Investor Presentation As of 2Q20

KASIKORNBANK Investor Presentation as of 2Q20

August 2020

For further information, please contact the Investor Relations Unit or visit our website at www.kasikornbank.com

KASIKORNBANK at a Glance  Established on June 8, 1945 with registered capital of Bt5mn (USD0.15mn)  Listed on the Stock Exchange of Thailand (SET) since 1976 Consolidated (as of June 2020) Assets Bt3,586bn (USD116.1bn) Ranked #4 with 15.5% market share** Loans* Bt2,127bn (USD64.8bn) Ranked #3 with 15.7% market share** Deposits Bt2,308bn (USD74.7bn) Ranked #3 with 16.3% market share** CAR 18.09% *** ROE (1H20) 4.72% ROA (1H20) 0.56% Number of Branches 880 Number of E-Machine (ATM/RCM) 10,989 Number of K PLUS Users 13.4mn Number of Employees 20,162 Share Information SET Symbol KBANK, KBANK-F Share Capital: Authorized Bt30.5bn (USD1.0bn) Issued and Paid-up Bt23.9bn (USD0.8bn) Number of Shares 2.4bn shares Market Capitalization Bt221bn (USD7.2bn) Ranked #2 in Thai banking sector 2Q20 Avg. Share Price: KBANK Bt93.87 (USD3.04) KBANK-F Bt94.08 (USD3.05) EPS (1H20) Bt4.02 (USD0.13) BVPS Bt169.83 (USD5.50) Notes: * Loans = Loans to customers less deferred revenue ** Assets, loans and deposits market share is based on C.B.1.1 (Monthly statement of assets and liabilities) of 14 Thai commercial banks as of June 2020 *** 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 June 2020 (Mid Rate) was Bt30.89 per USD (Source: Bank of Thailand)

2 Table of Contents Topic Slide Page

 Operating Environment 5 - 6  2020 Financial Targets 7 - 9  The K-Strategy 10 - 12  Financial Performance 13 - 18  Capital and Dividend 19 - 20  Summary 21

 Appendix 22 - 182

Appendix Topic Slide Page  KBank  Strategy 23-41  Business Highlights 42-49  Risk and Credit Management 50-57  Financial Performance 58-84 • 1H20 Highlights 59-61 • Interest Income - net 62 • Non-interest Income 63 • Net Fee Income 64-65 • Net Premium Earned - net 66 • Other Operating Expenses 67 • Loan 68-70 • Asset Quality 71-80 • Investment in Securities and Funding Structure 81-84  The Wholly-owned Subsidiaries 85-92  Muang Thai Life Assurance (MTL) 93-101  Other Information 102-111  Banking System and Regulations Update 112-135  Government Policy 136-157  Thai Economic Figures 158-180  IR Contact Information and Disclaimer 181-182

4 Operating Environment: Economic Outlook for 2020 Key GDP Forecasts and Assumptions 6.0 4.1 2.4 Key Points: 3.0 0.0  Given escalating downside risk from global economy, -3.0 % YoY -6.0 KResearch revised down the GDP forecast for 2020 to -9.0 -10.0% from the previous forecast of -6.0%. -12.0 -10.0 2018 2019 2020F 2020F*  Government spending will be the only growth driver of % Yo Y 2020F* (Previous) the Thai economy 2018 2019 Base Case Base case  In emergency situations, fiscal and monetary space GDP 4.1 2.4 -6.0 -10.0 are available for further execution, but policy Private Consumption 4.6 4.5 -2.3 -3.3 effectiveness should be the focus Government Consumption 1.8 1.4 2.0 2.3 Total Investment 3.8 2.2 -4.5 -7.9 - Private investment 3.9 2.8 -6.6 -12.1 Risk Factors: - Public investment 3.3 0.2 3.1 6.0  COVID-19 outbreak resurgence and uncertainty in Gov't Budget Deficit (% of GDP) -3.0 -2.9 -4.1 -5.2 vaccine development Exports (Customs Basis) 6.9 -2.7 -6.1 -12.0 Imports (Customs Basis) 12.1 -4.7 -10.9 -16.8  Thai Baht appreciation Current Account (USD bn) 28.5 37.3 24.8 15.5 Headline Inflation 1.1 0.7 -0.5 -1.2  Trade tensions and geopolitical risks Policy Interest Rate** 1.75 1.25 0.50 0.50  Household and business balance sheet deterioration

Notes: MPC’s policy rate is at 0.50% (as of August 5, 2020) if the outbreak lasts longer than expected represents a higher base case assumption, comparing with the previous forecast, represents a lower base case assumption, comparing with the previous forecast Source: * KResearch (as of August 28, 2020 vs forecast on June 2, 2020) ** KBank Capital Markets Research (as of August 10, 2020)

Operating Environment: Economic Outlook for 2020 Outlook Possible Impacts to Thai Economy

 Global Economy  Global economy: The global economy is projected to contract sharply in 2020 and  Even though the outbreak situation in Thailand has slowly recover in 2021, given escalating downside risks significantly improved, the Thai economy is still highly  US: The US economy will enter a recession in 2020. Facing a raging second wave vulnerable to global economic malaises and outbreak, the US economy will continue to be under great pressure in the second half of weakened purchasing power at home this year; a full economic recovery remains distant  The global recession, combined with appreciation of  Eurozone: The Eurozone may enter a deep recession in 2020. Even though economic the Thai Baht, will continue to pressure Thai export confidence is slowly picking up, full recovery is still a long way off and tourism sectors, further impacting the Thai labor  China: With the COVID-19 hitting global demand and continued outbreaks of the virus market not ruled out, the economic rebound may prove hard to sustain. China’s GDP growth in  Consumption and investment in Thailand could 2020 could possibly sink to a historic low deteriorate drastically  ASEAN economies: Risks to the ASEAN economies are increasingly tilted to the  Thai economy may contract 10% this year, given downside, given the global economic slowdown and rising trade tensions escalating downside risks

 Government Stimulus Plan  Government may roll out additional short-term stimulus packages at a large scale to  Supportive fiscal measures may help sustain domestic (App. pages 136-157) offset economic pressure caused by the outbreak activities to some extent  Government investment projects may be delayed due to potential shortage of capital goods amid disrupted global supply chain

 Inflation  Inflation is expected to fall to -1.2%, given a slump in domestic and external demand as  Monetary policy is expected to remain accommodative (App. pages 160 and 162) well as a slide in oil prices to economic growth throughout 2020

 Exports and Tourism  Thai exports could contract deeply amid likely global recession and disrupted supply  Thai government may need to implement targeted (App. pages 160, 163-166) chains measures to alleviate the loss in tourism and export  Tourist arrivals in 2020 could drop by 82.4% to 7.0mn, from 39.8mn in 2019, leading to sectors tourism revenue loss of around Bt1.6trn this year

 Fed Policy Normalization  A second wave of COVID-19 in the US will mean a longer recovery for the US economy  BOT may maintain its interest rate at a record low of (App. pages 172)  The COVID-19 outbreak, existing US-China tensions, and US election uncertainty are 0.50% in 2020, from 1.25% in 2019, after 3 rate cuts expected to impact US economic growth and pressure the Fed to keep its ultra in 1H20. Thai economy in 2020 has been hit by the monetary easing rate of 0.00-0.25% and its quantitative easing throughout the year COVID-19 outbreak, while government spending remains soft

 Baht (App. pages 159)  COVID-19 border restrictions impact inbound tourist revenue, but the Thai current  In 2H20, the Baht should strengthen due to the account in 2020 will remain in surplus, due to a trade surplus weakening US dollar, expected stability in the BOT  As a deflationary pressure, higher Thai real interest rate will encourage capital inflows to rate, and strong Thai economic fundamentals, such as Thai bonds, after more monetary easing by major central banks high current account surplus, low inflation, and high global liquidity Source: KResearch and KBank Capital Markets Research (as of August 28, 2020) 6 1H20 Financial Performance 1H20 Actual Consolidated 2019 Actual Notes (TFRS9 Compliance)

1H20 NIM slightly increased mainly due to yield on loans from EIR (TFRS9), NIM 3.31% 3.34% lower FIDF cost and saving rate cut despite negative impact from lower yield on loans due to interest rate cut and asset quality

6.23% YTD 1H20 YTD loans grew mainly from COVID-19 relief measures (mainly from Loan Growth 4.59% YTD 10.01% YoY SME) and corporate business

Net Fee Income Growth** -3.61% YoY -5.48% YoY 1H20 decreased YoY mainly from loan related fee and card business

1H20 improved from both higher revenue growth and lower operating Cost to Income Ratio*** 45.32% 42.00% expenses; focus on cost management and productivity improvement 1H20 credit cost increased due to set aside expected credit loss for prudent Credit Cost per year (bps) 174 bps 311 bps of economic recession from COVID19; NPLs ratio increased. Focus more on restructured asset quality management. COVID-19 significantly impacts asset quality. Relief measures help reduce short-term impact to asset quality. NPL will stay at a moderate level for now. Asset quality is closely monitored NPL Ratio (Gross)**** 3.65% 3.92% and constantly reviewed during the payment holiday.

ROE 9.90% 4.72%

ROA 1.20% 0.56%

Note: *The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). ** Net Fee Income = Fees and Service Income – Fees and Service Expense; KBank has a 38.25% economic interest in MTL; on the consolidated basis, Bancassurance fees are not included in net fee income, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation); Non-Interest Income = Total Operating Income – net less Interest Income – net *** Cost to Income Ratio = Total Other Operating Expenses to Total Operating Income – net (Total Operating income less Underwriting Expenses) **** NPL Ratio (Gross) = NPL (gross) to total loans; NPL (gross) used in the calculation are loans to general customers and loans to financial institutions that are non-performing loans; total loans used in the calculation are loans to general customers and loans to financial institutions

Y2020 Financial Targets Original Y2020 Targets Current Assumptions and 1H20 Actual (TFRS9 Compliant) Consolidated 2019 Actual Announced on Corresponding Trends (TFRS9 Compliant) 24 October 2019 (TFRS9 compliant) (No longer Announced on 20 July 2020 applicable)

. GDP expected to shrink by -6% to -10% due mainly to COVID-19 impact and global economic uncertainties; it may take at least three years for the economy 1Q20 = -1.8% GDP 2.4% 2.7% to near its pre-COVID-19 level . Difficult to predict Y2020 financial impact and targets amid uncertainties

NIM pressured from lower interest rates and COVID-19 relief measures, amid NIM 3.31% 3.34% 3.1-3.3%* positive impact from lower FIDF cost of deposits. NIM still holding above 3% 6.23% YTD Loan growth may be significantly higher than former target (4-6%) due to loan relief Loan Growth 4.59% YTD 4-6% measures (mainly from SME). Normal growth from corporate segment and secured 10.01% YoY retail lending due to data analytics capability

Non-Interest Income 1.51% YoY -7.00% YoY Net Fee Income and Non-Interest Income growth will contract sharply due to Growth** -5% to -17%* COVID-19 and other uncertainties; high volatility from gains (losses) on financial (Net Fee Income Growth) (-3.61% YoY) (-5.48% YoY) instruments measured at fair value through profit or loss (FVTPL) under TFRS9

COVID-19 impacting revenue; focus on cost management and productivity Cost to Income Ratio*** 45.32% 42.00% Mid-40s improvement, with some new investments for future growth. Cost to Income may be higher than former target (mid-40s) Credit Cost per year Credit Cost: Higher Expected Credit Loss (ECL), based on conservative assumptions 174 bps 311 bps Up to 150 bps (bps) related to COVID-19 plus prudent financial policy, pushing Credit Cost higher in 2020. Credit Cost may reach or exceed peak Y2017 level (239bps). Credit Cost may remain high for at least three years to be prudent amid high uncertainties NPL: COVID-19 significantly impacting asset quality. Relief measures help reduce NPL Ratio (Gross)**** 3.65% 3.92% 3.6-4.0% short-term impact to asset quality. NPL will stay at a moderate level for now. Asset quality is closely monitored and constantly reviewed during the payment holiday

ROE / ROA 9.90% / 1.20% 4.72% / 0.56% N/A

Capital / Dividend Capital remains sufficient amid COVID-19 impact; Dividends will follow BOT guidance; Board of Directors will consider current and future situations.

Note: Refer to the same note on slide number 7 8 Relief Measures to Lessen COVID-19 Impact: Loans by Customers, not Comparable to Loans by Business on Page 13  Relief measures (from government, BOT, and KBank) have been offered to help customers through the COVID-19 pandemic  Higher Expected Credit Loss (ECL), based on conservative assumptions related to COVID-19 plus prudent financial policy, pushing Credit Cost higher in 2020. Credit Cost may reach or exceed peak Y2017 level (239bps)  Credit Cost may remain high for at least three years to be prudent amid high uncertainties Loan Composition (data as of June 2020) Key Takeaways Loans not in Relief  Customers in relief programs Outlook for Ability to Pay Programs (Bt746bn) have avg. LTV of 81% will impact ECL, Credit Cost Bt1.2trn *Average LTV = 81%; Deposit Growth = 13%YTD and Level of NPL  Higher ECL, based on conservative assumptions related to COVID-19 Bt828bn plus prudent financial policy, pushing Credit Cost higher in 2020 Retail Bt82bn Bt746bn* Degree of Vulnerability  Relief measures help limit short-term Total impact on asset quality Loans . Continue to pay despite Bt2.1trn 70% of Bt746bn Payment Holiday (known  Asset quality closely monitored and Or Bt522bn locally as Debt Holiday) constantly reviewed during the Loans in (60% of . Likely to pay after relief payment holiday Relief customers) measures end  Potentially Vulnerable Group – will Programs Bt224bn Bt828bn Business lead to additional and higher ECL Bt746bn (net of collateral) but may not all Approx. . Likely to pay after relief measures end due to high become NPLs 30% of Bt746bn Bt146bn cash flow to debt ratio  As it may take at least three years Or Bt224bn for the economy to near its pre- (40% of . Closely monitor COVID-19 potential, Credit Cost customers) Approx. Bt78bn . Likely to require further may remain high for at least three debt restructuring years to be prudent amid high . Potentially Vulnerable Group uncertainties

KASIKORNBANK Vision and Foundation

Vision “KASIKORNBANK aims to be the most innovative, proactive, and customer centric financial institution, delivering world class financial services and sustainable value for all stakeholders by harmoniously combining technology and talent”

Guiding Foundation . Remain a top tier size with strong brand, distribution, and capital base . Acquire enduring customers and ensure excellent customer experience across all segments . Be a digital-oriented AEC+3 Bank . Be a data-driven bank and ensure data confidentiality . Be a cost competitive operator . Be a Bank of Sustainability

10 The K-Strategy  Customer Centricity remains our core philosophy with the aim to “Empower Every Customer’s Life and Business”

Purpose To Empower Every Customer’s Life and Business

Customer Total Solution Attentive & Inclusive Any Time & Any Where Trustworthy Promise A PIONEER FOR THE BETTER, A STEP AHEAD FOREVER K-Culture Customer at Heart | Agility | Collaboration | Innovativeness

Strategic Imperatives

Lend successfully Embed in select Ensure cyber using data analytics financially relevant security and data ecosystems confidentiality

New Capabilities 8 TRANSFORMATION JOURNEYS

New Capabilities to Enable K-Strategy  8 Transformation Journeys are new capabilities to help “Empower Every Customer’s Life and Business” To Empower Every Customer’s Life and Business

1 Ecosystem Orchestrator New Growth in 4 & Harmonized Channel Regional Market . Orchestrating ecosystems with partners . Exploring new growth by and providing an excellent experiences - Regional Payment for All throughout customer journeys - “Better Me” Finance

2 5 Intelligent Lending Purposeful Data Analytics . Leveraging customer data to . Expanding data analytics offer personalized lending & Practical capability to enhance business experience and achieve fair risk Leadership opportunity and operational adjusted return efficiency

3 Proactive Risk & Cyber Security & 6 Compliance Management IT Resilience . Proactively identifying potential risk and . Enhancing comprehensive establishing loss prevention and detection cyber security and IT capabilities

7 Performing Talent and Agile Organization 8 Modern World Class Technology Capability

12 Original Loan Growth Target (%) Composition of Growth: Loans by Business Announced on 24 October 2019  Moderate loan growth momentum in line with full-year target (No longer applicable) Loan Portfolio Structure Loan Portfolio Bt bn ConsolidatedAmount (Bt bn) 1H20 1H20 2020 2,400 1,803 1,914 2,002 2,127 1,698 Corporate Dec 19 Jun 20 Loan Grow th Yield Range Loan Growth Target (%) 2,000 (%YTD) (%) (No longer applicable) 36% 1,600 36% 34% SME 30% 35% Corporate Loans 691 777 12.4% 3-5% 2-4% 1,200 Retail SME Loans 672 721 7.3% 5-7% 1-3% 35% 34% 34% 800 39% 36% Retail Loans 556 570 2.6% 5-7% 9-11% Others 400 25% 24% 25% 28% 27% Other Loans 83 59 (29.4%) - 0 6% 5% 4% 4% 3% Total Loans 2,002 2,127 6.2% 4.9% 4-6% 2016 2017 2018 2019 1H20 Note: * From time to time, the Bank has adjusted loan definitions based on loan portfolio management; thus, the latest loan base is not comparable with previous reports. 1H20 2020 Outlook

Corporate . Support clients affected by economic slow down due to COVID-19 outbreak . Mainly from Commerce Consumer and Communication Industries Loans . Both long-term and short-term loans are still in demand from big corporates

. Global trade and the geopolitical situation remain uncertain; local government spending and public investment will be the major drivers. Lending should organically grow with prudent SME . Loan growth corresponded with slow pace of global and local consideration while still meeting customers’ funding needs and aligning with any further economies. The bank assisted and supported customers’ liquidity government measures Loans needs where appropriate, with a prudent approach . Support customers in need of financial services to cope with rapid economic change . Apply data analytics to enhance predictive model and credit process in order to lend intelligently with acceptable risk via traditional and digital channels . Organic growth target in-line with industry; lending thru data analytics and offers via assisted . Retail loans grew mainly from Home Loans and Personal Loans Retail and unassisted channels to support financial solutions for all life stages where most relevant . Credit Card fell due to seasonality amid loan repayments for tax- to customers’ lifestyles and needs; maintain lead market position in key products Loans saving funds purchased last year-end and low spending impact . Focus on new potential target customers with acceptable risk; predictive monitoring and from COVID-19 strict control of loan portfolio quality Loan Definition (more details on loans can be found in App. Page 68-70) 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 13

Composition of Growth: Net Fees and Non-interest Income June 2020 (Consolidated) Total Operating Income - net Non-interest Income Ratio and Net Fee Income Ratio

(Bt bn)  1H20 non-interest income 155.48 160.49 (%) 200 153.40 156.86 50 accounted for 30% of total net (+4%) (+2%) (-1%) (+3%) 42% 40% 150 79.23 40 37% 36% 37% 36% 30% operating income and net fee 42% 40% (+3% YOY) 30 25% 25% 25% 100 23% 21% income accounted for 21%; 30% 20 50 58% 60% 63% 64% non-interest income decreased 70% 10 0 0 7% YoY, mainly from net fee 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20* Net Interest Income Non-interest Income Non-interest Income Ratio Net Fee Income Ratio dropped, and a decrease in insurance business Non-interest Income Net Fee Income

(Bt bn)  Net fee income dropped 5.5% 70 63.73 62.70 Other Operating Income 65 (+2%) (-2%) 56.95 57.80 YoY, mainly due to loan-related 4% 2% (Bt bn) 60 (-9%) (+2%) 41.31 3% 3% Fee and Service Income - net 38.94 55 (+6%) 38.12 36.74 fee recognition according to 50 40 (+4%) (-8%) (-4%) 45 Net Premium Earned - net TFRS 9 and fee from card 40 66% 67% 35 61% 64% 30 24.06 Dividend Income business 30 16.90 (- 7%YoY) 25 3% 20 (- 5.48% YoY) 20 16% -0.3% Share of Profit from Investments on Equity Method 9% 5% 6% 0.1% 70% 15 3% 3% 0.3% 0.1% 4% 15% 10 0.2% 2% 6% 5% 0.7% 10 Gain on Investment 64% 6% 0.1% 5 14% 13% 16% 15% 18% 1% 0 0 -5 2016 2017 2018 2019 1H20* Gain on financial instrument measured at FVTPL (Gain on Trading and FX transactions-Old) 2016 2017 2018 2019 1H20* Note: - 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 * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). ** The Bank restated the 1Q20 financial statements from the reclassification of investment in fund/ REIT to investments in FVOCI to comply with the Federation of Accounting Professions’ announcement on 25 June 2020 and reclassification some items which did not impact to total assets, total liabilities and total equity.

14 Asset Quality and Expected credit loss (Provision) June 2020 (Consolidated)  Asset quality remains manageable Expected credit loss (Provision) Coverage Ratio  NPL ratio in 1H20 was at 3.92%, with During 1997 During 1997 Asian Crisis* (%) Asian Crisis* a coverage ratio of 155.68% (Bt bn) 160.6 155.7 148.5 148.6 54 50.6 150 141.4 48 44.1 127.1 131.8 134.5 41.8  1H20 credit cost was 311 bps 42 111.0 130.0 130.9 33.8 34.0 36 32.5 32.1 100 88.4 91.6 30 26.4  Adhere to a prudent financial policy; 24 16.8 48.8 18 14.2 economic downturn from COVID-19 11.7 50 34.7 34.2 9.4 25.4 30.0 12 7.8 6.7 7.3 8.4 6 2.3 0.7 outbreak 0 0 1996 1997 1998 1999 2000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20191H20** 1996 1997 1998 1999 2000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20191H20** Note: Provision referred to Impairment Loss on Loans and Debt Securities;  COVID-19 significantly impacts asset from January 1, 2020 onwards based on TFRS9, provision refers to Expected Credit Loss quality; however, relief measures help NPL Ratio and Credit Cost reduce short-term impact to asset During 1997 Asian Crisis* quality. NPL can stay at not too high (%) (bps) 45 42.0 888 900 level for now. The Bank has to 40 NPL ratio Credit Cost 723 35 31.7 700 prepare for the end of relief measures 30 23.5 500 25 NPL was peak at 20 287 42.3% in 1Q99 239 311 168 204 300 NPL Ratio by Business 2015 2016 2017 2018 2019 1H20 15 15.9 175 174 93 102 66 64 66 85 96 10 3.32 3.30 3.65 3.92 100 Corporate Business <2% <2% <2% <2% <2% <2% 44 3.09 3.76 2.91 2.45 2.16 2.11 2.24 2.70 3.34 5 5.1 14 SME Business ~3% ~5% ~5% ~5% ~6% <7% 0 -100 1996 1997 1998 1999 2000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20** Retail Business*** ~2% ~4% ~4% ~4% ~4% <5%

Notes: * Data in 1996-1997 is KBank only ** The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). *** NPL ratio in retail business, excluding 180 dpd (days past due) of credit card and consumer loans for peer comparison

ROA and ROE June 2020 (Consolidated)

ROA ROE

(%) (%) 24 2.5 20 2.0 1.49 16 13.23 1.5 1.20 1.27 1.20 12 10.24 10.61 9.9 1.0 8 0.56 4.72 0.5 4 0.0 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*

2016 2017 2018 2019 1H19 1H20 1Q20** 2Q20 ROA (%) 1.49 1.20 1.27 1.20 1.25 0.56 0.87 0.25

ROE (%) 13.23 10.24 10.61 9.90 10.35 4.72 7.26 2.15

16 Net Interest Margin June 2020 (Consolidated) NIM Yield on Earnings Assets and Cost of Fund

(%) 8.00

5 5.73 6.00 5.45 5.29 5.21 5.11 4 3.52 3.44 3.39 3.34 Yield on Loans 3.31 4.55 4.37 4.27 3 4.19 3.98 Yield on Earnings Assets 4.00 2 1 2.00 1.32 1.22 1.19 1.23 Cost of Fund 0 0.88 Cost of Deposits* 2016 2017 2018 2019 1H20** 1.18 1.11 1.11 1.14 0.00 0.80 2016 2017 2018 2019 1H20  NIM was 3.34% in 1H20, increased YoY mainly due to yield on loans from EIR (TFRS9) and lower FIDF cost of deposit despite negative impact from rate cut and asset quality trend  High portion of CASA (80%) helped support low cost of fund

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 NIM (%) 3.52 3.44 3.39 3.31 3.30 3.34 3.49 3.22 Yield on Earnings Assets (%) 4.55 4.37 4.27 4.19 4.18 3.98 4.20 3.80 Yield on Loans (%) 5.73 5.45 5.29 5.21 5.26 5.11 5.37 4.91 Cost of Fund (%) 1.32 1.22 1.19 1.23 1.21 0.88 0.98 0.79 Cost of Deposits (%), incl DPA 1.18 1.11 1.11 1.14 1.13 0.80 0.87 0.74

Note: Cost of deposits including contributions to the Financial Institutions Development Fund (FIDF) and Deposit Protection Agency (DPA). * The FIDF fee is temporarily reduce from 0.46% to 0.23% for 2 years, according to the BOT announcement in the Royal Gazette, during January 2020 to December 2021. ** The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

Cost to Income Ratio June 2020 (Consolidated)

Cost to Income Ratio Cost to Average Assets Ratio

(%) (%)

50 41.63 42.31 43.96 45.32 42.00 6 40 4 2.36 2.31 2.26 2.26 30 1.93 20 2 10 0 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*

 1H20 cost to income ratio was 42.00%; improved from both higher revenue growth and lower operating expenses; focus on cost management and productivity improvement

2016 2017 2018 2019 1H19 1H20 1Q20** 2Q20 Cost to Income Ratio (%) 41.63 42.31 43.96 45.32* 43.89* 42.00 45.94* 38.36 Cost to Average Assets Ratio (%) 2.36 2.31 2.26 2.26 2.11 1.93 2.06 1.79

18 Capital (Reported Number: Excluding Net Profit of Each Period) June 2020 (Consolidated) Bank only KASIKORNBANK FINANCIAL CONGLOMERATE* Basel III Basel III

19.62 18.09 (%) 18.17 17.20 17.26 18.52 16.98 (%) 18.84 17.96 18.32 18.0 3.90 3.58 18.0 3.43 15.0 2.58 2.51 2.83 3.68 2.30 2.42 2.71 15.0 12.0 12.0 9.0 9.0 14.27 14.62 14.75 14.94 14.15 15.15 15.66 15.90 16.19 15.38 6.0 6.0 3.0 3.0 0.0 0.0 2016 2017 2018 2019 1H20** 2016 2017 2018 2019 1H20**

Tier1 Tier2 Tier1 Tier2  Capital adequacy remains sufficient to support business growth; maintained adequate Tier 1 ratio, as required under the Basel III and new requirements Basel III 2015 2016 2017 2018 2019 1H20 Bank only CAR (%), excluding net profit of each period 17.39 18.17 17.20 17.26 18.52 16.98 Tier 1 (%), excluding net profit of each period 13.79 14.27 14.62 14.75 14.94 14.15 KASIKORNBANK FINANCIAL CONGLOMERATE* CAR (%), excluding net profit of each period 18.00 18.84 17.96 18.32 19.62 18.09 Tier 1 (%), excluding net profit of each period 14.53 15.16 15.66 15.90 16.19 15.38

Note: * 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 Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). 19

Dividend Dividend Per Share Dividend Payout Ratio

(%) (Bt) 5.00 50 5.0 42.49 4.004.00 4.004.00 4.00 40 34.43* 4.0 3.50 31.88 32.14 3.00 27.83 29.40 30 27.00 26.96 3.0 2.50 2.50 2.50 32.33 22.12 22.32 32.80 2.00 2.00 2.0 20 22.51 1.0 10

0.0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Interim Dividend

 Dividend policy: both operating results and long-term returns to shareholders are taken into consideration in determining dividend payments, in order to ensure a sustainable and adequate capital level through the changing economic environment, the ongoing adoption of Basel III and new requirements

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Dividend Per Share (Bt) 2.00 2.00 2.50 2.50 2.50 3.00 3.50 4.00 4.00 4.00 4.00 4.00 5.00 Dividend Payout Ratio (%) 31.88 32.33 42.49 32.14 27.00 22.12 22.32 22.51 27.83 26.96 32.80 29.40 34.43

Note: *The Board of Directors’ Meeting of KASIKORNBANK PCL. No. 1/2020, held on January 30, 2020 has approved the share repurchase project for financial management purposes with the number of shares to be repurchased not exceeding 23,932,601 shares or equal to the amount of not exceeding 1% of the total paid-up capital of the Bank and the maximum amount not exceeding Bt4,600mn. The share repurchase was conducted through the Stock Exchange of Thailand during February 14, 2020 to February 27, 2020.

