2Q17 & 1H17 Performance and Strategic Direction Investor - - PowerPoint PPT Presentation

TMB Bank Plc.

2Q17 & 1H17 Performance and Strategic Direction

Investor Presentation Opportunity Day Aug 2017

AGENDA

2

2Q17 and 1H17 Performance

Asset Quality Enhance Customer Experience 2017 Target

• 50

100 150 200 250

Mar-15 Dec-15 Sep-16 Jun-17

All Free No-Fixed ME Bank-wide TD

3

Deposit picked up QoQ, driven by retail deposit base

• Deposit volume picked up in 2Q17, with positive growth of

2.4% QoQ, and 0.4% YTD

• Key growth driver was retail deposit, +3.6% YTD

Deposit Volume and Mix

20% 41% 31% 8% 17% 44% 32% 7% 19% 43% 32% 7%

599 bn 588 bn 602 bn +0.4% YTD

Key Deposit Products

183

150

THB bn 32 5 181 44 45 222

*Mutual fund conversion TD No Fixed & ME Transactional (Saving) Current

% Txn deposit

40% 68% 39% 70% 39% 70%

% Retail deposit

• The expansion was in line with the strategies to;
• Replace TD by offering customers superior products,

No Fixed balance +7.5% QoQ, +10.1% YTD ME balance +1.9% QoQ, +8.3% YTD

• Grow transactional deposit for better customer

understanding, All Free +11.2% QoQ, +25.9% YTD

• 200

400 60 800 1,000 1, 1, 000 000 000 5,000 0,000 000 000 000 000 000 000 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17

Promote transactional deposit as well as primary banking benefit

4

190 232 454 485 271 256

FY2013 FY2014 FY2015 FY2016 1H17

16 19 38 40 45

+7% +11%

Unit: ‘000 accounts

Increasing New Accounts and no. of Transactions

+5%

• No. of new retail trxn account

– monthly average Avg no. of transaction/account 1.2 1.6 2.2

• To grow retail transactional deposit, TMB offered new benefit,

free ORFT, for All Free customers

• No. of new account opening of retail transactional account has

been on an improving trend

• No. of transactions has shown the same positive trend
• To better understanding customers, we boosted transactional

usage behavior by

• Offering primary banking benefit with higher bonus rate

(+30 bps) for No-Fixed customers who transact via All Free account 5 times/month

1.24% 1.24% 1.31% 1.58% 1.27%

.40% .60% .80% .00% .20% .40% .60% .80%

4Q16 1Q17 2Q17 1H16 1H17

Cost of Deposit

+7 bps

• 31 bps
• Cost of deposit, therefore, slightly rose to 1.31% or +7 bps QoQ
• 1H17 cost of deposit dropped 31 bps from 1H16 to 1.27%
• Improving transactional usage has reflected in improving cross

selling and fee income Improving no. of mutual fund customers and MF fees

THB mn 768 378

• No. of MF

customers

5.36% 5.30% 5.20% 5.49% 5.20%

3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00%

4Q16 1Q17 2Q17 1H16 1H17 Dec-16 Mar-17 Jun-17

• 100

• 50

Mar-15 Dec-15 Sep-16 Jun-17 Corporate Medium SME Small SME Mortgage Performing loan

5

Loan grew +3% QoQ with mortgage as a key driver

• Performing loan also picked up +3.0% QoQ and +3.9% YTD,

led by retail and corporate lending

• Retail loan +6.3% QoQ and 10.7% YTD with Mortgage

as a key driver (+8.1% QoQ, 15.7% YTD)

• Corporate loan +5.6% QoQ, 6.0% YTD
• Loan yield declined due mainly to;
• Shift in loan portfolio toward mortgage
• MRR rate cut (-50 bps, effective May 22)

Performing Loan Volume and Mix

Retail Small SME Medium SME Corporate

26% 16% 19% 39%

576 bn 581 bn 599 bn

27% 15% 18% 40% 26% 16% 19% 39%

+3.9% YTD

Loan Portfolio

Performing loan: yield 5.2% Corporate yield 3.2% Mortgage yield 4.6% Medium SME 5.7% Small SME 8.2%

Loan Yield

• 10 bps
• 29 bps

599 239 THB bn 520 231 122 56 105 105 89 90

6,391 6,160 6,198 12,102 12,357

2,000 4,000 6,000 8,000 10,000 12,000 14,000

4Q16 1Q17 2Q17 1H16 1H17

THB million 3.33% 3.21% 3.20% 3.06% 3.19%

0.0% 1.0% 2.0% 3.0% 4.0%

4Q16 1Q17 2Q17 1H16 1H17

6

NIM hold up at 3.2% in 2Q17

• NIM was maintained at 3.20% in 2Q17, (flat QoQ)
• For 1H17, NIM was 3.19% (+13 bps YoY), reflected

well managed funding cost

• Net interest income (NII) therefore, rose to THB6,198 mn

in 2Q17, +0.6% QoQ

• For 1H17, NII improved to THB12,357 mn, +2.1% YoY

+1% QoQ +2% YoY

Net Interest Margin (NIM) Net Interest Income (NII)

