance Guidelines and
With respect to nomination and remunerations, the Committee
disseminates them to internal and external parties involved,
formulates policies and criteria for selection of the Bank’s
to keep them informed of the Bank’s important criteria and
directors and high level executives; considers and nominates
code of practice in line with the principle of good corporate
qualified persons to be the Bank’s directors and senior
governance. Other responsibilities are to review and revise
executives; formulates policies on remuneration and other
relevant policies, principles, and performance guidelines
benefits including those offered to directors, executives and
regularly; recommend requirements relating to moral principles
staff. Other responsibilities are ensuring that directors and
and business ethics; consider good corporate governance
executives receive appropriate remuneration, setting guidelines
practices of other institutions in Thailand and abroad,
for their performance appraisal with a view to make adjustment
recommend the adoption of such practices as modifications
to their annual remuneration accordingly, and developing the
where appropriate to the Bank. In addition the Committee
Bank’s succession plan.
oversees the implementation of good corporate governance to ensure its practical effectiveness, continuity and appropriateness to the Bank’s business operations. The results are reported to the Bank’s Board of Directors together with comments and recommendations for rectification and improvement where appropriate.
Aviruth Wongbuddhapitak Chairman of the Committee
Phillippe G.J.E.O Damas
Kritsda Udyanin
Christopher John King
Member of the Committee
Member of the Committee
Member of the Committee
114
| Board of Directors’ Responsibility for Financial Reports
Annual Report 2010
Board of DirectorS’ Responsibility for Financial Reports
The Board of Directors is responsible for the Bank’s financial
Audit Committee entirely comprising independent directors
statements. The financial statements for the year ended
responsible for the quality of Bank’s financial reporting, the
December 31, 2010 have been prepared in accordance with
internal control systems as well as complete and appropriate
generally accepted accounting standards with appropriate
disclosure of connected transactions. The opinion of the Audit
accounting policies applied on a conservative and consistent
Committee with regard to these matters appears in the Report
basis. Judgement and estimates where required have been
of the Audit Committee in this Annual Report.
applied with careful and reasonable considerations, with adequate material information disclosures made available
The Board is of the view that the Bank has maintained an
in the notes to the financial statements. These financial
effective internal control system which provides an adequate
statements have been audited by independent auditors who
and appropriate level of protection, and therefore can assure
have given their unqualified opinions.
the credibility of the Bank’s financial statements as of December 31, 2010.
The Board has also adopted and maintained an appropriate and effective risk management, internal control, and compliance, so that the Bank can be assured that the financial records are accurate, complete and the protections are appropriate for the Bank’s assets. These controls also serve as preventive measures against any significant operational risk of the Bank. The Board of Directors has appointed an
Boontuck Wungcharoen
Saowanee Kamolbutr
Chief Executive Officer
Chairperson
TMB Bank Public Company Limited and its subsidiaries Report and financial statements 31 December 2010 and 2009
TMB Bank PCL
Report of Independent Auditor
|  117
Report of Independent Auditor
To the Shareholders of TMB Bank Public Company Limited I have audited the accompanying consolidated balance
In my opinion, the financial statements referred to above
sheets of TMB Bank Public Company Limited and its
present fairly, in all material respects, the financial position
subsidiaries as at 31 December 2010 and 2009 and the
of TMB Bank Public Company Limited and its subsidiaries
consolidated statements of income, changes in shareholders’
and of TMB Bank Public Company Limited as at 31 December
equity and cash flows for the years then ended, and the
2010 and 2009, and the results of their operations and cash
separate financial statements of TMB Bank Public Company
flows for the years then ended, in accordance with generally
Limited for the same periods. These financial statements
accepted accounting principles.
are the responsibility of the Bank’s management as to their correctness and the completeness of the presentation. My
Without qualifying my opinion on the above mentioned financial
responsibility is to express an opinion on these financial
statements, I draw attention to the matter as discussed in
statements based on my audits.
Note 38 to the financial statements whereby, in 2010, the Bank adjusted the measurement of and revenue recognition
I conducted my audits in accordance with generally accepted
on investments in the consolidated financial statements in
auditing standards. Those standards require that I plan
order to reflect the nature and conditions of the returns on
and perform the audit to obtain reasonable assurance
the investments. The Bank has thus adjusted the consolidated
about whether the financial statements are free of material
financial statements for the year ended 31 December 2009,
misstatement. An audit includes examining, on a test basis,
presented herein for comparative purposes, and I have audited
evidence supporting the amounts and disclosures in the
and agreed with such adjustments.
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
Ratana Jala Certified Public Accountant (Thailand) No. 3734 Ernst & Young Office Limited Bangkok: 24 February 2011
118
| Financial Statements and Notes to Financial Statements
Annual Report 2010
Balance sheets TMB Bank Public Company Limited and its subsidiaries As at 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements Note
2010
2009
Separate financial statements 2010
2009
(Restated)
Assets Cash
14,713,978,702
15,134,030,856
14,713,480,464
15,133,926,525
77,120,112,137
59,155,830,186
76,925,292,932
58,986,121,221
4,149,363,888
2,886,070,501
4,149,363,888
2,886,070,501
Interest bearing
1,861,570,876
1,447,199,037
1,861,570,876
1,447,199,037
Non-interest bearing
1,494,276,441
3,125,470,103
1,494,276,441
3,125,470,103
84,625,323,342
66,614,569,827
84,430,504,137
66,444,860,862
Interbank and money market items
8, 34
Domestic items Interest bearing Non-interest bearing Foreign items
Interbank and money market items — net Investments Short-term investments — net
9.1
46,248,845,208
59,365,406,141
45,945,276,922
59,365,406,141
Long-term investments — net
9.1
48,288,803,266
22,357,803,934
47,799,400,470
21,694,305,380
Investments in subsidiaries and associated companies — net
10
7,500
470,617,968
2,023,191,662
605,473,248
94,537,655,974
82,193,828,043
95,767,869,054
81,665,184,769
363,176,505,062
368,091,604,559
361,119,388,397
366,730,206,447
564,672,509
971,810,172
564,701,277
974,133,640
363,741,177,571
369,063,414,731
361,684,089,674
367,704,340,087
(20,389,883,488)
(30,995,310,499)
(18,926,507,177)
(29,548,185,438)
(155,812,886)
(212,836,540)
(155,812,886)
(212,836,540)
343,195,481,197
337,855,267,692
342,601,769,611
337,943,318,109
6,435,549,461
11,132,193,552
6,326,861,465
10,756,889,666
26,162,740
50,643,261
26,162,740
50,643,261
12,115,962,510
13,219,972,134
12,086,531,168
13,178,000,853
19,304,416,689
9,490,722,960
18,977,473,900
9,168,713,135
59,988,168
59,988,168
-
-
793,480,956
868,829,077
785,429,726
853,811,088
9,244,296,113
3,015,291,930
9,244,296,113
3,015,291,930
4,540,165,986
3,507,063,041
4,465,347,259
3,426,524,048
589,592,461,838
543,142,400,541
589,425,725,637
541,637,164,246
Investments — net Loans and accrued interest receivables
11, 34
Loans Accrued interest receivables Total loans and accrued interest receivables Less: Allowance for doubtful debts Revaluation allowance for debt restructuring
13, 34 14
Loans and accrued interest receivables — net Properties foreclosed — net
15
Customers' liability under acceptance Premises and equipment — net
16
Accounts receivable — net Goodwill — net Other intangible assets — net
17
Financial derivative assets Other assets — net Total assets
18, 34
The accompanying notes are an integral part of the financial statements.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
|  119
Balance sheets (Continued) TMB Bank Public Company Limited and its subsidiaries As at 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements Note
2010
2009
Separate financial statements 2010
2009
(Restated)
Liabilities and shareholders' equity Deposits
19, 34
Deposits in Baht
412,325,958,205
407,345,091,316
412,446,896,718
407,515,517,995
789,539,525
430,773,652
789,539,525
433,485,157
413,115,497,730
407,775,864,968
413,236,436,243
407,949,003,152
16,652,044,459
7,198,980,726
16,652,044,459
7,198,980,726
684,977,731
432,412,297
684,977,731
432,412,297
5,821,511,491
2,864,422,874
5,821,511,491
2,864,422,874
332,330,280
242,108,602
332,330,280
242,108,602
23,490,863,961
10,737,924,499
23,490,863,961
10,737,924,499
3,725,315,242
4,957,974,454
3,725,315,242
4,957,974,454
Short-term borrowings
36,372,727,257
25,081,094,337
36,386,727,257
25,092,594,337
Long-term borrowings
25,731,551,256
25,554,727,337
25,731,551,256
25,554,727,337
Total borrowings
62,104,278,513
50,635,821,674
62,118,278,513
50,647,321,674
26,162,740
50,643,261
26,162,740
50,643,261
1,138,512,988
938,770,073
1,138,556,638
938,807,733
6,235,216,475
9,764,325,241
6,204,870,521
6,139,450,521
850,317,632
2,125,524,933
815,497,632
4,450,167,864
Accounts payable
12,419,129,869
2,329,992,114
12,416,102,453
2,326,644,240
Financial derivative liabilities
9,705,893,887
3,244,851,950
9,705,893,887
3,244,851,950
6,926,195,369
3,823,554,900
6,897,724,151
3,703,636,546
539,737,384,406
496,385,248,067
539,775,701,981
495,146,425,894
Deposits in foreign currencies Total deposits Interbank and money market items
20, 34
Domestic items Interest bearing Non-interest bearing Foreign items Interest bearing Non-interest bearing Total interbank and money market items Liability payable on demand Borrowings
21, 34
Bank's liability under acceptance Accrued interest expenses Provisions for obligation on transfers of non-performing assets Provisions for other liabilities
Other liabilities Total liabilities
6, 7, 22 23
24, 34
The accompanying notes are an integral part of the financial statements.
120
| Financial Statements and Notes to Financial Statements
Annual Report 2010
Balance sheets (Continued) TMB Bank Public Company Limited and its subsidiaries As at 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements Note
2010
Separate financial statements
2009
2010
2009
(Restated)
Liabilities and shareholders' equity (Continued) Shareholders' equity Registered share capital
25
Preference shares (2009: 1,991,997,200 preference shares of Baht 10 each)
-
19,919,972,000
-
19,919,972,000
41,903,301,555
417,167,412,790
41,903,301,555
417,167,412,790
-
19,919,972,000
-
19,919,972,000
41,352,301,555
415,367,412,790
41,352,301,555
415,367,412,790
25
-
(303,088,346,225)
-
(303,088,346,225)
Revaluation surplus on assets
28
4,783,699,224
5,155,120,474
4,783,699,224
5,155,120,474
Revaluation surplus on investments
9.5
65,774,370
58,324,421
64,983,154
49,619,404
Other capital reserve — Share-based payments
27
33,903,639
-
33,903,639
-
19,258,527
11,815,598
19,258,527
11,815,598
200,000,000
2,100,000,000
200,000,000
2,100,000,000
-
8,717,165,400
-
8,717,165,400
3,316,892,370
(101,558,851,572)
3,195,877,557
(101,742,021,089)
Equity attributable to the Bank's shareholders
49,771,829,685
46,682,612,886
49,650,023,656
46,490,738,352
Equity attributable to minority shareholders of subsidiaries
83,247,747
74,539,588
-
-
49,855,077,432
46,757,152,474
49,650,023,656
46,490,738,352
589,592,461,838
543,142,400,541
589,425,725,637
541,637,164,246
44,108,738,479 ordinary shares of Baht 0.95 each (2009: 41,716,741,279 ordinary shares of Baht 10 each) Issued and paid-up share capital
25
Preference shares (2009: 1,991,997,200 preference shares of Baht 10 each) 43,528,738,479 ordinary shares of Baht 0.95 each (2009: 41,536,741,279 ordinary shares of Baht 10 each) Share discount — net Unrealised gains
Translation adjustments Retained earnings
25
Appropriated Statutory reserve Others Unappropriated (deficit)
Total shareholders' equity Total liabilities and shareholders' equity
29
The accompanying notes are an integral part of the financial statements.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 121
Balance sheets (Continued) TMB Bank Public Company Limited and its subsidiaries As at 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements 2010
Note
2009
Separate financial statements 2010
2009
(Restated)
Off-balance sheet items — commitments Aval to bills and guarantees of loans Liability under unmatured import bills Letters of credits Other commitments
33.1, 34
342,194,126
846,738,229
342,194,126
846,738,229
1,679,074,784
956,538,611
1,679,074,784
956,538,611
15,699,994,150
16,921,760,586
15,699,994,150
16,921,760,586
906,132,435,318
396,171,203,206
906,132,435,318
396,171,203,206
Boontuck Wungcharoen
Saowanee Kamolbutr
Chief Executive Officer
Chairperson of the Board
The accompanying notes are an integral part of the financial statements.
122
|  Financial Statements and Notes to Financial Statements
Annual Report  2010
Statements of Income TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements Note
2010
Separate financial statements
2009
2010
2009
(Restated)
Interest and dividend income Loans
15,809,816,378
17,506,409,697
15,565,454,628
17,351,836,312
771,200,585
736,730,586
768,651,630
733,570,776
1,918,456,627
2,238,094,243
2,195,615,344
2,481,981,410
18,499,473,590
20,481,234,526
18,529,721,602
20,567,388,498
4,343,628,455
5,827,094,860
4,344,111,926
5,828,079,106
93,047,856
157,919,996
93,047,856
157,919,996
Short-term borrowings
317,860,262
549,164,123
318,051,629
549,670,446
Long-term borrowings
1,485,600,281
1,539,600,114
1,294,934,281
1,343,600,114
Total interest expenses
6,240,136,854
8,073,779,093
6,050,145,692
7,879,269,662
12,259,336,736
12,407,455,433
12,479,575,910
12,688,118,836
1,710,725,052
2,845,855,199
1,105,567,561
2,931,375,578
(56,492,167)
(218,350,753)
(56,822,277)
(224,851,674)
10,605,103,851
9,779,950,987
11,430,830,626
9,981,594,932
Interbank and money market items Investments Total interest and dividend income Interest expenses Deposits Interbank and money market items
Net interest and dividend income Bad debt and doubtful accounts Reversal of losses on debt restructuring Net interest and dividend income after bad debt and doubtful accounts and reversal of losses on debt restructuring Non-interest income Gains (losses) on investments
9.6
157,130,331
13,896,172
(48,079,026)
31,122,994
Gains (losses) on investments in subsidiaries
9.7
-
-
140,161,176
(921,090,642)
Shares of profits from investments in associated companies
10
35,760,393
94,814,249
-
-
337,051,678
424,876,872
337,051,678
424,876,872
Others
4,465,806,628
4,089,116,713
4,115,567,854
3,681,215,066
Gains on exchange
1,284,427,552
1,011,765,477
1,284,466,854
1,011,878,489
3,917,150
2,301,483,276
3,917,150
2,301,483,276
260,227,423
954,769,876
260,227,423
954,769,876
421,805,505
1,186,442,091
406,245,088
1,259,516,608
6,966,126,660
10,077,164,726
6,499,558,197
8,743,772,539
Fees and charges Acceptances, avals and guarantees
Gains on buyback of perpetual non-cumulative Tier 1 securities
21
Gains on unwinding of interest rate swap contracts
33.1
Other income Total non-interest income
The accompanying notes are an integral part of the financial statements.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
|  123
Statements of Income (Continued) TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements Note
2010
2009
Separate financial statements 2010
2009
(Restated)
Non-interest expenses Personnel expenses
5,861,448,607
6,543,354,879
5,691,945,135
6,376,889,592
Premises and equipment expenses
2,906,598,509
2,687,644,039
2,843,993,016
2,621,762,188
627,762,958
671,587,380
623,589,077
668,661,041
1,424,397,208
1,333,250,662
1,383,052,536
1,285,959,062
30,264,400
27,137,740
28,444,400
23,511,419
Losses on impairment of properties foreclosed and other assets
947,800,895
2,736,978,484
816,756,634
1,917,210,992
Contributions to the Deposit Protection Agency
1,613,316,119
1,745,225,230
1,613,316,119
1,745,225,230
Provisions for obligation on transfers of non-performing assets (reversal)
(839,018,462)
309,331,339
-
310,000,000
Reversal of provisions for other liabilities
(547,498,313)
(379,631,944)
(571,118,313)
(374,721,944)
2,320,834,507
2,184,072,148
2,236,018,080
2,102,597,608
Total non-interest expenses
14,345,906,428
17,858,949,957
14,665,996,684
16,677,095,188
Earnings before income tax
3,225,324,083
1,998,165,756
3,264,392,139
2,048,272,283
14,378,489
33,453,766
-
-
3,210,945,594
1,964,711,990
3,264,392,139
2,048,272,283
3,202,237,435
1,945,180,145
3,264,392,139
2,048,272,283
8,708,159
19,531,845
3,210,945,594
1,964,711,990
0.07
0.05
0.08
0.05
0.07
0.04
0.07
0.05
Taxes and duties Fees and charges Directors' remuneration
Other expenses
Income tax
31
Net income Net income attributable to: Equity holders of the Bank Minority shareholders of subsidiaries
Earnings per share
32
Basic earnings per share Net income attributable to equity holders of the Bank Diluted earnings per share Net income attributable to equity holders of the Bank
Boontuck Wungcharoen
Saowanee Kamolbutr
Chief Executive Officer
Chairperson of the Board
The accompanying notes are an integral part of the financial statements.
-
-
-
-
-
-
-
-
303,088,346,225
-
-
-
-
-
(393,935,083,235) -
-
(371,421,250)
-
-
(371,421,250)
-
-
(371,421,250)
- 4,783,699,224
-
-
41,352,301,555
-
(303,088,346,225) 5,155,120,474
-
-
-
-
(132,919,729)
-
-
(132,919,729)
-
-
(132,919,729)
(303,088,346,225) 5,155,120,474
-
435,287,384,790
-
435,287,384,790
The accompanying notes are an integral part of the financial statements.
Appropriated to statutory reserve (Note 29) Balance as at 31 December 2010
-
(303,088,346,225) 5,155,120,474
-
-
435,287,384,790
-
(303,088,346,225) 5,288,040,203
-
(303,088,346,225) 5,288,040,203
-
435,287,384,790
-
435,287,384,790
Share discount
Revaluation surplus on assets
65,774,370
-
-
7,449,949
-
-
7,449,949
-
7,449,949
-
58,324,421
-
58,324,421
58,324,421
-
250,064,065
-
736,299,442
(486,235,377)
-
(486,235,377)
-
(191,739,644)
-
(191,739,644)
33,903,639
-
-
33,903,639
-
33,903,639
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Revaluation Other capital surplus (deficit) reserve — shareon investments based payments
19,258,527
-
-
7,442,929
-
-
7,442,929
7,442,929
-
-
11,815,598
-
11,815,598
11,815,598
-
3,015,312
-
-
3,015,312
3,015,312
-
-
8,800,286
-
8,800,286
Translation adjustments
Equity attributable to the Bank's shareholders
200,000,000
200,000,000
(2,100,000,000)
-
-
-
-
-
-
-
2,100,000,000
-
2,100,000,000
2,100,000,000
-
-
-
-
-
-
-
-
2,100,000,000
-
2,100,000,000
-
-
(8,717,165,400)
-
-
-
-
-
-
-
8,717,165,400
-
8,717,165,400
8,717,165,400
-
-
-
-
-
-
-
-
8,717,165,400
-
8,717,165,400
3,316,892,370
(200,000,000)
101,663,902,410
3,411,841,532
3,202,237,435
-
209,604,097
-
-
209,604,097
(101,558,851,572)
(510,916,692)
(101,047,934,880)
(101,558,851,572)
-
2,019,773,258
1,945,180,145
-
74,593,113
-
-
74,593,113
(103,578,624,830)
(412,197,595)
(103,166,427,235)
Retained earnings (deficit) Appropriated — Appropriated — Statutory reserve Others Unappropriated
Consolidated financial statements
19,531,845
19,531,845
-
-
-
-
-
91,507,786
-
91,507,786
49,771,829,685
-
-
3,089,216,799
3,202,237,435
33,903,639
(146,924,275)
7,442,929
7,449,949
(161,817,153)
46,682,612,886
(510,916,692)
47,193,529,578
46,682,612,886
83,247,747
-
-
8,708,159
8,708,159
-
-
-
-
-
74,539,588
-
74,539,588
74,539,588
- (36,500,043)
2,139,932,906
1,945,180,145
736,299,442
(541,546,681)
3,015,312
(486,235,377)
(58,326,616)
44,542,679,980
(412,197,595)
44,954,877,575
Total equity Equity attributable attributable to to minority the Bank's shareholders of shareholders subsidiaries
49,855,077,432
-
-
3,097,924,958
3,210,945,594
33,903,639
(146,924,275)
7,442,929
7,449,949
(161,817,153)
46,757,152,474
(510,916,692)
47,268,069,166
46,757,152,474
(36,500,043)
2,159,464,751
1,964,711,990
736,299,442
(541,546,681)
3,015,312
(486,235,377)
(58,326,616)
44,634,187,766
(412,197,595)
45,046,385,361
Total
(Unit: Baht)
| Financial Statements and Notes to Financial Statements
(Note 25)
Balance as at 31 December 2009 — as previously reported Cumulative effect of valuation adjustment of investments (Note 38) Balance as at 31 December 2009 — as restated Income (expense) recognised directly in equity Amortisation of revaluation surplus on assets Revaluation surplus on investments Translation adjustments Total income (expense) recognised directly in equity Share-based payments (Note 27) Net income Total income (expense) recognised for the year Reduction of capital and transfer of appropriated retained earnings to offset share discount and reduce the deficit
Balance as at 31 December 2008 — as previously reported Cumulative effect of valuation adjustment of investments (Note 38) Balance as at 31 December 2008 — as restated Income (expense) recognised directly in equity Amortisation of revaluation surplus on assets Revaluation deficit on investments Translation adjustments Total income (expense) recognised directly in equity Recognised revaluation deficit on investments in statement of income Net income (restated) Total income (expense) recognised for the year Dividends paid to minority shareholders of subsidiary Balance as at 31 December 2009 — as restated
Issued and paid-up share capital
TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009
Statements of changes in shareholders' equity
124 Annual Report 2010
-
Translation adjustments
Total income (expense) recognised directly in equity
Recognised revaluation deficit on investments in statement of income
Net income
Total income (expense) recognised for the year
-
41,352,301,555
The accompanying notes are an integral part of the financial statements.
Balance as at 31 December 2010
Appropriated to statutory reserve (Note 29)
(393,935,083,235)
-
Total income (expense) recognised for the year
Reduction of capital and transfer of appropriated retained earnings to offset share discount and reduce the deficit (Note 25)
-
-
Total income (expense) recognised directly in equity
-
-
Translation adjustments
Share-based payments (Note 27)
-
Revaluation surplus on investments
Net income
-
Amortisation of revaluation surplus on assets
Income (expense) recognised directly in equity
435,287,384,790
-
Balance as at 31 December 2009
-
Revaluation deficit on investments
435,287,384,790
Amortisation of revaluation surplus on assets
Income (expense) recognised directly in equity
Balance as at 31 December 2008
Issued and paid-up share capital
TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009
-
-
303,088,346,225
-
-
-
-
-
-
-
(303,088,346,225)
-
-
-
-
-
-
-
(303,088,346,225)
Share discount
4,783,699,224
-
-
(371,421,250)
-
-
(371,421,250)
-
-
(371,421,250)
5,155,120,474
(132,919,729)
-
-
(132,919,729)
-
-
(132,919,729)
5,288,040,203
Revaluation surplus on assets
64,983,154
-
-
15,363,750
-
-
15,363,750
-
15,363,750
-
49,619,404
240,807,798
-
736,299,442
(495,491,644)
-
(495,491,644)
-
(191,188,394)
Revaluation surplus (deficit) on investments
33,903,639
-
-
33,903,639
-
33,903,639
-
-
-
-
-
-
-
-
-
-
-
-
-
Other capital reserve — share-based payments
19,258,527
-
-
7,442,929
-
-
7,442,929
7,442,929
-
-
11,815,598
3,015,312
-
-
3,015,312
3,015,312
-
-
8,800,286
Translation adjustments
Separate financial statements
Statements of changes in shareholders' equity (Continued)
200,000,000
200,000,000
(2,100,000,000)
-
-
-
-
-
-
-
2,100,000,000
-
-
-
-
-
-
-
2,100,000,000
Appropriated — Statutory reserve
-
-
(8,717,165,400)
-
-
-
-
-
-
-
8,717,165,400
-
-
-
-
-
-
-
8,717,165,400
Appropriated — Others
3,195,877,557
(200,000,000)
101,663,902,410
3,473,996,236
3,264,392,139
-
209,604,097
-
-
209,604,097
(101,742,021,089)
2,122,865,396
2,048,272,283
-
74,593,113
-
-
74,593,113
(103,864,886,485)
Unappropriated
Retained earnings (deficit)
49,650,023,656
-
-
3,159,285,304
3,264,392,139
33,903,639
(139,010,474)
7,442,929
15,363,750
(161,817,153)
46,490,738,352
2,233,768,777
2,048,272,283
736,299,442
(550,802,948)
3,015,312
(495,491,644)
(58,326,616)
44,256,969,575
Total
(Unit: Baht)
TMB Bank PCL Financial Statements and Notes to Financial Statements | 125
126
|  Financial Statements and Notes to Financial Statements
Annual Report  2010
Statements of CASH Flows TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements 2010
2009
Separate financial statements 2010
2009
(Restated)
Cash flows from operating activities Earnings before income tax Adjustments to reconcile earnings before income tax to net cash provided by (paid from) operating activities: Depreciation and amortisation Losses on impairment of investments Gains (losses) on investments in subsidiaries Unrealised losses on revaluation of investments Losses on impairment of properties foreclosed and other assets Share of profits from investments in associated companies Bad debts and doubtful accounts Reversal of losses on debt restructuring Gains on disposals of equipment Provisions for obligation on transfers of non-performing assets (reversal) Reversal of provisions for other liabilities Provision for expenses relating to employees Provisions for share-based payments to employees Gains on disposals of investments Unrealised gains on exchange on borrowings and derivatives Gain on buyback of perpetual non-cumulative Tier 1 securities Other income from tax refundable Increase in other accrued income Increase in other accrued expenses Income from operating activities before changes in operating assets and liabilities (Increase) decrease in operating assets Interbank and money market items Trading securities Loans Properties foreclosed Accounts receivable Other assets Increase (decrease) in operating liabilities Deposits Interbank and money market items Liability payable on demand Short-term borrowings Provisions for obligation on transfer of non-performing assets Provisions for other liabilities Accounts payable Other liabilities
3,225,324,083
1,998,165,756
3,264,392,139
2,048,272,283
1,241,968,845 14,360,000 434,781
1,168,288,970 902,969,774 7,156,080
1,218,620,681 226,360,000 (140,161,176) 434,781
1,146,072,900 902,969,774 921,090,642 7,156,080
947,800,895
2,736,978,484
816,756,634
1,917,210,992
(35,760,393) 1,710,725,052 (56,492,167) (5,099,622)
(94,814,249) 2,845,855,199 (218,350,753) (11,184,895)
1,105,567,561 (56,822,277) (7,383,195)
2,931,375,578 (224,851,674) (11,184,895)
(839,018,462) (547,498,313) 157,496,862 33,903,639 (159,048,187)
309,331,339 (379,631,944) 243,907,032 (968,985,556)
(571,118,313) 157,496,862 33,903,639 (165,838,829)
310,000,000 (374,721,944) 243,907,032 (986,212,378)
(409,734,328)
(366,060,312)
(409,734,328)
(366,060,312)
(3,917,150) (98,982,052) (50,765,955) 993,585,514
(2,301,483,276) (278,858,907) (3,598,315) 327,936,784
(3,917,150) (98,982,052) (54,030,386) 992,642,350
(2,301,483,276) (278,858,907) (20,345,745) 331,097,308
6,119,283,042
5,917,621,211
6,308,186,941
6,195,433,458
(17,767,358,908) 598,699,519 (13,457,735,139) 4,450,904,030 1,591,599,006 393,545,779
5,715,183,610 5,906,005,308 35,082,558,541 3,844,455,906 1,558,978,310 1,868,965,214
(17,742,343,267) 598,699,519 (12,997,705,808) 4,315,696,349 1,388,293,876 391,604,902
5,682,649,867 5,906,005,308 35,609,839,352 3,480,755,965 1,539,478,897 1,859,882,522
5,339,632,762 12,752,939,462 (1,232,659,212) 11,598,006,324
(42,521,321,875) 1,438,744,745 1,660,643,149 (11,732,992,179)
5,287,433,090 12,752,939,462 (1,232,659,212) 11,600,506,324
(42,611,153,518) 1,438,744,745 1,660,643,149 (11,746,492,179)
73,823,697 (575,348,722) 430,396,662 501,395,265
(899,407,166) 195,876,954 (2,435,193,471)
(575,348,721) 430,717,119 587,094,693
(899,407,166) 192,620,668 (2,486,060,069)
The accompanying notes are an integral part of the financial statements.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
|  127
Statements of CASH Flows (Continued) TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 (Unit: Baht)
Consolidated financial statements 2010
Separate financial statements
2009
2010
2009
11,113,115,267 (12,479,575,910) 16,865,095,620 (4,590,317,847) 98,982,052 (97,432,315) 10,909,866,867
5,822,940,999 (12,688,118,837) 20,507,084,117 (7,396,617,702) 278,858,907 (80,682,709) 6,443,464,775
1,652,280,540 1,625,843,673 (155,402,405,303) (133,966,822,588) 150,313,235,189 122,455,764,298 - (23,112,047,598) 2,713,306,674 22,159,000,000 1,057,870,159 494,833,856 (34,481,100) -
1,641,257,817 (155,302,405,303) 150,213,235,189 2,687,306,674 1,056,675,454 (34,481,100)
(Restated)
Cash provided by operating activities 10,817,123,567 Net interest and dividend income (12,259,336,736) Cash received on interest income 17,087,075,371 Cash paid on interest expense (4,589,649,000) Cash refunded on income tax 98,982,052 Cash paid on income tax (118,501,676) Net cash provided by operating activities 11,035,693,578 Cash flows from investing activities 1,631,787,732 Cash received on interest and dividend income Purchases of available-for-sale securities (134,566,822,588) Sales of available-for-sale securities 122,913,172,983 Investments in held-to-maturity securities (23,112,047,598) Proceeds from redemption of held-to-maturity debt securities 22,176,000,000 Capital return from and sales of general investments 495,173,347 Investments in an associated company Capital return from and sales of investments in associatedcompanies 213,696,545 Dividends received from subsidiary and associated companies 282,223,872 Purchases of premises and equipment (665,408,217) Cash paid for leasehold rights (40,120,155) Purchases of intangible assets (257,767,558) Proceeds from disposals of equipment 178,122,948 Net cash used in investing activities (10,751,988,689) Cash flows from financing activities (1,139,881,583) Cash paid for long-term borrowings Cash paid for interest on long-term borrowings (1,194,658,939) Cash paid for redemption of debentures (2,040,110,000) Proceeds from issuance of subordinated debentures and perpetual non-cumulative Tier 1 securities 8,000,000,000 Cash paid for redemption of subordinated debentures and perpetual non-cumulative Tier 1 securities (8,079,499,450) Proceeds from issuance of long-term bills of exchange 3,742,950,000 Dividends paid to minority shareholders of subsidiaries Net cash used in financing activities (711,199,972) Net increase (decrease) in cash and cash equivalents (427,495,083) Increase in translation adjustments 7,442,929 Cash and cash equivalents at beginning of the years 15,134,030,856 Cash and cash equivalents at end of the years 14,713,978,702 Supplemental cash flows information Non-cash transactions Receipt of properties foreclosed from debtors in settlement of loans and receivables Receipt of promissory notes in settlement of NPAs sale and loans and receivables Settlement of the losses sharing on transfer of non-performing assets by offsetting with promissory note receivables Debt forgiveness to a subsidairy (Note 7.2)
5,600,118,257 (12,407,455,434) 20,584,320,402 (7,395,152,363) 278,858,907 (105,531,756) 6,555,158,013
451,833,013 139,880,784 (504,470,019) (177,146,204) (412,919,720) 117,344,485 (85,671,502)
213,696,545 282,223,872 (655,723,047) (40,120,155) (257,518,713) 174,313,972 (10,626,555,885)
451,833,013 249,380,740 (497,811,691) (177,146,204) (412,140,692) 116,945,013 (7,351,090)
(1,138,454,840) (1,423,092,372) (702,380,000)
(1,139,881,583) (1,194,658,939) (2,040,110,000)
(1,138,454,840) (1,423,092,372) (702,380,000)
9,300,000,000
8,000,000,000
9,300,000,000
(9,092,172,412) 436,990,000 (36,500,043) (2,655,609,667) 3,813,876,844 3,015,312 11,317,138,700 15,134,030,856
(8,079,499,450) 3,742,950,000 (711,199,972) (427,888,990) 7,442,929 15,133,926,525 14,713,480,464
(9,092,172,412) 436,990,000 (2,619,109,624) 3,817,004,061 3,015,312 11,313,907,152 15,133,926,525
2,060,122
46,933,901
2,060,122
46,933,901
2,204,446,513
5,808,805,175
2,178,451,627
5,682,594,666
3,020,000,000 -
-
4,030,622,012
-
The accompanying notes are an integral part of the financial statements.
128
| Financial Statements and Notes to Financial Statements
Annual Report 2010
Notes to financial statements TMB Bank Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009
1. General information TMB Bank Public Company Limited, (“the Bank”), is a public company incorporated and domiciled in Thailand. The Bank operates banking businesses. The Bank’s head office is located at No. 3000, Phaholyothin Road, Chomphon Sub-district, Chatuchak District, Bangkok. As at 31 December 2010, the Bank had altogether 452 branches, including the Head Office, in all regions throughout Thailand and 3 overseas branches (31 December 2009: 483 branches in Thailand and 3 overseas branches). All subsidiaries were incorporated as limited companies under Thai laws and operate in Thailand, with their core businesses being provisions of asset management and fund management services.
2.
Basis of preparation of financial statements
2.1
Basis of preparation of financial statements These financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547, except for the early adoption of TFRS 2 “Share-based Payment” (see the relevant accounting policy in Note 4.18 to financial statements). The presentation of the financial statements has been made in compliance with the Notification of the Bank of Thailand (“BOT”) regarding “Preparation and Announcement of Financial Statements of Commercial Banks and Parent Companies of Financial Holding Groups”, dated 3 August 2008, and relevant notifications of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared on a historical cost basis except where otherwise disclosed in Note 4 to the financial statements regarding significant accounting policies. 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 such Thai language financial statements.
2.2
Basis of consolidation
(a)
The consolidated financial statements include the financial statements of TMB Bank Public Company Limited and the following subsidiaries:
Percentage of shares held by the Bank as at 31 December
Type of business
Assets included as a percentage to the consolidated totals as at 31 December
Revenue included as a percentage to the consolidated totals for the years ended 31 December
2010
2009
2010
2009
2010
2009
100.00
100.00
0.43
0.61
1.14
0.36
Phayathai Asset Management Co., Ltd.
Asset management business
Designee for ETA Contract Ltd.
Financial support business
99.40
99.40
-
-
-
-
TMB Asset Management Co., Ltd.
Fund management business
75.00
75.00
0.05
0.05
2.18
1.87
TMB Bank PCL
(b)
Financial Statements and Notes to Financial Statements
| 129
The Bank and its subsidiaries do not treat investments in any mutual funds in which they hold more than 50% of outstanding units as investments in subsidiaries because they do not have control over the financial and operating policies of these funds. In addition, in case that the Bank and its subsidiaries receive shares as a result of debt restructuring of a borrower, which causes the Bank and its subsidiaries to hold more than 50 percent of the paid-up share capital of such company, the Bank and its subsidiaries will not treat that investee company as a subsidiary, since they intend to hold such investment temporality.
(c)
Subsidiaries’ financial statements are fully consolidated as from the date of acquisition, being the date on which the Bank obtains control, and continue to be consolidated until the date when such control ceases.
(d) (e)
The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Bank. Material balances and 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 books of accounts have been eliminated against shareholders’ equity of the subsidiaries.
(f)
Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are not held by the Bank and are presented separately in the consolidated statements of income and within equity in the consolidated balance sheets.
2.3 Separate financial statements The separate financial statements, which present investments in subsidiaries and associated companies under the cost method, have been prepared solely for the benefit of the public.
3. Adoption of new accounting standards During the current year, the Federation of Accounting Professions issued a number of revised and new accounting standards as listed below. (a)
Accounting standards that are effective for fiscal years beginning on or after 1 January 2011 (except Framework for the Preparation and Presentation of Financial Statements, which is immediately effective):
Framework for the Preparation and Presentation of Financial Statements (revised 2009) ▶▶
TAS 1
(revised 2009)
Presentation of Financial Statements
▶▶
TAS 2
(revised 2009)
Inventories
▶▶
TAS 7
(revised 2009)
Statement of Cash Flows
▶▶
TAS 8
(revised 2009)
Accounting Policies, Changes in Accounting Estimates and Errors
▶▶
TAS 10
(revised 2009)
Events after the Reporting Period
▶▶
TAS 11
(revised 2009)
Construction Contracts
▶▶
TAS 16
(revised 2009)
Property, Plant and Equipment
▶▶
TAS 17
(revised 2009)
Leases
▶▶
TAS 18
(revised 2009)
Revenue
▶▶
TAS 19
Employee Benefits
130
(b)
| Financial Statements and Notes to Financial Statements
Annual Report 2010
▶▶
TAS 23
(revised 2009)
Borrowing Costs
▶▶
TAS 24
(revised 2009)
Related Party Disclosures
▶▶
TAS 26
Accounting and Reporting by Retirement Benefit Plans
▶▶
TAS 27
(revised 2009)
Consolidated and Separate Financial Statements
▶▶
TAS 28
(revised 2009)
Investments in Associates
▶▶
TAS 29
Financial Reporting in Hyperinflationary Economies
▶▶
TAS 31
(revised 2009)
Interests in Joint Ventures
▶▶
TAS 33
(revised 2009)
Earnings per Share
▶▶
TAS 34
(revised 2009)
Interim Financial Reporting
▶▶
TAS 36
(revised 2009)
Impairment of Assets
▶▶
TAS 37
(revised 2009)
Provisions, Contingent Liabilities and Contingent Assets
▶▶
TAS 38
(revised 2009)
Intangible Assets
▶▶
TAS 40
(revised 2009)
Investment Property
▶▶
TFRS 2
Share-based Payment
▶▶
TFRS 3
(revised 2009)
Business Combinations
▶▶
TFRS 5
(revised 2009)
Non-current Assets Held for Sale and Discontinued Operations
▶▶
TFRS 6
Exploration for and Evaluation of Mineral Resources
▶▶
TFRIC 15
Agreements for the Construction of Real Estate
Accounting standards that are effective for fiscal years beginning on or after 1 January 2013: ▶▶
TAS 12
Income Taxes
▶▶
TAS 20
(revised 2009)
Accounting for Government Grants and Disclosure of Government Assistance
▶▶
TAS 21
(revised 2009)
The Effects of Changes in Foreign Exchange Rates
The management of the Bank and its subsidiaries believes that these accounting standards will not have any significant impact on the financial statements for the years when they are initially applied, except for the following accounting standards which management expects the significant impact on the financial statements for the years when they are adopted.
TAS 19 Employee Benefits This accounting standard requires employee benefits to be recognised as expense in the period in which the service is performed by the employee. In particular, an entity has to evaluate and make a provision for post-employee benefits using actuarial techniques. The Bank and its subsidiaries currently account for such employee benefits when they are incurred. The change in this accounting policy in 2011 will have the effect of decreasing the retained earnings brought forward as at 1 January 2011 in the consolidated and separate financial statements by Baht 1,061 million and Baht 1,051 million, respectively.
TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognise deferred tax assets and liabilities under the stipulated guidelines. At present, the management is evaluating the impact on the financial statements for the year when this standard is adopted.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 131
4. Significant accounting policies 4.1 Revenue recognition Interest and dividend income The Bank and its subsidiaries recognise interest and discount received on loans as revenue on an accrual basis. In accordance with the Bank of Thailand’s regulation, interest in arrears for more than three months, regardless of whether the loans are covered by collateral, is not accrued but is instead recognised as revenue on a cash basis. The Bank reverses accrued interest income on loans which interest has been recognised as revenue in arrears for more than three months, and loans classified as doubtful and doubtful of loss in accordance with the Bank of Thailand’s regulations. Interest income on restructured loans is recognised as revenue 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 recognises as revenue on a cash basis until the debtor is able to comply with the restructuring conditions for a period of no less than three months or three instalments, whichever is longer. Interest on investment in debt securities is recognised as revenue in the statement of income based on the effective yield rates over the holding periods. Dividend is recognised as revenue in the statement of income on the date that the Bank’s and its subsidiaries’ right to receive dividends is established.
Fees and service income Fees and service income are recognised as revenue when services are rendered.
