#1K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KASIKORNBANK Investor Presentation as of 1Q13 July 2013 For further information, please contact the Investor Relations Unit or visit our website at www.kasikornbankgroup.com or www.kasikornbank.com บริการทุกระดับประทับใจ K EXCELLENCE KASIKORNBANK at a Glance ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■Established on June 8, 1945 with registered capital of Bt5mn (USD 0.17mn) ■Listed on the Stock Exchange of Thailand (SET) since 1976 Consolidated (as of March 2013) Assets Loans* Deposits CAR ROE (1Q13) Bt2,110bn (USD72.0bn) Bt1,356bn (USD46.3bn) Bt1,428bn (USD48.7bn) Ranked #4 with 14.7% market share** Ranked #4 with 14.8% market share** Ranked #4 with 15.1% market share** 1 ROA (1Q13) Number of Branches Number of ATMs Number of Employees Share Information SET Symbol Share Capital: Authorized Issued and Paid-up Number of Shares Market Capitalization 1Q13 Avg. Share Price: KBANK KBANK-F EPS (1Q13) BVPS Notes: 15.79% *** 21.23% 1.93% 877 7,689 17,718 KBANK, KBANK-F Bt30.5bn (USD1.0bn) Bt23.9bn (USD0.8bn) 2.4bn shares Bt498bn (USD17.0bn) Bt204.75 (USD6.99) Bt206.72 (USD7.05) Bt4.22 (USD0.14) Bt81.85 (USD2.79) Loans Loans to customers less Deferred revenue Ranked #2 in Thai banking sector **Assets, loans and deposits market share is based on C.B.1.1 (Monthly statement of assets and liabilities) *** Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from 1 January 2013 onwards. CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT's to be financial conglomerate Exchange rate at the end of March 2013 (Mid Rate) was Bt29.31per USD (Source: Bank of Thailand) บริการทุกระดับประทับใจ 2#2K EXCELLENCE Table of Contents ■ Operating Environment ■The K-Strategy ■2013 Financial Targets ■Composition of Growth Capital and Dividend ■Summary ■ Appendix K EXCELLENCE Appendix Topic Topic บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Slide Page 5-6 7 8 9-14 15-16 17 18 - 117 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Slide Page KBank Highlights Strategy Risk and Credit Management Financial Performance 1Q13 Highlights Net Interest Margin Non-interest Income Net Fee Income 19-24 25-35 36-40 41-60 42-45 46 47 48 • Net Premium Earned - net 49 Other Operating Expenses 50 Loan 51-54 Asset Quality 55-57 Investment in Securities and Funding Structure 58-60 The wholly-owned subsidiaries of KBank 61-68 Muang Thai Life Assurance (MTL) 69-76 Other Information ■Banking System and Regulation Update ■Government Policy ■Thai Economic Figures ■IR Contact Information and Disclaimer 77-80 81-88 89-99 100-115 116-117 บริการทุกระดับประทับใจ 3 4#3K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Operating Environment: Economic Outlook for 2013 Key GDP Forecasts and Assumptions 7.8 6.5 3.8-4.3 0.1 10.0 7.0 4.0 1.0 -2.0 -5.0 -2.3 2009 2010 2011 % YoY 2011 2012 2012 2013F 2013F Range Base Case Key Points: ■ Private consumption and investment are expected to grow, albeit at a sharply decelerating rate ■Due to an economic slowdown in China, Thailand's main export destination, and weak global sentiment, a robust recovery is unlikely in Thai exports in 2H13. Thus, exports are expected to expand rather modestly in 2013 ■Given this weaker economic outlook, GDP growth forecast for 2013 was revised down to 4.0% (base case) with the forecast range between 3.8%-4.3% GDP 0.1 6.5 3.8-4.3 4.0 Private Consumption 1.3 6.7 2.3-2.8 2.6 Total Investment 3.3 13.2 2.8-3.8 3.3 Gov. Budget Deficit (% of GDP)* -3.3 -2.8 -2.9 to -2.2 -2.7 Risk Factors: Exports 14.3 3.2 2.0-7.0 4.0 Imports 24.9 7.8 3.5-9.0 5.7 Current Account (USD bn) 5.9 2.7 -2.1 to 0.7 -0.5 Headline Inflation 3.8 3.0 2.2-2.7 2.5 Policy Interest Rate** 3.25 2.75 2.50 2.50 ■Lingering global economic uncertainties, especially China ■Geopolitical risks ■Uncertainties in domestic politics and progress in the public investment plan Note: * Does not include borrowing under the emergency decree for water resource management Source: KResearch (as of June 28, 2013) and **KBank Capital Markets Research (as of June 21, 2013) บริการทุกระดับประทับใจ 5 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Operating Environment: Economic Outlook for 2013 Government Stimulus Plan (App. pages 89-99) Uncertainties remain regarding the implementation of Water Resource Management and the infrastructure development project. Satisfactory progress in the disbursement of these extra-budgetary funds in 2013 is not expected, however, there is a high degree of hope that these projects will be fully implemented in the next and subsequent years Outlook on Europe, the US, China, and ASEAN ☐ Global economic growth is expected to modestly rise: > The Eurozone should experience progress in measures which are already in the pipeline, such as the establishment of a banking union. This development, plus existing financial supports, should help prevent the Eurozone from slipping into a severe economic spiral ➤ The US may experience headwinds from sequestration and the expiration of payroll tax cut measures before gaining traction in 2H13 ➤ The Chinese economy recently revealed weakness underlying its banking system. Meanwhile, the subdued global economy seems to be suppressing its exports ➤ ASEAN economies will likely resume their recovery, given the benefits of regional economic integration as well as their flexibility in pushing forward fiscal and monetary policies needed to withstand impacts from lingering global economic uncertainties Outlook on Inflation (App. pages 103 and 105) ☐ Headline inflation is benign in 2013 as a result of: ➤ Stable oil prices ➤ Baht appreciation, which may reduce production costs as well as import prices > Continuation of government measures to assist cost of living (i.e. LPG subsidy for household use and reduction of excise tax on diesel) Outlook on Exports and Tourism (App. pages 104 and 106-107) ☐ Exports will slightly expand, due mainly to subdued global economic sentiment and China's slowdown ☐ Tourism will likely register double-digit growth, supported by an increasing number of Chinese tourists, as well as regional integration Outlook on CAPEX cycle (App. page 108) ☐ Capacity utilization is unlikely to improve, consistent with a weak MPI. This is mainly due to weak external demand for Thai exports, especially those in the global supply chain. Hence, the new investment cycle may be delayed, pending FDI flow Baht (App. page 101) ☐ Thai Baht will stay under depreciation pressure in the near-term due to portfolio outflows, larger trade deficits, and global market risk aversion; the Baht looks oversold and will likely rebound to 30.00 by year-end as the market reassesses Q.E. exit timing Source: KResearch and KBank Capital Markets Research (as of June 28, 2013) บริการทุกระดับประทับใจ 6#4K EXCELLENCE The K-Strategy Customer Strategy ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Long-Term Risk-Adjusted Sustainable Profitability PRODUCT & SOLUTION Innovate & be responsive Customer Centricity TO BE CUSTOMER'S MAIN BANK KASIKORNBANK, its wholly-owned subsidiaries, and its strategic partner BRANDING & MARKETING Clear & consistent communication 8 Customer Segments* INTEGRATION SERVICE QUALITY Excellent customer experience at all channels 4 Product Domains The Way We Work Strategic Capabilities Large Corporate Business Medium Business Small & Micro Business PRODUCT DOMAIN 8 Segments High Het Worth Individual ปรกับปัก EXCELLENCE Multi-corporate Business Mass Middle Income Affluent Understanding Customer Needs Innovative & Managing Products Sales & Service Excellence Note: * The definition of eight customer segments can be found in App. page 26 บริการทุกระดับประทับใจ K EXCELLENCE 2013 Financial Targets 2012 Actual 1Q13 Actual 2013 Targets ROE 20.76% 21.23% N/A ROA 1.86% 1.93% N/A NIM Loan Growth 3.58% 3.49% 3.4-3.6% 9.57% 2.19% YTD 9-11% 11.12% YoY Non-Interest Income Growth* 19.72% 16.72% YoY Provision Average per Q Bt2.1bn Bt3.5bn Cost to Income Ratio NPL Ratio (Gross) 45.00% 40.02% 2.16% 2.09% PRODUCT DOMAIN OPERATION & TRANSACTION 2 SAVING & INVESTING PRODUCT DOMAIN 3 FUNDING & BORROWING PRODUCT DOMAIN PROTECTION & INFORMATION Proactive Risk Management ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK (Consolidated) Notes Mid-teens Approximately Bt2bn plus Countercyclical Provision Mid-40s Below 2.4% System ranking maintained (Page 46) Decent and sustainable loan growth; in line with economic growth (Page 9 and 51-54) Mainly driven by fee income and insurance business; net fee income to grow up to mid-teens** and net premium earned-net to grow up to 20% in 2013 (Page 12-13 and 47-49) Higher provision was set aside to serve as countercyclical provision; credit cost revised up to range between 70 - 80+bps in 2013; prudent and aligned with global market environment Low cost to income ratio in 1Q13, to reflect normal seasonal pattern; cost to income ratio will range in mid-40s (Page 14) Manageable with lingering global economic environment (Page 11 and 55) Note: Non-Interest Income includes Net Premium Earned - net (Net Premium Earned less Underwriting Expenses) from Muang Thai Life Assurance (MTL); KBank has a 38.25% economic interest in MTL ** On the consolidated basis, Bancassurance fees are not included, due to the elimination of inter-company transactions (the accounting treatment from the Muangthai Group Holding consolidation) บริการทุกระดับประทับใจ 7 8#5K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Composition of Growth: Loans by Business Consolidated Target (Y2013) Loan Portfolio Amount (Bt bn) %YTD Growth % Yield Range Loan Growth Dec12 1Q13 1Q13 1Q13 Corporate Loans 416 424 2.1% 4-6% 4-6% SME Loans 469 473 0.8% 7-8% 10-12% Retail Loans 347 350 0.9% 6-7% 10-13% Other Loans 95 109 14.3% Total Loans 1,327 1,356 2.2% Loan Portfolio Structure 6.3% 9-11% (Bt bn) 1,500 1,327 1,356 7% 8% 26% 26% Other Loans 1,000- Retail Loans SME Loans 36% 35% Corporate Loans 500 31% 31% 0 2012 1Q13 Loan Definition (more details on loans can be found in App. page 52-53) Corporate Loans: Loans of KBank and KBank's Subsidiaries in Corporate Segments (Annual sales turnover > Bt400mn) SME Loans: Loans of KBank and KBank's Subsidiaries in SME Segments (Annual sales turnover Bt400mn) Retail Loans: Loans of KBank and KBank's Subsidiaries in Retail Segments Other Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans), and other loan types Y2013 Loan Growth Target: 9-11% Corporate Loans: 4-6% ➤ Growth target on long term investment and high capacity utilization industries and a focus on international trade customers ➤ Focused Industries: Auto & Parts, Construction Materials, Food & Beverage, Commerce and Transportation ■SME Loans: 10-12% ➤ Growth target reflects high demand from domestic consumption and international trade benefits from the FTA and AEC ➤ Focused Industries: Construction Materials, Construction, Hardware, Auto & Parts, Commerce, and Service ■Retail Loans: 10-13% ➤ Align target growth of mortgage loans with industry ➤ Focus on high yield products: K-Credit Card & K-Express Cash 1Q13 Loan Growth: 2.2% YTD and 11.1% YoY Corporate Loans: 2.1% YTD ➤ Mainly from short-term domestic and trade financial credit in Construction Materials, Financial Institution, Petroleum & Petrochemical Product, Service, and Real Estate ■SME Loans: 0.8% YTD ➤ Mainly from long-term credit; increased also in Commerce, Gems & Jewelry, and Transportation Retail Loans: 0.9% YTD ➤ Mainly from mortgage loans, slow growth in line with industry and seasonal effect. K-Express Cash shows highest growth with lower NPL than industry Note: Since 1Q13, as per the Bank of Thailand's requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports บริการทุกระดับประทับใจ 9 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Deposits Growth and Loans to Deposits Ratio March 2013 (Consolidated) Deposits & B/E Loans to Deposits Ratio (Bt bn) 1,500 1,391 1,428 100% 97.9% 97.5% 1,242 96.5% 1,200 1,100 95.4% 94.9% 975 95% 900 600 94.7% 92.8% 93.5% 94.1% 93.8% 90% 300 33 52 36 19 17 0 85% 2009 2010 2011 2012 1Q13 2009 Deposit B/E 2010 --Loans to Deposits 2011 2012 1Q13 Loans to Deposits + B/E 2009 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 Deposits (Bt bn) 975 1,100 1,242 1,391 1,306 1,428 1,391 1,428 Deposit (% YoY) 0.8% 12.8% 12.9% 12.0% 10.4% 9.39% 12.0% 9.39% Deposit (% YTD) 0.8% 12.8% 12.9% 12.0% 5.1% 2.65% 12.0% ! 2.65% Loans to Deposits (%) 96.5% 97.9% 97.5% 95.4% 93.4% 94.9% 95.4% 94.9% i บริการทุกระดับประทับใจ 10 10#6K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Asset Quality and Impairment Loss of Loans and Debt Securities (Provision) March 2013 (Consolidated) (Bt bn) Provision Coverage Ratio (%) 150 131.83 138.62 127.12 111.02 91.64 88.38 10 9.4 8.4 7.8 8 7.3 6.7 100 5.9 I 5.4 6 3.7 4 2 0 0 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 3.5 50 66.60 70.96 73.90 NPL Ratio and Credit Cost (bps) 200 (%) 10 8.88 8 150 6.85 105 6 102 4.44 93 Credit Cost 100 66 64 66 NPL ratio 4 83 82 3.76 50 2 60 3.09 2.91 2.45 2.16 2.09 0 0 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 NPL ratio improved to 2.09% in 1Q13, against the 2013 target of below 2.4% Coverage ratio was 138.62%; this ratio has been maintained above 100% since 2Q10 ■In 1Q13, KBank set aside a higher provision expense, amid economic expansion and satisfactory performance of the Bank, to serve as a countercyclical provision to prepare for any potential future economic downturn or changing economic circumstances, both domestic and abroad In 2013, average provision per quarter is estimated to be approximately Bt2bn, plus the countercyclical provision; credit cost expected to move between 70 - 80+ bps บริการทุกระดับประทับใจ 11 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Composition of Growth: Net Fees and Non-interest Income March 2013 (Consolidated) Non-interest Income Ratio and Net Fee Income Ratio Total Operating Income - net (Bt bn) 120 75.14 80 (+22%) 90.51 (+20%) 38% 104.31 (+15%) | 50 (%) 38% 39% 40% 38% | 40 39% 30 24% 25% 23% 23% 38% 28.70 20 40 (+16% YoY) 62% 61% 62% 40% 10 60% 0 0 2010 2011 2012 1Q13 2010 (Bt bn) Net Interest Income. Non-interest Income Non-interest Income 40 40 28.40 4% 30 (+31%) 2% 20 34.02 (+20%) 40.72 (+20%) 3% Other Operating Income Fee and Service Income - net Net Premium Earned - net Dividend Income Share of Profit from Investments 11.50 +17% YoY) on Equity Method 2% 18% Gain on Investment 10 16% 14% d02 2% 104% 0.05%2 2% 16% 14% 15% 12% 2% 0 Note: 19% 0.05% Gain on Trading and FX transactions 2011 2012 1Q13 Non-interest Income Ratio Net Fee Income Ratio Net Fee Income (Bt bn) 24 18.23 (+14%) 20.64 (+13%) 18 24.47 (+19%) 训 12 6 0 2010 2011 2012 7.14 (+30% YoY) 1Q13 2010 2011 2012 1Q13 - Non-interest Income Ratio = Non-interest Income/Total Operating Income - net -Net Fee Income Ratio = Net Fee Income / Total Operating Income - net - Net Premium Earned - net = Net Premium Earned less Underwriting Expense บริการทุกระดับประทับใจ Non-interest income accounted for 40% of total net operating income; net fee income was 25% in 1Q13 ■ Non-interest income rose, driven mainly by fee income and life insurance premiums ☐ Net fee income continues to be focused on non-loan related fees such as transaction services and card business; higher cross- selling capabilities will also help grow fees ■Net fee income in 1Q13 rose mainly thru credit card, debit card, and ATM fees, including fees from KAsset and KSecurities; the Bank will continue to focus on non-loan related fees 12#7K EXCELLENCE Net Fee Income Structure (Bank only) March 2013 Net Fee Income by Product Bancassurance 16% Trade Finance 6% Others 10% Credit Card Business 15% Transaction Services 25% Trade Finance Cash Commercial Management Credit 6% 22% ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Credit Card Business (mainly from credit card merchant fees) Transaction Services (such as ATM & debit cards, bill payments, money transfers, etc.). Commercial Credit (mainly from commercial credit related fees) Cash Management (such as fees from payroll accounts) Bancassurance (fee income obtained from selling Bancassurance products). Others (such as mutual funds, securities services, capital market business, etc.). Loan Related and Non-loan Related Fees - net Loan related 23% Non-loan related 77% Note: - On the consolidated basis, Bancassurance fees are not included, due to the elimination of inter-company transactions (the accounting treatment from the Muangthai Group Holding consolidation) - On the consolidated basis, Net Premium Earned - net (Net Premium Earned Less Underwriting Expenses) from Muang Thai Life Assurance (MTL) is reported as a part of non-Interest Income; KBank has a 38.25% economic interest in MTL บริการทุกระดับประทับใจ K EXCELLENCE Cost to Income Ratio March 2013 (Consolidated) Cost to Income Ratio ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Cost to Average Assets Ratio 70 -(%) (%) 6- 60 50.92 50.57 47.53 45.00 I 50 40.02 40 4 2.47 2.61 2.63 30 2.19 20 2 10 0 2009 2010 2011 2012 1Q13 0 2010 2011 2012 1Q13 1Q13 cost to income ratio was low, reflecting a normal seasonal pattern Y2013 cost to income ratio is expected to range in the mid-40s Cost management is in place in key areas 2009 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 Cost to Income Ratio (%) 50.92 50.57 47.53 45.00 41.42 40.02 50.49 40.02 Cost to Average Assets Ratio (%) n.a. 2.61 2.63 2.47 2.29 2.19 2.69 2.19 บริการทุกระดับประทับใจ 13 14#8K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Capital (Reported Number: Excluding Net Profit of Each Period) March 2013 Note: Bank only Basel II KASIKORNBANK FINANCIAL CONGLOMERATE* Basel III** Basel II Basel III** 18-(%) 15.98 15.44 18 (%) 15.64 15.79 13.96 15 13.81 15 13.40 13.41 5.55 4.36 4.32 5.20 12 4.59 4.18 12 4.27 3.84 9 6 9.37 9.63 10.43 11.08 6 9 11.47 10.44 9.13 9.57 3 3 I I 0 0 2010 2011 2012 1Q13 2010 2011 2012 1Q13 Tier1 Tier2 Tier1 Tier2 Capital adequacy remains sufficient to support business growth 2010 Basel II 2011 2012 Basel III 1Q13 Bank only CAR (%), excluding net profit of each period Tier 1 (%), excluding net profit of each period KASIKORNBANK FINANCIAL CONGLOMERATE CAR (%), excluding net profit of each period 13.96 13.81 15.98 15.44 9.37 9.63 10.43 11.08 13.40 9.13 13.41 9.57 15.64 10.44 | 15.79 11.47 Tier 1 (%), excluding net profit of each period * KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisted of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope from the BOT's to be financial conglomerate. Under Bank of Thailand regulations, net profit in the first half of the year is to be counted as capital after approval by the Board of Directors as per the Bank's regulations. Net profit in the second half of the year is also counted as capital after approval of the General Meeting of Shareholders. However, whenever a net loss occurs, the capital must be immediately reduced accordingly. ** The details on Basel III regulation can be found in App. page 84-85 บริการทุกระดับประทับใจ K EXCELLENCE Dividend Dividend Per Share ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Dividend Payout Ratio (Bt) 3.00 (%) 3.0 50 2.50 2.50 2.50 42.49 2.5 40 2.00 2.00 2.0 1.75 30.55 31.88 32.33 32.14 30 1.5 1.25 21.36 1.00 20-15.45 1.0 27.00 22.12 0.5 10 0.0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 Interim Dividend 2004 2005 2006 2007 2008 2009 2010 2011 2012 Dividend policy: both operating