20 Summary  The K-Strategy: Customer Centricity remains our core philosophy with purpose to “Empower Every Customer’s Life and Business”  Balanced Growth: loans to grow carefully in line with economic conditions and loans relief measures; appropriate liquidity maintained; manageable asset quality supported by strong risk management capabilities; appropriate loan loss reserves; manageable cost to income ratio; appropriate ROE maintained  Adequate Capital: maintains adequate Tier 1 ratio, as required under Basel III amid COVID-19 especially after debt moratorium and remain sufficient for new requirements  Sustainable Development: conducts business with the foundation of Bank of Sustainability, and appropriate risk management and good corporate governance principles; striving to balance economic, social, and environmental dimensions to achieve goals and create sustainable long-term returns  Original Y2020 financial targets are no longer applicable due to uncertainty and high volatility caused by the COVID-19 pandemic; assumptions and corresponding trends are given without numeric financial targets

Appendix

22 KBank: Strategy

Cost and Productivity Improvement .Dynamic and flexible resource allocation to align with strategic direction and support new businesses e.g. ecosystem with partners, digital, AEC+3, and data-driven bank .Increasing spending effectiveness aligned with business priorities and desired value .Productivity improvement focusing on lean processes and waste management will be addressed and customized to culture in: Channel optimization IT investment and procurement effectiveness . Optimize branch & ATM network, including account . Improve asset utilization and optimize maintenance planning, area planning, and relocation service /license costs . Enhance digital on-boarding and migration . Develop IT operating model to reduce costs

Human resources optimization Operational process improvement . Focus on lean organization with organizational . Drive customer migration to chat bot and self-service design, workforce management, and re-training on K PLUS . Create organizational infrastructure to drive agile . Enhance cash handling optimization and working environment and productivity improvement centralization model . Streamline and digitize back office process

24 Performance  Success is driven by continuous growth in number of customers and K PLUS users; highest Net Promoter Score among banks in Thailand Number of Customers* (mn) K PLUS Users and Transactions** (mn)

20 8,477 10,000 17.6 20 16.4 17.1 6,960 8,000 15.4 15 14.3 5,188 15 6,000 10 12.1 3,052 3,644 10.0 4,000 13.4 10 1,646 5 11.1 711 7.3 2,000 5 4.6 2.6 0 0 0 2015 2016 2017 2018 2019 1H19 1H20 2016 2017 2018 2019 1H20 Total Users Number of Transactions (RHS)

* Customers in Retail Business account for 93%, SME Business 7%, and Corporate ** Active users defined as minimum of 1 usage per month; 75% active users as of 1Q20 Business less than 1% of customer portfolio

Net Promoter Score (NPS)*** 30 (#1 among Banks in Thailand)

*** NPS Study 2019 surveyed by The Nielsen Company during July and August 2019, measuring the willingness of customers to recommend a company’s products or services to others

New Capabilities to Enable K-Strategy  8 Transformation Journeys are new capabilities to help “Empower Every Customer’s Life and Business” To Empower Every Customer’s Life and Business

7 Performing Talent and Agile Organization 8 Modern World Class Technology Capability

26 Ecosystem Orchestrator and Harmonized Channels . Orchestrating an ecosystem with partners and providing excellence throughout the customer journey . Developing presence where customers are with an excellent customer experience Partnership

Mobile Payment Platform

Joint Venture for Co-Lending through LINE Platform

E-Commerce Platform/ Shopping Platform/ Lifestyle Platform

E-Wallet Digital Workplace University Application Blockchain Technology

Venture Capital*

Note: * Direct investments via Beacon Venture Capital, a wholly-owned venture capital fund of KBank (total fund size of USD135mn to invest in early to growth-stage technology startups covering not only FinTech but also consumer internet and enterprise technology), aiming to leverage new technology from startups to support KBank’s businesses; Beacon Venture Capital also has indirect investment through VC Funds to enable KBank to leapfrog into the world arena and stay abreast of innovative technologies and business models in other regions (e.g. Partnered as an LP with VC funds managed by Dymon Asia Capital, Vertex Ventures, Nyca, Jerusalem Venture Partners and China Renaissance)

Harmonized Channels: Domestic Channels and No. of Transactions Branch E-Machine (ATM/RCM*)

11,891 11,985 1,026 958 10,973 10,989 11,000 886 880 836

2017 2018 2019 1H20 2020T 2017 2018 2019 1H20 2020T * Recycle Cash Machine Mobile Banking Users (mn) Number of Transactions**

1.2bn 1.5bn 2.0bn 2.7bn 1.7bn 11% 8% 5% 4% 2% Branch 28% 22% 37% E-Machine 48% 59% 15.0 12.1 13.4 76% 10.0 58% 68% Mobile Banking 7.3 44% 30%

2016 2017 2018 2019 1H20 2017 2018 2019 1H20 2020T

** Transaction includes only cash deposit, cash withdrawal, payment and transfer

28 Sample of Domestic Channels Branch K-Lobby Digital Banking

Digital Banking : includes: • K PLUS (Mobile Banking Application ) • K PLUS SHOP • K-Cyber Service (K-Cyber, K-Cyber Trade and K-Cyber Invest) • K-Payment Gateway • K-PowerP@y (mPOS) An electronic banking service with multiple functions such as Branch @ Department Stores K-ATM, K-CDM (Cash Deposit Machines), and K-PUM (Passbook Update Machine). K-Lobby is available to serve customers both in front of branch offices and as stand-alone machines

THE WISDOM Lounge MADSPACE Community Branch (K Park)

THE WISDOM @ ICON SIAM MADSPACE @ Central World K Park @ PTT Station K Park provides meeting space, a kid zone, parcel delivery, and An exclusive center providing a full range of services and One-stop service for online merchants, providing knowledge and banking services all in one place. It is designed to be welcoming and facilities to High Net Worth Individuals and Affluent segments tools for online businesses via KBank solutions and partners match the everyday lifestyle of customers in each community area

Intelligent Lending

. Leveraging customer data to offer personalized lending experience and achieve fair risk adjusted return

End to End Credit Journey

Target Port Lead Reach Marketing Credit Monitoring Generation & Offering Assessment & Collection

Expected Outcome

Wider Customer Reach Higher Conversion Optimized Risk Return Faster Time to Market

30 Proactive risk and compliance management helps sustain growth

Value Enabler Key Capabilities Value Protector Partner with business and provide Strengthen & secure our business effective integrated risk solutions to be resilient and sustainable • Predictive and integrated • Prudent risk-based provision customer segment-based and capital management credit analytics . Credit risk analytics & integrated credit portfolio • Early error detection through • Effective asset quality planning & monitoring effective quality assurance and management focusing on fraud management maximizing recovery . Enhanced fraud analytics • Effective and proactive • Intelligent fraud management & incident management compliance management in all key business processes • Customer data governance • Effective risk management . Customer data protection and management execution for business partners and 3rd parties

. Organization-wide prudent risk culture . Agile way of working and delivering integrated risk solutions

Growth in Regional Markets: Asset-Light Regional Expansion into . Strategically focusing on AEC+3 markets, KBank pursues an integrated regional operating model: physical footprint, digital platform, and regional partnerships

Physical Footprint

Lao PDR. Cambodia Myanmar Vietnam Indonesia Japan China

Digital Platform

X-Border Multi-Currency Settlement X-Border THB Direct Settlement

X-Border Retail Payment

Partnership

Note: AEC - Two subsidiary banks: KASIKORNTHAI BANK (Lao PDR) with two branches in Ponesinuan and Lane Xang, KASIKORNBANK (CHINA) with three branches in Shenzhen, Chengdu, Shanghai and one sub-branch in Long Gang - Three international branches: Cayman Islands, Hong Kong, and Phnom Penh - Seven representative offices: Beijing, Kunming, Tokyo, Yangon, Ho Chi Minh, Hanoi, and Jakarta - Two strategic partners: Maspion Bank in Indonesia and Ayeyawaddy Farmers Development Bank (A Bank) in Myanmar - Global partners with 84 banks in 17 countries: 52 Japanese partner banks; 10 Chinese partner banks; 1 Hong Kong bank; 3 Korean partner banks; 13 ASEAN partner banks (in Vietnam, Indonesia, Lao PDR, Cambodia, Philippines, Brunei, Malaysia, Singapore and Myanmar); 4 European regional banks (in Germany, Italy and Russia) and 1 Indian Bank …and others

32 KBank’s Regional Digital Expansion via 3-Track Strategy . To achieve rapid regional digital expansion in AEC+3, KBank will use 3-Track Strategy whereby each track leverages each other to build growth momentum and accelerate customer base & financial return Objectives Results 2020 Strategic Actions

Customer Track III: Mass Customer Acquisition & Base Industry Engagement & Solution Leverage partnerships to scale Behavioral & by collaborating & investing to provide Data Accelerate KVision Partnership Ecosystem seamless digital financial services

Regional Digital Payment & Track II: Settlement Fee, Float Transactional & Transaction Build Cross-Border & & Digital Capture fees & attract deposits by Banking Data Host Country Transactional becoming main operating bank Banking

Establish Footprints Interest / Track I: Fee income Conventional Acquire banking license in targeted market & Develop Implement Establish Banking and enhance banking service capabilities Banking Product Bank Bank based on customer & market understanding Foundation Localization Transformation Operation

Data Analytics . To create trust and transparency and deliver value to customers as a data-driven bank with data & analytics capabilities

Increase new revenue Treat data as or cost saving from valuable asset Data & Analytics Data Analytics Use Governance & Case Data Management Adopt data & Acquire data & Benefits to key stakeholders, analytics thinking Talent & Data Data Availability Data Driven assemble data including customers, business in day-to-day Driven DNA & Enrichment infrastructure business Bank with partners, internal users, and Trust and regulators decisions Transparency

Comply with regulatory Compliance & Data & Analytics Security Tools requirements (PDPA, Build tools for data BOT, etc.) and data Architecture democratization security standards

Modernize data architecture - flexible multi-speed and scalable to meet business demand Note: PDPA = Thailand’s Personal Data Protection Act; BOT = Bank of Thailand

34 Cyber Security and IT Resilience . Enhancing comprehensive cyber security and IT capabilities; addressing and aligning critical capabilities to fortify cyber security

Vision Protect KBank’s Cyber Assets & Reputation and Statement Deliver Security, Resilience, & Trustworthiness Ensure care & timely Customer Protect Customer Assets Provide secured services response for any cyber Promise with KBank incidents INTEGRATED PROACTIVE CARE & TIMELY PREVENTION DETECTION RESPONSE Strategy Align and integrate business, Real-time data analytics on Ensure readiness, IT, and governance functions cyber events with threat completeness, timely for prevention programs intelligence integration to response and recovery including people, processes, deliver situation awareness to all stakeholders and technology & early warning capabilities

Situation 4 Effective 1 Effective Risk 2 Advanced 3 Awareness & Incident Response Strategic Identification Threat Prevention Capabilities Threat Detection & Recovery

5 Cyber Hygiene Culture

Performing Talent and Agile Organization . People-focused strategy promotes “Performing Talent” and “Agile Organization” “PERFORMING TALENT” Innovativeness Agility TALENT CAPABILITY MANAGEMENT DEVELOPMENT ORGANIZATION WORKFORCE DESIGN PLANNING Select only the best talent Everyone is able to who fit with our culture develop based on his/her Promote team structure to Plan to motivate and business aspirations to individual needs and work across lines of sufficient workforce to continue growing with us business needs command with clear rules value creating roles and of engagement among tribes eliminating waste in their towards agile organization jobs PERFORMANCE & LEADERSHIP & REWARD Create purposeful and Be in top tier in the market PEOPLE COMMU- practical leadership in all to pay “A Players” at the EMPOWERMENT NICATION levels of leaders to be a top point with well-structured key role model of culture performance management Empower people to Embed mindset and shift system manage their lives with behavior that lead us to accountability, speed, achieve organizational Customer and transparency purpose Collaboration at Heart “AGILE ORGANIZATION”

36 KASIKORN BUSINESS – TECHNOLOGY GROUP (KBTG) Aiming to build modern world-class technology, allowing KBank to be the Top Regional Financial Provider

. Innovation platform Breakthrough . Cognitive banking Innovation . Deep Tech commercialization . Partnership co-creation . Innovation runway

One KBTG & Human . Customer-centric Experience Architecture . Cognitive analytics . To become Employer of Modernization . Harmonized O2O Choice in Southeast Asia channels Program . Open banking API . Application BEST TECH modernization . To be a process-oriented . Solid data foundation organization in alignment Strategic ORGANIZATION with technological innovation in Southeast Asia Dynamic BY 2022 Infrastructure while developing Process effectiveness and Modernization sustainability from project initiation through operation . Stable, secure, scalable management . Hybrid multi-cloud . Regional infrastructure

. Faster, more secure, Scaling Agile, and valuing quality DevSecOps, CICD

Note: O2O = Online to Offline/ Offline to Online; API = Application Programming Interface DevSecOps = Development, Security, and Operation; CICD = Continuous Integration and Continuous Delivery

KBTG Technology Towards a Sustainable Society: Paperless, Cashless and Contactless Set Up World-Class UX Design Company, Beacon Interface, to develop innovative mobile banking platform for everyone, enabling them to conduct financial transactions with ease and security

K PLUS Mobile Banking: platform for easy financial transactions, mobile payments, and lifestyle banking; capable of add-on services from external parties via open API and offering UX DESIGN promotions, privileges, and deals for K PLUS customers MOBILE MAKE by KBank: plans to launch MAKE by KBank – a mobile PAYMENT PLATFORM BUSINESS banking application for a new generation – at the end of 2020 KhunThong: social chatbot with seamless payment experience

Machine Commerce: leverage customer data understanding and machine learning techniques to tailor personalized product MACHINE COMMERCE offerings/recommendations to target groups via K PLUS Platform Eatable: launch a novel platform for food ordering, maximizing flexibility for restaurants and their customers in the 4.0 era

MACHINE LENDING Thai NLP: leverage machine learning to enable interactions Thai between computers and human (natural) language with a focus NPL on the Thai language, e.g. chatbot, social listening

Thai NLP Blockchain L/G on Hyperledger Platform by KBTG OriginCert: trusted platform to ensure integrity of paperless documents; initially to certify documents on Letters of Guarantee (L/G), including request, issuing, and notice of expiration

BIOMETRICS Open API Access to Support FinTech and Startups: to open BLOCKCHAIN connection to create extensive innovative services for OPEN API customers, e.g. launching API linkage to FlowAccount on K PLUS SME mobile application Note: UX = User Experience; API = Application Programming Interface NLP = Natural Language Programming 38 KBTG Technology – Examples of Notable Innovations in 2020 Towards a Sustainable Society: Paperless, Cashless, and Contactless MAKE by KBank* A mobile banking application designed specifically for a new generation increasingly reliant on mobile banking for the freedom it gives to personalize financial management.

Transfer money via Bluetooth Keep transaction history Allocate money to many pockets in chat format within one account number KhunThong Eatable Social chatbot helping friends settle expenses within a chat for a Platform responding to both restaurants and diners, providing seamless payment experience. options for takeout and food delivery.

Note: * MAKE by KBank application trial launched on July 23, 2020; full version will be available to public by the end of 2020. 39

KBTG Structure

. A Bridge between KBank and KASIKORN BUSINESS – TECHNOLOGY GROUP . Group’s Control Structure

Enable Seamless Integration

. Software Development to . Control Infrastructure . Center of Excellence for . Technology Research . Idea Creation Support Innovation and Resources for the Change, Technical Resource Pool and Innovation Labs Business Requirements the Run, and the Gone and Service*

Ensure Service Deliver Service Technology Research Create the Future Generate Business Value Continuity Excellence and Innovation Labs

Note: - KASIKORN BUSINESS – TECHNOLOGY GROUP established with 5 companies, as a wholly-owned subsidiary of KASIKORNBANK; included in the KASIKORNBANK FINANICIAL CONGLOMERATE, as approved by the BOT in October 2015 - Registered capital in each company at Bt5mn, except for KASIKORN SERVE at Bt10mn - KASIKORN SERVE changed names from PROGRESS SOFTWARE COMPANY LIMITED; established in March 1993

40 KBTG: K-Stadium, Innovation Center and K+ Building

K-Stadium at KBTG Main Building K+ Building: City-based KBTG office with co-working spaces

Innovation Center at KBTG Main Building Creative Box for small meeting at KBTG Main Building K+ Building: City-based KBTG office with co-working spaces

KBank: Business Highlights

42 Customer Segments

Multi-Corporate Company with annual sales >Bt5,000mn Corporate Business Business Large Corporate Business Company with annual sales >Bt400mn to Bt5,000mn

Medium Business Individual or company with annual sales >Bt50mn to Bt400mn SME Business Small & Micro Individual or company with annual sales ≤ Bt50mn, and with commercial Business credit limit ≤ Bt15mn

High Net Worth Individual wealth with KBank and its wholly-owned subsidiaries* ≥ Bt50mn Individual Individual wealth with KBank and its wholly-owned subsidiaries* Affluent Retail ≥ Bt10mn to < Bt50mn Business Individual wealth with KBank and its wholly-owned subsidiaries* Middle Income ≥ Bt15,000 to < Bt10mn

Mass Individual wealth with KBank and its wholly-owned subsidiaries* < Bt15,000 Retail Business Retail  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; or the monthly income of an individual customer

Revenue by Business June 2020 (Consolidated) Loans Portfolio structure Non-interest Income *

Retail Corporate Business Business Corporate (27.1%) (38.1%) Business Average Yield: 5-7% Average Yield: 3-5% Retail (30.5%) Business (51.1%) SME Business SME (34.9%) Business Average Yield: 5-7% (18.4%)

* 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 * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

44 Business Direction . Strategic Imperatives  Lend successfully using data analytics  Embed in select financially relevant ecosystems  Ensure cyber security and data confidentiality Corporate Business SME Business Retail Business

Trusted partner to enrich customer’s Bank for SME Customers Best Customer-Centric Bank businesses with best in class . Integrated business solutions, both . Ecosystem orchestrator and financial services and solutions financial and non-financial harmonized channel to deliver . Best funding solutions . Digital banking for SME anytime, anywhere experience . Best transaction banking and . Data Analytic Lending . Data-driven offerings, especially breakthrough initiator consumer finance World Business Private Banking Group Regional Digital Bank through 3-Track Regional Digital International Comprehensive Wealth Management Services Expansion . Cooperate with Lombard Odier to raise service and product . Track I: Conventional Banking - acquire banking license & offer standards to international levels analytic-based lending in CLMVI and China . Provide integrated wealth planning services, advising families . Track II: Transactional and Digital Banking - digitize banking on wealth management, continuity, and growth channel/services, become preferred operating bank and develop . Enhance use of technology to improve client experience analytic capabilities . Build comprehensive client insights from data-mining . Track III: Industry Solution & Ecosystem - provide digital platform for beyond banking solutions and own customers’ accessibility

Note: * CLMVI = Cambodia, Laos, Myanmar, Vietnam, and Indonesia 45

Corporate Business: Performance and Market Position

Medium Multi-Corporate Large Corporate Small and Micro High Net Worth Affluent Middle Mass Business Business Business Business Individual Income

Main Bank Status* Corporate Bond Underwriting

34% 30% 30% 26% 27% 22% 25% 26% 25% 20% 19% 23% 24% 20% 17% 17% 17% 14% 16% 20% (#1) (#1) (#1) (#1) (#1) (#1) (#1) (#1) 11% 10% (#3) (#1) 10% (#3)(#2) (#2) (#4) (#2) (#2) (#1) 0% 0% 2012 2013 2014 2015 2016 2017 2018 2019 1H20 2009 2010 2011 2012 2013 2014 2016 2018

Source: KBank Customer Survey Source: The Thai Bond Market Association (ThaiBMA)

Performance and Market Position  Main Bank Status: maintained #1 ranking in 2018  Corporate Bond Underwriting: ranked #1 with 19% market share in 1H20  Transaction Services: top player in transactional banking services  Cash Management Services: MB** 24% market share in 2018 (#1) / CB** 24% market share in 2018 (#2)  Trade Finance: MB** 27% market share in 2018 (#1) / CB** 32% market share in 2018 (#1)  Industrial Expertise: leverage capability in Utility, Real Estate, Transportation, Communication, and Commerce

Note: * Since 2014, Corporate and SME Business main bank status is reported every two years 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 ** MB = Multi-Corporate Business, CB = Large Corporate Business

46 SME Business: Performance and Market Position Medium Multi-Corporate Large Corporate Small and Micro High Net Worth Affluent Middle Mass Business Business Business Business Individual Income

#1 in Market Share by Value* #1 in Main Bank Status* 31% 30% 30% 30% 30% 40% 30% 28% 35% 29% 29% 30% 31% 30% 28% 20% (#1) (#1) (#1) (#1) (#1) (#1) (#1)(#1) (#1) (#1) 20% (#1) (#1)

10% 10%

0% 0% 2011 2012 2013 2014 2016 2018 2011 2012 2013 2014 2016 2018 Source: KBank Customer Survey Performance and Market Position Source: KBank Customer Survey . Main Bank Status: improved main bank status and strengthened #1 position . Market Share: 31% market share; maintained #1 position . Market Position: strengthened #1 position in SME market – “Bank for SMEs”; targeted to be SME market leader in all areas  Only bank to offer comprehensive solutions to SMEs through K SME program (launched in 2006, with a total of 24 classes and about 14,000 participants so far and 16 online courses with over 40,000 views in 2019) ,K SME Knowledge Center (established in 2009) and MADHUB (launched in 2019, providing one-stop services for online sellers: MADCARD, MADFUND, MADDEAL, MADCOURSE, MADSPACE and MADVISOR) Note: - SME Business in Thailand accounts for 43.0% of Thailand’s GDP, or Bt7.01trn (as of December 2018); supported by the government to become a key factor in economic and social growth (Source: The Office of Small and Medium Enterprises Promotion or OSMEP) - 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 * Since 2014, corporate and SME business main bank status and market share are reported every two years ** Market share by value and main bank status in 2018 may not be comparable with those in previous years due to a new SME population base covering more SMEs with better data availability

Retail Business: Performance and Market Position Multi-Corporate Large Corporate Medium Small and Micro High Net Worth Affluent Middle Mass Business Business Business Business Individual Income

Bancassurance* Mortgage Loan (New Business, Total and Renewal Premium) #1 in Mutual Fund (KAsset)

(% Market Share) Leader in Renewal and Ranked #2 in Total & New Business Premiums (% Market Share) Ranked #1 in Mutual Fund AUM (% Market Share) Maintaining Top 3 with good quality portfolio 35% 28.6% 29.7% (KAsset) 28.1% 27.8% 30% 27.8% 28.5% 30% 24.4% 24.8% 10% 23.8% 23.0% 7.4% 8.6% 25% 21.4% 21.2% 22.1% 7.7% 20.1% 20.2% 20.5% 20.1% 7.4% 7.4% 20% 15.8% 19.3% 20% 15.6% 15% 5% 10% 10% (#1) (#1) ( #1)( #1) (#1) (#3) (#3) (#3) (#3) (#3) 5% 0% 0% 2016 2017 2018 2019 1H20 0% New Business Total Premium Renewal Premium 2016 2017 2018 2019 1H20 2016 2017 2018 2019 1H20 Performance and Market Position . Strong Growth in Retail Segment: Higher growth than market size in retail customers. KBank’s retail customers grew 5%YoY in 1H20 against zero market growth. . Bancassurance: MTL ranked #1 in Renewal Premium with 21.4% market share in 1H20, and also ranked #2 in new business and total premiums with 15.6%, and 19.3% market share respectively. A variety of life and non-life products were offered to customers, together with an alternative digital channel via K PLUS. Moreover, free insurance coverage was offered for illness or death from the COVID-19 outbreak during 1Q20 to K PLUS customers who registered to receive the offer via LINE KBank Live. . Fund Management Services  Mutual Funds: KAsset maintaining #1 position since 2010, with highest market share at 22.1% in 1H20; recognized with three awards from Morning Star (Thailand) Co., Ltd.: Best Fund House - Domestic Equity, Best Retirement Mutual Fund – Equity for K Equity Retirement Mutual Fund (KEQRMF), and Best Long-Term Equity Fund for K 20 Select Long-term Equity Fund (K20SLTF). . Mortgage Loans: ranked in top 3, with 8.6% market share in 1H20, supported by expansion into new groups of high potential customers, conservative growth together with building stronger partner relationships, and maintaining good quality portfolio. . Credit Cards:  Purchase spending: ranked #1, with 19.0% market share in 1H20.  Number of cards: ranked #2, with 12.6% market share in 1H20.  Card-accepting merchant services (online & offline platforms): ranked #1, with approximately 30% market share by sales volume in 1H20. . Debit Cards:  #1 in total debit card spending with 43% market share in 5M20; maintaining top position by providing functions, features, security, and benefits to match customer lifestyles  Variety of cards and campaigns offered to promote greater card spending in several categories, such as travelling, online shopping, and food delivery, including attractive cards with privileges for specific groups; i.e. K-Provincial Debit Card (Nakhon Nayok), MADCARD for Kerry Express, JOURNEY Card, and KBank x BLACKPINK Card.

Note: * Total Premium = New Business Premium (NBP) + Renewal Premium; 48 New Business Premium = First Year Premium (FYP) + Single Premium (SP) Private Banking Group: Performance and Market Position

Medium Multi-Corporate Large Corporate Small and Micro High Net Worth Affluent Middle Mass Business Business Business Business Individual* Income

Market Share (Market Penetration) Assets Under Management (AUM)

36% (Bt bn) 35% 750 35% 34% 34% 34% 729 34% 34% 717 33% (#1) 32% 700 32% 684 687 31% 677

30% 2015 2016 2017 2018 2019 1H20 650 2016 2017 2018 2019 1H20 Source: Private Banking Group (market share by number of customers) Performance and Market Position  Market Penetration: ranked #1 with 35% market share (11,732 customers) and Bt729bn AUM in 1H20  AUM Breakdown: Investment 62% and Deposit 38%  Focus Customers (Type of Customer):  Sophisticated customers (over 70% of total customers); Non-Sophisticated customers  Product Types and Services:  Collaborate with Lombard Odier to develop innovative products; build capability via staff trainings and regular workshops; offer advisory services with close CIO collaborations; and offer referral offshore investment services  Key product and services: • Financial Products and Services: Investment Advisory • Non-Financial Products and Services: Family Wealth Planning & Real Estate • Others: Financial Event & Privilege

Note: * High Net Worth Individual = Individual wealth with KBank and its wholly-owned subsidiaries ≥ Bt50mn

KBank: Risk and Credit Management

50 KBank Risk Management Structure  The Bank’s organization is structured to facilitate all aspects of risk management; each business unit’s responsibilities and segregation of duties are clearly identified in accordance with good internal-control practices Board of Directors  Approve risk appetite and all risk management policies and guidelines  Oversee effectiveness of consolidated risk management framework Risk Oversight Committee Audit Committee

Operating Committee  Ensure effectiveness of overall risk management of the financial conglomerate Credit Risk Management Sub-committee  Establish risk management policies and risk appetites. Set risk limits for Credit Process Management Sub-committee significant aspects of the various risks Asset and Liabilities Management Sub-committee  Formulate strategy for the organization and resources to be used for the Market Risk Management Sub-committee risk management operation, in line with the risk management policy. This Capital Management Sub-committee strategy must enable the effective analysis, assessment, evaluation, and Operational Risk Sub-committee monitoring of the risk management system Business Continuity Management Sub-committee Information Technology Strategy Sub-committee  Credit Risk Management Sub-committee and Corporate Governance Digital Oriented Risk, Data and Cyber Security - Committee oversee project financing requests that could have adverse and IT Risk Management Sub-committee impacts on the environment and society

 Business units are responsible for continuous and active management of Business Units Internal Audit all relevant risk exposure, to be in line with its returns and risk appetite Business Units Risk RiskManagement Management Internal Audit and Control Function  Risk management is responsible for providing independent and objective CBS/DNW/PBG/CBS/ SME/ RBS/ and Control Function ADD CAT views on specific risk-bearing activities to safeguard the integrity of the ERM/ CSF/ KBTG CMB/CMB/ WBS/IBB/ WBG/ CSP/ TS ERM entire risk process. Control units are set to ensure that risk levels are in STA/TBG/CPD/ line with our risk appetite TS/KBTG/CSF  Internal Audit is independent and responsible for evaluation to add value and improve the effectiveness of risk management, control, and governance processes of the Bank and its subsidiaries

CBS = Corporate Business Division, DNW = Distribution Network Division, PBG = Private Banking Group, CMB = Capital Markets Business Division, IBB= Investment Banking Business Division, WBG = World Business Group, STA=Strategy and Analytics Division, TBG = Transaction Banking Division, CPD= Credit Products Division, TS = Central Treasury Department, CSF=Customer Service Fulfillment Division, KTBG = KASIKORN BUSINESS - TECHNOLOGY GROUP, ERM = Enterprise Risk Management Division, ADD=Audit Division 51

KBank Credit Risk Management Process  The Bank continues to enhance credit risk management processes to promote risk strategies with justified risk-return tradeoff within the rapidly changing economic environment Portfolio Management

 Determine portfolio-by-design taking into account risk-adjusted return trade-off  Manage portfolio according to the Bank’s risk appetite and concentration risk management (Country, Industry, Large Customer Group)  Perform stress testing to identify impacts to portfolio and proactively prepare appropriate management actions

Origination Monitoring Collection & Recovery

 Enhance decision  Monitor customer behavior and  Efficient collection and making/support tools for more detect early warning signs follow-up of customers with efficient return and risk  Leverage National Credit Bureau late payments evaluation information for effective credit  Restructure viable customers  Setup specific prescreening monitoring to prevent NPLs criteria for potential industries  Ensure credit condition compliance  Foreclose pledged assets to  Enhance customer income (e.g. insurance, capital injection, recover loan loss validation process project progress)  Take prompt action to prevent credit deterioration

52 KBank Credit Approval Process

Corporate SME SME Retails Retail (Medium) (Small & Micro) (Housing) (Unsecured Loans)

Credit Underwriting Dept. SME Credit and Housing Loan Approval Dept. Payment Service Fulfillment Department

Policy Lending Formula Lending Formula Lending • Application Score • Sufficiency of cash flow • Application Score • FICO Score • Growth trends and ability to compete • FICO Score • Bureau information/Credit history • Management experience and depth • Bureau information/Credit history • Debt service capacity • Leverage, Liquidity, and Asset Quality • Debt service capacity • Credit Risk Mitigation • LTV Approval Process Approval • Facilities Structure

Credit Service Fulfillment Dept. Payment Service Fulfillment Department

• Legal document • Legal document • Limit set up • Limit set up Bank-wide Risk Asset Review

Asset Quality Management Operation Dept. Post Approval Post • Customer Review by Relationship Manager (RM) • Credit Portfolio Monitoring Unit to facilitate RM in • Automated collection system customer monitoring • Efficiently utilize available behavior scoring and collection tools i.e. SMS, automated letter • Credit Clinic generation, phone

Note: FICO = Fair Isaac Corporation

KBank Credit Risk Management Process: Collection and Recovery Collection & Recovery Flow

 Efficient collection and follow-up of customers with late payments Performing Loans  Restructure viable customers to prevent NPLs Process  Foreclose pledged assets to recover loan loss Non-Performing Loans Move to Better Status Debt Resolutions Move to Worsen Status

Litigation Process Rescheduled Loans* (More information on Page 55) Performing Debt (Financial Aid Program) Repayment of Loans* Collections Rescheduled/ Restructured NPL** Write-off Term Loans with Restructured Loans DPD > 1 day go to debt (Not classified as NPL) NPL Sales collection stage Relapsed NPL

Note: * Rescheduled Loans are loans (no passed due date) that have changed payment conditions and not incurred losses. (Loans in the Financial Aid Program is a part of Rescheduled Loans) * Financial Aid Program helps customers during the bad macro business condition such as the big flood in 2011 and the political unrest in 2014 * Performing loans = Pass Loans (loans passing the due date by less than 1 month) and Special Mention Loans (loans passing the due date by more than 1 month but not over 3 months) ** NPLs = Non-performing Loans = loans passing the due date by more than 3 months = Sub-standard Loans, Doubtful Loans, Doubtful of Loss Loans, and restructured loans classified as NPL

54 Litigation Process  Litigation process in Thailand takes about 2-3 years Litigation Process Period

Negotiate, await approval, document Under Approximately 2 months Negotiation preparation & lawyer process

Pre-court (Notice) Issue notice & court filing Approximately 2 months

In Court Trial / wait for court ruling Approximately 9-18 months

Collect payment ruled by court or Execution Approximately 3 months foreclose

Public Auction Liquidation process Approximately 6-9 months

KBank Credit Cost Calculation Credit Cost Probability of Default (PD) Model Calibration

 High historical default rate in bad year  higher provision in following year

1) Observe Historical 2) Calibrate PD Model Default Rates: Historical The PDs are calibrated default rates over business based on historical default cycle are observed rates

% Default Rates % Credit Cost

239 bps 204bps 175bps 174bps

2012 2013 2014 2015 2016 2017 2018 2019 2020F*

Actual Default Rate (LHS) Forecast Default Rate (LHS) Credit Cost (RHS)

* Credit cost in 2020F may reach or exceed the peak level in Y2017 56 Credit Bureau Summary National Credit Bureau (NCB)* KBank Practice

 Two Types of Credit Reports Offered by NCB: KBank’s customers applying for loans  Consumer credit report for individuals  Commercial credit report for businesses Sign agreement to allow the Bank to get credit report from NCB  Credit report (monthly reported by members) Optional to Required to  Customer information (Name, address, identification (Large companies normally have Required to reliable financial statements) number, birth date, occupation, etc.)  Credit information (History of application, approval Corporate Business SME Business Retail Business history, loan payment history, etc.) Multi- Large Medium Small & 4 Customer Segments in  Data Record of Credit Report Corporate Corporate Business Micro Retail (HN, AF, MI and MA) Business Business Business  Individuals: Credit report remains on file for 3 years

 Businesses: Credit report remains on file for 3 years Good credit Poor credit Good credit Poor credit  Members: Financial institutions including commercial banks, specialized financial institutions (SFIs), non-bank KBank’s Reject KBank’s Reject Policy application Credit application financial institutions, finance companies, securities Lending Scoring companies, insurance companies, etc.

