12 Annual Report 2017 Public Company Limited

Management Report

New digital services are being introduced and enhanced to meet new lifestyles, especially for the younger generation.

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The 4.0 development plan to shift the country’s recent years, namely regionalization, urbanization and economy from a focus on exports to an innovative high-value digitalization. With the rapid growth in trade, investment and economy is now taking shape. The plan includes massive travel within the ASEAN Economic Community (AEC) and nearby infrastructure development such as road and rail development, countries we are supporting customers with regional interests mass transit extensions, and port and airport development, via our international branch network and local knowledge. particularly in Thailand’s eastern provinces, which are being As urban centers in Thailand and the region grow rapidly developed as a logistics hub for the region. There has also been along with incomes we are expanding our investment and an uptick in investment in response to the Board of Investment’s wealth offerings. Meanwhile, new digital services are being investment incentives for 10 strategic industries aimed at introduced and enhanced to meet new lifestyles, especially for upgrading Thailand’s capability in innovation and technology, the younger generation. as well as a significant shift towards e-Commerce and e-Payment services as part of a push towards a “cashless society.” Our broad customer base includes large corporations, small and medium-sized enterprises, high-net-worth and retail banking These developments serve to strengthen three major trends clients. During this period of transition, we are keeping close to which have been guiding Bangkok Bank’s business direction in our customers and helping them adapt to changing economic Annual Report 2017 Bangkok Bank Public Company Limited 13

realities. This includes supporting their expansion to new We continue to work with other companies in our financial markets, their adoption of new digital platforms, and their group to provide new investment and insurance offerings. building of new supply chains. To meet the growing demand for wealth management products we also formed a strategic partnership with AIA Group Limited, Given our leadership in Thailand’s corporate lending, the the largest independent publicly-listed pan-Asian life insurance infrastructure development projects present an important group. Under a 15-year distribution agreement we will offer our opportunity for us and our clients. After financing several mass customers in Thailand an extended range of insurance products transit projects in previous years, in 2017 we were the lead through our branches and other distribution points. arranger and advisor for the financing of the construction of the monorail extension in Bangkok, the MRT Pink Line and To support the demand for digital banking services we are Yellow Line. We are also providing support for another urban enhancing our technology infrastructure to process much higher rail transit extension, the MRT’s Blue Line. These projects are volumes of digital transactions. In parallel with this we are being managed under a Public Private Partnership structure. building our own in-house capability in areas such as artificial intelligence (AI) and Big Data which will give us in-depth As clients sought new funding streams to take advantage of insights into customer behavior which will help us improve our the low-interest rate environment, we played a major underwriting customers’ experience. role in the issuance of debt instruments. Amidst intense competition we headed the league table for the Thai Bond To ensure we can provide the latest digital banking services Market Association with long-term debt issuance growing by to both business and retail customers we joined the global R3 51 percent in value. consortium and through this we joined other major in 2017 in tests using Distributed Ledger Technologies in areas such On a regional level we are supporting customers’ expansion as trade services. We are also building an integrated cash with financial and advisory services, assistance in accessing management and payments platform to provide best-in-class regional markets, and export services such as documentation services for corporate, commercial and business banking and financing, while also providing trade and remittance customers. same-day services for international payments, namely AEC Trade Express and Asia Same Day Transfer. We are also Bangkok Bank InnoHub, the first global FinTech accelerator in supporting the use of local currencies for trade such as the Thailand, which received applications from 119 start-ups, Malaysian ringgit, and Indonesian rupiah. completed its inaugural program with the eight participating start-ups pitching their innovative technologies to Thai and We have been working closely with the public and private international investors. We are continuing to work with several sectors to establish new digital payment platforms which are of these companies to explore the development of new services secure and easily used by everyone including PromptPay, for our customers, and one of them, FundRadars, has worked a new standardized payment system for Thailand which links with our subsidiary, BBL Asset Management, to offer a new bank accounts to mobile phone numbers and/or Citizen ID mobile application for investors to track market information cards, to provide highly secure and extremely low-cost and analysis. electronic transfers. We rolled out various PromptPay services, beginning with transfers. In 2017, Bangkok Bank reported a net profit attributable to owners of the Bank of Baht 33.0 billion, up by 3.8 percent from Parallel with this we enhanced our mobile application services 2016. Net interest income (NIM) rose by 4.1 percent to Baht and introduced other digital payment options such as QR Code 66.6 billion, while non-interest income rose by 9.5 percent to payment via PromptPay using the Bualuang mBanking Baht 45.8 billion. Loans grew by 3.2 percent while deposits rose application. by 6.1 percent, ensuring a healthy level of liquidity with a loan-to-deposit ratio of 86.7 percent. We maintained our capital As customers increasingly switch to electronic channels, reserves at a high level to support future business expansion, our branches will focus more on financial advice. Staff are financial stability and sustainability. receiving coaching and training in providing total solutions and consultative selling and we are putting greater emphasis on technology and entrepreneurship.