results and long-term returns to shareholders are taken into consideration in determining dividend payments 15 2004 2005 2006 2007 2008 2009 2010 2011 2012 Dividend Per Share (Bt) 1.00 1.25 1.75 2.00 2.00 2.50 2.50 2.50 3.00 Dividend Payout Ratio (%) 15.45 21.36 30.55 31.88 32.33 42.49 32.14 27.00 22.12 บริการทุกระดับประทับใจ 16 16#9K EXCELLENCE Summary ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■Customer-centric strategy effectively executed on new IT business capabilities: the data-mining, analytic campaign management, and multi-channel of sales and services platforms has already enhanced our capability to quickly acquire new customers; the result is a top-notch total customer experience and strong market positions ■Balanced growth: loans to grow in-line with economic expansion; appropriate liquidity maintained; asset quality sustained with slightly higher credit costs reflecting countercyclical provision policy, and high loan loss reserves; strong non-interest income growth; stable cost to income ratio; strong ROE maintained ■ Adequate capital: Above 10% Tier 1 ratio based on Basel III consolidated basis K EXCELLENCE บริการทุกระดับประทับใจ Appendix ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 17 บริการทุกระดับประทับใจ 18#10K EXCELLENCE KBank: Highlights บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Corporate Business: Performance and Market Position Multi-Corporate Large Corporate Business Business Main Bank Status Medium Business Small and Micro High Net Worth Business Individual To be #1 in Corporate Bond Underwriting in 2013 Affluent Middle Income Mass To be #1 in Cash Management Services in 2014 30% 26% 30% 30% 23% 24% 25% 20% 23% 23% 21% 20% 20% 18% 17% 19% 20% 15% 14% (#1) (#1) (#1) (#1) 10% 10% (#2) (#2) (#3) (#2) (#1) 10% (#2) (#2) (#2) (#2) 0% 2009 0% 0% 2010 2011 2012 2009 2010 2011 2012 2013F Source: ThaiBMA 2009 Source: KBank Customer Survey 2010 2011 2012 19 Source: KBank Customer Survey Performance and Market Position ■ Maintain #1 in Main Bank Status and aim to be the #1 Trusted Partner Bank in Thailand through comprehensive fund raising solutions, integrated cash management solutions and value chain solutions ■Leverage industrial expertise capability in utility, real estate, transportation and commerce, etc; in 2012 our executives were invited to speak at seminars on green business and urbanization ■Striving to be a knowledge-based organization for family business (KFAM Club) ■Ranked #1 in outright trading volume of corporate bonds with 29% market share, and #2 in corporate bond underwriting with 17% market share in 2012; leading position in syndicated loan arranging with acclaimed expertise in power and petrochemical sectors ■ A top player in transactional banking services; 23% market share in cash management services, 31% market share in trade finance, and 39% market share in security services (MFS) in 2012 ■ Awards: Best domestic providers of FX services 2012 (Asiamoney), Best FX bank for Corporates and Fls in Thailand 2012 (Alpha Southeast Asia), Thailand Capital Market Deal 2012 (IFR Asia Magazine), Best Cash Management 2012 (Alpha Southeast Asia) Network Coverage: 63 Corporate & SME Service Centers, 6 Corporate Business Centers, and 26 Cheque Direct Service Offices (March 2013) Note: Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main saving and investing bank and/or main borrowing bank บริการทุกระดับประทับใจ 20 20#11K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK SME Business: Performance and Market Position Multi-Corporate Business Large Corporate Business Medium Business Small and Micro Business High Net Worth Individual #1 in Market Share by Value 30% 29% 27% 30% 30% Affluent Middle Income Mass #1 in Main Bank Status 30% 27% 27% 28% 29% 20% 20% (#1) (#1) (#1) (#1) (#1) (#1) (#1) (#1) 10% 10% 0% 0% 2009 2010 2011 2012 Source: KBank Customer Survey (updated annually) Performance and Market Position 2010 2012 2009 2011 Source: KBank Customer Survey (updated annually) ■ Strengthened #1 Main Bank position by acquiring new trade credit customers and offering effective cross-selling cash management solutions and packages ■ Strengthened #1 position in SME market - "Bank for SMEs❞ ■ Targeted to be SME market leader in all areas Improved market share from 29% in 2010 to 30% in 2011; market share maintained at 30% in 2012 Improved capital usage efficiency by increasing total income to loan ratio ■ Only bank to offer a 2-day credit approval process for small and micro SMEs, with receipt of funds within 5 days ■ Only bank to offer comprehensive solutions to SMEs through K SME Care program (launched in 2006, with a total of 19 classes and about 10,000 participants so far) and K SME Care Knowledge Center (established in 2009) Network coverage: Network coverage includes 877 branches, 177 SME business centers, 63 Corporate & SME service centers, 6 Corporate business centers, and 26 Cheque direct service offices (March 2013) Note: -SME Business in Thailand accounts for 37.9% of Thailand's GDP, or Bt3.4trn; 2.8 million SME customers with 0.57 million registered as legal entities (as of June 2010); supported by the government to become a key factor in economic and social growth -Market share by value = share of revenue (derived from both credit and non-credit products) that each bank gains from the market -Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main savings and investment bank and/or main borrowing bank บริการทุกระดับประทับใจ 21 21 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Retail Business: Performance and Market Position Multi-Corporate Large Corporate Business #1 in Bancassurance* (Total Premium and New Business Premium) Business Medium Business Small and Micro High Net Worth Business Individual Affluent Middle Income Mass #1 in Mutual Fund (KAsset) Mortgage Loan (% Market Share) Ranked #1 in both total and new business premium (% Market Share) Ranked #1 in Mutual Fund AUM (KAsset) (% Market Share) 30% 30% 15% 25.02% 23.47% 22.98% 25.52% 24.31% Maintaining good quality portfolio with lowest %NPL ratio among large commercial banks 25% 22.08% 22.26% 22.74% 23.72% 23.70% 20.47% 19.16% 20.78% 20% -15.77% 9.56% 9.38% 9.25% 20% 10% 8.81% 16.13% ■New 7.67% 15% 10% (#2) (#2) (#1) (#2) (#2) (#1) Business (#1) (#1) (#1) (#1) (#2) (#2) (#1) Total Premium (#2) (#1) 10% 5% (#2) (#3) (#3) (#3) (#3) 5% 0% 0% 0% 2010 2012 1Q13 2009 2010 2011 2012 1Q13 2009 2010 2011 2012 1Q13 2009 2011 Performance and Market Position ■ Strong market penetration to affluent customers with 72% penetration in 1Q13 (constant increase from 40% in 2010) Bancassurance: MTL claims #1 position of Total Premium and New Business Premium in 1Q13 ■Mutual Funds: KAsset maintains #1 position with high net increase in AUM and wider gap with 2nd player Mutual Funds + Private Funds + Provident Funds: KAsset maintains #1 position with highest total AUM for the fifth consecutive year ■Mortgage Loans: Ranked top 3 with 9.25% market share in 1Q13 with conservative growth (in line with industry) and maintaining good quality portfolio Credit Cards: KBank ranked #2 in total spending and number of cards, with high spending volume of Bt59bn and 2.7mn cards; ranked #1 in card-accepting merchant services (such as EDC, payment gateway, etc.) with 33% market share by volume in 1Q13 Debit Cards: Maintain leader position in 1Q13 with new attractive spending campaigns to match customer lifestyles, resulting in the highest debit card spending in the industry Market leader in Digital Banking, with 60% market share of Thailand Digital Banking users (Brand of Thailand Website, December 2012) and #1 Digital Banking top of mind Brand perception rating (Nielsen, 2012) Network Coverage: 877 branches; 7,689 ATMs; 1,464 CDMs; 146 K-Lobby; and 39 THE WISDOM Centers and Corners (March 2013) Note: * Total Premium = New Business Premium (NBP) + Renewal Premium; New Business Premium = First Year Premium (FYP) + Single Premium (SP) บริการทุกระดับประทับใจ 22 22#121,000 K EXCELLENCE Channels Branch 975 (+110) ATM ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK K-Lobby *** 102 1 877 865 (+72) New Branch Model* 7,500 9,000 7,603 7,689 8,294 240 232 7,471 7,366 6,955 200 35 816 805 30 6,000 (+691) 160- 146 (+106) 800 782 (+30) (+5) 126 4,500- 1842 873 (+1,853) (+516) (-105**) (+237) (+86) 120 99 103 77 (+23) (+11) 835 (+38) 3,000 80 (+120) (+23) (+7) (+4) (+20) (+19) (+22) 1,500 40- (+33) 600 0 0 2009 2010 2011 2012 1013 2013F 2009 2010 2011 2012 1Q13 2013F 2009 2010 2011 2012 1Q13 2013F Key Strategies in Channel Expansion 2009 2010 2011 2012 1Q13 Branch 782 805 816 865 877 Branch: provide customer service - Bangkok and Metro 46% 46% 46% 45% 45% ➤ Increase number of branches to 975 by year-end 2013 (including "new branch model") > Expand branch and "new branch model" to potential area for high competitiveness - Upcountry 54% 54% 54% 55% 55% ATM 6,955 7,471 7,366 7,603 7,689 - Bangkok and Metro 52% 51% 52% 51% 50% ➤ Expand branch size in high traffic/strategic areas to better serve customers ➤ Relocate low use branches to more convenient areas ➤ Begin expansion of "new branch model" in 4Q12 to match customer lifestyles, especially in BTS and Hypermart areas E-Channel: provide customer convenience ➤ #1 in number of Cash Deposit Machines (CDMs) in Thailand; utilize duo-function CDMs (deposits & withdrawals) to increase efficiency, enhance service coverage and improve customer convenience ➤ #1 in number of K-Lobby in Thailand; increase number of K-Lobby to 232 in 2013 > Relocate ATMs to provide more convenient service to customers * "New Branch Model" is a new modern-lifestyle branch model aiming to provide more convenience to targeted customers. This type of branch is designed to be smaller in size and equipped with an electronic banking machine and a small staff; hence, it is cost efficient to operate ** A drop in the number of ATMs reflected a relocation plan *** K-Lobby is an electronic banking service with multiple functions such as K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both outside of branch offices and as stand-alone machines in areas without branches บริการทุกระดับประทับใจ - Upcountry 48% 49% 48% 49% 50% CDM 973 1,014 1,067 1,398 1,464 - CDM (Deposit) 973 1,014 1,016 1,066 1,083 - CDM (Deposit & Withdraw) K-Lobby 51 332 381 77 99 103 126 146 Note: 23 23 K EXCELLENCE Sample of Channels Branch ธนาคารกสิกรไทย K Branch @Department Stores ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK New Branch Model A new modern- lifestyle branch model aiming to provide more convenience to targeted customers. This type of branch is designed to be smaller in size and equipped with an electronic banking machine and a small staff; hence, it is cost efficient to operate Mini Branch @ BTS THE WISDOM Center and Corner An exclusive center providing a full range of services and facilities to the High Net Worth Individual and Affluent segments THE WISDOM Lounge at Sofitel So Bangkok K-Lobby PUM/DB CDM ATM ATM บริการทุกระดับประทับใจ An electronic banking service with multiple functions such as K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both outside of branch offices and as stand-alone machines in areas without branches Digital Banking Sample of Digital Banking K-Mobile Banking K-Cyber Service (K-Cyber Banking, K-Cyber Trade and K-Cyber Invest) K-Payment Gateway K-Merchant on Mobile (mPOS) K-Cyber Banking 24 24#13K EXCELLENCE KBank: Strategy บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK K EXCELLENCE Eight Customer Segments Corporate Business Multi-Corporate Business Large Corporate Business Medium Business Company with annual sales >Bt5,000mn ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Company with annual sales >Bt400mn to Bt5,000mn Individual or company with annual sales >Bt50mn to Bt400mn SME Business Retail Business Small & Micro Business High Net Worth Individual Affluent Middle Income Individual or company with annual sales ≤ Bt50mn, and with commercial credit limit < Bt15mn Individual wealth with KBank and its wholly-owned subsidiaries* > Bt50mn Individual wealth with KBank and its wholly-owned subsidiaries* ≥ Bt10mn to Bt50mn Individual wealth with KBank and its wholly-owned subsidiaries* ≥ Bt15,000 to Bt10mn Mass Individual wealth with KBank and its wholly-owned subsidiaries* < Bt15,000 Customer-centric strategy: offering a full array of financial solutions and a satisfying experience to our customers Synergistic portfolio management by monitoring eight customer segments ▸ Offer financial solutions from among KBank, its wholly-owned subsidiaries, and the insurance company ➤ Make significant progress towards long-term aspirations; performance on track Note: * Wealth with KBank and its wholly-owned subsidiaries is defined as savings and investments, such as deposit products with KBank, mutual funds with KAsset บริการทุกระดับประทับใจ 26 25#14K EXCELLENCE Segment Performance Highlights Main Bank Status ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK No. of Customers and Overall Customer Satisfaction 30% 28% 27% 27% 29% SME Business No. of Customers (mn) * Overall Customer Satisfaction ** 15 85 85 86 86 24% 25% 26% Corporate Business 83 85 100 25% 80 24% 23% 10 20% 17% 60 14% 17% Retail Business 11.1 15% 10.9 40 5 11% 12% 10.0 10% 10% 5% 2008 2009 2010 2011 Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main saving and investing bank and/or main borrowing bank Average Product Holdings per Customer Old Definition New Definition*** 2.78 2.81 2.82 2.69 8.0 9.0 6.9 7.5 20 0 0 2007 2008 2009 2010 2011 2012 No. of Customers (mn) 2012 1Q13 Overall Customer Satisfaction (Overall) 1.69 2.15 2.46 (By Business Division) 2007 2008 2009 2010 2011 2011 (New) 2012 (New) 4.59 4.41 3.12 3.11 3.30 3.54 2.67 2.82 2.86 3.04 2.48 2.17 2.69 2.80 RBS 1.71 1.83 2.10 2.12 2.14 2.56 SME 1.44 CBS 2007 2008 2009 2010 2011 2011 2012 (New) (New) *** In 2012, the Average Product Holding calculation is adjusted in all eight customer segments to align with our better understanding of customer behavior; 2011 numbers were restated for comparison purposes * Customers in Retail Business Division (RBS) account for 94%, SME Business Division (SME) 6%, and Corporate Business Division (CBS) less than 1% of customer portfolio ** Customer Satisfaction Index are calculated using the weighted average of customer satisfaction index from our eight customer segments ■Customer-centric strategy and new IT capabilities have helped improve segment performance over the past few years ■Segment benefits: ➤ No. of customers grew 61%, from 6.9mn in 2007 to 11.1mn in 1Q13; new customers grew 2% YTD from Y2012 ➤ Main Bank Status and Market Penetration increased on track with our customer segment aspirations ➤ Average product holdings per customer increased as a result of higher cross-selling capability; the overall average product holdings per customer rose to 2.82 in 2012, from 2.69 in 2011 ➤ Overall Customer Satisfaction increased from 83 in 2007 to 85 in 2012; the index for retail customers exceeded the World Finance Industry Norm บริการทุกระดับประทับใจ 27 K EXCELLENCE Revenue by Eight Customer Segments March 2013 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Loan Portion Average Loan Yield (%) 4.5% Multi-Corporate Business 16.8% Large Corporate Business 4.6% 17.6% Medium Business Non-interest income * Middle Income 28% 22.0% 6.7% Small & Micro Business 17.2% 9.7% High Net Worth Individual 4.3% 0.3% 3.2% Affluent 5.3% Middle Income 22.3% 6.9% Mass 9.6% 0.6% Multi- Mass Corporate 10% Business 12% Large Corporate Business 8% Medium Business 12% Small & Affluent 11% Micro Business 14% High Net Worth Individual 5% * Non-interest income excludes capital market business, treasury business and others Note: Loan portion and loan yield of each customer segment includes loans from the Enterprise Risk Management Division (NPL + Performing Restructured Loans); figures are not comparable with loan data in other pages บริการทุกระดับประทับใจ 28#15K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KASIKORNBANK to Capture AEC Opportunities China Model: 3 Branches including Shenzhen, Chengdu and Hong Kong branch, with 3 Representative Offices in China; aiming to establish KASIKORNBANK China (LII) GDP Size of Economy (GDP) in USD Trillion AEC Plus Model: Business network is established with partner banks overseas Thailand ASEAN* 0.37 4.8%** 3.09 5.3% ■ ASEAN Economic Community (AEC): ASEAN member countries to become a single market by 2015; free flow of goods & services and non tariff barrier among 10 member nations ■ Greater opportunities available through ASEAN + 3 (China, Japan, and South Korea) ■To capture AEC opportunities, KBank continues to enhance business in ➤ Domestic base trading Cross border investment Foreign customers in AEC ■ Higher revenue generation and expansion of customer base Note: 2012 Y2015 Forecast 42:58 ASEAN economic growth are averaged growth among ASEAN member countries in national currencies (from IMF, October 2012) ** 2013 GDP Forecast is projected by KResearch (As of May 20, 2013) *** Greater Bangkok includes Nonthaburi, Sumut Prakarn, Nakorn Pathom, Samut Sakhon and Patumthani บริการทุกระดับประทับใจ 2013 GDP Forecast Contribution to GDP (by NESDB) Greater Bangkok*** : Provinces 44: 56 29 29 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KASIKORNBANK to Capture Urban Growth Opportunities Bangkok * In 2012, 14 provinces were selected as strategic provinces ■ Strategic Provinces Project* has been started to capture urban growth opportunities, and to prepare for the upcoming AEC ■Different industries, customer segments and behaviors in each strategic province in Thailand identified to capture different business opportunities Tourist Hub, Logistic Hub, Education Centre, Industrial Estate, and AEC Linkage are key areas Aspiration is to become no.1 in customer mind in each strategic province Higher revenue generation from both net interest income and non-interest income is expected, with a gradually rising proportion of loan and revenue generation from the upcountry ■Wider customer base in all customer segments is expected, along with higher Market Penetration, higher Market Share by Value, and higher Main Bank Status As of 1Q13, the portion of KBank's outstanding loans in Bangkok and its metropolitan area is around 63% vs. around 37% in the upcountry Note: Market Penetration = % of customers in the market who use at least one of the products of KBank and its wholly-owned subsidiaries Market Share by Value = share of revenue (derived from both credit and non-credit products) that each bank gains from the market Main Bank Status = % of customers in the market who use KBank and its wholly-owned subsidiaries as their main operating bank and/or main saving and investing bank and/or main borrowing bank บริการทุกระดับประทับใจ 30 30#16K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Strategic Provinces Project: Highlights in 2012* SME Corporate Business Business Retail Business KBank, its wholly-owned subsidiaries, and Muang Thai Life Assurance (MTL) aim to offer a full range of financial solutions based on customer-centric strategy to capture business in strategic provinces Corporate Business ➤ Total income earned from corporate customers in strategic provinces increased 8% in 2012 Successfully launched events to keep a strong relationship with Big Family (Phuket) ➤ Created Marketing Activities for corporate customers such as Professional Family Business Management and Business Matching Activities ■SME Business ➤ Total income earned from SME customers in strategic provinces increased 28% in 2012 ➤ Opened six SME hubs in strategic provinces Built K-SME brand awareness Launched localized marketing campaign, including branding selling and retention program, to serve customer needs in each strategic province ■Retail Business ➤ No. of retail customers grew 12% in 2012, especially from High Net Worth Individual and Affluent ➤ Opened 20 branches in strategic provinces ➤ Effective marketing communication and massive acquisition via launch of localized event, campaign and privileges to match customers' lifestyle in each strategic province, such as Joyful Festival and Money Expo Note: *In 2012, 14 provinces were selected as strategic provinces บริการทุกระดับประทับใจ K EXCELLENCE K-Transformation Project ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Strategic Understanding Capabilities Customer Needs Innovating & Managing Products Sales & Service Excellence Proactive Risk Management Know Our Customers (KOC) Information Technology Capital (ITC) K-Transformation Foundation Capabilities Multi- channel Sales And Services (MSS) Financial Information System (FIS) K-Transformation Supporting Solution (KSS) บริการทุกระดับประทับใจ 31 32 22#17Indicated Benefits K EXCELLENCE New IT Business Capabilities ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK. Key Deliverables and Benefits in 2013 ➤ New Core Banking System on Loans: - Open possibilities to capture new business opportunities - Help shorten product development time - Enhance product innovation capability Corporate Payment System Enhancement: - Create a Single Cash Management Platform - Better serve customers in the areas of Payment, Collection (Direct Debit), Balance Reporting, and new Cash Management Front-End ➤ New Branch Sales & Service and Call Center System Enhancement: - Create unique and consistent customer experience across channels including new infrastructure New loan core banking system will start to go live end of 2013 as planned, with gradual deployment of new loan and deposit core banking solutions and rollout to mitigate new technology system risk Capabilities from new core banking system on loans will open possibilities to capture new business opportunities After 2013, gradual deployment of the K-Transformation project will make the project KBank's new standard business system platform; the project budget will be included as a part of KBank's regular annual IT budget KBank's cost to income ratio will range in mid-40s บริการทุกระดับประทับใจ K EXCELLENCE New IT Business Capabilities Highlights Completed foundation and launched basic FIS and KOC Average Product Holding Set foundation around sales & services for channels and new payments 2.78 2.46 Completed MSS rollout in 1Q12 2.69 2.82 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Consolidated MSS across channels and ITC launch 1.69 2.15 Non-interest Income to Average Asset (%) 1.96 1.97 2.14 2.08 2.20 1.95 1.62 Cost to Income Ratio (%) 53.95 51.54 50.92 50.57 47.53 45.00 40.02 ROE (%) 15.94 15.73 14.35 12.79 16.72 20.76 21.23 Y2007-2008: Old Financial Presentation 2007 2008 2009 2010 Y2009 onwards: New Financial Presentation 2011 A Completed ✓Branch In Progress New basic customer analytics and marketing campaign New basic financial management, reporting, and budgeting ✓KOC marketing plan ✓New sales & service pilot rollout ✓Branch campaign integration ✔New basic payment system solution rollout 2012 1Q13 Pre-deployment of Legacy System; system integration testing 2013 onwards Consolidate sales & services across. channels and advanced campaign capabilities New loan core banking system will start to go live end of 2013 as planned, with gradual deployment of new loan and deposit core banking solution to mitigate new technology system risk New branch platform rollout Note: In 2012, Average Product Holding calculation was adjusted in all eight customer segments to align with customer behavior; 2011 number were revised for comparison purposes - Since January 1, 2011, financial statements have been reclassified per the Bank of Thailand's requirements; the 2009 and 2010 financial statements were restated and adjusted for comparison purposes - KOC = Know Our Customers; MSS = Multi-Channel Sales and Services; ITC = Information Technology Capital บริการทุกระดับประทับใจ 34 33 33#185 K EXCELLENCE KOC and MSS Capabilities Highlights Key Benefits from KOC No. of product holdings for Retail Customer Portfolio Increases Old Definition Contacted either in 2009 or 2010 Contacted both in 2009 and 2010 New* 4.25 4.34 Overall Retail Customer Porfolio 4.14 4.10 4 3.81 3.86 3,31 3 2.52 2.64 2.17 3.00 3.08 2.82 2.86 2.86 3.20 3.04 2.80 2 2.23 2.48 2.66 2.69 1 0 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Dec11 Dec12* *In 2012, the Average Product Holding calculation is adjusted in all eight customer segments to align with our better understanding of customer behavior; 2011 number were restated for comparison purposes Key Benefits from MSS and Lead & Referral New Branch Sales & Service Rollout Completed 800 (No. of Branch) 768 600 600 427 400 253 200 2 5 29 0 822 824 824 865 877 Key Achievement: Branch roll-out complete 100% (Since March 2012) 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 Volume & Amount of SME Lead Referrals Continue to Increase 80,000 Y2011 impacted by flood disaster Y2012 sharp rise reflected MSS branch roll-out completion since March 2012, and low 90.668 (+239%) 28.143 40,000 9.997 26.736 6,798 (-5%) 43.602 (+541%) (-32%) ■ Volume (Leads) Amount (Bt mn) 2010 2011 2012 base in 2011 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Long-term strategic positioning Developing a constructive and harmonious corporate culture and new IT platform providing unique tools to support our customer-centric strategy; overcoming IT obstacles makes KBank a leader among peers Progress and Benefits ■Acquiring and building unique business and IT capabilities creates thoroughly integrated sales and service IT platforms across all channels, generating revenue and keeping KBank ahead of peers ■New Sales & Service System creates faster customer responsiveness and a consistent customer experience across channels. Integrated with KOC capabilities, the new MSS system increases campaign execution effectiveness through the branch platform; increases lead creation, cross-selling, and up-selling; results in better campaign response rates; and increases product holdings and sales per customer บริการทุกระดับประทับใจ K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KBank: Risk and Credit Management 35 บริการทุกระดับประทับใจ 36#19K EXCELLENCE KBank Risk Management Structure ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK The Bank's organization has been structured to facilitate all aspects of risk management; each business unit's responsibilities and segregation of duties have been clearly identified in accordance with good internal-control practices Audit Committee Board of Directors ■ Approve all risk management policies and guidelines; approve risk limits and risk appetites ■ Ensure the adequacy and effectiveness of risk management system and internal controls Risk Management Committee Sub-committee Credit Policy and Risk Management Sub-committee Credit Process Management Sub-committee Market Risk Management Sub-committee Asset and Liabilities Management Sub-committee Operational Risk Management Sub-committee Capital Management Sub-committee ■ Oversee and monitor risk management policies and overall risk profile under the policies and guidelines approved by the Bank's Board of Directors Business Functions CBS/ RBS/ Risk Functions ERM SME/ CMB/ CSP ■ Business functions are accountable for managing all risks inherent in their day-to-day activities ■Risk functions are responsible for risk management policies, methodologies, and processes in order to effectively measure, monitor, and control all related risks CBS Corporate Business Division, RBS = Retail Business Division, SME = SME Business Division, CMB = Capital Market Business Division, CSP Corporate and SME Products Division, ERM = Enterprise Risk Management Division บริการทุกระดับประทับใจ 337 37 K EXCELLENCE KBank Credit Risk Management Process Portfolio Management ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■Determine portfolio by design i.e., portfolio target setting by key credit concentration dimensions (Country, Industry, Large Customer Group) and other sub portfolio dimensions based on value-based analysis ■Manage portfolio according to the Bank's risk appetite and concentration ■ Perform stress testing to identify portfolio weaknesses and proactively prepare appropriate management actions Origination Monitoring Collection & Recovery ■ Enhance decision making/supporting tools for more efficient return and risk evaluation ■ Setup specific prescreening criteria for potential industries Enhance customer income validation process ■Monitor customer behavior and detect early warning signs ■ Ensure credit condition compliance (e.g. insurance, capital injection, project progress) ■ Take prompt actions to prevent credit deterioration ■ Efficient collection and follow- up of customers with late payments ■Restructure viable customers to prevent NPLs ■Foreclose pledged assets to recover loan loss บริการทุกระดับประทับใจ 38#20Approval Process Annual Sales Post Approval K EXCELLENCE KBank Credit Approval Process MB Corporate > Bt5,000mn CB >Bt400-5,000mn Policy Lending ME > Bt50 400mn Credit Underwriting Dept. ⚫ Sufficiency of cash flow • Growth trends and ability to compete • Management experience and depth Leverage, Liquidity, and asset quality ⚫ Credit Risk Mitigation • Facilities Structure SME • Application Score ⚫ Legal document ⚫ Limit set up • Customer Review by Relationship Manager (RM) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK. SM ≤ Bt50mn Retails Housing Loan/ Secured Consumer SME Credit and Housing Loan Approval Processing Dept. Formula Lending ⚫ FICO Score ⚫ Bureau information/Credit history ⚫ Debt service capacity ⚫ LTV Formula Lending • Application Score • FICO Score Credit Card/ Unsecured Consumer Unsecured Credit Product Operation Dept. ⚫ Bureau information/Credit history • Debt service capacity (except Credit Card) ⚫ LTV (only housing loan/secured consumer) Credit Processing Dept. Bank-wide Risk Asset Review Retail and SME Business Collection and Recovery Dept. Unsecured Credit Product Operation Dept. ⚫ Legal document • Limit set up ⚫ Credit Portfolio Monitoring Unit to facilitate RM in customer monitoring ⚫ Credit Clinic • Automated collection system Efficiently utilize available behavior scoring and collection tools i.e. SMS, automated letter generation, phone Note: MB = Multi-Corporate Business, CB = Large Corporate Business, ME = Medium Business, SM = Small & Micro Business, FICO = Fair Isaac Corporation บริการทุกระดับประทับใจ K EXCELLENCE Credit Bureau Summary National Credit Bureau (NCB)* Two Types of Credit Reports Offered by NCB: ➤ Consumer credit report for individuals Commercial credit report for businesses Credit report (monthly reported by members) ➤ Customer information (Name, address, identification number, birth date, occupation, etc.) ➤ Credit information (History of application, approval history, loan payment history, etc.) Data Record of Credit Report ➤ Individuals: Credit report remains on file for 3 years ➤ Businesses: Credit report remains on file for 5 years ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KBank Practice KBank's customers applying for loans Optional to Sign agreement to allow the Bank (Large companies normally have reliable financial statements) Corporate Business to get credit report from NCB Required to Required to SME Multi- Corporate Business Large Corporate Business Medium Business Small & Micro Business Good credit Poor credit Retail Business 4 Customer Segment in Retail (HN, AF, MI and MA) Good credit Poor credit ■Members: Financial institutions including commercial banks, finance companies, securities companies, insurance companies, etc. KBank's Policy Lending Reject application KBank's Credit Scoring Reject application Note: *The concept of a credit bureau started in 1961 and central credit registration started in 1964. The Central Information Service was established in 1999 and its name was changed to Central Credit Information Service in 2000 and to the National Credit Bureau in 2005 บริการทุกระดับประทับใจ 39 39 40 40#21K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KBank: Financial Performance บริการทุกระดับประทับใจ K EXCELLENCE 1Q13 Performance Highlights ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 41 Consolidated 2011* Net Profit (Bt bn) 24.226 2012 35.260 1Q12 2Q12 3Q12 8.988 9.367 9.212 4Q12 7.692 1Q13 10.106 Profitability - NIM - ROE - ROA ■1Q13 net profit rose 12.44% YoY, driven by both net interest income and non-interest income ■Loans grew 2.2% YTD and 11.1% YoY; the YTD growth was mainly driven by corporate business 2.19% NIM slightly declined, in line with interest rates, but remained high 16.72% Net fee income continued to grow due to customer-centric strategy; growth entails strengthening acquisition, retention, and cross-selling capabilities 3.75% 16.72% 3.58% 20.76% 1.48% 1.86% 2.01% 3.58% 3.53% 3.55% 22.43% 22.32% 21.14% 1.89% 2.00% - YTD Loan growth 12.43% 9.57% 0.76% 3.73% - YoY Loan growth 12.43% 9.57% 12.65% - YoY net fee income growth 13.22% 18.56% - YoY non-interest income growth 19.78% 19.72% 1.51% 9.57% 7.62% 7.35% 9.57% 11.12% 12.14% 11.85% 13.37% 38.16% 29.52% 19.31% 14.13% 16.12% 30.83% 3.53% 3.49% 16.93% 21.23% 1.93% 6.32% Cost control - Cost to income 47.53% 45.00% Asset quality 2.45% - Coverage ratio 127.12% Loans to Deposits 97.47% Tier 1 Ratio (Bank Only)** 9.63% CAR (Bank Only)** 13.81% 2.16% 131.83% 95.35% 10.43% 15.98% 2.35% 2.20% 2.07% 2.16% 133.79% 144.57% 142.94% 131.83% 93.44% 94.75% 92.06% 95.35% 9.59% 9.76% 10.90% 15.48% 15.56% 16.53% 2.09% 138.62% 94.92% 15.98% 15.44%*** - NPL ratio 41.42% 44.16% 43.54% 50.49% 40.02% 10.43% 11.08%*** 1Q13 cost to income ratio was Note: *In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax item adjustments; there was no affect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries ** Under Bank of Thailand regulations, net profit in the first half of the year is counted as capital after approval by the Board of Directors as per Bank regulations. Net profit in the second half of the year is counted as capital after approval of the General Meeting of Shareholders. However, when a net loss occurs, the capital must be reduced immediately. *** Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from 1 January 2013 onwards. For KASIKORNBANK FINANCIAL CONGLOMERATE, as of 1Q13, Tier 1 = 11.47%, Tier 2 = 4.32%, and CAR = 15.79%. KASIKORNBANK FINANCIAL CONGLOMERATE means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisting of KBank, K Companies and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd. and other subsidiaries within the permitted scope of the BOT's to be a financial conglomerate บริการทุกระดับประทับใจ low, reflecting a normal seasonal pattern; cost to income ratio will range in mid-40s ■Manageable NPLs, with high coverage ratio maintained 42#22K EXCELLENCE Consolidated Financial Statements Statements of Comprehensive Income (Bt mn) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 2011* 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Interest income Interest expenses Interest income - net Fee and service income Fee and service expenses Fee and service income - net Total operating income Underwriting expenses 83,693 96,174 22,974 23,589 24,393 25,218 25,088 27,202 32,593 8,055 8,124 8,189 8,225 7,883 56,491 63,581 14,918 15,465 16,204 16,994 17,205 26,072 31,429 7,162 7,667 7,933 8,667 9,037 5,435 6,961 1,652 1,703 1,699 1,907 1,901 20,637 24,467 5,510 5,965 6,233 6,760 7,136 122,216 144,495 33,866 36,188 37,629 36,812 40,575 31,707 40,190 9,098 10,311 11,114 9,667 11,872 Total operating income - net 90,508 104,305 24,769 25,877 26,514 27,146 28,703 Total other operating expenses 43,019 46,934 10,260 11,426 11,544 13,705 11,488 Impairment loss of loans and debt securities 7,346 8,390 1,831 1,894 2,018 2,648 3,525 Operating profit before income tax expenses 40,144 48,981 12,678 12,557 12,953 10,793 13,690 Income tax expenses 13,962 11,136 3,043 2,561 3,010 2,522 2,743 Net profit attributable: Equity holders of the Bank 24,226 35,260 8,988 9,367 9,212 7,692 Non-controlling interest 1,957 2,585 648 628 731 578 10,106 842 Statements of Financial Position (Bt mn) Loans to customers (less deferred revenue) Total Assets Deposits Total Liabilities Total Equity attributable to equity holders of the Bank 2011 2012 1Q12 2Q12 3Q12 4Q12 1,210,834 1,326,732 1,220,068 1,256,052 1,287,299 1,326,732 1Q13 1,355,747 1,722,940 2,077,442 1,857,149 1,887,036 2,005,460 2,077,442 2,109,967 1,242,229 1,391,380 1,305,687 1,325,630 1,398,295 1,391,380 1,428,318 1,555,974 154,799 1,876,621 184,946 1,677,982 165,719 1,703,376 170,030 1,812,026 178,599 1,876,621 184,946 1,896,632 195,877 Notes: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 30, 2009. As the MTGH acquisition was completed on November 30, 2009, the Bank's consolidated financial statements from 2010 include the performance of companies in the MTGH Group for the whole year * In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax item adjustments; there was no affect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries บริการทุกระดับประทับใจ K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Earnings Before Provision and Tax (EBPT) and Net Profit March 2013 (Consolidated) 60 50 40 40 30 20 (Bt bn) 30.20 37.14 EBPT Net Profit (Bt bn) 57.37 40 47.49 30 35.26 nil. al. 24.23 20.05 20 14.73 17.22 10 10 0 * 2009 2010 2011 2012 1Q13 10.11 0 2009 2010 2011 2012 1Q13 EBPT and net profit in 1Q13 grew 18.65% and 12.44% YoY, respectively EBPT (Bt bn) Net Profit (Bt bn) 14.73 2009 2010 2011* 2012 30.20 37.14 47.49 57.37 20.05 24.23 35.26 1Q12 1Q13 14.51 17.22 8.99 10.11 4Q12 1Q13 13.44 17.22 7.69 10.11 43 Note: In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax items adjustment; there was no affect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries บริการทุกระดับประทับใจ 44#23Note: K EXCELLENCE ROA and ROE March 2013 (Consolidated) ROA ROE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK (%) 2.50 1.86 1.93 2.00 1.48 1.38 1.50 1.10 224 262 24 (%) 20.76 21.23 20 16.72 15.73 16 12.79 12 1.00 8 0.50 4 0.00 0 2009 2010 2011 2012 1Q13 2009 2010 2011 2012 1Q13 ROA (%) ROE (%) 2009 2010 2011* 2012 1Q12 1Q13 4Q12 1Q13 1.10 1.38 1.48 1.86 2.01 1.93 1.51 1.93 12.79 15.73 16.72 20.76 22.43 21.23 i 16.93 21.23 * In accordance with the corporate income tax rate reduction from 30% of taxable profit to 23% in 2012 and 20% in 2013, KBank recognized a one-time Bt1.9bn impact to the 4Q11 income statement due to deferred tax items adjustment; there was no affect on the business undertakings, profitability, or capital fund of the Bank and its subsidiaries บริการทุกระดับประทับใจ 45 K EXCELLENCE Net Interest Margin March 2013 (Consolidated) NIM ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Yield on Earnings Assets and Cost