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

KBank: Financial Performance

58 1H20 Performance Highlights  1H20 net profit decreased 52.18% YoY, due Consolidated 2018 2019 1Q20** 2Q20 1H20* to prudent set aside on expected credit Net Profit (Bt bn) 38.46 38.73 7.38 2.18 9.55 loss during the economic recession Profitability resulting from COVID-19 and lower non- - NIM 3.39% 3.31% 3.49% 3.22% 3.34% interest income, while net interest income - ROE 10.61% 9.90% 7.26% 2.15% 4.72% increased from EIR (TFRS9) and lower - ROA 1.27% 1.20% 0.87% 0.25% 0.56% FIDF cost - YTD Loan growth 6.17% 4.59% 2.05% 6.23% 6.23% - YoY Loan growth 6.17% 4.59% 6.70% 10.01% 10.01%  Loans grew 6.23% YTD, mainly from - YoY Net fee income growth (7.72%) (3.61%) 1.38% (12.02%) (5.48%) COVID-19 relief measures (mainly from - YoY Non-interest income growth (9.17%) 1.51% (18.55%) 3.36% (7.00%) SME) and corporate business Cost control  NIM was 3.34% in 1H20; slightly increased - Cost to income 43.96% 45.32% 45.94% 38.36% 42.00% YoY mainly due to yield on loans from EIR Asset quality (TFRS9), lower FIDF cost, and savings rate - NPL ratio 3.34% 3.65% 3.86% 3.92% 3.92% - Credit Cost 1.75% 1.74% 2.35% 3.87% 3.11% cut despite negative impact from interest - Coverage ratio 160.60% 148.60% 138.66% 155.68% 155.68% rate cut, asset quality, and high growth in Loans to Deposits 95.94% 96.62% 92.78% 92.15% 92.15% loan relief measures Tier 1 Ratio 15.90% 16.19% 15.17% 15.38% 15.38%  Net fee income dropped 5.48% YoY, mainly CAR 18.32% 19.62% 18.53% 18.09% 18.09% due to loan-related fee recognition Note: - Under Bank of Thailand regulations, net profit in the first half of the year is counted as capital after approval by the Board of according to TFRS 9 and fee from card 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 business - Capital Adequacy Ratio (CAR) has been reported in accordance with Basel III Capital Requirement from January 1, 2013 onwards. CAR is based on KASIKORNBANK FINANCIAL CONGLOMERATE. KASIKORNBANK FINANCIAL CONGLOMERATE  1H20 cost to income ratio was at 42.00%; means the company under the Notification of the Bank of Thailand re: Consolidated Supervision, consisting of KBank, continued focus on cost and productivity K Companies, and subsidiaries operating in supporting KBank, Phethai Asset Management Co., Ltd., and other subsidiaries improvements under pressure on slower within the permitted scope of the BOT’s definition to be a financial conglomerate * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 growth in income and new investments onwards. Some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9)  NPL ratio at 3.92% in 1H20, with 155.68% ** The Bank restated the 1Q20 financial statements from the reclassification of investment in fund/ REIT to investments in FVOCI to coverage ratio comply with the Federation of Accounting Professions’ announcement on 25 June 2020 and reclassification some items which did not impact to total assets, total liabilities and total equity.  Capital base remained adequate 59

Consolidated Financial Statements 2018 2019 2Q19 3Q19 4Q19 1Q20** 2Q20 1H20* Interest income 123,922 130,178 32,622 33,024 32,566 33,779 31,954 65,732 Interest expenses 25,384 27,490 6,852 6,928 6,996 5,697 4,872 10,568 Interest income - net 98,538 102,688 25,770 26,096 25,570 28,082 27,082 55,164 Fee and serv ice income 51,187 50,580 12,432 12,973 13,026 12,335 10,930 23,265 Fee and serv ice expenses 13,070 13,840 3,286 3,516 3,619 3,485 2,883 6,368 Fee and service income - net 38,117 36,740 9,146 9,457 9,407 8,850 8,047 16,897 Gain (Loss) on f inancial instrument measured at FVTPL - - - - - (300) 4,723 4,423 Gain (Loss) on trading and f oreign exchange transactions 9,003 8,362 2,173 1,978 1,979 - - - Gain (Loss) on inv estments 2,652 8,412 464 2,934 4,753 144 205 350 Total operating income 243,380 241,144 59,211 60,999 63,401 53,650 59,306 112,956 Underwriting expenses 87,897 80,653 19,808 19,131 21,674 15,597 18,132 33,730 Total operating income - net 155,483 160,491 39,403 41,868 41,727 38,053 41,174 79,227 Total other operating expenses 68,348 72,729 17,741 17,802 21,176 17,481 15,796 33,277 Expected Credit Loss - - - - - 11,872 20,192 32,064 Impairment loss of loans and debt securities 32,532 34,012 7,547 10,060 8,825 - - - Operating prof it bef ore income tax expenses 54,603 53,750 14,115 14,006 11,726 8,699 5,186 13,886 Income tax expenses 10,395 10,309 2,690 2,674 2,304 1,349 901 2,250 Net profit attributable: Equity holders of the Bank 38,459 38,727 9,929 9,951 8,802 7,375 2,175 9,550 Non-controlling interest 5,749 4,714 1,496 1,380 620 (25) 2,110 2,085 Statements of Financial Position (Bt mn) 2018 2019 2Q19 3Q19 4Q19 1Q20** 2Q20 1H20* Loans to customers (less def erred rev enue) 1,914,072 2,001,956 1,933,232 1,948,492 2,001,956 2,043,093 2,126,753 2,126,753 Total Assets 3,155,091 3,293,889 3,256,294 3,240,134 3,293,889 3,483,527 3,585,800 3,585,800 Deposits 1,995,001 2,072,049 2,004,953 1,998,886 2,072,049 2,202,112 2,307,997 2,307,997 Total Liabilities 2,737,269 2,840,174 2,813,769 2,791,551 2,840,174 3,033,814 3,135,108 3,135,108 Total Equity attributable to equity holders of the Bank 376,298 406,358 395,840 401,045 406,358 406,789 402,386 402,386 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. * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). ** The Bank restated the 1Q20 financial statements from the reclassification of investment in fund/ REIT to investments in FVOCI to comply with the Federation of Accounting Professions’ announcement on 25 June 2020 and reclassification some items which did not impact to total assets, total liabilities and total equity. 60 Earnings Before Provision and Tax (EBPT) and Net Profit June 2020 (Consolidated)

EBPT Net Profit

(Bt bn) (Bt bn) 100 89.55 90.48 87.14 87.76 60 80 40.17 38.73 34.34 38.46 60 45.95 40 40 20 20 9.55 0 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*  1H20 EBPT rose 6.50% YoY, mainly from an increase in net interest income; while, net profit decreased 52.18%, from a prudent increase in expected credit loss from the economic recession resulting from COVID-19 and a decrease in non-interest income

2016 2017 2018 2019 1H19 1H20 1Q20** 2Q20 EBPT (Bt bn) 89.55 90.48 87.14 87.76 43.15 45.95 20.57 25.38 EBPT Grow th (% YoY) 10.75% 1.05% (3.70%) 0.72% (7.71%) 6.50% (4.24%) 17.15%

Net Profit (Bt bn) 40.17 34.34 38.46 38.73 19.97 9.55 7.38 2.18 Net Profit Grow th (% YoY) 1.77% (14.53%) 12.00% 0.70% (7.88%) (52.18%) (26.58%) (78.09%)

Interest Income - net June 2020 (Consolidated)

Interest Income and Interest Expenses Interest Income - net

(Bt bn) 140.00 123.92 130.18 115.87 119.34 (Bt bn) 120.00 98.54 102.69 100.00 89.68 94.16 100.00 80.00 80.00 65.73 55.16 60.00 60.00 40.00 40.00 26.20 25.18 25.38 27.49 20.00 10.57 20.00 0.00 0.00 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*

Interest Income Interest Expenses Interest Income - net  1H20 net interest income grew 8.12% YoY

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Interest Income (Bt bn) 115.87 119.34 123.92 130.18 64.59 65.73 33.78 31.95 Interest Expenses (Bt bn) 26.20 25.18 25.38 27.49 13.57 10.57 5.70 4.87

Interest Income - net (Bt bn) 89.68 94.16 98.54 102.69 51.02 55.16 28.08 27.08 Interest Income - net (% Growth YoY) 5.49% 5.00% 4.65% 4.21% 6.16% 8.12% 11.21% 5.09% 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 * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

62 Non-interest Income and Structure June 2020 (Consolidated) Non-interest Income to Average Assets Non-interest Income Structure (%) 4 (Bt bn) 3 2.36 2.18 Other Operating Income 1.88 1.79 63.73 2 1.40 62.70 (+2%) (-2%) 56.95 57.80 Fee and Service I ncome - net 1 65 4% 2% (-9%) (+2% ) 3% 3% 0 55 Net Premium Earned - net 2016 2017 2018 2019 1H20* 45 61% Dividend Income Non-interest Income Ratio 66% 24.06 35 67% 64% (%) (-7% YoY) 60 Share of P rofit f rom Investment s on Equity Method 50 42 40 25 3% 37 36 16% Gain on Invest ment 40 30 9% 6% 5% 0.1% 70% 15 3% 3% 4% 30 0.2% 6% 0.3% 5% 0.1% 15% 0.7% 2% Gain on financial instrument measured at FVTPL 20 6% 0.1% 5 14% 13% 16% 15% 10 18% 1% (Gain on Trading and FX transactions - old) -0.3% 0 -5 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*

 1H20 non-interest income dropped 7% YoY, mainly from net fee income dropped from loan related fee recognition according to TFRS 9, card business, and a decrease in insurance business 2016 2017 2018 2019 1H19 1H20 1Q20** 2Q20 Non-interest Income (Bt bn) 63.73 62.70 56.95 57.80 25.88 24.06 9.97 14.09

Non-interest Income Growth (%YoY) 1.96% (1.62%) (9.17%) 1.51% (17.46%) (7.00%) (18.55%) 3.36% Non-interest Income Ratio (%) 41.54 39.97 36.62 36.02 33.65 30.37 26.2034.23 Note: - Non-interest Income Ratio = Non-interest Income/Total Operating Income - net - The Bank and its subsidiaries have adopted TFRIC 13: Customer Loyalty Programmes since January 1, 2014 onwards - Net Premium Earned - net = Net Premium Earned less Underwriting Expense * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). ** The Bank restated the 1Q20 financial statements from the reclassification of investment in fund/ REIT to investments in FVOCI to comply with the Federation of Accounting Professions’ announcement on 25 June 2020 and reclassification some items which did not impact to total assets, total liabilities and total equity. 63

Net Fee Income June 2020 (Consolidated) Net Fee Income Net Fee Income to Net Total Operating Income

(Bt bn) 41.31 38.94 38.12 (%) 36.74 30 26% 40 25% 25% 23% 21% 30 20 16.90 20 10 10

0 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*

 1H20 net fee income dropped 5.48% YoY, mainly from loan-related fee recognition according to TFRS 9 and fee from card business  Net fee income to net total operating income was 21.33% in 1H20

2016 2017 2018 2019 1H19 1H20 1Q20** 2Q20 Fee Income (Bt bn) 48.63 51.76 51.19 50.58 24.58 23.27 12.34 10.93 Fee Income-net (Bt bn) 38.94 41.31 38.12 36.74 17.88 16.90 8.85 8.05 Fee Income Growth (%YoY) 4.78% 6.43% (1.10%) (1.19%) (5.31%) (5.35%) 1.53% (12.08%) Net Fee Income Growth (%YoY) 3.78% 6.07% (7.72%) (3.61%) (9.62%) (5.48%) 1.38% (12.02%) Net Fee Income to Net Operating Income Ratio (%) 25.39 26.33 24.52 22.89 23.25 21.33 23.26 19.54

Note: - On the consolidated basis, Bancassurance fees are not included in net fee income since November 30, 2009, due to the elimination of inter-company transactions (the accounting treatment from the Muang Thai Group Holding consolidation) * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

64 Net Fee Income Structure June 2020 (Consolidated) Net Fee Income by Product

Credit Card Credit Card Business (mainly from credit card, merchant fees) Others Business Transaction Services (such as ATM & debit cards, bill payments, money transfers, etc.) 17% 12% Commercial Credit (mainly from commercial credit related fees) Cash Management Fund Transaction (such as fees from payroll accounts) Trade Finance Management Services Business 23% Fund Management Business (mainly from mutual fund and securities service fees) 23% Others (such as brokerage fee, capital market business, etc.) Trade Finance Commercial 6% Credit Cash 16% Management 3%

Loan Related and Non-loan Related Fees - net Note: - On the consolidated basis, Bancassurance fees are not included, due to the Loan- elimination of inter-company transactions (the accounting treatment from the related Muang Thai Group Holding consolidation) Non- 13% - On the consolidated basis, Net Premium Earned - net (Net Premium Earned loan Less Underwriting Expenses) from Muang Thai Life Assurance (MTL) is reported related as a part of non-Interest Income; KBank has a 38.25% economic interest in MTL 87% - The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9)

Net Premium Earned - net June 2020 (Consolidated)

Net Premium Earned and Underwriting Expenses Net Premium Earned – net

(Bt bn) 120 99.79 94.45 93.85 91.43 (Bt bn) 100 87.90 80.49 84.18 80.65 14 80 10.26 60 9 5.94 33.8933.73 3.54 40 4 0.16 20 -0.16 -1 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20* Net Premium Earned - net Net Premium Earned Underwriting Expenses Net Premium Earned - net = Net Premium Earned less Underwriting Expense  Net premium earned-net decreased YoY

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Net Premium Earned (Bt bn) 94.45 99.79 91.43 80.49 40.45 33.89 15.80 18.09 Underwriting Expenses (Bt bn) 84.18 93.85 87.90 80.65 39.85 33.73 15.60 18.13 Net Premium Earned - net (Bt bn) 10.26 5.94 3.54 (0.16) 0.60 0.16 0.20 (0.04) Net Premium Earned (% Growth YoY) 10.62% 5.65% (8.37%) (11.97%) (17.75%) (16.21%) (21.32%) (11.18%) Underwriting Expenses (% Growth YoY) 15.26% 11.49% (6.34%) (8.24%) (13.97%) (15.35%) (22.17%) (8.46%) Net Premium Earned - net (% Growth YoY) (16.83%) (42.17%) (40.41%) (104.63%) (79.09%) (73.49%) 458.72% (107.19%)

Note: KBank acquired additional ordinary shares in MTGH, to hold a 51% stake valued at Bt7,529mn. As 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. * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

66 Other Operating Expenses June 2020 (Consolidated)

Other Operating Expenses Structure (Bt bn) 72.73 75 66.37 68.35 63.85 65 29% Impairment on Application Software & Related 26% 27% 28% Expenses 55 0.2% Others 0.2% 0.2% 0.2% 7% 45 7% 7% 7% Directors' remuneration 18% 33.28 35 19% 19% 19% 27% Taxes & Duties 25 8% 0.4% 18% 15 47% 46% Premises & Equipment 47% 46% 47% 5 Employee's expenses

-5 2016 2017 2018 2019 1H20*

 1H20 other operating expenses decreased 1.41% YoY, resulting mainly from employee’s expenses, advertising and marketing activities expenses; while, debt management expense increased

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Other Operating Expenses (Bt bn) 63.85 66.37 68.35 72.73 33.75 33.28 17.48 15.80

Other Operating Expenses Growth (%YoY) (4.20%) 3.94% 2.98% 6.41% 3.33% (1.41%) 9.19% (10.97%)

Loan Growth June 2020 (Consolidated)

Loan Growth (% YoY)

(%) 15

10.01 10

6.20 6.17 5.45 5 4.59

0 2016 2017 2018 2019 1H20*

 1H20 loans grew 10.01% YoY, mainly from COVID-19 relief measures (mainly from SME) and corporate business

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Loans (Bt bn) 1,698 1,803 1,914 2,002 1,933 2,127 2,043 2,127 Loan Growth (% YoY) 5.45% 6.20% 6.17% 4.59% 5.16% 10.01% 6.70% 10.01% Loan Growth (% YTD) 5.45% 6.20% 6.17% 4.59% 1.00% 6.23% 2.05% 6.23%

68 Loan Structure and Loan Growth Targets June 2020 (Consolidated, TFRS 8: Operating Segments*) Loan Portfolio Structure Loan Portfolio Bt bn ConsolidatedAmount (Bt bn) Y2019 1H20 1H20 2020 2,400 1,803 1,914 2,002 2,127 Dec 19 Jun 20 Loan Growth Loan Growth Yield Range Loan Grow th Target (%) 1,698 Corporate 2,000 (%) (%YTD) (%) (No longer applicable) 36% Corporate Loans 691 777 1.2% 12.4% 3-5% 2-4% 1,600 36% 34% SME 30% 35% SME Loans 672 721 1.7% 7.3% 5-7% 1-3% 1,200 Retail Retail Loans 556 570 13.9% 2.6% 5-7% 9-11% 35% 34% 34% 800 39% 36% Other Loans 83 59 1.5% (29.4%) - Others 400 25% 24% 25% 28% 27% Total Loans 2,002 2,127 4.6% 6.2% 4.9% 4-6% 6% 4% 4% 3% 0 5% Note: * From time to time, the Bank has adjusted loan definitions based on loan portfolio management; thus, the latest loan base is 2016 2017 2018 2019 1H20 not comparable with previous reports.

Loan Definition (TFRS 8: Operating Segments) 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

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 Y2018 Loan Growth Target (%): Corporate 6-8%; SME 4-6%; Retail 5-7%; Total Loans: 5-7% Y2017 Loan Growth Target (%): Corporate 4-6%; SME 4-6%; Retail 5-7%; Total Loans: 4-6% Y2016 Loan Growth Target (%): Corporate 4-6%; SME 5-7%; Retail 5-7%; Total Loans: 6-7% Y2015 Loan Growth Target (%): Corporate 3-5%; SME 6-8%; Retail 5-7%; Total Loans: around 6%

** The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

Loan by Retail Products (All Segments) June 2020 (Consolidated, TFRS 8: Operating Segments*)

Loan by Retail Products

(Amount in Bt bn) Dec19 Jun 20 Y2019 1H20 % Portion Loan Loan to Growth Growth Total Loan (%) (%YTD) Housing Loans 326 350 14.4 7.6 16.5 Credit Cards 86 75 8.7 (12.5) 3.5 Consumer Loans 78 82 24.9 5.2 3.8 KLeasing 115 113 6.2 (1.9) 5.3

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 ** The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9).

70 Asset Quality June 2020 (Consolidated) NPL Ratio Coverage Ratio Classified Loans** (Bt bn) 1H20 (%) (%) Stage 1 Performing 1,808 5 200 Stage 2 Under-performing 230 3.92 160.60 155.68 4 3.65 148.45 148.60 Stage 3 Non-performing 96 3.32 3.30 3.34 150 130.92 3 100 2 50 1 0 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*  NPL ratio in 1H20 was at 3.92%, with a coverage ratio of 155.68%  COVID-19 significantly impacts asset quality; however, relief measures help reduce short-term impact to asset quality. NPL can stay at not too high level for now. The Bank has to prepare for the end of relief measures

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 NPL Ratio (%) 3.32 3.30 3.34 3.65 3.40 3.92 3.86 3.92 Coverage Ratio (%) 130.92 148.45 160.60 148.60 157.95 155.68 138.66 155.68

SML to Total Loans Ratio (%)* 2.55 2.59 1.90 2.80 2.50 - - -

Loans with significant increase in credit risk (%) - - - - - 9.43 9.32 9.43

Expected Credit Loss and Credit Cost June 2020 (Consolidated)

Impairment Loss of Loans Expected and Debt Securities Credit Loss Credit Cost

(Bt bn) (bps) 50 41.81 350 311 300 239 40 33.75 32.53 34.01 32.06 250 204 175 30 200 174 20 150 100 10 50 0 0 2016 2017 2018 2019 1H20* 2016 2017 2018 2019 1H20*

 1H20 credit cost was 311bps; increased due to prudent set aside on expected credit loss during the economic recession resulting from COVID-19

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Expected Credit Loss (Impairment Loss of Loans and Debt Securities) (Bt bn) 33.75 41.81 32.53 34.01 15.13 32.06 11.87 20.19

Credit Cost (bps) 204 239 175 174 157 311 235 387

72 Loan Portfolio Breakdown by Industry, Currencies, and Interest Rate June 2020 (Consolidated) Loan Portfolio by Industry By Currencies (December 2019)**

(Bt bn) Other US Dollar*** Currencies 2,500 3.1% *** 2,127 1.2% 1,914 2,002 2,000 1,803 13.0% Others 16.3% 1,610 1,698 14.6% 1,527 14.3% 19.6% 1,439 14.2% Housing Loans 1,500 1,327 14.5% 14.2% 14.9% 16.2% 11.6% 15.7% 14.2% 12.5% 14.8% 14.6% 13.5% 12.8% 13.4% Utilities & Services 15.5% 14.7% 13.7% 1,000 16.0% 12.5% 13.2% 8.5% 8.9% 8.9% 9.3% 13.0% 6.8% Real Estate & Construction Thai Baht 13.0% 6.9% 6.6% 6.5% 6.7% 95.7% Manufacturing & Commerce 500 46.2% 46.2% 43.0% 48.9% 48.9% 48.1% 49.1% 48.1% 47.3% Agricultural and Mining 1.7% 0 2.4% 2.3% 2.0% 1.9% 2.1% 1.9% 1.8% 1.7% *** Mainly trade finance products 2012 2013 2014 2015 2016 2017 2018 2019 1H20 By Maturity of Interest Repricing (June 2020)*

Definition of Loans 1) by industry = Gross loans = Loans to customers less deferred revenue > 6 months Others 2) by currency = Loans to customers and AIR - net 0.4% 3) by maturity of interest repricing = Loans to customers less deferred revenue 18.7%

Loans by Bangkok and Metropolitan vs. Upcountry <=6 months Proportion of KBank's Outstanding Loans 2014 2015 2016 2017 2018 2019 1H20 10.3% Immediate Bangkok and Metropolitan 64% 64% 63% 64% 62% 59% 60% repricing Upcountry 36% 36% 37% 36% 38% 41% 40% 70.7%

Note: * The information on loans breakdown by maturity of interest repricing are disclosed on half year basis ** As of June 2020, the information on loans breakdown by currencies has been changed to loans breakdown by residency of borrowers, being domestic 97.2% and foreign 2.8%

KBank Financial Aid Programs during the COVID-19 Pandemic, and thereafter  Proactive financial relief measures to lesson COVID-19 impact while maintaining prudent asset quality management to encounter economic uncertainties along with continuing enhancement of new lending capability

Phase 1: Relief Phase 2: On-going Phase 3: Expansion

 Proactive relief measures to  Data-driven risk-based customer  Loan portfolio rebalancing customers with adverse impact segmentation to better provide appropriate with new lending capability from COVID-19 outbreak on-going financial relief measures using data analytics

Financial Relief Measures: Phase 1 After Phase 1 Financial Relief Measures New Lending Capability

 For Business Can pay • 6-month payment period (Payment Holiday or known locally as Debt Holiday) • Financial aids programs i.e. payment deferral of principal and/or interest Data-driven • Liquidity injection programs such as BOT risk-based Can’t pay soft loans, etc. customer  For Individual segmentation Lend successfully using data analytics • Reduce minimum payment for unsecured Provide appropriate relief products measures / restructuring / • Payment deferral of principal and/or NPL interest

74 Proactive risk management to counter economic slowdown and high household debt

 Continue to deploy proactive credit portfolio/ risk management/ asset quality management to mitigate an adverse impact from prolonged economic recovery and high household debt

Corporate Business SME Business Retail Business

 Focus on high potential industries  Selective on quality of customers  Focus on high-value customers less impacted by economic  Proactive risk management by regarding prevailing slowdown visiting customers; raise BOT regulations  Closely monitor customers in high productivity of sales teams and  Proactive and efficient collection risk industries and supply chains relationship managers process  Actively monitor early warning  Efficient collection process  Analyze behavior regularly to signs identify weak spots  Promptly respond to adverse events

KBank: Financial Aid Programs during the COVID-19 Pandemic  Offer financial aid programs to help SME and retail customers during the COVID-19 pandemic

Credit Adjustment

For Businesses . Loan Payments for SMEs: o BOT measures*: 6-month grace period on principal and interest payments for SMEs with credit lines below Bt100mn (Automatic adjustment) o Up to 12-month grace period on principal payments for SMEs (program has ended) o “Generous (Business) Owners-Empathetic Creditor” program: a cooperative effort between KBank and business operators to reduce interest rates for 6 months For Individuals . Credit Cards: o Reduce minimum installment payment to 5% in 2020-21 and 8% in 2022, returning to 10% in 2023 (Automatic adjustment) o Grace period on principal payments until December 2020; reduce interest rate to 12% from May to September 2020 (as considered by bank)** (program has ended) . Xpress Cash: o Grace period on principal payments until December 2020; reduce interest rate to 22% from May to September 2020 (as considered by bank)** (program has ended) . Xpress Loan: o 3-month grace period on principal and interest payments** (program has ended) . Housing Loans: o Up to 12-month grace period on principal payments or 50% reduction in installment payments for up to 12-months** (program has ended) . KLeasing: o 3-month grace period on principal and interest payments** (program has ended)

Loans for SMEs

. Loans to support liquidity: o SME Loans with Credit Guarantees by Thai Credit Guarantee Corporation (TCG), with up to 7-year loan repayment period . Soft Loans: o BOT measures*: Soft loans for SMEs, with credit limit below Bt500mn, at 2% for 2 years and 6 months interest free o GSB soft loans for SMEs, with loan limit of Bt20mn for each SME, at 2% for 2 years of 5-year loan repayment period. (This program has ended, as the total loan limit has been used up) . “Zero Interest-rate Loan to Retain SME Staff” program: 0% interest rate with 10-year loan repayment period and 1-year grace period on principal and interest payments for the first year . Loans against mutual funds: o Short-term loans for mutual fund holders; mutual fund units can be used as collateral, with a limit from Bt30,000 to 80% - 95% of the funds' NAV, at 2% to 5.5% interest

Note: * According to the Emergency Decree on Financial Assistance to Enterprises affected by Coronavirus 2019 (B.E. 2563), dated April 18, 2020 ** Debtors must register via KBank Live LINE account, K-Contact Center 028888888 and K-BIZ Contact Center 028888822 Source: KBank 76 KBank: Financial Aid Programs Phase 2 (Continued)  Offer financial aid programs to help retail customers during COVID-19 pandemic Credit Adjustment Phase 2: For Individuals

For Individuals: Automatic Adjustment* Registration**

. Credit Cards: . Credit Cards: o Lower interest rate ceiling from 18% to 16% o Option 1: 6-billing-cycle grace period on principal . Xpress Cash: o Option 2: Change to 48-month term loan, at special interest rate of 12% (card will be closed) o Lower interest rate ceiling from 28% to 25% . Xpress Cash: . Xpress Loan: o Option 1: 6-billing-cycle grace period on principal o Lower interest rate ceiling from 28% to 25% o Option 2: Change to 48-month term loan, at special interest rate of 22% (card will be closed) . KLeasing: . Xpress Loan: o Lower interest rate ceiling from 28% to 24% o Option 1: 6-billing-cycle grace period on principal o Option 2: 30% reduction in installment payments for 6 billing cycles, at special interest rate of 22% . Xpress Loan – Long-Term Loan: o Option 1: 3-month grace period on principal o Option 2: 30% reduction in installment payments for 3 months o Option 3: 3-month grace period on principal and interest payments . Housing Loans: o Option 1: 3-month grace period on principal and 0.1% reduction in interest rate for 3 months o Option 2: 50% reduction in installment payments for 3 months o Option 3: 3-month grace period on principal and interest payments . KLeasing: o Car to cash (Pledge Registration): • 30% reduction in installment payments throughout the contract period with maximum interest rate not higher than 22% p.a. o Others: Hire Purchase and Financial Lease • Option 1: 3-month grace period on principal and interest payments and extension of term loan for another 3 months • Option 2: 50% reduction in installment payments for 6 months and extension of term loan for another 3 months

Note: - According to the BOT’s announcement of the second phase of COVID-19 relief measures, dated June 19, 2020. * Automatic adjustment will be effective from August 1,2020 onwards. ** For affected debtors who are non-NPLs as of Mar 1, 2020. KBank provides alternative options to help alleviate debtors’ burdens. They can choose an option depending on their ability to pay. Source: KBank

Relief Measures for COVID-19 Impact (Press Releases on Talk after Lockdown with KBank President (Mr. Patchara Samalapa), dated 2 July 2020) All Relief Measures (Grace Period, Debt Holidays, etc.)* No. of customers: 0.65 million customers Outstanding loans: Bt 828 billion Retail Customers Business Customers Outstanding loans No. of customers Outstanding loans No. of customers (Bt bn) (‘000) (Bt bn) (‘000) All Relief Measures* 82 356 All Relief Measures* 746 293 Additional loans 13 34 Additional loans 143** 60

*All Relief Measures include Grace Period, Debt Holidays, etc.; debt holiday in Thai context refers to payment holiday (not debt forgiveness); ** 30% YoY growth Note: All figures above are broken down by customer and are not comparable with loans in this presentation deck which are broken down by business. Business customers: Outstanding loans of Bt746 billion have average loan to value (LTV) around 81% Special Projects . “Generous (Business) Owners – Empathetic Creditor” lowered interest rates for business owners to allow them to keep their employees on payroll . “Zero Interest-rate Loan to Retain SME Staff” 0% interest rate for 10-year loans, to pay salaries Lending through special projects 1,144 million Baht No. of employees helped via special projects 49,000 employees

78 Restructured Loans Incurred Losses December 2019 (Consolidated)

 Restructured loans that incurred losses determine from the loan that present value of expected future cash flow to be received is less than the outstanding balance, where the present value is discounted by market rates; debt restructuring includes various forms i.e. reduction of principal and interest, transfer of assets, and change of repayment conditions

% of Restructured Loans that Incurred Losses Restructured Loans that Incurred Losses to Total Loans Breakdown by NPL and Non-NPL

(Bt bn) (% of Restructured Loans) 69.6 67.2 5% 70 62.2 58.3 3.6% 60 3.4% 3.5% 3.4% 4% 96% 93% 96% 98% 50 2.6% 3% 2.2% 40 35.1 1.9% 2.1% 1.9% 1.9% 1.6% 1.8% 27.1 2% 30 24.2 22.6 22.9 25.2 23.7 17.6 96% 20 1% 85% 89% 99% 98% 90% 90% 95% 10 4% 4% 7% 4% 2% 15% 11% 1% 2% 10% 10% 5% 0% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