4.2 Recognition of interest expense Interest expense are recognised in the statement of income on an accrual basis.
4.3 Cash and cash equivalents Cash and cash equivalents include cash on hand and cash in the process of collection.
4.4 Securities purchased under resale agreements/Securities sold under repurchase agreements The Bank enters into agreements to purchase securities or to sell securities that include agreements to sell or purchase the securities back at certain dates in the future at fixed prices. Amounts paid for securities purchased subject to a resale commitment are presented as assets under the caption of “Interbank and money market items - assets” or “Loans”, depending upon the type of its counterparty, in the balance sheets, and the underlying securities are treated as collateral to such receivables. Securities sold subject to repurchase commitments are presented as liabilities under the caption of “Interbank and money market items - liabilities” or “Borrowings”, depending upon the type of its counterparty, in the balance sheets, at the amounts received from the sale of those securities, and the underlying securities are treated as collateral. The difference between the purchase and sale considerations is recognised as interest income or expenses, as the case may be, over the transaction periods.
132
| Financial Statements and Notes to Financial Statements
Annual Report 2010
4.5 Investments The Bank and its subsidiaries classify their investments in debt securities and marketable equity securities as trading securities, available-for-sale securities or held-to-maturity debt securities, and classify their investments in non-marketable equity securities as general investments or investments in subsidiaries or associated companies.
Investments in subsidiaries and associated companies Investments in subsidiaries and associated companies in the Bank’s separate financial statements are accounted for using the cost method (cost net of allowance for impairment on investments in subsidiaries and associated companies). Losses on impairment are charged to the statements of income. Investments in associated companies in the consolidated financial statements are accounted for using the equity method. Investments are initially recorded at the acquisition cost and are adjusted to reflect the attributable share of profits or losses from the operations of the associated companies, in proportion to the investments and reduced by dividend received. If the Bank and its subsidiaries receive shares as a result of debt restructuring of a borrower, which cause the Bank and its subsidiaries to hold more than 50 percent or 20 percent of the paid-up share capital of such company, the Bank and its subsidiaries will not treat that investee company as a subsidiary or an associated company, respectively, since they intend to hold such investment temporarily. Such investments are classified as general investments and stated at cost less allowance for impairment (if any). The Bank and its subsidiaries do not treat investments in any mutual funds in which it holds more than 50% or 20% of the issued units of the fund as investments in a subsidiary or an associated company, respectively, because they do not have control over the financial and operating policies of these funds, which are independently managed by the fund managers in accordance with the details stipulated in the mutual fund prospectus and under the supervision of the Office of Securities and Exchange Commission.
Investments in debt and equity securities Debt securities and marketable equity securities held for trading are classified as trading securities and are stated at fair value. Change in the fair value of these securities are recorded as gains or losses in the income statement. Debt securities, including rights to receive non-negotiable promissory notes avaled by the Financial Institution Development Fund (“FIDF”) on the transfer of non-performing assets to Thai Asset Management Corporation (“tamc”), that the Bank and its subsidiaries intend and are able to hold to maturity are stated at amortised cost less allowance for impairment (if any). The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the remaining period to maturity, counting from acquisition date or investment date. Debt securities and marketable equity securities, other than those held for trading or held to maturity, are classified as available-for-sale securities and are stated at fair value, with any resultant gain or loss from revaluation being recognised directly in shareholders’ equity. The exceptions are impairment losses and gains or losses from investment reclassification, which are recognised in the statements of income.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 133
Non-marketable equity securities or investment in unit trust having the conditions of the return on the investments similar to debt securities, which are not classified as investments in subsidiaries or associated companies, are classified as general investments and are stated at cost less allowance for impairment (if any).
Fair value of securities The fair value of marketable equity securities held for trading and as available-for-sale is determined at the last bid price quoted on the last working day of the period. Fair value of unit trust is determined using the net asset value announced on the balance sheet dates. The fair value of investments in government sector debt securities is determined, using yield rate or price quoted on the Thai Bond Market Association (“TBMA”). The fair value of investments in other debt securities issued locally is determined based on market value appraised by the reliable institutions, their respective yields, or the TBMA’s yield rate adjusted by appropriate risk factors.
Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount, together with the associated cumulative gain or loss that was reported in shareholders’ equity, is recognised in the statement of income. If the Bank and its subsidiaries dispose of part of their holding in a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.
4.6
Loans Loans (except overdrafts) are shown exclusive of accrued interest receivables. Unearned discounts received in advance on loans are shown as deductions from the loans. Investments in receivables are investments in receivables of Phayathai Asset Management Company Limited (the Bank’s subsidiary), which are shown at cost, net of allowance for impairment and revaluation allowance for debt restructuring. The subsidiary’s accounting policies comply with the Bank of Thailand’s regulations. These procedures require that only investments in those receivables that have been restructured must be recorded as loans and accrued interest receivables at fair value as at the transfer date, to the extent that this does not exceed their book value. The fair value shall be based on the present value of the future collections according to the restructuring agreements and discounted by the discount rate that results in the present value of the future collections being equal to the book value of the investments in receivables. Differences between the net book value and the fair value at the transfer date are shown as a loss on debt restructuring in the statements of income.
4.7 Allowance for doubtful debts Allowance for doubtful debts is determined based on the BOT’s criteria and regulations. The Bank and its subsidiaries provide allowance for doubtful debts based specifically on the nature of loans and relevant factors such as debtor’s payment ability, collateral, historical loss, estimated loss, debtor’s credit risk, and experience of management.
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| Financial Statements and Notes to Financial Statements
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For loans classified as ‘Pass’ and ‘Special mention’, the Bank provides allowance for doubtful debts based on the nature of loans and relevant factors such as historical loss, debtor’s credit risk, and experience of management. The allowance for doubtful debts on performing loans includes an allowance determined at the minimum percentage required by the BOT and an allowance in excess of such minimum regulatory requirement, which is set aside for losses incurred but not yet reported. For loans classified as ‘sub-standard’, ‘doubtful’ and ‘doubtful of loss’, the Bank provides allowance for doubtful debts on each loan, taking into accounts the specific nature of the loans and relevant factors, such as debtor’s payment ability and collateral; at the rate of 100 percent of the excess of the book value of the outstanding debt and the present value of future cashflows expected to be collected from debtors or from the disposal of collateral in accordance with the BOT’s criteria. Where the Bank and its subsidiaries have a specific plan to manage its certain group of non-performing loans (“NPL”) such as NPL sale, they provide allowance for doubtful debts for those loans based on, for examples, estimated proceeds from such NPL sale and the rate of return expected by investors. Any additional allowances for doubtful debts are charged to expense in each period. The Bank writes off bad debts against the allowance for doubtful debts for uncollectible amounts and bad debts recovered are credited to the allowance for doubtful debts.
4.8 Troubled debt restructuring Foreclosed assets transferred as a result of troubled debt restructuring are recorded at the fair value of the assets net of estimated disposal expenses, to the extent that this does not exceed the book value of the debt plus non-booked interest to which the Bank is legally entitled. Where restructuring a loan involves modification of its terms, the present value of the future cash flows expected to be collected from those debtors is calculated by using discount rates equivalent to the market rates at the time of restructuring. The difference between the then-determined present value and the outstanding balances of loans and accrued interest receivables is recorded as a revaluation allowance on debt restructuring in the balance sheets. Such revaluation allowance is reviewed using the present value of the projected expected cash to be received over the remaining terms.
4.9
Properties foreclosed Properties foreclosed are stated at the lower of cost or net realisable value. Loss on impairment is recognised in statements of income. Gains or losses on disposal are recognised in statements of income when disposal is made. Cost of properties foreclosed as a result of settlement from a debtor are stated at the lower of the appraised value or book value of the related debt for properties acquired from debt settlement before 2002, and at fair value less expected direct selling expenses for properties acquired from debt settlement after 2002, to the extent that this does not exceed the book value of the debts plus non-booked interest to which the Bank and its subsidiaries are legally entitled. Cost of properties foreclosed through a public auction process are the purchase price plus transfer costs and less expected direct selling expenses. The Bank and its subsidiaries assess net realisable value taking into account the quality of the assets, which are classified into various grades based on attributes such as location, available utilities, and potential property usage, holding periods and market demand. In cases where each property has a high value, the recoverable value less direct selling expenses is assessed individually. The remainders of properties foreclosed are assessed on a portfolio basis categorised by quality of
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the assets and the holding periods, whereby the Bank and its subsidiaries group the assets according to their quality and holding period. The properties in each group are discounted by varying discount rates, determined based on their quality and holding period, historical data on disposals of properties foreclosed and market demand. Where the Bank and its subsidiaries have a specific plan to sell certain items or groups of properties foreclosed, they apply the present value of the expected cash to be received from disposal of those properties foreclosed less direct selling expenses.
4.10 Premises and equipment Land is stated at revalued amount less allowance for impairment (if any), buildings are stated at revalued amount less accumulated depreciation and allowance for impairment (if any) and equipment is stated at cost less accumulated depreciation and allowance for impairment (if any). The Bank and its subsidiaries initially record land, buildings and equipment at their costs on the acquisition dates. They, thereafter, arrange to have the independent appraisers valued the land and buildings on a regular basis and record then at the revalued amount (Revalued amounts are determined by the independent valuer using the market approach for land and the depreciated replacement cost approach for buildings) such that the carrying values of such assets as at the balance sheet dates do not differ materially from their fair values. The Bank recognises surplus/deficit arising as a result of revaluation of its assets as follows: (a)
When an asset’s carrying amount is increased as a result of the revaluation, the increase is credited directly to the equity under the heading of “Revaluation surplus on assets”. However, a revaluation increase will be recognised as revenue in statements of income to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense in statements of income.
(b)
When an asset’s carrying amount is decreased as a result of the revaluation, the decrease is recognised as an expense. However, a revaluation decrease will be charged directly against the related “Revaluation surplus on assets” to the extent that the decrease does not exceed the amount held in the surplus on revaluation in respect of the same asset and the excess amount is recognised as an expense in statements of income. Depreciation of buildings and equipment is calculated by reference to their cost or the revalued amount, on a straight line basis over the following estimated periods of useful lives. (Depreciation of fixed assets of overseas branches is computed at rates specified by the laws applicable in each locality at 20 – 25% of cost)
▶▶
Buildings
▶▶
Equipment
50 years 3 – 10 years
Depreciation is included in statements of income. No depreciation is determined for land and assets under construction and installation. The revaluation surplus on assets, that are in use, is amortised, using the straight-line method, over the estimated remaining periods of those assets’ estimated useful lives, and directly credited to the retained earnings. The remaining of revaluation
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surplus on an item of land and buildings, that is retired or disposed of, is transferred directly to retained earnings when the asset is retired or disposed of. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
4.11 Leasehold rights Leasehold rights are stated at cost less accumulated amortisation and are presented under the caption of “other assets”. Leasehold rights are amortised, using a straight-line method, over the lease periods, and the amortisation amounts are recognised as expenses in statements of income.
4.12 Intangible assets Goodwill Goodwill arising on the acquisition of an interest in a subsidiary represents the excess of the cost of the investment over the carrying amount of the net assets acquired at the date of acquisition. Goodwill is stated at cost less allowance for impairment (if any).
Other intangible assets Other intangible assets are carried at cost less accumulated amortisation and allowance for impairment (if any). Intangible assets with finite useful lives or with useful lives that can be estimated on a systematic basis are amortised over the periods of their economic benefit and are tested for impairment whenever there is an indication that the asset may be impaired. The amortisation periods and methods for such intangible assets are reviewed at least at each financial year-end. The amortisation amount and loss on impairment (if any) are recognised as expenses in the statements of income. Other intangible assets are computer software, which are amortised over the estimated period of its economic benefit of 5 years. No amortisation is record for computer software under development.
4.13 Allowance for impairment Impairment The carrying amounts of the Bank and its subsidiaries’ assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. Goodwill and other intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and when indicators of impairment are identified earlier. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statements of income unless it reverses a previous revaluation surplus on assets credited to equity, in which case an impairment loss on a revalued asset is recognised in equity to the extend that the impairment does not exceed the amount in the revaluation surplus for the same asset.
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When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statements of income. The amount of impairment loss that is recognised in the statements of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statements of income.
Calculation of recoverable amount The recoverable amount of the Bank and its subsidiaries’ investments in held-to-maturity securities is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate. The recoverable amount of loans and receivables is calculated based on those discussed in Notes 4.6 to 4.8 to the financial statements. The recoverable amount of available-for-sale financial assets is calculated by reference to their fair value. The recoverable amount of non-financial assets is the greater of the assets’ net selling price and value in use. 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. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cashgenerating unit to which the asset belongs.
Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. For financial assets carried at amortised cost, available-for-sale financial assets, general investments and investments in subsidiaries and associated companies, the reversal is recognised in the statements of income. An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount and will be reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortisation, if no impairment loss had been recognised.
4.14 Provisions Provisions for contingent liabilities as a result of obligation having credit risk exposures The Bank provides provision for contingencies having credit risk exposures, such as loan guarantees, avals or commitments irrevocable by financial institutions, where accounts have been classified as substandard, doubtful, doubtful of loss and loss, for which the provision rate will be equal to the allowance rate for loans in that particular case, and the Bank provides provision for the expected loss on obligation according to letter of guarantee of which the Bank was claimed against.
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Provisions for liabilities - others Provisions are recognised when the Bank and its subsidiaries have a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash outflows by a pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
4.15 Derivatives Trading derivatives are initially and subsequently measured at fair value. Gains or losses on measurement are recognised as income or expenses in the statements of income. In case where there is active market, the Bank uses the market value as the fair value of derivatives and if there is no active market, the fair value is derived from valuations incorporating market data obtained from reliable sources. The market price or market data are mainly based on exchange-traded prices, broker/ dealer quotations, or counterparties quotations. Derivatives entered into by the Bank for its banking book, and derivative contracts with interest components are recognised on an accrual basis, in the same manner as the hedged assets and liabilities. That is, the interest income or interest expense is recognised in the statements of income over the term of the contracts. Derivative contracts with foreign exchange components are recognised based on exchange rate at the end of the period. Unrealised gain or loss on exchange rate is recognised in the statement of income and the difference between the forward rate and the spot rate at the contract date is recognised as income or an expense using the straight-line basis over the contract periods.
4.16 Translation of foreign currencies Transactions in foreign currencies are translated to Thai Baht at the buying and selling rates specified by the Bank when the transactions occur. Monetary assets and liabilities denominated in foreign currencies outstanding on the balance sheet dates are translated into Thai Baht at the reference rates announced by the Bank of Thailand at those dates. Foreign exchange differences arising on translation are recognised in the statements of income. The financial statements of overseas branches are translated at the reference rates announced by the Bank of Thailand at the period-end dates. Foreign exchange differences arising on translation are recognised as a separate component in the shareholders’ equity until disposal of the investments, except for the Cayman Islands Branch, for which the foreign exchange differences arising on translation are included in the statements of income.
4.17 Employee benefits Salary, wages, bonuses, and contributions to the social security fund and provident fund are recognised as expenses on an accrual basis.
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4.18 Share-based payment transactions The cost of the TMB Performance Share Bonus 2010 Project (“Share-based payment plan”) is recognised as employees render services. The cost of the share-based payment plan is measured by reference to the fair value of the issued shares on the grant date. The fair value is determined by using the last bid price quoted on the Stock Exchange of Thailand. The cost of the share-based payment plan is recognised in the statements of income together with a corresponding increase in “other capital reserve-share-based payment” in shareholders’ equity over the periods in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for the share-based payment plan at each reporting date until the vesting date and the Bank’s management best estimate of number of equity instruments that will ultimately vest. The expense or reversal of expense for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
4.19 Income tax Income tax is provided in the accounts based on the taxable profits determined in accordance with tax legislation.
4.20 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 gives 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, together with close family members of such persons and companies which are controlled or influenced by them, whether directly or indirectly.
5. Significant accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant accounting judgments and estimates are as follow:
5.1
Fair value of financial instruments In determining the fair value of financial instruments that are not freely traded in an open market or for which quoted market prices are not readily available, the management exercises judgment in estimating the fair value of such financial instruments, using the generally accepted valuation method. The inputs used in such fair value calculation are comparable to those from the observable markets, taking into consideration of liquidity and correlation and long-term volatility of financial instruments.
5.2 Allowance for doubtful debts on loans and accrued interest receivables Allowances for doubtful debts on loans and accrued interest receivables are intended to adjust the value of loans and receivables for probable credit losses. The management follows the BOT’s guidelines regarding the provision of allowance for doubtful debts, including the use of judgment to estimate losses expected to be incurred on loans and/or accrued interest receivables, taking into consideration an analysis of each debtor’s status, payment history, collection experience
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from the debtor, the value of collateral and surrounding economic conditions. However, the use of different estimates and assumptions could affect the amounts of allowances for doubtful debts and adjustments to the allowances may therefore be required in the future.
5.3 Allowance for impairment on investments The Bank and its subsidiaries consider that investments are impaired when the management exercises judgment that there has been a significant and prolonged decline in the fair value below their cost or an indicator of impairment. The determination of what is “significant” or “prolonged” or “indicator of impairment” requires judgment.
5.4 Allowance for impairment on properties foreclosed The Bank and its subsidiaries consider allowance for impairment of properties foreclosed when net realisable value is below book value. The management uses judgment to estimate impairment loss, taking into consideration the latest appraisal values, the types, the characteristics of the assets and disposal plans for properties foreclosed. However, the use of different estimates and assumptions could affect the amounts of allowance for impairment and adjustments to the allowances may therefore be required in the future.
5.5
Premises and equipment/Depreciation In determining depreciation of buildings and equipment, the management is required to estimate the useful lives and salvage values of the Bank’s buildings and equipment and to review estimated useful lives and salvage values whenever circumstances change. The Bank measures land and buildings at revalued amounts. Such amounts are determined by the independent valuer using the market approach for land and the depreciated replacement cost approach for buildings. The valuation involves certain assumptions and estimates. In addition, the management is required to review premises and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amounts are lower than the carrying amounts. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review.
5.6 Recognition and derecognition of assets and liabilities In considering whether to recognise or derecognise assets and liabilities, the management is required to make judgment on whether significant risk and rewards have been transferred. Although management uses their best judgment and knowledge of current events in making assessments of risk and rewards, actual risks and rewards may ultimately differ.
5.7 Claims, litigation and the transfer of non-performing assets The Bank and its subsidiaries have contingent liabilities as a result of (a) claims, (b) litigation cases being made against them and (c) loss sharing from the transfer of non-performing assets. The determination of the provisions on the balance sheet requires the use of various assumptions and judgments by the management. However, actual outcomes could differ from the estimates.
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6. Sale of non-performing assets to Thai Asset Management Corporation (“TAMC”) In accordance with the conditions of the Emergency Decree on the Thai Asset Management Corporation B.E. 2544, the Bank and a subsidiary entered into the Asset Transfer Agreements with TAMC in 2001 for sales of non-performing assets to TAMC and the Bank and its subsidiary (as the transferors) had received promissory notes from TAMC (as the transferee) for settlement of the transfer prices. Under the agreements, TAMC and the transferors are jointly responsible for sharing the profits or losses from TAMC’s management of the non-performing assets, in accordance with the following conditions as specified in the agreements, at the end of the fifth year and the tenth year commencing 1 July 2001.
▶▶
In the case of losses, the transferor will be responsible for the first portion of losses, not exceeding 20% of the transfer price. The second portion of losses, not exceeding 20% of the transfer price, will be equally shared between TAMC and the transferor. The remaining losses will be absorbed by TAMC.
▶▶
In case of profits, the first portion of profits, not exceeding 20% of the transfer price, will be equally shared between TAMC and the transferor. Should there be any profits remaining, the transferor is entitled to the remaining profits up to an amount of not exceeding the book value of non-performing assets after deducting the transfer price and the transferors’ share in the first portion of the profits.
In 2006, TAMC informed the Bank and its subsidiary of preliminary profit/loss sharing information as at the end of the fifth year whereby the Bank and its subsidiary incurred loss of Baht 730 million from such asset management. In addition, in November 2006 the Bank had been informed by TAMC that TAMC requested for the transfer price adjustment of Baht 4,341 million, being the collateral value of the pledged machinery transferred to TAMC. The Bank denied such adjustment since it breached the condition in the Asset Transfer Agreements dated 12 October 2001. Therefore, such request could not be valid and the Bank has already taken legal action against TAMC. Later on 27 April 2010, the court of first instance judged in favor of the Bank. The case is in the process of being reconsidered by the Appeals Court. As at 31 December 2010 and 2009, the Bank and its subsidiary have estimated its share of contingent losses arising from such non-performing assets transferred to TAMC at the amount of Baht 6,235 million and Baht 6,178 million, respectively (the Bank only: Baht 6,205 million and Baht 6,140 million, respectively), with the following significant details.
▶▶
As at 31 December 2010 and 2009, the Bank and its subsidiary have estimated the present value of expected loss sharing from TAMC as at the end of the tenth year at the amount of Baht 1,618 million and Baht 1,561 million, respectively (the Bank only: Baht 1,588 million and Baht 1,523 million, respectively), taking into accounts the report from TAMC on the asset management performance and other historical information related to non-performing loan management of the Bank. The discount rate used to determine the present value of expected future loss is equal to the rate of return on assets or financial instruments having similar risks.
▶▶
As at 31 December 2010 and 2009, the Bank has estimated contingent loss of Baht 4,617 million (included accrued interest receivable of Baht 276 million) as a result of the transferred price adjustment request on non-performing loans having machinery pledged as collateral.
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For the years ended 31 December 2010 and 2009, the Bank amortised the present value of expected loss sharing from TAMC of Baht 65 million and Baht 12 million, respectively to be recognised as an interest expense in the statements of income.
7. Phayathai Asset Management Company Limited Phayathai Asset Management Company Limited (“PAMC” or “the subsidiary”) was registered with the Ministry of Commerce on 9 August 2000 and registered with the Bank of Thailand to operate as an asset management company on 1 September 2000. The Bank holds approximately 100% of the paid-up share capital of the subsidiary. Under conditions of the asset transferring, the Bank (as the transferor) delivers the documents relating to these assets to the subsidiary (as the transferee) within 30 days from the transfer date (the date stated in the contract to transfer non-performing assets), except that the counterparties agree to extend the delivery period. The transferor or transferee has the rights to revise the transfer prices of such assets within 180 days from the transfer date. As at 31 December 2010 and 2009, the Bank still has obligations to transfer the mortgage right of collaterals of such transferred assets.
7.1 The sale of assets by PAMC to Bangkok Commercial Asset Management Company Limited 7.1.1
Transferring of non-performing assets and the adjustment of transfer prices
On 3 September 2003, PAMC signed an Asset Sale Agreement with Bangkok Commercial Asset Management Company Limited (“BAM”) with the effective date of the asset transfer on 30 September 2003. The transfer of the assets and their underlying securities was arranged under the provisions of the Emergency Decree on the Asset Management Company B.E. 2541 whereby transfer prices were determined in accordance with agreement between the subsidiary and BAM. On the transfer date, BAM settled the transfer prices to the subsidiary the total value of the assets in the form of a negotiable promissory notes of Baht 19,533 million dated 30 September 2003, which comprised the transfer price of the non-performing loans (“the first and second asset groups”) of Baht 16,634 million and the transfer price of the properties foreclosed (“the third asset group”) of Baht 2,899 million. The promissory note will be matured on 30 September 2015 and carries interest at a rate equivalent to the weighted average interest rates for all types of only Thai Baht deposits of the 5 largest local commercial banks. The first interest payment will be due on the 6th anniversary of the issuing date of promissory note while subsequent payments will be on an annual basis after the first payment until the maturity date. However, PAMC is not allowed to endorse to transfer the note to any party except that the endorsement is made to TMB Bank Public Company Limited, the Bank of Thailand or the Financial Institutions Development Fund. In case of BAM’s decision to go into liquidation before the promissory note’s maturity date, BAM is required to transfer the rights and obligatory commitments over the promissory note to another juristic person as consented to by PAMC. Both PAMC and BAM have the right to call for an adjustment to the prices of the transferred assets within 180 days from the transfer date. The price adjustment, if in effect, could be done by issuing an additional promissory note by PAMC or by BAM as the case may be.
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Regarding the transferring of non-performing assets to BAM since 30 September 2003 to the end of year 2005, PAMC had transferred its investments in receivables, loans and receivables (both secured and unsecured), properties foreclosed and related assets to BAM for the total transfer price of Baht 19,712 million (Baht 179 million in addition to those have been transferred on the transfer date). PAMC had been settled for those transferred assets from BAM in the form of a negotiable promissory note and PAMC endorsed the said promissory note to the Bank in settlement of a long-term loan granted by the Bank to PAMC. Until the end of 2005, PAMC and BAM had agreed a total adjustment of Baht 1,011 million to the transfer price and accepted back certain non-performing loans and properties foreclosed previously transferred due to various reasons. PAMC issued a promissory note of Baht 1,011 million to BAM in respect of the agreed adjusted price and accepted the transfer of such assets back. Currently, PAMC is waiting to issue a promissory note of Baht 4 million to BAM, which is the difference arising from the sale of properties foreclosed in 2003. PAMC has recognised interest expenses on the promissory notes issued to BAM for the years ended 31 December 2010 and 2009 amounting Baht 7 million and Baht 9 million, respectively, as interest expenses in the statements of income. In the year 2006, PAMC and BAM had a meeting memorandum regarding the calculation of loss claimed by BAM according to Asset Sale Agreement and PAMC has to pay for such claim whereby both parties agree to settle the loss claims at the end of sixth year or the twelfth year by offsetting the loss claim amount with cash payment by BAM on the promissory notes as specified in Asset Sale Agreement dated 3 September 2003. 7.1.2 Computation of profit or loss sharing from transferring of non-performing assets to BAM
Computation of profit or loss from asset management is determined, only on the debts that are fully settled, for the value of assets collected and accumulated on a cash basis until the computation date, deducted by the transfer price and administrative expenses on each transferred asset, including interest expense on the promissory note. At the end of the sixth year and the twelfth year from the transfer date, profit or loss from the management of assets under the agreement must be shared between BAM and PAMC. In case of debt settlement done through asset transfer, recognition of profit or loss only occurs after the asset is successfully disposed off to clear the debt. An agreement was made between PAMC and BAM that sharing of profit or loss would be computed only for the first and second asset groups at the end of the sixth year and the twelfth year after the transfer date. In case there is a profit from the management of both the first and second asset groups, the first portion of not more than 20% of the transfer prices will be shared equally at a ratio of 1:1 between PAMC and BAM and the rest of the profit will be taken by PAMC. However, this portion must not be greater than the margin between the book value and the transfer prices. However, the rest of the profit, if any remained in excess of such margin, will be taken by BAM. In case there is a loss from the management of the first asset group, PAMC will absorb the loss of the first 20%. The next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAM. The rest of the loss will be absorbed in full by BAM.
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In case there is a loss from the management of the second asset group; (a)
if there was no discount on the transfer prices, PAMC will absorb loss of the first 30% while the next 20% of loss will be shared equally at a ratio of 1:1 between PAMC and BAM. The rest of the loss will be absorbed in full by BAM.
(b)
if there was a 5% discount on the transfer prices, PAMC will absorb loss of the first 25% while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAM. The rest of the loss will be absorbed in full by BAM.
(c)
if there was a 10% discount on the transfer prices, PAMC will absorb loss of the first 20% while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAM. The rest of the loss will be absorbed in full by BAM.
(d)
if there was a 15% discount on the transfer prices, PAMC will absorb loss of the first 20% while the next 20% of the loss will be shared equally at a ratio of 1:1 between PAMC and BAM. The rest of the loss will be absorbed in full by BAM.
7.1.3 Provision for obligation on transfers of non-performing assets
As at 31 December 2010, PAMC has no provision for obligation on transfers of non-performing assets since PAMC agreed to settle loss with BAM prior to the date specified in the Asset Sale Agreement as discussed in Note 7.1.4 to the financial statements and as at 31 December 2009, PAMC estimated the present value of expected loss sharing from BAM as at the end of the twelfth year at the amount of Baht 3,586 million, taking into consideration the asset management report from BAM and other historical information related to non-performing asset management of the Bank. The discount rate used to calculate the present value of expected future loss is equal to the rate of return on assets or financial instruments having similar risks. From the estimate of loss sharing, PAMC recorded cash receipts of Baht 74 million in preliminary profit sharing from BAM at the end of the sixth year in addition to provisions for obligation on transfers of non-performing assets. For the years ended 31 December 2010 and 2009, PAMC recognised increases in provisions for obligation on transfers of non-performing assets of Baht 190 million and Baht 196 million, respectively, as interest expenses in the statements of income. 7.1.4 Memorandum on profit or loss sharing from transferring of non-performing assets to BAM prior to the end of twelveth year
On 28 December 2010, PAMC and BAM entered into a memorandum of understanding on profit or loss sharing prior to the end of the twelfth year from the date specified in the Asset Sale Agreement. PAMC agreed to settle loss of Baht 3,020 million and promissory notes of Baht 1,011 million to BAM in respect of the price adjustment and the transfer back of certain assets as discussed in Note 7.1.2 to the financial statements. Such amounts were offset with promissory notes of Baht 19,712 million issued by BAM to PAMC. BAM thus issued a new promissory note of Baht 15,681 million to PAMC, with the same remaining maturity period, interest payment conditions and interest rate as the previous notes. On 28 December 2010, PAMC endorsed the promissory note to the Bank in settlement of a long-term loan granted by the Bank to PAMC. As a result of such memorandum, the profit or loss sharing between PAMC and BAM as specified in the Asset Sale Agreement dated 3 September 2003 was nullified. Hence, PAMC reversed the outstanding balance of provision for obligation on transfer of non-performing assets amounting to Baht 830 million in the statement of income.
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Debt restructuring agreement between the Bank and PAMC On 28 December 2010, the Bank entered into a debt restructuring agreement with PAMC to give a debt hair-cut on a long-term loan of Baht 4,031 million to the subsidiary due to changes made to the conditions relating to the transfer of non-performing assets between PAMC and BAM as discussed in Note 7.1.4 to the financial statements. The Bank recorded loss on debt forgiveness of Baht 4,031 million in the statements of income under the caption of “Gains (losses) on investments in subsidiaries”.
8. Interbank and money market items (assets) (Unit: Million Baht)
Consolidated financial statements 31 December 2010 At call
Term
31 December 2009
Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
4,116
4,400
8,516
2,852
7,800
10,652
34
36,683
36,717
35
32,071
32,106
Other banks
-
30,571
30,571
-
19,260
19,260
Finance, finance and securities, securities, credit foncier companies
-
356
356
-
-
-
35
5,040
5,075
31
208
239
4,185
77,050
81,235
2,918
59,339
62,257
Add: Accrued interest receivables
-
89
89
-
182
182
Less: Allowance for doubtful debts
-
(55)
(55)
-
(397)
(397)
4,185
77,084
81,269
2,918
59,124
62,042
1,142
1,326
2,468
2,651
1,178
3,829
Yen
111
-
111
282
-
282
Other currencies
744
40
784
414
48
462
1,997
1,366
3,363
3,347
1,226
4,573
-
(7)
(7)
-
-
-
Foreign items — net
1,997
1,359
3,356
3,347
1,226
4,573
Domestic and foreign items — net
6,182
78,443
84,625
6,265
60,350
66,615
Commercial banks
Other financial institutions Total domestic items
Domestic items — net
Foreign US Dollars
Total foreign items Less: Allowance for doubtful debts
146
| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Separate financial statements 31 December 2010 At call
31 December 2009
Term
Total
At call
Term
Total
4,116
4,400
8,516
2,852
7,800
10,652
34
36,537
36,571
34
31,902
31,936
Other banks
-
30,523
30,523
-
19,260
19,260
Finance, finance and securities, securities, credit foncier companies
-
356
356
-
-
-
35
5,040
5,075
31
208
239
4,185
76,856
81,041
2,917
59,170
62,087
Add: Accrued interest receivables
-
89
89
-
182
182
Less: Allowance for doubtful debts
-
(55)
(55)
-
(397)
(397)
4,185
76,890
81,075
2,917
58,955
61,872
1,142
1,326
2,468
2,651
1,178
3,829
Yen
111
-
111
282
-
282
Other currencies
744
40
784
414
48
462
1,997
1,366
3,363
3,347
1,226
4,573
-
(7)
(7)
-
-
-
Foreign items — net
1,997
1,359
3,356
3,347
1,226
4,573
Domestic and foreign items — net
6,182
78,249
84,431
6,264
60,181
66,445
Domestic Bank of Thailand and Financial Institutions Development Fund Commercial banks
Other financial institutions Total domestic items
Domestic items — net
Foreign US Dollars
Total foreign items Less: Allowance for doubtful debts
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 147
9. Investments 9.1 Classified by investment type (Unit: Million Baht)
Consolidated financial statements 31 December 2010
31 December 2009
Cost value / book value
Fair value
Cost value / book value
Fair value
1,866
1,866
1,804
1,803
-
-
(1)
-
1,866
1,866
1,803
1,803
41,286
41,283
35,747
35,760
50
-
50
-
161
162
-
-
41,497
41,445
35,797
35,760
(2)
-
13
-
(50)
-
(50)
-
41,445
41,445
35,760
35,760
Short-term investments Trading securities Government and state enterprise securities Less: Allowance for revaluation Trading securities — net Available-for-sale securities Government and state enterprise securities Private sector debt securities Domestic marketable equity securities Total Add(less): Allowance for revaluation Less: Allowance for impairment Available-for-sale securities — net Held-to-maturity debt securities Government and state enterprise securities
2,938
21,802
Total held-to-maturity debt securities
2,938
21,802
46,249
59,365
Short-term investments — net
Long-term investments Available-for-sale securities Government and state enterprise securities
14,318
14,318
7,738
7,756
309
278
342
264
14,627
14,596
8,080
8,020
Add: Allowance for revaluation
64
-
40
-
Less: Allowance for impairment
(95)
-
(100)
-
14,596
14,596
8,020
8,020
Domestic marketable equity securities Total
Available-for-sale securities — net Held-to-maturity debt securities Government and state enterprise securities
31,894
12,188
Total held-to-maturity debt securities
31,894
12,188
2,712
3,266
32
32
General investments Non-marketable equity securities Domestic Foreign Total
2,744
3,298
Less: Allowance for impairment
(945)
(1,148)
General investments — net
1,799
2,150
48,289
22,358
Long-term investments — net
148
| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Separate financial statements
31 December 2010
31 December 2009
Cost value / book value
Fair value
Cost value / book value
Fair value
1,866
1,866
1,804
1,803
Short-term investments Trading securities Government and state enterprise securities Less: Allowance for revaluation Trading securities — net
-
-
(1)
-
1,866
1,866
1,803
1,803
41,286
41,283
35,747
35,760
50
-
50
-
41,336
41,283
35,797
35,760
Available-for-sale securities Government and state enterprise securities Private sector debt securities Total Add(less): Allowance for revaluation Less: Allowance for impairment Available-for-sale securities — net
(3)
-
13
-
(50)
-
(50)
-
41,283
41,283
35,760
35,760
Held-to-maturity debt securities Government and state enterprise securities Total held-to-maturity debt securities Short-term investments — net
2,796
21,802
2,796
21,802
45,945
59,365
Long-term investments Available-for-sale securities Government and state enterprise securities Domestic marketable equity securities
14,318
14,318
7,738
7,756
309
278
330
248
14,627
14,596
8,068
8,004
Add: Allowance for revaluation
64
-
31
-
Less: Allowance for impairment
(95)
-
(95)
-
14,596
14,596
8,004
8,004
Total
Available-for-sale securities — net Held-to-maturity debt securities Government and state enterprise securities
31,405
11,540
Total held-to-maturity debt securities
31,405
11,540
2,711
3,266
32
32
2,743
3,298
Less: Allowance for impairment
(945)
(1,148)
General investments — net
1,798
2,150
47,799
21,694
General investments Non-marketable equity securities Domestic Foreign Total
Long-term investments — net
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 149
As at 31 December 2010 and 2009, the Bank and its subsidiary have non-transferable promissory notes of Baht 8,495 million and Baht 8,869 million, respectively (the Bank only: Baht 7,864 million and Baht 8,221 million, respectively) avaled by the Financial Institutions Development Fund, which were received by the Bank and its subsidiary from Thai Asset Management Corporation (“TAMC”) for transfer price settlement. The Bank and its subsidiary classified them as held-to-maturity debt securities. The notes are due during 2011 to 2015 and bear an interest rate at the average rate of deposit rates announced by the 5 major Thai banks and the interest is payable on the last working day of each year. As at 31 December 2010 and 2009, the Bank has pledged its government securities as collateral, having the face value of Baht 29 million and Baht 11 million, respectively. As at 31 December 2010, the Bank has pledged its securities as collateral for repurchase agreements, having the face value of Baht 10,749 million (31 December 2009: Nil).
9.2 Classified by remaining periods to maturity of debt securities As at 31 December 2010 and 2009, the Bank and its subsidiaries have investments in debt securities, except for those held for trading, which can be classified by remaining periods to maturity dates as follows: (Unit: Million Baht)
Consolidated financial statements 31 December 2010
31 December 2009
Remaining periods
Remaining periods
1 year
1 – 5 years
41,286
14,318
50
Over 5 years
1 – 5 years
Over 5 years
Total
1 year
Total
-
55,604
35,747
7,738
-
43,485
-
-
50
50
-
-
50
41,336
14,318
-
55,654
35,797
7,738
-
43,535
(3)
-
-
(3)
13
18
-
31
(50)
-
-
(50)
(50)
-
-
(50)
41,283
14,318
-
55,601
35,760
7,756
-
43,516
Government and state enterprise securities
2,938
20,185
11,709
34,832
21,802
8,854
3,334
33,990
Total held-to-maturity debt securities
2,938
20,185
11,709
34,832
21,802
8,854
3,334
33,990
44,221
34,503
11,709
90,433
57,562
16,610
3,334
77,506
Available-for-sale securities Government and state enterprise securities Private sector debt securities Total Add(less): Allowance for revaluation Less: Allowance for impairment Available-for-sale securities — net Held-to-maturity debt securities
Total debt securities
150
| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Separate financial statements 31 December 2010
31 December 2009
Remaining periods
Remaining periods
1 year
1 – 5 years
41,286
14,318
50
Over 5 years
1 – 5 years
Over 5 years
Total
1 year
Total
-
55,604
35,747
7,738
-
43,485
-
-
50
50
-
-
50
41,336
14,318
-
55,654
35,797
7,738
-
43,535
(3)
-
-
(3)
13
18
-
31
(50)
-
-
(50)
(50)
-
-
(50)
41,283
14,318
-
55,601
35,760
7,756
-
43,516
Government and state enterprise securities
2,796
19,696
11,709
34,201
21,802
8,206
3,334
33,342
Total held-to-maturity debt securities
2,796
19,696
11,709
34,201
21,802
8,206
3,334
33,342
44,079
34,014
11,709
89,802
57,562
15,962
3,334
76,858
Available-for-sale securities Government and state enterprise securities Private sector debt securities Total Add(less): Allowance for revaluation Less: Allowance for impairment Available-for-sale securities — net Held-to-maturity debt securities
Total debt securities
9.3 Investments in entities in which the Bank and its subsidiaries hold more than 10% As at 31 December 2010 and 2009, the Bank had investments in entities in which the Bank holds 10% or more of the paid-up share capital of the investee companies but such companies are not treated as its subsidiaries and associated companies. Those investments were summarised below. (Unit: Million Baht)
Consolidated and separate financial statements 31 December 2010
31 December 2009
Property development and construction
34
34
Public utilities and services
45
45
1,091
1,290
11
11
1,181
1,380
(41)
(45)
1,140
1,335
Mutual funds and financial services Others Total Less: Allowance for impairment Investments — net
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 151
9.4 Investments in companies having problems relating to financial position and operating results As at 31 December 2010 and 2009, the Bank had the following investments in listed companies which meet criteria for delisting from the Stock Exchange of Thailand (“SET”), default debt securities, or companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are similar to the listed companies which meet criteria for delisting from the SET: (Unit: Million Baht)
Consolidated and separate financial statements 31 December 2010 Cost value / book value
1. Listed companies under delisting conditions/ defaulted debt securities 2. Companies whose ability to continue as a going concern is uncertain, or unlisted companies whose financial position and operating results are similar to the listed companies which meet criteria for delisting from the SET Total
Fair value
31 December 2009
Allowance for impairment
Cost value / book value
Allowance for impairment
Fair value
62
-
(62)
62
-
(62)
1,480
547
(933)
1,576
439
(1,137)
1,542
547
(995)
1,638
439
(1,199)
9.5 Revaluation surplus on investments As at 31 December 2010 and 2009, revaluation surplus on investments can be summarised as follows: (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
Debt securities
19
39
19
39
Equity securities
68
28
67
20
Total
87
67
86
59
(18)
(3)
(18)
(3)
(3)
(6)
(3)
(6)
(21)
(9)
(21)
(9)
66
58
65
50
Revaluation surplus on investments:
Revaluation deficit on investments: Debt securities Equity securities Total Revaluation surplus on investments – net
152
|  Financial Statements and Notes to Financial Statements
Annual Report  2010
9.6 Gains (losses) on investments Gains (losses) on investments, excluding on investments in subsidiaries which have been shown in Note 9.7, for years ended 31 December 2010 and 2009 consisted of the followings: (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
For the years ended 31 December
For the years ended 31 December
2010
2009
2010
2009
Trading securities
69
85
69
85
Available-for-sale securities
12
775
-
775
157
287
157
286
-
1
8
18
238
1,148
234
1,164
(56)
(130)
(56)
(130)
Available-for-sale securities
-
(92)
-
(92)
General investments
-
(1)
-
(1)
(11)
(1)
-
-
(67)
(224)
(56)
(223)
-
(7)
-
(7)
Losses on impairment
(14)
(903)
(226)
(903)
Gains (losses) on investments
157
14
(48)
31
Gains on sales of investments
General investments Investments in associates Total gains on sales of investments Losses on sales of investments Trading securities
Investment in associates Total losses on sales of investments Losses from revaluation
9.7 Gains (losses) on investments in subsidiaries Gains (losses) on investments in subsidiaries for years ended 31 December 2010 and 2009 consisted of the followings: (Unit: Million Baht)
Separate financial statements For the years ended 31 December
Loss on investment Loss on debt restructuring with a subsidiary company (Note 7.2) Reversal of allowance for impairment Gains (losses) on investments in subsidiaries
2010
2009
-
(921)
(4,031)
-
4,171
-
140
(921)
At the balance sheet date, the management of the Bank has considered that PAMC has an improved financial position and will be able to increase its profitability after settlement of losses from transferring non-performing assets to BAM, which is an indication for reversal of impairment. Hence, the Bank reversed allowance for impairment on investment in PAMC in the statements of income for the year ended 31 December 2010.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 153
10. Investments in subsidiaries and associated companies (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
For the years ended 31 December
For the years ended 31 December
2010
2009
2010
2009
(Restated) Balance — beginning of the year Share of profit under equity method for the year Investments during the year Dividend income for the year Reversal of allowance for impairment Disposals/return of capital for the year Balance — end of the year
471
927
605
998
36
95
-
-
-
34
-
34
(282)
(140)
-
-
-
-
1,835
-
(225)
(445)
(417)
(427)
-
471
2,023
605
In September 2010, the Bank sold its investment in Thai ORIX Leasing Co., Ltd. at Baht 214 million, which approximates its carrying value. On 31 August 2009, Phayathai Property Fund was liquidated and the Bank received a capital return of Baht 197 million, which approximates its carrying value. On 5 November 2009, The Thai Business Fund 2 was liquidated and the Bank received a capital return of Baht 182 million, which approximates its carrying value. Investments in subsidiaries and associated companies as at 31 December 2010 and 2009, and share of profits from investments in associated companies and dividend income for the years ended 31 December 2010 and 2009 were as follows:
(Unit: Million Baht)
Consolidated financial statements
Percentage of shareholding as at 31 December
Paid-up share capital as at 31 December
2010
Investment value − cost method as at 31 December
2009
2010
2009
Investment value − equity method as at 31 December
2010
2009
Shares of profits from investments in associated companies for the years ended 31 December
2010
2009
2010
(%)
(%)
-
45.96
-
375
-
417
-
471
36
33
Metro Designee Co., Ltd.