of Fund (%) (%) 5 4 3.23 3.48 3.75 6.24 3.58 3.49 5.94 6.26 . Yield on Loans 6 5.24 3 Yield on Earnings Assets 5.55 5.42 5.09 4.63 2 2.08 1 2.14 1.89 Cost of Fund 2 1.32 1.99 1.70 1.81 0 Cost of Deposit* 1.05 2009 2010 2011 2012 1Q13 0 2010 2011 2012 1Q13 NIM was 3.49% in 1Q13, remaining the highest level among large commercial banks NIM position will be maintained, focusing on the high-yield lending market; pressure from rising competition will remain 2009 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 NIM (%) 3.23 3.48 3.75 3.58 3.58 3.49 3.53 3.49 Yield on Earnings Assets (%) n.a. 4.63 5.55 5.42 5.52 5.09 5.24 5.09 Yield on Loans (%) n.a. 5.24 5.94 6.24 6.24 6.26 6.35 6.26 Cost of Fund (%) n.a. 1.32 2.08 2.14 2.24 1.89 2.00 1.89 Cost of Deposit (%), incl DPA n.a. 1.05 1.70 1.99 1.99 1.81 1.92 1.81 L Note: * Cost of deposits including contributions to the Financial Institutions Development Fund (FIDF) and Deposit Protection Agency (DPA) บริการทุกระดับประทับใจ 46#24K EXCELLENCE Non-interest Income and Structure March 2013 (Consolidated) Non-interest Income to Average Assets ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Non-interest Income Structure (Bt bn) 50 (%) I 4 3 1.95 2.14 2.08 2.20 2 1.62 40 1 0 2009 2010 2011 2012 1Q13 Non-interest Income Ratio** Other Operating Income 40.72 Fee and Service Income - net 3% 34.02 4% Net Premium Earned - net* 28.40 30 2% 60% 61% Dividend Income Share of Profit from Investments 60 (%) 20 64% 50 38 38 39 40 40 35 30 20 10 0 2009 2010 2011 2012 1Q13 11.50 on Equity Method 18% 2% Gain on Investment 62% 19% 9%2% 0.05% 50 12% 2% Gain on Trading and FX transactions 10 16% 14% 2% 04% .05% 0.02% 2% 2% 14% I 16% 15% 0 2010 2011 2012 1Q13 Non-interest income continued to grow, mainly from fee income and life insurance earned premium 2009 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 Non-interest Income (Bt bn) 21.68 28.40 34.02 40.72 9.85 11.50 10.15 11.50 Non-interest Income Growth (% YoY) n.a. 30.97 19.78 19.72 19.31 16.72 30.83 16.72 Non-interest Income Ratio (%) 35.23 37.79 37.58 39.04 39.77 40.06 37.40 40.06 Note: Net Premium Earned - net = Net Premium Earned less Underwriting expense ** Non-interest income ratio = Non-interest income / Total operating income-net K EXCELLENCE Net Fee Income March 2013 (Consolidated) บริการทุกระดับประทับใจ Net Fee Income (Bt bn) 30 24.47 20.64 20 18.23 15.94 10 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Net Fee Income to Net Total Operating Income (%) 30 26% 24% 25% 23% 23% 20 10 7.14 0 2009 2010 2011 2012 1Q13 0 2009 2010 2011 2012 1Q13 47 1Q13 net fee income grew 29.52% YoY, driven by a rise in credit card, debit card, and ATM fees, as well as fee income from KAsset and KSecurities in line with market growth Net fee income growth will continue to be helped by the cross selling capability of our customer-centric strategy Net fee income to net total operating income was 25% in 1Q13; consolidated net fee income reflects the accounting treatment following the MTGH consolidation; Bancassurance fees were not included Fee Income (Bt bn) Fee Income - net (Bt bn) 2009 19.54 15.94 2010 2011 2012 22.82 26.07 31.43 18.23 20.64 24.47 1Q12 1Q13 4Q12 1Q13 7.16 9.04 8.67 9.04 5.51 7.14 6.76 7.14 Fee Income Growth (% YoY) Net Fee Income Growth (% YoY) n.a. n.a. 16.77 14.36 Net Fee Income to Net Operating Income (%) 25.90 14.25 20.55 13.22 18.56 24.26 22.80 23.46 15.42 i 26.19 37.02 26.19 12.14 29.52 38.16 29.52 22.24 24.86 24.90 24.86 บริการทุกระดับประทับใจ 90 48#25K EXCELLENCE Net Premium Earned - net March 2013 (Consolidated) Net Premium Earned and Underwriting Expenses 50 (Bt bn) 40 29.09 30 25.22 20 20 10 47.52 40.19 37.12 I 31.71 I 2.20 1.94 2009 2010 2011 Net Premium Earned 2012 20 (Bt bn) 15 10 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Net Premium Earned - net 7.33 14.10 11.87 5 5.41 3.87 0.26 0 1Q13 2009 2010 2011 Underwriting Expenses 2.23 2012 1Q13 Net Premium Earned - net Net Premium Earned - net = Net Premium Earned less Underwriting Expense 2009 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 Net Premium Earned (Bt bn) Underwriting Expenses (Bt bn) 2.20 29.09 37.12 47.52 10.93 14.10 11.21 14.10 1.94 25.22 31.71 40.19 9.10 11.87 9.67 11.87 Net Premium Earned - net (Bt bn) 0.26 3.87 5.41 7.33 1.83 2.23 1.55 I 2.23 Net Premium Earned - net (% Growth YoY) n.a. n.a. 39.84 35.41 61.18 22.17 33.81 i 22.17 Note: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn; the MTGH Acquisition was completed on November 30, 2009. As the MTGH acquisition was completed on November 30, 2009, the Bank's consolidated financial statements from 2010 include the performance of companies in the MTGH Group for the whole year. บริการทุกระดับประทับใจ K EXCELLENCE Other Operating Expenses March 2013 (Consolidated) Other Operating Expenses Structure (Bt bn) 50 46.93 43.02 Others 40 38.00 25% 25% 27% 0.2% 88,2% Directors' remuneration 30 7% 0.3% 7% 21% | 22% 20 23% Taxes & Duties I 11.49 10 46% Premises & Equipment 46% 43% 23% 8% 0.1% 21% 47% 0 Employee's expenses ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 2010 2011 2012 1Q13 In 1Q13, other operating expenses dropped 16.18% QoQ; the majority came from the seasonal decrease in promotion, advertising, and marketing expenses, as well as employee expenses 2009 Other Operating Expenses (Bt bn) 31.34 % Growth (YoY) 2010 38.00 2011 2012 1Q12 1Q13 4Q12 1Q13 43.02 46.93 10.26 11.49 13.71 11.49 n.a. 21.27 13.20 9.10 0.23 11.97 10.34 11.97 บริการทุกระดับประทับใจ 49 50#26K EXCELLENCE Loan Growth March 2013 (Consolidated) 20 (%) Loan Growth (% YoY) 14.43 15 12.43 11.12 9.57 10 5 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK. 0 2010 2011 2012 1Q13 Loans grew sensibly at 2.2% YTD and 11.1% YoY; the YTD growth was mainly driven by corporate business 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 Loans (Bt bn) 1,077 1,211 1,327 1,220 1,356 1,327 1,356 Loan Growth (% YoY) 14.43 12.43 9.57 12.65 11.12 9.57 11.12 Loan Growth (% YTD) 14.43 12.43 9.57 0.76 2.19 9.57 2.19 บริการทุกระดับประทับใจ K EXCELLENCE Loan Structure and Loan Growth Targets March 2013 (Consolidated, TFRS 8: Operating Segments*) Loan Portfolio Structure ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Loan Structure, Loan Yield and Loan Growth Targets 51 (Bt bn) 1,500 (Amount in Bt bn) Dec 12** Y2012 1Q13 1,327 1,356 Loan 7% 8% Growth YTD Loan Growth 1Q13 Yield Range Y2013 Loan (%) Target 26% 26% 1,000- (%) (%) (%) 1) Corporate Loans 416 5.5 424 2.1 4-6 4-6 36% 35% Multi-Corporate Business 203 5.2 212 4.2 500- Large Corporate Business 212 5.8 212 0.0 31% 31% 2) SME Loans 469 8.7 473 0.8 7-8 10-12 0 Medium Business 260 1.9 258 (0.6) 2012 1Q13 Small and Micro Business 207 18.5 211 2.2 Corporate Loans SME Loans Retail Loans Other Loans 3) Retail Loans 347 16.0 350 0.9 6-7 10-13 4) Other Loans 95 10.8 109 14.3 Total Loans 1,327 9.6 1,356 2.2 6.3 9-11 ** December 2012 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8 Loan Definition (TFRS 8: Operating Segments) Corporate Loans: Loans of KBank and KBank's Subsidiaries in Corporate Segments (Annual sales turnover > Bt400mn) SMĖ Loans: Loans of KBank and KBank's Subsidiaries in SME Segments (Annual sales turnover Bt400mn) Retail Loans: Loans of KBank and KBank's Subsidiaries in Retail Segments Other Loans: Loans in Enterprise Risk Management Division (NPL + Performing Restructured Loans), and other loan types Note: Since 1Q13, as per the Bank of Thailand's requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports บริการทุกระดับประทับใจ 52 52#27K EXCELLENCE Loan by Retail Products March 2013 (Consolidated, TFRS 8: Operating Segments*) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK. Loan by Retail Products (Amount in Bt bn) Dec 12** Y2012 Loan Mar 13 YTD % Portion Loan to Growth Growth Total Loan (%) (%) Housing Loans Credit Cards Consumer Loans KLeasing 203 10.1 205 0.7 15.1 54 27.7 51 (5.4) 3.8 37 38.7 39 4.4 2.9 83 29.8 84 1.8 6.2 ** December 2012 loan base is not comparable with previous reports, due to customer migration to larger segments and changes to comply with TFRS 8 Loan Definition (TFRS 8: Operating Segments) Housing Loans: KBank's housing loans to retail customer segments Credit Cards: KBank's credit card loans to all eight customer segments Consumer Loans: KBank's consumer loans to retail customer segments KLeasing: KLeasing's loans to all eight customer segments Note: *Since 1Q13, as per the Bank of Thailand's requirement, the Bank has complied with TFRS 8 (Operating Segments) to present operating results for each key segment in financial reports บริการทุกระดับประทับใจ 53 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Loan Portfolio Breakdown by Industry, Currencies, and Interest Rate Consolidated Loan Portfolio by Industry (March 2013) By Top 20 Borrowers (March 2013) (Bt bn) 1,600 1 1,356 1,327 1,400- 1,211 13.1% 14.2% 1,200- 1,077 11.6% Others 942 1,000 11.4% 16.0% 15.8% 16.0% Housing Loans 10.9% 15.5% 13.0% 12.9% Utilities & Services 800- 14.0% 12.4% 10.7% 6.5% 6.5% 6.2% 10.8% 5.7% 600 6.3% Real Estate & Construction Manufacturing & commerce Agricultural and mining 400- 54.3% 51.2% 48.9% 48.2% 55.4% 200 2.7% 2.5% 2.5% 2.4% 1 2.4% 0 2009 2010 2011 2012 1Q13 Top 20 Borrowers 5.45% By Currencies (December 2012)* US Dollar Other Currencies 5.77% 0.85% Thai Baht 93.38% Definition of Loans 1) by industry Gross loans Loans to customers less deferred revenue 2) by top 20 borrowers = Loans excluding the wholly-owned subsidiaries of KBank and Phethai Asset Management Company 3) by currency = Loans to customers and AIR - net 4) by maturity of interest repricing = Loans to customers less deferred revenue Note: *The information on loans breakdown by currencies and maturity of interest repricing are disclosed on half year basis By Maturity of Interest Repricing (December 2012)* 6 months and over 16.2% < 6 months Other 11.9% Immediate Repricing 61.0% บริการทุกระดับประทับใจ 10.9% 54#28K EXCELLENCE Asset Quality March 2013 (Consolidated) 8 (%) NPL Ratio ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Coverage Ratio (%) 150 127.12 131.83 138.62 111.02 91.64 100 6 3.76 4 2.91 2.45 2.16 2.09 50 2 0 0 2009 2010 2011 2012 1Q13 2009 2010 2011 2012 1Q13 NPL ratio improved to 2.09% in 1Q13 Coverage ratio was 138.62%; this ratio has been maintained above 100% since 2Q10 2009 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 NPL Ratio (%) 3.76 2.91 2.45 2.16 2.35 2.09 2.16 2.09 Coverage Ratio (%) 91.64 111.02 127.12 131.83 133.79 138.62 I 131.83 138.62 บริการทุกระดับประทับใจ 55 55 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Impairment Loss of Loans and Debt Securities (Provision) and Credit Cost March 2013 (Consolidated) Impairment Loss of Loans and Debt Securities Credit Cost (Bt bn) 9.38 10 8 8.39 7.35 6.70 6 4 2 0 2009 2010 2011 2012 (bps) 150 102 100 3.53 50 1Q13 0 2009 66 99 64 66 99 2010 2011 2012 105 1Q13 Higher provision expense was set aside in 1Q13, amid the economic expansion and the satisfactory performance of the Bank, to serve as a countercyclical provision to prepare the Bank for any potential future economic downturn or the changing economic circumstance, both domestic and abroad Credit cost rose to 105bps in 1Q13; credit cost will range between 70 - 80+ bps in 2013 Impairment Loss of Loans and Debt Securities (Bt bn) Credit Cost (bps) 2009 9.38 2010 2011 2012 1Q12 1Q13 4Q12 1Q13 6.70 7.35 8.39 1.83 3.53 2.65 3.53 102 66 64 66 60 105 81 I 105 บริการทุกระดับประทับใจ 56#29K EXCELLENCE Bad Assets Resolution March 2013 (Consolidated) Restructured Loans ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Outstanding Foreclosed Properties % of Restructured loans to Total loans Restructured loans (Bt bn) (Bt bn) 30 16% 100 82.38 83.37 77.19 76.70 74.50 12% 80 61.51 25 67.01 60 52.33 8% 76% 78% 74% 78% 78% 18.7 17.3 20 16.1 9.1% 8.2% 40 62% 78% 16.7 15.9 6.9% 7.4% 6.9% 6.3% 6.2% 6.1% 73% 15.1 12.5 4% 20 12.1 15- 38% 27% 22% 24% 22% 26% 22% 22% 0% 0 2006 2007 2008 2009 2010 2011 2012 1Q13 10 2006 2007 2008 2009 2010 2011 2012 1Q13 ■% of Performing Restructured loans to Restructured loans ■% of Non-Performing Restructured loans to Restructured loans Outstanding Restructured Loans was Bt83.37bn in 1Q13; 78% were performing restructured loans Definition: Outstanding Restructured Loans is the accumulated outstanding amount of restructured loans, comprised of performing restructured loans and non-performing restructured loans. Non-performing restructured loans are already counted as part of Non-Performing Loans (NPLs) Write-offs 20.0- (Bt bn) 10.0- Illatası. NPL Portfolio Sales 1999-2000: KBank and Phatra Thanakit sold NPLs to Phethai AMC and Ploy AMC totaling Bt64.5bn* and Bt41.2bn*, respectively 2001-2004: KBank sold NPLs totaling Bt14.6bn* to TAMC 2007: KBank and Phethai AMC sold NPLs totaling Bt11.4bn to Standard Bank Asia Limited and Morgan Stanley Emerging Markets Inc. at Bt7.6bn and Bt3.8bn, respectively 5 0 2006 2007 2008 2009 2010 2011 2012 1Q13 Sale of Foreclosed Properties 10 (Bt bn) 8 7.5 5.9 6 5.6 4.5 4.6 4.9 4.4 4.6 2 0.0. 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2008-1Q13: NPLs continue to decline without bulk NPL sales 0 Write-off 10.7 11.6 8.7 4.3 5.5 Note: Accrued interest receivable included 4.3 3.9 5.0 1.4 บริการทุกระดับประทับใจ 0.8 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Investment in Securities Portfolio and Structure March 2013 (Consolidated) Instrument Type Holding Type (Bt bn) (Bt bn) 450 382 450 382 342 400 0.5% 342 400 0.04% 6% 350 255 0.5% 251 264 4% 7% 350 251 264 -0.4% 0.05% 0.4% 0.4% 11% 255 0.5% 300 4% 0.1% 0.1% 0.3% 0.1% 300 0.1% 29% 12% 250 4% 5% 0.1% 0.1% 0.01% 6% 250 1% 0.7% 36% 1% 13% 23% 200 200 28% 33% 79% 150 150 68% 76% 73% 100 85% 83% 78% 64% 58% 100 65% 50 50 3% 0 0 2% 2009 2010 2011 2012 1Q13 Other Investment (Investments in Receivables, Investments in Subsidiaries and Other Investments) Equity Investment 2009 Trading General 2010 2011 Available-for-sales Investment in Receivables 2012 1Q13 Held-to-maturity Investments Subsidiaries Foreign Bonds Corporate Bonds Government & State Enterprise Bonds Note: Accounting for investments 1) Trading: Stated at fair value (FV). Unrealized gains or losses arising from changes in FV are recognized in the income statement 2) AFS: Stated at FV. Unrealized gains or losses arising from revaluation are reflected in the shareholder's equity 3) HTM: Stated at amortized cost, after deduction of any allowance for impairment KBank continues to manage its investment portfolio to reflect the BOT's interest rate trend and enhance risk adjusted return Investment Portfolio (Bt bn) % Growth (YoY) 57 57 2009 2010 2011 2012 254.98 251.22 264.29 382.33 147.69 (1.48) 5.21 44.66 1Q12 1Q13 372.30 342.18 47.48 (8.09) 4Q12 1Q13 382.33 342.18 44.66 (8.09) บริการทุกระดับประทับใจ 58#30K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Funding Structure and Interest Rate Movement March 2013 (Consolidated) Funding Structure Deposit Structure (Bt bn) 1,600 1,368 1,228 1,654 11% 1,645 8% 1,600 (Bt bn) 1,391 1,428 1,400 4% 5% 5% 1,242 1,101 1,100 3% 5% 1,200 1,200 7% 975 34% 33% 4% 39% 1,000 32% 7% 800 39% 800 87% 91% 600 84% 90% 60% 61% 89% 400 62% 55% 400 55% 200 0 6% 6% 5% 6% 6% 0 2009 2010 2011 2012 1Q13 2009 2010 2011 2012 1Q13 8 (%) Deposits ST and LT Borrowings Interbank and Money Market KBank Interest Rate Movement (Retail customers) Current ■Savings ST and LT Borrowings Term Deposit and Bill of Exchange Rates (April 30, 2013) (Bt bn) 120 Savings 0.75 95 6 Fixed 3M-12M 1.60-2.45 89 85 79 72 Fixed 24M-36M 2.55 80 34% 4 B/E 14D-1M 1.60-1.90 53% 78% 45% 79% 2 Lending rates (Oct 24, 2012) 40 59% 51% MLR 7.00% 47% 0 22% 21% 2007 2008 2009 2010 MLR Savings 2011 Fixed 3M 2012 Apr13 MOR 7.48% 7% 4% 0 MRR 8.10% 2009 2010 2011 2012 1Q13 ST Debentures B/E & Others LT Borrowing บริการทุกระดับประทับใจ K EXCELLENCE Long-term Senior/Subordinated Debentures ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Issued Date Name Type Embedded Option Amount Maturity (Years) Interest Rate (Per annum) USD500mn* 5.5 3.0% 20/09/2012 Senior Unsecured Debenture Unsecured Interest Payment period Credit Rating Semi-annually A3 by Moody's BBB+ by S&P and BBB+ by Fitch Ratings 59 15/02/2012 Subordinated debentures of Unsecured KASIKORNBANK PCL No.1/2555 22/06/2010 Subordinated debentures of Unsecured KASIKORNBANK PCL Callable after 5 years Callable after Bt22,000mn 10 4.5% Quarterly AA- (tha) by Fitch Ratings and axA by S&P Bt7,500mn 10 4.5% Quarterly AA- (tha) by Fitch Ratings No. 1/2553 5 years 17/07/2009 Subordinated debentures of Unsecured KASIKORNBANK PCL No.1/2552 19/12/2008 Subordinated debentures of KASIKORNBANK PCL Unsecured No.1/2551 Callable after 5 years Callable after 5 years Bt600mn 10 Year 1-3: 4.85% Year 4-7: 5.25% Year 8-10: 5.75% Quarterly AA- (tha) by Fitch Ratings Bt17,000mn 10 Year 1-3: 5.25% Year 4-7: 5.75% Year 8-10: 6.50% Quarterly AA- (tha) by Fitch Ratings 21/08/1996 Subordinated debentures of Unsecured USD183.31mn 20 8.25% Semi-annually BBB by S&P KASIKORNBANK PCL Note: *The issued noted is drawn down from the Bank's USD2.5bn Euro Medium Term Note Programme บริการทุกระดับประทับใจ 60 60#31K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KBank: The wholly-owned subsidiaries, and Muang Thai Life Assurance บริการทุกระดับประทับใจ 61 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK The wholly-owned subsidiaries of KBank: Business Profile and Aspiration March 2013 KAsset EST. 1992 KASIKORN ASSET Company Name CO., LTD. Company Profile MANAGEMENT A leader in fund management business (i.e. mutual funds, provident funds, and private funds) KResearch EST. 1995 KASIKORN RESEARCH CENTER CO., LTD. ■Professional in providing knowledge in economics, business, money, and banking ■Only research house which is an affiliate of a bank KSecurities* EST. Jul 2005 KASIKORN SECURITIES PCL Professional in providing a complete range of professional and excellent financial solutions and services, including investment banking, securities underwriting, and securities brokerage KLeasing EST. Aug 2005 KASIKORN LEASING CO., LTD. Professional in providing three core products: hire purchase, financial lease, and floor plan KF&E KF EST. 1990 KASIKORN FACTORY AND EQUIPMENT CO., LTD. Professional in providing a complete range of machinery and equipment leasing services Asset Size Bt1.67bn Market Share 22.75% (#1) Bt0.05bn N/A Bt12.90bn 5.71% (#4)* Bt85.35bn Bt10.56bn 7.28% (as of 2012) N/A 2013 Targets #1 in overall market 3-year Aspiration Maintain #1 position Top of mind research house for media and for the clients of KBank and its wholly owned subsidiaries Top of mind research house Maintain leading position in securities business Maintain position as a leading securities firm 16-18% YoY growth on outstanding loans 13-15% YoY growth on outstanding loans Maintain leading position in equipment leasing industry * In February 2012, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie Securities (Thailand) are traded under a new ticket called KSMACQ บริการทุกระดับประทับใจ 62 62#32K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK The wholly-owned subsidiaries of KBank: Y2012 Key Operating Performance March 2013 KAsset EST. 1992 KR KResearch EST. 1995 KSecurities* 1Q13 Key Operating Performance Assets Under Management (AUM): Bt875bn Most quoted research house in the media (2.85% YTD, 8.47% YoY) EST. Jul 2005 Trading