NPL Non NPL

Bad Assets Resolution June 2020 (Consolidated) Write-offs NPL Portfolio Sales (Bt bn) 28 26.4  2007: KBank and Phethai AMC sold NPLs totaling Bt11.4bn to Standard Bank Asia Limited and Morgan Stanley Emerging Markets Inc. at Bt7.6bn 24 and Bt3.8bn, respectively 19.9 20  2008-1Q16: NPLs continued to decline without bulk NPL sales  2016: KBank sold NPLs worth Bt6.4bn (Bt4.9bn in 2Q16 and Bt1.5bn in 16 4Q16) to JMT Network Services PCL 12.6 11.6 10.1  2017: KBank sold NPLs worth Bt8.4bn in 4Q17 to asset management 12 10.3 10.7 8.7 9.6 companies 7.3 8  2018: KBank sold NPLs worth Bt15.4bn (Bt7.3bn in 1Q18, Bt5.4bn in 3Q18, 5.5 5.0 4.3 4.3 3.9 and Bt2.7bn in 4Q18) to asset management companies 4  2019: KBank sold NPLs worth Bt7.1bn (Bt4.3bn in 1Q19 and B2.8bn in 3Q19) to asset management companies 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20  1Q20: KBank sold NPLs worth Bt4.9bn to asset management companies

Note: * On September 11, 2013, the Bank was formally notified of its final loss sharing portion under the asset transfer agreement with TAMC established in October 2001. This amounted to Bt206mn. An amount of Bt1,159mn relating to the provision for losses recorded in prior years has been reversed through profit or loss in 2013

Outstanding Foreclosed Properties Sales of Foreclosed Properties

(Bt bn) (Bt bn)

30 10 29.7 25 27.9 8 24.9 20 5.4 5.6 6 5.0 4.8 15 18.7 19.6 4.2 17.3 16.7 17.4 4.1 16.1 15.9 15.1 16.1 4 3.3 10 2.8 3.0 2.9 12.5 12.1 13.4 2.4 5 2 1.7

0 0 200620072008200920102011201220132014201520162017201820191H20 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20

80 TFRS 9: Investment in Securities Portfolio and Structure June 2020(Consolidated) Instrument Type Financial Assets Classification Holding Type (OLD) Asset Type*

(Bt bn) (Bt bn) 777 867 850 0.3% 0.2% 1,000 867 650 663 0.1% 900 777 0.2% 750 0.1% 536 0.1% 0.7% 9% 0.2% 0.1% 800 650 663 0.4% 650 0.2% 14% 700 0.3% 0.3% 16% 0.3% 0.2% 0.7% 51% 536 550 8% 10% 15% 600 8% 0.4% 7% 0.5% 19% 450 54% 500 10% 12% 46% 9% 16% 18% 350 56% 400 15% 63% 300 250 42% 74% 56% 43% 200 66% 53% 52% 64% 150 40% 100 32% 50 0 2% 4% 3% 2% 6% 2016 2017 2018 2019 1H20* -50 2016 2017 2018 2019 1H20* Other Investment (Investments in Receivables, Investments in Subsidiaries and Other Investments) Trading Available-for-sales Investments Subsidiaries Equity Investment Held-to-matu rity General Amortized cost Foreign Bonds Fair value through OCI Investment in Receivables Investments Subsidiaries Corporate Bonds Fair value through PL Government & State Enterprise Bonds  KBank’s guideline for investment portfolio management is to primarily maintain liquidity in order to support a future change in business conditions. In addition, an investment strategy was established in line with changes in economic conditions and the movement of money markets and capital markets both at home and abroad. 2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Investment Portfolio (Bt bn) 650 536 663 777 778 867 788 867

Investment Portfolio (% Growth YoY) 36.10% (17.52%) 23.51% 17.22% 27.66% 11.43% 11.50% 11.43% Note * The Bank and its subsidiaries have adopted new accounting standards (TFRS 9: Financial Instruments) since January 1, 2020 onwards, some financial statements and financial ratios are not comparable with previous years’ financial figures, which were based on the prior accounting standards (non-TFRS9). 81

Deposits Growth and Loans to Deposits Ratio June 2020 (Consolidated)

Deposits & B/E Loans to Deposits Ratio (Bt bn) 2,700 100% 2,400 2,308 2,072 96.0% 95.9% 96.6% 2,100 1,995 1,795 1,879 94.6% 1,800 95% 1,500 92.2% 1,200 900 90% 600 300 0.30000 0 85% 2016 2017 2018 2019 1H20 2016 2017 2018 2019 1H20 Loans to Deposits Deposits B/E  Deposits and Loans to Deposits Ratio is in line with peers

2016 2017 2018 2019 1H19 1H20 1Q20 2Q20 Deposits (Bt bn) 1,795 1,879 1,995 2,072 2,005 2,308 2,202 2,308 Deposits (% YoY) 5.2% 4.7% 6.2% 3.9% 5.4% 15.1% 11.3% 15.1% Deposits (% YTD) 5.2% 4.7% 6.2% 3.9% 0.2% 11.4% 6.3% 11.4% Loans to Deposits Ratio (%) 94.6% 96.0% 95.9% 96.6% 96.4% 92.2% 92.8% 92.2%

82 Funding Structure and Interest Rate Movement June 2020 (Consolidated) Funding Structure Deposit Structure

(Bt bn) (Bt bn) 2,400 2,308 2,507 2,800 1,995 2,072 2,194 2,236 5% 2,000 1,795 1,879 20% 2,400 2,051 2,019 6% 4% 24% 21% 22% 2,000 3% 3% 1,600 23% 8% 3% 4% 5% 4% 1,200 74% 1,600 71% CASA 72% 1,200 92% = 80% 93% 800 72% 73% 87% 93% 91% 800 400 400 6% 6% 0 6% 6% 6% 0 2016 2017 2018 2019 1H20 2016 2017 2018 2019 1H20 Interbank and Money Market ST and LT Borrowings Deposits Term Savings Current KBank Interest Rate Movement (Retail customers) ST and LT Borrowings Deposit rates (%) (May 26, 2020) (%) Savings 0.25 (Bt bn) 8 100 96 7 Fixed 3M-12M 0.37-0.45 82 71 71 71 6 Fixed 24M-36M 0.50-0.70 75 100% 5 100% 100% 4 Lending rates (%) (May 22, 2020) 50 84% 99% 3 MLR 5.47 25 2 0.17% 0.04% 1 MOR 5.84 0.40% 0.38% 16% 0.19% 1% 0 0 MRR 5.97 2013 2014 2015 2016 2017 2018 2019 1H20 2016 2017 2018 2019 1H20 LT Borrowing B/E & Others ST Borrowing ML R Savings Fixed3M

Long-term Senior/Subordinated Debentures

Issue Maturity Interest Rate Interest Name Type Feature Amount Payment Credit Rating Date Years (Per annum) period

Long-term Subordinated Debentures

Tier II Subordinated Notes 12 years Semi- Baa3 by Moody’s 02/10/2019 Unsecured 12NC7 USD800mn 3.343% due 2031* (02/10/2031) annually BB+ by Fitch Ratings

Subordinated Instruments intended to qualify as Tier 2 Capital of 10.5 years 14/07/2016 Unsecured 10.5NC5.5 Bt7,500mn 3.50% Quarterly AA- (tha) by Fitch Ratings KASIKORNBANK PCL No.1/2016 (14/01/2027) due 2027

Subordinated Instruments intended to qualify as Tier 2 Capital of 10.5 years 09/10/2015 Unsecured 10.5NC5.5 Bt6,500mn 3.95% Quarterly AA- (tha) by Fitch Ratings KASIKORNBANK PCL No.1/2015 (09/04/2026) due 2026

Long-term Senior Debentures

5 Years 07/12/2018 Floating Rate Notes due 2023* Unsecured - USD15mn 3m Libor+0.95% Quarterly - (07/12/2023)

Floating Rate Notes due 2023* 5 Years 30/10/2018 Unsecured - USD100mn 3m Libor+0.95% Quarterly - (Sustainability Bond) (30/10/2023)

Baa1 by Moody’s 5.5 Years Semi- 12/01/2018 Senior Unsecured Notes due 2023* Unsecured - USD400mn 3.256% BBB+ by S&P (12/07/2023) annually BBB by Fitch Ratings

Baa1 by Moody’s 5.5 Years Semi- 06/10/2016 Senior Unsecured Notes due 2022* Unsecured - USD400mn 2.375% BBB+ by S&P (06/04/2022) annually BBB by Fitch Ratings

5.5 Years 26/08/2015 Floating Rate Notes due 2021* Unsecured - USD10mn 3m Libor+1.00% Quarterly - (26/02/2021)

Note: *The issued notes are drawn from the Bank’s USD2.5bn Euro Medium Term Note Programme (EMTN)

84 KBank: The wholly-owned subsidiaries, and Muang Thai Life Assurance

The wholly-owned subsidiaries of KBank: Business Profile and Aspiration June 2020

KAsset KResearch KSecurities KLeasing KF&E EST. 1992 EST. 1995 EST. Jul 2005 EST. Aug 2005 EST.1990

Company KASIKORN ASSET KASIKORN RESEARCH KASIKORN LEASING KASIKORN FACTORY AND KASIKORN SECURITIES PCL Name MANAGEMENT CO., LTD. CENTER CO., LTD. CO., LTD. EQUIPMENT CO., LTD.

A leader in fund ‒ Professional in providing Professional in providing a Professional in providing Professional in providing a management business knowledge in economics, complete range of excellent three core products: hire complete range of (i.e. mutual funds, business, money, and financial solutions and purchase, financial lease, machinery and equipment Company provident funds, and banking services, including investment and floor plan leasing services Profile private funds) ‒ Only research house banking, securities which is an affiliate of a underwriting, and securities bank brokerage

Asset Size Bt3.02bn Bt0.14bn Bt27.34bn Bt111.90bn Bt23.31bn

Market Share 20% N/A 4% (#9) 7%* N/A

Top of mind research house Maintain leading position in for media and for the clients Maintain a good asset 5% YoY growth on 2020 Targets Maintain top tier position securities business under of KBank and its wholly- quality portfolio outstanding loans local bank parent owned subsidiaries Provide complete range 3-year of financial solutions and Maintain leading position in Maintain top tier position Top of mind research house Top of mind securities firm Aspiration maintain good asset equipment leasing industry quality

*KLeasing Market Share as of 4Q19 86 The wholly-owned subsidiaries of KBank: 1H20 Key Operating Performance June 2020

KAsset KResearch KSecurities KLeasing KF&E EST. 1992 EST. 1995 EST. Jul 2005 EST. Aug 2005 EST.1990 1H20 Key Assets Under Management Most quoted research - Trading volume: Bt575bn Outstanding loans: Outstanding loans: Operating (AUM): Bt1.42trn house in the media - Number of customers grew Bt112.64bn (+0.29% YoY) Bt23.08bn (+8.38% YoY) Performance (+1.84% YoY) 27% YoY

The wholly-owned subsidiaries of KBank: Net Profit

(Bt bn) 5.99 6 5.39  Due to the COVID-19 pandemic, net profit slightly 4.91 5 4.56 dropped from the same period of 2019. 3.85 4 3.66 3.23 3 2.76 2.25 1.84 2

0 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20

KAsset Highlights in 1H20 June 2020 Industry Outlook:  1H20 industry AUM at Bt7.13trn, decreasing -5.10% YoY AUM (KAsset vs. Industry)  KAsset AUM at Bt1.42trn, increasing +1.84% YoY

(Bt bn) (Bt bn) 7,737 8,000 6,959 7,173 7,130 2,000 6,368 KAsset Highlights: 5,534 6,000 5,118 1,500 4,253  Ranked #1 in Mutual Fund and #2 in Provident Fund 1,431 1,416 3,633 1,303 1,380 4,000 2,883 3,015 1,240 1,000 2,576 1,090 1,132 with market share of 22.1% and 15.6%, respectively 946 851 2,000 742 500 635 509  Ranked #2 in total AUM with market share of 19.9% ‐ ‐ 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H 20  Mutual fund accounts for 75% of KAsset AUM

Industry KAsset *2018-YTD include REITs Market Share by AUM KAsset AUM Breakdown by Type

(%) 32.1 32.3 Provident 29.9 30.7 29.6 Fund 30.0 14% 22.9 21.4 20.5 20.7 19.5 19.2 19.9 19.8 Private 18.7 18.5 12.6 11.6 Fund 10.5 15.0 11.8 10.8 11.6 12.1 11% 10.7 11.3 10.3 6.7 6.5 6.5 5.8 5.5 Mutual 0.0 Fund KAsset SCBAM KTAM MFC BBLAM Other 75%

2016 2017 2018 2019 1H20

88 KResearch Highlights in 1H20 June 2020

KResearch Highlights: Number of News Quotes  The most quoted private research house 16,000 14,532 in Thailand 14,000  Top of mind research house for the 12,000 11,500 public, including clients of KBank and its wholly-owned subsidiaries 10,000 9,292 9,346 8,452 7,672 7,910 8,000

6,000

4,000

2,000

- 2014 2015 2016 2017 2018 2019 1H20

Source : News Center, isentia, IQnewsClip, etc. The number of quotes from the media newspapers online newspaper and other online news. (excluding magazines, TVs, and Radio)

KSecurities Highlights in 1H20 June 2020 Industry Outlook:  1H20 industry trading volume* was Trading Volume (KSecurities vs. Industry)* Bt15.19trn, increasing 46% YoY (Bt bn) (Bt bn) 24,790  KS trading volume was Bt575bn 25,000 22,937 1,600 22,442 21,551 21,899 20,345 1,400 20,000 19,549 KSecurities Highlights: 1,296 1,200 1,251 15,194 1,000 15,000 13,772 860 868  KS ranked #9, with 3.79% market share 12,377 12,486 812 739 683 800 8,544 8,640 817 575  Majority of revenue came from brokerage 10,000 7,967 7,962 600 430 411 400  Number of customers account grew 27% 5,000 207 117 200 41 91 YoY to 186,496 customers in 1H20 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20 Total Industry Trading Volume KS Trading Volume Market Share by Trading Volume* KSecurities Revenue by Business

(%) 10.0 8.2 Investment Banking 6.8 6.16.1 6.5 15% 4.6 4.7 4.6 4.7 5.0 3.8 3.7 3.8 3.6 4.13.7 3.4 4.2 4.2 3.8 3.5 2.6 3.12.9 3.0 3.0 2.3 2.6 2.6 2.1 1.9

0.0 Brokerage and other KS SCBS KTZ BLS TNS MBKET 85% 2016 2017 2018 2019 1H20

Note: * Industry trading volume excluding proprietary trades 90 KLeasing Highlights in 1H20 June 2020

Industry Outlook: KLeasing vs. Industry  1H2020 industry car sales totaled 328,604 units, decreasing 37.3% YoY (Thousand Units) (Bt.bn.) 1,500 1,436 150 1,331 1,042 1,008 KLeasing Highlights: 872 1,000 882 800 769 112.6 100 108.1 114.8  1H2020 KLeasing loans totaled Bt112.62bn, 90.7 97.1 82.9 89.2 89.8 88.7 increasing 0.29% YoY 500 329 50  1H2020 KLeasing NPL ratio was 1.74%, lower - - 2012 2013 2014 2015 2016 2017 2018 2019 1H20 than the Thai commercial bank average ratio Total Car Sales in Thailand Kleasing Outstanding Loans Market Share by Total Outstanding Loans (%)* KLeasing Outstanding Loans Breakdown**

(%) 50 2930313131 29 25272728 25 1414151515 1412121211 10 8 887 7 8 8 7 7

0 TBANK AYCAL TISCO SCB KK KLeasing 2016 2017 2018 2019 1H20

Note: * Excluding captive and non-bank leasing; Data as of 1H19 ** New car includes HP New car, Fleet finance, Finance lease (FL) and Floorplan Used car includes Car to Cash (K-Car / Car registration loan) and other used cars

KF&E Highlights in 1H20 June 2020

Industry Outlook:  Growth in Equipment Leasing (EQL) business forecasted KF&E Outstanding Loans using numerous factors including total import volume of

(Bt.bn) machinery and equipment, direction of government policy, 25.0 22.88 23.08 domestic and international business growth opportunities, 20.38 20.0 and Capital Investment Index 17.63 14.80 KF&E Highlights: 15.0 13.40

10.0  KF&E outstanding loans were Bt23.08bn, increasing 8.38% YoY 5.0  KF&E currently ranked #1; maintaining lead position in 0.0 2015 2016 2017 2018 2019 1H20 equipment leasing industry

Note: In 2010, KASIKORN FACTORING (KFactoring) was renamed KASIKORN FACTORY AND EQUIPMENT (KF&E) to better reflect their business, focusing on offering leasing services for machinery and equipment; the factoring business operation of KFactoring was transferred to KBank

92 Life Insurance Industry in Thailand

Premium per % GDP by Country

(%) Source: Swiss Reinsurance 20.0  In 2019, low penetration rate of 3.3% in Thailand with 17.5 Y2017 16.5 a high opportunity for growth 17.9 15.0 Y2018 10.0 Y2019 6.1 5.8 6.2 6.0  Muang Thai Life Assurance (MTL) ranked #3 in life 5.0 3.3 3.4 3.6 6.6 6.6 2.1 2.7 2.8 2.3 2.3 3.6 3.3 1.51.4 1.3 1.6 2.3 1.5 2.8 3.3 2.7 1.9 1.2 1.2 1.3 1.4 insurance industry in Thailand, in 1H20 -  #3 in total premium with 12.6% market share India China Taiwan Vietnam Thailand Malaysia Australia Indonesia Singapore Philippines South Korea Size of Market by Premium(%) Market Share by Total Premium in Life Insurance (%) New Business Total Premium Premium (%) (Bt bn) (Bt bn) 700.0 200.0 30.0 180.0 23.1 2018 2019 1H20 600.0 25.0 22.8 601.7 627.4 160.0 500.0 568.3 610.9 20.0 537.5 140.0 21.4 15.1 14.4 13.7 503.9 15.0 12.6 400.0 442.5 120.0 9.6 285.9 15.1 10.1 9.8 8.3 300.0 391.4 100.0 10.0 13.8 7.4 5.3 7.9 5.8 5.9 5.3 2.4 328.6 80.0 10.7 5.3 4.7 4.0 200.0 5.0 8.1 4.0 2.5 8.4 60.0 6.5 5.3 4.5 4.1 2.1 100.0 40.0 - - 20.0 AIA TLI MTL SCBLife KTAL BLA AZAY FWD PLT OLIC Others 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20

Total Premium New Business Premium Source: The Thai Life Assurance Association

* New Business Premium in 1H20 = Bt76.2bn

Source: The Thai Life Assurance Association Note: Total Premium = New Business Premium + Renewal Premium; New Business Premium = First Year Premium + Single Premium

Bancassurance Highlights in 1H20

Bancassurance Market Share by Total Premium (%)

(%) 30 2018 23.2 23.0 19.3 2019 20 16.2 23.8 12.7 1H20 11.5 8.2 7.9 9.2 10 6.1 8.4 8.2 8.3 8.0 7.5 13.7 9.0 3.7 4.1 3.5 3.2 4.8  MTL ranked #2 in Bancassurance market 8.1 4.1 4.1 1.4 6.8 3.4 16.4 7.1 2.3 0 2.6  #2 in Bancassurance total premium with SCBLife MTL KTAL TLI PLT BLA FWD AIA AZAY DLA Others 19.3% market share  #2 in Bancassurance new business Bancassurance Market Share by premium with 15.6% market share New Business Premium (%) (%) 30 27.9 2018 2019 20.1 20 1H20 15.5 15.6 14.7

15.8 9.8 9.3 8.4 8.7 8.5 8.6 7.7 10 12.19.1 7.1 8.7 6.6 12.9 6.6 4.6 4.3 3.9 5.2 6.4 6.6 4.3 6.4 3.1 5.4 5.3 2.8 7.8 0 SCBLife MTL PLT KTAL TLI AIA FWD SELIC DLA BLA Others

Source: Muang Thai Life Assurance (MTL), The Thai Life Assurance Association (TLAA) monthly report (new format) Note: Bancassurance premium include all bank partners‘ premiums of MTL

94 KBank’s Strategic Acquisition in Muang Thai Group Holding (MTGH)

MTGH

MTI MTL MTB FVC AIGEN

MTIB

Current KBank Economic Interests  Established April 6, 1951 Muang Thai Group Holding Co. Ltd  First life insurance company to have received the Royal 51.0% (MTGH) benevolence in granting the appointment as the life insurance company of His Majesty King Bhumibol Adulyadej Muang Thai Life Assurance PCL 38.3%  Joined hands with Ageas in 2004 (formerly known as Fortis (MTL) Insurance International NV) and joined hands with KBank Muang Thai Insurance PCL 10.1% in 2009 (MTI)  Credit Rating: Muang Thai Broker Co, Ltd  BBB+ from S&P Global 50.98% (MTB)  A- and AAA (tha) from Fitch Ratings MT Insure Broker Co, Ltd  Life Insurance Company with Outstanding Management 38.2% (MTIB) (1st Place) 2006-2018 (13 consecutive years) Fuchsia Venture Capital Co, Ltd from Office of Insurance Commission 38.3% (FVC)  Life Insurance Company of the Year 2014, 2017 & 2018 from Asia Insurance Industry Awards AIGEN Co, Ltd 51.0% (AIGEN)  Ageas holds 7.83% in MTGH and holds 24.9999% in MTL

Note: OIC = Office of Insurance Commission 95

Muang Thai Life Assurance (MTL) Information Summary  Strong fundamentals and revenue generation, helped by process efficiency and service quality enhancements; platform and synergy alignment between MTL and KBank  Risk-Based Capital (RBC) remains strong, sufficient to support business growth and much higher than OIC minimum requirement

Statements of Comprehensive Income (Bt bn) Strategy in 2020

2018 2019 1H20 To sustainably deliver happiness to customers, employees, and stakeholders, MTL Net premiums earned 91.4 80.5 33.9 will reinforce its “MTL Everyday Life Partner” strategic direction to offer excellent Net investment income 19.0 20.5 10.0 products, services, and customer experience. We will continue to enhance Total revenues 110.4 100.9 43.6 distribution capabilities to grow market share sustainably as well as exploring new growth in regional markets. MTL plans to enhance connectivity with ecosystem Life policy reserve increase from the previous period 46.6 35.1 8.0 partners. We aim to become a data-driven company with the advanced data Net benefit payments and insurance claims 37.2 41.4 24.1 analytics capabilities to enhance business opportunities and efficiency. Human Commissions and brokerages 9.0 9.1 4.3 development remains our priority while also placing great emphasis on cost Other underwriting expenses 0.8 0.7 0.3 management and intelligent automation. MTL ensures effective risk management and is well-prepared for new regulatory standards. Operating expenses & Other 5.2 5.0 2.2 Total Expenses 98.9 91.4 38.8 2020 Key Financial Targets Profit before income tax expense 11.5 9.5 4.8 Bt bn 2015 2016 2017 2018 2019 2020 Income tax expense 2.2 1.8 -0.9 Total Premium 87.9 97.0 102.7 94.5 83.8 Net profit (loss) 9.3 7.7 3.9 (after refund) >=Industry growth

Statements of Financial Position (Bt bn) % Growth 17% 10% 6% -8% -11% 2018 2019 1H20 2018 2019 1H20 Total Assets 479.6 531.1 536.3 ROE (%) 16.6% 12.4% 10.8% Total Liabilities 421.5 464.5 468.6 Total Equities 58.1 66.6 67.7 ROA (%) 2.1% 1.5% 1.4% Risk-Based Capital (RBC) 323.7% 385.7% 311.1% Source: Muang Thai Life Assurance, data based on book value except for RBC Note: OIC = Office of Insurance Commission

96 MTL Investment Portfolio and Insurance Premium MTL Investment Portfolio: MTL Total Premium Fixed Income accounted for around 86% (bn) 120 102.7 97.0 100 94.5 83.8 Total Premium MTL Industry 80 Growth 60 (%YOY) 35.9 Y2016 10% 6% 40 33.8 31.1 Y2017 6% 6% 26.0 26.3 22.8 Y2018 -8% 4% 20 9.6 Y2019 -11% -3% 63.2 71.6 71.7 57.9 0 1H20 -16% -3% 2016 2017 2018 2019 1H20

New Business Premium Renewal Year Premium Total Premium

Assets Under Management (AUM)* (1H20): Bt509.6 bn Source: The Thai Life Assurance Association

Total Premium by Products: Total Premium by Channels: Ordinary product accounted for around 86% Bancassurance accounted for about 63% in 1H20

100% 100%

80% 80% 60% 60% 40% 40% 20% 20% 0% 2017 2018 2019 1H20 0% Group Personal Accident Industrial Ordinary 2016 2017 2018 2019 1H20 Other Direct Marketing Bancassurance Agents

*Remark: Invested Assets + Investment Property Source: The Thai Life Assurance Association (TLAA) / 1H20 data from TLAA monthly report (new format)

MTL International Business Expansion

MTL Current International Business Project (On-going)

Cambodia Lao PDR Vietnam Myanmar Company Name Sovannaphum ST-Muang Thai MB Ageas - Life Assurance Insurance Co., Ltd. Life Insurance Co., Plc. Ltd.

Entry Strategy Joint Venture with Joint Venture with Joint Venture with - Canadia ST Group Co., Ltd Military Bank and Investment and Muang Thai Ageas Holding Plc. Insurance Company Limited (MTI) Ownership by MTL 49% 22.5% 10% -

Year of Establishment 2015 2016 2016 2014

Business Operation Life Insurance Composite Life Insurance Representative Insurance Office (Life & Non-Life)

98 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

Sample of K-Bancassurance and MTL Products K-Bancassurance Products1 Muang Thai Life Assurance Products2 Endowment Life Insurance Endowment 615 Participating (Global) Pay premium for only 6 years, but the coverage continues for 15 years Muang Smart Linked 17/7 Pay premium for only 7 years, but the coverage continues for 17 years

Term Life Insurance Term Life Insurance

MRTA-Home (Mortgage Reducing Term Assurance) Khumkhrong Baep Khongthi Life-Bukkhon Single Premium payment period, but the coverage can be chosen between 1 - 15 years

1) K-Bancassurance products are MTL’s life insurance products selling through KBank 2) Muang Thai Life Assurance products are MTL’s life insurance products selling through MTL sales agents, and/or other channels

100 Sample of K-Bancassurance and MTL Products K-Bancassurance Products1 Muang Thai Life Assurance Products2 Whole Life Insurance Whole Life Insurance Khumkhrong Talot Chip 99/5 Muang Thai Happy Return 99/7 Life insurance with a premium payment of only 5 years, but the coverage continues to age 99 years Saving plan with whole life coverage: pay premium for only 7 years and get coverage to the age of 99

Remark (1) Is in % of the initial sum insured. (2) In case of being alive until contract maturity, the benefit is 100% of the initial sum insured or 101% of paid premium (whichever is higher). (3) Life coverage is 100% of the initial sum insured or cash surrender value at that time or 101% of paid premium (whichever is higher).