30.00
30.00
-
-
-
-
-
-
-
-
The Thai Business Fund 2
-
-
-
-
-
-
-
-
-
10
Phayathai Property Fund
-
-
-
-
-
-
-
-
-
52
-
417
-
471
36
95
(restated)
2009 (restated)
Associated companies Thai ORIX Leasing Co., Ltd.
Investments in associated companies — net
154
| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Separate financial statements Percentage of shareholding as at 31 December
2010
2009
(%)
(%)
Paid-up share capital as at 31 December
Cost as at 31 December
Allowance for impairment as at 31 December
2010
Investment value − Dividend income cost method as at for the years ended 31 December 31 December
2010
2009
2010
2009
2009
2010
1,070
1,070
3,870
3,870 (2,035) (3,870)
2009
2010
2009
Subsidiaries Phayathai Asset Management Co., Ltd. 100.00 100.00
1,835
-
-
-
-
-
-
-
-
-
188
188
-
109
4,058 (2,035) (3,870)
2,023
188
-
109
Designee for ETA Contract Ltd.
99.40
99.40
-
-
-
-
-
TMB Asset Management Co., Ltd.
75.00
75.00
100
100
188
188
-
Investments in subsidiaries— net
4,058
Associated companies Thai ORIX Leasing Co., Ltd.
-
45.96
-
375
-
417
-
-
-
417
282
78
30.00
30.00
-
-
-
-
-
-
-
-
-
-
The Thai Business Fund 2
-
-
-
-
-
-
-
-
-
-
-
10
Phayathai Property Fund
-
-
-
-
-
-
-
-
-
-
-
52
-
417
-
-
-
417
282
140
4,475 (2,035) (3,870)
2,023
605
282
249
Metro Designee Co., Ltd.
Investments in associated companies — net Investments in subsidiaries and associated companies — net
4,058
The summarised financial information of the associated companies, which were extracted from the management accounts of those associated companies, is shown below. Such information is not adjusted to reflect the proportionate shares held by the Bank. (Unit: Million Baht)
31 December 2010 Percentage of shareholding
Total assets
31 December 2009 Total liabilities
(%) Thai ORIX Leasing Co., Ltd. Metro Designee Co., Ltd.
Percentage of shareholding
Total assets
Total liabilities
(%) -
-
-
45.96
3,693
2,667
30.00
-
-
30.00
-
-
(Unit: Million Baht)
For the years ended 31 December 2010 Total revenues
2009 Net income
Total revenues
182
80
329
Metro Designee Co., Ltd.
-
-
-
-
The Thai Business Fund 2
-
-
1,075
939
Phayathai Property Fund
-
-
231
171
Thai ORIX Leasing Co., Ltd.
Net income 82
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 155
The statements of cash flows for the years ended 31 December 2010 and 2009 of Phayathai Asset Management Company Limited, the Bank’s subsidiary, which was extracted from the management accounts of that company, are disclosed herein in accordance with the Bank of Thailand’s requirement. (Unit: Million Baht)
For the years ended 31 December 2010
2009
4,140
(910)
Bad debts and doubtful accounts (reversal)
148
(34)
Losses on impairment of investments in receivables (reversal)
457
(51)
-
7
Cash flows from operating activities Earnings (losses) before income tax Adjustments to reconcile earnings (losses) before income tax to net cash provided by (paid from) operating activities
Losses on debt restructuring Losses on impairment for properties foreclosed and other assets Reversal of provisions for obligation on transfers of non-performing assets Provisions for other liabilities (reversal) Gain on debt forgiveness from the parent company Others Income (losses) from operating activities before changes in operating assets and liabilities
131
820
(839)
(1)
19
(5)
(4,031)
-
(7)
(2)
18
(176)
(Increase) decrease in operating assets Investments in receivables
(693)
45
Loans and receivables
382
216
Properties foreclosed
135
390
Other accounts receivable
273
(12)
(1)
5
(45)
130
Other assets Increase (decrease) in operating liabilities Other account payables Other liabilities Cash provided by operating activities
(5)
(4)
64
594
Net interest expense (income)
(59)
35
Cash received on interest income
242
185
Cash paid for interest expense
(16)
(105)
Net cash provided by operating activities
231
709
(600)
(100)
458
100
Proceeds from redemptions of held-to-maturity securities
17
26
Others
(2)
(2)
(127)
24
Cash paid for repayment of loans from financial institutions
(144)
(843)
Net cash used in financing activities
(144)
(843)
(40)
(110)
Cash and cash equivalents at beginning of the years
141
251
Cash and cash equivalents at end of the years
101
141
Cash flows from investing activities Cash paid on proceed from purchases of available-for-sale securities Sales of available-for-sale securities
Net cash provided by (used in) investing activities Cash flows from financing activities
Net decrease in cash and cash equivalents
156
| Financial Statements and Notes to Financial Statements
Annual Report 2010
11. Loans and accrued interest receivables 11.1 Classified by loan type ( Unit: Million Baht) Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
56,952
39,376
56,839
39,260
218,081
236,753
216,488
234,608
87,797
91,771
87,574
92,698
347
192
218
164
363,177
368,092
361,119
366,730
564
971
565
974
Total loans and accrued interest receivables
363,741
369,063
361,684
367,704
Less: Allowance for doubtful debts
(20,390)
(30,995)
(18,927)
(29,548)
(156)
(213)
(156)
(213)
343,195
337,855
342,601
337,943
Overdrafts Loans Bills
(1)
Others Total Add: Accrued interest receivables
Revaluation allowance for debt restructuring Loans and accrued interest receivables — net (1)
As at 31 December 2010 and 2009, the Bank and its subsidiary presented net of unearned interest income of Baht 12 million and Baht 12 million, respectively.
11.2 Classified by remaining periods to maturity of loan agreements (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
Within 1 year
162,052
153,036
159,386
149,811
Over 1 year
201,125
215,056
201,733
216,919
Total loans
363,177
368,092
361,119
366,730
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 157
11.3 Classified by currency and residency of debtors (Unit: Million Baht)
Consolidated financial statements 31 December 2010 Domestic Baht US Dollars Other currencies Total loans
Foreign
31 December 2009 Total
Domestic
Foreign
Total
344,634
5,161
349,795
353,844
4,738
358,582
11,247
1,106
12,353
7,670
1,122
8,792
965
64
1,029
632
86
718
356,846
6,331
363,177
362,146
5,946
368,092
(Unit: Million Baht)
Separate financial statements 31 December 2010 Domestic Baht US Dollars Other currencies Total loans
Foreign
31 December 2009 Total
Domestic
Foreign
Total
342,576
5,161
347,737
352,482
4,738
357,220
11,247
1,106
12,353
7,670
1,122
8,792
965
64
1,029
632
86
718
354,788
6,331
361,119
360,784
5,946
366,730
11.4 Classified by type of business and by loan classification (Unit: Million Baht)
Consolidated financial statements 31 December 2010 Pass
Agriculture and mining Manufacturing and commerce
Special mention
Sub-standard
Doubtful
Doubtful of loss
Total
4,372
454
79
42
1,522
6,469
127,693
16,572
3,042
698
15,868
163,873
Property development and construction
16,882
1,891
1,057
619
3,056
23,505
Infrastructure and services
63,849
4,929
508
55
3,996
73,337
Housing loans
52,789
1,539
298
429
3,157
58,212
Others
35,706
454
184
109
1,328
37,781
301,291
25,839
5,168
1,952
28,927
363,177
Total loans
158
| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Consolidated financial statements 31 December 2009
Agriculture and mining Manufacturing and commerce
Pass
Special mention
Sub-standard
4,198
1,359
94
Doubtful
Doubtful of loss
Total
121
4,263
10,035
100,019
27,429
2,762
3,124
24,197
157,531
Property development and construction
14,382
5,992
1,041
1,142
4,948
27,505
Infrastructure and services
58,967
9,917
2,631
177
3,372
75,064
Housing loans
52,900
1,862
536
573
3,240
59,111
Others
36,049
922
180
154
1,541
38,846
266,515
47,481
7,244
5,291
41,561
368,092
Total loans
(Unit: Million Baht)
Separate financial statements 31 December 2010 Pass
Agriculture and mining Manufacturing and commerce
Special mention
Sub-standard
Doubtful
Doubtful of loss
Total
4,372
454
79
42
1,437
6,384
127,693
16,572
3,042
698
14,690
162,695
Property development and construction
16,882
1,891
1,057
619
2,395
22,844
Infrastructure and services
63,849
4,929
508
55
3,840
73,181
Housing loans
52,789
1,539
298
429
3,157
58,212
Others
36,405
454
184
109
651
37,803
301,990
25,839
5,168
1,952
26,170
361,119
Total loans
(Unit: Million Baht)
Separate financial statements 31 December 2009
Agriculture and mining Manufacturing and commerce
Pass
Special mention
Sub-standard
Doubtful
Doubtful of loss
Total
4,198
1,359
94
121
4,113
9,885
100,019
27,429
2,762
3,124
22,758
156,092
Property development and construction
14,382
5,992
1,041
1,142
4,021
26,578
Infrastructure and services
58,967
9,917
2,631
177
3,008
74,700
Housing loans
52,900
1,862
536
573
3,240
59,111
Others
38,063
922
180
154
1,045
40,364
268,529
47,481
7,244
5,291
38,185
366,730
Total loans
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 159
11.5 Classified by loan classification The Bank and its subsidiary have classified loans and accrued interest receivables (excluding interbank and money market items-assets) in accordance with the BOT’s notifications, regarding the Classification and Provisions made by Financial Institutions, as follows: (Unit: Million Baht)
Consolidated financial statements 31 December 2010 Loans and accrued interest receivables
Balance net of collateral (1)
301,770
131,488
31 December 2009
Minimum percentage
Allowance provided in the accounts (2)
Loans and accrued interest receivables
Balance net of collateral (1)
1,322
266,938
102,859
(%)
Pass Special mention
Minimum percentage
Allowance provided in the accounts
(%)
1
1
1,049
25,911
6,652
2
133
47,677
15,341
2
307
Sub-standard
5,172
1,708
100
1,685
7,365
1,777
100
1,777
Doubtful
1,953
276
100
263
5,302
1,518
100
1,518
28,935
9,368
100
100
18,227
363,741
149,492
Doubtful of loss Total
Add: Excess over the BOT’s minimum requirement Total (1)
9,438
41,781
18,227
12,841
369,063
139,722
22,878
7,549
8,117
20,390
30,995
In determining allowance for doubtful debts on loans classified as sub-standard, doubtful and doubtful of loss, balance net of collateral means debt balance after deduction of the present value of future cash flows expected to be received from debt collection or from the disposal of collateral.
(2)
Allowance for doubtful debts on loans guaranteed by Small Business Credit Guarantee Corporation according to the Portfolio Guarantee Scheme was made in accordance with the Bank of Thailand’s notification on supervisory guidelines on loans guaranteed in the Portfolio Guarantee Scheme by Small Business Credit Guarantee Corporation. (Unit: Million Baht)
Separate financial statements 31 December 2010 Loans and accrued interest receivables
Balance net of collateral (1)
302,470
132,188
25,911
Sub-standard Doubtful
31 December 2009 Allowance provided in the accounts (2)
Loans and accrued interest receivables
Balance net of collateral (1)
1
1,322
268,955
104,874
1
1,049
6,652
2
133
47,677
15,341
2
307
5,172
1,708
100
1,685
7,365
1,777
100
1,777
1,953
276
100
263
5,302
1,518
100
1,518
26,178
8,366
100
100
16,973
361,684
149,190
Minimum percentage
(%)
Pass Special mention
Doubtful of loss Total
Add: Excess over the BOT’s minimum requirement Total (1)
Minimum percentage
Allowance provided in the accounts
(%)
8,436
38,405
16,973
11,839
367,704
140,483
21,624
7,088
7,924
18,927
29,548
In determining allowance for doubtful debts on loans classified as sub-standard, doubtful and doubtful of loss, balance net of collateral means debt balance after deduction of the present value of future cash flows expected to be received from debt collection or from the disposal of collateral.
(2)
Allowance for doubtful debts on loans guaranteed by Small Business Credit Guarantee Corporation according to the Portfolio Guarantee Scheme was made in accordance with the Bank of Thailand’s notification on supervisory guidelines on loans guaranteed in the Portfolio Guarantee Scheme by Small Business Credit Guarantee Corporation.
160
| Financial Statements and Notes to Financial Statements
Annual Report 2010
11.6 Non-performing loans (NPLs) NPLs per BOT’s regulations refer to all sub-standard, doubtful, doubtful of loss and loss loans. As at 31 December 2010 and 2009, the Bank and its subsidiary’ NPLs (including interbank and money market items) were summarised as follows: (Unit: Million Baht)
Consolidated financial statements (1)
Separate financial statements
31 December
31 December
2010
2009
2010
2009
24,689
32,726
22,935
30,604
424,975
405,967
423,920
405,860
5.81
8.06
5.41
7.54
36,047
54,095
33,290
50,719
436,333
427,337
434,276
425,976
8.26
12.66
7.67
11.91
Net NPLs (principal net of allowance for doubtful debts) NPLs after allowance for doubtful debt on NPLs Total loans after allowance for doubtful debts on NPLs Percentage of net NPLs NPLs (principal) NPLs Total loans Percentage of NPLs (1)
The consolidated financial statements included the balances of the Bank and Phayathai Asset Management Co., Ltd.
On 24 December 2010, the Bank disposed its NPLs with principal of approximately Baht 1,410 million to Phayathai Asset Management Company Limited. The selling price of such NPLs was approximately Baht 397 million, which approximated their net book value. On 21 April 2010, the Bank disposed its NPLs with principal of approximately Baht 550 million to Phayathai Asset Management Company Limited. The selling price of such NPLs was approximately Baht 320 million, which approximated their net book value. On 28 April 2010, the Bank and its subsidiary signed Sale and Purchase Agreement on NPLs of principal of approximately Baht 9,400 million with Bangkok Commercial Asset Management Company Limited (“BAM”). The selling price of such NPLs was approximately Baht 2,500 million, which approximated their net book value. On 7 May 2009, the Bank and its subsidiary signed Sale and Purchase Agreement on NPLs and Properties foreclosed (“NPAs”) with BAM comprising NPLs of approximately Baht 15,000 million and NPAs of approximately Baht 4,300 million, which were the carrying value before allowance of doubtful debts and allowance for impairment. The selling price of NPLs and NPAs according to such agreement were Baht 4,500 million and Baht 1,900 million, respectively, which approximated their carrying value net of allowance for doubtful debts and allowance for impairment. As at 31 December 2010 and 2009, the Bank has loans on which they ceased accrual of interest income in amount of Baht 41,972 million and Baht 52,753 million, respectively.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 161
11.7 Troubled debt restructuring For the years ended 31 December 2010 and 2009, the Bank and its subsidiary entered into contracts for troubled debt restructuring, which resulted in present value loss/losses on debt structuring in the following cases: (Unit: Million Baht)
For the year ended 31 December 2010 Consolidated financial statements Number of debtors
Amount Before restructuring
After restructuring
Separate financial statements Number of debtors
Amount Before restructuring
After restructuring
Type of restructuring Modification of terms of payments
94
7,843
4,419
92
7,841
4,417
Total
94
7,843
4,419
92
7,841
4,417
75
7,495
4,073
73
7,493
4,071
5
310
309
5
310
309
Over 10 years
14
38
37
14
38
37
Total
94
7,843
4,419
92
7,841
4,417
Term of debt restructuring agreements Not over 5 years 5 – 10 years
(Unit: Million Baht)
For the year ended 31 December 2009 Consolidated financial statements Number of debtors
Amount Before restructuring
After restructuring
104
5,868
4,902
11
39
115
Not over 5 years
Separate financial statements Number of debtors
Amount Before restructuring
After restructuring
104
5,868
4,902
32
-
-
-
5,907
4,934
104
5,868
4,902
89
3,803
2,922
78
3,764
2,890
5 – 10 years
14
1,592
1,500
14
1,592
1,500
Over 10 years
12
512
512
12
512
512
115
5,907
4,934
104
5,868
4,902
Type of restructuring Modification of terms of payments Combination of methods Total Term of debt restructuring agreements
Total
The Bank and its subsidiary recognised losses on debt restructuring for the year by the excess of the net book value of loans and interest receivables and the present value of cashflow expected to be recouped. The Bank and its subsidiary measure the expected recoverable amounts of loans restructured by means of modification of repayment conditions, using the present value of future cash expected to be received, discounted by the market interest rate.
162
| Financial Statements and Notes to Financial Statements
Annual Report 2010
Supplemental information for the years ended 31 December 2010 and 2009 relating to the restructured debts is as follows: (Unit: Million Baht)
For the years ended 31 December 2010 Consolidated financial statements Interest income on restructured debts, which is recognised in the statements of income Cash settlement by debtors
2009 Separate financial statements
Consolidated financial statements
Separate financial statements
171
153
261
257
1,378
1,289
1,523
1,455
56
57
218
225
Reversal of losses on debt restructuring
As at 31 December 2010 and 2009, the Bank and its subsidiary have the outstanding balances with troubled debt restructuring debtors, as follows: (Unit: Million Baht)
31 December 2010 Consolidated financial statements
31 December 2009
Separate financial statement
Consolidated financial statements
Separate financial statement
Number of Outstanding Number of Outstanding Number of Outstanding Number of Outstanding debtors balance debtors balance debtors balance debtors balance
Troubled debt restructuring debtors
12.
306
3,705
281
3,594
430
3,746
393
3,572
Classified assets Assets, which consisted of investments in securities, loans and accrued interest receivables (including interbank and money market items-assets), properties foreclosed, premises and equipment and other assets, as at 31 December 2010 and 2009, were classified in accordance with the regulation of the Bank of Thailand as follows:
3,146
Total
-
Doubtful
3,146
-
Sub-standard
Doubtful of loss
-
Special mention
434,929
26,178
1,953
5,172
25,911
375,715
Investments in securities
-
Loans and accrued interest receivables
Pass
436,986
28,935
1,953
1,111
-
Doubtful
5,172
Total
-
Sub-standard
25,911
1,111
-
Special mention
375,015
Doubtful of loss
-
Pass
Investments in securities
Loans and accrued interest receivables
1,309
1,309
-
-
-
-
1,729
1,729
-
-
-
-
Properties foreclosed
648
648
-
-
-
-
Premises and equipment
138
138
-
-
-
-
Other assets
440,590
31,839
1,953
5,172
25,911
375,715
Total
5,174
5,174
-
-
-
-
Investments in securities
2,920
2,920
-
-
-
-
731
731
-
-
-
-
427,131
38,405
5,302
7,365
47,677
328,382
2,885
2,885
-
-
-
-
Properties foreclosed
731
731
-
-
-
-
Premises and equipment
Categories of assets
428,490
41,781
5,302
7,365
47,677
326,365
Loans and accrued interest receivables
Separate financial statements
440,746
32,695
1,953
5,172
25,911
375,015
Premises and equipment
Categories of assets
144
144
-
-
-
-
Total
Properties foreclosed
31 December 2009
648
648
-
-
-
-
Other assets
Investments in securities
31 December 2010
1,857
1,857
-
-
-
-
Properties foreclosed
Loans and accrued interest receivables
Categories of assets
Categories of assets Premises and equipment
31 December 2009
31 December 2010
Consolidated financial statements
433,585
46,876
5,302
7,365
47,677
326,365
Total
128
128
-
-
-
-
Other assets
436,049
47,323
5,302
7,365
47,677
328,382
Total
(Unit: Million Baht)
135
135
-
-
-
-
Other assets
(Unit: Million Baht)
TMB Bank PCL Financial Statements and Notes to Financial Statements |  163
164
| Financial Statements and Notes to Financial Statements
Annual Report 2010
13. Allowance for doubtful debts Allowance for doubtful debts for the years ended 31 December 2010 and 2009 are as follows: (Unit: Million Baht)
Consolidated financial statements For the year ended 31 December 2010
Special mention
Pass
Balance — beginning of the year
Sub-standard
Doubtful
Doubtful of loss
Excess of the BOT’s minimum requirement
Total
1,049
307
1,777
1,518
18,227
8,117
30,995
273
(174)
(92)
(1,255)
3,714
22
2,488
Bad debt recovery
-
-
-
-
588
-
588
Bad debts written-off
-
-
-
-
(5,714)
-
(5,714)
Allowance for doubtful debts on the disposed NPLs
-
-
-
-
(7,377)
(590)
(7,967)
1,322
133
1,685
263
9,438
7,549
20,390
Allowance for doubtful debts
Balance — end of the year
(Unit: Million Baht)
Consolidated financial statements For the year ended 31 December 2009
Special mention
Pass
Sub-standard
Doubtful
Doubtful of loss
Excess of the BOT’s minimum requirement
Total
Balance — beginning of the year
1,172
378
4,001
2,490
29,378
8,044
45,463
Allowance for doubtful debts
(123)
(71)
(2,224)
(972)
6,182
73
2,865
Bad debt recovery
-
-
-
-
807
-
807
Bad debts written-off
-
-
-
-
(7,725)
-
(7,725)
Allowance for doubtful debts on the disposed NPLs
-
-
-
-
(10,415)
-
(10,415)
1,049
307
1,777
1,518
18,227
8,117
30,995
Balance — end of the year
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 165
(Unit: Million Baht)
Separate financial statements For the year ended 31 December 2010
Special mention
Pass
Balance — beginning of the year
Sub-standard
Doubtful
Doubtful of loss
Excess of the BOT’s minimum requirement
Total
1,049
307
1,777
1,518
16,973
7,924
29,548
273
(174)
(92)
(1,255)
3,377
(246)
1,883
Bad debt recovery
-
-
-
-
588
-
588
Bad debts written-off
-
-
-
-
(5,713)
-
(5,713)
Allowance for doubtful debts on the disposed NPLs
-
-
-
-
(6,789)
(590)
(7,379)
1,322
133
1,685
263
8,436
7,088
18,927
Allowance for doubtful debts
Balance — end of the year
(Unit: Million Baht)
Separate financial statements For the year ended 31 December 2009
Special mention
Pass
Sub-standard
Doubtful
Doubtful of loss
Excess of the BOT’s minimum requirement
Total
Balance — beginning of the year
1,172
378
4,001
2,490
28,070
7,821
43,932
Allowance for doubtful debts
(123)
(71)
(2,224)
(972)
6,238
103
2,951
Bad debt recovery
-
-
-
-
805
-
805
Bad debts written-off
-
-
-
-
(7,725)
-
(7,725)
Allowance for doubtful debts on the disposed NPLs
-
-
-
-
(10,415)
-
(10,415)
1,049
307
1,777
1,518
16,973
7,924
29,548
Balance — end of the year
14. Revaluation allowance for debt restructuring (Unit: Million Baht)
Consolidated and separate financial statements For the years ended 31 December 2010
2009
Balance — beginning of the year
213
453
Decrease during the year
(57)
(240)
Balance — end of the year
156
213
166
| Financial Statements and Notes to Financial Statements
Annual Report 2010
15. Properties foreclosed (Unit: Million Baht)
For the year ended 31 December 2010 Consolidated financial statements Beginning balance Increase Disposal
Separate financial statements
Ending Beginning balance balance Increase Disposal
Ending balance
Type of properties foreclosed Assets foreclosed in settlement of debts Immovable assets (1)
13,792
2
(5,931)
7,863
13,410
2
(5,757)
7,655
Internal appraiser
2,948
2,946
External appraiser
4,915
4,709
Movable assets
162
-
(57)
105
134
-
(57)
77
98
736
(510)
324
98
736
(510)
324
Total
14,052
738
(6,498)
8,292
13,642
738
(6,324)
8,056
Add (less): Allowance for impairment
(2,920)
(904)
1,967
(1,857)
(2,885)
(772)
1,928
(1,729)
Properties foreclosed — net
11,132
(166)
(4,531)
6,435
10,757
(34)
(4,396)
6,327
Others
(1)
Disclosed in accordance with the BOT’s notification regarding the Guideline for appraisal value of collateral and immovable assets foreclosed in settlement of debts, dated 9 December 2009, enforced from 1 January 2010 onwards.
(Unit: Million Baht)
For the year ended 31 December 2009 Consolidated financial statements Beginning balance Increase Disposal
Separate financial statements
Ending Beginning balance balance Increase Disposal
Ending balance
13,792
13,410
Type of properties foreclosed Assets foreclosed in settlement of debts Immovable assets (1)
22,919
85
(9,212)
20,145
85
(6,820)
Internal appraiser
4,998
4,998
External appraiser
8,794
8,412
Movable assets
311
2
(151)
162
237
1
(104)
134
349
72
(323)
98
349
72
(323)
98
Total
23,579
159
(9,686)
14,052
20,731
158
(7,247)
13,642
Add (less): Allowance for impairment
(4,319)
(2,651)
4,050
(2,920)
(3,913)
(1,836)
2,864
(2,885)
Properties foreclosed — net
19,260
(2,492)
(5,636)
11,132
16,818
(1,678)
(4,383)
10,757
Others
(1)
Disclosed in accordance with the BOT’s notification regarding the Guideline for appraisal value of collateral and immovable assets foreclosed in settlement of debts, dated 9 December 2009, enforced from 1 January 2010 onwards.
During the year ended 31 December 2009, the Bank and its subsidiary agreed to transfer NPAs to BAM, as described in Note 11.6 to the financial statements.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 167
As at 31 December 2010 and 2009, the Bank and its subsidiary had properties foreclosed which were subject to disposal restrictions, buyback options or first refusal rights, the carrying value of which amounted to Baht 265 million and Baht 242 million, respectively (the Bank only: Baht 259 million and Baht 195 million, respectively).
16. Premises and equipment Changes in premises and equipment (including the incremental revaluation) for the year ended 31 December 2010 are summarised as follows:
(Unit: Million Baht)
Consolidated financial statements Land
Buildings
Cost
The incremental revaluation
Equipment
Total
3,066
4,939
3,494
4,748
21,264
-
-
165
-
836
1,001
Disposals/written-off/transfer out
(539)
(246)
(267)
(97)
(583)
(1,732)
31 December 2010
4,478
2,820
4,837
3,397
5,001
20,533
31 December 2009
-
-
(2,547)
(1,404)
(3,363)
(7,314)
Depreciation during the year
-
-
(87)
(73)
(607)
(767)
Accumulated depreciation on disposals/ written-off/transfer out
-
-
90
44
178
312
31 December 2010
-
-
(2,544)
(1,433)
(3,792)
(7,769)
(622)
-
(109)
-
-
(731)
73
-
10
-
-
83
(549)
-
(99)
-
-
(648)
31 December 2009
4,395
3,066
2,283
2,090
1,385
13,219
31 December 2010
3,929
2,820
2,194
1,964
1,209
12,116
Cost
The incremental revaluation
5,017
Cost/Reappraised value 31 December 2009 Purchases/transfer in
Accumulated depreciation
Allowance for impairment 31 December 2009 Decrease during the year 31 December 2010 Net book value
Depreciation included in the statements of income for the years ended 31 December 2009
750
2010
767
168
| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Separate financial statements Land
Buildings
Cost
The incremental revaluation
Equipment
Total
3,066
4,939
3,494
4,633
21,149
-
-
165
-
825
990
Disposals/written-off/transfer out
(539)
(246)
(267)
(97)
(565)
(1,714)
31 December 2010
4,478
2,820
4,837
3,397
4,893
20,425
31 December 2009
-
-
(2,547)
(1,404)
(3,289)
(7,240)
Depreciation during the year
-
-
(87)
(73)
(590)
(750)
Accumulated depreciation on disposals/ written-off/transfer out
-
-
90
44
166
300
31 December 2010
-
-
(2,544)
(1,433)
(3,713)
(7,690)
(622)
-
(109)
-
-
(731)
73
-
10
-
-
83
(549)
-
(99)
-
-
(648)
31 December 2009
4,395
3,066
2,283
2,090
1,344
13,178
31 December 2010
3,929
2,820
2,194
1,964
1,180
12,087
Cost
The incremental revaluation
5,017
Cost/Reappraised value 31 December 2009 Purchases/transfer in
Accumulated depreciation
Allowance for impairment 31 December 2009 Decrease during the year 31 December 2010 Net book value
Depreciation included in the statements of income for the years ended 31 December 2009
735
2010
750
As at 31 December 2010 and 2009, the Bank and its subsidiaries have certain equipment which has been fully depreciated but is still in use. The gross carrying amount (before deducting accumulated depreciation and allowance for impairment loss) of those assets amounted to approximately Baht 1,935 million and Baht 1,747 million, respectively (The Bank only: Baht 1,902 million and Baht 1,712 million, respectively).
TMB Bank PCL
Financial Statements and Notes to Financial Statements
|  169
17. Other intangible assets (Unit: Million Baht)
Consolidated financial statements Computer software
Computer software under development
Total
Separate financial statements Computer software
Computer software under development
Total
Cost 31 December 2009
2,957
98
3,055
2,865
98
2,963
Additions/transfer in
192
255
447
191
255
446
Disposals/transfer out
(13)
(199)
(212)
(12)
(199)
(211)
3,136
154
3,290
3,044
154
3,198
(2,186)
-
(2,186)
(2,109)
-
(2,109)
(314)
-
(314)
(307)
-
(307)
4
-
4
3
-
3
(2,496)
-
(2,496)
(2,413)
-
(2,413)
31 December 2009
771
98
869
756
98
854
31 December 2010
640
154
794
631
154
785
31 December 2010 Accumulated amortisation 31 December 2009 Amortisation during the year Accumulated amortisation on disposals 31 December 2010 Net book value
Amortisation expenses included in the statements of income for the years ended 31 December 2009
265
-
265
259
-
259
2010
314
-
314
307
-
307
Remaining amortisation periods as at 31 December 2009
0 - 5 Years
0 - 5 Years
2010
0 - 5 Years
0 - 5 Years
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18. Other assets (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
Accrued income
787
1,014
731
953
Leasehold right — net
350
464
350
464
Deposit to derivative contracts
580
461
580
461
Suspense accounts — debtors
1,544
1,041
1,542
1,040
Prepaid expenses
495
95
485
87
Suspense accounts between head office and branches
376
193
376
193
Others
495
323
487
311
4,627
3,591
4,551
3,509
(87)
(84)
(86)
(82)
4,540
3,507
4,465
3,427
Total Less: Allowance for impairment Other assets – net
19. Deposits 19.1 Classified by types of deposits (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
Current accounts
39,881
42,935
39,901
42,947
Saving deposits
151,823
159,269
151,924
159,430
58,284
53,079
58,284
53,079
5,226
6,427
5,226
6,427
Over 1 year
157,901
146,066
157,901
146,066
Total deposits
413,115
407,776
413,236
407,949
Time deposits Within 6 months 6 months to 1 year
19.2 Classified by the remaining periods of deposit contracts (Unit: Million Baht)
Within 1 year Over 1 year Total
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
367,773
330,730
367,894
330,903
45,342
77,046
45,342
77,046
413,115
407,776
413,236
407,949
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19.3 Classified by currency and residency of depositors (Unit: Million Baht)
Consolidated financial statements 31 December 2010 Domestic Baht
Foreign
31 December 2009 Total
Domestic
Foreign
Total
408,834
3,492
412,326
404,827
2,518
407,345
US Dollars
472
145
617
175
123
298
Other currencies
151
21
172
106
27
133
409,457
3,658
413,115
405,108
2,668
407,776
Total
(Unit: Million Baht)
Separate financial statements 31 December 2010 Domestic Baht
Foreign
31 December 2009 Total
Domestic
Foreign
Total
408,955
3,492
412,447
404,997
2,518
407,515
US Dollars
472
145
617
178
123
301
Other currencies
151
21
172
106
27
133
409,578
3,658
413,236
405,281
2,668
407,949
Total
20. Interbank and money market items (liabilities) (Unit: Million Baht)
Consolidated and separate financial statements 31 December 2010 At call
Term
31 December 2009 Total
At call
Term
Total
Domestic Bank of Thailand and Financial Institutions Development Fund
-
2,509
2,509
-
3,167
3,167
169
11,806
11,975
142
-
142
28
-
28
35
-
35
441
4
445
211
4
215
Other financial institutions
2,095
285
2,380
2,877
1,195
4,072
Total domestic items
2,733
14,604
17,337
3,265
4,366
7,631
521
3,920
4,441
330
1,502
1,832
Other currencies
1,342
371
1,713
516
759
1,275
Total foreign items
1,863
4,291
6,154
846
2,261
3,107
Total domestic and foreign items
4,596
18,895
23,491
4,111
6,627
10,738
Commercial banks Other banks Finance, finance and securities, securities, credit foncier companies
Foreign US Dollars
172
21.
|  Financial Statements and Notes to Financial Statements
Annual Report  2010
Borrowings (Unit: Million Baht)
Interest rate
Maturities
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
13,300
12,087
13,300
12,087
4,160
5,562
4,160
5,562
(%) Subordinated debentures
4.70, 5.00
2019 and 2020
Perpetual Non-Cumulative Tier 1 Securities
7.00, 7.75
2011 and 2014
Debentures Bills of exchange Fixed-rate note payables Others
(1)
1.80
2011
1,000
2,040
1,000
2,040
1.00 - 5.00
2011 - 2013
37,731
23,538
37,745
23,549
-
-
-
10
-
10
0 - 3.25
2011 - 2031
5,913
7,399
5,913
7,399
62,104
50,636
62,118
50,647
Total (1)
(1)
The years in which call option exercise periods start.
Subordinated debentures On 18 January 2000, the Bank issued 10-year subordinated debentures of Baht 1,077 million with an interest rate of 4.25% per annum. Interest is payable annually. On 18 January 2010, the subordinated debentures were already redeemed. On 28 December 2000, the Bank issued 10-year subordinated debentures of Baht 260 million and Baht 545 million with an interest rate of 3.5% per annum payable annually. On 28 December 2010, the subordinated debentures were already redeemed. On 9 March 2005, the Bank issued the 10-year Subordinated Debenture No.12 of Baht 8,000 million. For the first 5 years, interest is payable at the higher of the floating rate equal to the 12 month fixed deposit rate of the Bank plus 2% per annum or the fixed rate of 4% per annum. For the remaining 5 years, interest is payable at the higher of the floating rate equal to the 12-month fixed deposit rate of the Bank plus 2% per annum or the fixed rate of 5% per annum. Interest is payable quarterly in March, June, September and December of every year. The Bank can early redeem the subordinated debentures on every interest payment date after 5 years from the issuing date or according to certain specified conditions. However, the Bank proposed to buyback these subordinated debentures, and offered the newly issued Subordinated Debentures No.1/2552 to the existing subordinated debenture holders on 6 November 2009. Existing subordinated debenture holders sold back the debentures totaling Baht 3,095 million and on 9 March 2010, the outstanding of the Subordinated Debenture No.12 totaling Baht 4,905 million was early redeemed. On 6 November 2009, the Bank issued the Subordinated Debenture No. 1/2552 to be offered to the existing debenture holders and the newly issued debentures of Baht 3,813 million was bought. In addition, general investors bought the newly issued debentures totaling Baht 1,487 million. The Bank has therefore issued Baht 5,300 million of the Subordinated Debenture No.1/2552. The Subordinated Debenture No. 1/2552 has a 10-year maturity period and bears fixed a interest rates of 5.00% for the first 3 years, 5.25% for the fourth and the fifth years and 6.50% for the sixth to the tenth years. Interest is payable
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quarterly in February, May, August and November of every year. The Bank can early redeem the Subordinated Debentures No.1/2552 after 5 years from the issuing date or according to certain specified conditions. On 2 April 2010, the Bank issued the Subordinated Debenture No.1/2553 amounting to Baht 8,000 million. The Subordinated Debenture No. 1/2553 carries 10-year maturity period with a fixed rate of 4.70% per annum over the first 5 years and at a fixed rate of 6% per annum over the remaining 5 years. Interest is payable quarterly in January, April, July and October of every year. The Bank can early redeem the Subordinated Debenture No. 1/2553 after 5 years from the issuing date or according to certain specified conditions.
Perpetual Non-Cumulative Tier 1 Securities On 3 May 2006, the Bank issued USD 200 million in aggregate as a principal amount of Perpetual Non-Cumulative Tier 1 Securities (“Hybrid Tier 1”). The securities are perpetual. However the Bank has an early redemption option subject to the prior written approval of the Bank of Thailand and the Bank being solvent at that time. Early redemption is permitted in the following circumstances:
1 . F rom year 10 onwards, on each interest payment date. 2 . In the event of certain changes affecting taxation in Thailand or the Cayman Islands made by any political sub-division or other authority with the power to tax. 3 . In the event the securities no longer qualify as Tier 1 capital of the Bank, under the Bank of Thailand’s capital adequacy requirements and applicable regulations. Interest is payable for the first 10 years at a fixed interest rate of 7.75% per annum, payable semi-annually on 30 June and 30 December and for the eleventh year onwards at a floating interest rate of 3.13% per annum above three-month USD LIBOR, payable quarterly on 30 March, 30 June, 30 September and 30 December of every year. In any interest payment period, if the Bank does not expect a net profit in the consolidated financial statements, the Bank is not obliged to make any interest payments for that period and such interest will be non-cumulative and will not be carried forward to the next payment periods. During 2009, the Bank partially bought back Hybrid Tier 1 Securities in an aggregate principal amount of USD 153 million. The payment of USD 86 million on such buyback and of USD 4 million on related accrued interest were made. The Bank recognised gain on Hybrid Tier 1 buyback of Baht 2,301 million in the statements of income for the year ended 31 December 2009. During 2010, the Bank additionally bought back Hybrid Tier 1 securities in an aggregate principal amount of USD 42 million. The Bank recognised gain on Hybrid Tier 1 buyback of Baht 4 million in the statements of income for the year ended 31 December 2010.
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
During October 2010, the Securityholders’ meeting passed a resolution to amend the conditions of the securities to grant the Bank an option to redeem all of the remaining securities, from 3 May 2011 onward, rather than the original option to redeem them after ten years. As at 31 December 2010 and 2009, the remaining principal amount of Hybrid Tier 1 Securities remained at USD 5 million and USD 47 million, which was equivalent to approximately Baht 160 million and Baht 1,562 million, respectively. On 30 April 2009, the Bank issued Baht 4,000 million in aggregate as a principal amount of Perpetual Non-Cumulative Tier 1 Securities (“Hybrid Tier 1”). The securities are perpetual. However, the Bank has an early redemption option subject to the prior written approval of the Bank of Thailand and the Bank being solvent at that time. Early redemption is permitted under the following circumstances:
1 . At every interest payment date, after the fifth year of the issuing date. 2 . I n the event that any change or amendment in the tax laws resulting in the more tax liabilities to the Bank or the Bank not being able to claim interest on such securities as tax-deductible expenses. 3 . I n the event that the Hybrid Tier 1 is no longer qualified as Tier 1 capital of the Bank. Interest is semi-annually payable on 30 April and 30 October every year, for the first 10 years at a fixed interest rate of 7.00% per annum and from the eleventh year onwards at a floating interest based on 6-month Time Deposit rate of the Bank plus 7.00% per annum. In case that the Bank incurs loss in the latest fiscal period before the interest payment date or in case that the interest payment on any interest payment date results in the Bank having a loss in the latest fiscal period before such interest payment date, the Bank will not be obliged to make any interest payment for that period and such interest will be non-cumulative and will not be carried forward to the next payment period unless allowed by the Bank of Thailand to pay such interest. The Bank recognised interest expenses for the years ended 31 December 2010 and 2009 of Baht 351 million and Baht 464 million, respectively.