volume: Bt409.96bn - No. of customers grew 50% YoY KLeasing EST. Aug 2005 KF&E KF EST. 1990 Outstanding loans: Bt84.33bn (1.76% YTD, 26.20% YoY) Outstanding loans: Bt10.26bn (9.88% YTD, 19.92% YoY) The wholly-owned subsidiaries of KBank: Net Profit (Bt bn) 2.5 2.25 1.84 2.0 1.43 1.5 1.19 1.0 0.5 0.0 2009 2010 2011 2012 The net profit continues to rise, along with synergy among KBank and its wholly-owned subsidiaries 0.96 1Q13 Note: Since January 1, 2011, financial statements have been reclassified per the Bank of Thailand's requirements; the 2010 financial statements were restated and adjusted for comparison purposes; in 4Q10, KBank early adopted TAS 19 (Employee Benefits) and TAS 12 (Income Taxes) to align with international practices and standards; 2009 financial statements were restated for comparison purposes * In February 2012, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie Securities (Thailand) are traded under a new ticket called KSMACQ บริการทุกระดับประทับใจ 63 K EXCELLENCE KAsset Highlights in 1Q13 March 2013 หลักทรัพย์จัดการกองทุนกสิกรไทย 开泰基金管理 KASIKORN ASSET MANAGEMENT AUM (KAsset vs. Industry) 3,846 (Bt bn) (+18.7% YoY) 1,000 (Bt bn) 3,633 4,000 2,883 3,015 2,576 2,228 2,167 851 1,756 742 2,000 635 875 (+8.5% YoY) 500 509 241 319 353 0 2006 2007 40 (%) 40 2008 2009 Total Industry AUM 0 2010 2011 KAsset AUM 2012 1Q13 Market Share by AUM Industry Outlook: ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 1Q13 industry AUM at Bt3,846bn, rising 5.87% YTD and 18.70% YoY; KAsset AUM at Bt875bn, growing 2.85% YTD and 8.47% YoY KAsset Highlights: 2010 ■2011 ■2012 ■1Q13 30.6 29.3 30.931.3 Continuously ranked #1 since 2009, with 22.75% market share in 1Q13 Mutual fund accounts for 70% of KAsset AUM KAsset AUM Breakdown by Type Provident Fund 30 22.0 20 10 24.6 23.422.8 19.5 19.3 18.317.8 11.0 12.0 11.812.0 9.0 8.9 8.3 8.6 7.8 5.9 7.2 7.6 0 KAsset SCBAM KTAM MFC BBLAM Other บริการทุกระดับประทับใจ 18% Private Mutual Fund 12% Fund 70% 64 70#33K EXCELLENCE KResearch Highlights in 1Q13 March 2013 ศูนย์วิจัยกสิกรไทย 开泰研究中心 KASIKORN RESEARCH CENTER ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK K EXCELLENCE K-Econ Analysis K-Business Analysis K Companies Contact Us WELCOME TO KASIKORN RESEARCH CENTER Empower your business with KResearch K-ECON ANALYSIS About Us DICTIONARY BIBLE JOIN: YouTube LOGIN K-Econ Analysis is a collection of reports on various aspects of the Thai economy, including macroeconomic and microeconomic analysis, financial market analysis, and analysis of the international economy by focusing on important current issues, [More] K-BUSINESS ANALYSIS K-Business Analysis is a specialized value added service for KBank customers. It is a compilation of information and analytical reports on economic conditions, finance, stock markets, trade and investment, FTAS, the Chinese economy, real estate, energy, the automotive industry, etc. The content is issued as daily, weekly and monthly reports. (The Bank reserves the right to limit access to this information only to customers whose qualifications meet the Bank's conditions) Мате ศูนย์วิจัยกสิกรไทย A Ac KResearch Search Q APPLY FOR SERVICES [Choose Online Service] OK-Econ Analysis OK-Business Analysis) Search for Research Service Channels Buy CD Useful Links K Auto Industry Outlook: ■ Only bank affiliated research house providing knowledge in economics, business, money, and banking KResearch Highlights: Most quoted research house in the media. Top of mind research house for media, and for the clients of KBank and its wholly-owned subsidiaries KResearch Center 02-273-1144 SNOW-Wedom for the good of the & busines บริการทุกระดับประทับใจ K EXCELLENCE KSecurities Highlights in 1Q13 March 2013 (Bt bn) 15,000 หลักทรัพย์กสิกรไทย #KASIKORN SECURITIES Trading Volume (KSecurities vs. Industry) CAGR'06-'12: 48% (Bt bn) 13,772 12,377 12,486 1,000 800 10,000 7,967 8,544 7,962 8,640 817 430 411 7,183 5,000 117 207 600 400 91 410 41 200 0 0 " 2006 2012 1Q13 ** 15 (%) 2007 2008 2009 2010 2011 Total Industry Trading Volume -KSMACQ Trading Volume" Market Share by Trading Volume 2010 2011 ■2012 ■1Q13 12.811.911.913.0 Industry Outlook: ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 1Q13 industry trading volume* was Bt7, 183bn, increasing 115.46% YoY ■KSMACQ** trading volume was Bt410bn KSecurities Highlights: KSMACQ** ranked #4, with 5.71% market share; maintained position as one of the leading securities firms Majority of revenue came from brokerage Number of customers grew 50% YoY KSecurities Revenue by Business Investment Banking 0.7% 10 5 5.9 5.7 3.5 3.3 4.6 4.2 4.1 4.2 4.4 4.8 4.8 4.6 4.5 4.4 4.8 4.6 3.2 3.0 2.8 2.9 0 ** KSMACQ SCBS KTZ BLS TNS MBKET Note: Brokerage 99.3% *Industry trading volume excluding proprietary trade ** In February 2012, KBank and Macquarie signed an Exclusive Strategic Alliance (ESA) covering a range of investment banking and securities operations; KSecurities and Macquarie Securities (Thailand) are traded under a new ticket called KSMACQ บริการทุกระดับประทับใจ 99 66 65 59#34K EXCELLENCE KLeasing Highlights in 1Q13 March 2013 ลีสซิ่งกสิกรไทย 开泰租赁 KASIKORN LEASING KL KLeasing vs. Industry (Thousand Units) 1,500 1,435 84.3 (Bt bn) 100 (+26.20% YoY) 794 800 82.9 1,000 549 703 682 500 631 22.1 615 53.9 63.8 50 413 43.6 11.3 2.9 33.9 0 2005 2006 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Industry Outlook: 1Q13 industry car sales totaled 413,254 units, growing 48% YoY KLeasing Highlights: 1Q13 KLeasing loans totaled Bt84.33bn, growing 1.76% YTD and 26.20% YoY 0 2007 2008 2009 2010 2011 2012 1Q13 # of Total Car Sales in Thailand KLeasing Outstanding Loans Market Share by Total Outstanding Loans (%)* KLeasing Outstanding Loans Breakdown** (%) Floor 50 37 35 34 35 2009 ■2010 2011 2012 Plan 9% Used Car 6% 25 18 18 17 18 15 15 16 14 12 12 14 15 11 11 11 11 8887 Fleet/FL 22% Hire Purchase 69% 0 TBANK AYCAL TISCO SCB KK KLeasing New Car 94% Note: * Excluding captive and non-bank leasing ** Definition of loan type: Hire Purchase = car loans to retail customers; Fleet = a bulk of car loans to corporate and SME customers; Floor Plan = a bulk of car loans to car dealers บริการทุกระดับประทับใจ K EXCELLENCE KF&E Highlights in 1Q13 March 2013 แฟคเตอรี แอนด์ อีควิปเมนท์ กสิกรไทย Industry Outlook: 开泰设备融资 KASIKORN FACTORY AND EQUIPMENT (Bt bn) 10.0 8.0 6.0 3.91 4.0 2.0 KF&E Outstanding Loans 10.26 9.34 8.01 0.0 2010 2011 2012 1Q13 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 67 Growth in Equipment Finance (EQF) business forecasted using numerous factors including total import volume and total registration volume of equipment and machinery from the Department of Industrial Works and Capital Investment Index KF&E Highlights: KF&E outstanding loans were Bt10.26bn, rising 9.88% YTD and 19.92% YoY; Equipment Finance (EQF) was Bt9.87bn rising 23.92% YoY KF&E currently ranked #2; will maintain the leading position in equipment leasing industry Note: In 2010, KASIKORN FACTORING (KFactoring) was renamed KASIKORN FACTORY AND EQUIPMENT (KF&E) to better reflect their business, which is focused on offering leasing services for machinery and equipment; the factoring business operation of KFactoring was transferred to KBank บริการทุกระดับประทับใจ 68#35K EXCELLENCE Life Insurance Industry in Thailand (%) 16 12 262840 15.4 13.9 7.0 Taiwan South Korea Premium per % GDP by Country 7.0 4.6 4.3 3.1 Singapore Australia ■Y2010 Y2011 Y2009 Source: Swiss Reinsurance 3.3 3.4 3.2 2.5 1.8 2.6 2.7 3.0 1.01.1 0.70.8 0.60.7 India Malaysia China Thailand Indonesia Philippines Vietnam ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■In 2011, Low penetration rate of 2.7% in Thailand, with a high opportunity for growth ■Muang Thai Life Assurance (MTL) ranked #2 in life insurance industry in Thailand, in 1Q13 13.6% market share by total premium 16.9% market share by new business premium Size of Market by Premium (%) Market Share by Total Premium in Life Insurance (%) Total Premium (Bt bn) First Year Premium (Bt bn) (%) 500 400 CAGR'03-'12: 13% 391.41 100 328.6 296.3 259.2 80 300 200 133.1 151.1 166.8 173.3 202.5 222.0 60 109.6 40 100 0 20 3225050 ■ 2011 ■ 2012 ■1Q13 23.8 26.3 13.6 15 12.1 11.1 10.2 10 7.9 7.6 12.49 12. 10.7 5.2 8.9 3.1 3.1 2.4 5. ΑΙΑ MTL BLA TLI SCBLife KTAL AZAY TLA OLIC ING Others 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13* Total Premium First Year Premium Source: The Thai Life Assurance Association * First Year Premium in 1Q13 = Bt25.47bn Source: The Thai Life Assurance Association Note: Total Premium = New Business Premium + Renewal Premium; New Business Premium = First Year Premium + Single Premium บริการทุกระดับประทับใจ 69 K EXCELLENCE Bancassurance Highlights in 1Q13 3200 Bancassurance Market Share by Total Premium (%) (%) 22.7 20.6 20.3 2011 2012 1Q13 10.8 22.3 15.0 25.3 11.3 6.4 6.8. 48.4 3.3.8 2.6.8 2.4 MTL BLA SCBLife KTAL TLA TLI AZAY ΑΙΑ ING PLT Bancassurance Market Share by New Business Premium (%) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK The Bancassurance Life industry continued its positive trend in 1Q13 with total premium growth of 42% and new business premium growth of 60% MTL ranked #1 in Bancassurance market #1 in Bancassurance total premium with 22.7% market share and 39% growth #1 in Bancassurance new business premium with 23% market share and 45% growth (%) 30 30 23.0 2011 2012 1Q13 20 20 18.9 16.5 12.2 8.7 10 4.6 3.9 23.5 9.8 24.2 10.4 10.7 2.8 0.0 2.7 27 0 MTL BLA SCBLife TLA KTAL AIA TLI DLA PLT ING Source: Muang Thai Life Assurance (MTL) บริการทุกระดับประทับใจ 70 70#36K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KBank's Strategic Acquisition in Muangthai Group Holding (MTGH) Before: 10% Stake in MTGH Currently: 51% Stake in MTGH after Acquisition 6.0% 10.0% Group A Persons KBank Swiss Re Fortis KBank 25.0% 65.05% 10.0% 4.95% 20.0% 51.0% MTFH* 25.2% 75.0% 53.7% 2.0% 98.0% 100.0% MTI* MTL* MTR* PL⭑ MTB* MTGS* Note: KBank's Economic Interest MTL MTFH 10.0% MTI 8.5% 7.5% MTB 9.8% Group A Persons** 41.2% MTGH* Ageas*** 7.8% 25.0% 19.9% 75.0% 99.0% MTI* MTL* MTB* KBank's Economic Interest MTGH 51.0% MTI 10.1% MTL MTB 38.3% 50.5% * MTFH = Muangthai Fortis Holding Company Limited, MTL = Muang Thai Life Assurance Company Limited, MTI = Muang Thai Insurance PCL, MTR = Muangthai Real Estate PCL, MTB = Muangthai Broker Company Limited, MTGS = Muangthai Group Service Company Limited, PL = Phatra Leasing PCL, Group A Persons Group of retail shareholders; Muangthai Fortis Holding (MTFH) changed its name to Muangthai Group Holding (MTGH) in July 2009 ** The details of Group A Persons can be found in Appendix A of Opinion Report of the Independent Financial Advisor Regarding to Connected Transaction *** Fortis Insurance International NV changed its name to Ageas in 2010 Source: Information from the General Meeting of Shareholders No. 97, April 3, 2009 บริการทุกระดับประทับใจ 71 Statements of Comprehensive Income (Bt bn) 2011 2012 Net premiums earned 37.1 47.6 Net investment income 5.2 6.4 Total revenues 42.3 54.0 K EXCELLENCE ประกันชีวิต ALANG THE LIVE AUDRANCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Muang Thai Life Assurance (MTL) Information Summary Established on 6 April, 1951. The first life insurance company to be granted Royal Patronage (since 1959) Joined hands with Fortis Insurance International NV (changed name to Ageas in 2010) in 2004 and joined hands with KBank in 2005 Credit Rating: BBB+/Stable and axA+ (ASEAN) from S&P's, AA+(tha)/Stable / BBB+/Stable from Fitch Ratings Life Insurance Company with Outstanding Management Award from OIC five years in role Strategy in 2013 Continue to enhance process efficiency and service quality as well as developing new products and services to effectively satisfy the needs of all customer groups 1Q13 14.1 1.9 16.0 Life policy reserve increase from the previous period 21.0 28.0 8.5 Benefits payments to life policyholders 5.9 6.9 2.0 Insurance claims and loss adjustment expenses 1.9 1.9 0.5 2013 Key Financial Targets Commissions and brokerages 6.3 8.4 2.5 Bt bn 2011 2012 2013F Other underwriting expenses 0.3 0.4 0.1 Total Premium after refund 37.9 48.9 Operating expenses & Other 2.5 2.8 0.7 Total Expenses 37.9 48.5 14.3 % Growth 28% 29% >Industry growth Profit before income tax expense 4.4 5.6 1.7 Income tax expense 1.5 1.4 0.3 Net profit (loss) 2.9 4.1 1.4 ROE (%) Statements of Financial Position (Bt bn) 2011 2012 1Q13 ROA (%) Total Assets 116.4 151.9 165.1 Risk-Based Capital (RBC) 2011 21.1% 2.8% 319.8% 2012 22.8% 3.1% 436.6% 1Q13 23.7% 3.4% 439.6% Total Liabilities 101.5 130.5 141.4 Total Equities 14.9 21.4 23.7 Source: Muang Thai Life Assurance, data based on book value except for RBC บริการทุกระดับประทับใจ 72 22#37K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK MTL Investment Portfolio and Insurance Premium MTL Investment Portfolio: Fixed Income accounted for around 80% MTL Total Premium: Growth continues to outpace the industry Total Premium MTL Industry Growth (% YOY) 14.9 Y2010 38% 14% 8.4 Y2011 28% 11% 6.5 Y2012 29% 19% 1Q13 31% 20% 1Q13 (bn) Debenture 22% Stock 816 Note 8% 40 Gov & SIE Bond 52% Policy Loan 4% BOOOO 60 48.9 50 37.9 29.6 27.2 30 21.5 21.7 20 16.5 16.4 13.1 10 0 Unit Trust 3% 2010 2011 2012 Mortgage Loan 1% Deposit 1% First Year and Single Premium Renewal Premium Total Premium Investment Property Source: The Thai Life Assurance Association Total Investment (1Q13): Bt155.7bn 1% Total Premium by Products: Ordinary product accounted for around 90% III 100% 80% 60% 40% 20% 0% 2010 Ordinary 2011 Industrial 2012 1Q13 Personal Accident ■ Group Total Premium by Channels: Bancassurance accounted for over 70% in 1Q13 with an increasing proportion 100% 80% 60% 40% 20% 0% 2010 2011 2012 1Q13 ■Agents ■Bancassurance Direct Marketing Other บริการทุกระดับประทับใจ K ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK EXCELLENCE MTL's Life Insurance Product Profile Four Major Types of Life Insurance Product ■Ordinary Life Insurance Products: Provide life protection for a fixed amount to an insured person Can be further classified into four sub-categories; ➤ Endowment Life Insurance: Savings type product; insured person receives an amount at the certain period of time or a designated beneficiary receives death benefits upon the death of the insured person within the insured period (e.g. Pro Saving products) Term Life Insurance: provides temporary protection with no savings component. Claim can be made upon death within the stated term period (e.g. MRTA products) Whole Life Insurance: provides life time protection (to the age of 90 or 99) with the death benefit paid to the beneficiary upon the death of the insured (e.g. Pro Life products) Rider: additional coverage desired by the insured (sample of additional coverage: medical expense, accident) ■Group Life Insurance Products: term insurance covering a group of people, usually employees of a company or members of a union or association ■Industrial Insurance Products: life insurance with a modest amount of coverage, low premium, and no health check requirement Personal Accident: a limited life insurance designed to cover the insured in case of personal accident บริการทุกระดับประทับใจ 73 74#38K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Sample of K-Bancassurance and MTL Products Pro-Savings 615 KBANCASSURANCE K-Bancassurance Endowment Life Insurance Life insurance with a premium payment of only 6 years, but the coverage continues for 15 years Life coverage increases in pursuant to the years as specified Ormsap 20/14 Muang Thai Life Assurance Endowment Life Insurance Pay premium for only 14 years, but the coverage continues for 20 years 200% 170%* Life Coverage at 100% of the sum insured amount 100%* End of Policy Year D 1 2 3 4 6 6 7 8 9 10 11 12 13 14 15 0 1 2 3 7 8 9 10 11 12 13 14 15 16 17 18 19 20 210%* Premium Payment at the Beginning of Policy year Policy year Receive cash bonus Receive yearly cash bonus 2.5% (at the end of policy year 1-14, total 35%) Pay premium at the beginning of policy year Stop paying premium Total Banalit 245% Term Life Insurance MRTA-Home (Mortgage Reducing Term Assurance) Example, in case the customers choose to insure their loan in full term and full coverage Loan Amount: Sum insured amount Coverage of Pitaksin-Home is equivalent to the reducing sum Insured amount The customers can choose to continue the coverage throughout the contract term or receive cash surrender value Premium payment at the beginning of policy year The contract starts Policy Year Coverage + Loan Amount Scenariola Death or total and 10 Scenariol Early Redemption Term Life Insurance Healthy Value 1 year coverage period, covered medical expenses up to Bt2mn End of Policy Year Term of installment loan " 14 Term of insurance Premium Payment at the Beginning of Policy year 0 permanent disability Remark: the above coverage is based on an assumption that the customer's credit repayment history is normal according to the Bank's loan contract บริการทุกระดับประทับใจ Life Coverage at 100% of the sum insured amount K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Sample of K-Bancassurance and MTL Products K BANCASSURANCE K-Bancassurance Muang Thai Life Assurance Whole Life Insurance Whole Life Insurance Pro Life 90/5 Whole life coverage to the age of 90 with annual cash bonus payment from the end of policy year 1 and requires only 5 years premium payment 100%* Life Coverage or the then cash surrender value (whichever is higher) Kumkrong Talodcheep Saving plan with whole life coverage: pay premium for only 20 years and get coverage to the age of 99 100% Maturity Benefit 100% Maturity Benefit 100% 75 At the end of policy year 0 1 2 3 4 5 ............. the age of 88 the age of 89 the age of 90 End of Policy Year 12 13 14 15 16 17 18 19 Receive cash bonus Age of 90 Stop paying premium Receive cash bonus 1% yearly cash bonus at the end of policy year 1 to the age of 89 Total Benefit 100% Pay premium at the beginning of policy year PA Plus Accident coverage PA Plus (Accident Coverage) Rider Health Care Plus Hospital and surgery benefit rider Health Care Plus (Hospital and Surgery Benefit Rider) Premium Payment at the beginning of Policy Year Rider Pure Cancer Additional cancer insurance which provides cash benefits up to Bt1mn. บริการทุกระดับประทับใจ Maturity Benefit 100% 76 60#39K EXCELLENCE KBank: Other Information บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK K EXCELLENCE Shareholder Structure April 17, 2013 (Closing Registration Date) Shareholder Structure Top 10 Shareholders 1. THAI NVDR CO., LTD* ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK % 28.652 2. STATE STREET BANK EUROPE LIMITED 7.931 3. CHASE NOMINEES LIMITED 42 5.124 Thai Shareholders 51% (NVDR = 28.65%*) Foreign Shareholders 49% 4. STATE STREET BANK AND TRUST COMPANY 3.308 5. HSBC (SINGAPORE) NOMINEES PTE LTD 2.777 6. NORTRUST NOMINEES LIMITED-NTO SEC LENDING THAILAND 2.215 7. THAILAND SECURITIES DEPOSITORY COMPANY LIMITED FOR DEPOSITORS (THAI SECURITIES - HOLDER ACCOUNT)** 2.171 8. CHASE NOMINEES LIMITED 1 Note: 9. THE BANK OF NEW YORK MELLON-CGT TAXABLE 1.312 1.304 Thai Shareholding Limit Foreign Shareholding Limit 51% 49% 10. STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA Other Shareholders 1.221 43.987 Total Note: NVDR stands for Non-Voting Depository Receipt 100.00 ** Thailand Securities Depository Company Limited (TSD), a subsidiary