Rider

101

KBank: Other Information

102 Shareholder Structure April 10, 2020 (Record Date) Shareholder Structure Top 10 Shareholders* %

1. THAI NVDR CO., LTD** 18.550 2. STATE STREET EUROPE LIMITED 8.510 3. SOUTH EAST ASIA UK (TYPE C) NOMINEES 5.936 Thai LIMITED Shareholders Foreign 51% Shareholders 4. SOCIAL SECURITY OFFICE 3.589 49% (NVDR 5. BNY MELLON NOMINEES LIMITED 3.299 = 18.550%**) 6. THE BANK OF NEW YORK MELLON 2.338 7. STATE STREET BANK AND TRUST COMPANY 2.132 8. SOUTH EAST ASIA UK (TYPE A) NOMINEES 1.669 LIMITED 9. NORTRUST NOMINEES LIMITED-NTO SEC 1.362 Note: LENDING THAILAND CL AC Thai Shareholding Limit 51% 10. GIC PRIVATE LIMITED 1.310 Foreign Shareholding Limit 49% Other Shareholders 51.305 Total 100.000

Note: * The Top 10 Shareholders are based on individual accounts ** Thai NVDR Co., Ltd (Thai NVDR) is responsible for issuing and selling Non-Voting Depository Receipts (NVDRs) to investors. The Stock Exchange of Thailand (SET) is the major shareholder, holding 99.99% of the total shares, of Thai NVDR. The NVDR limit for KBank is 25%. *** 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)

Source: Thailand Securities Depository Company Limited (TSD), the Stock Exchange of Thailand website (www.set.or.th), and KBank

103

Credit Ratings As of Aug 24, 2020

KBank Thailand Foreign Currency Local Currency/ National Outlook Government Outlook Long-term * Senior Subordinated Long-termRti Subordinated Foreign Local Unsecured Debts Debts Currency Currency Notes

Watch S&P's BBB+ BBB+ N/A N/A N/A BBB+ A- Stable2) Negative1)

Moody's Baa1 Baa1 Baa3 Baa1 N/A Stable3) Baa1 Baa1 Stable4)

Fitch BBB5) BBB5) BB+5) AA+ (tha) AA-(tha)5) Stable BBB+ BBB+ Stable6)

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 1) August 24, 2020: S&P’s changed the outlook on the long-term ratings of two Thai banks, including KBank, to watch negative from stable, following the change in the outlook for the banking industry outlook to negative from stable on August 21, 2020 2) April 13, 2020: S&P’s downgraded its outlook on Thailand’s sovereign credit rating to ‘Stable’ from ‘Positive’; reflecting its view that the COVID-19-induced economic uncertainty and the state of emergency declaration could delay political transitions expected under the civilian government over the next 12 months 3) April 22, 2020: Moody's changed the outlook on the long-term ratings of ten Thai banks, including KBank, to stable from positive, following the change in the outlook for the sovereign's rating to stable from positive on April 21, 2020 4) April 21, 2020: Moody’s changed the outlook on the Government of Thailand's issuer ratings to stable from positive, as the drivers of the outlook change to positive July 2019 have become significantly less likely to materialize, such as delays in policy implementation, ongoing political tensions, and the deep economic shock caused by the COVID-19 outbreak 5) April 2-8, 2020: Fitch downgraded KBank’s ratings, including SCB, BBL and BAY, due to the challenging operating environment and the large-scale economic disturbance caused by the COVID-19 pandemic 6) March 17, 2020: Fitch downgraded the outlook of Thailand to stable from positive, reflecting the evolving impact of the global COVID-19 outbreak on Thailand's economy through its tourism sector as well as lingering uncertainty in Thailand's political environment following the country's transition to civilian rule

104 Organization Chart Advisory Council to the Board of Directors/ Legal Adviser Auditor Shareholders Independent Directors Committee Corporate Governance Committee Corporate Secretary Board of Directors Human Resources and Remuneration Committee

Audit Committee

Risk Oversight Committee Management Operating Committee Audit Committee Division

Corporate Secretariat Division

Corporate Business Distribution Network Private Banking Capital Markets Investment Banking World Business Division Division Group Business Division Business Division Group

Strategy and Analytics Transaction Banking Enterprise Risk Customer and Enterprise Finance and Control Human Resource Credit Products Division Division Division Management Division Service Fulfillment Division Division Division

105

Board of Directors Structure  16 board members: 9 Independent Directors, 3 Executive Directors, and 4 Non-Executive Directors  Director age limit is 72 years old  Term limit of directorship for Independent directors shall not exceed nine consecutive years  Lead Independent Director and Independent Directors Committee were appointed in order to ensure proper checks and balances Executive Directors (3) Non-Executive Directors (4) Independent Directors (9)

• Ms. Kattiya Indaravijaya • Ms. Sujitpan Lamsam • Ms. Kobkarn Wattanavrangkul (Chief Executive Officer) (Vice Chairperson) (Chairperson of the Board and Lead Independent Director) • Mr. Pipit Aneaknithi • Dr. Abhijai Chandrasen (President) (Legal Adviser) • Sqn.Ldr. Nalinee Paiboon, M.D. (Chairperson of the Corporate Governance • Mr. Patchara Samalapa • Mr. Sara Lamsam Committee) (President) • Ms. Chonchanum Soonthornsaratoon • Mr. Saravoot Yoovidhya • Dr. Piyasvasti Amranand (Chairman of the Risk Oversight Committee) • Mr. Kalin Sarasin (Chairman of the Audit Committee) • Mr. Wiboon Khusakul • Ms. Suphajee Suthumpun (Chairperson of the Human Resources and Remuneration Committee) • Mr. Chanin Donavanik • Ms. Jainnisa Kuvinichkul Chakrabandhu Na Ayudhya Note: More information on the Board of Directors biographies can be found on our website https://www.kasikornbank.com/EN/about/Pages/board-of-directors.aspx 106 Sustainable Development PRIDE OF KBank KASIKORNBANK conducts business with the foundation of Bank of Sustainability, with INTERNATIONAL appropriate risk management and good corporate governance principles. We strive to The first and only commercial bank in Thailand and ASEAN balance economic, social, and environmental dimensions to achieve goals and create selected as a member of the DJSI World Index and DJSI sustainable long-term returns. The philosophy of sustainable development is instilled in Emerging Markets Index for four consecutive years (2016-present) all our operations as part of our Green DNA, ensuring maximum benefit for all stakeholders and paving the way for sustainable growth. KBank has been classified in the Bronze Class of the BANK OF SUSTAINABILITY banking industry category by RobecoSAM (2018-present)

Economic Aspect A member of the FSTE4Good Emerging Index for four • Corporate Governance consecutive years (2016-present) • Customer Centricity • Innovation KBank’s Leadership Level rating is at AA for its ESG • Financial Knowledge performance among emerging market banking sector peers • Risk Management The first Bloomberg Gender-Equality Index (GEI) member • Customer Data Security and Privacy from Thailand. The Bloomberg Gender-Equality Index (GEI) distinguishes companies committed to transparency in gender Social Aspect reporting and advancing women’s equality for two consecutive years (2019-present) The first Thai commercial bank with an A- Management • Labor Relations Management and Level rating, assessed by the Carbon Disclosure Program Employee Caring (CDP) • Employee Development NATIONAL • Occupational Health and Safety SET Sustainability Awards • Youth Education Development and Included in Thailand – Outstanding granted by Sustainability the Stock Exchange of Community and Social Development Investment (THSI) for Thailand for two consecutive four years (2015, 2017- years (2018-2019) Commitment-based Sustainable Finance Initiatives present) Environmental Aspect Participating in commitment-based sustainable finance initiatives Sustainability Report which are UN Principles for Responsible Banking, TCFD and ESG 100 certificate 2020 Award 2019 • Financial support to environmentally- memorandum of agreement on establishing responsible lending (Certified by Thaipat) friendly businesses practices. Sustainability Disclosure Award • Environmentally friendly and reducing The first and only commercial bank in Thailand granted by Thaipat the environmental impacts of our own granted Carbon Neutral Institute operations Certification (2018-2019) • Adaptation and mitigation of the impact Note: More information on our Sustainable Development can be found of climate change on our website and KBank’s Sustainability Report 2019 107

Example of Economic Aspect: ESG Risk Management  KBank has integrated ESG considerations into the risk management framework, with particular attention given to risks related to lending, investment, products, and services At the management level At the transaction level Lending activities are structured so as to demonstrate environmental The Bank ensures that lending transactions violate and social responsibility as follows neither the law nor social ethics  Board of Directors  Approving risk management policy, frameworks, risk limits and risk appetites Board of Directors  Risk Oversight Committee  Overseeing and ensuring compliance with consolidated risk management policies and strategies and acceptable risk appetite  Assessing risk management policies and Risk Oversight Corporate Governance strategies to cover all risks including Committee Committee emerging risks  Corporate Governance Committee  Overseeing, monitoring, and undertaking sustainable development

 Approving credit policy addressing Credit Risk environmental and social impact management Management Sub-committee in lending and investment activities  Ensuring effective practice of environmental Environmental and Social Assessment and social risk management Classify project finance type and conduct environmental and social  Business units impact assessment (ESIA)  Screening environmental and social risks of projects to be supported  Ensuring and monitoring projects’ Request management approval to conduct project feasibility study (If not approved, projects are terminated) Monitoring and compliance with regulations/ environmental Business Units Controlling Function and social management plans  Monitoring and Controlling Functions Consider all details and initiate negotiations on environmental and  Ensuring credit policy and procedure social issues as well as on credit possibility compliance  Reporting project finances and concerning Approve/reject application within delegated lending authority environmental and social issues to the along with designating environmental and social impact conditions Corporate Governance Committee

108 Examples of Economic Aspect: CG and Anti-Corruption Corporate Governance Anti-Corruption

. Reviewing KBank practices under Thai IOD, ASEAN CG  KBank, KAsset, and KSecurities co-signed a declaration of Scorecard, and Dow Jones Sustainability Indices (DJSI) criteria, the “Private Sector Collective Action Coalition Against including Corruption (CAC)” project and have been recognized as CAC  Sustainable Development Policy in accordance with the certified companies since 2013 Bank’s business and Sustainable Development Goals  BOD approval and annual reviews of Anti-Corruption Policy,  Human Rights Policy and KBank Tax Policy in compliance including issues such as bribes and inducements, gifts and benefits, with the Bank’s business and International Sustainability charitable contributions and sponsorships, and political participation Standards  Internal Communication on Anti-Corruption Policy to ensure . Implementing a strategic plan for CG activities to enhance proper practices within the organization by compliance by directors, executives, and staff with CG  Organizing training courses for executives and employees principles, Code of Conduct, and Anti-Corruption Policy  Communicating with all directors, executives and employees via through KBank electronic networks and website  Organizing training courses  Communicating with suppliers on operational guidelines,  Continually communicating via e-Learning system including  Communicating with companies within  Guidelines for acknowledgement and compliance related to KASIKORNBANK FINANCIAL CONGLOMERATE to business ethics, human rights, labor, occupational health and ensure consistency of operations safety, and the environment  Establishment of guidelines on KBank’s Supplier Code of Conduct Reviewing Vision, Mission and Core Values, CG Policy, and .  Communication on business operations in compliance with anti- related Charters; keeping them up-to-date in accordance corruption policy and practices with  Arrangement of supplier meetings on KBank’s procurement  Ongoing business operations and Bank Sustainability procedures  Compliance with laws, international practices, and best  Communication with customers and suppliers on No Gift Policy for practices as prescribed by regulatory agencies and all occasions and festive seasons competent agencies

Note: Thai IOD = Thai Institute of Directors; CG = Corporate Governance 109

Examples of Social and Environmental Aspects Social Aspect Environmental Aspect

1. Financial Inclusion and Financial Literacy 1. Management of Climate-related Risks and Opportunities • Providing financial knowledge and adding new channels of financial access • Assessing climate scenario analysis quantitatively and qualitatively for all customer categories and underprivileged groups • Reporting based on the Task Force on Climate-related Financial • Supporting customers’ financial discipline to alleviate household debts Disclosures (TCFD) recommendations 2. Human Resource Management 2. Financial Support To Environmentally Friendly Businesses • Embracing equitable treatment for employees regardless of differences • Offering financial support to renewable energy power and environmental • Providing various channels for complaints and suggestions conservation projects • Developing employee skills and abilities in alignment with K-Strategy • Issuing sustainability bonds and investing in green bonds • Providing a healthy and safe workplace 3. Environmental Management in KBank 3. Human Rights Operations • Appointing CEO to act as Chief Environmental Officer to drive KBank’s • Operating business in line with the United Nations Guiding Principles on environmental operations Business and Human Rights throughout the value chain • Committing to transform to a low carbon society • Implementing human rights risk assessment covering all operations of • Targeting to reduce GHG emissions by 6.1% by 2023 (base year 2018) KBank, K Companies, P Companies, suppliers, and joint ventures 4. Social Contributions • Applying the social activity framework based on the London Benchmarking The first Thai commercial bank to Group (LBG)* since 2015 become a TCFD Supporter. • Supporting various projects by extending budgetary support and donating items to create positive impact for society and communities The first Thai and ASEAN 248,180 bank to launch a Volunteer Human Rights Sustainability Bond Hours Policy and GHG Emissions ZERO Due Diligence (Scope 1 & 2) Process 103,997 tons CO2 KBTG– LEED-Platinum injury (15.7% decrease from base year 2012)

Note: * London Benchmarking Group (LBG) standard is used to evaluate the monetary value of corporate spending on social responsibility activities, including donations, hours of volunteer work an proportion of community investment. 110 Public Recognition Highlight: 2019-1H20 1H20 2019 - An index component of the Dow Jones Sustainability Indices (DJSI) 2019, - The Bronze Class of the banking industry category by RobecoSAM including the DJSI World Index and the DJSI Emerging Markets Index

- The Bronze Class of the banking - A member of the FSTE4Good industry category by RobecoSAM Emerging Index 2019 - Winner: Best Digital Customer Experience in Wealth Management - Winner: Loan Offering of the Year - Named the Leading Thai Bank in - Winner: Outstanding Customer Experience for Loans - A- score from 2019 Carbon Sustainable Development Disclosure Project (CDP) - Winner: Best Customer Experience – Debit Card - Highly Acclaimed: Best Digital Customer Experience in Private Banking - Rating is at AA, leadership Level in its - A member of the 2020 Bloomberg - Highly Acclaimed: Best Digital Customer Experience – Loan Application ESG performance among emerging Gender-Equality Index market banking sector peers. - Winner: Best Private Bank- Digitally Empowering RMs - Gold Award: Best Recruitment Marketing - Highly Acclaimed: Outstanding Private Bank Growth Strategy - HR Asia Best Companies and Employer Branding Program TM - Highly Acclaimed: Best Private Bank- Digital Client Communication to Work for in Asia 2019 - Bronze Award: Best Learning Program - Highly Acclaimed: Best Private Bank for HNWIs (Thailand Edition) Supporting a Change Transformation - ASEAN Most Honored Companies Business Strategy - Thailand Bond House of The Year - ASEAN Overall Best ESG/SRI Reporting - Thailand Capital Markets Deal of the Year - Best CFO-Thailand - Best Trade Finance Providers - The Asset ESG Corporate Awards - Platinum Award - Asset Management Award - Best Service Provider: Transaction Bank - Best DCM House in Thailand - Best Service Provider: Cash Management, Thailand - Best Service Provider: Cash Management - Gold Award: The Best Asia - Best Private Bank in Thailand - Best Service Provider: E-Solutions Partner, Thailand - Best Service Provider: E-Solutions Partner Pacific Contact Center Innovation - Best Cash Management Bank in Thailand - Top Outright Primary Dealer 2019 - Best Bond House in Thailand - Best FX Bank for Corporates and FIs in Thailand - Best FX Bank for Structured Products - Best Private Bank in ASEAN - Best Private Bank in Thailand - Domestic Cash Management - Best Corporate Treasury Sales and Structuring Team - Winner: Excellence in Next-Gen Customer Experience Bank of the Year - Best FX Bank for Retail Clients - Highly Acclaimed: Best Product or Service Innovation - Domestic Retail Bank of the - Highly Acclaimed: Best Customer Insight & Feedback Initiative Year-Thailand - 2020 Thailand’s Most Admired Brand for K-Credit Card products and K PLUS - Advertising Campaign of the - Best Private Bank - Thailand Domestic Year-Thailand - Best Brand Performance on Social Media in Banking Category - Winner: Best Debit Card Initiative - Best Repo Primary Dealer - Top Underwriting Bank 2019 - Highly Commended: Excellence in Service Innovation - Deal of the Year 2019 - Highly Commended: Best Staff Training and Development Programme - Most Prominent Fund House in Corporate Bond Market - Best Private Bank for Digital Culture in Asia - Best Retail Bank in Thailand - Best Fund House - Domestic Equity - Best Private Bank for - Best Private Bank for Digitally Empowering - Best Digital Brand Initiative - Best Retirement Mutual Fund – Equity Portfolio Management Relationship Managers in Asia - Private Banking Digitalisation Technology - Asia - Best Long-Term Equity Fund - Best DCM House in Thailand -- Asset management - Best Private Bank in Thailand company champion - 1 of 20 Asia/Pacific Best Bank for 2020 - Thailand - Best for ESG - Highly Commended in Sustainability Awards - Granted Carbon Neutral Certification - Best Innovative Company Awards

111

Banking System and Regulations Update

112 Thai Commercial Banks and Specialized Financial Institutions (SFIs)

Market Share (% of Total Loans) Market Share (% of Total Deposits)

Bt Billion Bt Billion 6 SFIs 24,000 24,000 20,032 20,516 18,869 19,358 19,178 17,765 17,707 18,463 20,000 16,680 17,004 20,000 16,843 15,866 15,651 16,296 30.2% 26.8% 16,000 29.9% 30.0% 30.4% 16,000 26.8% 27.0% 26.4% 29.9% 29.9% 26.2% 26.7% 29.4% 25.3% 12,000 12,000

8,000 8,000 14 Commercial Banks 4,000 4,000 70.6% 70.1% 70.1% 70.1% 70.0% 69.6% 69.8% 74.7% 73.8% 73.3% 73.2% 73.0% 73.2% 73.6% 0 0 2014 2015 2016 2017 2018 2019 2Q20 2014 2015 2016 2017 2018 2019 2Q20 SFIs Commercial Banks SFIs Commercial Banks

Net Loans Deposits Bt Billion Bt Billion 14,000 12,372 16,000 14,129 11,633 11,859 13,057 Other 14,000 12,578 Other 12,000 10,122 10,470 10,602 11,061 12,099 11,359 22.9% 22.2% 11,035 11,196 21.2% 22.8% BAY 12,000 21.5% BAY 10,000 22.7% 21.5% 22.8% 22.1% 23.5% 20.6% 20.6% 12.0% 13.3% KBank 21.2% 13.6% 10,000 21.5% 11.9% KBank 8,000 12.9% 10.9% 11.3% 11.3% 12.3% 12.5% 10.9% KTB 9.0% 9.4% 9.7% 16.3% 15.1% 15.4% 15.7% 8,000 15.8% KTB 15.0% 15.0% 14.8% 15.3% 15.8% 15.5% 15.8% 6,000 14.4% 14.6% 15.8% 16.8% BBL 17.1% 16.2% 16.5% 16.7% 18.1% 16.4% 15.8% 15.7% 6,000 17.4% BBL 18.1% 19.5% 19.1% 4,000 SCB 16.4% 16.1% 15.5% 15.5% 4,000 18.0% 17.7% 17.9% SCB 16.2% 16.4% 16.8% 18.1% 18.2% 18.6% 18.6% 2,000 2,000 16.9% 16.8% 17.5% 17.5% 17.4% 16.8% 16.4% 17.1% 16.8% 17.8% 17.3% 17.1% 16.5% 15.9% 0 0 2014 2015 2016 2017 2018 2019 2Q20 2014 2015 2016 2017 2018 2019 2Q20

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)

113

FinTech and TechFin in Thailand

Product Presentation Data Management Transaction Facilitation Post-Sale Servicing

AI/Machine Learning Cloud Accounting Platform Employee Data Management Financial Simulation

Business Tools Fundraising

Insurtech

Investment Management

Lending

Payments & Transactions

Sources: Thai Fintech Association, PitchBook, Techsauce, and KResearch (as of October 2019)

114 Non-Banks in Thailand: Lending Products

Credit Card Personal Loans Micro/Nano/Pico Loan

Sources: The Bank of Thailand and KResearch (as of October 2019)

115

Thailand’s Digital Readiness: Number of Users

 High adoption of digital lifestyle in Thai market; high penetration in smart devices and internet users in preparation toward a cashless society (Mobile Banking & e-Money )

145.4% 46.9% 75.0% Penetration Penetration Penetration

Mobile Internet 1) Broadband Internet 2) Social Media 3) (Mobile internet numbers) (No. of households using internet via broadband) (No. of Facebook users)

54.7 98.1% 48.6% 156.3% Million Penetration Penetration Penetration PromptPay 4) Mobile Banking 4) Internet Banking 4) e-Money 4) (Total registration) (No. of accounts) (No. of accounts) (No. of accounts/ cards)

Source: The Bank of Thailand (BOT), National Statistical Office of Thailand (NSO), Thai Banker Association (TBA), Ministry of Interior (MOI), wearesocial and KResearch

Notes: Denominator for all penetration ratio is number of population age six and above as of December 2019. Denominator for fixed internet penetration is number of household. 1) As of March 2020, 2) As of December 2019, 3) As of January 2020, 4) As of May 2020

116 Banking Institutions are Main Intermediaries for Transactions in Thailand

E-payment Volume E-payment Value

Million Transactions Trillion Baht

10,000 8,985.1 450 408.2 (+47.7%) 375.0 (+8.9%) 9,000 400 339.4 (+10.5%) 327.7 (+3.6%) 8,000 350 (+15.8%) 282.9 7,000 6,084.0 266.3 (+6.2%) (+44.9%) 300 (+5.5%) 6,000 4,743.2 250 4,199.9 (+43.7%) 188.2 5,000 (+31.0%) 166.1 (+13.3%) 3,205.3 3,301.8 200 (+6.9%) 4,000 2,589.8 (+23.8%) (+50.1%) 2,286.1 (+13.3%) 150 3,000 (+12.8%) 2,000 100 1,000 50 0 0 2014 2015 2016 2017 2018 2019 5M19 5M20 2014 2015 2016 2017 2018 2019 5M19 5M20

Notes: Volume and value of electronic payment transactions reported by e-Payment service providers, including banks and non-banks, under the Royal Decree Regulating on Electronic Payment Services B.E. 2551 (2008). Channels shown in graphs are; 1) BAHTNET 2) Bulk Payment including direct credit, direct credit, and ITMX Bulk Payment (SMART) 3) Interbank Funds Transfer (Online Retail Funds Transfer: ORFT) including ATM, internet/ mobile phone, and counter 4) Inhouse Funds Transfer including ATM and internet/ mobile/ telephone 5) Payment cards including debit card and credit card 6) e-Money

Sources: BOT

117

Regulations Update Capital (Basel III)  D-SIBs* Buffer : Currently, D-SIBs are required to maintain a D-SIBs Buffer at 1%  BCBS has finalized the new requirements on risk weighted asset (RWA) calculations including credit risk, operational risk, and CVA risk. The main objectives of the revision are to reduce variability in RWA across banks and jurisdictions and to balance simplicity and risk sensitivity of capital requirements Financial Sector Master Plan II (FSMP II)  Year 2010 - 2014: BOT’s FSMP II consists of three key policies: 1) Reducing system-wide operating costs; 2) Promoting competition and access to financial services; and 3) Strengthening financial infrastructure, including market liberalization, which will increase access by foreign financial institutions via granting licenses in some business areas as well as permission to increase number of branches and ATMs  Year 2014-2015: BOT established a licensing framework for new types of business operations for specific underserved markets, i.e. Nano-finance Financial Sector Master Plan III (FSMP III)  22 Mar 2016: Cabinet approved FSMP III (2016 – 2020), with aims to establish strategic framework for continuous financial sector development and ensure challenges arising from the changing environment will be effectively managed  Overall: FSMP III comprises four main initiatives: 1) Promote electronic financial and payment services as well as enhance efficiency of Thai financial system; 2) Support regional trade and investment linkage; 3) Promote financial access; and 4) Develop relevant infrastructure  1Q17: BOT adopted the ‘regulatory sandbox’ which allowed regulatory flexibilities to be granted to financial institutions and FinTech companies to experiment with FinTech businesses with plans to grant a new license for P2P lending players  Impacts on Thai banks: Move toward further liberalization and digitalization, along with enhanced competition from FinTech and non-bank companies  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 Thai and International Financial Reporting Standards (TFRSs / IFRSs)  Year 2020 onwards: Timeframe was specified by Thailand Federation of Accounting Professions (TFAC); TFRS 9 (Financial Instruments) and TFRS 16 (Leases) became effective in 2020; TFRS 4 (Insurance Contracts) will be changed to TFRS 17 and will be tentatively effective in 2024.  Expected impacts on Thai banks: For TFRS 9, expected credit loss is a significant issue due to economic uncertainty from COVID-19 outbreak. For TFRS 17, it will be more transparent and easier to compare financial performance from insurance business.  Expected impacts on KBank: For TFRS 9, Bank’s expected credit loss is still based on prudence basis following both TFRS 9 and BOT guidelines. Impacts resulted from TFRS 17 is still under investigation. *Note: D-SIBs = Domestic Systemically Important Banks Source: The Bank of Thailand and KResearch 118 Financial Sector Master Plan (FSMP) Implementation Stages FSMP I FSMP II (Y2010-2014) FSMP III (Y2016-2020) (Y2004-2009) Looking forward to liberalization competitive, inclusive, connected, and sustainable . Increase efficiency of 1) Promote electronic financial and payment services, as well as enhance Reducing system-wide operating costs the financial institutions efficiency of the financial system system - ‘One Presence’ policy . Streamlining regulations . Promote the adoption of digital banking & electronic payment services - Expand scope of . Tackling remaining NPLs and NPAs in the government, business, and retail sectors business: . Enhance operational efficiency of financial institutions and other service providers ‘Universal Banking’ Promoting competition and access to . Evaluate future financial landscape to promote operational efficiency of - New licenses for retail financial services banks and foreign bank financial institutions and other service providers subsidiaries . Promote competition 2) Support regional trade and investment linkages . Promote financial . Promote financial access inclusion . Facilitating and reducing obstacles for banks’ international expansion, - Strengthen financial Strengthening financial infrastructure including institutions (FIs) by . Promote development of financial . The establishment of Qualified ASEAN Bank (QAB) promoting voluntary products that help support risk . The development of cross-border financial infrastructures mergers management . The creation of suitable financial environments among neighboring . Protect customers . Enhance information systems for countries to foster international trade and investment in the GMS risk management . Push for draft/review of necessary 3) Promote financial access financial laws to support risk . For households: encouraging development of financial products and management and an expedited services appropriate for changing customer demands resolution to NPLs . For SMEs: improving necessary SME database within the financial institution . Promote information technology system and supporting credit extension to SMEs utilization . For Corporate: promoting and facilitating suitable environment for private . Develop human resources in the sector’s raising of capital financial sector 4) Develop relevant infrastructure (Enablers) . Developing key infrastructures in the financial system . Strengthening regulations and supervision in line with international standards Source: BOT and KResearch to ensure stability of the overall financial system Note: There are four types of Commercial banks in Thailand; Full service banks; Foreign bank branches; Retail banks; and Subsidiaries GMS = Greater Mekong Subregion = Cambodia, China, Lao PDR, Myanmar, Thailand, and Vietnam 119

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- Insured Deposit Under the amending the Deposit Protection Agency Act resident Thai Baht accounts 11 August 2012 – 10 August 2015 Up to Bt50mn  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), 11 August 2015 – 10 August 2016 Up to Bt25mn excluding deposits in foreign currencies and deposits from financial institutions not insured by the DPA  Since January 27, 2012, the contribution rate has increased from 0.40% to 0.47%, with 0.46% being the 11 August 2016 - 10 August 2018 Up to Bt15mn contribution to the FIDF, and 0.01% being paid to the DPA. The FIDF fee will temporarily reduce to 0.23% for 2 years* 11 August 2018 - 10 August 2019 Up to Bt10mn  Royal Decree on an extension of deposit protection coverage was announced in the Royal Gazette on September 24, 2012 11 August 2019 - 10 August 2021 Up to Bt5mn  The Cabinet approved a one-year extension of deposit protection up to a maximum of Bt5mn. From August 11, 2021, the protection will cover deposits up to Bt1mn. 11 August 2021, onwards Up to Bt1mn Deposit Accounts in Thailand (as of June 2020)

Deposits # of Accounts % Amount (Bt mn) % Less than Bt1mn 101,596,444 98.36 3,208,282 22.29 More than Bt1mn, but less than Bt10mn 1,553,452 1.50 3,891,783 27.04 * According to the BOT announcement in the Royal More than Bt10mn, but less than Bt25mn 92,502 0.09 1,367,157 9.50 Gazette, per the authority of the emergency decree dated April 7, 2020, financial institutions are required to More than Bt25mn, but less than Bt50mn 27,054 0.03 952,000 6.61 pay 0.23% of the average deposit amount, B/Es, debt More than Bt50mn 22,252 0.02 4,974,120 34.56 instrument (excluding the amount counted as capital), Total 103,291,704 100 14,393,342 100 borrowings, and securities transactions under repurchase agreements, during January 2020 to Source: Deposit Protection Agency (DPA), the Bank of Thailand , KBank and KResearch December 2021

120 Basel III: BOT minimum capital requirement Transitional Arrangement for Capital Requirement

All dates are as of 1 January 2016 2017 2018 2019 2020 2021 2022 2023

Conservation Buffer* 0.625% 1.25% 1.875% 2.5% 2.5% 2.5% 2.5% 2.5%

D-SIBs Buffer** - - - 0.5% 1.0% 1.0% 1.0% 1.0%

CET1: Min. Common Equity Tier 1 Ratio 5.125% 5.75% 6.375% 7.5% 8.0% 8.0% 8.0% 8.0% (after conservation buffer and D-SIBs buffer) (4.5%+0.625%) (4.5%+1.25%) (4.5%+1.875%) (4.5%+2.5%+0.5%) (4.5%+2.5%+1%) (4.5%+2.5%+1%) (4.5%+2.5%+1%) (4.5%+2.5%+1%)

Tier 1: Min. Tier 1 Ratio (after conservation buffer and 6.625% 7.25% 7.875% 9.0% 9.5% 9.5% 9.5% 9.5% D-SIBs buffer) (6.0%+0.625%) (6.0%+1.25%) (6.0%+1.875%) (6.0%+2.5%+0.5%) (6.0%+2.5%+1%) (6.0%+2.5%+1%) (6.0%+2.5%+1%) (6.0%+2.5%+1%)

CAR: Min. Total Capital Ratio (after conservation buffer and 9.125% 9.75% 10.375% 11.5% 12.0% 12.0% 12.0% 12.0% D-SIBs buffer) (8.5%+0.625%) (8.5%+1.25%) (8.5%+1.875%) (8.5%+2.5%+0.5%) (8.5%+2.5%+1%) (8.5%+2.5%+1%) (8.5%+2.5%+1%) (8.5%+2.5%+1%)

Countercyclical Buffer (Subject to the BOT consideration)*** - - - - - 0.0-2.5% 0.0-2.5% 0.0-2.5%

Leverage Ratio Parallel run period Effective in 2023 (Tier 1 / Exposure)  3% (Tentative)

Liquidity Coverage Ratio (LCR)**** Effective (Phase-in) (Liquid Assets / Net Cash Outflows within 30 days)  100% LCR  60% LCR  70% LCR  80% LCR  90% LCR 100% LCR 100% LCR  100% LCR  100% Effective in Jul-18 Net Stable Funding Ratio (NSFR) NSFR  NSFR  NSFR NSFR  NSFR  NSFR  (Available Stable Funding / Required Stable Funding)  100% 100% 100% 100% 100% 100% 100% Note: * Conservation Buffer is to ensure adequate capital to absorb losses during periods of financial and economic stress ** D-SIBs (Domestic Systemically Important Banks) Buffer is to limit negative impact associated with the distress or failure of banks on domestic financial system and economy *** In periods of excess aggregate credit growth, BOT may require banks to set a Countercyclical Buffer up to 2.5% to achieve the broader macro-prudential goal of protecting the banking sector **** KBank’s Average Liquidity Coverage Ratio (LCR) are 189%, 194%, 239% and 235% as of December 2019, June 2019, December 2018 and June 2018 , respectively; more details can be found on Basel III - Pillar 3 Disclosures Report Remark: Banks with a capital ratio less than the required regulatory buffers will face various degrees of constraint on earning distribution Source: The Bank of Thailand

121

Capital Definition Change (Consolidated) Basel II Basel III Tier 1 Common Equity Tier 1 • Issued and paid-up share capital • Issued and paid-up share capital* • Premium on ordinary shares • Premium on ordinary shares • Legal reserve and Retained earnings • Legal reserve and Retained earnings • Other comprehensive income (OCI) e.g. surplus on bond and equity FVTOCI (100%), 1 surplus on land & premises (100%)

Additional Tier 1 • Hybrid Tier 1 (<15% of total Tier 1) • Hybrid Tier 1 with loss absorbency feature** • Minority interest, Preferred stock • Minority interest, Preferred stock** Tier 1 capital Tier Deduction of Tier 1 Deduction of Common Equity Tier 1 • Goodwill, Treasury stock, Deferred tax asset • Goodwill, Deferred tax asset 2 • Intangible assets • Investment in insurance • Investment in insurance (Threshold Deduction) (50% Tier 1 and 50% Tier 2) - Amount ≤ 10% of CET1, %RW = 250% (KBank’s Case) - Amount > 10% of CET1, deduct CET1

• Long-term subordinated debt 3 • Long-term sub-debt with loss absorbency feature*** • Hybrid Tier 1 (exceeds from Tier 1 limit) • General Provision • General Provision * Net Treasury Stock • Surplus on AFS equity (45%) 1 ** Currently, KBank has no Hybrid Tier 1, Preferred Stock. • Surplus on land & premises (70% and 50%) *** Long-term subordinated debentures must have loss absorbency feature, if issued since 1 January 2013 Tier 2 capital Tier 122 TFRS 9 Expected Credit Loss and Basel General Provision/ Specific Provision . The concept of General Provision (GP) and Specific Provision (SP) for Basel is not changed, but the amount of provision reserve or expected credit loss that can be counted as GP and SP is changed along with new accounting standards under TFRS 9 Loan Classification and Reserve CAR Basel III Current

Reserve Requirement Capital Adequacy Ratio 1% GP Pass (% CAR) Special Mention 2%

Sub-Standard =

Doubtful 100% 1

Doubtful of Loss Tier 1 + Tier 2 (Subordinated Debt / GP)

Buffer (Excess Reserve) GP Risk Weighted Assets 2 TFRS 9 (Effective: January 1, 2020) (Outstanding – SP) x % Risk Weight

PD x LGD x EAD Stage 1 - Performing 1 Year 3 ECL – Stage 1 GP Stage 2 - Under-performing Lifetime ECL – Stage 2 (1) GP that can be counted in Tier 2 capital is provision reserve for “Pass” loans and excess reserve, but limited up to 1.25% of credit risk SP weighted assets (RWA) Stage 3 - Non-performing Lifetime (2) GP = ECL Stage 1 + Stage 2 (Limited up to 1.25% of RWA) ECL – Stage 3 (3) SP = ECL Stage 3 + Stage 2 that is not GP BOT Reserve Requirement = 1% Floor

123

TFRS and IFRS Implementation* 2013 2014 2015 2016 2020 2024**

TAS 21: Effects of TFRIC 13: TFRS 13: Fair TFRS 4: Insurance TFRS 16 (Leases) TFRS 17: Insurance Changes in Foreign Customer Loyalty value Contracts There is a single, on-balance Contracts  Insurance revenue will Exchange Rates Programmes Measurement sheet accounting model that is  Measure be based on margin,  Translate ‘Functional  Deferred portion  Clear required insurance liability similar to current finance lease not gross premium Currency’ to of income for factors and accounting. ‘Presentation Currency’ based on cash received reward credit disclosure flow estimation TFRS 9 (IAS 39), TFRS 7 & TAS granted about fair  Expected day one loss TFRS 8: Operating  Additional 32: Financial Instruments Segments valuation is immediately realized disclosure  Thai banks have implemented a while expected gain is  Disclose operating regarding risk new provisioning rule under IAS deferred over coverage results for each key exposure 39, since December 2006 segment period  Unquoted equities at cost to be faired value and not able to realize capital gain /loss in profit and loss if they are faired valued through OCI  Interest revenue of lending portfolio will be recognized per effective interest rate  Investment in property fund, REIT, infrastructure fund and infrastructure trust established Note: TAS = Thai Accounting Standard; TFRS = Thai Financial Reporting Standard; TFRIC = Thai Financial in Thailand will be classified as Reporting Interpretations Committee equity instrument. (Refer to OCI : Other Comprehensive Income announcement from TFRC *Only financial and disclosure impact to Thai Banks dated 25 June 2020) **Tentatively effective

124 TFRS 9: Implications for Thai Banking business (Effective: January 1, 2020)  Impacts on Thai banking business can be classified into four key areas, each with its own financial impacts to net profit (high, moderate, and low) Financial Key Impacts Impacts Key Areas Expected Credit Loss & Modification . New definition of SICR and modified loans . Additional TFRS9 Expected Credit Loss . Changes in provision: from “1-year Expected Credit Loss” per High . TFRS9 and current number are non-comparable BOT guidelines to “Lifetime Expected Credit Loss”; also, additional base of unused credit line and guarantee Assets Classification . Instrument at cost -> fair value: investment in non-listed equities will turn from “at cost” to “at fair value through PL” or “at fair value through . Non-interest income and OCI: volatile from OCI” depending on business model unrealized market move . AFS instrument -> fair value through PL: Generally, AFS instrument will be fair value through OCI, only for some product features will be “fair value through PL” Effective Interest Rate Moderate . Upfront fee -> interest accrual: credit fee income will turn from . Fee income and non-interest income: lower “Cash basis” to “Interest income on amortization basis” . Bottom line: neutral over the contractual life . Future step rate: averaged over behavioral lifetime and recognized . NIM: higher but more volatile upfront as fixed rate Hedge Accounting – Optional . Derivative at accrual -> fair value: banking book derivatives will turn . PL on trading business: more volatile if derivatives

Low from “accrual basis” per TFAC guideline to “Mark to Market” per risk are unqualified for hedge accounting and/or carry offsetting basis basis risk Note: SICR = Significant Increase in Credit Risk ; PL = Profit and Loss; OCI = Other Comprehensive Income as part of equity; AFS = Available for Sale; TFAC = Thailand Federation of Accounting Professions who governs accounting professionals in Thailand 125

Expected Credit Loss: Key Changes in Loan Classification  Apart from days past due (DPD), risk information is used to capture credit quality. Hence, cannot directly compare with the current basis. Current: defined by days past due

Pass DPD = 0 - 30 days

Special Mention DPD = 31 - 90 days

Sub-Standard

Doubtful DPD > 90 days

Doubtful of Loss

New: TFRS 9 – defined by incremental risks (Effective: January 1, 2020) TFRS 9 Asset Class: New definition of SICR and Modified Loans . SICR reflects higher risk than origination, but not yet bad quality . Modified loans are loans with changing terms and conditions, either good or bad; thus, it can be at any stage

Stage 1: Perform Stage 2: Underperforming Stage 3: Non-performing Assets with “> 30 days DPD” or higher credit risk New or good assets than origination capturing via risk information Defaulted assets eg. Credit scoring, PD change etc.