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Other Borrowings Borrowings with specific uses as at 31 December 2010 and 2009 are as follows:
Consolidated and separate financial statements Borrowing From
Objectives
31 December 2010 Outstanding balance
Baht equivalent
31 December 2009 Outstanding balance
(Million Baht)
Ministry of Finance
- For agro-industrial enterprises
THB 11 million
11
Baht equivalent (Million Baht)
THB 15 million
15
-
EUR 0.15 million
7
- For enterprises in major basic industries of the Country
-
- For enterprises investing for energy conservation
THB 543 million
543
THB 425 million
425
National Science and Technology - For enterprises involving in THB 42 million Development Agency research and development activities
42
THB 66 million
66
Energy Conservation Promotion Fund
Nordic Investment Bank (NIB)
- For joint ventures with the Nordic countries and businesses using Nordic machinery/equipment
USD 51 million
1,525
USD 62 million
2,065
Japan Bank for International Cooperation (JBIC)
USD 117 million - For equity investment & on-lending to non-SET listed enterprises and non-environmental impact having a joint-venture with Japanese or Japanese connection, or Tsunami adversely affected entrepreneurs having Japanese connection
3,518
USD 133 million
4,449
Kreditanstalt fur Wiederaufbau (KfW)
- For small industry businesses
Total
EUR 7 million
274
5,913
EUR 8 million
372
7,399
176
22.
| Financial Statements and Notes to Financial Statements
Annual Report 2010
Provisions for obligation on transfers of non-performing assets (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
Thai Asset Management Corporation (Note 6)
Bangkok Commercial Asset Management Company Limited (Note 7)
Total
Thai Asset Management Corporation (Note 6)
Bangkok Commercial Asset Management Company Limited (Note 7)
As at 31 December 2009
6,178
3,586
9,764
6,140
-
6,140
Increase during the year
65
264
329
65
-
65
-
(3,020)
(3,020)
-
-
-
(8)
(830)
(838)
-
-
-
6,235
-
6,235
6,205
-
6,205
Settlement during the year Reversal of provisions As at 31 December 2010
23.
Total
Provisions for other liabilities (Unit: Million Baht)
Off-balance sheet contingencies Obligation for litigation cases (Note 33.2) Loss on investment in a subsidiary in excess of its cost of investment HR transformation programme Others Total
Consolidated financial statements
Separate financial statements
For the year ended 31 December 2010
For the year ended 31 December 2010
Beginning balance
Increase (decrease)
Ending balance
Beginning balance
Increase (decrease)
Ending balance
1,071
(871)
200
1,071
(871)
200
776
(635)
141
764
(658)
106
-
-
-
2,336
(2,336)
-
207
165
372
207
165
372
72
65
137
72
65
137
2,126
(1,276)
850
4,450
(3,635)
815
The Bank sets aside provision for the HR transformation programme based on estimates made by the management. Expected cost will depend on new HR structure. Following the balance sheet date and up to the date of approval of the financial statements, the Bank has already paid a total of Baht 245million under the HR transformation programme.
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| 177
24. Other liabilities (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December Accrued expenses Deposits
2009
2010
2009
2,155
1,183
2,130
1,151
791
878
775
858
Deposit from derivative contracts
1,336
-
1,336
-
Suspense accounts - creditors
2,332
1,448
2,367
1,406
312
315
290
289
6,926
3,824
6,898
3,704
Others Total
25.
31 December
2010
Capital shares
25.1 Preference shares The preference shares outstanding as at 31 December 2009 are the class B non-cumulative preference shares with voting rights, issued to the Ministry of Finance and certain retail shareholders under the Tier 1 Capital Support Scheme on 19 May 2000, which have the right to receive dividend prior to the ordinary shares and convert to ordinary shares. The rights and benefits of the class B preference shares are summarised as follows: 1 . Right to receive of dividend is superior to that of ordinary shares. - At the rate of 3.75% per annum. If, in any year, the Bank pays dividend for ordinary shares at a rate higher than that of preference shares, the Bank has to pay the same rate of dividend for preference shares. - If the profit is inadequate to pay dividend for preference shares at the determined rate, the Bank will pay dividend for preference shares according to its eligible profit and financial ability.
2 . In case of capital decrease due to the following events. - The operating losses arising from the assets acquired before the capital injection of the Ministry of Finance, the Bank will reduce the capital of the ordinary shares before a reduction of the capital of the preference shares. - The operating losses arising from the assets acquired after the Ministry of Finance’s increase of capital, the Bank shall proportionately decrease capital according to the holding portion of the ordinary shares and the preference shares. - In the event of the Bank’s liquidation or reduction in the Bank’s capital, the preference shares will have the preferential right over the ordinary shares in receiving the return of capital. Class B preference shares had the pre-emptive right for 10 years i.e. until 19 May 2010, after which the pre-emptive right expired and each preference share automatically became an ordinary share, with the same rights as other ordinary shares. The holders of a class B preference share were entitled to convert it into an ordinary share before 19 May 2010 on any 20 March, 20 June, 20 September or 20 December.
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
During 2009, 3,600 class B preference shares were converted into ordinary shares. As at 31 December 2009, outstanding of ordinary shares after conversion is 41,536,744,879 shares and outstanding of class B preference shares is 1,991,993,600 shares. The Bank registered these convert authorised share capital with the Ministry of Commerce on 4 January 2010. During 2010, 1,400 class B preference shares were converted into ordinary shares. The Bank registered these convert authorised share capital with the Ministry of Commerce on 24 March 2010 and on 24 May 2010, the Ministry of Finance exercised its rights to convert 1,991,992,200 class B preference shares into ordinary shares and hence there was no preference shares remained. The Bank registered such conversion with the Ministry of Commerce on 25 May 2010. The Bank had registered share capital of Baht 437,087,384,790, consisting of 43,708,738,479 ordinary shares of Baht 10 per share and the paid-up share capital of Baht 435,287,384,790, consisting of 43,528,738,479 ordinary shares of Baht 10 per share.
25.2 Ordinary shares On 24 June 2010, the Extraordinary General Meeting of Shareholders No.1/2553 passed the following resolutions: 1. The transfer of the following reserve funds to offset for the Bank’s deficit. Other reserves
Baht
8,717,165,400
Legal reserve
Baht
2,100,000,000
Total
Baht
10,817,165,400
2. The reduction of the Bank’s registered and paid-up share capital by means of decrease of the share par value from Baht 10 per share to Baht 0.95 per share, resulting in the decrease of registered share capital from Baht 437,087,384,790 to Baht 41,523,301,555 and the decrease of the paid-up share capital from Baht 435,287,384,790 to Baht 41,352,301,555. The decrease paid-up capital as a result of such reduction in the share par value shall be brought to eliminate the discount on shares and reduce the Bank’s deficit. On 25 June 2010, the Bank has been granted permission from the Bank of Thailand (“BOT”) to decrease of the Bank’s registered and paid-up capital. The Bank also registered the changes in registered capital and paid-up capital with the Ministry of Commerce on 29 June 2010. 3. 3. The offering of the 400,000,000 newly-issued ordinary shares of the Bank to its employees under TMB Performance Share Bonus 2010 and approve the increase of the registered capital from Baht 41,523,301,555 to Baht 41,903,301,555 by issuing the Bank’s new ordinary shares in the number of 400,000,000 shares, at the par value of Baht 0.95 per share. The Bank registered increased registered share capital with the Ministry of Commerce on 6 July 2010. As at 31 December 2010 and 2009, the registered capital of the Bank as presented in the balance sheets is the registered capital per the Bank’s Memorandum of Association.
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| 179
25.3 Reconciliation of preference shares and ordinary shares For the years ended 31 December 2010
2009
No. of shares
Par value
Amount
No. of shares
Par value
Amount
(Share)
(Baht per share)
(Baht)
(Share)
(Baht per share)
(Baht)
Preference shares Registered share capital Preference shares at the beginning of the years Registered conversion of preference shares into ordinary shares Preference shares at the end of the years
1,991,997,200 (1,991,997,200)
10
19,919,972,000
1,991,997,200
10
19,919,972,000
10 (19,919,972,000)
-
-
-
-
-
-
1,991,997,200
10
19,919,972,000
Preference shares at the beginning of the years
1,991,997,200
10
19,919,972,000
1,991,997,200
10
19,919,972,000
Conversion of preference shares into ordinary shares
(1,991,997,200)
10 (19,919,972,000)
-
-
-
1,991,997,200
10
19,919,972,000
10 417,167,412,790 41,716,741,279
10
417,167,412,790
Issues and paid-up share capital
Preference shares at the end of the years
-
-
-
Ordinary shares Registered share capital Ordinary shares at the beginning of the years Registered conversion of preference shares into ordinary shares Ordinary shares before capital reduction Reduction of share capital by means of decrease of the share par value
41,716,741,279 1,991,997,200
19,919,972,000
-
-
-
10 437,087,384,790
-
-
-
- (9.05) (395,564,083,235)
-
-
-
43,708,738,479
10
Ordinary shares after capital reduction
43,708,738,479
0.95
41,523,301,555
-
-
-
Increased share capital under the TMB PSBP 2010
400,000,000
0.95
380,000,000
-
-
-
Ordinary shares at the end of the years
44,108,738,479
0.95
41,903,301,555 41,716,741,279
10
417,167,412,790
10 415,367,412,790 41,536,741,279
10
415,367,412,790
Issues and paid-up share capital Ordinary shares at the beginning of the years Conversion of preference shares into ordinary shares Ordinary shares before capital reduction Reduction of share capital by means of decrease of the share par value Ordinary shares at the end of the years
41,536,741,279 1,991,997,200
19,919,972,000
-
-
-
10 435,287,384,790
-
-
-
- (9.05) (393,935,083,235)
-
-
-
41,352,301,555 41,536,741,279
10
415,367,412,790
43,528,738,479
43,528,738,479
10
0.95
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
26. Warrants On 1 February 2006, the Bank issued 68,158,000 units of warrants with zero prices to the Bank’s employees. The warrants can be exercised to buy ordinary shares. These warrants are in the bearer’s name and are non-transferable, except for legacy transfers. The details of the warrants issued are as follows: ▶▶
Offer date
1 February 2006
▶▶
Maturity
Five years from the issuance date
▶▶
Offer price
Baht zero
▶▶
Right to exercise
1 warrant: 1.051 ordinary shares (after adjusted)
▶▶
Exercise price
Baht 4.48 (after adjusted) per share except in case of adjustment
in accordance with the terms and conditions
▶▶
Exercise date
31 January and 31 July of each year (every last business day)
▶▶
Term of exercise period
31 July 2008 - 31 January 2011
From 31 July 2008 to 31 January 2011, no warrant holders exercised their rights and hence 68,158,000 warrants expired.
27. Share-based payments On 24 June 2010, the Extraordinary General Meeting of Shareholders No. 1/2553 approved the TMB Performance Share Bonus 2010 Project (TMB PSBP 2010) which will offer newly issued ordinary shares of the Bank to its employees (including employees who hold a position of director of the Bank) who have qualifications under TMB PSBP 2010. The Employees under TMB PSBP 2010 shall be entitled to subscribe for the newly issued shares according to the conditions specified in TMB PSBP 2010 with mandatory participation of top management but optional participation of staff at other levels. Term of Continuing Scheme:
5 years starting from the first offering date.
Number of Ordinary Shares
Not exceeding the total of 400,000,000 newly issued ordinary shares with the par
to be Offered:
value of Baht 0.95 each, which will be offered pursuant to the continuing scheme.
Offering Price per Share:
The offering price per share to be offered to the Employees under TMB PSBP 2010 is equivalent to the average closing price of ordinary shares of the Bank on the Stock Exchange of Thailand (“SET”) on each trading day for the period of 90 calendar days prior to each offering date of the newly issued shares. The offering price may be lower than 90% of the market price as prescribed in the notification of the Securities and Exchange Commission relating to the calculation of the offering price and the determination of the offering price for issuance of the newly issued shares. In the case that the calculation of the offering price in any offering is lower than the par value of the ordinary shares of the Bank, the Bank is required to offer newly issued shares to the Employees under TMB PSBP 2010 Project at the price equivalent to the par value of the ordinary shares of the Bank.
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| 181
Condition for Subscription
The Employees under TMB PSBP 2010 who will subscribe for the newly issued shares
for the newly Issued Shares:
shall be employees of the Bank as of the subscription date of such newly issued shares (still retain the rights for employees who are retired pursuant to the Bank’s regulation or death).
During 2010, the Bank recorded share-based payment expense in the consolidated and separate statements of income of Baht 34 million.
28. Revaluation surplus on assets This represents surplus arising from revaluation of land and buildings. The revaluation surplus can neither be offset against deficit nor used for dividend distribution. (Unit: Million Baht)
Consolidated and separate financial statements For the year ended 31 December 2010 Balance — beginning of the year
For the year ended 31 December 2009
5,155
5,288
(73)
(75)
Derecognition of assets during the year
(136)
-
Transfer out during the year
(162) (1)
Amortisation during the year
Balance — end of the year (1)
4,784
(58) 5,155
Including the amount of impairment losses on revaluation surplus on land and buildings, recognised directly in shareholders’ equity, of Baht 79 million and Baht 1 million, respectively.
29. Statutory reserve Before 23 April 2010, under the Bank’s Articles of Association, the Bank is required to set aside a statutory reserve at least 10 percent of its net earnings after deducting accumulated deficit brought forward (if any) until the reserve reaches 25 percent of the registered capital. On 23 April 2010, the 2010 Annual General Meeting of Shareholders passed a resolution of the amendment on the Bank’s Articles of Association in order to have the same requirement as prescribed by the law whereby the Bank is required to set aside a statutory reserve at least 5 percent of its net earnings 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. As at 31 December 2010, the Bank appropriated Baht 200 million from its operating results for the year 2010 to be a statutory reserve.
182
30.
| Financial Statements and Notes to Financial Statements
Annual Report 2010
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 Financial Institution Business Act B.E. 2551. (Unit: Million Baht)
Separate financial statements 31 December 2010
31 December 2009
Tier 1 capital Issued and fully paid share capital
41,352
435,287
-
(303,088)
4,200
5,758
Statutory reserve
-
2,100
Other reserves
-
8,717
(78)
(102,868)
45,474
45,906
1,973
2,145
980
1,043
4,800
4,600
13,300
10,205
29
6
Total Tier 2 capital
21,082
17,999
Total capital funds
66,556
63,905
Discount on ordinary and preference shares Hybrid Tier 1
Net loss after appropriation Total Tier 1 capital Tier 2 capital Revaluation surplus on land Revaluation surplus on buildings Provision for assets classified as “pass” Subordinated debentures Unrealised gain on revaluation of available-for-sale equity securities
(Unit: percentage)
Separate financial statements 31 December 2010
31 December 2009
Tier 1 capital ratio
11.33
12.31
Total capital ratio
16.59
17.13
Minimum tier 1 capital ratio requirement
4.25
4.25
Minimum total capital ratio requirement
8.50
8.50
In compliance with the BOT’s notification regarding Public Disclosure of Capital Maintenance for Commercial Banks, the Bank has disclosed capital adequacy information on solo consolidation level as of 30 June 2010 through the Bank’s website at www.tmbbank.com on 15 September 2010. For public disclosure of capital maintenance for commercial banks of full consolidation level (Basel II’s Pillar III) according to the Bank of Thailand’s notification, the Bank is to disclose capital adequacy and capital risk exposure information as at 31 December 2010 through the Bank’s website at www.tmbbank.com, by April 2011, in the 2010 annual report of TMB Bank Public Company Limited, and as an attachment to its 2010 56-1 report.
TMB Bank PCL
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|  183
31. Income tax The income tax expenses in the separate financial statements of income are less than the amount determined by applying the Thai corporate income tax rate to the accounting profit for the year principally because unutilised tax losses brought forward from the prior years have been utilised during the period to set-off against the current year’s taxable income. The income tax expenses in the consolidated financial statements of income related to the profit of the Bank’s subsidiaries and were calculated on earnings after adding back expenses, which are disallowable for tax computation purposes.
32. Earnings per share Basic earnings per share is calculated by dividing net income attributable to equity holders of the Bank, after deducting the dividend paid to the preference shareholders (if any), by the weighted average number of ordinary shares held by outside shareholders in issue during the year. Diluted earnings per share is calculated by dividing net income attributable to equity holders of the Bank, after deducting the dividend paid to the preference shareholders (if any), by the sum of weighted average number of ordinary shares held by outside shareholders in issue during the year and the weighted average number of ordinary shares which would need to be issued to convert all potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the period or on the date the potential ordinary shares were issued (the warrants are excluded in determining the potential ordinary shares since the exercise price is higher than the fair value of the ordinary shares).
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Basic earnings per share and diluted earnings per share are presented below.
Consolidated financial statements For the year ended 31 December Weighted average number of ordinary shares
Net income
Earnings per share
2010
2009
2010
2009
2010
2009
(Million Baht)
(Million Baht)
(Million shares)
(Million shares)
(Baht)
(Baht)
3,202
1,945
42,743
41,537
0.07
0.05
-
-
786
1,992
3,202
1,945
43,529
43,529
0.07
0.04
Basic earnings per share Net income attributable to equity holders of the Bank Effect of dilutive potential ordinary shares from the conversion of preference shares Diluted earnings per share
Separate financial statements For the year ended 31 December Weighted average number of ordinary shares
Net income
Earnings per share
2010
2009
2010
2009
2010
2009
(Million Baht)
(Million Baht)
(Million shares)
(Million shares)
(Baht)
(Baht)
3,264
2,048
42,743
41,537
0.08
0.05
-
-
786
1,992
3,264
2,048
43,529
43,529
0.07
0.05
Basic earnings per share Net income attributable to equity holders of the Bank Effect of dilutive potential ordinary shares from the conversion of preference shares Diluted earnings per share
TMB Bank PCL
33.
Financial Statements and Notes to Financial Statements
|  185
Commitments and contingencies
33.1 Commitments (Unit: Million Baht)
Consolidated and separate financial statements 31 December 2010 Foreign Currencies
Baht
31 December 2009 Total
Foreign Currencies
Baht
Total
Avals to bills and guarantees of loans
86
-
86
129
-
129
-
256
256
-
717
717
86
256
342
129
717
846
8
1,671
1,679
215
742
957
397
15,303
15,700
252
16,670
16,922
25,212
5,677
30,889
26,940
6,845
33,785
Bought
-
219,130
219,130
-
57,946
57,946
Sold
-
228,753
228,753
-
66,232
66,232
Bought
-
3,525
3,525
-
1,625
1,625
Sold
-
1,046
1,046
-
671
671
Bought
-
16,675
16,675
-
6,003
6,003
Sold
-
12,100
12,100
-
492
492
Interest rate swaps contracts
318,918
21,027
339,945
172,696
3,853
176,549
Interest rate futures contracts
-
-
-
-
4,174
4,174
Bought
1,619
-
1,619
-
3,337
3,337
Sold
1,619
-
1,619
-
3,337
3,337
50,832
-
50,832
42,019
1
42,020
Total other commitments
398,200
507,933
906,133
241,655
154,516
396,171
Total
398,691
525,163
923,854
242,251
172,645
414,896
Avals to bills Guarantees of loans Total avals to bills and guarantees of loans Liabilities under unmatured import bills Letters of credit Other commitments Other guarantees Forward foreign exchange contracts
FX options contracts
Cross currency and interest rate swap contracts
Interest rate options contracts
Unused overdraft credit lines
For the year ended 31 December 2010, the Bank early terminated 3 interest rate swap contracts, having a gain on the termination of approximately Baht 260 million (For the year ended 31 December 2009: 20 interest rate swap contracts, having a gain on the termination of approximately Baht 955 million).
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33.2 Litigation As at 31 December 2010 and 2009, legal proceedings under guarantees and other claims are made against the Bank and its subsidiaries in 179 cases and 191 cases, respectively, with the claim amounts of approximately BBaht 17,987 million and Baht 18,789 million, respectively (the Bank only: 160 cases and 171 cases, respectively, with the claim amounts of approximately Baht 12,912 million and Baht 13,414 million, respectively) with amounts liable for performance of approximately Baht 8,044 million(1) and Baht 8,493 million (1) and Baht 8,493 million (1), respectively (the Bank only: Baht 2,969 million (1) and Baht 3,118 million (1), respectively). As at 31 December 2010 and 2009, the Bank and its subsidiaries recognised provisions for contingent loss from legal cases of approximately Baht 141 million and Baht 776 million, respectively (the Bank only: Baht 106 million and Baht 764 million, respectively). The management concluded and believed that such provisions were adequate to cover any possible loss from these legal cases. In addition, the Bank is the defendant of a claim of approximately Baht 140,261 million arising from a guarantee allegedly issued by the Bank with an amount of Baht 200 million. The court of First Instance and Appeal rejected this claim. Currently, the case is in trial of the Supreme Court. The management has been given consultation that the Supreme file submission has no merit and is very unlikely that the plaintiff would succeed. The management therefore believes that the Bank will have no liability resulting from this case. (1)
Excluded claims for compensation as at 31 December 2010 and 2009 on the Bank amounting to Baht 1,819 million and Baht 2,446 million, respectively for which the court of first instance or the appeal court dismissed claims or passed the judgment to reduce the liable amount, causing obligations of the Bank to decrease.
33.3 Other commitments 33.3.1 Capital commitments (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December 2010 31 December 2009 31 December 2010 31 December 2009
Contracted but not yet recognised Buildings and other constructions
44
23
44
23
Equipment
92
191
92
191
150
227
150
225
286
441
286
439
Software Total
33.3.2 Non-cancellable operating lease commitments (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December 2010 31 December 2009 31 December 2010 31 December 2009
Within one year
241
234
230
218
After one year but within five years
332
279
312
266
Total
573
513
542
484
TMB Bank PCL
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| 187
34. Related party transactions 34.1 Definitions and characteristics of relationship Related parties are those parties related to the Bank and its subsidiaries by way of shareholding, or having common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices. Related parties are as follows: 1. Major shareholders who own over 10% of the Bank’s paid-up share capital and related companies of such major shareholders. 2. Entities who are controlled by the Bank or significantly influenced by the Bank. 3. Entities, excluding those in item 2, in which the Bank holds 20% or more of paid-up share capital or in which the Bank holds less than 20% of paid-up share capital and has control or significant influence through the Bank’s directors of executive officers. 4. Entities in which the Bank is not a shareholder, but in which the Bank’s directors or executive officers, including related parties, own shares, or in which they are the directors exercising control or significant influence. 5. The Bank’s directors or executive officers, including their related parties. The additional information on investments in subsidiaries and associated companies is disclosed in Note 10 to the financial statements.
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| Financial Statements and Notes to Financial Statements
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The followings are relationships with related parties that control or jointly control the Bank or are being controlled or jointly controlled by the Bank or have transactions with the Bank and its subsidiaries. Name of entities
Country of incorporation
Nature of relationships
Ministry of Finance and entities
Thailand
The major shareholder of the Bank owning over 10%
whose shares have owned or have
of the Bank’s paid-up share capital and related through
been controlled by the Ministry
the major shareholder
of Finance ING Bank N.V.
Netherlands
The major shareholder of the Bank owning over 10% of the Bank’s paid-up share capital
ING Life Ltd.
Thailand
Related through the major shareholder of the Bank owning over 10% of the Bank’s paid-up share capital
ING Funds (Thailand) Co., Ltd.
Thailand
Related through the major shareholder of the Bank owning over 10% of the Bank’s paid-up share capital
Phayathai Asset Management
Thailand
Co., Ltd. Designee for ETA Contract Ltd.
Subsidiary, 100% shareholding, more than 50% of directors are representatives of the Bank.
Thailand
Subsidiary, 99.40% shareholding, more than 50% of directors are representatives of the Bank.
TMB Asset Management Co., Ltd.
Thailand
Subsidiary, 75.00% shareholding, more than 50% of directors are representatives of the Bank.
Thai Orix Leasing Co., Ltd (1)
Thailand
Associate, 45.96% shareholding, less than 50% of directors are representatives from the Bank.
Metro Designee Co., Ltd
Thailand
Associate, 30.00% shareholding, less than 50% of directors are representatives from the Bank.
Phayathai Property Fund (2)
Thailand
Being property a fund under type 2 which was established for institutional investors, 30.00% shareholding and less than 50% of directors are representatives from the Bank.
The Thai Business Fund 2 (3)
Thailand
Being property a fund under type 4 which was established for institutional investors, 32.00% shareholding and less than 50% of directors are representatives from the Bank.
(1)
This entity was a related party until 15 September 2010 (date of disposal of investment)
(2)
This entity was a related party until 31 August 2009 (date of liquidation)
(3)
This entity was a related party until 5 November 2009 (date of liquidation)
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 189
34.2 Pricing policy The Bank’s pricing and interest rate policy is as follows:
▶▶
Interest rates of loans are in accordance with the market rate except for the interest rate of staff welfare loans which are in accordance with the Bank’s regulation, and the interest rate of loans to a subsidiary, which is based on the deposit interest rates.
▶▶
Fee and service income as a result of the Bank’s providing registrar and related services, money transfer services for unitholders, agent and support services for funds managed by its subsidiary and related company are charged at the rate based on conditions specified in contracts negotiated in the normal course of business, taking into accounts the size of funds and the purchase and sale volumes of investment units.
▶▶
Interest rates on deposits and borrowings are in accordance with the market rates.
▶▶
Fee and service income for other types of services is in accordance with the market price except that the monthly service income for acting as the agent for debt collection for a subsidiary is equal to Baht 10,000.
▶▶
The Bank entered into office rental and service agreements as follows: - The Bank entered into office rental and service agreements with 9 related companies for its branches. The rental and service expenses are based on market rates. - The Bank entered into office rental and service agreements with a related company. The rental and service income are based on a mutually agreed rate or market rate on the contracted date.
▶▶
Sale of non-performing assets to a subsidiary is made at the fair value or the market price for each asset item (See Note 11.6).
34.3 Significant agreements with related parties 1.
On 25 April 2008, the Annual General Meeting of Shareholders approved the connected transaction between the Bank and companies under the ING Group which are connected persons of the Bank as follows: 1.1) Distribution Agent Agreement between the Bank and ING Funds (Thailand) Co., Ltd. The agreement has a duration of 10 years. The agreement provides co-exclusive distribution rights to TMB Asset Management Company Limited and ING Funds (Thailand) Co., Ltd. Prior to the expiration of the agreement, negotiations can be conducted to review the appropriateness of the agreement and conditions, and should the Bank wish to continue the arrangement, this must be proposed at the shareholders’ meeting for approval. Fees to be received by the Bank vary according to the type of fund, and will be determined jointly by the parties.
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
On 24 June 2010, the Meeting of the Board of Directors approved the amendment to Distribution Agent Agreement. The Bank will offer service of provident fund and private fund to its clients and will refer them to ING Funds which act as a fund manager, and receive fee in return. Additionally, ING Funds’ right for exclusivity is relaxed such that the Bank can offer asset management products of other asset management companies to particular client segments of the Bank. 1.2) Bancassurance Product Distribution Agreement between the Bank and ING Life Ltd. The agreement, which is exclusive (precludes the Bank from selling life insurance products for other companies except ING Life), has a duration of 10 years. Prior to the expiration of the agreement, negotiations can be conducted to review the appropriateness of the agreement and conditions, and should the Bank wish to continue the arrangement, this must be proposed at the shareholders’ meeting for approval. Fees and other commercial terms are to be mutually agreed by both parties. 2.
On 28 August 2008, the Bank’s Board of Directors unanimously approved that the Bank can enter into the referral agreement (“the Agreement”) made with ING Asia Private Bank Limited, who is considered as a connected person to the Bank. Details are as follows: The Agreement was executed by the Bank and ING Asia Private Bank Limited on 10 November 2008. Each party has its rights to terminate the Agreement by giving one-month advance notice to its counterparty. Fees to be received by each party vary according to the type of banking services and products, which are stipulated in the Agreement. Since 29 January 2010 onwards, ING Asia Private Bank Limited has been operated as a wholly-owned subsidiary of Oversea Chinese Banking Corporation Limited (“OCBC Bank”) and has been renamed to Bank of Singapore Limited. Hence, it is no longer considered as a connected person to the Bank.
3.
On 26 May 2009, the Bank engaged ING Bank N.V., Singapore Branch, which is a connected person to the Bank, to assist on negotiations with bondholders in relation to the buyback of the Bank’s USD 200 million Perpetual Non-Cumulative Tier I Securities issued in 2006, the buyback arrangement, settlement, and cancellation of the bought back securities. The engagement is one-time basis and has concluded after the buyback of USD 22 million securities on 5 June 2009. The fee in relation to the engagement is agreed based on market rate.
4.
On 18 June 2010, the Bank sold of 1,165,500 ordinary shares in ASEAN Potash Mining Public Company Limited to Bangchak Petroleum Public Company Limited which is a connected person of the Bank and offered the highest bid price through bidding process, for Baht 80 per share, totaling Baht 93,240,000.
5.
On 28 December 2010, the Bank entered into a debt restructuring agreement to give the debt hair-cut to PAMC, as described in Note 7.2 to the financial statements.
TMB Bank PCL
6.
Financial Statements and Notes to Financial Statements
| 191
On 21 April 2010 and 24 December 2010, the Bank disposed of NPLs to PAMC, as described in Note 11.6 to the financial statements.
34.4 Other benefits payable to the directors and executives The Bank’s directors and executives from the rank of department manager upwards do not receive other benefits both in term of monetary and non-monetary items, except for the benefits that are normally received such as monthly directors’ remuneration, meeting allowance, salary and bonus (See Note 27). Directors who are the Bank’s executives and the representative directors who are the executive of ING Bank N.V. shall not receive remuneration as per ING Bank N.V.’s policies. Nevertheless, directors with permanent residence abroad can reimburse travelling and accommodation expenses in connection with the operation of the Bank’s business as actually incurred. Foreign executives are eligible for additional benefits, which are housing allowances, including utilities, telephone and home trip expenses in accordance with the established criteria.
34.5 Transactions with related parties which occurred during the years For the years ended 31 December 2010 and 2009, significant transactions with related parties are as follows: (Unit: Million Baht)
Consolidated financial statements For the year ended 31 December 2010 Interest and dividend income
1. Major shareholders who own over 10% of the Bank’s paid-up share capital and related companies of such major shareholders. 2. Subsidiaries and associated companies.
Noninterest income
Interest expenses
For the year ended 31 December 2009
NonInterest and interest dividend expenses income
Noninterest income
Interest expenses
Noninterest expenses
657
575
88
125
784
388
61
113
-
-
-
-
3
-
-
12
3. Entities whose shares are owned for 20% or more of paid-up share capital by the Bank (exclude subsidiaries and associated) or owned for less than 20% and controlled or significantly influenced by the Bank’s directors or executive officers.
70
-
-
2
73
-
-
2
4. Entities, whose share are not owned by the Bank, but in which the Bank’s directors or executive officers, including their related parties, own shares, or in which they are the directors with control or significant influence.
-
-
1
-
-
-
1
-
5. The Bank’s directors or executive officers, including their related parties.
1
-
1
-
-
-
2
-
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
(Unit: Million Baht)
Separate financial statements For the year ended 31 December 2010 Interest and dividend income
Noninterest income
Interest expenses
For the year ended 31 December 2009
NonInterest and interest dividend expenses income
Noninterest income
Interest expenses
Noninterest expenses
1. Major shareholders who own over 10% of the Bank’s paid-up share capital and related companies of such major shareholders.
657
575
88
125
784
388
61
113
2. Subsidiaries and associated companies.
289
(3,828)
1
-
267
164
2
12
3. Entities whose shares are owned for 20% or more of paid-up share capital by the Bank (exclude subsidiaries and associated) or owned for less than 20% and controlled or significantly influenced by the Bank’s directors or executive officers.
70
-
-
2
73
-
-
2
4. Entities, whose share are not owned by the Bank, but in which the Bank’s directors or executive officers, including their related parties, own shares, or in which they are the directors with control or significant influence.
-
-
1
-
-
-
1
-
5. The Bank’s directors or executive officers, including their related parties.
1
-
1
-
-
-
2
-
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 193
34.6 Outstanding balances with related parties As at 31 December 2010 and 2009, outstanding balances with related persons or parties comprised of: 34.6.1 Significant balances between the Bank and the major Bank’s shareholders who own over 10% or more of the Bank’s paid-up share capital and their related parties as at 31 December 2010 and 2009 are as follows:
(Unit: Million Baht)
Consolidated and Separate financial statements 31 December 2010
31 December 2009
59,691
45,162
74
418
Entities whose shares are owned or controlled by the Ministry of Finance
39
3
ING Life Ltd.
58
26
3
2
4,724
6,479
223
552
11
22
10,498
1,022
3,015
1,503
32
14
-
1
40,682
13,175
424
183
Loans and accrued interest receivables (Including interbank and money market items) (before allowance for doubtful debts) Ministry of Finance and entities whose shares are owned or controlled by the Ministry of Finance Allowance for doubtful debts Ministry of Finance and entities whose shares are owned or controlled by the Ministry of Finance Other assets
ING Funds (Thailand) Co., Ltd. Deposits (Including interbank and money market items) Ministry of Finance and entities whose shares are owned or controlled by the Ministry of Finance ING Life Ltd. ING Funds (Thailand) Co., Ltd. Borrowings (Including interbank and money market items) Ministry of Finance and entities whose shares are owned or controlled by the Ministry of Finance ING Bank N.V. Other liabilities Ministry of Finance and entities whose shares are owned or controlled by the Ministry of Finance ING Bank N.V. Contingencies Entities whose shares are owned or controlled by the Ministry of Finance ING Bank N.V.
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
34.6.2 Significant balances between the Bank and its subsidiaries, and associated companies as at 31 December 2010 and 2009 are as follows: (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December 2010 31 December 2009 31 December 2010 31 December 2009
Loans and accrued interest receivables (before allowance for doubtful debts) Subsidiary -
-
700
1,000
-
100
-
100
-
-
7
10
-
1
-
1
-
-
24
10
-
-
14
12
Phayathai Asset Management Co., Ltd.
-
-
101
141
TMB Asset Management Co., Ltd.
-
-
20
32
-
1
-
1
-
-
53
12
Phayathai Asset Management Co., Ltd. Associated company Thai ORIX Leasing Co., Ltd. Allowance for doubtful debts Subsidiary Phayathai Asset Management Co., Ltd. Associated company Thai ORIX Leasing Co., Ltd. Other assets Subsidiary TMB Asset Management Co., Ltd. Borrowings Subsidiary TMB Asset Management Co., Ltd. Deposits Subsidiaries
Associated company Thai ORIX Leasing Co., Ltd. Other liabilities Subsidiary TMB Asse Management Co., Ltd.
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 195
34.6.3 Significant balances between the Bank and companies whose shares are owned 20% or more of paid-up share capital by the Bank (exclude subsidiaries and associated) or entities whose share are owned for less than 20% of paid up share capital and controlled or significantly influenced by the Bank’s directors or executive officers as at 31 December 2010 and 2009 are as follows:
(Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
4
4
4
4
2
3
2
3
Deposits TMB Property Development Co., Ltd. Other assets Siam Resort Fund
34.6.4 Significant balances between the Bank and companies, whose shares are not owned by the Bank, but in which the Bank’s directors or executive officers, including their related parties, own shares, or in which they are the directors with control or significant influence as at 31 December 2010 and 2009 are as follows: (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
46
18
46
18
1
-
1
-
60
-
60
-
Deposits The Deves Insurance Plc. Thai Plastic and Chemicals Plc. Borrowings The Deves Insurance Plc.
34.6.5 Significant balances between the Bank and the Bank’s directors or executive officers, including their related parties as at 31 December 2010 and 2009 are as follows: (Unit: Million Baht)
Consolidated and separate financial statements 31 December 2010 Loans and accrued interest receivables Welfare loans Deposits
13
31 December 2010 8
24
16
187
160
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| Financial Statements and Notes to Financial Statements
Annual Report 2010
34.6.6 Loans and contingencies given to executives, and to enterprises where over 10% of their paid-up share capital is held by the Bank and the Bank’s executive officers (including their related parties) as at 31 December 2010 and 2009, are as follows: (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December
31 December
2010
2009
2010
2009
3
103
703
1,103
37
24
37
24
Loans Related companies Executive officers
Executives are directors or executive officers and Head of Financial Control Group and Financial Planning and Analysis Group.
35. Provident fund The Bank, its subsidiaries and their employees have jointly established provident fund schemes under the Provident Fund Act B.E. 2530. The employees contribute to the funds at rates ranging from 2 − 10 percent of their basic salaries and the Bank and its subsidiaries contribute at rates ranging from 5 − 10 percent depending on number of years of service of each employee. The fund will be paid to the employees upon death, termination or dissolution of the business, in accordance with the rules of the funds. For the years ended 31 December 2010 and 2009, the Bank and its subsidiaries contributed Baht 314 million and Baht 310 million, respectively to the funds (the Bank only: Baht 308 million and Baht 304 million, respectively).
36. The financial position and results of operations classified by domestic and overseas business 36.1 Financial position categorised by type of business (Unit: Million Baht)
Consolidated financial statements 31 December 2010 Domestic business
Overseas business
589,251
Interbank and money market items — net (assets) Investments — net
31 December 2009 Total
Domestic business
Overseas business
341
589,592
542,706
436
543,142
84,390
235
84,625
66,375
240
66,615
94,538
-
94,538
82,194
-
82,194
Loans
363,098
79
363,177
367,930
162
368,092
Deposits
412,929
187
413,116
407,553
223
407,776
Interbank and money market items (liabilities)
19,512
3,979
23,491
9,207
1,531
10,738
Borrowings
58,426
3,678
62,104
44,625
6,011
50,636
923,854
-
923,854
408,175
6,721
414,896
Total assets
Contingencies
Total
TMB Bank PCL
Financial Statements and Notes to Financial Statements
| 197
36.2 Results of operations categorised by type of business The results of operations categorised by type of business for the years ended 31 December 2010 and 2009 are summarised as follows: (Unit: Million Baht)
Consolidated financial statements For the year ended 31 December 2010 Domestic business
Interest and dividend income
Overseas Eliminated business transactions
For the year ended 31 December 2009
Total
Domestic business
Overseas Eliminated business transactions
Total
18,496
131
(128)
18,499
20,470
430
(418)
20,482
6,249
119
(128)
6,240
8,108
384
(418)
8,074
Net interest and dividend income
12,247
12
-
12,259
12,362
46
-
12,408
Bad debt and doubtful accounts (reversal) (1)
1,656
(2)
-
1,654
2,631
(3)
-
2,628
Non-interest income
6,964
2
-
6,966
7,806
2,271
-
10,077
14,319
27
-
14,346
17,807
51
-
17,858
3,236
(11)
-
3,225
(270)
2,269
-
1,999
Interest expenses
Non-interest expenses Earnings (losses) before income tax (1)
Including losses on debt restructuring
37. Financial instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.
Risk Management Approach The Bank has set up its risk management structure in order to manage its core risks i.e. credit, market, operational, liquidity, reputational and strategic risks. Various risk policies and procedures have been established to provide common guidelines and standards to be applied consistently across the Bank and subsidiaries with appropriate quality of coverage. The Bank manages its risks under the following key principles: core risks must be identified, measured, monitored, reported, analysed and controlled; business activities are managed under a risk-return framework to ensure that risks undertaken are commensurate with an appropriate return. The Bank’s risk governance structure consists of the Board of Directors (BOD), which holds the ultimate responsibility for the Bank’s overall risk management, the Risk Management Committee (RMC) and senior management risk committees that provide forums to discuss specific risk areas: Asset and Liabilities Management Committee (ALCO), the Risk Policy Committee (RPC), the Operational Risk Management Committee (ORMC). The RMC has been delegated by the Board of Directors to review and oversee the management of all risks across the Bank and is authorised to approve certain risk management strategies, policies, frameworks and standards, as well as aggregate risk tolerance and risk concentration levels.
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While business units are primarily responsible for managing risks within responsible portfolio, all the risk management related functions are under the stewardship of the Chief Risk Officer (CRO). There are dedicated Market Risk Management Group, Risk Analytics and Policy Group, Credit Risk Intelligence Group and Operational Risk Management Group responsible for establishing firm-wide risk management policies and guidelines, and assumes the following roles: to develop and maintain risk management policies; to propose risk strategy and recommend risk appetite to top management for approval, and to monitor, control and report risk levels to top management, respective committees and the BOD.