of the Stock Exchange of Thailand, provides three types of securities post trade services: securities depository services, securities registration services, and provident fund registration services; the shareholders booked under TSD are those who are not eligible for dividend payments as their investment is not aligned with their citizenship (i.e. foreign investors buying KBank shares on the local board or Thai investors buying KBank shares on the foreign board) บริการทุกระดับประทับใจ 77 78#40K EXCELLENCE Credit Ratings As of May 31, 2013 Foreign Currency Long-term* ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK KBank Thailand Foreign Currency Senior Unsecured Outlook Government Country Ceiling for Deposit Country Ceiling for Debt Outlook Notes Moody's Baa1 A3 Stable Baa1 Baa1 A2 Stable S&P's BBB+ BBB+ Stable BBB+ Fitch BBB+ BBB+ Stable BBB+ A- Stable Stable Note: Moody's: Foreign Currency Long-term Deposit Rating; S&P's: Long-term Counterparty Credit Rating; Fitch Ratings: Foreign Currency Long-term Issuer Default Rating บริการทุกระดับประทับใจ 19 79 K EXCELLENCE Public Recognition Highlight: 2012 - 1Q13 1Q13 Corporate Governance Asia - Asia's Best CEO (Investor Relations) - Asia's Best CFO (Investor Relations) - Best Investor Relations Company (Thailand) THE ASIAN BANKER Best Retail Bank in Thailand ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 2012 The Bankers Choice Awards in Thailand The Leading Counterparty Bank in Thailand Best Cash Management Bank in Thailand ct - Best Cash Management House in Thailand Trailblazer Awards 2012 - Product Excellence in Debit Cards 2012 - Strategy Excellence in Business Innovation (Special Commendation) SAA Awards for Listed Companies 2012: - Best Chief Executive Officer Best Investor Relations - The Asset's Platinum Awards -Triple A Transaction Banking Awards 2013: Treasury, Trade and Risk Management THE ASIAN BANKER wysy - Platinum Award, Banking and Finance sector. - Best Retail Bank in Thailand - Best Cash Management Bank in Thailand - The Best Managed Banks Achievement Awards 2013 Thai ESCO - ESCO Excellent Supporting Bank Awards 2013 - Best SME Bank in Thailand 2012 - Best SME Banker in Thailand 2012 The Asset's Platinum Awards in 2012 Asia Risk - House of the Year, Thailand Finance Asia Best Bond House-Thailand 2012 Alpha South East Asia Best Bank - Best Cash Management Bank - Best FX Bank for Corporates and Fls -Best Retail Bank of the Year 2012 Corporate Governance Asia - Asia's Best CEO (Investor Relations) - Best Investor Relations Company (Thailand) - Asian Corporate Director Recognition Award 2012 SET Awards 2012: - SET Award of Honor for Excellence in Corporate Governance Report 2008-2012 - SET Award of Honor for Excellence in Investor Relations 2010-2012 Institutional ‣ Investor - Best Investor Relations Professional - Corporate Governance Asia Recognition Award 2012 บริการทุกระดับประทับใจ IR magasine - Best Investor Relations by a Thai Company for Excellence in Investor Relations 80#41K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Banking System and Regulations Update บริการทุกระดับประทับใจ 81 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Thai Commercial Banks and Specialized Financial Institutions (SFIs) March 2013 Market Share (% of Total Deposits) Market Share (% of Total Loans) As of Mar-2013 6 SFIs 18,000 (Bt bn) 18,000 (Bt bn) 12,000 10,074 EXIM 8,622 8,872 11,793 28.1% 13,573 13,812 29.0% 13,723 10,996 28.9%12,000 9,935 13,439 25.6% 25.8% 1 " 26.9% 8,000 8,824 9,172 8,000 20.2% 23.6% 28.5% 25.9% 22.0% 25.5% 14 Commercial Banks 4,000 71.1% 4,000 71.5% 74.4% 74.2% 78.0% 74.5% 73.1% 71.9% 71.0% 74.1% 79.8% 76.4% Bangkok Bank 0 0 2008 2009 2010 2008 2009 2010 2011 2012 Mar-13 summansing ■SFls SFIS Commercial Banks 2011 2012 Mar-13 Commercial Banks As of Mar-2013 I I SCB Inow 10,500 Net Loans (Bt bn) ธนาคารธนบ CIMB TMB Col 9,000 7,500 8,591 8,77510.000 Deposits (Bt bn) 9,315 9,490 7.534 6,545 5,818 33.4% 33.3% 6,000 5,300 32.0% 33.1% KIATNAKIN BANK 15.3% 15.8% LH BANK Standard Chartered ICBC 0 I 33.9% 4.500 36.1% 3,000 13.8% 14.9% 13.3% 15.5% 1,500 16.7% 17.8% 18.4% 184% 17.2% 17.6% 2.000 17.2% 16.7% 20.1% 17.9% 17.4% 17.9% 2008 2009 2010 2011 2012 Mar-13 Others SCB KBank KTB BBL 17.3% 17.5% 16.3% 15.4% 14.8% 14.8% 8.000 6,000 4,000 0 6,856 6,515 6,534 29.9% 27.7% 34.7% 31.4% 16.3% 15.9% 14.0% 14.6% 17.2% 16.1% 14.9% 15.0% 16.3% 18.5% 18.2% 17.8% 20.1% 20.5% 20.0% 21.1% 7,239 30.7% 30.7% 17.9% 17.5% 15.0% 15.1% 17.3% 18.0% 19.0% 18.7% I I I 2008 2009 2010 2011 2012 Mar-13 Others ■SCB ■KBank ■KTB ■BBL Note: 6 SFIs include Government Saving Bank (GSB), Government Housing Bank (GHB), Export-Import Bank of Thailand (EXIM Bank), Bank for Agriculture and Agricultural Co-operatives (BAAC), Small and Medium Enterprise Development Bank of Thailand (SME Bank), and Islamic Bank of Thailand (IBank) บริการทุกระดับประทับใจ 82 62#42K EXCELLENCE Regulations Update Capital (Basel III) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■January 2013 onwards: Basel III implementation on bank only and consolidated basis (early adopt). Requirements are in line with international guidelines ➤ Expected impacts on Thai banks: Manageable impacts expected based on quantitative impact study by the BOT ➤ Expected impacts on KBank: Manageable impacts to KBank expected Financial Sector Master Plan II (FSMP II) ■■Year 2010-2014: The BOT's FSMP II consists of three key policies: reducing system-wide operating costs; promoting competition and access to financial services; and strengthening financial infrastructure, including market liberalization, increased access by foreign financial institutions via granting licenses in some business areas, and permission for an increased number of branches and ATMs Progress In 2013: The BOT will establish a licensing framework for foreign commercial banks, aiming to enhance competitiveness within the banking industry under FSMP II ➤ Expected impacts on Thai banks: Move toward liberalization, along with higher competition Expected impacts on KBank: Ability to maintain competitiveness over both existing and new players, helped by an effective customer-centric strategy and preparation for a changing environment International Accounting Standards (IASS and IFRSS) ■Year 2013 onwards: The time frame is specified by the Federation of Accounting Professions; IFRS 8 (Operating Segment) and IAS21 (Foreign Exchange) has been implemented since January 2013; full IFRS conversion is expected in 2016 Expected impacts on Thai banks: More logical and transparent presentation and disclosure, with different impacts on each bank ➤ Expected impacts on KBank: Manageable impacts expected, as the Bank early adopted some IASS and IFRSS and continues to prepare for full implementation Note: TAS = Thai Accounting Standards; BCBS = Basel Committee on Banking Supervision Source: The Bank of Thailand, KResearch บริการทุกระดับประทับใจ 83 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Basel III: The BOT Implementation Timeframe ■The BOT implementation timeframe is mostly in line with the BCBS timeframe Effective implementation: January 1, 2013 (Bank) and January 1, 2014 (Consolidated) Banks able to early adopt Basel III on consolidated basis since January 1, 2013 Full Implementation: January 1, 2019 Transitional Arrangement for Capital Requirement All dates are as of 1 January 2013 2014 2015 2016 2017 2018 2019 Conservation Buffer* CET1: Minimum Common Equity Tier 1 Ratio (after conservation buffer) 4.5% 4.5% 4.5% 0.625% 5.125% (4.5%+0.625%) 1.25% 5.75% (4.5%+1.25%) 1.875% 2.5% 6.375% (4.5%+1.875%) 7.0% (4.5%+2.5%) Tier 1: Minimum Tier 1 Ratio (after conservation buffer) 6.0% 6.0% 6.0% CAR: Minimum Total Capital Ratio (after conservation buffer) 8.5% 8.5% 8.5% Countercyclical Buffer (Subject to the BOT consideration)** 6.625% (6.0%+0.625%) 9.125% (8.5%+0.625%) 0.0-2.5% 7.25% (6.0%+1.25%) 8.5% 7.875% (6.0%+1.875%) (6.0%+2.5%) 10.375% 9.75% 11.0% (8.5%+1.25%) (8.5%+1.875%) (8.5%+2.5%) 0.0-2.5% 0.0-2.5% 0.0-2.5% Leverage Ratio Liquidity Coverage Ratio (LCR)*** Net Stable Funding Ratio (NSFR)*** Parallel run period Effective Effective (Phase-in) Effective ** * Conservation Buffer is to ensure adequate capital to absorb losses during periods of financial and economic stress. Banks with a CET1 ratio less than the required conservation buffer (i.e. 2.5% CET1) will face various degrees of constraint on distribution of dividends and bonuses *In periods of excess aggregate credit growth, the BOT may require banks to set a Countercyclical Buffer up to 2.5% to achieve the broader macroprudential goal of protecting the banking sector Requirements for liquidity ratios have not been finalized. Banks are required to submit data to the BOT for further calibration *** Source: Bank of Thailand (BOT), KBank บริการทุกระดับประทับใจ 84 4#43Tier 1 capital K EXCELLENCE Capital Definition Change (Consolidated) Tier 2 capital Tier 1 Basel II • Issued and paid-up share capital • • • • Premium on ordinary shares Legal reserve and Retained earnings • Minority interest, Preferred stock Hybrid Tier 1 (<15% of total Tier 1) Deduction of Tier 1 Goodwill, Treasury stock, Deferred tax asset Investment in insurance (50% Tier 1 and 50% Tier 2) Long-term subordinated debt . • • Hybrid Tier 1 (exceeds from Tier 1 limit) General Provision (reserve on 'Pass' loans and the excess allowance of required reserves) Surplus on AFS equity (45%) Surplus on land & premises (70% and 50%) 1 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Basel III Common Equity Tier 1 • Issued and paid-up share capital • • Premium on ordinary shares Legal reserve and Retained earnings • 1 Other comprehensive income (OCI) e.g. surplus on AFS bond and equity (100%), surplus on land & premises (100%) Additional Tier 1 • • Hybrid Tier 1 with loss absorbency feature* Minority interest, Preferred stock* Deduction of Tier 1 • • 2 • 3 . Goodwill, Treasury stock*, Deferred tax asset Intangible assets (new item: gradually deduct CET1) Investment in insurance (Threshold Deduction) - Amount 10% of CET1, %RW = 250% (KBank's Case) - Amount > 10% of CET1, deduct CET1 Long-term sub-debt with loss absorbency feature** General Provision (reserve on 'Pass' loans and the excess allowance of required reserves) * Currently, KBank has no Hybrid Tier 1, Preferred Stock, or Treasury Stock ** Long-term subordinated debentures must have loss absorbency feature, if issued since 1 January 2013 บริการทุกระดับประทับใจ 85 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Financial Sector Master Plan (FSMP) Implementation Stages FSMP I (Y2004-2009) ■ Increase efficiency of the financial institutions system - 'One Presence' policy Expand scope of business: 'Universal Banking' New licenses for retail banks and foreign bank subsidiaries ■ Promote financial inclusion Strengthen financial institutions (Fls) by promoting voluntary mergers ■ Protect customers FSMP II (Y2010-2014) Looking forward to liberalization Reducing system-wide operating costs ■ Streamlining regulations ■Tackling remaining NPLs and NPAs (Allow banks to partner with private firms to work on raising attractiveness of NPAs, promote efficiency in the trading of NPLs and NPAs by establishing an NPA Information Center, and encourage write-offs of fully provisioned 'doubtful of loss' loans) Promoting competition and access to financial services ■ Promote competition - Encourage voluntary mergers to lower operating costs - Enhance the role of existing service providers (Liberalization of branch network, widen business scope, upgrade qualified retail banks to commercial banks, and expand branch network of foreign banks) - Introduce new entry to fill gaps and create value-added - Reduce government ownership in the commercial banking sector ■ Promote financial access - Facilitate bank expansion of business, as well as support Specialized Fls in focusing on providing services to the populations without access to banks - Introduce new service providers with microfinance expertise into the system Strengthening financial infrastructure (including market liberalization, increased access for foreign financial institutions via grants of licenses for some business areas, and permission for an increased number of branches and ATMs) ▪ Promote development of financial products that help support risk management ■ Enhance information system for risk management ▪ Push for draft/review of necessary financial laws to support risk management and an expedited resolutions to NPLs ■ Promote information technology utilization ■ Develop human resources in the financial sector Note: There are four types of Commercial banks in Thailand; Full service banks; Foreign bank branches; Retail banks; and Subsidiary Source: BOT and KResearch บริการทุกระดับประทับใจ FSMP III (Y2014 onwards) ■ Further development based on FSMP II results ■ Another feasibility study in light of empirical results 86#44K EXCELLENCE TAS and IFRS Implementation 4Q2010 2013 2014 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 2016 (Tentative) 31 Dec 2010 TAS Implementation TAS 19: Employee Benefits (KBank early adopted in 4Q10; the formal effective date is January 1, 2011) ➤ Use actuarial techniques to determine retirement reserve for eligible staff TAS 12: Income Taxes (KBank early adopted) (KBank early adopted in 4Q10; the formal effective date is January 1, 2013) ➤ Use deferred income tax concept to record tax asset/liability Other TASS 1 Jan 2011: New financial statement presentation BOT's New Financial Statement Presentation/Convention ➤ New and reclassified presentation lines in financial statement in order to align with the revised TAS Note: TAS = Thai Accounting Standard Phase 2: TAS/TFRS Implementation TAS 21: Effects of Changes in Foreign Exchange Rates ➤Translate 'Functional Currency' to 'Presentation Currency' TFRS 8: Operating Segments >Present operating results for each key segment IFRS Conversion TFRI 13: Customer Loyalty Program ➤Defer portion of income for reward credit granted บริการทุกระดับประทับใจ Full IFRS Conversion IFRS 9 (IAS 39), IFRS 7 and IAS 32: Financial Instruments ➤Thai banks have implemented a new provisioning rule under IAS 39, since December 2006 ➤ Thai banks have complied with IAS 39 when reporting embedded derivatives, since 2008 IFRS 4: Insurance Contracts ➤ Re-measuring insurance liability to reflect current market situation ➤ Unbundling of deposit components IFRS13: Fair value measurement (Revised timeline from 2013 by Federation of Accounting Professions) ➤ Clear required factors in fair valuation and disclosure about valuation techniques 87 22 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Updates on the Deposit Protection Agency (DPA) DPA Objectives and Missions Enhanced understanding of the deposit protection scheme ■Close cooperation with related authorities to maintain stability of the financial institution system Establishment of an appropriate system for premium collection and sound management of the Deposit Protection Fund ■Development of an effective information system to ensure fairness of the deposit protection scheme, with accurate and rapid reimbursement ■Management according to Good Governance Principles and in compliance with international standards established by the International Association of Deposit Insurers Amount of Insured Deposits ■Insured deposits include deposits and accrued interest denominated in Thai Baht accounts, excluding non-resident Thai Baht accounts ■Blanket guarantee will be gradually phased-out to a limited coverage of Bt1mn per depositor per institution Until 2011, Thai banks paid 0.40% per year of the daily average deposit amount (paid in June and December), excluding deposits in foreign currencies and deposits from financial institutions not insured by the DPA Since January 27, 2012, the contribution rate increases from 0.40% to 0.47%, of which 0.46% is paid to the BOT to manage FIDF debts* and 0.01% is paid to the DPA ■Royal Decree on an extension of deposit protection coverage was announced in the Government Gazette on September 24, 2012 Deposit Accounts in Thailand (as of March 2013) Insured Deposit Under new Royal Decree 11 August 2012-10 August 2015 Up to Bt50mn 11 August 2015-10 August 2016 Up to Bt25mn 10 August 2016, onwards Up to Bt1mn Deposits (Corporate and Retail Deposits) Less than Bt1mn More than Bt1mn, but less than Bt50mn More than Bt50mn Total # of Accounts % Amount (Bt mn) % 80,430,979 1,201,078 15,545 81,647,602 98.51% 2,561,209 1.47% 4,552,253 0.02% 100.00% 3,176,253 10,289,715 24.89% 44.24% 30.87% 100.00% Source: DPA, Bank of Thailand (BOT), KBank, KResearch * According to the BOT announcement in Government Gazette, per the authority of the emergency decree, dated May 11, 2012, financial institutions are required to pay 0.46% of the average deposit amount, B/Es, debt instrument (excluding the amount counted as capital), borrowings, securities transactions under repurchase agreements, beginning January 27, 2012 บริการทุกระดับประทับใจ 88#45K EXCELLENCE K Government Policy บริการทุกระดับประทับใจ EXCELLENCE Sources and Uses of Public Fund FY2013 Annual Budget Budget Planning Tax Revenue + Non-Tax Revenue (Bt2.1trn) + Borrowing under the Annual Budget Act (Bt300bn) Annual Budget (Bt2.4trn) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Budget Execution Budget Disbursement (94% target disbursement rate + carry-over) General Administration (Bt822.7bn) ■ Defense ■ Debt services Economic Services (Bt471.4bn) ■Subsidy to SFIs (e.g. loss from rice pledging scheme) Subsidy to SOES (e.g. Infrastructure project, free bus and train service policy) ■Infrastructure/Agricultural Development Social and Community Services (Bt1,105.9bn) ■ One Tablet per Child ■ Universal Healthcare Extra-Budget Borrowing Extra-Budget Borrowing under Special Act/Decree 1. Water Resource Management project (Bt350bn) Details in App. Page 93 2. Infrastructure Investment Project (Bt2trn) Details in App. Page 94 Quasi-Fiscal Instrument SFIs taking deposit, as well as borrowing บริการทุกระดับประทับใจ Quasi-fiscal activities (e.g. Rice Pledging Scheme, Soft Loan Program) 89 90#46K EXCELLENCE Highlights of Government Stimulus Plans Consumption Stimuli (Increase income/ boost consumption/ease spending burden) Investment Stimuli (Confidence and competitiveness enhancement) Projects/ Campaigns FY2012 Budget Act (Bt2.38trn) FY2012: Disbursed = Bt2.1trn or 90.3% FY2013 Budget Act (Bt2.4trn) FY2013: Disbursement as of April 2013 = Bt1.4trn or 57.6% Emergency Decree for Water Resource Management (Bt350bn) * Disbursement As of April 2013 = 2.9% Infrastructure Development (around Bt2trn) ** Corporate Income Tax Reduction (from 30% to 23% in 2012 and to 20% in 2013) 'First-Home' buyer The National Catastrophe Insurance Fund The BOT Soft Loans Bt300 daily minimum wage Bt15,000 monthly income for civil servants Rice pledging policy Performing-debt suspension 'First-Car' buyer Energy / cost of livings VAT maintained at 7.0% 2012 Note: * Bt50bn is allocated for short-term / emergency projects, and Bt300bn is allocated for long-term projects, which are in process of Term of Reference (TOR) ** Preliminary data; pending more information from the authorities Source: Compiled by KResearch, information as of May 2013 บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 2013 91 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Funding Needed