Note: SICR = Significant Increase in Credit Risk; DPD = Days Past Due

126 Expected Credit Loss: Provision Reserve (PD x LGD x EAD)  Existing building blocks of both provision and credit cost are unchanged. TFRS 9 changes only the definition and methodology of provision calculation. TFRS 9 (Effective: January 1, 2020) Probability Incorporate forward looking over lifetime of Default . Macro-factor is captured through PD point-in-time (PD) Define relevant Incorporate Derive term Weight with Stage 1: Performing 1 Year economic factors through PD structure PD & probability & scenario point-in-time ECL by scenario for final ECL Stage 2: Under-performing Lifetime

Stage 3: Non-performing Lifetime . Term structure PD is derived over behavioral life . Multi-scenario is weighted to come up with final Expected Credit Loss (ECL) Loss Given Incorporate recovery from both collateral and cash payment Default (LGD) Combination of drawn and undrawn as credit exposure Exposure at . It is an accounting complication to treat drawn ECL as assets contra and undrawn ECL Default as liabilities, while to risk, both are “credit exposure” (EAD) . Drawn is “outstanding amount + EIR adjustment” . Undrawn is “outstanding amount x conversion factor” “Drawn” “Undrawn” Notional x CCF Principal 1) Contingent products: LI, LC ------+ Accrued Interest 2) Committed unused facilities CCF could be regulatory CCF or behavioral CCF + EIR adjustment

Note: Drawn = Loan amount that customer has already drawn down, which is booked under loans to customers or part of “Interbank and money market items” Undrawn = Credit facilities that are not utilized yet or credit facilities that are utilized but are booked as contingent liabilities, excluding derivatives EIR = Effective Interest Rate; LI = Letter of Indemnity; LC = Letter of Credit; CCF = Conversion Credit Factor 127

Expected Credit Loss: Day 1 Adoption (Effective: January 1, 2020)  Even without excess allowance, prudence on TFRS 9 can be achieved through conservatism in the model assumption TFRS 9

Case 1: Banks with Excess Allowance * Definition: Stage 1 (Requirement) Model Output and Management Overlay Management “BOT 1% Floor” Model overlay 1% x Stage 1 +2 of Stage 2 + Output EAD of Customers Model Output: Current Stage 3 Results generated from pure model base and stable assumptions where key driving Excess Reserve Release to P&L over Five Years factors on its value are: Required or subject to BOT change Reserve . Shift of asset structure from Stage 1 to Stage 2 Case 2: Banks with Provision Shortfall . Change of economic outlook Excess Provision . Move between drawn & undrawn ECL Stage 1 (Requirement)* Management “BOT 1% Floor” 1) Provision Model + overlay 1% x Stage 1 +2 of shortfall Stage 2 Output (Current < T9) EAD of Customers Management Overlay: Stage 3 ECL estimation to cover emerging issues and uncertain future events not captured in

Deduct from Retained Earnings Outcome Floor the model 2) Provision Shortfall (T9 < BOT floor) Deduct from Tier 1 for Three Years Note: EAD = Exposures At Default * The BOT Reserve Requirement 1% Floor = 1% of stage1 + stage 2 of EAD of customers. It is used to maintain financial stability, both prudential and countercyclical; the BOT will enforce it through capital requirements 128 Expected Credit Loss: Going Forward (Effective: January 1, 2020) . TFRS 9 requires ECL estimation to be based on past events, current conditions, and forecasts of future economic conditions where judgement should be used for emerging issues and uncertain future events.

On-going Key Driving Factors Observed Evolution

Expected Credit Loss (ECL) should not be too volatile, as risks in each loan stage are clearly identified and there is management overlay, unless economic view changes, loans shift from Stage 1 to Stage 2, and exposure moves between on- and off- balance sheet

. Changing economic view . Apply %ECL by stage . Shift between Stage 1 and Stage 2 Prudent Management . Movement between on- and off- balance . Apply “total ECL” for ECL adequacy analysis, e.g. sheet NPL coverage (Coverage Ratio)

. Bank size . Focus on trend and derive own normalized level Non- . Portfolio mix . Monitor detailed disclosure of ECL movement comparable . Risk appetite analysis and basis of assumption

129

TFRS9 Impacts to Financial Numbers and Ratios (Effective: January 1, 2020)  TFRS 9 reflects the true economic value of financial instruments* at a point in time where financial impacts to net profit (high, moderate, and low) vary for each area TFRS 9: Changes in definition and calculation method

Impacts to Financial Numbers: Non-comparable between TFRS 9 and current numbers

Interest Income Fee Income Non-Interest Provisioning Expense Modified Loans Income

• Higher from credit fee / • Lower from • Volatile from • Higher underperforming loan • Higher modified loan future interest; transforming into unrealized gain/loss of & required reserve from more than current interest income on an treasury products’ stringent requirement • Volatility is expected restructured loan amortized basis marking to market from behavioral lives • Volatile from change in from different assumption economic outlook and shift of definition stage 1 to stage 2

Impacts to Financial Ratios: Non-comparable between TFRS 9 and current numbers

New Net Interest Non-Interest Income Growth Credit Coverage Stage 2 Margin (NIM) Cost Ratio Ratio

Higher but more volatile Lower and more volatile Potentially volatile Insignificant impact, Higher than the current considering total ECL Special Mention Loan

* Financial instruments where main products of banks are lending, investment, financial guarantee, derivatives, deposits, and borrowings Note: ECL = Expected Credit Loss will drive more accurate economic valuations of loan portfolios and promote earlier recognition of credit losses avoiding the delays observed during the credit crisis.

130 TFRS9: Key Changes (Effective: January 1, 2020) Before After

1. Expected Scope • Outstanding loan • Outstanding loan, contingent and Credit Loss unused limit of Financial Stage • 5 grades based on aging • 3 grades based on aging and credit Instruments risk information (Provision) • %PD, LGD,EAD by behavioral Model • %PD given by the BoT model over 12-month or lifetime depends on stage

2. Classification Classes • 4 classes based on business model • 3 classes based on business model and or type of investments i.e. Trading, & cash flow characteristics i.e. Measurements Available for sales, Held to maturity Fair value through PL, Fair value and General investment through OCI & Amortized cost Income • Credit fee income = Cash basis • Credit fee income & Interest income approach Interest income = Contractual basis = amortizing per EIR • General investment = FVTPL or FVTOCI Non-quoted where no PL recycling for FVTOCI of equity value • General investment = Cost basis equity instruments

3. Hedge Derivatives Accounting value • Derivatives value = Accrual basis • Derivatives value = Fair value (Optional)

131

TFRS 9: Key Changes in Financial Statement Presentation of Thai Banks Statements of Financial Position: Assets As is To be (TFRS 9) Assets Assets

Cash Cash Interbank and money market items - net Interbank and money market items - net Derivative assets Financial assets measured at fair value through profit or loss (new) Investments - net Derivative assets Investments in subsidiaries, associates and joint venture - net Investments - net Loans to customers and accrued interest receivables - net Investments in subsidiaries, associates and joint venture - net Loans to customers Accrued interest receivables Loans to customers and accrued interest receivables - net Total Loans to customers and accrued interest receivables Properties foreclosed - net Less Deferred revenue Premises and equipment - net Less Allowance for doubtful accounts Goodwill and other intangible assets - net Less Revaluation allowance for debt restructuring Deferred tax assets Total Loans to customers and accrued interest receivables - net Other assets - net Properties foreclosed - net Premises and equipment - net Goodwill and other intangible assets - net Deferred tax assets Other assets - net

132 TFRS 9: Key Changes in Financial Statement Presentation of Thai Banks Statements of Financial Position: Liabilities and Equity As is To be (TFRS 9)

Liabilities Liabilities Deposits Deposits Interbank and money market items Interbank and money market items Liabilities payable on demand Liabilities payable on demand Derivative liabilities Financial liabilities measured at fair value through profit or loss (new) Debts issued and borrowings Derivative liabilities Provisions Debts issued and borrowings Deferred tax liabilities Provisions Insurance contract liabilities Deferred tax liabilities Other liabilities Insurance contract liabilities Other liabilities

Equity Equity No changes No changes

133

TFRS 9: Key Changes in Financial Statement Presentation of Thai Banks Statement of Profit or Loss and Other Comprehensive Income As is To be (TFRS 9) Interest income Interest income Interest expenses Interest expenses Interest income - net Interest income - net Fees and service income Fees and service income Fees and service expenses Fees and service expenses Fees and service income – net Fees and service income - net Gain (loss) on trading and foreign exchange transactions Gain (loss) on financial instrument measured at fair value through profit or loss (new) Gain (loss) on investments Gain (loss) on investments Share of profit (loss) from investments using equity method Share of profit (loss) from investments using equity method Dividend income Dividend income Net premiums earned Net premiums earned Other operating income Other operating income

Total operating income Total operating income Underwriting expenses Underwriting expenses

Total operating income - net Total operating income - net Other operating expenses Other operating expenses Employee expenses Employee expenses Directors' remuneration Directors' remuneration Premises and equipment expenses Premises and equipment expenses Taxes and duties Taxes and duties Other Other Total other operating expenses Total other operating expenses Impairment loss on loans and debt securities Expected credit loss (rename) Operating profit before income tax expense Operating profit before income tax expense Income tax expense Income tax expense Net profit Net profit

134 TFRS 9: Key Changes in Financial Statement Presentation of Thai Banks Statement of Profit or Loss and Other Comprehensive Income As is To be (TFRS 9)

Other comprehensive income Other comprehensive income Items that will be reclassified subsequently to profit or loss Items that will be reclassified subsequently to profit or loss Gain (loss) on remeasurement of available-for-sale Gains (losses) on investments in debt instruments at fair value investments through other comprehensive income (new) Gain (loss) arising from translating the financial statements of a Gains (losses) on cash flow hedges foreign operation Gains (losses) arising from translating the financial statements of a foreign operation Income taxes relating to components of other comprehensive income Share of other comprehensive income of associates and joint venture Items that will not be reclassified subsequently to profit or loss Income taxes relating to components of other comprehensive income Changes in revaluation surplus Items that will not be reclassified subsequently to profit or loss Actuarial gain (loss) on defined benefit plans Changes in revaluation surplus Income taxes relating to components of other comprehensive Gains (losses) on investment in equity instruments designated income at fair value through other comprehensive income (new) Gains (losses) on financial liabilities designated at fair value Total other comprehensive income through profit or loss from credit risk (new) Actuarial gains (losses) on defined benefit plans Share of other comprehensive income of associates and joint venture Income taxes relating to components of other comprehensive income Total other comprehensive income

135

Government Policy

136 Sources and Uses of Public Funds FY2020 Budget Implementation of FY2020 budget is experiencing delays from October 1, 2019 to 1Q20, due to political reasons. FY2020 budget General Administration act was approved in January and was published in the Royal Gazette on February 24. (Bt1.18trn or 37%) . Defense Budget Planning Budget Execution . Homeland security FY2020 Budget Economic Affairs Tax Revenue + (Bt3.20trn) (Bt678bn or 21%) Non-Tax Revenue = . Development of the country’s (Bt2.73trn) Budget competiveness General Budget Disbursement . Subsidize SOEs (Bt2.46trn or 77%) (100% target (e.g. Infrastructure project, free + bus and train service policy) disbursement rate + Investment Budget . Infrastructure/Agricultural Development Borrowing under (Bt0.66trn or 20%) + carry-over) FY2019 Budget Act + Social and Community (Bt469bn) Principal Repayments Services (Bt1.34trn or 42%) (Bt0.09trn or 3%) . Education . Universal Healthcare

Extra-Budget Borrowing Quasi-Fiscal Instrument To relieve the impact of the COVID-19 outbreak, the Quasi-fiscal Extra-Budget government approved SFIs taking deposits, activities Borrowing under emergency decree that allows borrowing, as well as (e.g Soft Loan Special Act/Decree the Finance Ministry to borrow government subsidy Program) up to Bt1.0trn

Notes: Thai government's fiscal year (FY) begins on 1 October and ends on 30 September of the following year. IFF = Infrastructure Fund, PPP = Public-Private Partnership, SFIs = Specialized Financial Institutions

137

Government Fiscal Budget  Thai parliament approved FY2020 budget worth Bt3.2trn, with a 1200 deficit of Bt469bn 1000  Implementation of FY2020 budget effective February 2020

800 600  To relieve the impact of the COVID-19 outbreak, the government approved an emergency decree allowing the Finance Ministry to 600 borrow up to Bt1trn (Bt600bn for FY2020 and Bt400bn for FY2021), 163 100

Billion Baht 400 of which Bt600bn will be used for relief measures and public health and Bt400bn will be spent on economic recovery measures 200 390 390 450 450 469  In addition to growth in commercial bank loans, government 0 funding activities may affect system liquidity FY2016 FY2017 FY2018 FY2019 FY2020F Budget Deficit Extra-Budget Borrowing

Economic Key Points Implementation Process Possible Impacts/ Policies Expected Budget

 2019 Budget Act  FY2019 budget at Bt3trn with a FY2019  Government spending will help deficit of Bt450bn  Effective date: October 1, 2018 maintain economic momentum  Fiscal sustainability to remain  2020 Budget Act  FY2020 budget at Bt3.2trn with a FY2020 manageable in near-term; however, deficit of Bt469b  Effective date: February 24, 2020 continued debt creation, both from budget deficit and other borrowings, may impact long-term fiscal sustainability

Note: - FY2016, FY2017, FY2018, and FY2019 budget deficits are based on budget documentation, whereas extra-budget borrowing is projected by KResearch - Thai government's fiscal year (FY) begins on October 1 and ends on September 30 of following year - NLA = National Legislative Assembly; PPP = Public-Private Partnership Sources: The Ministry of Finance and KResearch (as of May 2020) 138 Public Debt to GDP and Fiscal Budget Public Debt Budget Disbursement Rate

7,500 46 100 Public Debt % to GDP 90 FY 2020 FY 2019 FY 2018 80 77.4 44.8% 70 70.4 60 63.8 7,000 44 58.3 50 48.1 40 30 34.1 % Cumulative% Budget

Disbursement Rate (%) Rate Disbursement 28.8

Billion Baht Billion 20

% to GDP % 22.8 10 15.7 6,500 42 10.9 0 Jul Oct Apr Jan Jun Mar Feb Nov Dec Aug Sep May

FY20 Budget FY20 target 10M FY2020 Unused FY20 6,000 40 actual Budget Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Total Budget Bt3.20trn Bt2.48trn Bt0.72trn Bt3.20trn (100%) (77%) (23%)

 Public debt to GDP ratio rose significantly to - General Budget Bt2.56trn Bt2.24trn Bt0.32trn Bt2.56trn 44.8%, as of June 2020. However, it is still under (100%) (88%) (12%) - Investment Budget Bt0.64trn Bt0.24trn Bt0.40trn the 60% limit set under the fiscal sustainability Bt0.64trn (100%) (37%) (63%) framework  Government budget disbursement rate for 10M FY2020 is 77.4%,  Thai government is committed to keep the ratio of slightly declined by 1.6% from the 79.0% in 10M FY2019. The public debt to GDP not exceed 60%. The public disbursement started to catch up after the budget enactment debt to GDP is expected to rise to 57% in 2021  Government investment projects could be further delayed as the government needs to impose emergency stimulus measures to Source: Ministry of Finance (MOF), Fiscal Policy Office (FPO), and Public Debt Management Office (PDMO) counter the virus threats 139

Relief Measures for COVID-19 Impacts MOF BOT Measures Package Size Measures Package Size Phase 1 Bt400 billion Government bond purchase Bt100 billion - Soft loans worth Bt150 billion - Interest cuts and delayed debt payments (SFIs) Provide liquidity for bond - Reducing electricity and water bills Bt1.0 triillion Phase 2 Bt120 billion mutual funds - Cash handouts - Emergency loans Soft loans Bt500 billion - Tax benefits Phase 3 Bt1.0 trillion Corporate Bond Liquidity Bt400 billion - Implementing health-related plans and giving financial aid to affected people Stabilization Fund (BSF) - Economic and social rehabilitation Bt1.5 trillion or 9% of GDP Bt2.0 trillion or 12% of GDP

Note: SFIs = Specialized Financial Institutions

Source: MOF, BOT and KResearch, as of May 2020

140 Relief Measures for COVID-19 Impacts Measures from Government, BOT, and SEC for Businesses and Individuals

Market Stability and Liquidity Soft Loans Others (Government, BOT, and SEC) (Government and BOT) (Government) For Businesses For Businesses (Bt680bn) For Individuals . Financial Markets: BOT, MOF, & SEC . Soft Loans for SMEs: Government and BOT . Household: o Bt1trn Fixed Income Fund: BOT set up a special o Gov’t: Bt150bn worth of soft loans for SMEs, via o Reduce water and electricity bills and refund meter facility to provide liquidity for mutual funds. GSB, at 2% for 2 years fees Commercial banks purchasing investment units can o BOT: Bt500bn worth of soft loans for SMEs with o Extend deadline for personal income tax filing to Aug use the eligible underlying unit trust as collateral for credit lines not over Bt500mn, at 2% for 2 years and 2020, and increase health insurance premium liquidity support from the facility 6-months interest free* deductions o Bond Markets: BOT will purchase bonds to provide . Soft Loans for Entrepreneurs Registered with the . Work Force: liquidity and lessen volatility in the bond market Social Security Office: Government o 3-month payment of 62% of wages to people under . Corporate Bond Stabilization Fund (BSF): BOT o Bt30bn worth of soft loans at 3% for 3 years the SSF, if their employer closed their business or if o Bt400bn of bridge financing to high-quality firms with For Individuals (Bt60bn) the government ordered business operations bonds maturing during 2020-2021 at higher-than- . Soft Loans for Individuals: Government suspended market ‘penalty’ rates. (Issuers must raise the Reduce SSF contribution to 1% o Bt40bn worth of soft loans at Bt10,000 per person at o majority of their funding needs through other means 0.1% (no collateral) via GSB & BAAC o 3-month Bt5,000 monthly payments to workers not such as bank loans or capital increase) covered by the SSF o Bt20bn worth of soft loans at Bt50,000 per person at . Reduce FIDF Fee: BOT 0.35% (with collateral) via BAAC . Economy and Health: o FIDF fee cut from 0.46% of deposit base to 0.23% o Bt45bn for health-related plans for 2 years, supporting lower reference lending rates o Bt555bn for relief measures, including workforce . Tax Relief: Government o Bt400bn for economic recovery plans o Deduct 1.5 times for interest expenses (Apr-Dec o Tax exemption on risk payments for medical workers 2020) for SMEs receiving Bt150bn in soft loans o Bt80-100bn from ministries to use as stimulus funds o Deduct 3 times for salary costs for SMEs that . Support Stock Markets: maintain their employees o Add Bt200,000 of tax-deductible Super Saving Funds o Reduce withholding tax for domestic businesses to bought in Apr-Jun 2020 1.5% (Apr-Sep 2020) o Speed up VAT refunds to exporters of domestic goods to 15 days (online) or 45 days (filing manually) o Extend corporate income tax filing to Aug 2020

Notes: BOT = Bank of Thailand; SSF=Social Security Fund; GSB = Government Saving Bank; BAAC = Bank for Agriculture and Agricultural Cooperatives; SFIs = Specialized Financial Institutions The BOT provides soft loans at 0.01% to banks to lend to SMEs; amount to not be over 20% of each SME’s outstanding loans; government pays for first 6-months interest; in case of NPLs, the government will support 60-70% of additional reserves for loans Source: MOF, BOT and KResearch 141

Relief Measures for COVID-19 Impacts (Continued) Measures from BOT

Credit Adjustment

For Businesses Phase 2: For Individuals . Loan Payments for SMEs: . Reduce the interest rate ceiling for credit cards and personal loans by 2% to 4% o 6-month debt holiday on principal and interest payments for SMEs having credit lines p.a., effective from August 1,2020 onwards. not over Bt100mn . Increase credit limit from 1.5x to 2x of monthly income for good debtors with a For Individuals monthly income of less than Bt30,000, from August 2020 to December 2021 . Credit Card and Revolving Loans: o Reduce minimum installment payment to 5% in 2020-21 and 8% in 2022, returning to . Provide alternative measures to help debtors hit by COVID-19 who do not have NPLs 10% in 2023; refinancing into long-term loans with lower interest rates . Restructure debt: FIs must focus on debtor’s ability to pay debt in order to relieve their . Personal Loans with Installment Payments and Auto Title Loans: burden o (Banks and SFIs), 3-month grace period on principal and interest payments Debt Consolidation Program for Individuals o (Other lenders), 3-month grace period on principal and interest payments, or pay up . Consolidate unsecured loans, hire purchase and housing loan from same creditor to to 70% of installments for 6 months utilize the collateral. For the combined unsecured loan, interest rate is capped not higher . Hire Purchase: than the Minimum Retail Rate (MRR), while loan repayment period can be extended o 3-month grace period on principal and interest payments, or 6-month grace period on according to the debt service ability of debtor principal payments for motorcycles (<=Bt35,000), automobiles (<=250,000), and leasing “DR BIZ” Project for Businesses who have multiple financial institution creditors (<=Bt3mn) with a total loan of Bt50–500mn . Housing Loans and Micro and Nano Finance: . Receive relief measures with all financial institutions in an integrated manner 3-month grace period on principal payments and case-by-case interest rate cuts for o . Have main creditors to take care debtors and coordinate with other creditors housing (<=Bt3mn) and micro and nano finance (<=Bt20mn) . Around 8,400 debtors with a total loan of Bt1.2trn have qualifications to join the project . Ease Commercial Bank Loan Rules for Easier Access Loans Classification

 Non-NPL (Pre-Emptive): 1) Can immediately classify Non-NPL debtors as stage 1 (stage 1 or stage 2 >> stage 1) 2) Not to be deemed as TDR and not to be reported to National Credit Bureau  NPL: Classify as stage 1, under a 3 consecutive-month payment period (from the previous 12 months)  Additional Working Capital: Can be classified as stage 1, provided that the debtors have sufficient cash flow for repayment

Regulation Relaxation Report to the BOT Other measures

 No additional provision for unused credit line  Financial institutions are required to submit  Relaxing credit line for emergency cases  Easing liquidity-related regulations, including NSFR and LCR reports to the BOT detailing target loans and  Reducing the FIDF fee from 0.46% of deposit base to 0.23% outstanding debts of the debtors who are subject per annum for a period of two years to these measures

Source: BOT 142 20-Year National Strategy (2017-2036) (As defined in Section 65 of the Constitution of the Kingdom of Thailand and passed by the NLA in June 2017)  To achieve the vision “Security, Prosperity, Sustainability”, to become a high-income country, to improve quality of life, to generate high income, to escape the middle income trap, and to ensure well-being for all Thais Key Strategies The Goals

. High income country: 15,000 USD per capita by 2036 (2016 income per capita = 5,901 USD) . Economic growth around 5% per year (4-5% under 12th NESDB Social and Economic Development Plan and 5% for the next three NESDB 5-Year Plans) . People of all ages healthy and with lifelong learning opportunities . Target Gini: <= 0.36 (inequality measurement: lower figure indicates better income distribution) . Forest area as percentage of total land area more than 40% . Fully implement Digital Government Services . Enhance Corruption Perceptions Index beyond 50Plus (the lower tier of least corrupt countries)

National Strategy Committee: Chairman is the Prime Minister; Secretary is NESDB Secretary-General

. 34 committee members . First 17 committee members are high-ranking state officials and leading industry experts such as the Prime Minister, members of the top brass, National Police Chief, Permanent Secretary for Defense, President of the House of Representatives, Chairman of the Federation of Thai Industries, President of the National Farmers Council, President of the Thai Bankers' Association, Chairman of the Thai Chamber of Commerce, etc. . Second 17 Committee members are experts from various fields 2017 2022 2027 2032 2036

Jun17: NLA passed the law Aug17: Cabinet appointed committees Jun18: Cabinet endorsed the plan Jul18: NLA approved the plan The National Economic and Social Development Plan (5-year plan) aligned with the 20-year National Strategy

The 12th National Economic and Social The 13th National Economic and Social The 14th National Economic and Social The 15th National Economic and Social Development Plan (2017-2021) Development Plan (2022-2026) Development Plan (2027-2031) Development Plan (2032-2036)

143

Government Policies Twelve Main Policies Twelve Urgent Policies

 National Security  Economic Issues  Protecting and upholding the monarchy  Solving bread-and-butter concerns and reforming  Maintaining security, safety and peace the tax system  Preserving religion and culture  Economic measures to cope with volatility in the global economy  Enhancing Economic Development  Helping farmers develop innovations  Promoting Thailand’s role on the global stage  Upgrading worker capabilities  Boosting competitiveness  Laying foundations for the country’s growth  Developing economic areas and distributing wealth  Devising measures to deal with drought and floods to all regions  Social Issues  Supporting Sustainable Social Development  Improving the welfare system and the people’s  Building the country’s strength through a bottom-up quality of life approach  Preparing Thais for the 21st century  Reforming learning processes and helping Thais  Solving corruption among politicians and reach their potential government officials  Improving the public health system and social  Tackling drug problems and restoring peace in the security Deep South  Reforming management in the state sector  Improving public services  Prevention and suppression of corruption  Other Issues  Enviromental Issues  Supporting efforts to study constitutional  Replenishing natural resources amendments and gathering public opinion

Sources: Bangkok Post newspaper and KResearch (as of July 24, 2019) 144 Government Policy: Long-term and Short-term Policies Long-term Policies Short-term Policies

 Transport Infrastructure Development Plan:  Government Budget:  Project will reduce logistical costs, increase transportation speed of goods and  Fiscal budget deficit in FY2020: plans for Bt469bn deficit to provide additional people, as well as connect Thailand to neighbors along the East-West and supports to Thai economy amid global uncertainties North-South Economic Corridors  Short-term Stimuli:  Transport Action Plan Year 2016, worth Bt1.796trn, approved by Cabinet in November 2015; Transport Action Plan Year 2017, worth Bt1.318trn, approved  Mid-2019 stimulus plan (Bt21.8bn) : Give Bt13.2bn directly to people with disabilities, by Cabinet in December 2016 farmers, and other holders of welfare cards to help people with low incomes; tax measures worth Bt8.6bn, supporting property markets, tourism, education, etc  Digital Economy:  Thailand Plus Package: attract foreign investment, especially to expedite  NBTC plans to award mobile licenses in various spectrums and launch 5G in investments from companies seeking to relocate as a result of ongoing trade war ‘ near future  Cash handout for workers not covered by the SSF: 3-month Bt5,000 monthly  Government plans to adapt National Digital ID to speed up the process towards payments to informal workers affected by COVID-19 digital economy  Measures to help farmers: 2019/2020 rice and palm oil price insurance scheme, drought-afflicted relief program, and easing production costs; 3-month Bt5,000  BOI Measures for Supporting Private Investment: Cabinet approved tax and monthly payments to farmers (May-July 2020) non-tax incentive measures to support private investment, such as Special  Supporting tourism: Subsidies for domestic tourists (Moral Support & We Travel Economic Zones (SEZs) and ten targeted industries as new engines of growth Together campaigns)  Eastern Economic Corridor (EEC): Area for facilitating and attracting investment  Property stimulus package: Offer Bt50,000 cash-back per buyer on down payment; in 10 innovative target industries to transform Thailand into Thailand 4.0 reduce property transfer and mortgage fees  2020 SMEs aid program: Offer credit guarantee facility, liquidity aids, soft loans, and  Promote Establishment of International Headquarters (IHQ) and an assistance in debt restructuring processes for SMES International Trading Center (ITC) in Thailand: Help Thailand become a key trading nation in the region