37.1 Credit risk Credit risk is the risk of loss to TMB as a result of borrowers and/or counterparties failing to meet their financial and contractual obligations in accordance with agreed terms. It arises principally from granting loans and undertaking contingent liabilities, and also from certain off-balance sheet products such as guarantees and credit derivatives. The maximum credit risk exposure is the carrying value of the financial assets after deducting allowance for losses as presented in the balance sheets, and the risk from off-balance sheet commitments arising as a result of loan guarantees and other guarantees.
Credit Policies/Framework The Bank’s credit risk appetite and strategy are approved by the Risk Management Committee. To properly manage credit risk, the Bank has put in place the Core Credit Risk Policies (CCRP) and frameworks to ensure that credit decisions are prudently made and make credit risk management an integrated part of all credit-related business processes. All relevant Business Units and Support Units are required to formulate their own specific policies and supplementary policies under the CCRP. The Bank has also established policies to ensure diversification of its credit portfolio to address various concentration risks covering single exposure concentration risk on a group basis that is economically interdependent, industry/business sector concentration risk and country exposure concentration risk.
Credit Approval Process In managing credit risk, the Bank segregates the roles and responsibilities of the credit marketing function from the credit granting function to ensure proper checks and balance. Individual credit risk is analysed and assessed by experienced credit officers and approved by an appropriate authority depending on the size and risk levels of credit requested. The Bank has contingent liabilities by issuing loan payment guarantees, and other forms of guarantee as well as issuing letters of credit and endorsing aval on commercial bills and notes for its customers. Such contingent transaction activities require assessment on financial conditions of customers in the same manner as those for direct lending. The Bank normally demands the placement of adequate collateral by customers in various forms including, for example, bank deposits, securities and personal/corporate guarantees. The Bank also makes it a standard practice to set credit terms and conditions to mitigate the elements of risk in the same manner as for other credit granting procedures.
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| 199
Credit Quality Review The Bank has set up Credit Quality Review Department independent from credit processes to provide on-going surveillance on potential credit quality deterioration trend. An independent review of the credit quality function is fully dedicated to identifying early-warning signs of changes in portfolio quality and providing senior management with insight and in-depth information on the quality of the credit portfolio, weaknesses of policies, processes and procedures together with corrective and protective recommendations. Changes and improvements to relevant credit policies, procedures and processes could be made based on lessons-learned recommendations to relevant parties.
37.2 Market risk Market risk refers to the risk of the fluctuation of foreign exchange rates, interest rates and prices of equity securities, all of which have a strong impact on the Bank’s assets and liabilities including off-balance sheet items. The ALCO holds the responsibility to assist the BOD and the RMC to ensure that bank-wide market risk management follows the relevant risk policies and levels of risk appetite. The Bank classifies the overall market risk into 2 parts: trading book and banking book. The Bank has set a policy to set standards on the book definitions and classification criteria. Market risk in the trading book: The trading market risk consists of market risk from financial instruments, equities and derivatives that are held with trading intent, as well as Bank-wide currency risk. The Bank manages all the trading market risks within the guidelines set under the established Market Risk Management: Trading Book Policy including setting up the appropriate risk appetite. Market risk in the banking book: This risk consists of market risk embedded in the Bank’s on-and off-balance sheet structure, and derivatives designated to hedge other banking book items. The Bank has developed Market Risk Management: Banking Book Policy, which outlines the approach towards managing such market risk and setting the maximum risk limit in a way which is appropriate to the Bank’s balance sheet structure. The Bank also regularly employs the tools set under the policy to analyse the impact of changes in the market environment to the Bank’s balance sheet as part of the practice of asset and liability management. 37.2.1 Interest rate risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Bank’s principal financial assets, loans, mostly earn interest at floating rates, based on MRR, MLR, MOR, interest rates of time deposits or other benchmark floating rates (SIBOR or LIBOR).
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As at 31 December 2010 and 2009, financial assets and liabilities classified by type of interest rate are as follows:
(Unit: Million Baht)
Consolidated financial statements 31 December 2010 Descriptions
Floating interest rate
Fixed interest rate
Non-interest bearing
Total
Financial Assets Cash Interbank and money market items Investments — net Loans
-
-
14,714
14,714
8,885
70,068
5,644
84,597
23,812
68,487
2,239
94,538
272,465
88,221
2,491
363,177
177,017
219,785
16,313
413,115
3,567
18,907
1,017
23,491
-
-
3,725
3,725
5,042
56,937
125
62,104
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings
(Unit: Million Baht)
Consolidated financial statements 31 December 2009 Descriptions
Floating interest rate
Fixed interest rate
Non-interest bearing
Total
Financial Assets Cash Interbank and money market items Investments — net Loans
-
-
15,134
15,134
295
60,524
6,011
66,830
15,950
63,359
2,885
82,194
289,853
76,137
2,102
368,092
191,247
201,538
14,991
407,776
3,432
6,631
675
10,738
-
-
4,958
4,958
11,419
38,974
243
50,636
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings
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| 201
(Unit: Million Baht)
Separate financial statements 31 December 2010 Descriptions
Floating interest rate
Fixed interest rate
Non-interest bearing
Total
Financial Assets Cash Interbank and money market items Investments — net Loans
-
-
14,713
14,713
8,885
69,874
5,644
84,403
23,181
68,487
4,100
95,768
270,466
88,162
2,491
361,119
177,118
219,785
16,333
413,236
3,567
18,907
1,017
23,491
-
-
3,725
3,725
5,042
56,951
125
62,118
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings
(Unit: Million Baht)
Separate financial statements 31 December 2009 Descriptions
Floating interest rate
Fixed interest rate
Non-interest bearing
Total
Financial Assets Cash Interbank and money market items Investments — net Loans
-
-
15,134
15,134
294
60,355
6,011
66,660
15,302
63,359
3,004
81,665
288,529
76,099
2,102
366,730
191,408
201,538
15,003
407,949
3,432
6,631
675
10,738
-
-
4,958
4,958
11,419
38,985
243
50,647
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings
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The significant financial assets and liabilities classified by interest repricing periods as at 31 December 2010 and 2009 are as follows: (Unit: Million Baht)
Consolidated financial statements 31 December 2010 Repricing within 3 months
Over 3 − 12 months
Over 1 year
Non-interest Non-performing bearing assets
Total
Financial Assets Cash
-
-
-
14,714
-
14,714
Interbank and money market items
78,839
114
-
5,644
-
84,597
Investments — net
53,195
12,767
26,337
2,239
-
94,538
Loans
287,298
26,997
10,344
2,491
36,047
363,177
Total financial assets
419,332
39,878
36,681
25,088
36,047
557,026
260,358
91,567
44,877
16,313
-
413,115
22,127
86
261
1,017
-
23,491
-
-
-
3,725
-
3,725
26,793
13,709
21,477
125
-
62,104
309,278
105,362
66,615
21,180
-
502,435
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings Total financial liabilities
(Unit: Million Baht)
Consolidated financial statements 31 December 2009 Repricing within 3 months
Over 3 − 12 months
Over 1 year
Non-interest Non-performing bearing assets
Total
Financial Assets Cash
-
-
-
15,134
-
15,134
Interbank and money market items
57,831
2,988
-
6,011
-
66,830
Investments — net
52,590
22,726
3,993
2,885
-
82,194
Loans
260,924
44,172
6,799
2,102
54,095
368,092
Total financial assets
371,345
69,886
10,792
26,132
54,095
532,250
273,002
43,389
76,394
14,991
-
407,776
8,554
1,497
12
675
-
10,738
-
-
-
4,958
-
4,958
25,868
10,140
14,385
243
-
50,636
307,424
55,026
90,791
20,867
-
474,108
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings Total financial liabilities
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(Unit: Million Baht)
Separate financial statements 31 December 2010 Repricing within 3 months
Over 3 − 12 months
Over 1 year
Non-interest Non-performing bearing assets
Total
Financial Assets Cash
-
-
-
14,713
-
14,713
Interbank and money market items
78,663
96
-
5,644
-
84,403
Investments — net
52,564
12,767
26,337
4,100
-
95,768
Loans
287,997
26,997
10,344
2,491
33,290
361,119
Total financial assets
419,224
39,860
36,681
26,948
33,290
556,003
260,459
91,567
44,877
16,333
-
413,236
22,127
86
261
1,017
-
23,491
-
-
-
3,725
-
3,725
26,807
13,709
21,477
125
-
62,118
309,393
105,362
66,615
21,200
-
502,570
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings Total financial liabilities
(Unit: Million Baht)
Separate financial statements 31 December 2009 Repricing within 3 months
Over 3 − 12 months
Over 1 year
Non-interest Non-performing bearing assets
Total
Financial Assets Cash
-
-
-
15,134
-
15,134
Interbank and money market items
57,709
2,940
-
6,011
-
66,660
Investments — net
51,942
22,726
3,993
3,004
-
81,665
Loans
262,938
44,172
6,799
2,102
50,719
366,730
Total financial assets
372,589
69,838
10,792
26,251
50,719
530,189
273,163
43,389
76,394
15,003
-
407,949
8,554
1,497
12
675
-
10,738
-
-
-
4,958
-
4,958
25,879
10,140
14,385
243
-
50,647
307,596
55,026
90,791
20,879
-
474,292
Financial Liabilities Deposits Interbank and money market items Liability payable on demand Borrowings Total financial liabilities
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Annual Report  2010
The average balances of the financial assets and liabilities of the Bank and its subsidiaries and the average rates of interest and dividend for the years ended 31 December 2010 and 2009 are as follows:
(Unit: Million Baht)
Consolidated financial statements For the years ended 31 December 2010 Average balance
2009
Interest and Average dividend rate income/expenses (%)
Average balance
Interest and Average dividend rate income/expenses (%)
Financial assets Interbank and money market items
56,733
771
1.36
58,534
737
1.26
Investments
92,765
1,918
2.07
101,534
2,238
2.20
Loans
355,959
15,810
4.44
377,417
17,506
4.64
Total
505,457
18,499
537,485
20,481
384,210
4,344
1.13
400,045
5,827
1.46
Interbank and money market items
10,932
93
0.85
15,143
158
1.04
Borrowings
53,740
1,803
3.36
59,114
2,089
3.53
448,882
6,240
474,302
8,074
Financial liabilities Deposits
Total
(Unit: Million Baht)
Separate financial statements For the years ended 31 December 2010 Average balance
2009
Interest and Average dividend rate income/expenses (%)
Average balance
Interest and Average dividend rate income/expenses (%)
Financial assets Interbank and money market items
56,541
769
1.36
58,368
734
1.26
Investments
91,945
2,196
2.39
100,847
2,482
2.46
Loans
354,948
15,565
4.39
376,746
17,351
4.61
Total
503,434
18,530
535,961
20,567
384,365
4,344
1.13
400,253
5,828
1.46
Interbank and money market items
10,932
93
0.85
15,143
158
1.04
Borrowings
53,756
1,613
3.00
59,146
1,893
3.20
449,053
6,050
44,542
7,879
Financial liabilities Deposits
Total
TMB Bank PCL
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|  205
37.2.2 Currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. In addition to the financial assets and liabilities denominated in foreign currencies already disclosed in the relevant notes to the financial statements, as at 31 December 2010 and 2009, the Bank has the following net foreign currency positions categorised by major foreign currencies: (Unit: USD Million)
Separate financial statements 31 December 2010 USD
Spot
Euro (1)
31 December 2009
Other currencies (1)
Total
USD
Euro (1)
Other currencies (1)
Total
56
5
38
99
8
1
26
35
Forward
(86)
(6)
(40)
(132)
(25)
(1)
(25)
(51)
Net position
(30)
(1)
(2)
(33)
(17)
-
1
(16)
(1)
Balances denominated in Euro and other currencies are stated in USD equivalents.
37.2.3 Equity price risk
Risk from changes in price of equities is any risk that arises from changes in price of equities that may cause volatility in the Bank’s earnings or value of financial assets. The equity portfolio management of the Bank is managed under specified managing units depend on the type of business, TMB’ s direction and strategy and overseen by the Asset and Liability Management Committee (ALCO) and/or the Chief Executive Committee (CEC) (all equity investment must comply with the bank-wide investment policy and framework, and related risk policies.) The criteria for equity investments include consideration of risk factors such as credit, market, and liquidity risks. Various limits are set including Gross Investment Limits and Loss Limit Levels. All of these measures are established to ensure that securities investments comply with policies and remain within approved limits and that the impact on capital adequacy is also taken into consideration.
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37.3 Liquidity risk Liquidity risk refers to the risk that arises if the Bank fails to meet its obligation when due as assets cannot be liquidated into cash at current market prices in time or from an inability to raise funds deemed adequate by management to the Bank’s operations. The ALCO is responsible for assisting the BOD and the RMC in monitoring that the liquidity risk management of the Bank complies with the Bank of Thailand’s regulations, and ensuring that the Bank has sufficient liquidity for its operations in both normal circumstances and crisis situations. In addition, ALCO is responsible for identifying and securing appropriate funding sources through changing market circumstances. The Balance Sheet Management Group (BSMG) is the unit of the Bank responsible for liquidity management, including measurement, monitoring, and reporting to ALCO under the liquidity risk management policy. The policy is reviewed once a year or when necessary to ensure that it is appropriate for all situations. The Bank and each company in the Bank’s financial group manage liquidity risk separately. In order to mitigate liquidity risk, the Bank practices continuous management of its funding sources and access to capital markets, and recognizes the importance of holding highly marketable assets that it can both exchange for cash and use as collateral for funds. Risk indicators are used as a tool to measure and monitor risk. These comprise financial ratios (such as Loan to Deposit and BE ratio, and Liquid asset ratio), liquidity gap reporting based on contractual maturity and behavioral maturity, and the determined MCO (Maximum Cumulative Outflow). The Bank sets risk indicator limits in order to maintain liquidity risk within the Bank’s risk tolerance. Risk indicators are monitored against the limits and reported to ALCO on a weekly and monthly basis. In addition, liquidity status is monitored in day-to-day management of the Bank, to ensure the effectiveness of liquidity risk management. Stress tests are performed under various scenarios, in accordance with the BOT’s guidelines, in order to assess the Bank’s ability to withstand a crisis. The stress testing results are used for liquidity planning and in preparing liquidity reserves. In addition, contingency plans are prepared for various crisis situations, and these identify the roles and responsibilities of relevant units, and plans for funding and communications. Risk Indicators as at 31 December 2010 ▶▶
Loan to Deposit & BE ratio
82.2%
▶▶
Liquid Asset Ratio
28.5%
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The financial instruments classified by maturity as at 31 December 2010 and 2009 are summarised as follows: (Unit: Million Baht)
Consolidated financial statements 31 December 2010 At call
Within 3 month
Over 3 − 12 months
Over 1 − 5 years
Over 5 years
No maturity
14,714
-
-
-
-
-
14,714
6,192
70,292
8,113
-
-
-
84,597
-
33,579
12,444
34,567
11,709
2,239
94,538
66,823
73,331
21,898
88,335
112,790
-
363,177
87,729
177,202
42,455
122,902
124,499
2,239
557,026
191,704
83,723
92,346
45,342
-
-
413,115
Interbank and money market items
4,596
18,549
85
261
-
-
23,491
Liability payable on demand
3,725
-
-
-
-
-
3,725
-
25,847
10,526
11,037
14,694
-
62,104
200,025
128,119
102,957
56,640
14,694
-
502,435
5
69
12
-
-
-
86
29
-
-
227
-
-
256
34
69
12
227
-
-
342
-
1,544
135
-
-
-
1,679
Letters of credits
696
5,428
5,084
4,492
-
-
15,700
Other guarantees
11,862
9,378
7,940
1,144
565
-
30,889
Total
Financial assets Cash Interbank and money market items Investments — net Loans
(1)
Total financial assets Financial liabilities Deposits
Borrowings Total financial liabilities Off-balance sheet items Avals to bills and guarantees of loans Avals to bills Guarantees of loans Total Liability under unmatured import bills
(1)
Non-performing loans are classified under their original maturity dates.
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Annual Report 2010
(Unit: Million Baht)
Consolidated financial statements 31 December 2009 At call
Within 3 month
Over 3 − 12 months
Over 1 − 5 years
Over 5 years
No maturity
15,134
-
-
-
-
-
15,134
6,264
57,545
2,988
33
-
-
66,830
-
37,554
21,476
16,885
3,394
2,885
82,194
Loans (1)
51,197
73,748
28,091
71,172
143,884
-
368,092
Total financial assets
72,595
168,847
52,555
88,090
147,278
2,885
532,250
202,205
81,915
46,610
77,046
-
-
407,776
Interbank and money market items
4,111
5,119
1,497
11
-
-
10,738
Liability payable on demand
4,958
-
-
-
-
-
4,958
-
19,657
5,424
8,724
16,831
-
50,636
211,274
106,691
53,531
85,781
16,831
-
474,108
8
90
31
-
-
-
129
365
-
-
352
-
-
717
373
90
31
352
-
-
846
-
826
131
-
-
-
957
Letters of credits
352
3,348
3,424
9,798
-
-
16,922
Other guarantees
13,812
9,567
8,468
1,386
552
-
33,785
Total
Financial assets Cash Interbank and money market items Investments — net
Financial liabilities Deposits
Borrowings Total financial liabilities Off-balance sheet items Avals to bills and guarantees of loans Avals to bills Guarantees of loans Total Liability under unmatured import bills
(1)
Non-performing loans are classified under their original maturity dates.
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Financial Statements and Notes to Financial Statements
| 209
(Unit: Million Baht)
Separate financial statements 31 December 2010 At call
Within 3 month
Over 3 − 12 months
Over 1 − 5 years
Over 5 years
No maturity
14,713
-
-
-
-
-
14,713
6,181
70,126
8,096
-
-
-
84,403
-
33,579
12,303
34,077
11,709
4,100
95,768
Loans (1)
64,212
73,330
21,844
88,243
113,490
-
361,119
Total financial assets
85,106
177,035
42,243
122,320
125,199
4,100
556,003
191,825
83,723
92,346
45,342
-
-
413,236
Interbank and money market items
4,596
18,549
85
261
-
-
23,491
Liability payable on demand
3,725
-
-
-
-
-
3,725
-
25,861
10,526
11,037
14,694
-
62,118
200,146
128,133
102,957
56,640
14,694
-
502,570
5
69
12
-
-
-
86
29
-
-
227
-
-
256
34
69
12
227
-
-
342
-
1,544
135
-
-
-
1,679
Letters of credits
696
5,428
5,084
4,492
-
-
15,700
Other guarantees
11,862
9,378
7,940
1,144
565
-
30,889
Total
Financial assets Cash Interbank and money market items Investments — net
Financial liabilities Deposits
Borrowings Total financial liabilities Off-balance sheet items Avals to bills and guarantees of loans Avals to bills Guarantees of loans Total Liability under unmatured import bills
(1)
Non-performing loans are classified under their original maturity dates.
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Annual Report 2010
(Unit: Million Baht)
Separate financial statements 31 December 2009 At call
Within 3 month
Over 3 − 12 months
Over 1 − 5 years
Over 5 years
No maturity
15,134
-
-
-
-
-
15,134
6,264
57,423
2,940
33
-
-
66,660
-
37,554
21,476
16,237
3,394
3,004
81,665
Loans (1)
47,997
73,745
28,069
71,047
145,872
-
366,730
Total financial assets
69,395
168,722
52,485
87,317
149,266
3,004
530,189
202,378
81,915
46,610
77,046
-
-
407,949
Interbank and money market items
4,111
5,119
1,497
11
-
-
10,738
Liability payable on demand
4,958
-
-
-
-
-
4,958
-
19,668
5,424
8,724
16,831
-
50,647
211,447
106,702
53,531
85,781
16,831
-
474,292
8
90
31
-
-
-
129
365
-
-
352
-
-
717
373
90
31
352
-
-
846
-
826
131
-
-
-
957
Letters of credits
352
3,348
3,424
9,798
-
-
16,922
Other guarantees
13,812
9,567
8,468
1,386
552
-
33,785
Total
Financial assets Cash Interbank and money market items Investments — net
Financial liabilities Deposits
Borrowings Total financial liabilities Off-balance sheet items Avals to bills and guarantees of loans Avals to bills Guarantees of loans Total Liability under unmatured import bills
(1)
Non-performing loans are classified under their original maturity dates.
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37.4 Estimated fair value of financial instruments Methods and assumptions in estimating market value or fair value of financial instruments are as follows:
Cash and interbank and money market items (assets) The fair value approximates the carrying value.
Investments in securities — net The fair value of investments in securities is based on the method disclosed in Note 4.5 to the financial statements.
Loans and accrued interest receivable The fair value is based on the carrying value of loans and accrued interest receivable net of allowance for doubtful debts as most loans are floating rate loans.
Deposits The fair value is based on the carrying value of deposits, except for the fair value of fixed rate deposits with remaining maturities greater than 1 year which is estimated by using a discounted cash flow calculation applying interest rates currently being offered on such or similar deposits.
Interbank and money market items (liabilities) The fair value is based on the carrying value of interbank and money market items, except for the fair value of fixed rate items with remaining maturities greater than 1 year which is estimated by using a discounted cash flow calculation applying interest rates currently being offered on such or similar deposits.
Liability payable on demand The fair value approximates the carrying value.
Borrowings The fair value is based on the carrying value of borrowings, except for the fair values of fixed rate borrowings with remaining maturities greater than 1 year which is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date, in case where there is no active market, and the Bank uses the market value as the fair value of borrowings, in case where there is active market.
Derivatives In case where there is active market, the Bank uses the market value as the fair value of derivatives and if there is no active market, the fair value is derived from valuations incorporating market data obtained from reliable sources. The market price or market data are mainly based on exchange-traded prices, broker/dealer quotations, or counterparties quotations.
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The fair values of significant financial instruments have been estimated by using available market information or appropriate valuation methodologies in case of no market value information available. Fair values together with the carrying values shown in the balance sheets at 31 December 2010 and 2009 were as follows: (Unit: Million Baht)
Consolidated financial statements
Separate financial statements
31 December 2010 31 December 2009 31 December 2010 31 December 2009 Book value (1)
Fair value
Book value (1)
Fair value
Book value (1)
Fair value
Book value (1)
Fair value
Financial assets Cash
14,714
14,714
15,134
15,134
14,713
14,713
15,134
15,134
Interbank and money market items — net
84,625
84,625
66,615
66,615
84,431
84,431
66,445
66,445
Investments — net
94,538
94,606
82,194
82,690
95,768
95,836
81,665
82,161
Loans and accrued interest receivable — net
343,195
343,195
337,855
337,855
342,601
342,601
337,943
337,943
Total financial assets
537,072
537,140
501,798
502,294
537,513
537,581
501,187
501,683
413,115
413,013
407,776
407,304
413,236
413,134
407,949
407,477
23,491
23,490
10,738
10,738
23,491
23,490
10,738
10,738
3,725
3,725
4,958
4,958
3,725
3,725
4,958
4,958
62,104
62,975
50,636
50,182
62,118
62,989
50,647
50,194
502,435
503,203
474,108
473,182
502,570
503,338
474,292
473,367
Bought
219,130
5,728
57,946
1,024
219,130
5,728
57,946
1,024
Sold
228,753
(5,574)
66,232
(744)
228,753
(5,574)
66,232
(744)
Bought
3,525
12
1,625
9
3,525
12
1,625
9
Sold
1,046
(4)
671
(2)
1,046
(4)
671
(2)
Bought
16,675
(1,539)
6,003
(625)
16,675
(1,539)
6,003
(625)
Sold
12,100
840
492
32
12,100
840
492
32
Interest rate swaps contracts
339,945
87
176,549
281
339,945
87
176,549
281
Interest rate futures contracts
-
-
4,174
3
-
-
4,174
3
Bought
1,619
12
3,337
-
1,619
12
3,337
-
Sold
1,619
(12)
3,337
-
1,619
(12)
3,337
-
Financial liabilities Deposits Interbank and money market items Liability payable on demand Borrowings Total financial liabilities Derivatives Forward foreign exchange contracts
FX options contracts
Cross currency and interest rate swap contracts
Interest rate options contracts
(1)
For derivatives, the figures presented under the book value caption are notional amounts.
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37.5 Financial derivative instruments risk In the normal course of business, the Bank uses financial derivative instruments to serve the needs of its customers and to manage its exposure against fluctuations in foreign exchange rates and interest rates. These instruments allow the Bank and its customers to transfer, modify or reduce their foreign exchange and interest rate risks. The Bank has established risk policies and limits, reporting lines and control procedures to manage and control its derivative activities. Risk control functions are independent from the trading units. Settlement risk related to financial derivatives is managed as part of the overall credit limits granted to customers. To control the level of credit risk taken, the Bank assesses counterparties using the same techniques as for lending decisions. The notional amounts of certain types of financial instruments provide a basis for comparison with instruments recognised on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Bank’s exposure to credit or price risks. The derivative instruments become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates or foreign exchange rates relative to their terms. Therefore, the extent to which the financial derivative instruments are favourable or unfavourable can fluctuate significantly from time to time. As at 31 December 2010 and 2009, financial derivatives as classified by their maturities are as follows: (Unit: Million Baht)
Consolidated and separate financial statements 31 December 2010 Less than 1 year
Over 1 year
31 December 2009 Total
Less than 1 year
Over 1 year
Total
Forward foreign exchange contracts Bought
218,491
639
219,130
57,946
-
57,946
Sold
227,791
962
228,753
66,232
-
66,232
Bought
3,525
-
3,525
1,625
-
1,625
Sold
1,046
-
1,046
671
-
671
4,039
12,636
16,675
2,391
3,612
6,003
830
11,270
12,100
-
492
492
139,924
200,021
339,945
56,736
119,813
176,549
-
-
-
4,174
-
4,174
Bought
-
1,619
1,619
3,337
-
3,337
Sold
-
1,619
1,619
3,337
-
3,337
FX options contracts
Cross currency and interest rate swap contracts Bought Sold Interest rate swap contracts Interest rate futures contracts Interest rate option contracts
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37.6 Operational risk Operational risk is defined as the risk of loss, both financial and non-financial, resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk. Effective operational risk management leads to more stable business processes and lower operational costs. Operational Risk Management at the Bank is managed through a governance structure where the Board of Directors holds the ultimate responsibility for bank-wide risk management. The Board has delegated several operational risk management related authorities to the Operational Risk Management Committee (ORC), chaired by the CEO and whose responsibilities are to identify, measure, monitor, and manage the operational risks of the Bank and its subsidiaries with appropriate quality of coverage (granularity) and to ensure that appropriate management action is taken by the responsible line managers at the appropriate level of granularity. The Bank has established a dedicated Operational Risk Management Group (ORMG), reporting to the CRO, which consists of specialized departments to oversee specific operational risk management concerns such as processing risk, control risk, unauthorised activity risk, information (technology) risk, crisis management & business continuity / disaster recovery risk, fraud risk, personal & physical security risk, and employment practice & workplace safety risk. Business and Support Units are primarily responsible and accountable for their own operational risk management and control. The Bank has appointed a number of Unit Operational Risk Managers (UORM) in the Business and Support Units who, with support from the Operational Risk Management Group, take on / carry out the operational risk management responsibilities of their respective units. Audit Group operates as the “third line of defence”. Their mission is to provide an independent assurance of the design and effectiveness of internal controls established by the first and second line of defence. In carrying out this work, Audit Group will provide specific recommendations for improving the governance, risk & control framework. The Bank has developed an Operational Risk Management Framework to ensure that the Operational Risks are properly identified, assessed, monitored, reported, analysed and controlled in a systematic and consistent manner. The Framework provides the foundations and a common infrastructure for delivering, maintaining, and governing risk management. The Framework consists of an Operational Risk Governance Structure applying the three lines of defence risk governance model, and aligning with the COSO risk management framework. The Bank has established the risk appetite level for operational risk utilising the potential loss (probability and impact) concept. The level is determined based on consideration of the historical loss data of the bank, the financial strength, and the overall operational risk management environment. For potential loss over a threshold amount, the bank will take further mitigating action to bring down the potential loss level to within threshold. Various policies, minimum standards, and guidelines have been established to manage the various operational risks as per Basel New Capital Accord (Basel II) guideline including coverage on all key processes and tools such as Risk & Control Self-Assessment (R&CSA), Control Self Assessment (CSA), Key Risk Indicators (KRI), and Incident Management.
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R&CSA / CSA is a process that helps identify and assess key risks and controls as well as to determine the mitigating actions. The Bank has also established KRI at corporate level to be a warning signal for all levels of management enabling them to proactively manage and control their operational risks. Incident reporting is established to enable detection, resolution, analysis of operational risk incidents as well as collection of loss data. This incident reporting and response is key in order to facilitate management’s insight in and awareness of the actual costs of operational risks, existing control weaknesses and the Bank’s specific risk profile. Other major Operational Risk Mitigation Programs/Mechanisms include Product and Service Approval Process (PSAP), Action Tracking, Outsourcing / Insourcing Risk Management, and Business Continuity Plan and Disaster Recovery Plan (BCP / DRP). To ensure that products and services are offered in a safe manner, the Product and Services Approval Process (PSAP) is established to set guidelines for sign-off and approval of new products and services. This due diligence process ensures that the risks created by the new products and services are properly identified and addressed, and that the necessary infrastructure and controls are in place to support the new business. To ensure adequate and timely resolution of audit and non-audit items, ORMG has also implemented an action tracking system as a tool to keep track of the status of their items. Through this action tracking system, all outstanding audit and non-audit findings can be monitored and managed efficiently by all appropriate parties. The Bank has established the Outsourcing / Insourcing Risk Management Policy to set out the principles and standards for the effective identification of the major risks created by outsourcing / insourcing and the management of such risks. The Bank has established the Business Continuity Management Policies and Standards to provide guidance and standards for all units to develop Business Continuity Plan. The Business Continuity Management under ORMG is set up to oversee the implementation of BCM Policies and Standards, monitor and lead the co-ordination of group-wide BCP initiatives to raise the overall BCP / DRP readiness of the Bank. In term of operational risk management at the subsidiaries, the subsidiaries have started to align and adopt TMB’s Operational Risk Management Framework, Policies, and Minimum Standards, where applicable. Their organization structure including dedicated operational risk management functions and Committees have been established to oversee proper operational risk management. To date, TMB’s Subsidiaries have already implemented loss data collection, Business Continuity Plan, and Operational Risk Control Self Assessment. Implementation plan of additional operational risk policies and tools are put in place for further execution from 2011 onwards.
38. Valuation adjustment of investments in the consolidated financial statements During 2010, the Bank adjusted the measurement of and revenue recognition on investments in Siam Resort Fund and The Column Property Fund in the consolidated financial statements whereby it has changed the recording of those investments from the equity method to the cost method, in order to reflect the nature and conditions of the return on the investments. Hence, the Bank has adjusted the previous year’s consolidated financial statements, as presented herein for comparative
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purposes, under the heading of “Cumulative effect of valuation adjustment of investments” in the consolidated statement of changes in shareholders’ equity. The effects of the above adjustment to the consolidated financial statements for the year ended 31 December 2009 are as follows: (Unit: Million Baht)
Consolidated balance sheet as at 31 December 2009 Increase in long-term investments — net
1,132
Decrease in investments in subsidiaries and associated companie — net
(1,643)
Increase in deficit
(511)
Consolidated statement of income for the year ended 31 December 2009 Increase in interest and dividend income on investment
73
Decrease in share of profits from investments in associated companies
(172)
Decrease in net income
(99)
Decrease in basic earnings per share (Baht per share)
(0.0024)
Decrease in diluted earnings per share (Baht per share)
(0.0023)
Such adjustments do not have an impact on the separate financial statements, except for the reclassification of investments in the balance sheet from investments in associated companies to long-term investments (See Note 39 to the financial statements).
39. Reclassification Certain amounts in the financial statements as at 31 December 2009 and for the year ended 31 December 2009 have been reclassified to conform to the current year’s classification but with no effect to previously reported net income or shareholders’ equity. The reclassifications are as follow: (Unit: Million Baht)
31 December 2009 Separate financial statement
Long-term investments — net Investment in subsidiaries and associated companies — net
After reclassification
As previously reported
21,694
20,562
605
1,737
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(Unit: Million Baht)
31 December 2009 Consolidated financial statements After reclassification
As previously reported
Separate financial statement After reclassification
As previously reported
Off-balance sheet items — commitments Avals to bills and guarantees of loans Other commitments
847
2,753
847
2,753
396,171
394,265
396,171
394,265
(Unit: Million Baht)
For the year ended 31 December 2009 Consolidated financial statements
Separate financial statement
After reclassification
As previously reported
After reclassification
As previously reported
17,506
17,650
17,352
17,496
4,089
4,053
3,681
3,645
-
332
-
411
1,186
710
1,259
704
Premises and equipment expenses
2,688
2,652
2,622
2,586
Other expenses
2,184
2,183
2,102
2,101
33
34
-
1
Interest and dividend income Loans Non-interest income Fees and charges — others Gains on disposals of assets Other income Non-interest expenses
Income tax
40. Subsequent events On 24 February 2011, the Board of Directors of the Bank passed a resolution to propose for consideration and approval the payment of a dividend of Baht 0.015 per share to the Bank’s ordinary shareholders from its 2010 operating results or a total of Baht 653 million, to the Annual General Meeting of Shareholders. Such dividend will be paid and recorded after it is approved by the Annual General Meeting of the Bank’s shareholders.
41. Approval of financial statements These financial statements were authorised for issue by the Bank’s Board of Directors on 24 February 2011.
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Annual Report  2010
Basel II Pillar III Disclosure
1. Scope of Application In this annual disclosure report over the reporting year 2010, TMB discloses any quantitative information on full consolidation and solo basis (Bank Only), in line with Bank of Thailand (BOT) notification. As this is the first disclosure on full consolidation, no quantitative information for comparison is included. The subsidiaries below are included in the full consolidation.
2.
Name
Type of business
1. Phayathai Asset Management Co., Ltd.
NPL and NPA management
2. TMB Asset Management Co., Ltd.
Fund Management
3. Designee for ETA Contract Co., Ltd.
Infrastructure
Capital
2.1 Capital Structure Table 1: Regulatory Capital composition
(Unit: Million Baht)
Full consolidation
Solo basis
Item
Dec 31, 2010
Jun 30, 2010
Dec 31, 2010
1. Tier I Capital
45,474
46,168
45,617
1.1 Ordinary shares capital
41,352
41,352
41,352
1.2 Warrants
-
-
-
1.3 Net premium (discount)
-
-
-
1.4 Non Cumulative Preferred share
-
-
-
1.5 Statutory reserves
-
-
-
1.6 Reserve appropriated from the net profit 1.7 Cumulative profit (loss) after appropriation* 1.8 Hybrid Tier 1 that BOT allows to be counted as Tier I capital 1.9 Minority shareholders 1.10 Less: Deduction items
1.10.1 Deduction items for Tier I capital
-
-
-
(78)
(78)
42
4,200
4,894
4,200
-
-
83
-
-
-
-
-
60
1.10.2 Deductions from Tier 1 capital and Tier 2 capital 50% each
-
-
-
1.10.3 Deductions from the excess portion of Tier 2 capital requirement
-
-
-
2. Tier II Capital
21,082
20,956
21,082
2.1 Tier II Capital before deductions
21,082
20,956
21,082
-
-
-
3. Total regulatory capital
66,556
67,124
66,699
3.1 Total regulatory capital before deductions
66,556
67,124
66,699
2.2 Deductions from Tier 1 capital and Tier 2 capital 50% each
3.2 Less: Negative valuation of AFS equity
-
-
-
Total capital to risk-weighted assets
16.59%
18.37%
16.55%
Tier I capital to risk-weighted assets
11.33%
12.64%
11.32%
362,226
Risk Weighted Assets (RWA) 1. Credit Risk Weighted Assets
361,088
322,412
2. Market Risk Weighted Assets
10,116
12,301
10,116
3. Operational Risk Weighted Assets
30,059
30,629
30,729
401,263
365,342
403,071
Total RWA * excluding 2010 net profit
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Perpetual Non-Cumulative Tier 1 Securities On 3 May 2006, the Bank issued USD 200 million in aggregate as a principal amount of Perpetual Non-Cumulative Tier 1 Securities (“Hybrid Tier 1”). The securities are perpetual. However the Bank has an early redemption option subject to the prior written approval of the Bank of Thailand and the Bank being solvent at that time. Early redemption is permitted in the following circumstances: 1. After the tenth year onwards, on each interest payment date. 2. In the event of certain changes affecting taxation in Thailand or the Cayman Islands made by any political sub-division or other authority with the power to tax. 3. In the event the securities no longer qualify as Tier 1 capital of the Bank, under the Bank of Thailand’s capital adequacy requirements and applicable regulations. Interest is payable for the first 10 years at a fixed interest rate of 7.75% per annum, payable semi-annually on 30 June and 30 December of every year during the first 10 years, and for the eleventh year onwards at a floating interest rate of 3.13% per annum above three-month USD LIBOR, payable quarterly on 30 March, 30 June, 30 September and 30 December of every year. In any interest payment period, if the Bank does not expect a net profit in the consolidated financial statements, the Bank is not obliged to make any interest payments for that period and such interest will be non-cumulative and will not be carried forward to the next payment periods. During 2009, the Bank partially bought back Hybrid Tier 1 Securities in an aggregate principal amount of USD 153 million. During 2010, the Bank additionally bought back Hybrid Tier 1 in an aggregate principal amount of USD 42 million. During October 2010, the Securityholders’ meeting passed a resolution to amend the conditions of the securities to grant the Bank an option to redeem all of the remaining securities, from 3 May 2011 onward, rather than the original option to redeem them after ten years. As at 31 December 2010, the remaining principal amount of Hybrid Tier 1 Securities remained at USD 5 million, which is equivalent to approximately Baht 160 million. On 30 April 2009, the Bank issued Baht 4,000 million in aggregate as a principal amount of Perpetual Non-Cumulative Tier 1 Securities (“Hybrid Tier 1”). The securities are perpetual. However, the Bank has an early redemption option subject to the prior written approval of the Bank of Thailand and the Bank being solvent at that time. Early redemption is permitted under the following circumstances: 1. At every interest payment date, after the fifth year of the issuing date. 2. In the event that any change or amendment in the tax laws resulting in the more tax liabilities to the Bank or the Bank not being able to claim interest on such securities as tax-deductible expenses. 3. In the event that the Hybrid Tier 1 is no longer qualified as Tier 1 capital of the Bank.
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Interest is semi-annually payable on 30 April and 30 October every year, for the first 10 years at a fixed interest rate of 7.00% per annum and from the eleventh year onwards at a floating interest based on 6-month Time Deposit rate of the Bank plus 7.00% per annum. In case that the Bank incurs loss in the latest fiscal period before the interest payment date or in case that the interest payment on any interest payment date results in the Bank having a loss in the latest fiscal period before such interest payment date, the Bank will not be obliged to make any interest payment for that period and such interest will be non-cumulative and will not be carried forward to the next payment period unless allowed by the Bank of Thailand to pay such interest.
2.2 Capital Adequacy At the end of 2010 the Bank reported a Basel II Capital Adequacy Ratio (CAR) ratio of 16.59%, 16.55% and a Tier 1 ratio of 11.33%, 11.32% for Solo basis and Full consolidation, respectively. The CAR ratio is significantly above the regulatory minimum of 8.5%. CAR Ratio for Solo basis slightly decreased when compared to 18.37% as at the end of June 2010 mainly due to an increase in credit risk weighted assets reflecting a higher outstanding loan book, combined with lower Tier 1 capital upon buy back Hybrid Tier 1. The bank has implemented an Internal Capital Adequacy Assessment Process (ICAAP), with regular reporting to management and Board of Directors about the bank’s capital adequacy and all relevant capital management issues.
Table 2: Calculation Approach capital requirement Approach implemented by risk type
Approach
Credit risk
SA
Equity risk
SA
Market risk
SA
Operational risk
BIA
Table 3: Minimum capital requirements for credit risk classified by types of assets under the SA approach (Unit: Million Baht)
Minimum capital requirement for credit risk classified by types of assets under SA approach 1. Performing assets 1.1 Claims on Sovereigns and Central Banks and Multilateral Development Banks (MDBs)
Full consolidation
Solo basis Dec 31, 2010
Jun 30, 2010
Dec 31, 2010
27,935
24,083
27,838
145
138
145
1.2 Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
3,168
2,069
3,180
1.3 Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
15,894
13,726
15,894
1.4 Claims on retail portfolios
3,959
3,631
3,958
1.5 Residential mortgage exposures
1,791
1,848
1,791
1.6 Other assets
2,978
2,671
2,870
2. Non-performing assets
2,758
3,322
2,951
3. First-to-default credit derivatives and securitisation Total minimum capital requirement for credit risk under the SA approach
-
-
-
30,693
27,405
30,789
TMB Bank PCL
Basel II Pillar III Disclosure
Table 4: Minimum capital requirement for market risk for positions in the trading book
(Unit: Million Baht)
Full consolidation
Solo basis
Minimum capital requirement for market risk (positions in the trading book) Total minimum capital requirement for market risk (Standardized Approach)
| 221
Dec 31, 2010
Jun 30, 2010
860
1,046
Dec 31, 2010
860
* Minimum capital requirement based on regulatory minimum CAR ratio of 8.5%
Table 5: Minimum capital requirement for operational risk
(Unit: Million Baht)
Full consolidation
Solo basis
Minimum capital requirement for operational risk Total minimum capital requirement for operational risk (Basic Indicator Approach)
Dec 31, 2010
Jun 30, 2010
Dec 31, 2010
2,555
2,603
2,612
* Minimum capital requirement based on regulatory minimum CAR ratio of 8.5%
3. Risk exposures and assessment Management of risk is fundamental to TMB and is an integral part of TMB’s strategic focus. TMB takes a disciplined approach to managing credit, market and operational risk. Risk management is essential to our business being able to create shareholder value with appropriate and sustainable shareholder returns. Risk management is embedded in the daily business activities and strategic planning with the objective to optimize risks and returns. Our approach to risk is founded on solid risk governance and embedding a risk management culture where all employees look for risks and consider their impacts and apply appropriate risk mitigation strategies. This section outlines TMB’s approaches to risk management, explaining our objectives as well as the high level policies, processes, measurement techniques and controls that are used. This section also presents a summary of information and disclosure on our portfolios and positions.