+13 bps YoY

• 1 bps

QoQ

1,915 2,034 2,205 2,034 2,827 3,758 4,861

427 662 739 705 482 1,064 1,187

1,000 2,000 3,000 4,000 5,000 6,000

2Q16 3Q16 4Q16 1Q17 2Q17 1H16 1H17

Net fees & service income Other Non-NII

THB million

Non-NII improved, driven by fee income growth

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• Non-NII improved both QoQ and YoY, boosted by fee income
• 2Q17 Non-NII +21% QoQ
• 1H17 Non-NII +25% YoY
• Positive momentum in fee income was driven mainly by retail fees despite a 49% decline in loan-

related fee

• 2Q17 Net fee income +39% QoQ
• 1H17 Net fee income +30% YoY

Non-Interest Income (Non-NII)

+21%

QoQ

+25%

YoY

+39% QoQ +30% QoQ

75 77 182 152 113 119 236 232 135 144 548 279 1,915 2,034 2,205 2,034 2,827 3,758 4,861

2Q16 3Q16 4Q16 1Q17 2Q17 1H16 1H17

Other Trade finance LG Fee Loan related fee Mutual fund Bancassurance

Fee income has shown good momentum, driven by retail fee

8 Bancassurance Mutual fund Loan-related LG Trade finance

Fee Income from Key Products (THB mn) Net Fee and Service Income (THB mn)

Fee income growth was driven by retail fees, especially from strategic products: BA and MF Commercial banking fees in 2Q17 dropped 19% QoQ and 1H17 fell 19% YoY

• Key reason was a slowdown in loan-related fee, -49% from 1H16
• However, seeing QoQ improvement in loan-related, TF and LG fees

Retail fees grew 55% QoQ in 2Q17 and 50% YoY in 1H17

• Mutual fund continued to grow, mainly from Global Income Fund
• Growth in Bancassurance was from (1) bancassurance sale and (2) access fee

from the renewal of life bancassurance collaboration of TMB and FWD

Note: Consolidated +124% QoQ +55% YoY +27% QoQ +98% YoY +6% QoQ

• 49%

YoY +5% QoQ

• 2%

YoY +3% QoQ

• 17%

YoY

Net fee +39% QoQ Net fee +30% YoY

BA MF Loan related

LG TF

2Q16 3Q16 4Q16 1Q17 2Q17 1H16 1H17 2Q16 3Q16 4Q16 1Q17 2Q17 1H16 1H17 Note: Bank-only

556 1,241 1,069 1,797

605 768 694 1,373

9,315 8,830 9,409 16,865 18,239 4,460 4,134 4,366 7,872 8,501

6,000 12,000 18,000

4Q16 1Q17 2Q17 1H16 1H17

Operating income Operating expenses THB million

Operating expenses increased from business vol. & investment

9

• Operating income was THB9,409 mn (+6.6% QoQ) while expenses was THB4,366 mn (+5.6% QoQ)
• For 1H17, operating income was THB18,239 mn (+8.1% YoY) with expenses of THB8,501 mn (+8.0% YoY)
• The increase in operating expenses due to expense related business volume and investments
• HR cost, revenue sharing from growing business vol.
• Marketing expenses increased both in retail and commercial banks
• Depreciation of investment projects kicked in and software rental expenses increased

+6.6% QoQ +8.1 %YoY +8.0% YoY +5.6% QoQ

Operating Income and Expenses

4,834 4,764 5,135 9,022 9,899

2,000 4,000 6,000 8,000 10,000

4Q16 1Q17 2Q17 1H16 1H17

THB million

PPOP improved YoY, reflected earnings capability

10

• Positive momentum in PPOP reflected the Bank’s earnings capability
• PPOP was THB5,135 mn in 2Q17, +7.8% QoQ
• For 1H17, PPOP was THB9,899 mn, +9.7% YoY

Pre-Provision Operating Profit (PPOP)

+8% QoQ +10% YoY

48% 47% 46% 47% 46%

0% 10% 20% 30% 40% 50% 60% 4Q16 1Q17 2Q17 1H16 1H17

Cost to income ratio remained in target

11

• Cost to income ratio dropped slightly to 46% in 2Q17 and 1H17, in line with target

Cost to income ratio

AGENDA

12

2Q17 and 1H17 Performance Enhance Customer Experience

Asset Quality

2017 Target

17,605 17,588 18,208 2.53% 2.53% 2.56%

2% 3% 4%

10,000 20,000

Dec-16 Mar-17 Jun-17

NPLs & NPL ratio

NPLs NPL ratio THB million

NPL ratio stayed relatively stable at 2.56%

13

• NPLs stayed relatively stable in 2Q17 with NPL ratio at 2.56% as of Jun-17
• TCG claimable was 20% of total NPLs