 Join the Regional Comprehensive Economic Partnership (RCEP): Deepen economic cooperation among sixteen countries and promote export sector

 Energy Policy: Reform petroleum concessions and energy price structures, including an LPG subsidy

 Tax Reform: Reform tax collection, generate sufficient revenue for the government, and boost competitiveness for local businesses, especially SMEs

Note: NBTC = National Broadcasting and Telecommunications Commission; SOE = State Owned Enterprise; GSB = Gvernment Saving Bank SSF = Super Saving Fund Sources: Newspaper and KResearch (as of January 2020) 145

Transport Infrastructure Development Plan  The Transport Infrastructure Development Plan is aimed at facilitating social stability and economic growth  Transport Action Plan Year 2016, worth Bt1.796trn*, approved by the Cabinet in 2015  Transport Action Plan Year 2017, worth Bt1.318trn, approved by the Cabinet in 2016 Source of Fund Type of Projects Project Details Motorway Fund, Regular Investment 0.8% Budget, 4.7% Dual-Track Trains, 6.6% Marine Transport, 0.3% Transport SOE, 3.1% 1. Bangkok and Vicinity Mass-Transit System (Bt368bn) 4. Rail Transportation Cooperation (Bt1,096bn) Air Transport, 2.7% Action Plan Transportation PPP, 21.0% Motorway, 8.9% Year 2016 Cooperation Plan 61% 2 Motorway (Bt160bn) 5. Air Transport (Bt49bn) (Bt1.796trn) Government Bangkok and Vicinity Borrowing, 70.5% Mass-Transit System 20.5%

3. Dual-Track Trains (Bt118bn) 6. Marine Transport (Bt5bn)

Source of Fund Type of Projects Project Details Others 1.9% Bangkok and Vicinity mass Marine Transport Transport Transit system 1. Bangkok and Vicinity Mass-Transit System (Bt248bn) 4. Air Transport (Bt301bn) Government 12.8% 18.8% Action Plan Borrowing Year 2017 PPP 54.1% 33.9% Air Transport Motorway & (Bt1.318trn) 22.8% Expressway 2 Motorway & Expressway (Bt167bn) 5. Marine Transport (Bt168bn) SOE's Revenue 12.7% Dual-Track Regular Investment 3.0% Trains Budget 5.6% TFFIF,3.4% 31% 3. Dual-Track Trains (Bt409bn) 7. Others (Bt25bn)

* Total investment may be reduced due to cutting the scope of work, especially the Rail Transportation Cooperation projects Notes: PPP = Public-Private Partnership; SOE = State of Enterprise; MRTA = Mass Rapid Transit Authority of Thailand; SRT = State Railway of Thailand ; TFFIF = Thailand Future Fund First round of Thailand Future Fund IPO (amount Bt45bn) to invest in the right to 45% of toll revenue of the Expressway Authority of Thailand on the Chalong Rat (Ram Intra - At Narong) Expressway and the Burapha Withi (Bang Na) Expressway Source : Office of Transport and Traffic Policy and Planning, Newspaper, KResearch (as of October, 2019) 146 Transport Infrastructure Development Budget Disbursement  In 2016-2019, budget disbursement was only 10.0% of total investment value, but it will gradually increase as construction on many projects is expected to start in 2021

Budget Disbursement Schedule (FY2016-2034)*

200 180 178 180 170 165 158 155 155 160

140 125 120 97.8 100 Billion Baht 80 65.1 60 36.8 40 24.5 19.1 20 0 2016 2017 2018 2019 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e

Notes: - Thai government's fiscal year (FY) begins on 1 October and ends on 30 September of the following year - Included four high speed train lines Source : Office of Transport and Traffic Policy and Planning * KResearch Projected (as of August 2020)

147

Projects under construction Expected completion Projects under construction year Motorways: Pattaya-Map Ta Phut 2020 Bang Pa-In-Nakhon Ratchasima 2020 / 2021 Bang Yai-Kanchanaburi 2021 / 2022

Projects under construction Expected completion year Dual-Track Railways: Prachuap Khiri Khan-Chumphon 2021 Nakhon Pathom-HuaHin 2021 Hua Hin-Prachuap Khiri Khan 2021 Lop Buri-Pak Nam Pho 2022 Mab Kabao-Jira Junction 2023

Projects under construction Expected completion year

High Speed Railway: Thailand-Chinese 2023 (Bangkok-Nakhon Ratchasima-Nong Khai)

Projects under construction Expected completion Projects under construction Expected completion year year Mass-Transit System and Commuter Rail Lines: Air Transport: Orange Line (Thailand Cultural Centre-Min Buri) 2022 Suvarnabhumi Airport Phase 2 and Mae Sot Airport 2020 Pink Line (Khae Rai-Min Buri) 2021 (Tak) Yellow Line (Lad Prao-Samrong) 2021 Others: Red Line (Bang Sue-Rangsit) 2020 Intermodal Facility – Chiang Khong (Chiang Rai) 2019 / 2020

Source: Ministry of Transport and KResearch (August 2020) 148 Upcoming Infrastructure Projects Upcoming Infrastructure Projects by Status Upcoming Infrastructure Projects by Areas

Preparing for construction Expected to start construction

High Speed Train: High-Speed Rail Linked 3 Airports 2021 Marine Transport: Map Ta Phut Industrial Port Phase 3 2020 Laem Chabang Phase 3 2021

Air Transport: U-Tapao Airport 2021

TOR/Bidding Process Expected to start construction

Mass-Transit System and Commuter Rail Lines: Orange Line (West Section) 2021 Purple Line (South Section) 2021 Dual-Track Railways: Northern line (Double-Track Railway: Den Chai-Chiang 2021 Rai-Chiang Khong) Northeast line (Double-Track Railway: Ban Phai – Maha 2021 Sarakham – Roi Et – Mukdahan - Nakhon Phanom)

Projects pending for approval Projects Preparation/ PPP Process /EIA Process

Dual-Track Railways: For example: Dual-Track Railway 2nd phase Motorways ; Hat Yai to Malaysia Border, Bangkok to Mahachai Motorways: High Speed Train ; Bangkok to Hua Hin Nakhon Pathom-Cha-am Light Rail in Phuket, Khon Kaen, Chiang Mai

Source: Ministry of Transport and KResearch (August 2020) 149

Eastern Economic Corridor (EEC): Three eastern provinces: Chachoengsao, Chon Buri, and Rayong  Objectives: To facilitate and attract investment in 10 innovative target industries aimed at achieving “Thailand 4.0”, an innovation driven society (the 10 industries are Next-Generation Automotive, Smart Electronics, Medical and Wellness Tourism, Food for the Future, Robotics, Aviation, Agriculture & Biotechnology, Biofuels & Bio Chemicals, Digital, and Medical Hub)  Key Development Plan: An expansion of existing transportation facilities, plus new investment in logistics systems to transform the EEC area (13,266 square kilometer) into a regional center for trade, investment, and tourism  Investment Amount: Bt1.7trn in the first five years (starting from 2019 onwards) from the government and private businesses (around 2/3 from private sector); high-priority projects to start in 2019 are U-Tapao Airport, high speed railways from Bangkok to Rayong, the third phase of Laem Chabang Port and Map Ta Phut Port, and the maintenance repair and overhaul (MRO) campus.  Investment Incentives: EEC privileges corporate income tax (CIT) exemption of up to 13 years and additional 50% CIT reduction for up to five years for some projects; 15-year CIT exemption for qualified projects under Thailand Competitive Fund (R&D investment); a flat tax rate of 17% personal income tax (PIT) for experts/specialists; long-term land leases (up to 99 Years) Four Core Areas - 15 Crucial Investment Projects* Investment Amount as Planned by EECO ( Bt1.7trn in the first five years)

Bt bn

752.2 947.8

Infrastructure Industries and others (Private)

Source: The Board of Investment of Thailand (BOI), and The Eastern Economic Corridor Office of Thailand (EECO) presentation and KResearch projected (as of October 2019)

150 EEC Progress

Expected disbursement of Expected private investment Private Investment Breakdown by infrastructure project (FY2019-2027)* (FY2019-2027)* Business type (during the first 5 years)

250,000 300,000 8.8% 200,000 250,000 Bt mn Bt mn 200,000 150,000 150,000 100,000 100,000 91.2% 50,000 50,000 0 0 Infrastructure-related investment 2019 2020 2021 2022 2023 2024 2025 2026 2027 2019 2020 2021 2022 2023 2024 2025 2026 2027 Target and non-targer industries

Name of the Expected project Projects Amount Owner TOR period Progress selected JV completion The High-Speed Rail Linked 3 Airport Project State Railway of PPP Contract signed Bt224.5bn Jun 18 CPH1) 2027 (Don Muang-Suvarnbhumi-U-tapao) Thailand in Oct 2019 Final stage of bid U-tapao airport and aviation city2) Bt290bn Royal Thai Navy Oct 18 BBS3) 2026 selection process Maintenance, repair and overhaul (MRO) Pending after Bt10.6bn Thai Airways Oct 18 Finding new JV N.A. centre* Airbus withdrew Port Authority of Third phase of the Laem Chabang seaport* Bt155.8bn Oct 18 Under Negotiation GPC4) (Tentative) 2026 Thailand Industrial Estate PPP Contract signed Third phase of the Map Ta Phut seaport* Bt47.9bn Authority of Oct 18 GPC4) 2024 in Oct 2019 Thailand Source: Newspaper, KResearch (as of August 2020) Note: *Projects are under Transport Action Plan Year 2017 1) CPH = A consortium joint venture led by Charoen Pokphand Group, 2) Most of Aviation City development comes from private sector, 3) BBS (BA 45% + BTS 35%+ STEC 20%), 4) GPC = Gulf Energy Development Pcl + PTT Tank Terminal Company + China Harbour Engineering Company 151

BOI Measures for Supporting Private Investment  Cabinet approved measures for supporting private investment

Special economic zones (SEZs) (January 19, 2015)

Targeted provinces . Launched a pilot project to set up 6 special economic zones in 5 provinces, namely Tak, Mukdahan, Sa Kaeo, Songkhla, and Trat . Second phase of special economic zones to be established in 5 additional provinces – Chiang Rai, Kanchanaburi, Nong Khai, Nakhon Phanom, and Narathiwat

Incentives . Projects in special economic zones: tax exemption for first 8 years and 50% tax reduction in following 5 years

10 targeted industries for new engines of growth (November 17, 2015)

10 targeted . First S-Curve (to enhance efficiency of existing production, boosting short and medium-term economic growth) consists of Next industries Generation Automotive, Smart Electronics, Affluent Medical and Wellness Tourism, Agriculture and Biotechnology, and Food for the Future . New S-Curve (for new growth) consists of Robotics, Aviation and Logistics, Biofuels and Biochemicals, Digital, and Medical Hub

Incentives . Up to 15 years for tax exemption; personal income tax exemption for international qualified expertise . Tax deduction will be granted up to 3 times for expenses relating to technology R&D from 2015-2019

Additional Incentives under Revised Investment Promotion Act (February 14, 2017)

Competitiveness . Promote investment in line with Thailand 4.0, especially new technology and high-impact investment Enhancement Act . Targeted Core Technologies consist of Biotechnology, Nanotechnology, Advanced Materials Technology, and Digital Technology

Incentives . Corporate income tax exemption for up to 13 years for businesses using advanced technology and R&D . 50% corporate income tax reduction for up to 10 years . Import duty exemption for machinery and raw materials for exports . Non-tax incentives such as up to 99 years ownership of land and imports of skilled-labor and foreigner specialists . Bt10bn grants for investment projects engaged in R&D, innovation, or human resource development in specific areas

Source: Newspaper, KResearch (as of August 2017)

152 BOI Measures for Supporting Private Investment Special Cabinet incentives approved to attract relocating measures industries for supporting (September 6private, 2019) investment

Thailand Plus . To attract foreign investment, especially to expedite investments from companies seeking to relocate as a result of the ongoing Package trade war

Incentives . Additional 5 years of 50% reduction of corporate income tax when at least Bt1bn of actual investment is put in place by December 2021 and the application is submitted by December 2020 . Special deduction of training expenses related to advanced technology . Investments in automation systems will be entitled to double deduction . Set up an investment steering committee (One-Stop Service) to coordinate the consideration and facilitation of the investment projects, especially those involving large investments

Broad Investment Measures to Boost Economy (February 6, 2020)

Thailand Plus . To attract foreign investment, especially to expedite investments from companies seeking to relocate as a result of the ongoing Package trade war

Incentives . Extension and improvement of promotional measures allowing companies to enjoy tax benefits when they invest in projects supporting grassroots economies by enhancing the competitiveness of co-operatives and village enterprises. Special deduction of training expenses related to advanced technology endorsed by the Ministry of Higher Education, Science, Research, and Innovation

Steps to Ease COVID-19 Impact, Accelerate Investment in Medical Sector (13 April 2020)

Thailand Plus . To mitigate the impact of the COVID-19 outbreak on business Package . To encourage rapid investment in the manufacturing of medical equipment Incentives Accelerate investments in the medical sector . A 50% reduction in corporate income tax for an additional 3 years to qualified investments in the medical sector . Applications to be submitted between January - June 2020, with production begun and income generated by December 2020 Temporary relaxation of investment conditions . Deadlines relaxed in cases such as duty-free importation of machinery and full operation start-up, as well as waivers for applications for temporary cessation of operations for a period of more than two months

Source: Newspaper, KResearch (as of August 2020) 153

Short-term Stimuli  Cabinet approved economic packages to stimulate economy: village / district levels, SMEs, and property

Measures to support economy (August 2018, January 2019, August 2019)

Welfare Card (Phase 1, 2) . Individuals earning less than Bt30,000 annually will receive government transfers of Bt200-300 a month to each welfare smart card (Bt100 for purchase of necessary goods and up to Bt200 for E-money) until January 2020 . Welfare cardholders will also receive a monthly subsidy for transportation expenses for inter-provincial public buses, third-class trains, and local public buses and electric trains

Add-ons under Welfare Card . Up to Bt500 per month e-wallet top-up allowance until January 2020 (Phase 3) . Bt500 per month elderly allowance until January 2020 . Bt300 per month allowance for taking care of children aged up to six until September 2019

Measures to support domestic tourism and spending in upcountry area (August 2019)

Tourism . Extension of fee-waiver for tourist visas until September 2020

Cash handouts for domestic . Offer a Bt1,000 freebie to Thai travelers, up to 10 million persons, visiting tourism destinations outside tourists : Eat Shop Travel their home province (Bt19bn) . 15% cash rebate, up to Bt30,000, on tourism spending for food and beverages, local products, and accommodation expenses

Measures to support domestic tourism (June 2020)

Tourism . 4-month tourism campaigns (July to October 2020)

Subsidies for domestic tourists . Moral Support: support domestic trips for more than 1 million healthcare workers and volunteers from sub-district Moral Support & We Travel hospitals (Bt2,000 subsidy per person for two days, one night trips) Together (Bt22.4bn) . We Travel together: - Subsidize 40% of normal room rates, capped at Bt3,000 per night (up to five nights) - Subsidize 40% of other services such as food, capped at Bt600 per room per night - Subsidize 40% of airline ticket price Source: Newspaper, KResearch (as of August 2020) 154 Short-term Stimuli (Con’t)  Cabinet approved economic packages to stimulate economy: village / district levels, SMEs, and property

Measures to help Farmers (August 20,2019, and August 27, 2019)

Drought-afflicted relief program . Low-interest loans will be offered to support farmers affected by the drought . An extension of debt repayment for BAAC borrowers . Emergency loans capped at 50,000 Baht, with no interest charged in the first year . Drought rehabilitation loans up to 500,000 Baht, each with a special interest rate of MRR-2% Easing production cost • Bt500 per rai grant for easing crop expenses during 2019/2020 crop cycle (capped at 20 rai per farmer household)

2019/20 Rice and Palm Oil Price . Price guarantee of Bt4 per kilogram for palm oil, up to 25 rai per farmer household Insurance Scheme . Up to Bt15,000 per tonne risch price guarantee, up to 40 rai per farmer household (Bt34bn)

Measures to help SMEs (September 8, 2015, July 25, 2017, August 1, 2017, and August 20, 2019, January 7,2020)

2020 Loans guaranteed by Thai . TCG will offer Bt60bn credit guarantee facility to the first group of up to 50,000 SMEs and enlarge credit guarantee Credit Guarantee (TCG) coverage to 40% from 30%

2020 Debt restructuring program . TCG will delay bankruptcy process for SMEs and help SME debt restructuring process

Loans guaranteed by TCG . TCG will absorb first 30% of NPLs as loss (Bt100bn) . Guarantee fee will drop to 0% in 1st year, 0.5% in 2nd year, 1.5% in 3rd, and 1.75% in remaining years

Venture capital fund for SMEs . GSB, KTB, and SME banks will provide Bt6bn in venture capital funding for start-up SMEs with insufficient capital

SME Transformation Loan programme by Government Saving Bank and Krung Thai Bank (January 7, 2020)

2020 Liquidity aid (Bt60bn) . GSB and KTB will offer Bt60bn loans to boost SMEs’ liquidity

Source: Newspaper, KResearch (as of January 2020)

155

Short-term Stimuli (Con’t)  Cabinet approved economic packages to stimulate economy: village / district levels, SMEs, and property

Measures to support small SMEs (August 20,2019, January 7,2020)

Special Credit Program to . Grant soft loans, up to Bt1mn per entrepreneur, with interest rate of only 1% per annum and seven-year grace period support small SMEs (Bt5bn)

Measures to support property market (October 29, 2019, November 26, 2019)

Property transfer fee reduction . Property transfer fees reduced from 2 percent to 0.01 percent . Mortgage fees reduced from 1.0 percent to 0.01 percent for buying condominium units priced at not over Bt3 million

Baan Dee Mee Down Program . Bt50,000 cash-back per buyer on down payment for buyers earning less than Bt100,000 per month (Nov 19 - Mar 20) (Cash Rebate on down payment)

Source: Newspaper, KResearch (as of January 2020)

156 Ongoing Government Measures to Assist Cost of Living Measures Details Household Assistance Train and Bus Fares: Bt500 monthly allowance for welfare card holders to use for bus and train service Necessity Goods: A Bt100* grant per month in welfare card to purchase necessity goods, products intended for education and farming materials from all Blue Flag shops Cooking Gas: A Bt45 discount each quarter in welfare card for purchasing cooking gas Allowances (e-Money) : Up to Bt 200** for e-Money in welfare card, which can be withdrawed from an ATM Water and electricity price: Reduce water and electricity bills and refund meter fees Energy Prices Diesel Fuel: Government intends to restructure diesel fuel prices to reflect global prices

Elimination of some Oil Fund levies (effective Diesel Price NGV and LPG Price: Government lowered the NGV and LPG subsidy, allowing retail selling prices to reflect global market prices 35  NGV price rose to Bt15.31/kg since April 2019, align with global price 33 29.99  LPG prices are as follows: 31  Household sector: Current household LPG prices are Bt18.87/kg 29 and Bt16.37/kg for low income household. 27  Transport sector: adjusted to market price at Bt18.87/kg

Baht/Litre 25  Industrial sector: adjusted in line with relevant production costs, currently at 23 Bt18.87/kg FT Rate: Fuel Adjustment Tariff (FT) Rate for electricity is set to increase by less than the 21 Price mov es in accordance with global oil prices actual cost (from September-December 2020, FT rate at Bt-0.1243/unit ) 19 Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- 11 12 13 14 15 16 17 18 19 20

Retail Price Price without Subsidy Value-added-tax (VAT) Rate On September 10, 2019, the Government announced the following VAT Rates:  Maintain the 7% value-added-tax (VAT) rate until September 30, 2020  On October 1, 2020, the VAT rate will be increased to 10%

Note : * Effective period July– October 2019 ** Household income exceed Bt30,000 per annum will get Bt 100 for e-Money Source: KResearch 157

Thailand Economic Figures

158 Currency and Interest Rate Outlook USD/THB: End Period Interest Rate Trend

4.00 3.25 2.75 Fed Funds rate BOT's 1-Day Repurchase rate Bt 2.25 2.00 35.97 35.84 1.50 1.50 1.50 1.75 37 32.68 32.91 32.66 32.55 2.00 1.25 0.50 33 31.54 30.60 29.98 30.50 % p.a. 0-0.25 0-0.25 0-0.25 0-0.25 0-0.25 0.25-0.50 0.50-0.75 1.25-1.50 1.50-1.75 0.00-0.25 29 0.00 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19 4Q20F Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20F USD/THB . USD/THB depreciated to around 30.90 in 1H20, due to . Fed would keep its ultra-monetary easing with Fed a risk-off sentiment from fear of the COVID-19 Funds rate of 0.00-0.25% and its quantitative easing outbreak and BOT rate cuts throughout the year, from 1.50-1.75% in 2019, as the COVID-19 outbreak, existing US-China tensions, . However, USD/THB to drop back to 30.50 by the end and US election uncertainty are expected to impact of this year, due to the tendency toward US dollar US economic growth weakness, expected stability in the BOT rate, and strong Thai economic fundamentals, such as high . BOT may maintain its interest rate at 0.50% in 2020, current account surplus, low inflation, and high from 1.25% in 2019, due to impacts of the COVID-19 global liquidity outbreak globally on Thai economic growth

Note: F is estimated by KBank Capital Markets Research (as of August 10, 2020)

159

Monthly Economic Conditions: June 2020

2018 20192020 YTD  June indicators suggested the Thai Units: YoY %, or indicated otherwise 1Q-20 2Q-20 Mar-20 Apr-20 May-20 Jun-20 2020 economy improved from the Private Consumption Index (PCI) 4.5 2.5 1.7 -10.3 -0.8 -14.3 -11.5 -4.7 -4.4 previous month, due to the gradual ꞏ Non-durables Index 1.4 2.3 1.1 -7.0 1.2 -11.2 -6.4 -3.2 -2.8 ꞏ Durables Index 8.0 -2.0 -12.0 -29.1 -22.0 -37.5 -32.0 -18.9 -20.4 relaxation of lockdown measures ꞏ Service Index 5.3 2.8 -9.9 -28.2 -21.9 -31.1 -28.6 -24.3 -19.0  June private consumption ꞏ Passenger Car Sales 19.1 -2.4 -22.6 -58.7 -44.6 -72.9 -61.4 -40.3 -40.2 ꞏ Motorcycle Sales -2.8 -3.3 -5.7 -28.8 -11.2 -34.4 -37.1 -12.8 -16.9 indicators contracted at a lower Private Investment Index (PII) 3.5 -2.6 -6.5 -13.5 -7.9 -9.9 -18.2 -12.1 -10.0 rate, compared with the previous ꞏ Construction Material Sales Index 4.4 -0.7 -0.3 2.7 -1.0 16.3 -2.5 -3.3 1.1 month ꞏ Domestic Machinery Sales at constant prices 6.1 -5.4 0.6 -22.5 -1.7 -15.5 -28.5 -22.6 -10.8 ꞏ Imports of Capital Goods at constant prices 3.6 -0.9 -9.2 -19.6 -11.0 -17.5 -26.8 -13.7 -14.5  June exports continued to contract ꞏ Newly Registered Motor Vehicles for Investment 5.7 -3.0 -11.7 -24.5 -8.0 -25.4 -34.7 -12.6 -17.8 drastically, especially exports of Manufacturing Production Index 3.7 -3.6 -6.4 -20.0 -10.5 -18.2 -23.8 -17.7 -12.9 automotive and parts, machinery ꞏ Capacity Utilization 69.2 66.0 66.9 52.9 67.8 51.3 52.3 55.2 59.9 Agriculture Production Index 7.4 -0.4 -13.8 -4.7 -25.1 -15.4 -0.3 2.7 -10.0 and equipment, and petroleum- ꞏ Agriculture Price Index -5.4 1.8 8.8 -1.4 8.7 3.6 -2.9 -4.5 3.6 related products Tourist arrival growth 7.3 4.2 -38.0 -100.0 -76.4 -100.0 -100.0 -100.0 -66.2 Exports (Custom basis) 6.9 -2.6 0.9 -15.2 4.2 2.1 -22.5 -23.2 -7.1  June current accounts registered a Price 3.4 0.3 -0.4 -2.0 -1.6 -2.4 -2.3 -1.5 -1.2 deficit from tourist revenue Volume 3.9 -3.7 1.8 -16.1 -0.8 -1.0 -21.9 -23.5 -7.1 Imports (Custom basis) 12.0 -4.8 -1.9 -23.5 7.2 -17.2 -34.4 -18.1 -12.6  June headline inflation remained Price 5.6 0.2 -0.9 -5.1 -4.2 -7.3 -5.1 -2.8 -3.0 negative for 4 consecutive months Volume 7.7 -5.7 -0.1 -19.3 8.7 -10.5 -30.6 -15.8 -9.7 but dropped at a lower rate than Trade Balance ($ millions) (Custom basis) 4,756 10,009 3,934 6,767 1,592 2,462 2,695 1,610 10,701 previous months. Meanwhile, core Current Account ($ millions) 28,457 38,358 8,917 -837 544 -654 64 -247 8,080 Headline CPI 1.06 0.71 0.41 -2.67 -0.54 -2.99 -3.44 -1.57 -1.13 inflation turned negative for the first Core CPI 0.71 0.52 0.53 0.12 0.54 0.41 0.01 -0.05 0.32 time in more than a decade

Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), Office of Industrial Economics (OIE), and Office of Agricultural Economics (OAE)

160 KR Household Economic Condition Index (KR-ECI)

 The 3-month Expected KR-ECI in June 2020 stayed at 37.4, showing signs of improvement from 35.9 recorded in May 2020. For the first time in 7 months, the KR-ECI for the next three months is found to be higher than the current economic condition index. This turnaround suggests the perception of households towards economic conditions in, which will continue to improve in the future.

KR Household Economic Condition Index (KR-ECI) Components of 3-month Expected KR-ECI

3-month Expected KR-ECI

30.5 Household savings 29.2 Jun-20 41.3 May-20 Household income 39.3

48.0 Household debt 47.1

33.2 Household expenses excluding debt 30.0

37.1 Prices of consumer goods 37.0

Source: KResearch 0 5 10 15 20 25 30 35 40 45 50 55

Notes: - The KR Household Economic Condition Index (KR-ECI) has been devised by KResearch to monitor household sentiment towards economic conditions at the current level and over the next three months. Any reading above 50 reflects positive sentiment and below 50 negative sentiment. - Research sample includes households in Bangkok and Metropolitan Area (BMA). - KR-ECI consists of household savings, household income, household debt, household expenses excluding debt and prices of consumer goods.

