Annual Report 2005 |Bangkok Bank Public Company Limited
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Annual Report 2005 | Bangkok Bank Public Company Limited ë 1 Annual Report 2005 | Bangkok Bank Public Company Limited ë 1 Contents Financial Performance Indicators Message from the Chairman Message from the Executive Chairman Management Report Community Services Corporate Governance Risk Factors Management Discussion and Analysis Appp ropriation of Profit for the Year 2005 Ten-Year Statistical Summary Organization Chart Board of Directors and Top Executives Board of Directors and Executive Officers Report of the Board of Directorsû Responsibilities for Financial Statements Report of the Audit Committee Report of the Nomination and Remuneration Committee Report of the Independent Certified Public Accountants Financial Statements Notes to Financial Statements General Information References Disclosure of Information on Capital Structure and Large Shareholders Remuneration and Benefits for the Board of Directors and Top Executives Change in Shareholdings of the Board of Directors Auditorûs Remuneration Information on Bonds Investment in Companies at 10% or More of Paid-up Capital List of Branches 5 6 8 10 20 24 34 38 49 50 52 54 70 75 76 77 79 80 91 175 175 175 177 178 179 179 180 184 çBangkok Bank The bank that looks after its customersû total needs With a complete range of servicesé A pioneer in Thai banking, Bangkok Bank has long been synonymous with the progress of the country. The Bank has grown and matured with Thai people and their business interests and today is renowned for its size, stability and partnership approach. The Bank is driving innovation in new products and services and building on its inherent scale advantages to meet the challenges of a changing financial landscape and consolidate its leadership position for the future. 4 ë Annual Report 2005 | Bangkok Bank Public Company Limited Financial Performance Indicators Percentage change 2005 2004 2003 2005/2004 2004/2003 Consolidated financial performance (million baht) Assets 1,398,842 1,407,347 1,363,339 -0.6 +3.2 Loans and advances (net of loan loss provisions)1 830,598 824,690 715,964 +0.7 +15.2 Deposits1 1,163,501 1,195,366 1,123,294 -2.7 +6.4 Liabilities 1,259,033 1,292,097 1,260,849 -2.6 +2.5 Shareholdersûequity-net 139,808 115,251 102,490 +21.3 +12.5 Interest and dividend income 56,571 48,742 48,195 +16.1 +1.1 Total income 75,045 68,289 70,241 +9.9 -2.8 Profit (loss) before tax2 22,650 17,817 11,514 +27.1 +54.7 Net profit (loss)3 20,306 17,620 11,355 +15.2 +55.2 Per share (baht) Profit (loss) before tax2 11.87 9.34 7.79 +27.1 +19.9 Net profit (loss)3 10.64 9.23 7.69 +15.3 +20.0 Par value 10.00 10.00 10.00 - - Book value2 73.24 60.38 53.70 +21.3 +12.4 Share prices range 114.00-95.50 113.00-83.00 113.00-48.75 - - year-end 105.00 104.00 109.00 +1.0 -4.6 Financial ratio (%) Rate of return on average assets2 1.45 1.28 0.87 +0.17 +0.41 Rate of return on average equity2 15.97 16.24 14.45 -0.27 +1.79 Net profit (loss) to total income3 27.06 25.80 16.17 +1.26 +9.63 Capital to risk assets 14.02 13.49 15.88 +0.53 -2.39 Remarks 1. Not including interbank and money market items 2. Including minority interests 3. Not including minority interests Annual Report 2005 | Bangkok Bank Public Company Limited ë 5 Message from the Chairman I am pleased to say that the overall performance results number of development plans to enhance its competi- of Bangkok Bank in 2005 have been satisfactory. It achieved tiveness with the aim to establish itself a customer-centric a near record profit result of Baht 20.3 billion, the highest organization. It has established a new and efficient since 1997. Earnings per share increased from Baht 9.23 organizational structure regrouping business units based in 2004 to Baht 10.6 in 2005, while shareholders equity rose on key target customer groups, namely corporate, commer- by 21.1 percent to Baht 139.8 billion. The Bank paid an cial, business and consumer customers, with the view to interim dividend on common shares at a rate of Baht 0.75 instill a customer-focused culture. This, coupled with per share on September 23, 2005. improved internal systems, and the development of staff knowledge and skills has yielded tangible success in terms A proud achievement for Bangkok Bank during the year of increased business volume and a growing customer was that we received approval from the Chinese base particularly in the SME segment. We were also government to upgrade our representative office in Beijing delighted with the findings of a customer satisfaction survey to a branch. Bangkok Bank was the only Thai bank to of SME operators, which indicated that this target customer receive such approval for opening a branch in Beijing last group had a high level of confidence in Bangkok Bank. year and the branch was officially opened on