from the Government for Investment Stimuli 1,000 Billion Baht 800 600 300 FY2013 F ■In addition to commercial bank loan expansion, funding needed from the government to finance budget deficit, as well as to invest in the water resource management and infrastructure development projects may affect liquidity in the system 342.5 400 1.9 200 344 0 FY2012 Economic Policies ■2013 Budget Act Budget Deficit Extra-budget borrowing Key Points ■FY2013 expenditures set at Bt2.4trn with a budget deficit of Bt300bn, compared to Bt2.38trn in expenditures with a Bt400bn deficit in FY2012 Implementation Process FY2013 ■ Effective date: announced in the Royal Gazette on Sep 30, 2012 Possible Impacts/ Expected Budget ■ Government spending help lessen flood impacts and risks from global economic uncertainty ■Fiscal discipline to remain manageable in the near-term; however, continued debt creation, both from budget and other borrowings, may impact long- term fiscal sustainability Sources: MOF, KResearch (As of May 2013) Note: FY2012 is actual data, and FY2013 is estimated data บริการทุกระดับประทับใจ 92 22#47K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Emergency Decree for Water Resource Management Summary Information Budget: Bt350bn* in 2012 - June 2013 Investment Period: 2012 - 2016 Objective: ■ To prevent severe flood in Central region ■ To enhance investor confidence Sources of Funds: Borrowing Budget Bt350bn* = Bt50bn for short-term projects Bt300bn for long-term projects Bt300bn long-term projects* Others (6.7%) Land use zoning and land utilization (16.7%) Reservoir construction (16.7%) Flood ways or flood division channel (40%) Adapting irrigated agricultural areas into retention areas Key Activity Plan 2Q13 ■Announce winners and start borrowing to finance project ■Complete borrowing as stated by the Emergency Decree Award contracts 2H13 ■Contractors start their projects - Design and Built projects - Compliance with related regulatory requirements, e.g., EIA and public hearing process 2014 - 2016 Full-scale construction (20%) Note: * Bt50bn is allocated for short-term /emergency projects, and Bt300bn is allocated for long-term projects, which are in process of Term of Reference (TOR) Sources: Strategic Committee for Water Resource Management, KResearch (Update as of May 2013) บริการทุกระดับประทับใจ K EXCELLENCE Infrastructure Development Summary Information Budget: Around Bt2trn Investment Period: 2013-2020 (7 Years) Objective: ■ Enhance long-term competitiveness ■ Create 1.5-2.0mn jobs Stimulate domestic economy ■ Enhance quality of life Sources of Funds: Main funding is expected to be domestic borrowing under a special Act ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Bt2trn infrastructure Development Dual-track railways, ports construction, and distribution centers (17.7%) Support systems and contingency funds (0.5%) Electric trains in and around Bangkok plus road networks linking rural areas with industrial and tourist areas (29.7%) High-speed trains and inter-city highways (52.1%) Timeline Mar 2013: Cabinet approved the draft act Late March: The draft act being submitted to the House of Representatives for consideration Note: * Preliminary data; pending more information from the authorities Sources: Newspaper complied by KResearch, as of May 2013 บริการทุกระดับประทับใจ Sep 2013: Expected effective date of the special act 93 94#48K EXCELLENCE Summary on Government Stimulus Plans: Economic Policies ■ Corporate income tax cut Enhancing Competitiveness for SMEs ■Bt300 daily minimum wage ■Bt15,000 monthly salary or equivalent income for civil servants with undergraduate degrees ■Rice pledging policy ■3-Year Performing Debt Moratorium ■Monthly welfare allowance for citizens over age 60 ■Fund for Entrepreneurship Expired Measures 'First Home' program (Expired measure) ■'First Car' tax incentives (Expired measure) ■GHB home loans with 0% interest for 3 years (Expired measure) Source: KResearch, information as of May 15, 2013 Key Points ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■Reduction in corporate income tax from 30% to 23% in 2012 and 20% in 2013 and 2014 ■Financial assistance through cooperation between SME Bank, Thai Credit Guarantee Corporation (TCG), and the Social Security Fund, as well as tax breaks ■Daily minimum wage rising to Bt300 until December 2015 ■Salaries (wages plus benefits) raised to at least Bt15,000 per month Using the Bank for Agriculture and Agricultural Co-operatives (BAAC) as an arm of the government to support the rice pledging program, with prices set at Bt15,000 a tonne for white rice and Bt20,000 a tonne for fragrant or 'Hom Mali' rice 3-year debt moratorium for small-scale farmers and low income earners with outstanding debt not to exceed Bt500,000 per person with the interest rate reduced by 3% per year ■Monthly welfare allowance of Bt600-1,000 paid to citizens between ages 60-90 ■Provide startup capital/soft loans for entrepreneurs who want to open businesses ■10% maximum personal income tax deduction (maximum Bt100,000 deduction per year) for first-time buyers of new houses or condominiums valued below Bt5mn ■Deduction will be spread out over five years ■Rebate of the excise tax (capped at Bt100,000) on small passenger cars (engine size less than or equal to 1,500cc) and pickup trucks worth up to Bt1mn ■Government Housing Bank (GHB) will provide up to Bt1mn in housing loans for first-time home buyers with 0% interest for the first three years บริการทุกระดับประทับใจ 95 K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Summary of Four Financial Emergency Decrees Decree Name ■Emergency decree authorizing government borrowing for strategic investment plans covering water resource management ■Emergency decree providing assistance loans to flood-hit SMEs and individuals ■Emergency decree. establishing flood-related insurance fund ■Emergency decree improving management of the Financial Institutions Development Fund (FIDF) debt Key Points ■Establishing water management system; flood prevention program to regain investor confidence Providing soft-loans with fixed interest rate of no more than 3% for flood-affected parties ■Establishing a flood insurance scheme, with favorable insurance premiums in light of partial government support ■Set a clear responsibility to manage debts, particularly yearly interest rate burdens, by introducing additional sources of funds from financial institution contributions Implementation Process Approved (by Cabinet): Jan 10, 2012 Effective date: Jan 27, 2012 ■Approved (by Cabinet): Jan 10, 2012 ■Effective date: Jan 27, 2012 ■ Approved (by Cabinet): Jan 10, 2012 ■Effective date: Jan 27, 2012 ■Approved (by Cabinet): Jan 10, 2012 Effective date: Jan 27, 2012 Possible Impacts/ Expected Budget ■■Bt310bn in government borrowing will have taken place by June 30, 2013 ■Funding wholly comes from government borrowing ■Boosting infrastructure investment ■Bt300bn in soft-loans ■Bank of Thailand contributes up to 70% of total amount ■State-owned and commercial banks contribute the remaining amount ■As of September 2012, this measure has provided support to more than 520,000 affected customers nationwide ■■Bt50bn in funds ■Funding comes mainly from government borrowing ■As of May 7, 2013, a total of 808,119 catastrophe policies have been sold, with reinsurance premiums under the National Catastrophe Insurance Fund reaching Bt75,926mn ■■Until 2011, Thai banks paid 0.40% per year of the daily average deposit amount to the Deposit Protection Agency; since January 27, 2012, the contribution rate has been increased from 0.40% to 0.47%, of which 0.46% is paid to the BOT to manage FIDF debts and 0.01% is paid to the DPA According to news reports, SFIs will also be required to pay 0.47% of their deposits into a country development fund Source: KResearch, information as of May 2013 บริการทุกระดับประทับใจ 96#49K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Government Assistance Measures for SMEs Affected by Wage Hike ■Daily minimum wage rose to Bt300 and will remain at Bt300 until December 2015 Measures Tax measures ■ Reduce income tax Details Financial measures Productivity-boosting measures Other measures ➤ If annual income ≤ Bt300,000, income tax rate = 0% ➤If annual income between Bt300,000 and Bt1mn, income tax rate = 15% ➤ If annual income over Bt1mn, income tax rate = 20% ■ Cut withholding tax to 2% (from 3%) ■ Allow 100% depreciation in the first year for machinery Exempt income tax from the sale of old machinery ■ Offer tax deductions for 1.5 times incremental wages ■ Offer soft loans worth Bt20bn from SME Bank and Bt10bn from Social Security Fund ■ Offer credit line guarantee worth Bt240bn by Thai Credit Guarantee Corporation ■ Establish Venture Capital Fund (Bt1bn) and Machine Fund (Bt3.4bn) to promote mechanization in SMEs by providing venture capital and interest rate subsidy for SMEs intending to purchase new machinery and equipment (still in Cabinet approval process) ■ Offer soft loans (0.1% p.a.) for staff training costs, by the Skill Development Fund ■ Reduce employer contributions to Social Security Fund to 4% (from 5%) ■ Increase budget for state officer trainings and seminars at provincial hotels ■ Reduce business tax by 50% to Bt40 per room (from Bt80) for small scale hotels under the supervision of the Local Administration Organization บริการทุกระดับประทับใจ K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Ongoing Government Measures to Assist Cost of Living Household Assistance Energy Prices Baht/Litre Measures 29.99 37 Elimination of some Oil Fund levies Diesel Price 35 (effective Aug. 29, 2011) 33 29.99 31 29 27 Pegged Price Uncontrolled Price 25 Dec-10 Jun-11 Value-added-tax (VAT) Rate Dec-11 Jun-12 Dec-12 Details Train and Bus Fares: A subsidized fare for buses and trains; some buses and trains provided for free Electricity: A full subsidy on electricity bills for households using less than 50 units of electricity per month Diesel Fuel: The government intends to control diesel fuel prices to not exceed Bt30/litre by adjusting the amount contributed to the Oil Fund and excise tax on diesel fuel NGV and LPG Price: The government has subsidized NGV and LPG costs, allowing retail selling prices to be lower than global market prices. However, the government plans to restructure a fuel price system to better reflect global market price movements ■NGV price fixed at Bt10.50/kg ■LPG prices are as follows: ➤ Household sector planned price increase by Bt0.50 per month starting June 1, 2013 until the price equals to the transport sector price (as of May 7, 2013, price at Bt18.13/kg) ➤ Transport sector adjusted in accordance with Oil Fund levies and the direction of global prices (as of May 7, 2013, price at Bt21.38/kg) ➤ Industrial sector adjusted in alignment with relevant production costs (as of May 7, 2013, price at Bt28.07/kg) FT Rate: Fuel Adjustment Tariff (FT) Rate for electricity is set to increase by less than the actual cost On August 7, 2012, the Cabinet approved the following VAT Rates: ■Maintain the 7% value-added-tax (VAT) rate until September 30, 2014 ■After Sep 2014, VAT rate may be increased to 10% unless the government extends the VAT reduction period. บริการทุกระดับประทับใจ 98 97 46#50% Cumulative Budget Disbursement Rate (%) K EXCELLENCE Public Debt to GDP and Fiscal Budget ■Government budget disbursement rate for 7M2013 (October 2012-April 2013) was 57.6%, slightly better than the same period in FY2012 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■The public debt to GDP ratio is 44.16% as of March 2013, still under the 60% limit set by the fiscal sustainability framework Bt bn 100 5,100 % to GDP 48 90 FY2013 FY 2012 ----FY 2011 Public Debt 90.3 80 70 60 50 40 4,800 -% to GDP 46 46 81.1 45.1 74.7 44.16 57.6 67.5 50.5 61.2 4,500 - 44 36.7 42.1- 55.5 43.6 49.2 42.3 42.3 29.2 4,200 42 30 23.4 34.4 20 27.8 12.1 21.2 10 3,900 40 13.9 7.5 0 3,600 Note: The 2012 Budget Act was announced in the Royal Gazette on February 8, 2012 Source: Ministry of Finance 1 1 1 1 1 1 1 1 }}} K EXCELLENCE บริการทุกระดับประทับใจ Thai Economic Figures ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK บริการทุกระดับประทับใจ 100 38 99#51K EXCELLENCE Currency and Interest Rate Outlook USD/THB: End Period ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Interest Rate Trend 4.00 3.25 2.75 2.50 B4 33.32 2.00 31.54 32 30.15 30.60 31.13 2.00 30.00 20 1.25 0-0.25 0-0.25 0-0.25 0-0.25 0-0.25 30 28 0.00 4Q09 4Q10 4Q11 4Q12 26-Jun-13 4Q13F USD/THB Dec-09 Dec-10 Fed Funds rate Dec-11 Dec-12 Dec-13F ■BOT's 1-Day Repurchase rate ■The Fed signals its plan to reduce asset purchases by end-2013 if the U.S. economy improves in line with its June forecasts. The strength of the U.S. economy remains in doubt, while the same level of monetary support should be maintained through 2013. The global economy shows further signs of weakness, while the U.S. government's finances and housing market recovery remain dependent on low interest rates which are products of the Q.E. measure The Thai Baht stays under depreciation pressure due to portfolio outflows and larger trade deficits. It is likely to be futile to "fight the Fed" or go against the market's risk aversion; the Baht looks oversold and is likely to rebound to 30.00 by year-end as the market reassesses the timing of the Q.E. exit Note: F is estimated by KBank Capital Markets Research (as of June 21, 2013) ■ On May 29th, the MPC decided to lower its policy rate by 25bps to 2.50% following a deceleration in Thailand's economic activities, as reflected in its 1Q13 GDP, and lower risks to inflation. Domestic demand growth slowed down significantly after several fiscal stimulus measures expired, while exports performed poorly due to weak external demand and the Baht's appreciation in 4M13 ■ We forecast that the MPC will maintain its 2.50% policy rate until year-end 2013 due to an expectation of positive GDP growth, albeit at a lower rate compared to expectations at the start of the year. Inflation is likely to remain low and stable while risk to growth rose due to the weaker outlook on Asia's economic growth. Recent volatility in the financial market may also pose risks to the global economy บริการทุกระดับประทับใจ K EXCELLENCE Impact of Baht Appreciation to Key Sectors Impacts/Support Reasons Highly Impacted Export-oriented, high use of local content, low competitiveness, price inelastic, and/or weaker overseas demand Decreased competitiveness Deteriorating demand in the US and Europe, but seeing benefit of lower cost of imports Diversified market, despite high use of local content Diversified market & lower costs of imports Sectors Garments, Musical and Sports Instruments, Canned and Processed Fruit & Seafood, Frozen Shrimp, and Processed Poultry Rice and Labor-Intensive Products, e.g., Shoes, Leather Products, and Furniture Computers and Parts, Electrical Appliances, Jewelry and Ornaments Rubber, Tapioca Products, Fresh and Frozen Fruit, Sugar, Rubber Products, and Tourism Vehicles and Parts, Iron and Steel Products, and Machinery Key Issues: ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■ Export industries most affected are those with a high proportion of local content and low profit margin, including Footwear & Leather Products, Furniture, Textiles & Garments Less impacts are seen in high import- content industries, due to benefits from natural FX hedges Sensitivity of Baht to exports and GDP Baht Appreciation 1% Impact on exports - (0.6-1.1%) Impact on GDP - (0.1-0.3%) Less Impacted Domestic market-oriented and/or high import content Source: KResearch, information as of February 2013 Petrochemical and Petroleum Products, Construction Materials, Retail and Wholesale Trade, and Other Services Source: KResearch บริการทุกระดับประทับใจ 101 102#52K EXCELLENCE Monthly Economic Conditions: May 2013 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Units: % over-year, otherwise indicated 2012 2013 2011 2012 3Q 4Q 1Q Feb Mar Apr May Private Consumption Index (PCI) 3.7 5.6 6.8 7.4 3.9 3.3 1.8 1.8 -0.2 Sales Volume of Benzene and Gasohol Value-added Tax at 1995 prices Imports of Consumer Goods at 1995 prices -1.4 5.1 2.3 14.9 7.0 6.3 9.9 12.5 5.0 10.2 15.7 20.6 18.2 6.9 3.3 1.0 3.7 -1.6 13.6 10.0 11.1 13.8 9.1 2.4 -5.3 12.3 0.9 Passenger Car Sales 4.3 86.7 78.6 275.7 97.2 92.1 92.9 22.9 -5.8 Motorcycle Sales 7.4 6.1 -0.5 26.0 5.7 -0.5 0.1 7.3 -11.8 Private Investment Index (PII) 7.7 17.1 13.0 28.9 3.7 8.9 3.7 -0.9 -3.3 Domestic Sales Volume of Cement 4.6 11.6 14.2 20.6 16.1 14.9 17.4 9.5 11.8 Sales Volume of Commercial Cars Imports of Capital Goods at 1995 prices Value of BOI Applications -4.4 75.4 53.4 227.2 19.4 14.0 11.6 26.5 -1.4 15.0 24.3 19.7 32.6 -2.3 -8.9 -13.1 -7.3 -12.0 54.5 128.4 88.4 203.1 28.7 21.4 56.2 280.9 2.4 Manufacturing Production Index -8.7 2.5 -10.9 43.8 3.0 -1.3 0.9 -4.2 -7.8 Industrial Capacity Utilization 59.3 65.4 66.1 67.0 66.2 63.0 71.1 60.2 65.8 Agriculture Production Index 8.8 5.1 6.3 4.9 1.9 0.2 -0.7 -4.4 0.5 Agriculture Price Index Exports (In terms of US Dollars) 12.1 -9.6 -9.8 -5.3 -4.0 -4.2 -4.1 -3.0 1.5 14.3 3.2 -3.0 18.2 4.5 -4.6 4.2 3.7 -5.1 Unit Value 5.6 Volume 8.3 63 0.6 -0.1 1.0 0.4 0.2 -0.1 -0.7 -0.4 2.6 -2.9 17.0 4.1 -4.8 4.3 4.4 -4.7 Imports (In terms of US Dollars) 24.9 7.8 -2.5 14.9 7.2 3.7 -12.3 8.5 -4.9 Unit Value 10.1 1.6 -0.5 -0.4 -1.8 -1.7 -2.6 -3.3 -3.4 Volume 13.4 6.1 -1.9 15.4 9.2 5.5 -10.0 12.1 -1.6 Trade Balance (USD millions) Current Account (USD millions) Headline CPI 16,989 8,337 5,006 765 -271 575 1,975 -1,620 535 5,889 2,728 2,747 923 1,267 1,568 1,936 -3,361 -1,051 Core CPI 3.8 2.4 3.0 2.1 2.9 3.2 3.1 3.2 2.7 2.4 2.3 1.9 1.8 1.5 1.6 1.2 1.2 0.9 Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), Office of Industrial Economics (OIE), Office of Agricultural Economics (OAE) บริการทุกระดับประทับใจ ■ Key economic figures in May13 reaffirmed that the Thai economy was experiencing a slowing momentum ■Private spending decelerating as effects of stimuli fading Exports still lackluster as the global economy remained weak ■Imports contracted led by a contraction in auto parts and raw material imports ■Current account still in deficit as outward remittances countervailing May13 slight trade surplus ■May13 inflation remained benign because of a base effect K EXCELLENCE Economic Condition Highlights: May 2013 May13 BSI rose on weakening Baht, while CCI declined due to household's financial constraints ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK May13 private consumption and investment slowed due mainly to the fading impact of government stimuli 90 85 & 80 * 75 70 53.9 60 55 50 45 82.5 40 35 30 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Consumer Confidence Index (CCI) Business Sentiment Index (BSI) May13 foreign tourist arrivals were still well above previous years BSI No. of Foreign Tourist Arrivals (Thousand) 2,800 2,395 2.300 1,890 1,819 1.800 1,780 1,300 800 Jan Apr ايال -2010 2011 Oct .2012 2013 Sources: BOT, MOC, UTCC, OIE % YoY Export Value (USD Million) 400% 200% 0.9% 0% -0.2% -3.3% -5.8% -1.4% -12.2% -200% PCI PII 4Q12 1Q13 ■Apr-13 Passenger Commercial Imports of Imports of Car Sales Car Sales Capital Goods Consumer Goods ■May-13 May13 exports contracted due to sluggish global demand and loss of competitiveness on rice exports 25,000 20,000 15.000 10.000 5,000 40% 30% 20% 