161

Economic Condition Highlights: June 2020 Jun20 MPI contracted at a lower rate than previous months, Activities in real estate market, except new housing registrations, while CapU slightly picked up expanded in 1Q20

10 85 400% 5 300% 0 75 200% -5 65 48% -10 55.2 100% -15 55 % YoY 0% %YoY of MPI of %YoY 2% -20 45 Rate Utilization %Capacity -100% -25 -17.7 -12% -30 35 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Construction areas permitted Nationwide Condominium Registration Nationwide New Housing registered in BKK and Vicinity MPI (lhs) %Capacity Utilization (rhs)

Jun20 Headline inflation stood at -1.57% YoY, while core inflation Property prices continued to improve in 1Q20, given government fell to -0.05% YoY stimulus measures for the housing sector

1.0 3.00 20.0 -0.05% YoY 2.00 15.0 0.5 1.00 0.00 10.0 -1.00 5.1 0.0 -2.00 5.0 4.9 % YoY %MoM -3.00 %YoY 0.0 -0.5 -4.00 3.7 -1.57 % YoY -5.0 Jan- May- Sep- Jan- May- Sep- Jan-1 May- Sep- Jan- May- 17 17 17 18 18 18 9 19 19 20 20 -10.0 1Q09 2Q10 3Q11 4Q12 1Q14 2Q15 3Q16 4Q17 1Q19 Headline CPI (MoM-lhs) Core CPI (MoM-lhs) Headline CPI (YoY-rhs) Core CPI (YoY-rhs) Si ngle House (Wi th Land) Townhouse (With Land) Land Sources: BOT, MOC, OIE, and REIC (Real Estate Information Center)

162 Economic Condition Highlights: June 2020 Jun20 CCI and Jul20 BSI improved, due to the relaxation of Jun20 Private investment and private consumption contracted at lockdown measures a lower rate than previous months

10% 90 60 1Q20 2Q20 May-20 Jun-20 85 0% 80 55 -10% -4.7% -3.3% -3.2% 75 50 %YoY 70 -20% -12.1% -12.6% -13.7%

CCI 42.9 65 45 BSI -18.9% 60 40 -30% -24.3% 55 35 -40% 50 49.2 PCI PII Registered Construction Imports of Consumer's Consumer's Consumer's 45 30 Motor Materials Capital Non Durable Durable Service Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Vehicles Goods Consumer Confidence Index (CCI) Business Sentiment Index (BSI)

There were no tourist arrivals in 2Q20, due to inbound travel Jun20 exports continued to contract drastically, due to the restrictions pandemic and resulting lockdowns around the world

Exp o r t V alu e 4.2% % YoY 45.0 20.4% 9.4% 7.3% 40% (USD Million) 40.0 8.9% 20% 35.0 0% 28,000 30 30.0 -6.5% -20% 24,000 -23.2 20 25.0 -66.2% 20.0 -100.0% -40% 20,000 10 15.0 -60% 16,000 0 24.8 0.0 -80% 35.6 32.5 10.0 29.9 12,000 -10 Million Person 38.2 39.8

5.0 6.7 -100% 0.0 -120% 8,000 -20 4,000 -30 2014 2015 2016 2017 2018 2019 6M20 Jun-20 -17.3 0 -40 No of Foreign Tourist Arrival % Tourist Arrival YoY (RHS) Jan-16 Sep-16 May-17 Jan-18 Sep-18 May-19 Jan-20 Exports Exports exclu ding gold Exports % YoY Exports excluding gold % Y oY Sources: Bank of Thailand (BOT), Ministry of Commerce (MOC), University of the Thai Chamber of Commerce (UTCC), and Office of Industrial Economics (OIE)

163

Exports and Imports: 1H20 Exports by Country Imports by Country

Others Others ASEAN CLMV 10.6% 21.0% Middle 21.1% Middle East China East 24.9% 6.7% 23.1% 3.2% U.S.A. EU Hong Kong 8.4% 14.3% 5.1% U.S.A. China ASEAN CLMV 5.9% EU Japan 8.9% Japan 12.8% 18.6% 8.8% 9.8% 13.3%

Top 10 Exports by Product (Customs Basis) Top 10 Imports by Product (Customs Basis)

1H2020 1H2020 Total Exports, Custom Basis Import, Custom Basis USD Millions Weight %YoY USD Millions Weight %YoY Total Exports, 114,343 100.0% -7.1% Total Imports, 103,642 100.0% -12.6% Electronic machines 17,226 15.1% 0.2% Crude oil 9,500 9.2% -18.0% Electrical equipment 10,988 9.6% -11.2% Machinery and parts 8,986 8.7% -13.5% Precious stones and jewellery 10,078 8.8% 39.1% Electrical machinery and parts 8,071 7.8% -5.5% Motor cars, motor vehicles, parts and accessories 9,312 8.1% -32.6% Electrical, electronic equipment and parts thereof 7,713 7.4% 3.9% Polymers of ethylene in primary forms 3,799 3.3% -18.7% Chemicals 7,460 7.2% -5.1% 5,158 5.0% -22.0% Chemical products 3,276 2.9% -17.3% Iron, steel and products Parts and accessories of vehicles 4,448 4.3% -22.6% Machinery and parts thereof 3,075 2.7% -14.8% Other metal ores, metal waste scrap, and products 4,114 4.0% -9.3% Textiles 2,857 2.5% -16.9% Refine fuels 2,856 2.5% -23.2% Computers, parts and accessories 3,892 3.8% -5.4% Iron and steel and their products 2,564 2.2% -10.9% Vegetables and vegetable products 3,655 3.5% 3.6% Source: Ministry of Commerce

164 Export and Import Data: 2015 - 2019 Exports by Country Imports by Country 250 300 22.7% 21.2% 200 22.6% 250 20.4% 21.7% 20.6% 9.9% 8.3% 22.9% 22.2% 8.2% 200 22.0% 22.8% 3.4% 9.1% 6.1% 7.3% 3.8% 5.0% 3.4% 150 7.7% 6.7% 4.8% 4.2% 6.8% 6.2% 5.2% 11.1% 4.8% 14.1% 14.0% 150 5.4% 5.3% 15.4% 14.5% 11.2% 12.7% USD Billion 15.8%

USD Billion 11.2% 9.9% 11.4% 10.0% 100 9.4% 9.3% 20.0% 21.3% 9.5% 12.0% 20.3% 21.6% 20.0% 100 11.1% 11.0% 12.5% 11.8% 10.3% 10.1% 9.9% 9.6% 8.9% 9.5% 8.9% 8.8% 10.2% 11.6% 50 9.3% 50 10.4% 10.3% 10.6% 11.2% 4.8% 4.9% 4.8% 4.9% 5.7% 15.3% 15.1% 14.6% 15.5% 14.4% 19.0% 13.9% 13.8% 13.4% 13.3% 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 ASEAN-5 CLMV EU China Japan USA Hong Kong Middle East Others ASEAN -5 CLMV EU China Japan USA Middle East Others

2019 2019 Exports, Custom Basis Imports, Custom Basis USD Millions Weight %YoY USD Millions Weight %YoY Total Exports, 246,245 100.0% -2.7% Total Imports, 236,640 100.0% -4.7% Electronic machines 35,598 14.5% -7.2% Crude oil 21,543 9.1% -19.9% Motor cars, motor vehicles, parts and accessories 27,271 11.1% -5.8% Machinery and parts 20,945 8.9% 1.3% Electrical equipment 24,324 9.9% 0.1% Electrical machinery and parts 17,564 7.4% -8.3% Precious stones and jewellery 15,691 6.4% 30.9% Electrical, electronic equipment and parts thereof 15,451 6.5% -2.9% Polymers of ethylene in primary forms 9,172 3.7% -11.0% Chemicals 15,314 6.5% -8.2% Chemical products 7,590 3.1% -17.3% Iron, steel and products 12,917 5.5% -3.9% Refine fuels 7,341 3.0% -21.2% Parts and accessories of vehicles 11,505 4.9% -4.0% Machinery and parts thereof 7,309 3.0% -10.9% Jewellery including silver bars and gold 11,036 4.7% -25.9% Textiles 6,910 2.8% -3.3% Other metal ores, metal waste scrap, and products 8,936 3.8% -9.7% Other industrial products 6,307 2.6% -0.5% Computers, parts and accessories 8,191 3.5% -8.5%

Source: Ministry of Commerce

165

Export and Import Growth by Key Destinations Export growth by key destinations Import growth by key destinations

30% 2016 2017 2018 2019 30% 2016 2017 2018 2019 25% 25% 20% 20% 15.6% 15% 11.8% 15% 11.8% 10% 10% % YoY % 5% YoY % 5% 0.9% 0% 0%

-5% -3.8% -1.5% -2.7% -5% -5.0% -4.7% -6.3% -5.9% -10% -6.0% -5.8% -10% -9.6% ASEAN-5 CLMV EU China Japan USA Total ASEAN-5 CLMV EU China Japan USA Total Exports Imports

2018 2019 2018 2019 Value Value Value Value Exports (Million USD) Share (Million USD) Share Imports (Million USD) Share (Million USD) Share ASEAN-5 39,212 15.5% 35,432 14.4% ASEAN-5 33,158 13.4% 31,512 13.3% CLMV 29,334 11.6% 27,472 11.2% CLMV 12,089 4.9% 13,512 5.7% EU 25,042 9.9% 23,553 9.6% EU 22,249 9.0% 20,903 8.8% China 30,317 12.0% 29,172 11.8% China 49,903 20.1% 50,328 21.3% Japan 24,937 9.9% 24,558 10.0% Japan 35,256 14.2% 33,222 14.0% USA 28,041 11.1% 31,343 12.7% USA 14,969 6.0% 17,307 7.3% Total 252,957 100.0% 246,245 100.0% Total 248,201 100.0% 236,640 100.0%

Source: Ministry of Commerce

166 Economic Condition Highlights: CAPEX and Investment Cycle

Capacity Utilization by Key Industries Investment value of BOI-approved applications (Total)*

Integrated Circuits & Parts 74.4 1 809.4 867.5 (+12%) (+7%) 900 631.1 549.5 Motor Vehicles 700 (-27%) (-13%) 447.4 48.7 (-19% ) 500 (Bt bn) (Bt 300 89.4 Basic Metal (-34% ) 46.4 100 Investment Value -100 Rubber & Plastic Products 2015 2016 2017 2018 2019 1Q20 46.1

Chemical & Chemical Products 77.2 Investment value of BOI-approved applications (by Industry)*

Paper and Paper Products 75.1 500 400 Textiles 41.5 300 Tobacco 200 58.6 2017 (Bt bn) 100 23.74 18.79 15.78 15.13 12.39 0 2.59 2018 0.97 Food Value Investment 56.6 0 2019 Baverages 56.0 1H20

0 20406080100 Avg 16-18

2015 2016 2017 2018 2019 1Q20 Source: The Bank of Thailand (BOT), The Ministry of Commerce (MOC), and Office of Industrial Source: The Board of Investment of Thailand (BOI) Economics (OIE) Note: *Figures above indicate investments of approved projects requesting investment promotion benefits from BOI (Data as of March 2020)

167

Property Market: Market still cautious, weak supply on the 1st quarter could be expected

Supply Side: New Housing Completions and New Projects Launched in BMR* Outstanding Mortgage Loans to Individuals and Property Developers to GDP 1,000 Units 170 % of GDP 131 150 132 133 124 127 125 132 115 130 117 102 114 111 125112 108 114 112 30 110 101 81 84 86 90 68 75 68 64 66 62 62 70 52 51 58 44 43 49 46 50 20 16.8 50 31 37 30 16 20 1314 20 16 16 10.4 3 4 9 14 12 10 10 -10 4.6 0 New Housing Completions New Projects Launched 1993 1996 1999 2002 2005 2008 2011 2014 2017 2Q20 Loans to Property Developers Housing Loans Demand Side: Transferred Properties in BMR* 1,000 Units  Mortgage loans to GDP are higher than pre-crisis level, due to factors such as 250 196 197 198 changes in consumer behavior, intense competition among banks, and a 200 178 182 174 175 146 161 151 159 163 150 more accessible credit market 100 50 26 26  Outstanding loans granted to property developers (including contractors) to 0 GDP was 4.8% in 2Q20, still lower than pre-crisis level  Supply Side: Overall new housing projects launched in 2M20 sharply decreased 30.1% YoY, due to high accumulated stocks of property Price Growth of Properties developers and unfavorable of economic situation Avg. 5-year price growth before the crisis (1992-1996): Land 9.4%; % (YoY) Single House 6.3%; Townhouse 6.3%  Demand Side: Number of property transactions in 2M20 rose only 0.4% YoY, Avg. price growth in last 5-years (2015-2019): despite government stimulus measure of cash back for down payment and 25.0 Land 4.2%; Single House 2.8%; Townhouse 3.9% 2.6 20.0 reducing home ownership transfer fee, as buyers still cautious 5.5 15.0 5.3  Prices: single house and townhouse prices in 2M20 (pre Covid-19) rose as 10.0 developers and consumers shifted to favor low-rise projects, while land 5.0 0.0 prices increased slightly -5.0  Mortgage NPLs among Thai commercial banks rose to 4.04% in 2Q20, from -10.0 3.71% in 4Q19 -15.0 Land Single House Townhouse

Sources : National Economic and Social Development Council (NESDC), BOT, Real Estate Information Center (REIC), Agency for Real Estate Affairs (AREA), and KResearch Note: * Including Condominium, Single House, and Townhouse; BMR = Bangkok and Metropolitan Area ** Measures to support Property sector during October 2015 – April 2016, such as cutting transfer fees and mortgage fees and tax deduction for the first five years

168 Household Borrowing Household Borrowing to GDP % NPL for Consumption Loans of Thai Commercial Banks Old Definition New Definition % of Loans 25 % of GDP 20 100 79.7 81.2 79.4 78.1 78.4 79.9 80.1 71.8 76.6 15 80 66.2 59.3 8.8 8.3 7.5 7.3 7.6 8.2 8.3 7.1 8.5 10 60 5.5 11.3 12.0 12.6 12.7 12.5 12.3 12.2 12.3 4.7 10.0 10.6 3.23 8.8 23.4 23.1 22.3 22.5 5 40 28.9 22.3 22.4 23.1 22.6 22.3 19.6 24.4 18.9 21.5 20 11.2 15.1 0 7.7 26.8 29.5 32.3 33.5 34.5 33.7 33.1 33.5 34.3 34.3 13.9 24.5 2001 2005 2009 2013 2017 1Q20 0 11.9 13.2 1994 1996 1997 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20

Commercial Banks SFIs Saving Cooperatives Non-Bank FIs Others To tal  Household debt to GDP edged up to 80.1% in 1Q20, and is expected to rise further in 2020

Old Definition: Data from 1991 – 1997: lending from commercial banks and SFIs to individual persons for consumption only  Household borrowing to GDP is higher than pre-crisis New Definition: Data from 2010 onwards: takes into account individual persons’ outstanding loans from all types of financial level, due to factors such as changes in consumer institutions, including savings Co-ops and non-banks behavior, intense competition among banks, and a more Cross-Country Comparison Debt Service Ratio of Thai households** accessible credit market of Household Debt (as of 2018)*  Thailand’s household debt to GDP is comparable to % of GDP 40% other countries*; debt service ratio of Thai households 128.6 27.9% 28.1% 28.4% 29.1% 140 30% 27.2% is still well below 40%**, indicating the household debt 120 100.4 situation is unlikely to trigger any problems in the 100 83.0 78.6 20% 80 67.3 66.0 foreseeable future 53.2 60 10%  NPL ratio for consumption loans of commercial banks 40 20 was at 3.23% in 1Q20, vs. 2.90% in 4Q19 0 0% 2009 2011 2013 2015 2017 Source: BOT, Bank for International Settlements (BIS), National Statistical Office (NSO), CEIC and KResearch

169

BOT Macro Prudential Policy  New frameworks on retail lending announced by BOT to closely monitor systematic risk and implement preventive actions

LTV Criteria for Mortgage Loans Criteria for Credit Card / Personal Loans (Effective: January 20, 2020) (Effective: September 1, 2017)

New (Including Top-up loans) Credit Cards Personal Loans Lending Criteria Price and 1st Contract 2nd 3rd Contract New OldNew Old Type of Properties NEW OLD (Apr-19) Contract Onwards Min.Monthly Income Bt15,000 Bt15,000 - - - LTV Limit LTV Threshold LTV Limit LTV Limit Income Credit Line Credit Line Income Credit Line Credit Line House ≤ 100%*≤ 95% 80-90% 70% Credit Line < Bt10mn < Bt30,000 ≤ 1.5 times ≤ 1.5 times Condo. ≤ 100%* ≤ 90% 80-90% 70% (times of average < Bt30,000 monthly income) < Bt50,000 ≤ 3 times≤ 5 times ≤ 3 institutions ≤ 5 times House & ≤ 90% 80% Bt10mn 80% 70% > Bt50,000 ≤ 5 times Bt30,000 ≤ 5 times Condo. (LTV Limit)  For credit card loans, credit line will be raised to 2 times for customers who have monthly income 1) Under the new framework, LTV limit will be capped at 100% for the first contract of below 30,000 Baht per month, effective until December 2021. housing loans, and * loans for furniture and decorations can be added up to 10% of collaterals (old - no these conditions) 2) For the second contact, LTV limit is 80% if the first contract’s installment payments are Criteria for Car Loans less than two years (old - three years); otherwise, LTV limit is 90% 3) Risk weight is 35% if LTV does not exceed its LTV limit; while the risk weight will  Auto Registration Loans (Effective: February 1, 2019): Auto registration loan increase to 75% for the loans for furniture and decorations of the first contract providers to be approved by Bank of Thailand and Ministry of Finance

Regulated by Fiscal Policy Office Regulated by the BOT

Notes: Picofinance* Pico Plus* - August 15, 2019: BOT relaxed the LTV rules for co-signers that have no ownership Capital Fund  Bt5mn  Bt10 mn  Bt50 mn interest in the home being purchased - April 2019: BOT tightened LTV criteria for mortgage loans, and raised down payment Credit Line  Bt50,000  Bt100,00 Depends on debt-servicing ability for the second contract onwards. Interest Rate  36%  36% for first Bt50,000  24% - Year 2009: BOT announced revised criteria in 2009-2010 on mortgage loan risk Ceiling weights with a different effective date  28% for the amount in  24% - Year 2008: Risk weights for mortgage loans dropped from 50% to 35% under Basel II excess of Bt50,000 Note: * Picofinance and Pico Plus are allowed to provide loans only in the registered province

170 Thailand’s external balances remain relatively strong compared to peers

High international reserve / Imports (Import Coverage) Low foreign holding ratio in Thai government bonds

16.0 50% 13.8 42.0% 14.0 12.5 40% 11.2 10.9 12.0 10.5 30.1% 9.4 30% 10.0 22.7% 6.8 8.0 20% 17.0% 6.0 12.3% 10%

Number Number of Month 4.0 2.0 0% 0.0 Indonesia South Korea Malaysia U.S. Thailand India Indonesia Phillippines South Korea Malaysia Thailand Singapore Note: Retrieved from Asia Bond Online, based on latest available data Source: CEIC, KResearch (data as of June 2020) Source: Asian Development Bank, US Department of Treasury High international reserve ratio / External debts

150% 139.2%  Thailand’s economy and financial markets are able to withstand impacts from QE tapering and its aftermath due to: 102.6% 100% 82.1% 83.4%  High import coverage (international reserves/monthly imports) compared with the IMF’s three month import 42.3% 50% 32.0% coverage guideline 18.2%  More than 100% of external debt covered by 0% India Indonesia Phillippines South Korea Malaysia Thailand Singapore international reserves

Source: CEIC, KResearch (data as of June 2020)  Low portion of foreign holdings in Thai government bonds compared with other countries

171

Monetary and fiscal expansion raises financial stability concerns

In consistent with the Fed, the BOT cut interest rate to Thailand has enough FX reserves support the economy amid COVID-19 outbreak to meet all internal and external obligations

3.0 3 months of imports $ Billion Federal Funds Target $ Billion Reserves backing banknotes Rate - Upper Bound FX Reserves 2.5 300 300 ST external debt Federal Funds Target Net Forward Position 250 Rate - Lower Bound 250 2.0 BOT Policy Rate 200 200 1.5 150 250.4 150 55.3 $274.5 Billion $177.28 Billion

Percent 100 100 62.4 1.0 50 50 59.6 24.1 0.5 0 0 Source: BOT, KResearch Last Update: July 31, 2020 0.0 Excess liquid assets in Thai commercial banks slightly decreased Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 May-15 May-16 May-17 May-18 May-19 May-20 Million Baht %LCR 184.74 186.2 5,000,000 183.5 182.23 190 176.9 173.8  Due to a deteriorating economy, the Fed decided to cut its policy 4,000,000 180 rate by 1.50% in 2020 to 0.00-0.25%  Monetary easing leads to a massive exodus of capital from 3,000,000 170 emerging markets and worsens exchange rate depreciation. 2,000,000 160 However, Thailand’s external stability will likely be maintained 2016 2017 2018 2019 1Q20 2Q20  TheThai banking system excess liquidity decreased due to the Liquid Assets LCR (%) impacts of the COVID-19 outbreak. However, CAR and NPL ratios were rather manageable (18.41% and 3.21% as of 1Q20, Note: BOT has imposed the Liquidity Coverage Ratio (LCR) Framework which replaces the maintenance 6% reserve requirement. Regarding the LCR framework, all banks shall maintain high-quality liquid assets not less than net expected respectively), with net profits of Bt64.17bn in 1Q20 cash outflow over the next 30 days. The LCR was implemented on January 1, 2016, with the minimum requirement set at 60%, rising in equal annual steps of 10 percentage points to reach 100% on January 1, 2020 Source: Kresearch (as of August 2020) 172 Challenges: Exports  Export is expected to mediocre in 2020 amid global trade uncertainties and transitions to structural changes Exports

Short-term Challenges  Faltering global demand  THB appreciation  US trade policy, e.g. measures to reduce trade deficit from 16 major countries  Trade uncertainties

Key Structural Problems  High dependence on China’s market  Changing demand in electronic products and loss of competitiveness in some areas (e.g., HDD)  High crop surplus among competitors

Key Affected Products  Electronics and Electrical Appliances (Structural Challenge)  Fishery and Agriculture Products (US SIMP)  Steel and Aluminum, Washing machine (US tariffs)  Plastic, ICs, Machinery and Electrical Equipment (US-China’ s trade dispute)

Short-term Measures from Authorities  Extending products to catch up with changing consumer trends and Related Parties  Enhancing practices to comply with international standards  Setting up export promotion board  Providing supports to help individuals gain skills and qualifications relevant to the needs of the labour market

Long-term Measures from Authorities  Negotiating FTA and regional trade agreements and Related Parties  Relocating factories to GSP eligible countries  Promoting BOI’s privileges which grant merit based on competitiveness enhancements  Enhancing productivity

Note: HDD = Hard Disk Drive; IUU fishing = Illegal Unreported and Unregulated fishing; FTA = Free Trade Area; GSP = Generalized System of Preferences; BOI = the Board of Investment of Thailand Source: KResearch (as of April 2019)

173

Impacts of US-China trade dispute

China’s exports to US subject to tariffs Postponed until further notice . The two-year US-China trade war shaved Thai exports by US imposes tariffs USD1.1bn, although some Thai on Chinese goods USD 50 bn USD 200 bn USD 120 bn USD 160 bn products benefited as 25% (List 1,2) replacements for Chinese/US % tariff rates on Chinese 25% (List 3) 7.5% (List 4A) products, both directly and goods to US (Feb 2020) indirectly. Volume is still not enough to cover the drop in exports to countries within China’s Thai exports lost USD1.1bn during 2018-2019 or 0.1% of annual GDP supply chain. Moreover, Thailand lost its foothold in the markets of Thai exports to US to Thai exports to China China to dominate CLMV neighboring countries + replace Chinese goods + to replace US goods - as Thailand set to lose out . However, the trade war has eased since the ‘Phase 1’ US-China Thai exports to US Thai exports to China % Share of Thai goods CLMV (USDbn) (USDbn) to CLMV’s import trade deal was signed on January 15, 2020. At present, the COVID- Electrical List 1: List 1: appliance 19 outbreak is putting Electronic international trade in greater List 2: List 2: equipment jeopardy Iron/ List 3: List 3: . The US presidential election in Aluminum November has complicated the trade war situation, which is likely China exports to US US exports to China % Share of Chinese CLMV (USDbn) (USDbn) goods to CLMV’s import to be protracted. A ‘Phase 2’ trade

List 1: List 1: Electrical deal is unlikely to materialize appliance anytime soon. Meanwhile, the List 2: List 2: Electronic geopolitical tension is set to equipment continue List 3: List 3: Iron/ Aluminum

2017 2019

Source: USITC, Trademap.org, Ministry of Commerce 174 Other Figures

Thai Bond Market Size (Gov't and Private bonds) Bond Yields

16,000 79% 78% 79% 83% 90% 74% 76% % 14,000 69% 70% 71% 80% 63% 64% 65% 70% 3.0 12,000 57% 56% 10,000 60% 50% 2.0 8,000 40%

6,000 GDP to % Billion Baht 30% 1.0 1.5 4,000 20% 1.2 1.3 1.0 1.1 2,000 10% 0.8 0.9 10,341 11,403 12,577 13,465 4,888 5,086 6,118 6,962 7,327 8,580 8,992 9,287 9,825

13,297 0.7 0.5 0.5 0.5 0 0% 0.0 0.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20 6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y Dec-17 Dec-18 Dec-19 04 Aug 20 Thai Bond Outstanding (LHS) Bond Market Size to GDP (RHS) Foreign Holdings of Thai Bonds Current Account and FX Reserve

50 USD242bn (Jun20) 300 1200 8% 8% 8% 8% 9% 7% 7% 8% 40 250 1000 6% 6% 6% 6% 7% 30 800 6% 200 5% 20 600 4% 150 4% 10

Billion Baht 100 400 1% 3% USD Billion 0 USD Billion 2% 2% (+)USD80.8bn (Jun20) 200 1% 50 1% -10 918 % of Total Bond % Outstanding 49 76 66 280 419 710 708 683 571 664 932 990 843 0 0% -20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20

Foreign Holding Outstanding (LHS) % of Thai Bond Market (RHS) Current Account (LHS) FX Reserves (RHS)

175

Other Figures Credit Card Loans/GDP Million Baht % to GDP 500,000 2.7 3.0 Housing Loans / GDP 2.5 2.5 2.6 2.4 2.4 2.3 2.2 2.5 400,000 2.0 2.0 2.0 2.1 Million Baht % to GDP 2.0 300,000 5,000,000 30 1.5 200,000 1.0 23.2 23.9 22.0 22.3 22.3 22.6 25 100,000 4,000,000 21.0 0.5

19.4 196,599 216,427 228,903 261,553 290,425 318,141 333,493 360,096 394,123 418,747 457,090 393,506 18.3 17.7 17.4 18.0 20 0 0.0 3,000,000 2009 2012 2015 2018 1H20 15 Credit Card Loan Outstanding (LHS) Credit Card Loan to GDP (RHS) Note : 1) Credit card loans represent outstanding credit card loans from commercial banks and non-banks, 2,000,000 10 excluding SFIs, saving cooperatives and others financial Institutions 1,000,000 Personal Loans/GDP 5 1,709,897 1,885,139 2,034,137 2,263,552 2,510,012 2,783,129 3,021,811 3,251,488 3,448,852 3,706,397 3,918,565 4020913 0 0 Million Baht % to GDP 2009 2012 2015 2018 1H20 800,000 3.4 3.4 4.0 3.5 Housing Loans for Personal Consumption (LHS) 600,000 3.0 2.3 2.4 2.3 2.3 2.3 2.3 % Housing Loans to GDP (RHS) 2.2 2.1 1.9 2.5 400,000 1.7 2.0 1.5 Note : Housing loans represent outstanding housing loans for personal consumption 200,000 1.0 granted to individuals of householders by financial institutions (including 0.5 Commercial banks, Finance companies, Credit financiers, SFIs, and Insurance 213,745 187,491 213,310 257,129 299,139 312,851 318,354 332,996 354,243 383,303 579,911 564,461 companies but excluding Saving Cooperatives and others financial Institution) 0 0.0 2009 2012 2015 2018 1H20 Personal Loan Outstanding (LHS) % Personal Loans to GDP (RHS) Source: BOT, NESDB Note : 1) Personal Loans represent outstanding personal loans under supervision (including commercial banks and non-banks, excluding SFIs, saving cooperatives and others financial Institution) . 176 Other Figures Loans to GDP as of 2019 Thai Banks’ Net Loan Growth and NPL Ratio

United States 47.1 % YoY % to Total Loans Thailand 80.0 15 5.2 6 S.Korea 88.5 12 5 3.9 Japan 92.8 9 3.0 3.1 3.1 3.1 3.2 4 2.9 2.7 6 2.4 2.3 2.3 3 Malaysia 117.3 3 2 Singapore 136.4 12.5 15.1 14.0 10.5 4.2 3.4 1.3 4.3 5.2 1.9 4.2 5.3 % of GDP 0 1 China 160.1 -0.5 -3 0 2009 2012 2015 2018 1H20 0 50 100 150 200 %YoY Net Loan Growth %Gross NPL Ratio Note: Data on China, Korea and Japan include loans from commercial banks as well as financial institutions, the rest include loans only from commercial banks Note : %YoY Net loans represent growth of net loans in 14 Thai commercial banks from C.B.1.1 Latest %Gross NPL is as of 1Q20 Credit Card Statistics GDP Per Capita % YoY Baht % YoY 25 19.9 250,000 20 20 15.7 12.8 11.3 15 11.1 10.2 8.6 9.7 8.7 200,000 5.7 6.7 7.2 4.0 3.9 5.4 5.2 10 10 6.3 6.0 1.8 3.2 2.8 5 150,000 -1.1 3.9 10.1 5.8 14.3 11.0 9.5 4.8 8.0 9.4 6.2 9.2 0 0 -0.7 100,000 -5 Credit Card Loan Growth Spending Growth -10 -10 50,000 -13.3 -15 147,364 163,956 170,467 185,159 192,327 195,807 202,151 213,586 225,095 236,815 243,467 2009 2012 2015 2018 1H20 0 -20 Note: The credit card statistics number includes foreign bank and non-bank credit cards 2009 2011 2013 2015 2017 2019 Source: The Bank of Thailand, National Statistical Office (NSO), CEIC Data, and KResearch GDP Per Capita % YoY 177

Other Figures Population and Labor force Unemployment Rate Million Person % of Labour Force

56.6 56.7 60 54.0 54.5 55.0 54.8 55.2 55.6 56.0 56.3 1.5 1.2 50 1.0 1.1 1.0 1.0 39.4 0.9 0.9 40 38.9 39.4 38.6 38.5 38.3 38.1 38.4 38.2 38.2 1.0 0.8 0.7 0.7 0.7 0.7 30 20 0.5 10 0.0 0 2009 2011 2013 2015 2017 2019 1Q20 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 Population (Age>= 15 years) Labour Force Source: NESDB, National Statistical Office (NSO), and KResearch

Foreign Direct Investment Foreign Direct Investment Position by Countries Trillion Baht % YoY 10 25 100% 23.2 22.1 22.2 21.8 22.9 23.6 24.5 24.1 24.6 23.3 15.2 13.9 80% 8 11.7 9.6 8.2 7.9 8.1 7.5 6.8 7.3 8.6 7.9 15 9.3 6.6 6.9 7.5 60% 6 2.8 30.0 31.7 34.6 35.0 35.1 35.3 34.5 35.3 -1.3 5 36.4 36.4 -1.8 40% 1.2 4 -4.4 1.4 1.9 1.6 1.7 2.3 2.0 2.3 2.7 2.6 16.5 17.0 16.0 -5 20% 16.1 16.0 14.0 14.8 14.9 13.6 14.0 2 19.8 18.2 17.1 17.6 16.3 16.2 16.8 15.5 17.7 17.5 4.9 5.6 5.8 6.6 6.5 7.0 7.9 7.7 8.3 7.5 0% 0 -15 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 FDI Position (LHS) % YoY (RHS) ASEAN EU China Japan US Others 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 - FDI position by countries is an investment outstanding that nonresident investors have with resident enterprises as stock concept - Converted FDI US Dollar to Thai Baht by reference rate from the Bank of Thailand

178 Members of ASEAN Economic Community (AEC)  Since December 31, 2015, ASEAN has transformed into the “ASEAN Economic Community,” with free movement of goods, services, investment, and skilled labour, and a freer flow of capital  Strategic measures under the five characteristics in the AEC Blueprint 2025 will be operationalised through sectoral work plans and their implementation and monitored through the AEC 2025 Monitoring and Evaluation Framework

Size of ASEAN Economy (USD Trillion)

Average Projected GDP Growth around 4.0-4.5%

GDP Thailand ASEAN AEC Blue print 2025 (2016-2025) Size of Economy (GDP) in USD Trillion for 2020 0.5 3.1 A resilient, A highly A competitive, Enhanced 2020 Real GDP Growth Forecast -6.0% -2.5% inclusive, and integrated Innovative, connectivity A global people-oriented, and cohesive and dynamic and sectoral ASEAN people-centred Note: economy ASEAN cooperation ASEAN - Size of economy from IMF and compiled by KResearch - 2020 GDP forecast is projected by KResearch

Source: The Association of Southeast Asian Nations and KResearch Source: IMF and KResearch (June 2020)

179

AEC as a Growth Driver to Thailand 1) Regional Connectivity 2) The Pluralism of Economic Integration 3) High Growth Environment

• The emergence of AEC and RCEP, as well as other • The materialization of regional FTAs, will attract even more FDIs into the region, supply chain will help maintain the especially from the +3 countries region’s competitiveness through labor division • 2015 marks the completion of ASEAN Free Trade Zone amidst CLMV lowering their import tariffs close to zero • The establishment of Thailand’s SEZs along the border is to tap • Strategically located, Thailand • Thailand will constitute the center of production in into plentiful resources of CLM is the most essential area for Mainland South East Asia, while low-value, GMS connectivity labor-intensive processes will be moved to CLMV • Consumer markets in CLMV will grow along with GDP increase and • Physical connectivity and ease urbanization of customs formalities will spur regional trade and promote regional supply chain

Note: CLMV = Cambodia, Laos, Myanmar and Vietnam; GMS = Greater Mekong Subregion; SEZs = Special Economic Zones; RCEP = Regional Comprehensive Economic Partnership

180 For Further Enquiries, Contact KASIKORNBANK Investor Relations:

Chief Investor Relations Officer Tel (66) 2470 2673 to 4 Fax (66) 2470 2680 Investor Relations Team Tel (66) 2470 6900 to 1 Tel (66) 2470 2660 to 1 Fax (66) 2470 2690 Email: [email protected] IR Website www.kasikornbank.com  Investor Relations

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181

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