December In addition to expanding its SME base, the Bank succeeded 8, 2005. in achieving a satisfactory rate of growth in consumer banking, in line with our intention to increase our share of Bangkok Bankûs four China branches, which are located this target market. in Beijing, Shanghai, Xiemen and Shantou, form the largest branch network of any Thai bank in China and are all Achievements of the Bank were reflected in recognition located in high-potential economic areas. The branch and awards such as Thailandûs Most Admired Bank for the network is expected to serve the Bankûs objective to sixth consecutive year from BrandAge magazine, Bank of expand into new markets, increase business volumes, grow the Year 2005 from Money & Banking magazine, and top the customer base in China, as well as to support businesses bank in Thailand, and fourth best bank in Asia and 190th in other countries to enter and expand in the China top brand in Asia from Asian Integrated Mediaûs annual market. Top Asian Brands. Over the past few years, Bangkok Bank has been focusing Bangkok Bank in 2005 introduced new products and services on maintaining and growing our customer base and as well as innovative marketing strategies and these were protecting our market share amidst intensifying competition, warmly welcomed by target customer groups. To mention and these are situation-driven goals. From a longer-term a few, Bangkok Bank was the first bank in Thailand to perspective, the Bank has also initiated and worked on a install electronic chips to credit cards in accordance with 6 ë Annual Report 2005 | Bangkok Bank Public Company Limited EMV standards, and the Bank launched lucky draw campaigns offering cars and condominiums to credit card holders which helped to build our credit card customer base. The Bank also offered home loans with a variety of interest rate and payment options to expand its home loan customer base, introduced new bancassurance services, and distributed various mutual funds as investment alternatives for deposit customers. Bangkok Bank also made significant progress in other areas including improvements to the Bankûs credit and operational risk management systems, preparations for the introduction of Basel II in 2008, and expanded branch and electronic banking channel networks to provide customers with a higher level of convenience when using the Bankûs services. As we move into 2006, the Bank and its customers are facing new challenges in terms of the business environment, and the domestic and the global economies. Bangkok Bank is determined to develop itself further so as to remain Chatri Sophonpanich a modern, learning and flexible organization. This will Chairman assist us to adapt to dynamic situations, while at the same time enabling us to give a high level of care and attention to our customers. I would like to take this opportunity to thank our customers, vendors and suppliers, as well as all other stakeholders for their support during the year. I would also like to thank members of the Board of Directors, the management and staff for their efforts which have helped the Bank to achieve our goals. (Chatri Sophonpanich) Annual Report 2005 | Bangkok Bank Public Company Limited ë 7 Message from the Executive Chairman The past year was a challenging one for Bangkok Bankûs business Amidst this rapidly changing internal and external environment, as we adjusted to an economic slowdown at both the national Bangkok Bank achieved satisfactory progress in its 2005 performance and global levels, in addition to intensifying competition in the results. The Bank recorded its highest net profit since the 1997 financial sector in Thailand. financial crisis, and succeeded in growing business volume and its customer base in target markets, particularly the consumer segment. Global economic growth slowed down, mainly because of escalating It also achieved significant progress in the development of new oil prices and the upward cycle of global interest rates. However, products and services, as well as improvements to its technology the growth in the US economy, which rose by a robust 3.6 percent infrastructure, working processes and risk management. At the same last year, helped stimulate global trade volumes and this in turn time, the Bank continued to play a significant role in providing both contributed to the growth of exports from Thailand. financial and technical support for entrepreneurs in the SME and agricultural sectors. The Thai economy in 2005 was affected not only by the rising oil prices and the higher cost of raw materials on world markets but Bangkok Bank is proud to have obtained approval from the Chinese by a number of internal challenges, particularly the tsunami, government to upgrade its representative office in Beijing to a widespread drought, avian flu, and ongoing violence in the three full-service branch.