3.1 Credit risk Credit risk is the risk of loss to TMB as a result of borrowers and/or counterparties failing to meet their financial and contractual obligations in accordance with agreed terms. It arises principally from granting loans and undertaking contingent liabilities, and also from certain off-balance sheet products such as guarantees and credit derivatives. 3.1.1 Overall Credit Risk Management:
Credit risk management is the process by which risks that are inherent in the credit processes and credit portfolios are managed and controlled. TMB’s credit risk management objective is to maximize the Bank’s risk-adjusted return by maintaining credit risk exposure within acceptable level and build a sustainable competitive advantage by integrating risk management into business activities and strategic planning. In recent years, TMB has improved and continues to improve its credit risk management capabilities with investments in people, risk management governance, processes, measurement tools and systems including the development of an economic capital framework, improved risk measurement processes and tools, such as risk rating model for Corporate and SME, Application Scorecard and Behavior Scorecard for Retail portfolio and small SME portfolio, and established frameworks
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which sets out credit policies, procedures and lending guidelines covering the measurement and management of credit risk. TMB Financial Business Group consists of Phayathai Asset Management Company (PAMC) and TMB Asset Management (TMBAM). Currently PAMC and TMBAM are not involve of credit-risk taking transactions. The business nature of PAMC primarily involves in the liquidation of NPA and NPL, while TMBAM is a fund management company and also does not have credit-granting transactions. 3.1.2 Credit risk management processes:
The granting of credit and the undertaking of contingent liabilities is one of TMB’s major sources of income. However, lending can expose TMB’s earnings and capital to credit risk. Effective management of the portfolio and credit functions is crucial to TMB’s safety and soundness as it ensures that risks inherent in the credit processes and credit portfolios are managed and controlled. This is achieved by building strong credit culture, adhering to the sound credit risk management principles from time of business origination to the final settlement. TMB operates under the following core credit risk management principles. ▶▶
Credit Portfolio Management: TMB strategically manages the composition of its credit portfolio and sets limits to cap concentration risk at an acceptable level to ensure that its credit portfolio is well-diversified, credit portfolio are growing within acceptable risk appetite and generates the required risk- adjusted return.
▶▶
Checks and Balances: TMB has established a framework of Delegation of Authority for credit approval to segregate the duties of a recommending authority from an approving authority. This is to ensure that all credit decisions are taken at the most appropriate level of experience and knowledge within the Bank.
▶▶
Sound Credit Granting: Credit risk is managed through a framework which sets out policies and procedures covering the management, underwriting and measurement of credit risk. The operational procedures are set out in writing with sufficient details to provide guidance to staff throughout the credit process.
▶▶
Standard for Professionalism: TMB ensures that staffs who are involved in the credit process comply with all applicable policies, procedures and guidelines, appropriate laws and regulations, and TMB’s code of conduct. TMB also provides several training modules to ensure that credit risk knowledge is at par with the best practices.
▶▶
Monitoring and Control: Adequate reporting standards are defined to monitor and maintain effectiveness of credit portfolio management.
3.1.3 Structure and organization of relevant credit risk management function:
TMB maintains a risk governance structure that is intended to strengthen risk management while ensuring that risk-taking authorities are cascaded down from the Board through to the appropriate committees and functional levels. Risk issues and the changing regulatory and business environment are addressed in an effective manner.
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The following chart highlights TMB’s credit risk governance structure. Board of Directors Board Credit Committee Credit Underwriting Committee (CUC) Credit Restructuring Committee 1 (CRC1) Credit Restructuring Committee 2 (CRC2)
Chief Executive Officer
Board Risk Management Committee Risk Policy Committee (RPC)
Chief Risk Officer (CRO) Wholesale Credit and Restructuring Group Consumer and SME Credit Group Risk Analytics and Policy Group Credit Risk Intelligence Group
Operational Risk Committee (ORC) Asset and Liability Management Committee (ALCO)
Market Risk Mana-gement Group Operational Risk Management Group Compliance Group Legal Group Independent Credit Review Macroprudential Risk
The Board of Directors (BOD) holds ultimate responsibility of bank-wide risk management. The Risk Management Committee (RMC) has been delegated by the Board of Directors to review and oversee the management of all risks across the Bank and is authorized to approve the Bank’s overall risk management strategies, policies, frameworks and standards, as well as aggregate risk tolerance and risk concentration levels. All the risk management related functions are under the stewardship of the Chief Risk Officer (CRO). The CRO has several direct reports responsible for specific risk management functions within TMB. As for credit risk management structure, the Board of Directors (BOD), Risk Management Committee (RMC), Risk Policy Committee (RPC) provide forums to discuss and decide credit risk matters, while the Credit Committee (CC), the Credit Underwriting Committee (CUC), the Credit Restructuring Committee 1 and Credit Restructuring Committee 2 (CRC1 and CRC2) make transactional credit decisions. At transactional level, the Wholesale Credit and Restructuring Group and the Consumer and SME Credit Group create consistency throughout the Bank by providing common credit underwriting standards, credit manuals and tools, and performing credit underwriting, portfolio proactive management, credit review, collection and remedial (including credit restructuring and workout and loan recovery) management activities. The Risk Analytics and Policy Group is responsible for establishing bank-wide risk management policies and guidelines and the measurement and management of credit risk, and additionally performs validation of the credit risk models, conducts credit risk stress testing and undertakes comprehensive industry analysis and provision of internal industry ratings. The Credit Risk Intelligence Group supports credit risk stakeholders on data support and rule management system, credit risk and regulatory reporting, develops and monitors credit risk models, develops and manages risk system and processes to be in line with credit risk strategy. The Independent Credit Review Department provides the required independent review of credit of individual significant credits and provides support on the review of performance and end-to-end process for identified high-risk segments. The Macroprudential Risk undertakes forecasting and commentary on macro economic developments in support to risk as well as business strategies.
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Business Units, as a first line of defense, are directly accountable for the management of risks arising from their business activities. A key objective is to ensure that business decision strike an appropriate balance between risk and reward, consistent with the Bank’s risk appetite. 3.1.4 Scope and nature of credit risk measurement, approval, monitoring and reporting system:
Credit risk policies: The credit risk policies are developed with a clearly defined guideline under the common framework for credit extension. Loans are not provided for businesses that are against the laws, the code of ethics or which could have an impact on TMBs reputation as defined by the BOD. The policies cover the followings: 1. As a basis for the operations, policies and customer qualifications are set out according to risk levels, divided into three groups, credits that are prohibited/suspended, credits that are discouraged, and credits requiring special attention. 2. Credit portfolio management is carried out to prevent concentration of the credit extension, for example, to any particular industrial/business sector or group of borrowers. To ensure a check and balance in the approval process, the Bank clearly separates the roles and duties of business relationship management unit, credit risk analysis unit and parties with approval authority. 3. The working procedure and practice of credit analysis are set out in writing so as for the officials to have a guideline for customer screening, customer payment ability analysis, risk analysis, collateral consideration, and risk mitigation through financial covenants. TMB’s retail credit portfolios comprise consumer and small/micro SME exposures and are now managed on a product portfolio basis. Policy scope and product terms and conditions are packaged and standardized in order to achieve maximum efficiency and reliability in portfolio underwriting, management and collections. Scorecards and credit risk rating tools are also used where available.
Credit risk measurement and reporting: Credit risk measurement plays an important role in portfolio management decisions by producing the most accurate possible quantitative assessment of the credit risk to which TMB is exposed, from the level of an individual facility up to the total portfolio. TMB currently uses internal Probability of Default (PD) models, Loss Given Default (LGD) and Exposure at Default (EAD) parameters for measurement of credit risk at transactional as well as portfolio level, for quantification of Economic Capital (EC) and IBNR provision as well as credit portfolio monitoring. TMB set up risk pre-defined set of risk boundaries for each business, segment and some portfolio and products through Risk Appetite Statement (RAS). The actual performance is monitored against the defined RAS and subject to review with all stakeholders on a regular basis so as to determine appropriate actions where required.
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The RAS, credit exposures and portfolio performance are reported via credit dashboard which is presented to the Risk Management Committee on a monthly basis. The credit dashboard contains comprehensive information with respect to the overall risk (including credit risk) profile of TMB and also includes credit concentration, credit risk rating distribution, and regulatory and economic capital for the Bank overall but also for each of the Business Unit.
Credit approval and monitoring process: Credit exposures to individual counterparties, groups of connected counterparties are reviewed and approved by respective committees or individuals within a defined credit approval authority framework with clearly defined roles and responsibilities based on check and balance concept. Credit risk rating models are used in the approval process, along with judgment and experience, for the Wholesale and SME portfolios. In retail portfolios (and small business facilities), application scorecards are used as a tool in decision making process. The Bank has a separate credit process for wholesale, SME and retail credit and has segregated the role by credit process into relationship management (Front Office) and credit management for proper checks and balances. Front Office groups report to their respective Chief Officers, while credit management groups report to the Chief Risk Officer. Front Office staff for wholesale portfolio comprising Relationship Management and Lending and Structuring Product (LSP) are responsible for marketing, sales and deal origination, customer service, pre-screening and preparation of credit applications that will be forwarded to credit underwriters for further credit risk assessment and recommendation. Front Office staff also have the responsibility to manage the full credit life cycle: origination, monitoring, managing and review of their credit portfolio including all risks involved. The credit applications (including recommendation from credit underwriter) are then proposed to the relevant approval authorities that have the authority to approve on the basis of borrower- and industry data, subject to TMB’s policies and BOT regulations. Credits that show deterioration in performance are the subject of increased attention from Relationship Managers (RMs) and underwriters by way of proper monitoring and management processes to prevent delinquency. Delinquent customers in need of restructuring are transferred to Credit Restructuring and NPA Management. For Retail Credit and Small SMEs, the credit process is structured on a product basis. Again, sales/marketing and credit management are separated into different functions, with the Business Unit handling the marketing and reporting to the Chief Retail Banking Officer or Chief SME Banking Officer and the credit management function reporting to the Chief Risk Officer. Customer acquisition is through branches, relationship managers or other sales channels under the marketing and sales guidance of the product manager and sales/account manager. A Loan Origination System is under development for consumer credit applications both secured and unsecured products. Full implementation is expected in late 2011. Credit Scoring plays an important role in credit decisions for Unsecured Consumer and also Small SME applicants. The Retail Collection team under the Consumer and SME Credit Group is responsible for the remedial management and collections follow up on high risk or delinquent consumer and small SME customers, as well as NPL recovery on unsecured consumer debts. Management of NPL recovery for SME customers & secured consumer product customers is handled by specialists in Retail Credit Restructuring in Credit Restructuring and NPA.
Credit quality management: TMB manages quality of credit portfolio by monitoring and reviewing status of the borrowers and/or counterparties regularly. Special attention is paid to problem exposures, which are subject to more frequent review and reporting. Early warning system is in place to detect customers that may be moving toward adverse classification or further deterioration performance.
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Dedicated Debt Restructuring team and Credit Restructuring Committees are established to restructure problem loan in an effective manner and to provide advice on debt restructuring conditions. TMB sets aside loan loss provision adequately in accordance with guidelines from the Bank of Thailand (BOT). TMB also takes additional excess provisions for performing loan as a further cushion for losses expected as a result of future events or operation for loss incurred but not yet recognized (IBNR) using probability of default based on risk level and exposure at default based on loan types or debtor types and loss given default based on collateral types. 3.1.5 Policies for hedging and/or mitigating of credit risk and processes for monitoring the continuing effectiveness of hedges/mitigants:
Credit Risk Mitigation (CRM) is defined in the Core Credit Risk Policy (CCRP) and is determined through methods based on the Bank of Thailand’s Basel II regulations. In principle, TMB takes the CRM effects of financial collateral, guarantees into account using credit risk substitution method on credit risk exposures. TMB has implemented robust procedures for the timely liquidation of collateral to ensure that any legal conditions required for declaring the default of the counterparty and liquidating the collateral are observed, and that collateral can be liquidated promptly. TMB has established collateral assessment policy and procedures which are in accordance with BOT’s regulation. The reappraisal frequency is also driven by level of risk based on loan performance. TMB takes credit risks in an informed and measured fashion. As such, the creditworthiness of our customers, trading partners and investments is continually evaluated for their ability to meet their financial obligations to TMB. During the assessment process of creating new loans, trading limits, or investments, as well as reviewing existing loans trading positions and investments, TMB determines the amount and type of collateral, if any, that a customer may be required to pledge to the Bank. Generally, the greater the Probability of Default of a viable borrower or financial counterparty, the more collateral the customer or counterparty will have to provide. Within counterparty trading activities, TMB actively enters into various legal arrangements whereby TMB and/or counterparties may have to post collateral to one another to cover market fluctuations of their relative positions. Laws in various jurisdictions also affect the type and amount of collateral that TMB can receive or pledge. Additionally, TMB will sometimes enter into credit default swaps, and other similar instruments, in order to reduce the perceived credit risk on a given borrower or portfolio. The type of collateral which is held as security is determined by the structure of the loan or position. 3.1.6 Guidelines for setting risk controlling limits:
Concentration risk in credit portfolios is an important aspect of credit risk management. TMB manages and monitors credit concentration with respect to industries, countries and borrowers by establishing the bank-wide industry diversification threshold and country limits and names concentration to manage both existing and potential exposures within acceptable level to ensure appropriate diversification of the portfolio and avoid excessive credit risk exposure in certain industries or countries. In addition, TMB sets risk-based Single Exposure Limit to manage the maximum exposure for single obligor and related lending. 3.1.7 Roles and responsibilities of internal auditor relevant to credit risk:
The Bank has established the Audit Group as an independent function to evaluate and recommend improvements on the adequacy and effectiveness of risk management, control and governance processes throughout the Bank. Auditors review
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to ensure relevant units carry out their duties in compliance with credit risk management policies established by the Bank and rules set by the regulator. In addition to Audit Group, TMB sets up the Independent Credit Review Department independent from credit underwriting and booking processes to provide on-going surveillance on potential credit quality deterioration trends. An independent review of the credit quality function is fully dedicated to identifying early-warning signs of changes in portfolio quality and providing senior management with insight and in-depth information on the quality of the credit portfolio, weaknesses of policies, processes and procedures together with corrective and protective recommendations. Changes and improvements to relevant credit policies, procedures and processes could be made based on lessons-learned recommendations to relevant parties. 3.1.8 Loan Classification and provision
TMB classify loan based on past due status and qualitative classification using historical and future financial performance, liquidity and historical debt repayment. TMB sets aside loan loss provision according to guidelines from Bank of Thailand (BOT). The guidelines require all banks to categorize their loan portfolios into 6 loan classification, which are subject to different levels of provisioning based on percentages prescribed by BOT. TMB also takes additional excess provisions for loan classified as Pass (P) and Special Mention (SM) in its credit portfolio to provide further cushion for losses expected as a result of future events or operation for loss incurred but not yet recognized (IBNR) using probability of default based on risk level and exposure at default based on loan types or debtor types. TMB will at all times ensure that its provisions held equal or exceed the minimum level prescribed by BOT.
Table 6: Outstandings of on-balance sheet assets and off-balance sheet items before credit risk mitigation (Unit: Million Baht)
Full consolidation
Solo basis
Item 1. On-balance sheet assets 1.1 Net loans
(1)
(including interbank and money market item)
1.2 Net investments in debt securities
(2)
1.3 Deposits (including accrued interests) 2. Off-balance sheet items
(3)
2.1 Aval of bills, guarantee, and letter of credits 2.2 OTC derivatives (4) 2.3 Undrawn committed line
(1)
Average during 2010
Dec 31, 2010
Dec 31, 2009
Dec 31, 2010
500,876
518,701
 483,050
520,120
406,380
415,786
396,973
416,379
85,165
91,668
78,662
92,299
9,331
11,247
7,415
11,442
609,155
870,542
347,768
870,542
18,223
17,721
18,725
17,721
564,292
816,316
312,268
816,316
26,640
36,505
16,775
36,505
Including accrued interests receivable and net of deferred revenues, allowances for doubtful accounts and revaluation allowances for debt restructuring. (2) Excluding accrued interests and net of revaluation allowances for investments and allowances for impairment. (3) Before multiplying by CCF (4) Including equity derivatives (1)
Total
Europe
91,668
-
-
-
-
91,668
396,973
6
-
-
2,974
393,993
Net Loan (1)
78,662
-
-
-
-
78,662
Net investment in debt securities (2)
On-balance sheet assets
415,786
47
-
-
6,406
409,333
Net Loan
Net investment in debt securities (2)
7,415
176
-
2,507
1,229
3,503
Deposit (include accrued interest)
11,247
444
-
1,047
1,026
8,730
Deposit (include accrued interest)
347,768
4,547
-
1,189
8,671
333,361
Total
870,542
10,330
-
10,906
5,247
844,059
Total
816,316
10,330
-
10,906
3,309
791,771
OTC derivatives
18,725
-
-
-
72
18,653
Aval of bills, guarantees, and letter of credit
312,268
4,547
-
1,189
8,598
297,934
OTC derivatives
Off-balance sheet items (3)
17,721
-
-
-
30
17,691
Aval of bills, guarantees, and letter of credit
16,775
-
-
-
1
16,774
Undrawn committed line
(Unit: Million Baht)
36,505
-
-
-
1,908
34,597
Undrawn committed line
Including accrued interest receivable and net of deferred revenues, allowances for doubtful accounts and revaluation allowances for debt restructuring and include interbank and money market item. (2) Excluding accrued interest receivable and net of revaluation allowances for investments and allowances for impairment. (3) Before multiplying by CCF
(1)
483,050
182
-
2,507
Africa and Middle East
4,203
North America and Latin America
476,158
Total
518,701
491
Asia Pacific (exclude Thailand)
Thailand
Country or geographic area of debtor
Dec 31, 2009
Total
Europe
-
1,047
Africa and Middle East
7,432
North America and Latin America
509,731
Total
Asia Pacific (exclude Thailand)
Thailand
Country or geographic area of debtor (1)
Off-balance sheet items (3)
Solo basis
On-balance sheet assets
Table 7: Outstandings of on-balance sheet assets and off-balance sheet items before CRM classified by country or geographic area of debtors
(Unit: Million Baht)
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Dec 31, 2010
228 Annual Report  2010
47 416,379
92,299
-
-
-
-
92,299
11,442
444
-
1,047
1,027
8,924
Deposit (include accrued interest)
870,542
10,330
-
10,906
5,247
844,059
Total
17,721
-
-
-
29
17,692
816,316
36,505
589,331
4,719 -
226,985
Total
36,505
816,316
17,721
870,542
11,247
91,668
415,786
518,701
16,775
188,632
8,576
213,983
7,415
59,031
189,644
256,090
Maturity not exceeding 1 year
-
123,636
10,149
133,785
-
19,631
207,329
226,960
Maturity exceeding 1 year
Dec 31, 2009 Total
16,775
312,268
18,725
347,768
7,415
78,662
396,973
483,050
36,505
589,331
13,002
638,838
11,442
46,371
217,948
275,761
Maturity not exceeding 1 year
-
226,985
4,719
231,704
-
45,928
198,431
244,359
Maturity exceeding 1 year
Dec 31, 2010
Full consolidation
(2)
(1)
Total
36,505
816,316
17,721
870,542
11,442
92,299
416,379
520,120
Basel II Pillar III Disclosure
Including accrued interest receivables and net of deferred revenues, allowances for doubtful accounts and revaluation allowances for debt restructuring. Excluding accrued interest receivables and net of revaluation allowances for investments and allowances for impairment. (3) Before multiplying by CCF
2.3 Undrawn committed line
2.2 OTC derivatives
2.1 Aval of bills, guarantee, and letter of credits
13,002
231,704
11,247
638,838
2. Off-balance sheet items (3)
1.3 Deposits (including accrued interests)
45,786
197,838
45,882
217,948
1.1 Net loans (1) (including interbank and money market item) (1)
243,624
Maturity exceeding 1 year
Dec 31, 2010
1.2 Net investments in debt securities (2)
275,077
1. On-balance sheet assets
Item
Maturity not exceeding 1 year
Solo basis
(Unit: Million Baht)
36,505
-
-
10,330
-
-
1,908
34,597
Undrawn committed line
(Unit: Million Baht)
10,906
3,310
791,770
OTC derivatives
Off-balance sheet items Aval of bills, guarantees, and letter of credit
(3)
Including accrued interest receivables and net of deferred revenues, allowances for doubtful accounts and revaluation allowances for debt restructuring and include interbank and money market item. (2) Excluding accrued interest receivables and net of revaluation allowances for investments and allowances for impairment. (3) Before multiplying by CCF
(1)
491
520,120
-
-
6,405
409,927
Net Loan (1)
Net investment in debt securities (2)
On-balance sheet assets
Table 8: Outstandings of on-balance sheet assets and off-balance sheet items before credit risk mitigation classified by residual maturity
Total
Europe
-
1,047
North America and Latin America
Africa and Middle East
7,432
511,150
Total
Asia Pacific (exclude Thailand)
Thailand
Country or geographic area of debtor
Dec 31, 2010
Full consolidation
TMB Bank PCL | 229
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Table 9: Loans and accrued interest receivables and investments in debt securities before credit risk mitigation classified by country or geographic area of debtors and by asset classification specified by the Bank of Thailand Solo basis Dec 31, 2010 (Unit: Million Baht)
Sub standard
Doubtful
Doubtful loss
Total
Investment in debt securities Doubtful loss
25,905
5,172
1,952
26,080
428,256
53,273
6,558
5
-
-
63
6,626
-
-
-
-
-
-
-
-
Loan and accrued interest receivables (1)
Country or geographic area of debtor
Thailand Asia Pacific (exclude Thailand) North America and Latin America Africa and Middle East Europe Total (1)
Normal
Special mentioned
369,146
-
-
-
-
-
-
-
11
1
-
-
35
47
-
375,715
25,911
5,172
1,952
26,178
434,929
53,273
Including loans and accrued interest receivables of interbank and money market item.
Dec 31, 2009 (Unit: Million Baht)
Loan and accrued interest receivables
Investment in debt securities Doubtful loss
Normal
Special mentioned
325,346
47,672
7,281
5,302
38,403
424,004
-
3,030
5
83
1
2
3,121
-
North America and Latin America
-
-
-
-
-
-
-
Africa and Middle East
-
-
-
-
-
-
-
Country or geographic area of debtor
Thailand Asia Pacific (exclude Thailand)
Europe Total (1)
Sub standard
(1)
Doubtful
Doubtful loss
Total
6
-
-
-
-
6
-
328,382
47,677
7,364
5,303
38,405
427,131
-
Including loans and accrued interest receivables of interbank and money market item.
Full consolidation Dec 31, 2010 (Unit: Million Baht)
Doubtful
Doubtful loss
Total
Investment in debt securities Doubtful loss
Loan and accrued interest receivables (1)
Country or geographic area of debtor
Thailand Asia Pacific (exclude Thailand) North America and Latin America Africa and Middle East Europe Total (1)
Normal
Special mentioned
Sub standard
368,446
25,905
5,172
1,952
28,838
430,313
53,273
6,558
5
-
-
62
6,626
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
1
-
-
35
47
-
375,015
25,911
5,172
1,952
28,935
436,986
53,273
Including loans and accrued interest receivables of interbank and money market item.
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Table 10: Provisions (divided into general provisions and specific provisions) and charge-offs for loans and accrued interest receivables and investments in debt securities classified by country or geographic area Solo basis Dec 31, 2010 (Unit: Million Baht)
Loan and accrued interest receivables (1)
Country or geographic area of debtor
Thailand
General Provision
Specific Provision
Charges-off between period (2)
13,093
Investment in debt securities Specific Provision
10,330
68
Asia Pacific (exclude Thailand)
63
-
-
North America and Latin America
-
-
-
Africa and Middle East
-
-
-
Europe
-
-
-
8,751
10,393
13,093
68
Total (1)
Include provisions and charge-offs for loans and accrued interest receivables of interbank and money market item Include provisions for NPL disposal
(2)
Dec 31, 2009 (Unit: Million Baht)
Loan and accrued interest receivables
Country or geographic area of debtor
General Provision
Specific Provision
(1)
Charges-off between period (2)
Investment in debt securities Specific Provision
Thailand
20,196
18,139
-
Asia Pacific (exclude Thailand)
84
-
-
North America and Latin America
-
-
-
Africa and Middle East
-
-
-
Europe Total (1)
-
-
-
9,879
20,280
18,139
-
Include provisions and charge-offs for loans and accrued interest receivables of interbank and money market item Include provisions for NPL disposal
(2)
Full consolidation Dec 31, 2010 (Unit: Million Baht)
Loan and accrued interest receivables (1)
Country or geographic area of debtor
Thailand
General Provision
Specific Provision
Charges-off between period (2)
13,682
Investment in debt securities Specific Provision
11,333
68
Asia Pacific (exclude Thailand)
63
-
-
North America and Latin America
-
-
-
Africa and Middle East
-
-
-
Europe
-
-
-
9,212
11,396
13,682
68
Total (1)
Include provisions and charge-offs for loans and accrued interest receivables of interbank and money market item Include provisions for NPL disposal
(2)
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Annual Report  2010
Table 11: Loans and accrued interest receivables* before credit risk mitigation classified by type of business and by asset classification specified by the Bank of Thailand Solo basis Dec 31, 2010 (Unit: Million Baht)
Type of business
Agriculture and Mining Manufacturing and Commerce
Normal
Special mentioned
Sub standard
Doubtful
Doubtful loss
41
1,437
6,394
4,382
454
79
Total
127,854
16,623
3,044
698
13,973
162,192
Property and Construction
14,680
1,729
976
613
2,165
20,163
Public Utilities and Services
55,836
5,022
590
61
4,795
66,304
52,610
1,528
296
429
3,140
58,003
Others
Housing
120,353
555
187
110
668
121,873
Total
375,715
25,911
5,172
1,952
26,178
434,929
Dec 31, 2009 (Unit: Million Baht)
Type of business
Agriculture and Mining
Normal
Special mentioned
Sub standard
Doubtful
Doubtful loss
Total
4,202
1,362
94
124
4,158
9,940
100,196
27,547
2,829
3,130
22,856
156,558
Property and Construction
13,122
5,669
1,037
1,105
3,676
24,609
Public Utilities and Services
47,270
10,304
2,687
216
3,400
63,878
Housing
52,464
1,844
536
571
3,235
58,650
Others
111,127
951
181
157
1,080
113,496
Total
328,382
47,677
7,364
5,303
38,405
427,131
Manufacturing and Commerce
Full consolidation Dec 31, 2010 (Unit: Million Baht)
Type of business
Agriculture and Mining
Manufacturing and Commerce
Normal
Special mentioned
Sub standard
Doubtful
Doubtful loss
Total
4,382
454
79
41
2,110
7,067
127,854
16,623
3,044
698
14,558
162,777
Property and Construction
14,680
1,729
976
613
2,165
20,163
Public Utilities and Services
55,836
5,022
590
61
5,482
66,991
Housing
52,610
1,528
296
429
3,244
58,107
Others
119,653
555
187
110
1,376
121,881
Total
375,015
25,911
5,172
1,952
28,935
436,986
* Including loan and accrued interest receivable of interbank and money market item.
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Table 12: Provisions (divided into general provisions and specific provisions) and charge-offs for loans and accrued interest receivables* classified by type of business Solo basis (Unit: Million Baht)
Dec 31, 2010
Type of business
General Provision
Agriculture and Mining Manufacturing and Commerce Property and Construction Public Utilities and Services
Specific Provision
Dec 31, 2009 Charges-off between period (1)
General Provision
Specific Provision
Charges-off between period (1)
361
294
2,132
1,370
6,631
1,494
13,979
766
599
394
991
127
1,377
83
1,495
1,864
Housing
957
255
1,066
297
Others
468
10,573
617
13,715
10,393
13,093
9,879
20,280
18,139
Total (1)
8,751
Including provision for NPL disposal
Full consolidation (Unit: Million Baht)
Dec 31, 2010
Type of business
General Provision
Agriculture and Mining
Specific Provision
Charges-off between period (1)
702
394
6,931
1,591
599
401
Public Utilities and Services
1,565
207
Housing
1,005
294
Manufacturing and Commerce Property and Construction
Others Total (1)
9,212
594
10,795
11,396
13,682
Including provision for NPL disposal
* Including loans and accrued interest receivables of interbank and money market item
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Annual Report  2010
Table 13: Reconciliation of changes in provisions for loans and accrued interest receivables* Solo basis (Unit: Million Baht)
Dec 31, 2010 Item
Provisions at the beginning of the period Charge-offs during the period Increases or (decreases) of provisions during the period Other provisions (provisions for losses from foreign exchange, provisions for merger and sale of businesses) Provisions at the end of the period
General Provision
Specific Provision
9,879
Dec 31, 2009 Total
General Provision
Specific Provision
Total
20,280
30,158
9,685
34,720
44,405
-
13,093
13,093
-
18,139
18,139
(1,128)
3,207
2,079
194
3,699
3,893
-
-
-
-
-
-
8,751
10,393
19,144
9,879
20,280
30,159
Full consolidation (Unit: Million Baht)
Dec 31, 2010 Item
Provisions at the beginning of the period Charge-offs during the period Increases or (decreases) of provisions during the period Other provisions (provisions for losses from foreign exchange, provisions for merger and sale of businesses) Provisions at the end of the period
General Provision
Specific Provision
Total
10,072
21,534
31,606
-
13,682
13,682
(860)
3,544
2,684
-
-
-
9,212
11,396
20,608
* Including loans and accrued interest receivables of interbank and money market item
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Basel II Pillar III Disclosure
|  235
Table 14: Outstanding of on-balance sheet assets and off-balance sheet items for credit risk under the SA approach classified by type of assets Solo basis (Unit: Million Baht)
Dec 31, 2010
Type of assets
Onbalance sheet assets
Offbalance sheet items*
1. Performing assets
570,953
62,215
1.1 Claims on sovereigns and central banks and Multilateral Development Banks (MDBs)
133,514
1.2 Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies 1.3 Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
Dec 31, 2009
Total
Onbalance sheet assets
Offbalance sheet items*
Total
633,168
515,339
32,179
 547,518
3,166
136,680
125,663
2,965
128,628
89,052
24,034
113,086
63,486
8,170
71,656
169,725
32,281
202,006
151,974
17,371
169,345
1.4 Claims on retail portfolios
66,212
2,734
68,946
70,746
3,673
74,419
1.5 Residential mortgage exposures
52,912
-
52,912
52,751
-
52,751
1.6 Other assets
59,538
-
59,538
50,719
-
50,719
2. Non-performing assets
22,941
1,574
24,515
30,854
2,726
33,580
-
-
-
-
-
-
593,894
63,789
657,683
546,193
34,905
581,098
3. First-to-default credit derivatives and Securitisation Total * After multiplying by CCF
Full consolidation (Unit: Million Baht)
Dec 31, 2010
Type of assets
Onbalance sheet assets
Offbalance sheet items*
Total
1. Performing assets
570,526
62,215
632,741
1.1 Claims on sovereigns and central banks and Multilateral Development Banks (MDBs)
134,145
3,166
137,311
1.2 Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
89,247
24,034
113,281
1.3 Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
169,725
32,281
202,006
1.4 Claims on retail portfolios
66,212
2,734
68,946
1.5 Residential mortgage exposures
52,912
-
52,912
1.6 Other assets
58,285
-
58,285
2. Non-performing assets
23,996
1,574
25,570
3. First-to-default credit derivatives and Securitisation Total * After multiplying by CCF
-
-
-
594,522
63,789
658,311
236
| Basel II Pillar III Disclosure
Annual Report 2010
3.1.9 Disclosure of methodology to calculate capital required for credit risk
External Credit Assessment Institutions (ECAIs) used by TMB For capital calculation purpose, TMB uses ratings assigned by the following external credit rating agencies to determine risk weight of credit risk assets: ▶▶
Moody’s Investors Service
▶▶
Fitch Rating (Thailand)
▶▶
Tris Rating
How the bank assign ECAI’s rating to customer The lowest external ratings will be used for regulatory capital calculation. In case there is no external rating available, the Standardized Approach provides for specific risk-weights depending on the counterpart type.
Risk weight (%)
0
20
5,420
66,203
-
-
23,934
100
1,092
50
4,644
100
13,674 170,819
12
3,119
50
Rated outstanding 20
18,144
150
5,497
64
97
150
0
44
-
150
-
0
-
20
-
20
10,061
319
50
8,228
100
5,915 153,666
-
24,924
150
1,609
1
0
22,894
For the part with no CRM whose risk weights depend on the ratio of provisions to total exposures.
Items which BOT allows to deduct from capital of FIs
(1)
0
6,040
52,750
20
2,258 50
50
100
35
48,207
35
75
2,302
70,202
75
100
Unrated outstanding
75
34,856
1,839
100
31,945
2,151
-
-
-
625
625
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100/8.5%
937.5
-
-
-
-
-
-
-
-
-
-
-
-
100/8.5%
(Unit: Million Baht)
937.5
(Unit: Million Baht)
Basel II Pillar III Disclosure
Non-performing assets (1)
- Other assets
- Residential mortgage exposures
Risk weight (%)
-
- Claims on retail portfolios
-
- Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
2,915
100
35
3,452
-
-
-
2,697
100
-
- Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
137,558
50
Rated outstanding 20
50
47,561
58,499
75
Unrated outstanding 35
- Claims on sovereigns and central banks and Multilateral Development Banks (MDBS)
0
20
50
Â
Risk weight (%)
869
20
Performing assets
Type of assets
47,247
0
For the part with no CRM whose risk weights depend on the ratio of provisions to total exposures.
Dec 31, 2009
(1)
Items which BOT allows to deduct from capital of FIs
Non-performing assets (1)
- Other assets
- Residential mortgage exposures
Risk weight (%)
-
- Claims on retail portfolios
-
- Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
147,308
0
- Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
- Claims on sovereigns and central banks and Multilateral Development Banks (MDBS)
Performing assets
Type of assets
Dec 31, 2010
Solo basis
Table 15: Outstanding of on-balance sheet assets and off-balance sheet items after credit risk mitigation for each type of assets classified by risk weight under the SA approach
TMB Bank PCL |  237
-
50
100
-
150
0
-
20
-
50
35
75
100
(1)
0
20
5,420
66,278
24,054
1,257
50
4,601
100
13,674 170,819
12
3,119
19,076
150
5,497
64
97
0
47,262
For the part with no CRM whose risk weights depend on the ratio of provisions to total exposures.
Items which BOT allows to deduct from capital of FIs
Non-performing assets (1)
- Other assets
- Residential mortgage exposures
Risk weight (%)
-
- Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
- Claims on retail portfolios
-
- Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
147,939
20
869 50
35
47,561
75
3,452
58,499
100
33,588
1,839
2,697
-
-
-
20
- Claims on sovereigns and central banks and Multilateral Development Banks (MDBS)
0
Unrated outstanding
Risk weight (%)
Rated outstanding
Performing assets
Type of assets
Dec 31, 2010
Full consolidation
625
-
-
-
-
-
-
937.5
-
-
-
-
-
-
-
-
-
-
-
-
100/8.5%
(Unit: Million Baht)
238 | Basel II Pillar III Disclosure Annual Report 2010
TMB Bank PCL
Basel II Pillar III Disclosure
|  239
Table 16: Part of outstanding that is secured by collateral under the SA approach classified by type of assets and collateral Solo basis (Unit: Million Baht)
Dec 31, 2010 Type of assets
1. Performing assets 1.1 Claims on sovereigns and central banks and Multilateral Development Banks (MDBs)
Dec 31, 2009
Eligible financial collateral (1)
Guarantee and credit derivative
Eligible financial collateral (1)
Guarantee and credit derivative
23,434
14,369
 7,871
9,011
-
-
-
-
1.2 Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
10,601
12,600
2
8,872
1.3 Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
6,113
680
3,433
93
1.4 Claims on retail portfolios
6,665
1,085
4,370
45
55
4
66
1
-
-
-
-
1.5 Residential mortgage exposures 1.6 Other assets 2. Non-performing assets Total (1)
548
370
-
-
23,982
14,739
7,871
9,011
Eligible financial collateral that the Bank of Thailand allows to use for risk mitigation such as cash, deposit etc.
Full consolidation (Unit: Million Baht)
Dec 31, 2010 Eligible financial collateral (1)
Guarantee and credit derivative
23,434
14,369
-
-
1.2 Claims on Banks, Public Sector Entities (PSEs) that are treated as claims on banks and securities companies
10,601
12,600
1.3 Claims on Corporate and Public Sector Entities (PSEs) that are treated as claims on corporate
6,113
680
1.4 Claims on retail portfolios
6,665
1,085
55
4
Type of assets
1. Performing assets 1.1 Claims on sovereigns and central banks and Multilateral Development Banks (MDBs)
1.5 Residential mortgage exposures 1.6 Other assets 2. Non-performing assets Total (1)
-
-
548
370
23,982
14,739
Eligible financial collateral that the Bank of Thailand allows to use for risk mitigation such as cash, deposit etc.
240
3.2
| Basel II Pillar III Disclosure
Annual Report 2010
Market risk Market risk exposures Market risks comprise of both price and liquidity risks. Price risk is the potential loss due to fluctuations in interest rates, foreign exchange rates, equity and commodity prices.
3.2.1 Market Risk Management Structure Two entities independent from the Business Units are directly involved in the market risk management of the Bank: the Asset and Liability Management Committee (ALCO) and the Market Risk Management Group (MRMG).
The Asset and Liability Management Committee (ALCO) The ALCO is a supervisory body with delegated authority from the Risk Management Committee (RMC) to ensure that the bank-wide market risk management is in compliance with the Bank’s overall risk management policies and level of risk appetite established by the Board of Directors. The RMC delegates the day-to-day responsibility for asset and liability management and market risk management to the ALCO. The ALCO is responsible for establishing market risk directives as well as endorsing/or approving all market risk issues and limits concerning asset and liability management. ALCO is also responsible for monitoring liquidity positions and capital management programs approved from the RMC and the Board of Directors, which is the case for major policies and liquidity risks. The ALCO membership currently comprises of the Bank’s Chief Executive Officer who serves as chairman of the committee, and the Bank’s senior management. The ALCO meets at least once a month, or as needed, to review policies used for managing the Bank’s assets and liabilities, market risks, and to review the alignment of the Bank’s assets and liabilities with the changing market environment, as well as to determine that interest rates on loans, deposits, and bills of exchange are set at appropriate levels.
The Market Risk Management Group (MRMG) The MRMG is the supporting unit directly responsible for managing the market risks of the Bank with reporting line to the Chief Risk Officer. The MRMG is responsible for:
▶▶
Developing relevant new market risk management policies and implementation or amendment of existing policies to be in line with changes in the Bank’s strategy, market environment and regulatory requirements.
▶▶
Developing, implementing and enforcing market risk management processes in the Trading Book.
▶▶
Developing, implementing and enforcing market risk management processes in the Banking Book.
▶▶
Developing and validating the risk models.
3.2.2 Market Risk Management Process
The Business Units undertaking business activities that involve market risks are responsible for ensuring that they abide by the standards/guidelines set out in the policies. The MRMG ensures that the risk levels stay within the approved limits, and that any foreseeable major impending risks or adverse events are escalated to the appropriate authorities to take the necessary and timely actions.
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| 241
The limits strictly imposed include, but are not limited to, ▶▶
Foreign Exchange Risk Limits (FX Limits) cover all foreign currency transactions. These are set in accordance with the BOT regulations regarding daily foreign exchange overbought/oversold position (open position).
▶▶
Interest Rate Sensitivity Limits (PV01) control the effect of 1 basis point movement in interest rates on interest rate sensitive products. The PV01 limits are established and monitored for all relevant discrete tenor buckets.
▶▶
Management Action Trigger Limits (MAT) set the maximum tolerance levels that the management will tolerate. MAT breaches must be escalated to the ALCO for making decisions to rectify the breaches within the defined periods.
▶▶
Stop Loss Limits set the maximum losses on portfolios that the Bank must not exceed.
Within these limits, the Capital Markets Group (CMG) is responsible for managing and trading the portfolio to optimize the return on the funds invested. Procedures, strategies and performance are reviewed by ALCO, which also monitors adherence to the limits For other companies in TMB Financial Business Group, which include Phayathai Asset Management Company Limited (PAMC), TMB Asset Management Company Limited (TMBAM) and Designee for ETA Contract Limited (Designee), the Bank has established policies to define minimum guidelines in managing market (price) risk in the trading book and leaves certain discretion to subsidiaries to develop their own policies in line with their business. However, due to the nature of their business, the market (price) risk is negligible (if any).