3.8 bn 3.9 bn TCG claimable 3.6 bn

14

Maintained Prudent Provision and Coverage ratio

• Provision and credit cost stayed relatively stable
• To accommodate write-offs together with slow

economic recovery, TMB set aside THB2,282 million of provision or credit cost of 148 bps in 2Q17

• For 1H17, provision was THB4,523 mn or credit

cost of 147 bps which remained in the Bank’s target

(Note: written-off loan was required to set up 100% provision, disregarded of collateral value)

• Coverage ratio stayed at 140% as of Jun-17,

remained in target range and above industry average

2,234 2,241 2,282 3,875 4,523 151 150 148 131 147

30 60 90 120 150 1,000 2,000 3,000 4,000 5,000 6,000

4Q16 1Q17 2Q17 1H16 1H17

Provision & Credit cost

Provision expenses Annualized credit cost THB million bps 143% 144% 140% 143% 140%

0% 40% 80% 120% 160%

Dec-16 Mar-17 Jun-17 Jun-16 Jun-17

Coverage ratio

2,138 2,096 2,330 4,243 4,426

1,500 3,000 4,500

4Q16 1Q17 2Q17 1H16 1H17

THB million

Net profit continued on positive trend

15

• Net profit was THB2,330 mn in 2Q17, +11.1% QoQ
• For 1H17, net profit was THB4,426 mn (+4.3% YoY), represented an ROE of 10.4%

Net Profit (to equity holder of the Bank)

+11% QoQ +4% YoY

16

• Capital ratios are well above BoT’s requirements
• As of Jun-17, CAR was at 16.5%
• Tier I and Core Tier I were at 12.3%

CAR and Tier I remained at strong levels

12.8% 12.8% 12.3% 6.625% 7.25% 7.25%

0% 5% 10% 15%

Dec-16 Mar-17 Jun-17

Tier I ratio

Tier I BoT's min. requirement

AGENDA

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Asset Quality 2Q17 and 1H17 Performance

Enhance Customer Experience

2017 Target

424 K 1 Mn

3 Mn

10 Mn

• 5,000,000
• 3,000,000
• 1,000,000

1,000,000 3,000,000 5,000,000 7,000,000 9,000,000 11,000,000

80,000 280,000 480,000 680,000 880,000 1,080,000 280,000 480,000 Jan-16 Jul-17

Digital Customer #of Login Customer per month

Dec-16 Apr-17 Jun-17 ORFT TMB Transfer Top-up 1-Day Transfer Bill Payment Promptpay

Right Digital Experience Results in Higher Adoption and Usage

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• TMB reaches 1 million digital registered users in June 2017 with 10 mn login user a month.
• 650,000+ active digital customers or to 28% (Jun-17) of total of 2.3 mn active retail customers, increased from 20% in Dec-16.
• Waived ORFT fee further fuels the growth of digital transactions and became the leading transaction with +221% YTD growth

Dec-16

TMB reached 1 Million Digital Customers Active Digital Customers increased to 28%

• f 2.3 mn Active Retail Customers

Digital Transactions Growth backed by ORFT

Digital VS Physical

85%

YTD

14%

YTD

15%

YTD

28%

(650,000+)

20%

Jun-17

As of May-17

*Free ORFT launched in April 17

92%

# of transaction (‘000)

12%

Jan-16

More Transactions per month done through Digital Channel

AGENDA

19

Asset Quality 2Q17 Performance

2017 Target

Enhance Customer Experience

2017 Target

20

Key ratios 1H17 Actual 2017 Target Performing loan growth 4% YTD 8-10% Deposit growth 0.4% YTD 5-7%

(Previous target: 8-10%)

Net interest margin (NIM) 3.19% 3.1%-3.2%

(Previous target: 3.2%-3.3%)

Net fee income growth 29% YoY 20-30%

(Previous target: 10-20%)

Cost to income ratio 46.2% 45-47% ROE 10.4% 10%-12% NPL ratio 2.56% 2.3-2.5% Coverage ratio 140% 140-150% Credit cost (annualized) 149 bps 140-150 bps

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TMB Bank Public Company Limited 3000 Phahonyothin Road Chatuchak, Bangkok 10900 TMB Website : www.tmbbank.com IR Webpage : www.tmbbank.com/ir Important Disclaimer

This presentation contains some information from other sources, that TMB Bank Public Company Limited does not make any representations regarding the use, validity, accuracy, or reliability of, or the results of the use of information, data but not limited to, all text, and images (“the Content”) on this presentation. Some content may contain forward looking statements, that based on management’s view upon the information currently available to us. These statement are subject to certain risks and uncertainties that could cause the actual results materially differed from what had been previously stated. The materials in this presentation shall not, and are not intended to, constitute or contain an offer to sell or the solicitation of an offer to buy, any securities of TMB Bank Public Company Limited.