10% ge 59% 0% -10% +-20% May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Exports % YoY for Exports บริการทุกระดับประทับใจ Exports (excluding gold) % YoY for Exports exc Gold 104 103#53MPM% K EXCELLENCE Economic Condition Highlights: May 2013 May 13 MPI contracted amid sluggish external demands ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Activities in the property market cooled after a year of high growth % YoY of MPI 100.00 50.00 75.0 65.8 65.0 55.0 -50.00 -7.8 45.0 -100.00 35.0 Aug- Nov- Feb- May- Aug- Nov- Feb- May- 11 11 12 12 12 12 13 13 -MPI (Ihs) -%Capacity Utilization (rhs) May13 inflation was benign thanks mainly to a high base effect but showed 1.5 1.0 0.5 0.0 -0.5 Jan 12 May-12 Headline CPI (MoM-Ihs) Sep-12 Headline CPI (YoY-rhs) Jan-13 Core CPI (MoM-Ihs) -Core CPI (YoY-rhs) %Capacity Ut Utilization Rate % YoY 000000 L 3010 4010 1011 2011 3Q11 4011 1012 2012 Construction areas permitted in municipal zone Condominium Registration Nationwide -New Housing In BKK and Vicinity 3012 4012 Land and property prices continued to rise in 1Q13, due to a growing demand in the upcountry 5.0 20.0 2.27 4.0 15.0 3.0 2.0 %YoY 1.0 дол% 10.0 5.0 0.97 0.0 May-13 0.0 -5.0 Sources: BOT, MOC, OIE, REIC (Real Estate Information Center) บริการทุกระดับประทับใจ K EXCELLENCE Exports and Imports: 5M13 Exports by Country Others 21.7% ASEAN 26.2% Middle East 5.1% Hong Kong 5.5% Japan 10.0% EU 9.9% China USA 11.7% 10.0% Top 10 Exports by Product (BOP Basis) USA 5.9% Single House (With Land) Townhouse (With Land) - -Land ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Imports by Country Others 23.9% Japan 16.9% EU 9.0% ASEAN 16.4% Middle East China 14.3% 13.6% Top 10 Imports by Product (BOP Basis) 5M13 5M13 Total Exports (BOP Basis) Total Imports (BOP Basis) USD Millions Total Exports 92,926 Weight 100.00% % YoY USD Millions Weight % YoY 2.2% Total Imports 94,282 100.0% 4.8% Electronics 10,492 11.3% 1.7% Fuel 20,254 21.5% 1.5% Automotive 12,857 13.8% 14.8% Machinery, equipment, and supplies 19,228 20.4% -5.9% Agro-manufacturing Products 11,939 12.8% -2.4% Electronics parts and electrical appliances 11,027 11.7% -3.1% Machinery & Equipment 7,157 7.7% 2.2% Materials of base metal 9,738 10.3% 9.9% Petro-chemical Products 5,177 5.6% 9.4% Non-monetary gold 8,632 9.2% 42.9% Metal & Steel 5,149 5.5% 36.7% Automotive 6157 6.5% 19.83% Electrical Appliances 5,115 5.5% 8.0% Chemicals 5,673 6.0% -1.4% Petroleum products 4,882 5.3% -12.7% Non-durables Consumer goods 5,642 6.0% 10.7% Chemicals 3,944 4.2% 13.6% Agricultural and agro-manufacturing products 3,714 3.9% -4.9% Rubber 3,613 3.9% -11.0% Plastics 3,131 3.3% -2.1% Source: Bank of Thailand (BOT), BOP Basis = Balance of Payment Basis บริการทุกระดับประทับใจ 106 4011 1Q12 2012 3Q12 4012 1013 105 6.9 5.1 4.4 ELOL 66.24 22.68 40.65#54USD Million K EXCELLENCE Export and Import Data: 2012 Exports by Country 250,000 200,000 150,000 21.5% 5.3% 23.1% 22.5% 22.7% 23.0% 4.9% 4.7% 5.1% 3·70° 6.7% 70% 9.8% 9.9% 5.7% 10.3% 10.7% 10.2% II.4% 6.2% 100,000 11.3% 10.9% 10.5% 11.8% 11.7% 9.1% 10.3% 11.0% 10.6% 11.2% 10.9% 9.5% 60,000 13.2% 11.9% 22.7% 24.3% 24.7% 22.6% 21.3% 0 2008 2009 2010 2011 2012 USD Million ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Imports by Country 260,000 22.5% 25.0% 200,000 13.0% 24.4% 150,000 23.2% 13.3% 5.2% 15.7% 22.4% 11.6% 5.9% 20.0% 5.8% 100,000 6.4% 18.4% 12.34% 20.7% 18.7% 50,000 12.2% 18.7% 13.3% 14.9% 13.2% 8.1% 8.0% 12.7% 9.0% 7.6% 7.8% 16.8% 18.5% 16.6% 16.2% 16.3% 0 2008 2009 2010 2011 2012 ASEAN EU■China Japan USA Hong Kong Middle East Others Top 10 Exports by Product (BOP Basis) ASEAN EU China Japan ■USA Middle East Others Top 10 Imports by Product (BOP Basis) 2012 2012 Total Exports (BOP Basis) USD Millions Weight % YoY Total Exports 226,156 100.0% 3.2% Total Imports (BOP Basis) Total Imports USD Millions Weight % YoY 217,819 100.0% 7.8% Electronics 33,004 14.6% 0.9% Machinery, equipment, and supplies 50,537.1 23.2% 28.3% Automotive 29,368 13.0% 26.3% Fuel 47,358.8 21.7% 9.5% Agro-manufacturing Products 28,565 12.6% 4.1% Electronics parts and electrical appliances 27,711.8 12.7% 2.8% Machinery & Equipment 17,091 7.6% 1.9% Materials of base metal 21,866.5 10.0% 1.5% Petroleum products 13,117 5.8% 15.9% Automotive 14,258.3 6.5% 43.4% Petro-chemical Products 11,703 5.2% -1.8% Chemicals 13,674.4 6.3% -4.6% Electrical Appliances 11,531 5.1% 2.2% Non-durables Consumer goods 12,417.5 5.7% 11.5% Metal & Steel 11,410 5.0% 21.3% Non-monetary gold 10,742.3 4.9% -34.8% Rubber 8,746 3.9% -31.1% Agricultural and agro-manufacturing products 9,310.8 4.3% 6.4% Chemicals 8,386 3.7% 2.1% Plastics 7,896.7 3.6% 10.8% Source: Bank of Thailand (BOT), BOP Basis Balance of Payment Basis บริการทุกระดับประทับใจ Household Electrical Appliances 79.80 Integrated Circuits & Parts 53.38 Vehicles 110.00 Basic Metal K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Economic Condition Highlights: CAPEX and Investment Cycle Capacity Utilization by Key Industries: Applications Approved for Investment Promotion* 1,200 1,000 800 600 983.9 M..Ï. 271.3 ■Total Investment Value (of Approved Applications) 491.3 447.3 400 281.4 200 0 2009 2010 2011 53.24 2012 1Q2013 Rubber & Plastic Products 68.21 Chemical & Chemical Products 86.19 Paper and Paper Products 67.89 2010 Garments 37.06 Tobacco 50.24 Food and Beverage 2011 2012 1Q2013 Investment Value Applications Approved for Investment Promotion by Industry* 500 400 (Bt bn.) 300 200 100 0 23.6 58.04 Agriculture ■Avg 04-08 0 50 50 100 150 ■2009 Minerals&Ceramics Light Industry 6.3 9.3. Source: BOT, MOC, OIE (Data as of February 2013) Source: BOI 2010 1Q2013 Note: *Figures above indicate investments of approved projects requesting for investment promotion benefits from BOI 2011 2012 Metal Processing Electronics & Electrical Chemical Plastic Paper Service & Infrastructure บริการทุกระดับประทับใจ 108 107#55K EXCELLENCE Property Market: No clear sign of property bubble Supply Side: New Housing Completions and New Projects Launched in BMR* 1,000 Units 284 300 250 200 190 136 145 150 1; 100 50 0 4443 1994 1995 1996 1997 866 1999 ■New Housing Completions New Projects Launched ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Outstanding Mortgage Loans to Individuals and Property Developers to GDP % 25.0 20.0 A 20° 14 31 13 20 52468464 66 81 68 58 117 86 102 51 50 62 75 15.0 84 62 2000 2001 2002 10.0 2009 2010 2011 2012 2007 2008 5.0 10.0 12.4 9.6 13.7 9.2 → 10.4 16.8 15.3 10.9 → 16.6 11.1 15.3 13.8 13.2 13.9 14.6 16.2 17.1 17.2 16.9 17.2 18.9 18.7 19.3 19.9 1,000 Units 200 100 148 ° 2008 % (YoY) 25.0 19.4 20.0 15.8 16.0 13 0.0 10.0 10.9 5.0 9.9 0.0 -6.0 -10.0 -15.0 1992 1993 Demand Side: Transferred Properties in BMR* 181 178 151 2009 Land 2010 Price growth of Properties 2000 Single House 2005 2011 2006 2007 Townhouse 158 2012 2008 2009 2010 4.3 2.8 2012 1994 1997 2000 2008 2009 2012 2003 % Outstanding loans to Property Developers to GDP -% Outstanding mortgage loans to GDP ■Mortgage loans to GDP is higher than the pre-crisis level, due to several factors such as changes in consumer behavior, intense competition among banks, and a more accessible credit market ■Outstanding loans to property developers to GDP was 4.0%, which was lower than the pre-crisis level ■Supply Side: New housing completions and new projects launched were still below the pre-crisis level ■Demand Side: In the last 5 years, the number of transferred properties was still higher than the supply side figures ■Prices: Property prices are on an upward trend, albeit at a slow pace ■NPL ratio for mortgage loans at Thai commercial banks was low at 2.3% as of 4Q12 Sources: National Economic and Social Development Board (NESDB), BOT, Real Estate Information Center (REIC), Agency for Real Estate Affairs (AREA), the BOT, and KResearch Note: *Including Condominium, Single House and Townhouse; BMR = Bangkok and Metropolitan Area บริการทุกระดับประทับใจ 109 K EXCELLENCE Household Borrowing Household Borrowing to GDP Old Definition New Definition 30.0% 90.0% 80.0% 77.6% 70.5% 63.3% 7.2% 70.0% 20.0% 5.9% 11.6% 60.0% 5.1% 10.5% 50.0% 9.4% 24.2% 10.0% 40.0% 23.0% 28.8% 24.6% 20.2% 30.0% 19.9% 20.0% 15.0% 11.3% 8.1% 7.9% 26.2% 28.8% 32.1% 0.0% 10.0% 8.1% 12.1% 13.3% 13.8% 0.0% T 1991 1994 1996 1997 2010 2011 2012 Commercial Banks SFIS Saving Cooperatives 2001 19.0% ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK % NPL for Consumption Loans of Thai Commercial Banks 19.4% 13.5% 9.7% 6.2% 2006 5.0% 2007 4.1% 3.4% 3.1% 2.3% 2.0% 2012 1.9% 1Q13 2.0% Non-Bank Fis Others --Total Old Definition: Data from 1991 - 1997 are lending from commercial banks and SFIs to individual persons for consumption only New Definition: For the data from 2010 onwards, the information accounts for all individual persons' outstanding loans from all types of financial institutions, including saving Co-ops and non-banks Debt Service Ratio Cross Country Comparison 50% 40% 40% High probability of insolvency 31% 28% 29% 30% 20% 10% 0% 14.50% 14% US (2008) UK (2008) Korea (1997) Korea (2011) Thailand (2008) Thailand (2011) Source: BOT, Bank for International Settlements (BIS), National Statistical Office (NSO), and KResearch Household Borrowing to GDP is higher than the pre- crisis level, due to several sectors such as changes in consumer behavior, intense competition among banks, and a more accessible credit market ■ Although household borrowing to GDP is rising, the debt service ratio of Thai households is still at a moderate level as interest rates are kept low ■NPL ratio for consumption loans of Thai commercial banks is on a decreasing trend reflecting a better quality of retail credit บริการทุกระดับประทับใจ 110#56K EXCELLENCE Key Regulations for Mortgage Loans ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK ■The BOT has taken preventive actions and closely monitored risk in the property market ➤ Risk weights for mortgage loans dropped from 50% to 35% under Basel II since 2008 ➤ However, the BOT announced revised criteria in 2009-2010 on mortgage loan risk weights with a different effective date Price Condominium House Loan to Value (LTV) Risk Weights Effective Date ≥ Bt10mn ✓ ✓ > 80% < Bt10mn ✓ > 90% 75% March 2009 January 2011 < Bt10mn ✓ > 95% January 2013* > Bt10mn ✓ ✓ ≤ 80% March 2009 < Bt10mn ✓ ≤ 90% 35% January 2011 < Bt10mn ✓ ≤95% January 2013* Note: * The effective date is postpone from January 2012, due to the severe floods in 2011 Source: The Bank of Thailand K EXCELLENCE Other Figures Housing Loans/GDP บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Credit Card Loans/GDP Million Baht 2,500,000 2,000,000 1,500,000 1,000,000 500,000 16.9% 2007 1,438,039 17.2% 21% 19.9% 20% 19.3% 19.3% 18.9% 20% 18.7% 19% 19% 18% 18% 17% 2008 1,560,724 1,709,897 2010 1,885,139 2011 2,034,137 2012 2,263,552 1Q2013 2,309,998 17% 16% 16% 15% Housing Loans for Personal Consumption (LHS) Housing Loans to GDP (RHS) Percent to GDP Note: Housing loans represent outstanding housing loans for personal consumption that financial institutions (including Commercial banks, Finance companies, Credit financiers, SFIs, and Insurance companies but excluding Saving Cooperatives and others financial Institution) grant to individuals or householders Source: BOT, NESDB Note: 2013 GDP is based on 1Q2013 GDP annualized Million Baht 300,000 250,000 200,000 2.1% 2.1% 2.2% 2.1% 2.2% 2,3% 150,000 100,000 50,000 0 2007 179,276 2008 189,227 2009 196,599 2010 216,427 2011 228,903 2012 261,553 2.5% 2.0% 2.0% 1.5% Mar-13 240,728 1.0% 0.5% 0.0% Percent to GDP Credit Card Loans Outstanding (LHS) Credit Card Loans to GDP (RHS) Note: Credit card loans represent outstanding credit card loans in Commercial banks and non-banks but excluding SFIs, Saving Cooperatives and others financial Institution Personal Loans/GDP Million Baht 300,000 2.5% 2.5% 2.4% 250,000 200,000 150,000 100,000 50,000 0 2007 211,809 2008 229,137 1.9% 3.0% 2.0% 2.2% 2.3% 2.5% 2.0% 1.5% 2012 251,549 Mar-13 270,712 1.0% 0.5% 2009 213,745 2010 187,491 2011 213,236 Total Personal Loans Outstanding (LHS) 0.0% Percent to GDP Personal Loansto GDP (RHS) Note: Personal Loans represent outstanding personal loans under supervision (including Commercial banks and non-banks but excluding SFIs, Saving Cooperatives and others financial Institution) บริการทุกระดับประทับใจ 111 112#57% of Unemployment K EXCELLENCE Other Figures GDP Per Capita (Baht) 200,000 9.8% 8.3% 7.9% 150,000 5.8% 100,000 -1.1% 50,000 11.1% 2005 2006 2007 2008 2009 2010 2011 2012 Unemployment Rate 2.0 1.8 1.5 1.5 1.4 1.4 1.5 1.0 1.0 0.6 0.6 0.5 0.5 0.0 ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Bond Yields 5.00 % 12.0% 4.00 10.0% 7.3% 3.9% 8.0% 3.00 6.0% 2.00 2.60 2.61 2.71 2.75 2.82 2.97 3.04 3.15 3.24 3.28 3.35 3.67 4.0% 2.0% 1.00 0.0% 0.00 -2.0% 6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 12/2011 12/2012 5/2013 Foreign Direct Investment 350,000 100.0% 300,000 80.0% THB Million 250,000 60.0% 40.0% 200,000 20.0% 150,000 -28.2% 0.0% 100,000 -20.0% 50,000 -40.0% 0 -60.0% Feb-13 2008 2009 2010 2011 FDI % YoY 2012 2M2013 Source: NESDB, National Statistical Office (NSO), and KResearch K EXCELLENCE Other Figures USA China Singapore Loans to GDP as of 2011 62.8% Korea Japan Malaysia Thailand 116.2% 115.0% 104.0% 95.5% 116.7% 91.4% Note: FDI refers to equity investment, lending to affiliates, and reinvested earnings. Investment in equity is treated as a direct investment when the direct investors own 10% or more of ordinary shares บริการทุกระดับประทับใจ % YoY ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Thai Banks' Net Loans and NPLs 16.00% 14.00% 12.00% 12.87 15.08% 14.04% 6.0% 13.02% 5.3% 12.54% 10.00% 4.0% 8.00% 4.1% 6.00% 4.00% 3.0% 2.0% 2.5% 2.4% 2.00% -0.51% 0.00% -2.00% Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Mar-13 0.0% % Gross NPLs to Total 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% Percentage to GDP Note: Data on China, Korea and Japan include loans from commercial banks as well as financial institutions, the rest include loans from only commercial banks Credit Card Statistics % YoY Net Loan --% Gross NPLs Note: % YoY Net loans represent growth of net loans in Commercial banks (include LHBANK) Thai Banks' Liquidity 25.0% 20.0% 14.0% 13.5% 15.0% * 10.0% 6.3% 5.0% 0.0% T 19.6% 15.7% 13.1% 14.2% 4.8% 5.6% 3.9% 10.1% 5.8% 14.3% 11.6% T 2007 2008 2009 2010 2011 Credit Card Loan Growth T 2012 Mar-13 Spending Growth Note: The credit card statistics number include Foreign Banks' Credit Card Source: BOT, NSO, CEIC, and KResearch Millon Baht 2.800.000 2.700.000 2,600,000 2,500,000 2,400,000 2,300,000 2,200,000 2,100,000 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Percentage 90.00 88.69 89.00 88.00 Feb-13 Mar-13 2689 114 87.00 86.00 85.00 Liquidity Assets (In Broader Definition) Gross Loans to Deposits and Borrowings (RHS) Note: The liquidity includes cash, as well as net positions in the short-term money market and net investments บริการทุกระดับประทับใจ 114 loans 113#58K EXCELLENCE The ASEAN Economic Community (AEC) ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK By 2015, ASEAN will be transformed into the "ASEAN Economic Community," with free movement of goods, services, investment, and skilled labour, and a freer flow of capital THAILAND SINGAPORE VIETNAM PHILIPPINES BRUNEI MALAYSIA MYANMAR LAOS CAMBODIA INDONESIA AEC by 2015 Single Market and Integration Competitive Economic Production Base Region Equitable Economic Development With the Global Economy Size of ASEAN Economy (USD Trillion) 2.58 2.41 2.25 2.09 2.14 1.90 Average Projected GDP Growth 5-6% 2010 2011 2012F 2013F 2014F 2015F ■ Thailand-ASEAN Trade: around 19% average growth expected during 2012-2015 Source IMF (October 2012), KResearch Source: The Association of Southeast Asian Nations, KResearch บริการทุกระดับประทับใจ K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK For Further Enquiries, Contact KASIKORNBANK Investor Relations: Chief Investor Relations Officer Tel (66) 2470 2673-4 Fax (66) 2470 2680 Investor Relations Team Tel (66) 2470 6900-1 Tel (66) 2470 2659-62 IR Website Fax (66) 2470 2690 Email: [email protected] www.kasikornbank.com → Investor Relations Disclosure Practice: ■Unreviewed/unaudited quarterly financial reports are released within 21 days from the end of each period ■Reviewed financial reports are released within 45 days from the end of the period for 1Q and 3Q; Audited financial reports are released within 60 days from the end of the period for 2Q and 4Q ■Following good governance practice, KASIKORNBANK maintains a "silent period" for approximately 7 days prior to the unreviewed/unaudited earnings announcement. During this period, the Bank refrains from replying to questions or commenting on the earnings announcement บริการทุกระดับประทับใจ 115 116#59K EXCELLENCE ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK DISCLAIMER: This document is intended to provide material information relating to investment or product in discussion and for reference during discussion, presentation or seminar only. It does not represent or constitute an advice, offer, contract, recommendation or solicitation and should not be relied on as such. In preparation of this document, KASIKORNBANK PUBLIC COMPANY LIMITED ("KBank") has made several crucial assumptions and relied on the financial and other information made available from public sources, and thus KBank assumes no responsibility and makes no representations with respect to accuracy and/or completeness of the information described herein. Before making your own independent decision to invest or enter into transaction, the recipient of the information ("Recipient") shall review information relating to service or products of KBank including economic and market situation and other factors pertaining to the transaction as posted in KBank's website at URL www.kasikornbank.com and in other websites including to review all other information, documents prepared by other institutions and consult financial, legal or tax advisors each time. The Recipient understands and acknowledges that the investment or execution of the transaction may be the transaction with low liquidity and that KBank shall assume no liability for any loss or damage incurred by the Recipient arising out of such investment or execution of the transaction. The Recipient also acknowledges and understands that the information so provided by KBank does not represent the expected yield or consideration to be received by the Recipient arising out of the execution of the transaction. Further the Recipient should be aware that the transaction can be highly risky as the markets are unpredictable and there may be inadequate regulations and safeguards available to the Recipient. KBank reserves the rights to amend either in whole or in part of information so provided herein at any time as it deems fit and the Recipient acknowledges and agrees with such amendment. Where there is any inquiry, the Recipient may seek further information from KBank or in case of making complaint, the Recipient can contact KBank at [email protected] or +(662) 470 6900 to 01, +(662) 470 2673 to 74. * The information herewith represents data in the Bank's consolidated financial statements, some of the numbers and ratios are calculated before netting with KBank's non-controlling interest. บริการทุกระดับประทับใจ ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK 117