Table 17: Minimum capital requirements for each type of market risk under the Standardized Approach (Trading only) (Unit: Million Baht)
Solo basis Minimum capital requirement for market risk under the Standardized Approach
Dec 31, 2010
1. Interest rate risk 2. Equity position risk 3. Foreign exchange rate risk 4. Commodity risk Total minimum capital requirement * Minimum capital requirement based on regulatory minimum CAR ratio of 8.5%
Full Consolidation
Jun 30, 2010
Dec 31, 2010
714
939
714
-
-
-
146
107
146
-
-
-
860
1,046
860
242
3.3
| Basel II Pillar III Disclosure
Annual Report 2010
Liquidity Risk Liquidity risk is the risk that the Bank or any one of its subsidiaries cannot meet its financial liabilities when they come due, at reasonable costs and in a timely manner. Within the Bank, the liquidity risk management framework is determined by the ALCO which has to be approved by the Board of Directors. It sets limits where applicable and takes appropriate actions in case of limit breaches. The Balance Sheet Management Group (BSMG) is assigned to maintain a sound liquidity profile through:
▶▶
Managing a well diversified mix of funding sources in terms of instrument types, fund providers, geographic markets and currencies;
▶▶
Actively managing access to the capital markets;
▶▶
Holding a portfolio of highly liquid marketable assets that can be used to obtain secured funding;
▶▶
Maintaining structural liquidity gaps that taking into account the asset mix as well as possibilities of the Bank to obtain funding from both the secured and unsecured sources;
▶▶
Maintaining a funds transfer pricing methodology in which the Bank’s cost of liquidity is properly reflected both under normal and contingency situations; and
▶▶
Day-to-day liquidity management
In determining cash flows for the liquidity gap report, the non-contractual cash flows are adjusted with client behavioral based on historical data. The client behavioral analysis is regularly reviewed and continuously studied in order to fully optimize the result in the Bank’s liquidity gap report. The liquidity risk management function is delegated to the Market Risk Management Group (MRMG), which joins with BSMG in bearing the responsibility for liquidity risk stress testing. The BSMG jointly with the MRMG undertake quarterly liquidity risk stress testing. The liquidity positions are stress tested under various scenarios to assess whether the Bank can withstand a prolonged period of stress. The MRMG’s roles and responsibilities pertaining to liquidity risk management include, but are not limited to the following: ▶▶
Owns, develops, reviews, and updates the liquidity risk management policy and stress testing scenarios;
▶▶
Endorses and recommends the supplementary guidelines under the Bank’s liquidity risk management policy; and
▶▶
Identifies, monitors and reports liquidity risk to ensure compliance with the Bank’s policy and regulatory framework.
Contingency Plan The Bank has a contingency plan, which establishes procedures and actions for managing liquidity in crisis situations. The plan is regularly reviewed and tested to ensure that the Bank is well prepared for a potential liquidity crisis. For other companies in TMB Financial Business Group, the Bank has established policies to define minimum guidelines in managing liquidity risk and leaves certain discretion to subsidiaries to develop their own policies in line with their business. However, due to the nature of their business, their liquidity risk is negligible (if any).
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| 243
3.4 Equity exposures in banking book The equity exposures in the Bank’s Banking Book consists of equity considered “Available-for-Sale” and “Other Investment”. Those in the “Available-for-Sale” portfolio comprise of quoted equities held for the following purposes: ▶▶
Joint Venture,
▶▶
Debt Restructuring,
▶▶
Property Funds and
▶▶
Financial & Supporting Business.
Those in the “Other Investment” portfolio comprise of non-quoted equities held for the following purposes: ▶▶
Joint Venture - General Investment,
▶▶
Debt Restructuring - General Investment,
▶▶
Property Funds - General Investment,
▶▶
Financial & Supporting Business - General Investment,
▶▶
Financial & Supporting Business - Associated Company, and
▶▶
Financial & Supporting Business - Subsidiary Company.
With the exception of those held in the last two portfolios: “Financial & Supporting Business-Associated Company” and “Financial & Supporting Business-Subsidiary Company” as strategic investments, the Bank’s strategy is to liquidate.
Table 18: Equity exposures in the banking book (Unit: Million Baht)
Solo basis Equity exposures
Dec 31, 2010
Full Consolidation
Dec 31, 2009
Dec 31, 2010
1. Equity exposures 1.1 Equities listed and publicly traded in the Stock Exchange (include Thailand and Foreign)
- Cost
309
329
470
- Market value
278
248
440
6,802
7,774
2,743
166
779
178
64
14
65
349
256
190
1.2 Other equities (include Thailand and Foreign) * 2. Gains (losses) of sale of equities in the reporting period 3. Net surplus (loss) from valuation AFS equity 4. Minimum capital requirements for equity exposures classified by the calculation methods - SA approach * Including subsidiaries only solo basis
3.5 Operational risk Operational risk is defined as the risk of loss, both financial and non-financial, resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk. Effective operational risk management leads to more stable business processes and lower operational costs.
244
| Basel II Pillar III Disclosure
Annual Report 2010
Operational Risk Management at the Bank is managed through a governance structure where the Board of Directors holds the ultimate responsibility for bank-wide risk management. The Board has delegated several operational risk management related authorities to the Operational Risk Management Committee (ORC), chaired by CEO, whose responsibilities are to identify, measure, monitor, and manage the operational risks of the Bank and its subsidiaries with appropriate quality of coverage (granularity) and to ensure that appropriate management action is taken by the responsible line managers at the appropriate level of granularity. The Bank has established a dedicated Operational Risk Management Group (ORMG), reporting to the CRO, which consists of specialized departments to oversee specific operational risk management concerns such as processing risk, control risk, unauthorized activity risk, information (technology) risk, crisis management & business continuity/disaster recovery risk, fraud risk, personal & physical security risk, and employment practice & workplace safety risk. Business and Support Units are primarily responsible and accountable for their own operational risk management and control. The Bank has appointed a number of Unit Operational Risk Managers (UORM) in the Business and Support Units who, with support from the Operational Risk Management Group, take on / carry out the operational risk management responsibilities of their respective units. Audit Group operates as the “third line of defence”. Their mission is to provide an independent assurance of the design and effectiveness of internal controls established by the first and second line of defence. In carrying out this work, Audit Group will provide specific recommendations for improving the governance, risk & control framework. The Bank has developed an Operational Risk Management Framework to ensure that the operational risks are properly identified, assessed, monitored, reported, analysed and controlled in a systematic and consistent manner. The Framework provides the foundations and a common infrastructure for delivering, maintaining, and governing risk management. The Framework consists of an Operational Risk Governance Structure applying the three lines of defence risk governance model, and aligning with the COSO risk management framework. The Bank has established the risk appetite level for operational risk utilizing the potential loss (probability and impact) concept. The level is determined based on consideration of the historical loss data of the bank, the financial strength, and the overall operational risk management environment. For potential loss over a threshold amount, the bank will take further mitigating action to bring down the potential loss level to within threshold. Various policies, minimum standards, and guidelines have been established to manage the various operational risks as per Basel New Capital Accord (Basel II) guideline including coverage on all key processes and tools such as Risk & Control SelfAssessment (R&CSA), Control Self Assessment (CSA), Key Risk Indicators (KRI), and Incident Management. R&CSA / CSA is a process that helps identify and assess key risks and controls as well as to determine the mitigating actions. The Bank has also established KRI at corporate level to be a warning signal for all levels of management enabling them to proactively manage and control their operational risks. Incident reporting is established to enable detection, resolution, analysis of operational risk incidents as well as collection of loss data. This incident reporting and response is key in order to facilitate management’s insight in and awareness of the actual costs of operational risks, existing control weaknesses, and the Bank’s specific risk profile.
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| 245
Other major Operational Risk Mitigation Programs/Mechanisms include Product and Service Approval Process (PSAP), Action Tracking, Outsourcing / Insourcing Risk Management, and Business Continuity Plan and Disaster Recovery Plan (BCP / DRP). To ensure that products and services are offered in a safe manner, the Product and Service Approval Process (PSAP) is established to set guidelines for sign-off and approval of new products and services. This due diligence process ensures that the risks created by the new products and services are properly identified and addressed, and that the necessary infrastructure and controls are in place to support the new business. To ensure adequate and timely resolution of audit and non-audit items, ORMG has also implemented an action tracking system as a tool to keep track of the status of their items. Through this action tracking system, all outstanding audit and non-audit findings can be monitored and managed efficiently by all appropriate parties. The Bank has established the Outsourcing / Insourcing Risk Management Policy to set out the principles and standards for the effective identification of the major risks created by outsourcing / insourcing and the management of such risks. The Bank has established the Business Continuity Management Policies and Standards to provide guidance and standards for all units to develop Business Continuity Plan. The Business Continuity Management under ORMG is set up to oversee the implementation of BCM Policies and Standards, monitor and lead the co-ordination of group-wide BCP initiatives to raise the overall BCP / DRP readiness of the Bank. In term of operational risk management at the subsidiaries, the subsidiaries have started to align and adopt TMB’s Operational Risk Management Framework, Policies, and Minimum Standards, where applicable. Their organization structure including dedicated operational risk management functions and Committees have been established to oversee proper operational risk management. To date, TMB’s Subsidiaries have already implemented loss data collection, Business Continuity Plan, and Operational Risk Control Self Assessment. Implementation plan of additional operational risk policies and tools are put in place for further execution from 2011 onwards.
3.6 Interest rate risk in the banking book (IRRBB) The interest rate risk in the Banking Book is the risk that the Bank’s earnings or economic value resulting from the non-trading positions is negatively impacted by movements in interest rates. The Bank has established policies that set a framework for managing interest rate risk in the Banking Book (IRRBB) to ensure that the risk management practices are prudently carried out. The Bank’s key elements for sound interest rate risk management include, but are not limited to the following: ▶▶
The Board of Directors and senior management oversight;
▶▶
In-place risk management policies and procedures;
▶▶
The risk identification, measurement, monitoring, and control procedures; and
▶▶
The internal controls and independent audits.
246
| Basel II Pillar III Disclosure
Annual Report 2010
The Assets and Liabilities Management Committee (ALCO) is delegated by the Board of Directors to oversee the firm-wide structural interest rate risk to stay within the Bank’s aggregated interest rate risk limit. ALCO endorses and/or approves limits where applicable and takes appropriate actions in case of limit breaches. The Balance Sheet Management Group (BSMG) is a designated unit with full responsibility to operate day to day management of interest rate risk in the Banking Book and ensure that all activities undertaken are carried out in full compliance with relevant policies. The Market Risk Management Group (MRMG) is an independent unit responsible to ensure that the IRRBB is properly and appropriately identified, measured, monitored, controlled and reported. In case of any non-compliance matters, the MRMG reports/escalates the matters with suggestions on corrective measures to the senior management and ALCO, whereby ALCO reports such non-compliance matters to the RMC. The BSMG is responsible to submit a corrective action plan and seek for approval/endorsement from the senior management and ALCO. The Financial Control Group (FCG) ensures that the accounting treatment is consistent with related policies and statutory requirements. In managing the IRRBB, the Bank uses the Repricing Gap approach to determine the impact of interest rate changes on the net interest income (NII) and economic value on a monthly basis. The Repricing Gap uses the remaining term or next repricing date as stipulated in the contract. There are established interest rate risk limits to monitor and control the impact of interest rate changes on the NII and economic value. The Bank adopts interest rate risk hedging measures to cushion the interest rate volatility, e.g. rebalancing of assets and liabilities with consideration of external and internal factors including interest rates forecasted by the Bank’s Research Department. To examine the effect of exceptional but plausible events, stress testing is performed. Currently, changes to the net interest income and economic value are computed assuming different size shocks in interest rate yield curves. Going forward, the Bank will measure the possible loss under probable and severe stress scenarios to be determined by the ALCO measured via NPV-at-Risk and Earnings-at-Risk. The Bank also reports on the effect of changes in interest rate by 100 bps upward shift to net interest income, economic value and stress testing results. The organizational structure of the Bank is established to promote and ensure appropriate check and balance systems including suitable lines of control and segregation of duties. Internal control systems are established by specifying detailed frameworks and processes, delegation of authority, verification of transactions, reconciliation of inputs, accounts and records of documents and agreements with accuracy and completeness.
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| 247
Table 19: The effect of changes in interest rates to earnings (net) by 100 bps parallel in the next 1 year Solo basis (Unit: Million Baht)
Solo basis Dec 31, 2010 Currency
Upward shift 100 bps
Full consolidation Dec 31, 2009
Downward shift 100 bps
Upward shift 100 bps
Dec 31, 2010
Downward shift 100 bps
Upward shift 100 bps
Downward shift 100 bps
THB
849
(1,636)
735
(1,682)
853
(1,642)
USD
34
(56)
21
(17)
34
(56)
Others
(5)
4
(4)
4
(5)
4
878
(1,688)
752
(1,695)
882
(1,694)
Total Effect
Based on the balance sheet structure of the Bank, for assets and liabilities of which the repricing periods are within 1 year, the asset side has a relatively shorter term repricing period while the liability side has a relatively longer term repricing period. This results in positive impact on the net interest income when interest rates increase. On the other hand, the Bank’s interest income is more sensitive to interest rate decreases as the deposit cost cannot be reduced by the full 100 bps for all deposit products. The impact to net interest income for the full consolidation of the group mostly resulted from the effect from the Bank where the nature of its business is to undertake interest rate risks. Based on the 2010 balance sheet structure of Phayathai Asset Management Company (PAMC), for assets and liabilities of which the repricing periods are within 1 year, the asset side has a higher proportion of relatively shorter term repricing period while that of the liability side remains unchanged. The cumulative asset and liability gap is positive. For other companies in TMB Financial Business Group, the Bank has established policies to define minimum guidelines in managing interest rate risk in the non-trading book (including interest rate risk management of assets, liabilities and offbalance-sheet items) and leaves certain discretion to subsidiaries to develop their own policies in line with their business. However, due to the nature of their business, the interest rate risk is negligible (if any).
3.7 Strategic risk Strategic risk is defined as the risk that results from the exercise of strategic plans, business plans, strategic implementation, and control that are inappropriate and inconsistent with both internal and external business environments. Core Strategic Risk Policy (“the Policy”) is one of risk management policies to assure overall sound risk management practices of TMB and its subsidiaries. The Policy consists of two key interrelated processes.
▶▶
Strategic management process deals with how TMB and Subsidiaries deploys its existing resources and capabilities to add most value in an environmental setting, divided into 3 steps: Strategic Formation, Strategic Implementation, and Strategic Control.
248
| Basel II Pillar III Disclosure
▶▶
Annual Report 2010
Strategic risk management is concerned with the development of risk preventive and corrective tools in order not only to lower the likelihood of strategic risk exposure, but also to maintain the bank’s awareness of strategic risks which address the best practice framework for identifying, monitoring, and controlling strategic risks
Sound governance will support TMB and Subsidiaries to maintain and reinforce the effectiveness of both strategic management process and strategic risk management. In order to ensure effective check and balance, RMC will play a key role with support from RMG in oversight for managing strategic risks and maintaining and controlling strategic risk management process The Policy is subject to be reviewed annually to reflect changes in internal and external business environments. Where relevant, changes in the Policy must be followed by changes to supplementary policies, frameworks, or guidelines maintained by respective BU/SUs and Subsidiaries. The bank does an annual assessment of the level and trend relating to strategic risk.
3.8 Reputational risk Reputational Risk can be described as the exposure incurred from unexpected incidents or from unanticipated response to TMB’s initiatives, actions, and day-to-day activities, which generate reputation damage ranging from negative perception to corporate litigation, unintentional non compliance to governing laws and regulations. Since 2007, TMB has implemented the Reputational Risk Management Policy based on both preventive and corrective basis. The scope of Policy governs all TMB units by recognizing TMB’s employee behaviors, operations, products/services and external factors as the main sources of reputational risk exposure. Corporate Communications Group is responsible to monitor reputational risk issues and incidents from media and public on a regular basis and take appropriate actions as deemed necessary to comply with the Communication Guideline as stated in the Policy. To minimize the likelihood of risk exposures, the Policy identifies the factors of the risk which may cause the damage to the bank’s reputation and states the guidelines to prevent and mitigate the reputational risk. Moreover, to effectively implement the Policy and reduce potential risk exposures, the Bank has conducted Guideline of Reputational Risk issue’s Escalation based on the severity of its possible consequence. The Boards and Senior Management are ultimately responsible for setting up the right “Tone & Priorities” and ensuring that the developed and implemented risk management practices are appropriate for TMB. At organizational level, Risk Management Group will assist Risk Management Committee in overseeing relevant matters relating to reputational risk management. Eventually, to ensure compliance with policies, plans, procedures, and business objectives relevant to Reputational Risk Management Policy, Audit Group will regularly review the adequacy of controls established and report the results to the Board, Audit Committee, and Executive Management as deem appropriate
TMB Bank PCL
Company Information
|  249
Company Information
General Information Name of the company
TMB Bank Public Company Limited
Nature of Business
Commercial bank’s businesses in accordance with Financial Institutions Businesses Act and the businesses concerning financial services under the permission of the Ministry of Finance, the Bank of Thailand, and other parties concerned.
Head Office
3000 Phahon Yothin Road, Chom Phon, Chatuchak, Bangkok 10900
Registration No.
0107537000017
Telephone
0-2299-1111
Facsimile
0-2273-7640, 0-2299-2758
TMB Phone Banking
1558
Website
http://www.tmbbank.com
ir@ tmbbank.com
Registered capital
41,903,301,555 Baht (as of 31 December 2010)
Paid-up capital
41,352,301,555 Baht
Common share
43,528,738,479 shares at par value 0.95 Baht
Other referral parties Share Registrar
Thailand Securities Depository Co., Ltd. The Stock Exchange of Thailand Building 62 Ratchadapisek Road, Klongtoey Bangkok 10110, Thailand Tel. 0-2229-2800
Auditors
Ms. Ratana Jala
CPA Registered No. 3734
Or Ms. Rungnapa Lertsuwankul CPA Registered No. 3516 Or Mr. Narong Puntawong
CPA Registered No. 3315
Ernst & Young Office Limited 33nd Floor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road, Klongtoey, Bangkok 10110 Tel. 0-2264-0777
250
| Investment of TMB in Other Companies
Annual Report 2010
Investment of TMB in other Companies
Investment in other companies as of Dec.31, 2010 holding more than 10 % of the paid-up capital in each company were as follows: TMB’s ownership Type of capital (share)
Type of business
1 Phayathai Asset Management Co.,Ltd. Tel. 0-2354-5001, Fax 0-2354-5014
Bangkok
Finance
Common stock
107,000,000
2 TMB Property Development Co., Ltd. Tel. 0-2299-1159, Fax 0-2242-3138-9
Bangkok
Real estate
Common stock
10,000
9,993
99.93
4,169,342.92
3 Designee For Eta Contract Co., Ltd. Tel. 0-2299-1217, Fax 0-2299-1278
Bangkok
Support financial institution
Common stock
1,000
994
99.40
13,617.80
4 TMB Asset Management Co., Ltd. Tel. 0-2636-1800 ext. 1725 (customer service center)
Bangkok
Finance
Common stock
10,000,000
7,499,997
75
188,230,287.36
5 Siam Resort Fund Tel. 0-2649-2000, Fax 0-2649-2107-8
Bangkok
Property fund
Unit trust
92,816,465
44,681,927.89
48.14
319,771,489
6 Metro Designee Co., Ltd. Tel. 0-2230-6201, Fax 0-2230-6200
Bangkok
Support financial institution
Common stock
1,000
300
30.00
7,500
7 The Column Property Fund Tel. 0-2649-2000, Fax 0-2649-2107-8
Bangkok
Property fund
Unit trust
212,430,342
63,138,715.66
29.72
633,750,256.10
8 N D Group Feedmill Co., Ltd.
Lumphun
Wholesale/ Retail
Common stock
120,000
30,000
25.00
0.00
Chiang mai Garment 9 Wing Group Co., Ltd. manufacturer Tel. 0-5333-1315-6, Fax 0-5333-1314, 0-5333-1336
Common stock
9,000
2,250
25.00
0.00
10 Rural Capital Partners Co., Ltd. Tel. 0-2318-3958, Fax 0-2718-1851
Bangkok
Finance
Common stock
1,000,000
175,000
17.50
257,250.00
11 Thai Chareonphol Industry Co., Ltd. Tel. 0-5458-1202, Fax 0-5458-1876
Phrae
Production
Common stock
15,500
2,500
16.13
0.00
12 Tris Corporation Limited Tel. 0-2231-3011, Fax 0-2231-3681
Bangkok
Services
Common stock
1,000,000
153,000
15.30
14,361,948.00
13 Thai Business Fund 5 Tel. 0-2670-4900 ext. 1291-2 Fax 0-2679-1820
Bangkok
Property fund
Unit trust
220,000,000
30,000,000
13.64
137,343,000
14 M-Home Spv 1 Co., Ltd. Tel. 0-2633-6950, Fax 0-2633-6990
Bangkok
Real estate
Common stock
10,000
1,000
10.00
0.00
15 Wholesale Town Co., Ltd. Tel. 0-2531-6860, Fax 0-2532-3009
Bangkok
Transportation Common stock
22,000
2,200
10.00
0.00
16 M_Thai Estate Co., Ltd. Tel. 0-2261-1144, Fax 0-2261-1143
Bangkok
Real estate
Common stock
30,000,000
3,000,000
10.00
0.00
17 Paiboon Insurance Co., Ltd. Tel. 0-2246-9635, Fax 0-2246-9660-1
Bangkok
Services
Common stock
2,000,000
200,000
10.00
30,200,000.00
Company
Paid-up capital (share)
Amount (share)
Amount (Baht) Percentage (net of allowance for (%) diminution in value)
Head office location
107,000,000 100.00
1,834,940,256.70
TMB Bank PCL
TMB Branches in Bangkok Metropolitan
|  251
TMB Branches in Bangkok Metropolitan
Office
Telephone
Fax
Ministry Of Defence
0-2222-1215, 0-2222-1218, 0-2224-4197 (Manager)
0-2224-7407
Krung Kasem
0-2222-5158-9, 0-2222-7801, 0-2222-5724, 0-2222-3504
0-2222-5667
Kluay Nam Thai
0-2712-4048-9, 0-2712-4051
0-2712-4050
Royal Thai Armed Forces Headquarters
0-2575-6425-7
0-2575-6427
Royal Thai Army Headquarters
0-2280-1825, 0-2280-1799
0-2280-1537
Royal Thai Navy Headquarters
0-2891-0052-5
All numbers
Royal Thai Air Force Heradquarters
0-2531-8560-2
0-2531-2427
Provincial Electricity Authority
0-2591-1424-5
0-2591-1426
Khlong Chun
0-2377-1370, 0-2377-9636, 0-2377-9737, 0-2375-7872, 0-2375-7871
0-2377-1360
Khlong Toei
0-2249-1831, 0-2249-6067, 0-2249-1619, 0-2249-1518
0-2240-2237
Carrefour Lamlukka Khlong 4
0-2563-3236-7
0-2563-3238
Carrefour Suan Luang
0-2328-0745-7
0-2328-0747
Khae Rai
0-2951-0840, 0-2951-0842, 0-2588-1778, 0-2588-1418
0-2951-0841
Ngam Wong Wan
0-2580-2187 (Manager), 0-2588-0021, 0-2588-0023
0-2588-3148
Charan Sanit Wong
0-2424-5520-1, 0-2882-4548-9
0-2435-2393
Chamchuri Square
0-2160-5212-6
0-2160-5215-6
Chaeng Watthana
0-2574-0203-5, 0-2574-5655
All numbers
Chong Nonsi
0-2285-3939-42
0-2285-3943
Chok Chai 4
0-2538-8412, 0-2538-3125-6, 0-2539-2615, 0-2933-2745
0-2538-3125-6
Soi Lang Suan
0-2652-2090-4, 0-2652-1761-2
0-2652-2095
Seacon Square
0-2721-9560-2
0-2721-9563
Central Bangna
0-2745-7263-5
All numbers
Central Pinklao
0-2433-1386-7
0-2433-1390
Central Rama II
0-2872-4564-5
0-2872-4566
Central Rama III
0-2213-0803-5
All numbers
Central Ratana Thibet
0-2525-4570-4
All numbers
Centralplaza Chaengwattana
0-2835-3589-91
0-2835-3592
Central Plaza Ladprao
0-2937-0356-8
All numbers
Central World
0-2646-1284-6
0-2646-1286
Zeer Rangsit
0-2992-6370-2
0-2992-6372
252
| TMB Branches in Bangkok Metropolitan
Annual Report 2010
Office
Telephone
Fax
The Platinum Fashion Mall
0-2121-9241-3
All numbers
The Mall 3 Ramkhamhaeng
0-2319-1401-3
All numbers
The Mall Ngamwongwan
0-2550-0437-8
0-2550-0439
The Mall Bangkapi
0-2704-7727-9
All numbers
The Mall Bangkae
0-2454-9433-4
0-2803-8325
Tri Phet
0-2224-4281, 0-2221-6841, 0-2224-1921, 0-2221-1371, 0-2224-3819, 0-2221-2908, 0-2224-9196
0-2221-8706
Talad Thanommit WatcharaPhon
0-2347-0157-8
0-2347-0159
Talad Noi
0-2235-1720-1, 0-2235-3437, 0-2236-1004, 0-2236-0998
0-2235-3436
Talad Pong Phet
0-2953-3901-2, 0-2953-3904-5, 0-2589-3228
0-2953-3906
Talad Phlu
0-2465-2322, 0-2465-9949, 0-2465-9955-6
All numbers
Taling Chan
0-2880-8070-3
0-2880-8073
Tao Poon
0-2585-1123, 0-2585-1233, 0-2587-8990-1, 0-2585-9215, 0-2911-5387
0-2911-5386
Thanon Chom Thong
0-2476-3886, 0-2476-3951, 0-2476-3631
0-2468-8190
Thanon Chan
0-2213-2540-3, 0-2213-1308-9
0-2213-2541
Thanon Charoennakhon
0-2862-4910-2
0-2862-4913
Thanon Cheang Wattana
0-2584-5549-50, 0-2583-9997, 0-2962-1695, 0-2962-1697
0-2548-5548
Thanon Tiwanon
0-2950-0252-4
0-2591-0390
Thanon Theparak
0-2383-5618-9, 0-2383-5968
0-2383-5969
Thanon Thepharak Km.12
0-2312-2123-5
0-2312-2126
Thanon Thepharak Km.22
0-2706-0995-8
0-2706-0998
Thanon Theparak Km.3
0-2753-2860-3
0-2753-2864
Thanon Borommarat-Chonni
0-2434-9791-3, 0-2434-2411
0-2434-2411
Thanon Bangna-Trat Km.4
0-2744-1214-7
0-2744-1213
Thanon Pracha Rat – Nonthaburi
0-2525-3074, 0-2967-5501-4
0-2526-3526
Thanon Prachauthit
0-2870-9124-6
0-2870-9127
Thanon Rama IX
0-2643-0383-4, 0-2643-0398-9
0-2643-0212
Thanon Rama IX – Thanon Seri 7
0-2718-2743-8
0-2718-2747
Thanon Phatthanakan
0-2722-6846-8
0-2722-6849
Thanon Phibun Songkhram
0-2526-2020-2, 0-2966-5503
0-2526-2020-1
TMB Bank PCL
TMB Branches in Bangkok Metropolitan
| 253
Office
Telephone
Fax
Thanon Phetcha Kasem – Bang Khae
0-2413-0922-3, 0-2413-3179-80
0-2804-6001
Thanon Phetcha Kasem – Nong Khaem
0-2431-0308-12
0-2431-0313
Thanon New Phetcha-Buri
0-2319-1520-4
0-2319-1522
Thanon Ratchadaphisek-Nanglinchi
0-2678-0164-7
0-2678-0169
ThaNon Rattana Thibet
0-2921-8740-3
0-2921-8740
Thanon Wat King Kaeo
0-2750-1920-2, 0-2750-1875 (Manager)
0-2750-1923
Thanon Srinakarin-Tara
0-2322-0691-2, 0-2320-0100, 0-2320-0098
0-2320-0099
Thanon Srinakarin Tara – La Salle
0-2748-7484-6
0-2748-7483
Thanon Song Prapha
0-2929-7100-3
0-2929-7104
Thanon Samakkhi
0-2574-6221, 0-2980-0400-1
0-2980-1368
Thanon Sai Luat – Samutprakan
0-2389-5021-2, 0-2389-5063-4, 0-2389-3747
0-2389-3302
Thanon Suk Sawat – Ratburana
0-2428-4507-11
0-2428-4387
Thanon Sukhaphiban 1
0-2509-1062, 0-2509-1064, 0-2509-1065
0-2509-1068
Thanon Sukhaphiban 2
0-2704-8156-8, 0-2704-8160
0-2704-8159
Thanon Sukhaphiban 3
0-2735-2581-4
0-2735-2585
Thanon Sukhumwit – Samrong
0-2394-5858-9, 0-2756-8082, 0-2756-9013-4
0-2384-2856-7
Thanon Luang – Worachak
0-2226-4781-5
0-2226-4788
Thonglo
0-2390-0437-40, 0-2712-7625-6, 0-2712-7624, 0-2712-5879
0-2392-3496
Tha Phra
0-2869-0910-2
0-2869-0915
Suvarnabhumi Airport
0-2134-1818-21
0-2134-1878
Tesco Lotus Navanakorn
0-2909-0829-31
0-2909-0831
Tesco Lotus Srinakarin
0-2175-7575, 0-2175-7824-5
0-2175-7826
Thammasat – Rangsit
0-2516-9970-2
0-2516-9973
Thatthong
0-2392-9235, 0-2395-9582, 0-2381-6281-2, 0-2391-3146
0-2392-3495
Bang Khun Non
0-2424-2826, 0-2424-2322, 0-2424-5740
0-2424-2829
Bang Khen
0-2513-2805, 0-2513-2807, 0-2513-8201
0-2513-3132
Bang Chak
0-2332-9290-3
0-2332-9294
Bang Sue
0-2911-3142-4
0-2911-3145
Bangna
0-2398-4859-60, 0-2398-4862-3
All numbers
Bang Bon
0-2451-0630-3
0-2451-0634
Bang Bua
0-2972-9693-5, 0-2972-9699
0-2972-9693
254
| TMB Branches in Bangkok Metropolitan
Annual Report 2010
Office
Telephone
Fax
Bang Bua Thong
0-2920-2510-3
0-2920-2514
Bang Phlad
0-2435-4910, 0-2424-5221, 0-2424-6499
0-2435-4864
Bang Rak
0-2237-1844, 0-2237-2620-21
0-2266-4115
Bang Lamphu
0-2629-1011-3
0-2282-5395
Big C – Thanonrama 2
0-2416-7806, 0-2416-7881, 0-2416-7950
0-2416-7950
Bo Bae
0-2222-0024, 0-2225-2823, 0-2225-4255, 0-2225-4284
0-2222-3631
Pathum Thani
0-2581-1740-2
0-2581-2155
Pracha Niwet 1
0-2953-8161-2, 0-2953-8164
0-2953-8163
Pom Phrachula Chomklao
0-2425-9879, 0-2425-8205, 0-2425-8499, 0-2425-9667
0-2819-8188
Pak Kret
0-2583-8220, 0-2583-8685, 0-2583-4434, 0-2583-4435
0-2583-7153
Pak Khlong Talad
0-2222-5828, 0-2222-5809, 0-2222-5826
0-2623-8708
Poo Chao Saming Prai
0-2384-1387-8, 0-2394-4412, 0-2394-6317
0-2384-1673
Phaya Thai
0-2354-5052-3, 0-2354-5076, 0-2354-5228, 0-2354-5059
0-2354-5163
Phra Khanong
0-2381-1117-8, 0-2381-1126
0-2390-0022
Phra Pradaeng
0-2463-3872-4
0-2463-3909
Phrapinklao
0-2883-2884-7
0-2433-5406
Phran Nok
0-2412-2764, 0-2412-3527, 0-2412-3040, 0-2412-2223, 0-2412-3778, 0-2412-2435
0-2412-3527
Phahonyothin
0-2299-2349-50, 0-2299-1282, 0-2299-1283, 0-2299-1295
0-2273-7806
Patpong
0-2236-9395-9
0-2634-3246
Pantip Plaza Ngamwongwan
0-2953-5167-9
0-2953-5169
Pantip Plaza Bangkapi
0-2187-3059-60
0-2187-3061
Phutthamonthon
0-2441-0120-1, 0-2441-9392-3
0-2889-3432
Peninsula Plaza
0-2253-0067-8, 0-2253-9756-7, 0-2253-4837
0-2253-9755
Future Park Rangsit
0-2958-0930-2
All numbers
Fashion Island
0-2947-5129-31
0-2947-5131
Mahaprutharam
0-2238-5029-30, 0-2238-0867-8
0-2237-6302
Bangkok University – Rangsit Campus
0-2516-8492-4
0-2516-8494
Kasetsart University
0-2561-4289, 0-2940-5728, 0-2940-5729
0-2561-4290
Thammasat – Thaphrachan
0-2225-8186-7
0-2225-8188
Chandrakasem Rajabhat University
0-2513-7264-5
0-2513-1700
TMB Bank PCL
TMB Branches in Bangkok Metropolitan
| 255
Office
Telephone
Fax
Dhonburi Rajabhat University
0-2465-5690-1
0-2465-5744
Phranakhon Rajabhat University
0-2522-6187-9
All numbers
Ramkhamhaeng University – Bangna Campus
0-2397-7048, 0-2397-7049
0-2397-7047
Ramkhamhaeng – Huamak
0-2369-1820-2
0-2369-1822
Sripatum University
0-2579-2268, 0-2579-6094
0-2579-8473
Siam University
0-2868-5338, 0-2868-5375
0-2868-5932
Mah Boonkrong Center
0-2215-2136-7, 0-2620-9233-4, 0-2686-3690
0-2686-3689
Minburi
0-2517-3778-9, 0-2517-1222, 0-2918-5714
0-2918-5712
Muang Thong Thani
0-2504-5141-3
0-2504-5143
Muang Ake Rangsit
0-2536-4173-6
All numbers
Makro Charansanitwongse
0-2864-6066-7
0-2864-6068
Yannawa
0-2289-1132, 0-2291-3464, 0-2688-1508-9
0-2291-3465
Yawaraj
0-2225-9453-4, 0-2224-7829, 0-2224-7263
0-2225-8254
Rangsit – Khlong 3
0-2990-9131-4
0-2990-3134
Rang Sit – Pathum Thani
0-2958-1007-9
0-2516-8551
Ratchadaphisek – Huai Khwang
0-2692-3105-8
0-2692-3109
Rajdamnern
0-2280-0101-3
0-2280-0107
Rajprasong
0-2252-6689-91, 0-2255-1472
0-2252-6967
Rajawong
0-2221-0599, 0-2225-3721, 0-2226-3324-5
0-2226-3323
Rarm Intra Km.8
0-2943-1451-2, 0-2519-3579-80, 0-2943-1450
0-2519-3581
Rarm Intra Km.4
0-2973-0741-3
0-2973-0745
Bangkok Hospital Soi Soonvijai
0-2369-2657-8
0-2369-2659
Bangkok Hospital Dental Center Building
0-2319-0674-9
0-2319-0680
St.Louis Hospital
0-2212-6300-2, 0-2675-7905-6
0-2212-6303
Phramongkutklao Hospital
0-2354-7880-84
0-2354-7879
Bhumibol Adulyadej Hospital
0-2532-2854-6, 0-2531-6278
All numbers
Somdej Phrapinklao Hospital
0-2460-0269-70, 0-2498-9844, 0-2476-3062 (Manager)
0-2476-3061
Lat Krabang
0-2739-1820-3
0-2739-1820
Lat Phrao 103
0-2370-3167-69, 0-2370-3165-6
0-2370-3170
Lat Phrao 124
0-2514-0802, 0-2514-0562, 0-2514-2916, 0-2934-0974-5
0-2530-1891
256
| TMB Branches in Bangkok Metropolitan
Annual Report 2010
Office
Telephone
Fax
Lat Phrao 6
0-2511-1819, 0-2511-4052, 0-2511-5186, 0-2511-3983, 0-2938-6618, 0-2938-6619
0-2513-8112
Lat Ya
0-2439-7134, 0-2437-3882, 0-2437-1078
0-2439-1064
Landmark Plaza
0-2255-8431-3
0-2255-8434
Wong Wien Yai
0-2472-1304, 0-2472-1432, 0-2890-0361-2
0-2890-0362
Wang Burapa
0-2221-5121-2, 0-2623-8833
0-2221-5124-5
Sriyan
0-2243-1446-7, 0-2241-3865, 0-2243-3867
0-2243-0664
Siriraj
0-2866-2674-6, 0-2411-3606, 0-2411-3548
0-2411-3552
Metro Shopping Center
0-2252-9009-10, 0-2252-9014, 0-2254-1288
0-2254-1289
Wararat Shopping Center
0-2287-3683-5
All numbers
The Government Complex (Building B)
0-2143-8310-14
0-2143-8314
The Government Complex (Building A)
0-2143-8307-8
0-2143-8309
Sanam Pao
0-2278-5240-1, 0-2278-2555-6
0-2270-0252
Sanam Suapa
0-2282-3451-2, 0-2281-6180
0-2282-6099
Samut Prakan
0-2389-5917-8, 0-2389-5895-6, 0-2389-5919, 0-2387-0307
0-2389-5897
Siam Paragon
0-2129-4585-6, 0-2129-4588, 0-2129-4587
0-2129-4587
Siam Square
0-2658-1752-3, 0-2251-2232, 0-2252-6049
0-2252-5856
Suan Chatuchak
0-2272-4415-6, 0-2272-4233
0-2271-4499
Krung Thon Bridge
0-2424-2577, 0-2434-3536, 0-2883-3711
0-2424-5939
Saphan Khwai
0-2278-2090-2, 0-2278-2122, 0-2279-2268, 0-2618-4756
0-2279-0413
Saphan Nonthaburi
0-2976-5500-5
All numbers
Saphan Luang
0-2216-9650-2, 0-2216-2527
0-2216-2527
Sapanmai Donmuang
0-2521-3007-8, 0-2971-1107
0-2971-1106
Sathu Pradit
0-2294-3487, 0-2294-5510, 0-2295-4217-18
0-2294-4021
Samrong
0-2384-0352-3, 0-2384-4653, 0-2384-4661
0-2754-1904
Siyak Soi On Nuj – Thanon Srinakarind
0-2321-6924-7
0-2322-6093
Siyak Thanon Bang Khunthian – Thanon Rama II 0-2415-0151-3
0-2415-0154
Silom
0-2236-4452-3, 0-2236-4432, 0-2236-4824, 0-2236-9500, 0-2236-0213
0-2236-4410
Silom Soi 7
0-2230-5439, 0-2230-5241, 0-2230-5732, 0-2230-5145, 0-2230-5253
0-2230-5194
Sukhumwit 11
0-2254-1330-2, 0-2253-0334, 0-2651-0243
0-2651-0242
TMB Bank PCL
TMB Branches in Bangkok Metropolitan
| 257
Office
Telephone
Fax
Sukhumvit 31
0-2662-3546-7
0-2662-1933
Sukhumvit 71
0-2711-3080-1, 0-2711-3083, 0-2391-6514, 0-2391-6785, 0-2392-0313, 0-2391-0710
0-2392-0312
Thanon Sukhumwit Km.28 – Samut Prakan
0-2702-3418-20
0-2702-3426
Surawong
0-2266-5230-3, 0-2634-0208
0-2236-3651
Suvarnabhumi Free Zone
0-2134-1851-3
0-2134-1874
Suvarnabhumi Airport Fl.2 Arrival
0-2134-1804-5
0-2134-1876
Suvarnabhumi Thai Airway Technical
0-2134-1848-50
0-2134-1873
Suvarnabhumi Aob
0-2134-1845-6
0-2134-1875
Senanikom
0-2570-1386-7, 0-2570-1710
0-2570-0874
Nong Chok
0-2543-1344-6, 0-2988-2852
0-2543-1344-6
Lak Song
0-2801-4291-3
0-2081-4294
Huai Khwang
0-2274-3200-5
0-2274-3206
Hua Mak
0-2318-0503-5
0-2718-8057-8
Asok
0-2259-3312-4, 0-2261-6653, 0-2261-6654, 0-2261-6655 (Manager)
0-2261-6654
On Nut
0-2333-0395-6, 0-2742-1724
0-2333-0399
Column Tower Ratchadapisek
0-2259-7712-4
0-2259-7714
Yada Building Silom
0-2652-5165-6, 0-2652-5175-6, 0-2236-3915
0-2652-5167
Indra – Pratunam
0-2208-0981-2, 0-2208-0978
0-2208-0906
Inthrarak
0-2374-0291-2
0-2374-0293
Udom Suk
0-2383-9224-6
0-2383-9227
Ekkamai
0-2381-7088-90
0-2381-7092
Energy Complex
0-2936-0314-6
0-2936-0316
Home Works Phetchakasem
0-2809-1574-5
0-2809-1576
258
| TMB Branches in Upcountry
Annual Report 2010
TMB Branches in Upcountry
Province
Office
Telephone
Kanchanaburi
Kanchanaburi
0-3451-2441-2, 0-3451-1677, 0-3452-1101-2 All Numbers
Tha Rua
0-3456-1745, 0-3456-1822, 0-3456-2046
All Numbers
Krabi
0-7561-2718-20
0-7563-0086
Plai Phraya
0-7568-7018-9
0-7568-7019
Lum Thap
0-7564-3595-6, 0-7564-3598
0-7564-3599
Aou Nang Krabi
0-7563-7657, 0-7563-7624 Boot Exc. 0-7563-7596
0-7563-7685
Kamphaeng Phet
Kamphaeng Phet
0-5571-3801, 0-5571-3802
0-5571-3803
Kalasin
Kalasin
0-4381-2133, 0-4381-2135, 0-4382-1848
0-4381-2134
Khon Kaen
Khon Kaen
0-4324-1497-9
0-4333-4419
Chum Phae
0-4331-1170, 0-4331-1270, 0-4338-6387
0-4331-2470
Central Plaza Khon Kaen
0-4328-8034-5
0-4328-8036
Thanon Mittraphap Khon Kaen
0-4332-4861-6
0-4332-4867
Ban Phai
0-4327-2750, 0-4327-2790
0-4327-2733
Muang Phon
0-4341-4060, 0-4341-4061
0-4341-4762
Thanon Srichan - Khon Kaen
0-4324-6490-1
0-4324-6492
Chanthaburi
0-3932-1215, 0-3931-1799, 0-3935-0440-1
0-3931-1777
Thanon Benjamarachutit Chanthaburi
0-3932-2150-2
0-3932-2053
Nong Khla
0-3939-5471-3
0-3939-5474
Robinson Chanthaburi
0-3932-2823-5
0-3932-2886
Thanon Mahajakkapad Chachoengsao
0-3851-1912, 0-3851-2390, 0-3851-4322
0-3851-2549
Bangkhla
0-3854-1123, 0-3882-7231-3
0-3854-1689
Bang Wua
0-3853-8255, 0-3853-8277, 0-3853-9003-4
0-3884-0909
Plang Yao
0-3858-9132-3, 0-3857-5230, 0-3885-1215
0-3885-1214
Phanom Sarakham
0-3883-6516-8
0-3883-6519
Thanon Sukprayun - Chachoengsao
0-3882-3794-7
0-3882-3795-7
Chai Nat
Chai Nat
0-5641-1118, 0-5641-2394, 0-5641-0129, 0-5641-2372
0-5641-2372
Chon Buri
Chon Buri
0-3827-2984-5, 0-3827-4088
0-3827-4089
Jomtien
0-3823-2079, 0-3823-2080, 0-3823-2973, 0-3823-2086
All Numbers
Central Plaza Chon Buri
0-3300-3240-2
0-3300-3243
Central Festival Pattaya Beach
0-3300-3644-6
0-3300-3647
Thanon Thap Phraya Pattaya
0-3830-3778-80, 0-3830-3877
All Numbers
Krabi
Chanthaburi
Chachoengsao
Fax
TMB Bank PCL
Province
Chumphon
Chiang Mai
Chaiyaphum
TMB Branches in Upcountry
| 259
Office
Telephone
Fax
Nong Mon
0-3839-2065-7
0-3839-2065
Bang Lamung
0-3836-7749-51
0-3836-7752
Ban Suan - Chon Buri
0-3879-9301-3
0-3879-9304
Pakruam Borwin
0-3833-7949-50
0-3833-7951
Pattaya Klang
0-3841-1936-7
0-3841-1937
Phanat Nikhom
0-3878-7699-700, 0-3847-3168-9
0-3847-3169
Pattaya
0-3842-9501-2, 0-3842-2966, 0-3842-1002
0-3842-1005
Kasetsart University Sri-racha
0-3876-8970-1
0-3876-8972
Royal Garden
0-3871-0401-2, 0-3842-9216
0-3841-1752
H.M.Queen Sirikit Hospital Sattahip
0-3824-4022, 0-3824-4555
0-3824-4114
Robinson Sri-racha
0-3831-4356-9
0-3831-4360
Tesco Lotus Laemchabang
0-3876-8442, 0-3876-8923-4
0-3876-8280
Sri-racha
0-3831-3239-40, 0-3831-1824
All Numbers
Thanon Sukhumwit - Chon Buri
0-3826-0960-3
0-3826-0960
Sattahip
0-3843-7123, 0-3843-7339, 0-3843-7678, 0-3843-8561
All Numbers
Huaghunjae - Ban Bung
0-3820-1211-2, 0-3820-1026
0-3820-1212
Aou - Udom
0-3835-1642-4
0-3835-1643
Chumphon
0-7750-2545, 0-7750-4960-1
0-7750-2544
Thung Tako
0-7753-6902, 0-7758-5209
0-7758-5209
Lang Suan
0-7754-1233, 0-7754-1894
0-7754-1333
Chiang Mai
0-5325-1058-61
0-5323-3159
Thanon Chang Khlan Chiang Mai
0-5390-3630-2
0-5390-3535
Central Plaza Chiang Mai Airport
0-5320-1843-5
All Numbers
Thanon Changpuak Chiang Mai
0-5321-1061-2, 0-5322-2966, 0-5321-8901
0-5322-1545
Talad Nong Hoi - Chiang Mai
0-5314-0123-5
0-5380-1456
Fang
0-5345-1154, 0-5345-1002
0-5345-3507
Talad Varorot - Chiang Mai
0-5323-3117-8
0-5325-2882
Si Yak Kuang Sing - Chiang Mai
0-5341-0980-2
0-5341-0983
Thanon Suthep Chiang Mai
0-5381-1674, 0-5381-1675, 0-5381-1164
All Numbers
Sanpakhoy - Chiang Mai
0-5324-9858, 0-5324-9859, 0-5324-9595
0-5324-9861
Huaikaeo Road - Chiang Mai
0-5340-4042-4
0-5340-4128
Hot
0-5346-1055, 0-5346-1056, 0-5383-1333
0-5383-1334
Chaiyaphum
0-4481-1659, 0-4481-1666, 0-4482-2123
0-4481-1666
260
| TMB Branches in Upcountry
Annual Report 2010
Province
Office
Telephone
Fax
ChianG Rai
Chiang Rai
0-5371-1100-1, 0-5371-4822, 0-5371-5657
0-5371-3590
Doi Mae Salong
0-5376-5159-60
0-5376-5159-60
Thoeng
0-5379-5001, 0-5379-5003, 0-5379-5040
0-5379-5002
Tak
Trang
Trat
Nong Khai
Nakhon Pathom
Narathiwat
Nan
Nakhon Phanom
Nong Bua Lamphu
Thanon Phahon Yothin - Chiang Rai 0-5371-4886-7, 0-5360-0716-7
0-5371-4890
Maesai
0-5373-3145-6, 0-5364-0351-2
0-5373-3145
Huai Khrai
0-5376-3001, 0-5366-7350-2
0-5376-3001
Tak
0-5551-2093-4
0-5551-5451
Mae Sot
0-5553-3038, 0-5553-3039, 0-5553-3040
0-5553-3383
Trang
0-7521-0811-2, 0-7521-4026
0-7521-8344
Khlong Pang
0-7528-6055, 0-7528-6066
0-7528-6055
Huai Yot
0-7527-1147, 0-7527-1425, 0-7523-5562
0-7527-1148
Trat
0-3952-0636, 0-3952-0638
0-3952-0637
Ko Chang
0-3955-1040-1
All Numbers
Bo Rai
0-3959-1041-2
0-3959-1041
Nong Khai
0-4242-0562-3
0-4242-0564
Phon Phisai
0-4247-1266-7, 0-4240-5552
All Numbers
Nakhon Pathom
0-3421-9731-4
0-3421-9736
Kamphaeng Saen
0-3435-1020-2
0-3428-1103
Nakhon Chai Si
0-3422-8340, 0-3422-8341, 0-3422-8339
0-3422-8342
Phra Pathomchedi
0-3425-0750, 0-3425-6116, 0-3425-6137
0-3425-0751
Silpakorn University - Sanam Chandra Palace
0-3425-0823-5
0-3425-0826
Sampran Nakornpathom
0-3432-2885-7, 0-3422-5155, 0-3422-5498-9, 0-3422-5564-5
0-3432-1990
Aom Yai
0-2810-3325-7
0-2810-3329
Narathiwat
0-7351-2273-5
0-7351-2273-5
Sungai Kolok
0-7361-1555-6, 0-7361-5234
0-7361-1587
Nan
0-5471-0455, 0-5477-1971, 0-5477-2818
0-5471-0477
Tha Wang Pha
0-5479-9679, 0-5479-9963, 0-5479-9964
0-5479-9138
Ban Luang
0-5476-1003, 0-5476-1076
0-5476-1003
Nakhon Phanom
0-4251-1023, 0-4251-1322, 0-4251-2234
0-4251-2614
That Phanom
0-4254-1008-9
0-4254-1010
Nong Bua Lamphu
0-4236-0547-9
0-4236-0551
TMB Bank PCL
TMB Branches in Upcountry
| 261
Province
Office
Telephone
Fax
Nakhon Ratchasima
Nakhon Ratchasima
0-4425-2505, 0-4425-2545, 0-4425-7680
0-4425-7681
Suranaree Camp - Nakhon Ratchasima
0-4434-1872, 0-4434-1873
0-4434-1874
Dan Khun Thot
0-4438-9101, 0-4438-9102
0-4438-9279
The Mall Nakhon Ratchasima
0-4439-3750-1
0-4439-3752
Pak Thong Chai
0-4444-1019, 0-4444-1641
0-4444-1100
Prathai
0-4447-9511, 0-4447-9128
0-4448-9537
Thanon Prajak - Yak Sanlakmueang 0-4425-5567-8, 0-4426-7471, 0-4425-5191
0-4425-6202
Pak Chong
0-4431-5996, 0-4431-5997, 0-4431-5998
All Numbers
Phimai
0-4447-1334, 0-4428-7407, 0-4428-7408
0-4447-1335
Thanon Phibunla-iat - Nakhon Ratchasima
0-4427-5200-2, 0-4427-5204
0-4427-5203
Muang Khong
0-4445-9234, 0-4445-9266
0-4445-9235
Sung Noen
0-4441-9241, 0-4441-9865, 0-4441-9588
All Numbers
Hua Thalae Nakhon Ratchasima
0-4426-4964-5
0-4426-4980
Nakhon Nayok
Nakhon Nayok
0-3731-2350, 0-3731-2346, 0-3731-2348-9
0-3731-2588
Nakhonsawan
Chumsaeng
0-5628-2498, 0-5628-2499
0-5628-2699
Takhli
0-5626-1537, 0-5626-1538
0-5626-2155
Phayuha Khiri
0-5634-1498, 0-5631-6699
0-5634-1497
Farry Land Nakhonsawan
0-5622-2913, 0-5622-2672, 0-5622-1782, 0-5631-3056
0-5622-7414
Thanon Asia Nakhonsawan
0-5622-8223, 0-5622-8225
0-5622-8224
Nakhon Si Thammarat
0-7534-2893, 0-7534-5616, 0-7535-6801
0-7535-6979
Chandi
0-7548-6185, 0-7548-6304, 0-7548-6305
0-7548-6184
Nakhon Si Thammarat
Buri Ram
Prachuap Khiri Khan
Talad Hua It - Nakhon Si Thammarat 0-7531-6164-7
0-7531-6168
Thung Song
0-7541-2446-8
0-7541-2446-8
Nakhon Si Thammarat Rajabhat University
0-7539-2116, 0-7539-2117
0-7539-2118
Buri Ram
0-4461-3441-3
0-4461-3433
Nong Ki
0-4464-1111, 0-4464-1112
0-4464-1112
Nang Rong
0-4462-2722, 0-4463-1456-7
0-4463-1456
Prachuap Khiri Khan
0-3260-1547-8, 0-3261-1919
0-3261-1918
Pran Buri
0-3262-1989-0, 0-3262-1829, 0-3254-4557
0-3262-1991
Hua Hin - Prachuap Khiri Khan
0-3251-2205, 0-3251-2500, 0-3251-2151
0-3251-2347
Hua Hin Market Village
0-3252-6314-6
0-3252-6316
262
| TMB Branches in Upcountry
Annual Report 2010
Province
Office
Telephone
Fax
Prachinburi
Prachinburi
0-3721-1355-6, 0-3721-1655
0-3721-1355-6
Prachantakham
0-3729-1252, 0-3729-1509
0-3729-1251
Pattani
Pattani
0-7333-2677-9
0-7333-1038
Ayutthaya
Ayutthaya
0-3524-1417-18, 0-3524-2417
0-3524-2417
Bang Ban
0-3530-7942-43
0-3530-7944
Pra Tu Nam Phra In
0-3521-9784-8
0-3521-9789
Wang Noi
0-3521-5649-50
0-3521-5652
Ayutthaya Park
0-3521-3061-2
0-3521-3008
Uthai - Ayutthaya
0-3533-5417-8, 0-3521-3623-4
All Numbers
Phangnga
0-7641-1626-7, 0-7641-1555
0-7641-1555
Khao Lak Phangnga
0-7644-3445-8
0-7644-3448
Phichit
0-5665-1331, 0-5661-3558, 0-5661-2219
0-5661-2216
Khao Sai
0-5664-9060, 0-5664-9111
0-5664-9060
Taphan Hin
0-5662-1194, 0-5662-1325
0-5662-1477
Sam Ngam
0-5669-1210-1, 0-5666-5511, 08-9707-8878 0-5666-5511
Sak Lek
0-5669-9266, 0-5669-9367
0-5669-9267
Phetchabun
0-5671-1386, 0-5672-1250
0-5672-1290
Lom Sak
0-5670-1044, 0-5670-1579, 0-5674-6270
0-5674-6269
PhAtthalung
Phatthalung
0-7461-3305, 0-7461-3313, 0-7462-6801
0-7461-1965
Phetchaburi
Phetchaburi
0-3242-6005, 0-3242-6115
0-3242-7165
Phetchaburi Rajabhat University
0-3249-3000-1
All Numbers
Phayao
Phayao
0-5448-1720-1, 0-5448-2329
0-5448-2330
Phrae
Phrae
0-5451-1655, 0-5462-1327
0-5451-1646
Sung Men
0-5454-1231, 0-5454-2001
0-5454-1360
Phitsanulok
0-5524-5770-2
0-5524-5544
Phitsanulok 2
0-5528-3007-8
0-5524-2790
Khok Matum - Phitsanulok
0-5521-2432, 0-5521-2434-6
0-5521-2436
Sapphraiwan
0-5529-3076
0-5529-3077
Phuket
0-7621-2123, 0-7621-2978, 0-7621-3488
0-7621-3487
Jungceylon Phuket
0-7636-6166-8
0-7636-6169
Central Festival Phuket
0-7624-8509-11
0-7624-8511
Thalang
0-7631-1366-7, 0-7631-1484, 0-7631-1500, 0-7631-1777
0-7631-1501
Phangnga
Phichit
Phetchabun
Phitsanulok
Phuket
TMB Bank PCL
Province
TMB Branches in Upcountry
| 263
Office
Telephone
Fax
Phuket Airport
0-7632-8383-5
0-7632-8255
Thanon Phra Barami Patong Beach
0-7634-3455-7
0-7634-3458
Montri Road - Phuket
0-7622-5486, 0-7623-0104, 0-7622-5178, 0-7623-0137
0-7623-0102
Bangkok Phuket Hospital
0-7621-0059, 0-7621-0065, 0-7621-0140
0-7621-0140
Vajira Hospital - Phuket
0-7623-7238-40
0-7623-7241
Ha Yaek Chalong Phuket
0-7638-1749-51
0-7638-1751
Maha Sarakham
0-4372-2111-2
0-4372-2113
Maha Sarakham University
0-4375-4141-2
0-4375-4143
Mae Hong Son
Mae Hong Son
0-5362-0123-4
0-5362-0125
Mukdahan
Mukdahan
0-4261-1520, 0-4261-1855, 0-4263-1451-2
0-4261-1892
Yala
Yala
0-7321-4029, 0-7321-4384, 0-7321-1587, 0-7321-4231
0-7321-5380
YAsothon
Yasothon
0-4571-2301, 0-4571-2302, 0-45720602(NAC), 0-4572-0603(NAC)
0-4571-2303
Ranong
Ranong
0-7782-3028, 0-7782-3029
0-7782-3030
Kra Buri
0-7789-1027-8
0-7789-1294
Ratchaburi
0-3232-1808, 0-3232-2048, 0-3231-0410
0-3232-2047
Damnoen Saduak
0-3225-3348, 0-3225-3349, 0-3234-5331
0-3225-3701
Thanon Khathathorn Ratchaburi
0-3231-5645-47
0-3231-5817
Ban Pong
0-3220-0382-3, 0-3234-4767-8
0-3220-0382-3
Photharam
0-3235-4047-8, 0-3223-1637, 0-3223-1062
All Numbers
Rayong 2
0-3861-7470-4
0-3861-7475
Klaeng
0-3888-4595-7
0-3888-4463
Noen Khao Din
0-3866-9498, 0-3866-9500
0-3866-9499
Ban Khai
0-3864-1002-3
0-3864-1001
Ban Chang
0-3888-0585-7
0-3888-0588
Laemthong Plaza Rayong
0-3861-0229-32
All Numbers
Roi Et
Roi Et
0-4351-1369, 0-4351-1612
0-4351-2449
Lop Buri
Lop Buri
0-3641-1945, 0-3642-2931, 0-3642-1570, 0-3641-2093
0-3641-2093
Carrefour Lopburi
0-3661-2480-1
0-3661-2482
Wong Wien Sra Kaew - Lop Buri
0-3641-2729, 0-3641-3369
0-3642-2915
Maha Sarakham
Ratchaburi
Rayong
264
| TMB Branches in Upcountry
Annual Report 2010
Province
Office
Telephone
Fax
Lampang
Lampang
0-5422-4154, 0-5422-6223, 0-5422-6522, 0-5432-2455
0-5422-6155
Ngao
0-5426-1193, 0-5426-1194
0-5426-1007
Thanon Chatchai - Lampang
0-5435-2050-1
0-5422-5073
Hang Chat
0-5426-9206, 0-5426-9207
0-5426-9208
Lamphun
0-5356-1460-1, 0-5351-0461-3
0-5351-0460
Lamphun Industrial Estate
0-5355-4821, 0-5355-4385, 0-5353-9618
0-5353-9618
Loei
0-4281-2122-3
0-4283-3568
Loei Rajabhat University
0-4283-5754-5
0-4283-5756
Si Sa Ket
Si Sa Ket
0-4561-2518, 0-4561-2519
0-4561-2520
Sa Kaeo
Sa Kaeo
0-3724-2688-90
0-3724-2692
Aranyaprathet
0-3723-1280, 0-3723-1290
0-3723-2601
Songkhla
0-7431-1333, 0-7431-2001, 0-7432-4373
0-7431-4803
Khuan Niang
0-7438-6572-3
0-7438-6574
Thanon Juti Anusorn - Hat Yai
0-7423-0883-4, 0-7424-4324
0-7423-1289
Thanon Phet Kasem - Hat Yai
0-7423-6403-4, 0-7423-9830
0-7423-6405
Ranot
0-7439-1030-1, 0-7439-2555
0-7439-1030-1
Thanon Rathakhan - Hat Yai
0-7423-8800-2
0-7423-8501
Taladsantisuk
0-7423-0576, 0-7435-1611-3
0-7423-0575
Hat Yai
0-7423-1141-3, 0-7435-5311, 0-7435-5313
0-7435-5312
Samut Sakhon
0-3441-2333, 0-3442-2245, 0-3442-5992
0-3442-5993
Kra Thum Baen
0-3484-8977-9
0-3484-8977-9
Thanon Setthakit 1- Samut Sakhon
0-3481-5609, 0-3481-5610, 0-3481-5611
0-3481-5608
Om Noi
0-2431-0975-7, 0-2420-2347
0-0242-0347
Surat Thani
0-7727-2753-4 , 0-7728-1009, 0-7728-1010, 0-7728-1010 0-7721-0283-4
Na San
0-7734-1037, 0-7734-1038
0-7734-1538
Front of Surat Thani Hospital
0-7728-3459-61
All Numbers
Suratthani Rajabhat University
0-7735-5162, 0-7735-5234
0-7735-5162
Ko Samui
0-7742-1137, 0-7742-0360-1
0-7742-1143
Chaweng Beach Ko Samui
0-7723-1955-7
All Numbers
Thongsala Ko PHangan
0-7723-8920-2
All Numbers
Big C Suratthani
0-7722-4201, 0-7722-4324, 0-7722-4809
All Numbers
Ban Song Suratthani
0-7725-7093, 0-7725-7127
All Numbers
Bo Phut Ko Samui
0-7724-6225-6
0-7724-6227
Lamphun
Loei
Songkhla
Samut Sakhon
Surat Thani
TMB Bank PCL
TMB Branches in Upcountry
| 265
Province
Office
Telephone
Fax
Satun
Satun
0-7472-1219, 0-7472-1220
0-7472-1221
Sukhothai
Sukhothai
0-5561-1147, 0-5561-1590 , 0-5561-4358 , 0-5561-4359 (manager)
0-5561-1995
Ban Dan Lan Hoi
0-5568-9110, 0-5568-9070
0-5568-9070
Sawankhalok
0-5564-2317, 0-5564-2381
0-5564-1124
Sakon Nakhon
Sakon Nakhon
0-4271-1393, 0-4271-1993, 0-4271-2195, 0-4271-4691-2, 0-4274-1993
0-4271-3403
Saraburi
Saraburi
0-3622-2430-1, 0-3621-1039, 0-3622-1429
0-3622-1229
Phraphutthabat
0-3626-6744-5, 0-3626-7799
0-3626-7800
Thanon Phahon Yothin Saraburi
0-3631-8271-3, 0-3621-2023, 0-3621-2024
0-3631-8270
Muak Lek
0-3634-1990, 0-3634-1017
0-3634-1024
Wihan Daeng
0-3637-7258-9
0-3637-7725
Wang Muang
0-3635-9211-2
0-3635-9213
Suphan Buri
0-3552-2356, 0-3552-2358
0-3552-2360
U Thong
0-3555-2007, 0-3555-2009
0-3555-2020
Surin
Surin
0-4451-4250, 0-4451-4251, 0-4451-4252
0-4451-4252
Samut Songkhram
Samut Songkhram
0-3471-5454-5, 0-3471-4018-9, 0-3471-1682, 0-3474-0123
0-3471-5456
Sing Buri
Sing Buri
0-3651-1326, 0-3651-2803
0-3651-2276
Amnat Charoen
Amnat Charoen
0-4551-1590-1, 0-4551-1594
0-4551-1592
Udon Thani
Udon Thani
0-4224-1130, 0-4224-1594, 0-4224-4776-8
0-4224-4391
Carrefour Udonthani
0-4293-1700-1
0-4293-1702
Thanon Thahan - Udonthani
0-4234-1951-3
0-4234-1957
Ban Phu
0-4228-1264-5
0-4228-1265
Thanon Phosi - Udonthani
0-4224-9551-3
0-4224-9554
Udon Thani Rajabhat University
0-4224-4042, 0-4224-4258
0-4224-4043
Uttaradit
Uttaradit
0-5541-1655, 0-5541-1800
0-5541-2380
Ang Thong
Ang Thong
0-3561-1262, 0-3561-2418, 0-3562-5130
0-3562-5131
Uthai Thani
Uthai Thani
0-5651-1187, 0-5651-1122, 0-5652-4942
0-5651-1613
Ban Rai
0-5653-9002, 0-5653-9003
Ubon Ratchathani
0-4524-1313, 0-4525-4308, 0-4525-4890
Trakan Phutphon
0-4548-1111
Thanon Phrommarat - Ubon Ratchathani
0-4524-0215-7
Suphan Buri
Ubon RatchAthani
266
| TMB Overseas Branches
Annual Report 2010
TMB Overseas Branches
Branch
Information
Hong Kong
General Manager
Mr. Pongsak Fookirkkiat
Address
Room 1601, 16th Floor, New Road Tower 1 18 Queen’s Road Central Hong Kong
tmbhk @ tmbhk.com.hk
Telephone
+852-2845-6677
Facsimile
+852-2845-1182
Telex
82645 tmbhk hx
General Manager
Mr. Louchai Louchaisa
Address
34/2 Unit 76, Ban Haysok Samsemthai Road, Chanthabouli, Vientiane, Lao PDR
tmbvte @ tmbbank.net
Telephome
+856-2121-7174, +856-2121-6486
Facsimile
+856-2121-6486
Telex
4327 tmbvtels
Address
P.O. Box 501, Cardinal Avenue, George Town Grand Cayman, Cayman Islands
Vientaine
Cayman Islands
c/o TMB Bank Public Company Limited 3000 Phahonyothin Road, Chatuchak, Bangkok 10900 Thailand E-mail
satian.tan @ tmbbank.com
Telelepone
+662-230-5791, +662-230-5792
Facsimile
+662-230-5788
Telex
20040 militfx th, 20356 militfx th
TMB Bank PCL
TMB Currency Exchange Service Offices
|  267
TMB Currency Exchange Service Offices
Name Booth
Address
Telephone
Andaman Barzaar
188/2 Thaweewong Road, Patong, Kathu, Phuket
0-7634-1015
Andaman Promanard
Andaman Club Room No.120/10-11, Raj-U-Thit 200 years Road, Patong, Kathu, Phuket
0-7634-1357, 0-7634-1387
Ao Nang Br. Krabi
146/2 Moo.2, Ao Nang, Muang, Krabi
0-7563-7656
Ao Nang Sunset
268 Moo.2, Ao Nang, Muang, Krabi
0-7563-7408
Ao Pra Nang
208/2-3 Moo.2, Ao Nang, Muang, Krabi
0-7569-5462
Arrival Hall 1 (AH1)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Arrival Hall 2 (AH2)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Arrival Hall, Phuket Airport
222 Moo.6, Mai Khao, Talang, Phuket
0-7632-6737
Arrival Hall3 (AH3)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Arrival Hall 4 (AH4)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Arrival Lounge 1 (AL1)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Arrival Lounge 2 (AL2)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Arrival Lounge 3 (AL3)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Bangkok Hospital Soi Soonwijai
Inside Inter Nation Building at Bangkok Hospital, Soi Soonvijai, Bangkok
0-2318-9770
Bangla 1
136/1 Thaweewong Road, Patong, Kathu, Phuket
0-7634-0157
Banthai
94 Thaweewong Road, Patong, Kathu, Phuket
0-7634-0618
Bo Phud Br.
25/21-22 Moo.6, Bo Phud, Koh Samui, Suratthani
0-7724-6225-7
BTS Asoke
E4-9 Sukhumvit Road, Klongtan, Klongtoey, Bangkok
0-2651-0192
BTS Nana
E3-11 Sukhumvit Road, Klongtan, Klongtoey, Bangkok
0-2651-0228
Caesar Plalace Hotel
382/34 Moo.9, Nongprue, Banglamung, Chonburi
0-3842-5011-2
Central Festival Phuket
74-75 Central Festival Shopping Center 2nd Floor, Moo.5, Wichit, Muang, Phuket
0-7624-8515
Central World
Inside Center World 2nd Floor, Unit No.K-B 205, Room K2-10/2 Rama I Road, Patumwan, Bangkok
0-2646-1326
Chatuchak Gate2
FX Booth Gate 2 Chatuchak Administration Office Bangkok, Kamphaeng Phet 2 Road, Ladyao, Chatuchak, Bangkok
0-2272-4715-6
Chatuchak Gate3
FX Booth Gate 3 Chatuchak Administration Office Bangkok, Kamphaeng Phet 2 Road, Ladyao, Chatuchak, Bangkok
0-2272-4105-6
268
| TMB Currency Exchange Service Offices
Annual Report 2010
Name Booth
Address
Telephone
Cherry Hotel Pattaya
Cherry Hotel Pattaya 270/3 Moo.10, Nongprue, Banglamung, Chonburi
0-3842-9501-2
Departure Hall 1 (DH1)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Departure Hall 2 (DH2)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Departure Hall 3 (DH3)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Departure Hall 4 (DH4)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Departure Hall 5 (DH5)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Departure Lounge 2 (DL2)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Devana
49/145 Raj-U-Thit 200 years Road, Nongprue, Bang Phli, Phuket
0-7634-0035
Domestic Departure (DD)
Domestic Terminal Donmuang Airport 2nd Floor ViphavadeeRangsit Road, Donmuang, Bangkok
0-2535-3171
Domestic South (DS)
Domestic Terminal Donmuang Airport 1st Floor ViphavadeeRangsit Road, Donmuang, Bangkok
0-2535-3172
Floting Market Pattaya
451/304 Moo.12, Nongprue, Banglamung, Chonburi
0-3807-6845-6
Gallery (GL)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Had Chaweng 1 Br. Koh Samui
167/36-37 Moo.2, Bo Phud, Koh Samui, Suratthani
0-7723-1955-6
Had Chaweng 1
Front of Chaweng Villa Bangalow 157 Moo.2 Liab Had Chaweng Road, Bo Phud, Koh Samui, Suratthani
0-7742-2492
Had Dongtan, Pattaya
69 Nongprue, Nongprue, Banglamung, Chonburi
0-3842-9501-2
Had Jomtian
75/19 Moo.12, Nongprue, Banglamung, Chonburi
0-3823-1442
Had Karon
643 Patak Road, Karon, Muang, Phuket
0-7639-6978
Had Kata
Corner Plaza Shopping Complex 112/3 Taina Road, Karon, Muang, Phuket
0-7633-0088
Hua-Hin 1
160 Naresdamri Road, Hua-Hin, Prachuapkhirikhan
0-3253-2372
Hua-Hin 3, Hua-Hin Prachuapkhirikhan Br.
226/2 Phetkasem Road, Hua-Hin, Prachuapkhirikhan
0-3251-5735
Indra Pratunam
120/67 Soi Indra, Rajprarob Road, Phayathai, Rajthevi, Bangkok
0-2208-0982-3
Indra Square
120/126 Rajprarob Road, Phayathai, Rajthevi, Bangkok
0-2631-9457-9
TMB Bank PCL
TMB Currency Exchange Service Offices
|  269
Name Booth
Address
Telephone
International Baggage claim (IB)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
International Baggage claim (IB2)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
International Baggage claim (IB3)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
International Departure (East) (ID1)
999 Moo.1, Nongprue, Bang Phli, Samut Prakarn
0-2134-1813-4
Jomtien
334/1-2 Moo.12, Jomtien Beach Road, Nongprue, Banglamung, Chonburi
0-3823-2079
Jungcelon Phuket
181 Jungceylon Shopping Center FL., B Raj-U-Thit 200 years Road, Kathu, Phuket, Phuket
0-7636-6170
Kata Noi
183 Koktanode Road, Karon, Muang, Phuket
0-7633-3236
Khao-Lak Br.
19/4-5 Moo.6, Khukkhak, Takuapa, Pang-Nga
0-7644-3445-7
Khaosan(Pimanwit School)
212 Pimanwit School Khaosan Road, Pranakorn, Bangkok
0-2629-0579
Koh Chang Br.
9/41 Moo.4, Ban Had Sai Khao, Koh Chang, Trat
0-3958-6242
Koh Samui Br.
67/12-13 Moo.3, Angthong, Koh Samui, Suratthani
0-7742-0360-2
Krabi Airport
Phetkasem Road, Nue-Klong, Nue-Klong, Krabi
0-7570-1587
Landmark Plaza
138 Landmark Plaza Building, Sukhumvit Road, Klongtoey, Klongtoey, Bangkok
0-2252-6092
Mae Sai Br.
44/1-2 Moo.7, Phahonyothin Road, Mae Sai, Mae Sai, Chiangrai
0-5373-3145-6
Mah Boonkrong Center
444 Mah Boonkrong Department Store (MBK), Phayathai Road, Wangmai, Pathumwan, Bangkok
0-2215-2136-7, 0-2217-9234
Marina Cottage Hotel
47 Karon Road, Karon, Muang, Phuket
0-7633-3051-2
Mark Land Hotel
436/541 Moo.9, North Pattaya Beach Road, Nongprue, Banglamung, Chonburi
0-3841-5294
Mountain Beach Hotel Pattaya 378/24 Moo.12, Nongprue, Banglamung, Chonburi
0-3825-2994
National Stadium BTS.station National Stadium BTS Station W1-29, Rama I Road, Wangmai, Pathumwan, Bangkok
0-2612-3132
Night Barzaar, Chiang Rai
870/12 Moo.4 Phahonyothin Road, Wieng, Muang, Chiangrai
0-5371-5657
Otop Patong shoping Center OTOP Shopping Center Patong (Opposite Holiday Inn Hotel), Raj-U-Thit 200 years Road, Phuket
0-7634-0164
270
|  TMB Currency Exchange Service Offices
Name Booth
Address
Annual Report  2010
Telephone
Patong Merlin Hotel (Phuket) Front of Patong Merlin Hotel, Thaweewong Road, Phuket
0-7634-1048
Pattaya
325/67-70 Pattayaland Shopping Center, Moo. 10, Nongprue, Banglamung, Chonburi
0-3842-6107
Pattaya Beach
Naklur, Banglamung, Chonburi
0-3842-0747
Pattaya Road 2nd (Alcaza)
Thai Palace Hotel, 212 Moo.9, Pattaya 2nd Road, Nongprue, Banglamung, Chonburi
0-3841-5302
Phromphong
Promphong BTS Station, E5-10/1A Sukhumvit 24 Road, Klongtoey, Bangkok
0-2663-7485
Phuket International Airport
222 Moo.6, Mai Khao, Talang, Phuket
0-7632-8383-5
Platinum Pratunam
The Platinum Fashion Mall, 222 Petchaburi Road, Petchaburi, Rajthevi, Bangkok
0-2121-9404
Platinum Pratunam 2
In Front of The Platinum Fashion Mall, 222/226 Petchaburi-Tadmai Road, Petchaburi, Rajthevi, Bangkok
0-2121-9493
Rambuttri
323 Rambuttri Road, Taladyod, Pranakhon, Bangkok
0-2629-0620-1
Royal Garden
218 Moo.10, Muang Pattaya, Nongprue, Banglamung, Chonburi
0-3841-1750
Sabana Resort Hotel
14/53 Moo.1, Rawai, Muang, Phuket
0-7634-0545-6
Sai Nam Yen Center Point
271 Raj-U-Thit 200 years Road, Patong, Kathu, Phuket
0-7634-0545-6
Soi Bua Khao
210 Moo.9, Nongprue, Banglamung, Chonburi
0-3872-0083, 0-3872-0092
Soi Chaiyos, Sukumvit11
2/6 Soi Chaiyos Sukhumvit Road, Klongtoey-Nue, Wattana, Bangkok
0-2253-1045
Sunshine Pattaya
240/12 Moo.5, Pattaya -Naklur Road, Naklur, Banglamung, Chonburi
0-3841-0617
Tappaya
31502 Tappaya Road, Nongprue, Banglamung, Chonburi
0-3825-1449
Thanon Phra Barami Patong Beach
256,256/3 Phra Barami Road, Patong, Kathu, Phuket
0-7634-3454-61
Thanon Tappaya (Pattaya)
315/297 Moo.12, Nongprue, Banglamung, Chonburi
0-3830-3778
The Loft Samui Hotel, 30/11 Moo.3, Bo Phud, Koh Samui, Suratthani Had Chaweng 2 Br., Koh Samui
0-7723-1959-60
Thong Sala Branch (Koh Phangan)
0-7723-8920-2
161/21 Moo.1, Koh Phangan, Koh Phangan, Suratthani
Winmill Resort Hotel Pattaya Inside Windmill Resort Pattaya, 665 Moo.5, Pattaya-Naklur, Banglamung, Chonburi
0-3837-1441-3
Wong Wien Karon
240 Karon Road, Karon, Muang, Phuket
0-7639-6088
Yada Building Silom
56 Yada Building, Silom Road, Suriyawong, Bangrak, Bangkok
0-2267-0969
TMB Bank PCL
TMB Supply Chain and Business Center
| 271
TMB Supply Chain and Business Center
Business Center
Address
Telephone
Fax
Asoke
189/1 Grand Park View Building, 2 Floor
0-2204-2723-5
0-2204-2726
906, 908, 910 Baromratchonnee Road,
0-2886-5435-6,
0-2434-1756
Bangbumru, Bangplad, Bangkok 10700
0-2435-6819
275/5, 2nd Floor, Chang Puak Road, Tumbon
0-5341-0102-3,
Chang Puak, Ampur Muang Chiangmai 50300
0-5341-0987
62/9 Sukhumvit Road, Tumbon Bangplasoi,
0-3827-0794,
Ampur Muang Chonburi 20000
0-3828-3526
360/16-19 Rama III Road, Chongnonsee,
0 -2285-3881-2
0 -2285-3875
160 Niphatuthit 2 Road, Tumbon Hat Yai,
0-7435-5314,
0-7435-4491
Ampur Hat Yai, Songkla 90110
0-7435-5749
127/12 Prachasamosorn Road, Nai Muang,
0-4324-2406-7
0-4324-2405
1514 Krungkasem Road, Thepsirin, Pomprab
0-2221-1085,
0-2221-1275
Bangkok 10100
0-2226-1598
3000 3rd Floor, Phaholyothin Road, Jomphol,
0-2299-1429, 02-299-3231,
Jatuchak, Bangkok 10900
0-2299-1422, 02-299-1449
37/53 Montri Road, Tumbon Taladyai, Ampur
0-7622-5177,
Muangphuket, Phuket 83000
0-7623-0083
127/27, Moo 14, Suksawat Road, Bangpeung,
08-9924-3248,
Phrapradaeng, Samutprakarn 10130
08-9924-3253
nd
Sukhumvit 21 Road, Wattana, Bangkok 10110 Baromratchonnee
Chiangmai
Chonburi
Chongnonsee
0-5341-0909
0-3828-3652
Yannawa, Bangkok Hat Yai
KHONKAEN
Ampur Muang, Khonkaen 40000 Krung Kasem
Phaholyothin
Phuket
PHRAPRADAENG
Rangsit - Pathumthani 42 Rangsit Pathumthani Road, Prachathipat,
Rayong
0-2567-5646, 0-2567-5629
0-2242-3505
0-7623-0084
0-2818-1807
0-2567-5662
Thanyaburi, Pathumthani 12130
0-2567-5634
139/1 Sukhumvit Road, Tumbon Cherngnurn,
0-3880-0401
0-3880-0402
0-2753-3600-1
0-2753-3602
Ampur Muang, Rayong 21000 Samutprakarn
88 Moo 3, Theparak Road, Tumbon Theparak, Ampur Muang, Samutprakarn 10270
Samutsakorn
824/48-52 Norrasing Road, Tumbon Mahachai, 0-3481-1419-20
0-3481-1418
Ampur Muang, Samutsakorn 74000 Silom
393 1st Floor, Silom Road, Bangrak Bangkok 10500
0-2230-5320, 0-2230-6059
0-2230-6008
272
| Main Correspondent Banks
Annual Report 2010
MAin Correspondent Banks
Country
Bank
AUSTRALIA
Australia and New Zealand Banking Group, Commonwealth Bank of Australia, Westpac Banking Corp, National Australian Bank
BELGIUM
BNP Paribas Fortis
CANADA
Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Toronto Dominion Bank
CHINA
Bank of China Limited, Industrial and Commercial Bank of China, Hua Xia Bank
DENMARK
Danske Bank
FINLAND
Nordea Bank Finland, Sampo Bank
FRANCE
Le Crédit Lyonnais, Crédit Industriel et Commercial, Société Générale, BNP Paribas, Crédit Agricole CIB, Natixis
GERMANY
Commerzbank, Deutsche Bank, UniCredit Bank AG, Landesbank Baden-Württemberg
HONG KONG
Hongkong and Shanghai Banking Corporation Ltd., Shanghai Commercial Bank Limited
INDIA
State Bank of India
ISRAEL
Bank Hapoalim B.M. Tel-Aviv, Bank Leumi le - Israel, Israel Discount Bank
ITALY
Deutsche Bank S.p.A.
JAPAN
Bank of Tokyo-Mitsubushi UFJ, Mizuho Bank, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation, Sumitomo Trust & Banking Co., Ltd.
MALAYSIA
CIMB Bank Berhad, Malayan Banking Berhad, RHB Bank Berhad
NETHERLANDS
ABN AMRO Bank N.V., The Royal Bank of Scotland N.V., ING Bank N.V., Rabobank Nederland
NEW ZEALAND
Bank of New Zealand
NORWAY
DnB Nor Bank, Nordea Bank Norge ASA
PHILIPPINES
Asian Development Bank
SINGAPORE
Overseas Chinese Banking Corp, DBS Group, United Overseas Bank Limited
SWEDEN
Nordea Bank AB (publ), Skandinaviska Enskilda Banken (publ), Svenska Handelsbanken AB (publ)
SWITZERLAND
Credit Suisse, UBS AG
UNITED KINGDOM
Barclays Bank Plc, Lloyds TSB Bank, National Westminster Bank, The Royal Bank of Scotland N.V.
USA
Bank of America N.A., Bank of New York Mellon, HSBC Bank USA, N.A., Wells Fargo Bank N.A., Citibank N.A., Deutsche Bank Trust Company America, JP Morgan Chase Bank N.A.